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iminal Appeals Nos. 102 and 103 of 1958. Appeals by special leave from the judgment and order dated March 28, 1958, of the Calcutta High Court in Criminal Appeal No. 428 of 1957 and reference section 374 Cr. P. C. No. 8 of 1957 arising out of the 1325 judgment and order dated September 21, 1957, of the Court of the Sessions Judge of Cooch Behar in Sessions Trial No. 2 of 1957 (Sept. Sessions) (Sessions Case No. 18 of 1957). section K. Kapur, for the appellants. B. Sen, P. K. Ghosh for P. K. Bose, for the respondent. September 19. The Judgment of the Court was delivered by IMAM J. In these appeals the appellants were convicted for the murder of Malchand Bhadani. A charge under section 302, Indian Penal Code had been framed against each of them. The Sessions Judge found that the murder had been committed in the furtherance of their common intention. In his opinion as appellant Bipin Behari Sarkar had actually committed the murder he convicted this appellant under section 302 of the Indian Penal Code. He convicted the appellant Bishnu Charan Saha under section 302/34 of the Indian Penal Code. He sentenced both the appellants to death. The appellants appealed to the Calcutta High Court while the Sessions Judge made a reference for the confirmation of the death sentence passed by him. The High Court found the appellants guilty under section 302/34 of the Indian Penal Code. It accordingly confirmed the sentence of death imposed on the appellants by the Sessions Judge. According to the prosecution, one Tarachand Bhadani had a cloth shop at Mathabhanga in the district of Cooch Bihar. He was joint in business and mess with his two sons, Prithiraj and the deceased Malchand. The annual turn over of the shop was between Rs. 50,000 to Rs. 60,000. On December 18, 1956, Tarachand had gone to Rajasthan and Prithiraj had gone to Falakata Hat. Accordingly at the shop on that day Malchand was the only person in charge of it. At about 8 30 p. m., after the close of the day 's business, Malchand was counting the cash in the iron safe in an ante room of the shop when the appellants with one Sanatan Das, who was acquitted at the trial, 1326 called at the shop. Malchand came out of the anteroom into the shop to attend to these late customers. He had left open the safe and one of its drawers on the floor. The appellants purported to make certain purchases and examined various pieces of cloth. After selection of the cloth they were put into packets. Cash memoes in duplicate were prepared and signed by Malcliand and the appellant Bishnu Charan Saha. The cash memoes had been completely filled in. Two of them had been separated from the cash memo book, but before the 3rd cash memo could be detached from the book, Malchand was struck down by the appellants with a heavy cutting instrument which they had carried. The neck was so severely cut that the head was nearly severed from the trunk. Just about then, a neighbour called out to Malchand by way of casual enquiry before retiring for the night. This so frightened the miscreants that they fled. The money in the open safe was left untouched. The motive for the murder was to steal the money from the safe. On December 25, 1956, the police seized a sharp cutting weapon variously described as a sword or a dagger. It was found lying close to some shrubbery near Malchand 's shop. It was stained with human blood. It was a practice of the shop of Tarachand Bhadani to despatch from time to time, after obtaining Hundis, the accumulated proceeds of the business to Calcutta. On the morning of December 18, 1956, Prithiraj, before he went to Falakata Hat, had made enquiries from the firm of Bhairabhan Bhowrilal whether any Hundi was available. As Bhowrilal was not able to supply him the Hundi the cash remained in the shop. The contents of the safe showed that on December 18, 1956, before Malchand was murdered there was a sum of Rs. 3,913 in cash and 8 1/4 tolas of gold. There was, therefore, a substantial amount in the safe at the shop which would have been stolen were it not that the miscreants fled after murdering Malchand because of a neighbour calling out to him. The conviction of the appellants, as pointed out by the High Court, depended entirely on circumstantial 1327 evidence. The High Court did not rely upon the confessional statement made by the appellant Bishnu Charan Saha to a Magistrate, as, in its opinion, it was not a voluntary statement. Reference will be made to the circumstantial evidence, upon which the High Court relied, in due course. Before we deal with that aspect of the case it is necessary to refer to a submission made on behalf of the appellants concerning the tender of pardon under section 337 of the Code of Criminal Procedure to Bishnu Charan Saha and, the failure of the prosecution to comply with the provisions of section 339 of the Code of Criminal Procedure. It was urged that the provisions of section 339 of the Code not having been complied with the trial ",as vitiated as the appellant Bishnu Charan Saha could not be tried alongwith the appellant Bipin Behari Sarkar. In order to understand this submission it is necessary to state a few facts. Bishnu Charan Saha was arrested at about 3 p. m. on December 19, 1956. His confession was recorded by the Magistrate Mr. section C. Chaudhury on December 20, 1956. A charge sheet against the appellants and Sanatan Das was submitted by the police on June 20, 1957. On June 22, 1957, a prayer was made to the Sub divisional Magistrate on behalf of the prosecution that Bishnu Charan Saba may be tendered a pardon under section 337 of the Code of Criminal Procedure and the Magistrate recorded an order to the effect that this appellant was tendered pardon under section 337 of the Code of Criminal Procedure on condition of his making a full and true disclosure of the whole of the circumstances within his knowledge relating to the offence and to every other person concerned whether as principal or abettor in the commission thereof. The Sub divisional Magistrate bad already reported on June 20, 1957, to the District Magistrate that both he and the other Magistrate of Mathabhanga should not hold the commitment proceedings as they had had something to do with the investigation. On August 1, 1957, the Magistrate Mr. Sinha, to whom the case had been ultimately transferred, recorded an order to the effect that the three accused had been produced before him and that he had seen the Court 1328 Inspector 's petition praying that the accused Bishnu be made an approver in the case under section 337 of the Code of Criminal Procedure. This accused had, however, stated that he made the confessional statement before the Magistrate at Mathabhanga as he had been assaulted by the police and that he did not wish to become an approver. After the completion of the enquiry before commitment, the appellants and Sanatan Das were committed to the Court of Session to stand their trial for the murder of Malchand. Section 339(1) of the Code provides that " where a pardon has been tendered under section 337 or section 338, and the Public Prosecutor certifies that in his opinion any person who has accepted such tender has, either by wilfully concealing anything essential or by giving false evidence, not complied with the condition on which the tender was made, such person may be tried for the offence in respect of which the pardon was so tendered, or for any other offence of which lie appears to have been guilty in connection with the same matter ". The proviso to this sub section prohibits the trial of such person jointly with any of the other accused and that such person shall be entitled to plead at such trial that he had complied with the condition upon which such tender was made. The provisions of this section clearly pre suppose that the pardon which had been tendered to a person had been accepted by him and that thereafter that person had wilfully concealed anything essential or had given false evidence and therefore bad not complied with the condition on which the tender was made to him. Section 337 of the Code, under which a pardon is tendered, shows that such tender is made on the condition that the person to whom it is tendered makes a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other person concerned whether as a principal or an abettor to the commission thereof. Sub section (2) of this section requires that every person who has accepted a tender shall be examined as a witness in the court of the Magistrate taking cognizance of the offence and in the subsequent trial, if any. 1329 It is clear, therefore, that a mere tender of pardon does not attract the provisions of section 339. There must be an acceptance of it and the person who has accepted the pardon must be examined as a witness. It is ' only thereafter that the provisions of section 339 come into play and the person who accepted the pardon may be tried for the offence in respect of which the pardon was tendered, if the Public Prosecutor certifies that in his opinion he has, either wilfully concealed anything essential or had given false evidence and had not complied with the condition on which the tender was made. In the present case, there is nothing on the record to show that on July 22, 1957, although Bishnu Charan Saha had been tendered a pardon, he had accepted the tender. Indeed, the order sheet of the Sub divisional Magistrate of that date does not even disclose that Bishnu Charan Saha had been produced before him. On the other hand, when Bishnu Charan Saha and his co accused were produced before the Magistrate Mr. Sinha, to whom the case had been transferred, the prosecution made a prayer to the Magistrate that Bishnu Charan Saha may be made an approver in the case under section 337 of the Code of Criminal Procedure. This would show that upto that time Bishnu Charan Saha had not accepted the tender of pardon made to him by the Sub divisional Magis trate on June 22,1957. On the prayer of the Prosecutor made to Mr. Sinha on August 1, 1957, Bishnu Charan Saba flatly denied that he wished to be an approver and had stated that the confessional statement made by him to Mr. Chaudhury was not a voluntary one. On the facts of the present case, therefore, all that is proved is that at one stage of the proceedings a tender of pardon had been made to Bishnu Charan Saba. There was, however, no proof that that tender had been accepted by him. Such being the situation it could not be said that there was in existence an effective pardon under section 337 and that its provisions applied to the facts of the present case. Consequently, no question arises about the applicability of section 339 to the proceedings before the Magistrate holding an enquiry before commitment or to the trial of the appellants, because the 1330 provisions of section 339 can only come into operation if there is in existence an effective pardon under section 337 of the Code. In our opinion, on the facts of the present case, there is no foundation for the submission which had been made. Coming now to the circumstantial evidence in the case upon which the High Court relied for upholding the conviction of the appellants, which may be summed up as follows: (1) The evidence clearly established that the appellants were local men who lived or worked not far from Malchand 's shop. They accordingly had the means and the opportunity of knowing the state of things obtaining at his shop at a particular date. (2) The association of the appellants and Sanatan Das immediately prior to the murder. (3) The evidence of their movements towards the direction of Malchand 's shop. (4) The evidence concerning their presence in the shop of Malchand shortly before the latter was murdered. (5) The evidence concerning the appellant Bipin Bihari Sarkar hurrying away from the direction of Malchand 's shop closely followed by the appellant Bishnu Charan Saha. (6) The evidence of injuries on the palms or fingers of the appellants found at the time of their arrest which took place within 24 hours, or shortly thereafter, of the murder. (7) The evidence of the presence of human bloodstains on the shirt of Bishnu Charan Saha and bloodstains on the wrapper of Bipin Behari Sarkar with burnt holes at places where the stains were found. (8) The cash memoes with the signatures of the appellant Bishnu Charan Saha. (9) In the opinion of the doctor the nature of the injuries on Malchand showed that probably he was overpowered by someone first and then another person pressed the weapon against his neck. The matter for consideration is whether the circumstantial evidence, as stated above, is sufficient to prove 1331 that the appellants had participated in the murder of Malchand. Two findings of the High Court may be stated at, this stage before the circumstantial evidence is referred to. One concerned the cash memoes signed by Bishnu Charan Saha and the other concerned the colour of the wrapper worn by Bipin Behari Sarkar when he was seen by Kali Mohan Sarkar, P. W. 7 going away from a place near the shop of Malchand after the murder. The cash memoes bore the date 11 12 56 and not 18 12 56. The High Court gave good reasons for holding that the date 11 12 56 was wrongly entered in these cash memoes after examining the account books of Malchand 's shop and the other circumstances in the case as well as the admission of Bishnu Charan Saha that on December 18, 1956, between 1 30 and 2 p. m. be had caused three cash memoes to be issued in the shop of Malchand. We find ourselves in complete agreement with the findings of the High Court in this respect. The wrapper worn by Bipin Behari Sarkar at the time he was seen by Kali Mohan Sarkar was described by the witness as blue in colour whereas, in fact, the recovered wrapper from the house of this appellant was green in colour. The High Court thought and, in our opinion, rightly that what was in fact green in colour might have appeared to be blue to a witness when seen at night by him. A mistake in describing the colour accurately in the circumstances of the present case did not materially affect the evidence that Bipin Behari Sarkar was wearing a wrapper at the time he was seen at a spot near Malchand 's shop after the murder. Further reference to the wrapper will be made when we consider the case of this appellant. Mohan Lal Sarma, P. W. 4 had stated that at about 8 p.m. on December 18, 1956, he had seen the appellants and Sanatan Das sitting in the latter 's shop. Bishnu Charan Saha was the first to leave the shop. 10 or 15 minutes later, Bipin Behari Sarkar and Sanatan Das left after padlocking Sanatan 's shop. The evidence of this witness had been fully accepted 169 169 1332 by the High Court. Sudhir Ranjan De, P. W. 8 deposed that in the evening of December 18, 1956, at about 7 30 p.m. he had seen Bishnu Charan Saha passing in front of Gostha 's shop which was nearly opposite Malchand 's shop. He had on his body a Sujni Chaddar. 4 or 5 minutes later, Bipin Behari Sarkar and Sanatan Das were seen going in the same direction. The High Court believed the evidence of this witness. It came to the conclusion that on the evidence of Mohan Lal Sarma and Sudhir Ranjan De it was established that at about 8 p.m. the appellants and Sanatan Das were moving towards Malchand 's shop. There was no doubt some discrepancy about the timing but, as was pointed out by the High Court, the witnesses were giving the time approximately and did not purport to give the exact time. Kumud Lal Saha, P. W. 2 deposed that at about 8 30 p.m. on December 18,1956, he saw the appellants and Sanatan sitting with Malchand in the latter 's shop. Malchand was at that time placing cloth for their inspection. The High Court referred to the various criticisms levelled against the testimony of this witness and after dealing with them came to the conclusion that the witness was a truthful witness and that his evi dence established that the appellants were at the shop of Malchand at about 8 30 p.m. and that Malchand was last seen alive with them. The evidence of Khum Chand Bothers, P.W. 3 proved that at about 8 30 p.m. on the night of Malchand 's murder he had called out "Malchand " " Malchand ", but had received no reply. Kali Mohan Sarkar, P. W. 7 proved that at about 8 p.m. on the night in question when he was going home he met the appellant Bipin Behari Sarkar who was going away hurriedly from the direction of the Bazar. On some enquiry made by the witness this appellant stated that he had been pressed by a call of nature. Thereafter, the appellant Bishnu Charan Saha was seen coming behind Bipin Behari Sarkar. Bipin Behari Sarkar had on his person a blue coloured wrapper. The spot at which he had met the appellant Bipin Behari Sarkar was at a distance of about 100 cubits to the south of the passage meant for sweepers 1333 of Malchand 's house. He had heard Bishnu Charan Saha calling out " Hei, Hei " to Bipin Behari Sarkar . The evidence of these witnesses, which had been accepted by the High Court, established that the appellants were seen going in the direction of Malchand 's shop. Thereafter, they were seen with Malchand at his shop. Subsequent to that, Bipin Behari Sarkar was seen going away hurriedly at a place not far from Malchand 's shop followed by Bishnu Charan Saha who was calling out to him " Hei, Hei ". The last time that Malchand was seen alive was in the company of the appellants. The existence of the cash memoes, which were stained with human blood, with the signatures of Bishnu Charan Saha clearly established that at least Bishnu Cliaran Saha must have been present at the time of the murder because the cash memoes were being made out for him and they were stained with human blood which shows that Malchand was murdered while he was handling the cash memoes. It had been further proved that Bishnu Charan Saha had on him certain injuries of which one was an incised injury. The evidence of the doctor was that this injury could have been caused by the same instrument with which the neck injury of Malchand had been caused. It had been further established that the shirt of Bishinu Charan Saha was stained with human blood. The explanation offered by Bishnu Charan Saba for the injuries on his person was not accepted by the High Court and, in our opinion, rightly. Bishnu Charan Saha had stated to the doctor at the time of his examination that injury No. 1 was caused as the result of contact with a grass cutting dao and injuries Nos. 2 and 3 by having drawn his hand over a rough piece of wood, but to the doctor this explanation was unacceptable inasmuch as this appellant was not a left handed person a fact which appeared clear from his formation and development. When examined under section 342 of the Code of Criminal Procedure Bishnu Charan Saha told the Court that 2 days prior to his examination by the doctor lie had been cutting straw for his cattle with his left hand when his daughter aged about 1334 4 came up from behind and pushed him which resulted in the injury to his finger by its contact with the dao and that he had also received injuries on the back of his finger by striking it against a piece of wood. So far as the shirt stained with human blood, which was found on his person at the time of his arrest, was concerned, Bishnu Charan Saha seriously disputed the identity of the shirt. The identity of the shirt, however, had been clearly established. His explanation to the Court was that some of the stains had been caused by betel spit and that one or two might have been caused by some drops of blood falling on the shirt at the time he had sustained his injuries. This explanation was also not accepted by the High Court and, we think, rightly. The evidence therefore established that so far as Bishnu Charan Saha was concerned he was seen in the company of Bipin Behari Sarkar and Sanatan Das near about 8 p. m. He was seen shortly thereafter, as were the other two, going in a direction which was towards the shop of Malchand. He was seen along with the other two persons at the shop of Malchand at about 8 30 p.m. Thereafter, he was seen not far from the shop of Malchand going in the same direction as Bipin Behari Sarkar and calling out to him. The cash memoes at Malchand 's shop had been signed by him. He had injuries on his person consistent with their having been caused while the murder of the deceased took place. The shirt that he was wearing at the time of his arrest was stained with human blood for which he gave no reasonable explanation. In our opinion, the sum total of the evidence against Bishnu Charan Saha established beyond any reasonable doubt that he had participated in the murder of Malchand. Coming now to the case of Bipin Behari Sarkar the evidence against him is the same as against Bishnu Charan Saha about the movements towards the shop of Malchand, presence at the shop of Malchand and being seen going away at a place near the shop of Malchand and the existence of injuries on his person. In addition there was the evidence that a wrapper was seized the next morning after his arrest with marks of 1335 burning round which there were traces of blood. Unlike the case of Bishnu Charan Saba no signatures of his were found on the cash memoes. It is a matter for consideration whether in the case of this appellant ' any reasonable doubt could arise as to his guilt. It was urged that mere movements towards the shop of Malchand, his presence at the shop of Malchand and his being seen going away at a place near the shop of Malchand would not be sufficient circumstantial evidence to convict him. So far as the injuries were concerned the doctor had admitted that they could have been caused by a split bamboo. The doctor had at no time stated that they could have been caused by the same weapon which caused injuries to the neck of Malchand. The existence of the injuries, therefore, was no additional incriminating circumstance from which any conclusion could be drawn against this appellant. So far as the wrapper was concerned, there was no evidence that the burnt marks found on it were not there before December 18, 1956. Although blood stains had been found on this wrapper it had not been established that they were human blood stains. The wrapper was also, therefore, n0 additional incriminating circumstance against this appellant. It is, however, to be remembered that this appellant was with Bishnu Charan Saha and that Malchand was last seen alive in the company of the appellants. The murder of Malchand had already taken place when this appellant followed by Bishnu Charan Saha was seen going away hurriedly at a spot near the shop of Malchand and Bishnu Charan Saha was calling out " Hei, Hei " to him. It is remarkable that this appellant was seen not only at the shop of Malchand but near that shop after he bad been murdered and that he was found to have injuries oil his person when he was arrested at 10 30 p.m. on December 19, 1956. It would be a remarkable coincidence that both he and Bishnu Charan Saha should have injuries on their persons so shortly after the murder. Bipin Behari Sarkar denied ownership of the wrapper. His explanation was not that the burnt marks on the wrapper were there before December 18. 1336 This wrapper had blood stains. They were too small in quantity to enable a Serologist to determine their origin, but it is remarkable that wherever the bloodstains were found on the wrapper an attempt had been made to burn out those marks. Unfortunately, for the appellant, his attempt to burn out the bloodstains on the wrapper was not entirely successful. This was in our opinion, an incriminating circumstance against this appellant. The circumstantial evidence taken as a whole leaves no room for a reasonable doubt in our minds about the guilt of this appellant. In our opinion, the High Court rightly found the appellants guilty under section 302/34 of the Indian Penal Code. It could not be said that the sentence of death for a murder of the kind proved in this case was unduly severe. The appeals are accordingly dismissed. Appeals dismissed.

The two appellants and one other person were accused of committing a murder. The second appellant made a confession before a Magistrate. The police submitted a charge sheet against the three accused. Thereafter the prosecution made a prayer to the sub divisional Magistrate that the second appellant may be tendered a pardon under section 337, Code of Criminal Procedure and the Magistrate recorded an order to the effect that he was tendered a pardon under section 337 on condition of his making a full and true disclosure of the whole of the circumstances within his knowledge. Before the Committing Magistrate the second appellant stated that the confession made by him was not voluntary and that he did not wish to become an approver. The appellants were committed to the Court of Sessions and were convicted of the murder and were sentenced to death. On appeal the High Court confirmed the conviction and sentence. It was contended by the appellants that the second appellant having been tendered a pardon the joint trial of the appellants was vitiated as it was barred by the proviso to section 339(I) Of the Code. Held, that there was no effective pardon under section 337 Of the Code and consequently the provisions of section 339 did not come into operation in this case. A mere tender of pardon does not attract the provisions of section 339 ; there must be an acceptance of the pardon by the accomplice and he must be examined as a witness. It is only after this that section 339 comes into play if the accomplice who has accepted the pardon fails to comply with the conditions on which the pardon was tendered. In the present case though a tender of pardon was made to the second appellant there was no proof that it was accepted by him and as such it could not be said that there was in existence an effective pardon under section 337.

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Civil Appeal No. 90 of 1950. Appeal against the Judgment and Decree dated the 22nd July 1948 of the High Court of Judicature at Calcutta (K. C. Mitter, and K.C. Chunder J J) in appeal from Original Decree No. 49 of 1942 arising 74 574 out of Decree dated the 8th September 1941 of the Subordi nate Judge at Asansole in Suit No. 1 of 1941. Purusottam Chatterji (section N. Mukherjee, with him) for the appellants. Panchanan Ghose, (P. C. Chatterjee, with him) for the respondent. May 4. 'the following judgments were delivered : DAS J. This appeal arises out of a suit filed by the appellants on January 2, 1941, in the Court of the Subordi nate Judge, Asansole. That suit came to be filed in circum stances which may now be stated shortly. A suit had been instituted by one Kumar Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for partition of the Searsole Raj Estate. One Bhagabati Charan Mitra was appointed receiver of that estate in that suit. On August 10, 1908, the said receiver with the permis sion of the Court which had appointed him as receiver grant ed two mining leases, each for 999 years one in respect of 5/16 share of the Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village Marich Kota to a firm then carrying on business under the name and style of Laik Banerjee & Company. On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm. The Malias joined the re ceiver in executing the aforesaid leases and the mortgage. As a result of these transactions the firm of Laik Banerjee & Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors ' interest in the same. By diverse processes not necessary to be detailed, the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga gee under the mortgage of August 10, 1908. 575 On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908. Preliminary decree was passed in the last mentioned suit on ' July 31, 1928, and a final decree for sale was made I on February 26, 1929. In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for ' Rs. 59,000. This sale was confirmed by the Court on June 30, 1931. A large sum remaining still due to Deva Prasanna, he applied for, and on October 30, 1935, obtained a personal decree for Rs. 1,27,179 0 6 against Raja Pramatha Nath Malia who had by inheritance acquired the lessors ' interest and become the borrower. In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja. The exact date of the attachment does not appear from the printed record. The Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case. Negotiations for settlement started and eventually, on January 30, 1937, a petition (exhibit 2) was filed in the exe cuting Court stating as follows : "The judgment debtor having made special requests to the decree holder for an amicable settlement of the aforesaid execution case, the decree holder has agreed to the same. But some time is required to settle the talks and all the terms etc. The judgment debtor has paid to the decree holder the costs of this execution amounting to Rs. 76 14 0, and he having made requests for this execution case being struck off for the present on keeping the attachment in force, the decreeholder has agreed to it. It is, therefore, prayed that under the circumstances aforesaid, the Court may be pleased to strike off this execution case keeping the attachment in force." Neither the original nor a certified copy of the order made on that date by the executing Court on the 576 above petition is forthcoming but the parties have definite ly agreed that the order is substantially and correctly entered in column 20 of exhibit F which is a certified copy of extract from the Register of applications for executions of decrees relating to execution Case No. 118 of 1936. The heading of column 20 is 'Date on which execution case was finally disposed of and purport of final order. " The entry in column 20 under that head is: "D. H. admits receipt of Rs. 76 14/ as costs of this case from the J.D. The execution case is dismissed for non prosecution the attachment already effected in this case continuing. 30th January 1937. " The entry under column 11 of that very exhibit reads as follows : "Claim case automatically drops as the execution case is dismissed. It is, therefore, rejected without any sort of adjudication. 30th January 1937. " In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards. By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja. By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/ within two years from that date. Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons. A creditor, however, had filed a suit under sec tion 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that trans fer as fradulent and void as against the creditors of the Raja 577 An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circum stances, it was considered safer to join the Raja in the last mentioned Kobala in favour of Deva Prasanna. On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder. It was headed "Money Execution Case No. 118 of 1936. The relevant portions of this petition were as follows; "That the above execution case was disposed of on the 30th January 1937 with the attachment of the properties subsisting; since then the decree put into execution in the above case has been adjusted after remission of a large amount of interest by the out and out sale of certain properties by a registered Kobala dated 4th January 1939 . . . . . . . . .So there is no longer any need of the said attachment remaining subsisting. It is, therefore, prayed that the attachment may be withdrawn. " On the same day the following order was made on that petition: " Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money exhibit 118 of 1936 though that case was dismissed. Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead er for the decree holder and pleader of the judgment debtor according to the adjustment mentioned but not detailed in this petition of to day. Make necessary notes and send this petition to the District Record Room. " In the remarks column No. 22 in exhibit F the following entry was made : "The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned 578 pleader for the D.H. and the pleader of the Judgment Debtor according to the adjustment mentioned but not detailed in this petition of to day. Dated 2nd June 1989. " The Raja died in August, 1940, leaving the two appellants as his sons and legal representatives. The Bengal Money Lend ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940. On January 2, 1941, the appellants who, as the legal representatives of the Raja, became "borrowers" within the meaning of the Act filed the suit out of which the present appeal has arisen. The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans actions and taking accounts and for release from all liabil ities in excess of the limits specified by law. In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act. There was also a prayer for reconveyance of the Senapati Mahal. The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar. On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, "for a preliminary hear ing of the suit and particularly of such of the issues as have been based on the pleas in bar." Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows: "Does the plaint disclose a valid cause of action for the suit ?" The appellants preferred an appeal to the High Court at Calcutta. Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in 579 "a suit to which this Act applies" and consequently dis missed the appeal. The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure. Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1). Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub section (5) of section 36. It is quite clear that if either of the two points is decided against the appellants, this appeal must fail. The main provisions of section 36 (1)are in the follow ing terms : "Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act ap plies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the bor rower, it shall exercise all or any of the following powers as it may consider appropriate namely, shall (a) reopen any transaction and take an account between the parties; (b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties; (c) release the borrower of all liability in excess of the limits specified in clauses (t) and (2) of section 30; (d) if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order 580 the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid; (e) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just. " It will be noticed (a) that the provisions of this section apply notwithstanding anything contained in any law for the time being in force, (b) that the powers conferred on the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower. In the present case the borrowers have insti tuted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint. There are, however, two provisions to sub section (1) of section 36. The relevant portion of the second proviso is expressed in the words following: "Provided that in exercise of these powers the Court shall not (i) * * * * (ii) do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or * * * *" The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and ' which was not fully satisfied by January 1, 1939. In the light of the decision of the Full Bench of the 581 Calcutta High Court in Mrityunjay Mitra vs Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy vs Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso. Therefore, the only thing that remains to be ascertained is whether the decrees were passed in "a suit to which this Act applies. " Section 2 (22) of the Act is as follows: "2. In this Act, unless there is anything repugnant in the subject or context" (22) "Suit to which this Act applies "means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro ceeding in execution (a) for the recovery of a loan advanced before or after the commencement of this Act; (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act; or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act. " The words "instituted or filed on or after the 1st day of January, 1939, or pending on that date" have been read and understood as qualifying the words "any suit or proceed ing" in the beginning of the definition as well as the words "proceeding in execution" occurring further down: see per Spens C.J. in Bank of ' Commerce Ltd. vs Amulya Krishna (3). Accordingly, it has (1) I.L.R. 11944) 2Cal. 376; (2) L.R. 76 I.A. 179 at p. 190. (3) ;A.I.R. 1944 F.C. 18. 582 been held in Ram Kumar De vs Abhoya Pada Bhattacharjee (1) that where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro ceeding in execution was started or was actually pending on or after that date it is not a decree in "a suit to which this Act applies"and cannot be reopened. The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari vs Girish Chandra (2)which overruled two earlier decisions to the contrary. The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well founded. In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date. The only question that has therefore, to be consid ered is whether any proceeding in execution was pending on or after that date. The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939. As to (i) It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court. Order XXI, rule 57, is expressed in the following terms : "Where any property has been attached in execution of a decree but by reason of the decree holder 's default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease. " The marginal note of the rule is determination of at tachment. The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray vs Sheikh Saberuddin Ahmad(3) as follows: (1) ; (2) (3) I.L.R. at pp. 421 422 583 "Rule 57 of Order XXI was a new provision introduced in 1908. It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica tion for execution cannot further be proceeded with by reason of the decree holder 's default. This was, and still is, a very common case. The decree holder makes some informal arrangement to give the judgment debtor time with out obtaining full satisfaction of the decree ;the applica tion for execution is not further prosecuted; it is not withdrawn; neither party attends. In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal. The reason why it was necessary to require the Court, if it did not adjourn a proceeding to a definite date, to dismiss the application for execution formally and definitely can be amply illustrated from the decided cases. In the absence of a definite order of dismissal the files of the Courts became encumbered with a number of applications for execution which were water logged and derelict, and a practice arose whereby such applications were ordered to be 'struck off. ' This was a practice not justified by the Code and in cases where attachments in execution had already been entered, the question arose whether the effect of an order 'striking off ' was that the attachment made upon application for execution was itself struck off or whether it remained notwithstanding such an order. Many other awkward and important questions arose out of this practice and the object of rule 57 was to ensure that this illogical and inconvenient practice should be stopped. Applications for execution were to be definitely dismissed if they were not adjourned to a future date. The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and 584 the legislature has provided that it is to fall to the ground. " The new rule thus ' introduced left two distinct courses open to the executing Court in the situation envisaged by the rule. Each course had its advantage as well as its disadvantage. Thus the adjournment of the execution pro ceedings kept the attachment alive without any special direction. While the adoption of this course helped bona fide arrangement between the decree holder and the judgment debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings. On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu lated to discourage decreeholders from giving even reasona ble accommodation to the judgment debtor on account of the destruction of the attachment which left the judgment debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased. It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend ed rule 57 by adding the words "unless the Court shall make an order to the contrary" at the end of the last sentence of that rule. The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree holder. It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order. The rule, as amended, therefore, contemplates three distinct forms of order, any one of which may be made by the Court in the 585 circumstances mentioned in the rule. The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls. It will be recalled that the order of January 30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution Case No. 118 of 1936. Great stress was laid by the learned advocate for the appellants on the words "struck off for the present" occurring in the body of that petition. It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition. In the actual prayer portion the decree holder did not use the words "for the present" but only asked the Court "to strike off the execution case keeping the attachment in force. " Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F. The Court regarded the willingness of the the decree holder to enter into a long and protracted negotiation with the judg ment debtor as evidence of unwillingness on the part of the decree holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non prosecution but thought fit to expressly keep alive the attachment. It is quite obvious that the Court made an order of the third kind mentioned above. The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping. If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all. The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf. The fact that the Court gave an express direction that the attachment should continue clearly indicates that the 586 Court intended to make a final order of dismissal. Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column. The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal. That the claim case was automatically dropped is yet another indication that the execution case was at an end. The fact that the judgment debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci sively, that the execution proceeding was finally disposed of by the order. The following endorsement appears on the petition exhibit 2 (a), dated June 2, 1939: "Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money exhibit 118 of 1936 though that case was dismissed." This endorsement also clearly shows that the Court itself understood that the order that it made on January 30; 1937, was a final order of dismissal and that the attachment had been continued by a special order. On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend ment made by the Calcutta High Court in rule 57. Learned advocate for the appellants contended that if the execution case came to an end the attachment could not be left hanging in the air. There is no substance in this argument. Ordi narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it. But rule 57, as amended, expressly empow ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case. Here the attachment does not, to use the expression of the learned advocate for the appellants, 587 hang in the air. It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make. The continuance of the attachment, in the circumstances, needs no execution proceeding to support it. Take the case of an attachment before judgment. Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re attachment of the property. It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree holder. After the decree is passed, the attachment continues but nobody will say that although there has been no applica tion for the execution of the decree at any time by the decree holder there is, nevertheless, an execution proceed ing pending merely because the attachment continues. Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding. Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed. In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court. As to (ii) Learned advocate for the appellants then contended that the petition (exhibit 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of "a suit to which this Act applies". I do not think this argument is sound. The petition (Ex.2a) was not really an application at all. See Raja Shri Prakash Singh vs The Allahabad Bank Ltd. (1). In substance, it was nothing but a certification by the decree holder of the satisfaction of the decree. The mere fact (1) 33 C.W.N. 267; A.I.R. 1929 P.C. 19, 588 that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement. It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded. The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled. In my judgment, that petition (exhibit 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act. For reasons stated above, the decrees sought to be reopened were not decrees made in "a suit to which this Act applies". Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date. The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act. This conclusion is sufficient to dismiss this appeal and it is not necessary for us to consider the other question raised by the respondent on the strength of section 36 (5) of the Act and I express no opinion on that question. The result is that this appeal must stand dismissed with costs and I order accordingly. KANIA C.J. I agree. PATANJALI SASTRI J. The facts bearing on the dispute in this appeal are fully stated in the judgment of ray brother Das which I have had the advantage of reading and it is unnecessary to recapitulate them here. 589 The appellant mortgagor seeks in these proceedings the reliefs provided by the Bengal Money lenders Act, 1940 (hereinafter referred to as the Act) in respect of a decree debt payable by him. The respondent who represents the sub mortgagee decree holder invokes the protection of two exemptions contained in the Act: (1) Section 86 (1), proviso (ii), which exempts inter alia "any decree other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939". This raises a dispute as to whether the respondent 's decree was passed in a suit to which the Act applies. (2) Section 36 (5) which exempts "the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide and that he had not received the notice re ferred to in clause (a) of sub section (1) of section 28". This raises the question whether a sub mortgagee is an assignee within the meaning of the Act. On the first question "a suit to which this Act applies" is defined in section 2 (22) as meaning "any suit or pro ceeding instituted or filed on or after the 1st day of Janu ary, 1939, or pending on that date and includes a proceeding in execution for (among other things) the recovery of a loan advanced before or after the commencement of this Act. " This definition has been construed as requiring that the "pro ceeding in execution "referred to therein should be pending on 1st January, 1939, and the question accordingly arises whether the order of the executing court dated 30th January, 1937, which purported to dismiss the respondent 's execution case for non prosecution while continuing the attachment already effected, terminated the proceeding in execution which had resulted in the attachment. It was said that the order was made in accordance with Order XXI, rule 57, of the Civil Procedure Code as amended by the Calcutta High Court and must, therefore, be taken to have been intended to put an end to the execution proceeding altogether. I am not satisfied that such was the result of the dismissal. The amendment which added the words "unless the court shall make an order to the contrary" 200 at the end of the rule envisages a dismissal of an "applica tion for execution" while at the same time continuing a subsisting attachment. The dismissal of 30th January, 1987, must, therefore, be taken to be a dismissal of the execution application then before the court and cannot be taken to have any wider operation. On the other hand, the continu ance, in express terms, of 'the attachment notwithstanding the dismissal, indicates that the proceeding which had resulted in the attachment was kept alive to be carried forward later on by sale of the attached property. Attachment itself is a "proceeding in execution" and, so long.as it subsists, the proceeding in execution can well be regarded as pending. In In re Clagett 's Estate; Fordham vs Clagett (1) Jessel M.R. declared that "a pending matter in any court of justice means one in which some proceeding may still be taken". The attachment was cancelled by the court only on 2nd June, 1939, when the decree in question was recorded as adjusted and then, and not before, could execu tion of the decree be properly considered to have terminat ed. In this view, a "proceeding in execution" was pending on the 1st day of January, 1939, and the respondent 's decree must be taken to have been passed "in a suit to which this Act applies ' ', with the result that the respondent 's claim to exemption under proviso (ii) to sub section (1) of sec tion 36 of the Act must fail. I am, however, of opinion that the respondent 's claim to recover his decree debt is protected under section 36 (5). There is no question here but that the submortgage to the respondent 's predecessor in title was bona fide. Nor could he have received the notice referred to in clause (a) of ' sub section (1) of section 28 as the transaction took place long before the Act was passed. It is not disputed that section 36 (5) applies to pre Act debts. [See Renula Bose vs Manmatha Nath Bose(2)]. The only question, therefore, is whether the respondent as sub mortgagee is an assignee within the meaning of sub section (5) of section 36. The learned (1) (2) L.R. 72 I.A. 156, 591 Judges in the court below held that he was not, following an earlier decision of their own court in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(1). That decision, however, was reversed by the Privy Council in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(2) where their Lordships dealt with the question now before us in the following terms : "It was suggested, in the judgment of Mitter J. (with which Waight J. agreed), and in the argument for the re spondents that if a sub mortgagee were an `assignee ' within section 36, sub section (5), of the Act. , certain difficul ties and anomalies would result. Their Lordships cannot agree with this suggestion. They express no view as to the position which arises if the sub mortgage contains only a charge on the original mortgage debt, but when it contains an assignment of that debt, and of all the rights of the mortgagee, the position appears to be free from difficulty. Relief can be given to the original mortgagor as against the original mortgagee under section 36, but such relief must not affect the rights of the assignee by way of sub mort gage. To take an imaginary case by way of illustration, let it be assumed that the amount due on the original mortgage, for principal and interest at the original rate, is Rs. 1,000, and the sum due on the sub mortgage by assignment, for principal and interest at the original rate, is Rs. 500. Let it further be assumed that if relief could be given, and were given, under section 36 as against both mortgagee and sub mortgagee, the sums due to them respectively would be Rs. 800 and Rs. 400. By reason of sub section (5), the sub mortgagee 's rights cannot be affected. He can therefore, as assignee of the mortgage debt: claim his full Rs. 500, as against both mortgagor and original mortgagee. But if the court gives the mortgagor relief as against the original mortgagee, the mortgagor will only be liable to pay to the original mortgagee Rs. 300, the balance of the reduced debt after paying the sub mortgagee in full. As to contention (b), it is impossible to read subsec tion (5) of section 36 as referring only to an assignee (1) (2) L.R. 76 I.A. 74. 592 of a mortgage decree. The words and that he had not received the notice referred to in clause (a)of subsection (1) of section 28 make it plain that an assignee of a mortgage debt is within the sub section, since section 28, sub section (1) is concerned only with assignment of debts" (pp. 83 84). The sub mortgage here in question also contains an assignment of the debt due under the original mortgage debt and of "the entire interest" of the original mortgagee. After reciting their original mortgage, the mortgagees proceed to state in the deed of sub mortgage: "We mortgage all that is at present due and that will in future become due to us, the first, second, third and fourth parties, on account of the said one lakh of rupees together with interest and the entire interest under the mortgage taken by us on the basis of the said Indenture in respect of five annas share of the said Niskar Mouza Mono harbahal and in respect of sixteen annas of the surface and underground rights in the said Mouza Marichkota and we make over the said Deed of Indenture to you". The decision referred to above is, therefore, directly in point and rules the present case. It was suggested that the said decision was inconsist ent with the earlier decisions of the same tribunal in Ram Kinkar Banerjee vs Satya Charan Srimani(1) and Jagadamba Loan Co. vs Raja Shiba Prasad Singh(2). Stress was laid upon the expression "all the rights of the mortgagee" used by their Lordships in the passage quoted above, and it was pointed out that in the earlier decisions they held that in India a legal interest remained in the mortgagor even when the mortgage was in the form of an English mortgage, and that the interest taken by the mortgagee was not an absolute interest. This proposition, it was said, implied that in a sub mortgage all the rights of the original mortgagee are not assigned to the sub mortgagee and that the mortgagee still retains a legal (1) 64 I.A. 50. (2) 68 I.A. 67. 593 interest in the original mortgage. This is a rather super ficial view of the matter. In the earlier cases their Lordships were considering the quantum of interest trans ferred by a mortgagor to a mortgagee in a mortgage of leasehold interest for the purpose of determining whether or not there was privity of estate between the landlord and the mortgagee. If the mortgage could operate as an assign ment of the entire interest of the mortgagor in the lease, the mortgagee would be liable by privity of estate for the burdens of the lease. If on the other hand, it operated only as a partial assignment of the mortgagor 's interest, no such result would follow. It was in determining that issue that their Lordships held that no privity of estate arose in India because a legal interest remained in the mortgagor and the interest taken by the mortgagee was not an absolute interest. These cases had no bearing on the question, which arose in Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya (1) and arises in the present case, as to whether a sub mortga gee becomes an assignee of the mortgage debt and of the mortgagee 's right to recover the debt from the original mortgagor. The Act affords relief to certain classes of debtors by curtailing pro tanto the rights of the creditors, subject to certain exceptions in regard to "assignments of loans". In such a context the only relevant consideration could be whether the assignment is such as to establish a debtor and creditor relation between the assignee and the debtor so as to bring the case within the purview of the Act. If the sub mortgagee obtained, by virtue of the sub mortgage, the right to sue the original mortgagor for recov ery of the mortgage debt, that would seem sufficient to make him an assignee within the meaning of the Act. It was from this point of view that the question as to the nature of the right transferred to a sub mortgagee under his sub mortgage was considered in Promode Kumar Roy vs Nikhil Bhusan Mukho padhya(1) as it has to be considered in the present case, and the reference to the sub mortgage containing an assign ment of all the rights (1) 76 I,A. 74. 594 of the mortgagee must, in that context, be understood with reference to the sufficiency of the right assigned to enable the sub mortgagee to sue the original mortgagor in his own right, so as to bring the relevant provisions of the Act into play as between them. The reservation made by their Lordships in the case of a sub mortgage containing only a charge on the original mortgage is significant and supports this view. I do not consider, therefore, that there is any inconsistency between Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya(1) and the earlier decisions, and even if there be any such inconsistency it has no relevance to the present case. In the result I agree that the appeal fails and should be dismissed with costs. Appeal dismissed.

A decree on a mortgage was passed in a suit brought by the representatives in interest of a sub mortgagee in 1929 and a personal decree for recovery of the amount remaining due after the sale of the mortgaged properties was passed in 1935. In 1936 the decree holder started execution of the personal decree and attached certain properties of the judgment debtor. The decree holder filed a petition on January 30, 1937, praying that the execution case "may be struck off for non prosecution, keeping the attachment in force" in view of certain negotiations for amicable settle ment, and the court passed an order that the execution case "is dismissed for non prosecUtion, the attachment 573 already effected continuing". On June 2, 1939, the decree holder filed a petition stating that the decree had been adjusted and attachment may be withdrawn. The Bengal Money lenders Act came into force on September 1, 1940, and on January 2, 1941, the legal representatives of the judg ment debtor filed a suit under section 36 of the Act praying for re opening the transactions. The question being whether any proceeding for execution was pending on or after January 1, 1939, within the meaning of the definition of "a suit to which this Act applies" contained in section 2 (22) of the Bengal Money lenders Act: Held, per KANIA C.J. and DAs J. That the order of January 30, 1937, was in form and in substance a final order of dismissal of the execution petition of 1936. The attach ment continued not because there was a pending execution proceeding but because a special order for continuing the attachment was made under O. 21, r. 57 of the Civil Proce dure Code as amended by the Calcutta High Court, and not withstanding the fact that the attachment was continued there was no execution proceeding pending on January 1, 1939, and accordingly the decree sought to be reopened was not one passed in "a suit to which the Act applies" within the meaning of section 2 (22) of the Act and the Court had no power to re open the transactions under section 36 (2). The petition of June 2, 1939, was also not a proceeding for execution but a mere certification by the decree holder of satisfaction of the decree. PATANJALI SASTRI J. The continuance of the attachment notwithstanding the dismissal of the execution petition, indicated that the proceeding which had resulted in the attachment was kept alive to be carried forward later on by sale of the attached property. Attachment itself is "a proceeding in execution" and so long as it subsists, the proceeding in execution can well be regarded as pending. In this view a proceeding in execution was pending on January 1, 1939, and the decree must be taken to have been passed in "a suit to which this Act applies ". But inasmuch as the sub mortgage to the respondent 's predecessor in title was bona fide and he obtained by virtue of the sub mortgage the right to sue the original mortgagor for recovery of the mortgage debt, the decree holder was a bona fide assignee and his claim for the entire decree debt was protected by section 36 (5) of the Act. Renula Bose v, Manmatha Nath Bose (L.R. 72 I.A. 156), Promode Kumar Roy vs Nikhil Bhusan Mukhopadhya (50 C.W.N. 407) and Prom ode Kumar Roy vs Nikhil Bhusan Mukhopadhya (L.R. 76 I.A. 74) referred to.

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ivil Appeal No. 480 of 1986. From the Judgment and Order dated 10.7.85 of the Madhya Pradesh High Court in Misc. Petition No. 1235 of 1984. D.N. Mukherjee and Ran jan Mukherjee for the Appellant. S.S. Khanduja, Yashpal Dingra and Baldev Kishan for the Respondents. The Judgment of the Court w. as delivered by 146 K. JAGANNATHA SHETTY, J. This appeal by leave from a judgment of the M.P. High Court concerns the scope of Sec tion 415 of the M.P. Municipal Corporation Act, 1956 ( 'the Act ' for short). The circumstances can be shortly stated. Within the Jabalpur Municipal Corporation limits, there is a 'Mandi ' established under the M.P. Krishi Upaj Mandi Adhiniyam, 1973 ( 'Adhiniyam ') covering an area of 55 acres. It is enclosed by high boundary wall and is under the con trol and jurisdiction of the Krishi Upaj Mandi Samithi or otherwise called the Market Committee. Under Section 7 of the Adhiniyam, the market Committee is a body corporate with power to provide facilities for regulation of buying and selling of agricultural produce and establishment of proper administration of the market. Section 7(3) of the Adhiniyam provides that notwithstanding anything contained in any enactment for the time being in force, every market commit tee shall for all purposes, be deemed to be a 'local author ity '. Inside the Mandi, the market committee appears to have constructed office buildings, shop complexes, godowns, market yards, shades and other buildings. The Jabalpur Municipal Corporation assessed property tax in respect of the buildings within the Mandi area and also demanded safai tax, water tax, electricity charges, development charges for the years 1980 81 to 198384. The market committee has re fused to pay the same and claimed that the corporation has no jurisdiction to levy and collect such taxes or charges. The Corporation did not agree with that claim and initiated proceedings to recover the dues. Challenging the action taken, the Market Committee moved the High Court under Article 226 of the Constitution for quashing the recovery proceedings. The High Court following an earlier decision arising under Section 334 of the M.P. Municipalities Act, 1961, allowed the petition and quashed recovery proceedings. The High Court also directed the Corporation to take steps in accordance with Section 4 15 of the Act for resolving the dispute with the market committee. The order of the High Court reads as follows: "Section 415 of the M.P. Municipal Corporation Act, 1956 provides for adjudication of disputes between the Corpora tion and local authorities by the State Government on a reference made to it for this purpose. The corresponding provision in the M.P. Municipalities Act, 1961 is Section 334. In a similar situation, where recovery proceedings had been commenced against a Krishi Upaj Mandi Samiti, like 147 the petitioner, by the Municipal Council, Gadarwara, a Division Bench in Misc. Petition No. 994 of 1981 (Jawahar Krishi Upaj Mandi Samiti, Gadarwara and another) decided on 5.6.1983 quashed the recovery preceedings and directed the Municipal Council to take steps under section 334 of the M.P. Municipalities Act, 1961 for adjudication of the dis pute between itself and the Krishi Upaj Mandi Samiti. Since section 415 of the M.P. Municipal Corporation Act, 1956 is in pari materia with section 334 of the M.P. Municipalities Act, 1961 that decision has to be followed. Consequently, this petition is allowed. The pending recovery proceedings against the petitioner are quashed and the respondent Municipal Corporation, Jabalpur is directed to take steps in accordance with section 4 15 of the M.P. Municipal Corporation Act, 1956 for resolving its dispute with the petitioner. The parties shall bear their own costs. " In this appeal, the Municipal Corporation, Jabalpur has challenged the validity of the above order. Before us, the core of the argument of learned counsel for the appellant is that the Market Committee is not a local authority either under the Municipal Corporation Act, or under the M.P. General Clauses Act, 1957. It has been declared to be a local authority only for purposes of the Adhiniyam and that declaration could not be relevant for the purpose of Section 415 of the Act. The Market Committee unless it falls within the definition of 'local authority ' under the M.P. General Clauses Act, 1957, the dispute under Section 415 of the Act could not be referred to the Govern ment. Counsel also referred to us the various provisions of the Act which confer power on the Corporation to levy and collect taxes and charges. Indisputably, the respondent is not a local authority as defined under M.P. General Clauses Act, 1957. Section 2(20) of the said Act defines 'local authority ' to mean "a munici pal corporation, municipality, local board, Janapad Sabha, village panchayat, or other authority legally entitled to, or entrusted by the Government with the control of manage ment of a municipal or local fund. " Counsel for the respond ent however, strongly relied upon Section 7(3) of the Adhi niyam which provides that the Market Committee shall be deemed to be a local 148 authority notwithstanding anything contained in any other enactment. It seems to us that it is not necessary to express any opinion on this controversy and even if we assume in favour of the respondent that it is a local authority without deciding, the recovery proceedings could not have been quashed by the High Court. And the Corporation could not have been directed to refer the dispute to the Government under Section 415 of the Act. Section 4 15 of the Act reads: "Disputes between Corporation and local authorities: If any dispute arises between the Corporation and any local authority as regards anything done or to be done under this Act, it shall be referred to the Government for decision and such decision may include an order as to costs of any en quiry ordered by the Government, and shall be final. Provided that it shall be competent to the Corpora tion and the local authority to agree in writing that any such dispute shall, instead of being referred to the Govern ment for decision, be referred to the decision of an arbi trator or arbitrators appointed under the , or to a civil court under Section 20 of the Code of Civil Procedure, 1908. " The Section is clear and provides that the disputes arising between the Corporation and local authority as regards anything done or to be done under the Act, shall be referred to the Government for decision. It shall be compe tent also to the Corporation and local authority to agree in writing that any such dispute shall, instead of being re ferred to the Government be referred to the decision of an arbitrator under the or to a civil court under Section 20 of the Code of Civil Procedure. The assess ment of tax or demand of any fees by the Corporation under the provisions of the Act could fall within the term "any thing done or intended to be done under the Act" as provided under Section 415. Even refusal of the Corporation to con sider the objections against assessment and recovery of tax or fees could also be considered as "anything done or in tended to be done under the Act". The question however, is whether it would be obligatory for the Corporation in the event of the local authority refusing to pay taxes or fees to approach the Government or refer the dispute 149 to the Government for decision? The answer to the question should be in the negative. Section 4 15 does not provide that the Corporation has to move the Government when the local authority has refused to pay the tax or fees levied and demanded. There are also no rules framed by the Govern ment regulating the exercise of power under the Section and at any rate our attention has been drawn to no statutory rules framed under the section. The High Court however, has followed its earlier deci sion arising under Section 334 of the Municipalities Act. There the dispute arose between the Gadarwara Municipal Council and Mandi Samiti Gadarwara as to the authority of the former to collect takes and charges from the latter. The Mandi Samithi was an authority constituted like the present Market Committee under Section 7 of the Adhiniyam and func tioning within the Municipal limits. It challenged the recovery proceedings initiated by the Municipal Council and moved the High Court for appropriate relief under Article 226 of the Constitution. The High Court quashed the recovery proceedings and directed the Municipal Council to approach the Government under Section 334 of the Municipalities Act to resolve the dispute. This decision, we think, overlooks the plain terms of Section 334 and even otherwise it is not relevant for operation of Section 415 of the Act. Section 334 of the M.P. Municipality Act, 1961 reads: "Dispute between Council and other local body: (1) In the event of any dispute arising between a Council and any other local authority established under any State Act on a matter in which they are jointly interested, such dispute shall be referred to the State Government, whose decision shall be final. " Under this Section the State Government has framed rules called "Madhya Pradesh Municipalities (Regulation of Rela tions between Councils and other local Authorities) Rules, 197 1". Rules 2 and 3 are in these terms: "Rule 2. Whenever a Council and any other authority are jointly interested in any matter, such matter shall be settled amicably between them and where they do not come to a mutual agreement, the matter shall be referred to the Collector. 150 Rule 3. The Collector shall then arrange a joint meeting of the Council and Local Authority and manage to bring about an amicable settlement. " The rules thus provide that the dispute in which the Council and local authority are jointly interested in any matter, but not possible to settle the dispute mutually, the matter shall be referred to the Collector. The Collector shall try to bring about an amicable settlement by arranging a joint meeting of both the authorities. Rules 4 and 5 are also relevant in this context and may be read: "Rule 4. If the talk for amicable settlement fails, the Collector shah persuade the Council and the local authority to agree in writing to refer the matter to an arbitrator or arbitrators appointed under the and if they agree, the matter shall be referred to such arbitrator or arbitrators, as the case may be. Rule 5. When the Council and local authority do not agree to refer the matter to arbitration the Collector shall refer the matter to the State Government with his comments on it and the decision of the State Government shall be final. " Under Rule 5, it would be for the Collector to refer the matter to the Government with his comments, and not for the Municipal Council to approach the Government. By comparing the provisions of Section 415 of the Act with Section 334 of Municipalities Act, it will be seen that the structure of the former is different from the latter. Section 4 15 speaks of dispute between the Corporation and local authority as regards anything done or to be done under the Act. And such a dispute shall be referred to the Govern ment for decision. Section 334 refers to a dispute on a matter in which the Municipal Council and local authority are jointly interested and it states that such dispute shall be referred to the State Government for decision. Section 334 does not refer to the dispute as regards "anything done or to be done under the Act. " Section 415 does not speak of any dispute in which the Corporation and the local authority are jointly interested. Secondly, there are no rules framed for operation of Section 415 of the Act. In view of these differences the view taken by the High Court. That the Corporation must take steps to resolve the dispute cannot be justified. It has apparently no support 151 either from the terms of Section 4 15 or from any rules framed for the purpose. In the result, we allow the appeal and reverse the judgment of the High Court. In the circumstances of the case, there will be no order as to costs. T.N.A. Appeal allowed.

The appellant Corporation assessed property tax in respect of buildings belonging to the respondent Market Committee, which refused to pay the same. Proceedings were commenced for recovery of the dues. The respondent moved the High Court under Article 226 of the Constitution for quash ing the recovery proceedings. The High Court following its earlier decision arising under Section 334 of the M.P. Municipalities Act, 1961 allowed the petition, quashed the recovery proceedings and directed the Corporation to refer the dispute to the Govern ment under Section 415 of the M.P. Municipal Corporation Act, 1956. Aggrieved by the aforesaid decision, the Corporation, appealed to this court. Allowing the appeal, this Court, HELD: 1. The assessment of tax or demand of any fees by the Corporation under the provisions of the M.P. Municipal Corporation Act, 1956 could fail within the term "anything done or intended to be done under the Act" as provided under Section 415 of the Act. Even 145 refusal of the Corporation to consider the objections against assessment and recovery of tax or fees could also be considered as "anything done or intended to be done under the Act". But section 415 does not provide that the Corpora tion has to move the Government when the local authority has refused to pay the tax or fees levied and demanded. [148GH; 149A] 2. The structure of section 415 of the M.P. Municipal Corporation Act, 1956 is different from section 334 of the M.P. MuniCipalities Act; 1961. Section 415 speaks of dispute between the Corporation and local authority as regards anything done or to be done under the Act. And such a dis pute shall be referred to the Government for decision. Section 334 refers to a dispute on a matter in which the Municipal Council and local authority are jointly interested and it states that such dispute shall be referred to the State Government for decision. Section 334 does not refer to the dispute as regards "anything done or to be done under the Act. " Section 415 does not speak of any dispute in which the Corporation and the local authority are jointly inter ested. There are no rules framed for operation of section 415 while under section 334 the State Government has framed Rules. In view of these differences the view taken by the High Court that the Corporation must take steps to resolve the dispute cannot be justified. It has apparently no sup port either from the terms of section 415, or from any rules framed for the purpose. Therefore, the recovery proceedings should not have been quashed by the High Court. And the Corporation should not have been directed to refer the dispute to the Government under section 415 of the M.P. Municipal Corporation Act, 1956. [150F H; 151A] Jawahar Krishi Upaj Mandhi Samiti Gadarwara & Anr. vs Municipal Committee Gadarwara & Anr. Petition No. 994 of 1981 decided by the M.P. High Court on 5.5.1983, distin guished.

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ivil Appeal No. 322 of 1973. From the Judgment and Order dated 4.12.1970 of the Madhya Pradesh High Court in First Appeal No. 90 of 1962. Awadh Bihan Rohtagis Vivek Gambhir and S.K. Gambhir for the Appellants. U.R. Lalit and G.B. Sathe for the Respondents. The Judgment of the Court was delivered by 762 K. RAMASWAMY, J. 1. This appeal by special leave by the legal representatives of the plaintiff, Bhikubai, arises from decision in First Appeal No. 90/62 of the High Court of Madhya Pradesh, Indore Bench, dated July 18, 1982 reversing the decree of the trial court in O.S. No. 29/51 filed for possession and mesne profits of two houses, Nos. 88 of 89 situated at Nandlalpura, Indore City, mentioned in the plaint 'schedule. In this appeal, we are only concerned with House No. 88 as the parties have settled their dispute regarding to the other house. The admitted facts are that one Hariba Bhagwat of Mouza Pisore village had a son by name Appaji and a daughter Bajabai. Appaji in turn had a son by name Rakhmaji and a daughter Bhikubai (the plaintiff). Bajabai was married to Ganpatrao Page of Madhavagoan vil lage. As they were issueless they adopted Rakhmaji. Both the villages are situated in Ahmednagar District of Bombay Province. They are Dhangars (Shepard) by caste. All of them migrated to Indore. Rakhmaji died in 1918 and Sonubai his childless widow succeeded to the two houses and other properties as limited owner. She gifted House No. 88 to Shankar Lanke, a brahmin, first defendant by a registered gift deed dated October 31, 1944 under Ex DI 5. Shankar Lanke in turn hypothecated House No. 88 to Hiralal, fifth defendant/first respondent on September 21, 1948 under Ex 5 D3. Sonubai died on March 11, 1949. Rakhmaji was the natural brother of Bhikubai, but by operation of law namely adoption, he became her father 's sister 's son, i.e. a band hu. The case of the plaintiff was that the family is gov erned by the Bombay School of Hindu Law wherein female bandhu is an heir and thereby she was entitled to succeed to the estate of Rakhmaji. Sonubai, as limited owner, had no power to dispose of the properties by way of gift and so the gift deed and the mortgage are void and do not bind her. The respondents are in unlawful possession as trespassers. The suit was resisted by the first defendant, the donee, on diverse grounds. The material defence relevant for the disposal of this appeal is that the persons concerned are governed by the Banaras School of Hindu Law under which a female bandhu is not an heir, Hiralal 's case was that the mortgage was for consideration and that he had no objection to hand over the possession of the property provided the consideration of Rs. 12,000 borrowed by Shankar Lanke was paid to him. The trial court framed as many as 14 issues with sub issues on each count. It found on issue No. 6a, which is material for the purpose of this case, that the parties are governed by the Bombay School, and not the Banaras School, of Hindu Law; the plaintiff is the heir of Rakhmaji as his mother 's brother 's daughter, and though the consi 763 deration was paid under the mortgage obtained by Hiralal, it was not taken after due inquiry about existence of legal necessity and in good faith. The gift deed was declared void and does not bind the plaintiff. The plaintiff was held entitled to possession and mesne profits. The claim for refund of the mortgaged money was rejected. Accordingly, the suit was decreed. Hiralal and another filed the appeal. Shankar Lanke did not file any appeal. It was contended before the High Court that the plaintiff 's family belonging to Dhangar caste were migrants from U.P. (Mathura) to Auran gabad from where they had further migrated to Central Prov ince (now Madhya Pradesh). They are governed by the Banaras School of Hindu Law. There is no proof that they abandoned the personal law, namely, Banaras School of Hindu Law, and adopted Bombay School of Hindu Law. This contention found favour with the Hindu Court, which relief upon the statement made in Indore State Gazette of 193 1 at page 20, wherein it was claimed to have been recorded that Holkars belonged to Dhangar caste and it would appear that they were originally residents of the country side around Mathura and they mi grated to Aurangabad District and thereafter Phaltan Parga na. At page 90, it was mentioned about Dhangars in general and that in Indore Shepard caste was the ruling family. Many of the Dhangars were Shivail 's trusted Maoles used for Gureilla warfare. In domestic life as also in language, dress and food they closely resemble the Marathas, though in the caste scale their position is lower. Their deity is Khandoba. The High Court also found that the parties, name ly, Rakhmaji 's father and Ganpatrao Page were residents of Ahmednagar District. Their family God is Malhar Jijori, which is situated in the District of Poona. They migrated from Maharashtra to Indore. This finding is based on the evidence of, not only the plaintiff (PW 4), but also the admission made by the defendant No. 1 and his witness, D.W. No. 8 Placing reliance solely on the recital in the Indore State Gazette, it was concluded that the parties had migrat ed from Mathura and thereby they are governed by the Banaras School of Hindu Law, under which the female Bandhu is not an heir to succeed to the estate of the last male holder. Alternatively, it also found that even applying the Bombay School of Hindu Law (Mitakshara), the plaintiff had not established that she was an heir to Rakhmaji. Accordingly, the appeal was allowed. At the outset, it is made clear that neither Hiralal, nor Shankar Lanke pleaded that the plaintiff or her ances tors had migrated from Mathura and settled down in Ahmedna gar District. The specific plea of the plaintiff in para graph 5 of the plaint that they were original residents of Ahmednagar District was not disputed. Hiralal 764 did not also plead that the Banaras School of Hindu Law would apply to the plaintiff 's family. Shankar Lanke vaguely pleaded this but adduced no evidence in proof thereof. Both the Courts have concurrently found that the plaintiff, Rakhmaji, and Ganpatrao Page are Dhangars by caste; their family God is Khandoba of Jijori; their manners and customs were also of Maharashtrian, vide D.W. 8 Khsumrao; and the High Court also further found that, "Undoubtedly true that the customs, manners, marriages and the way they worship the God are all the same as that of Maharashtrians or of the Marathas. " But the customs, dress, language and manners may not by themselves show that person migrating from Mathura has given up the law of origin, though they are relevant facts. It must also be proved that in a particular case that they have given up their law of origin, i.e. the Banaras School of Hindu Law, and adopted the law of domicile, i.e. the Bombay School of Hindu Law. Accordingly, it was held that the parties are governed by the Banaras School of Hindu Law. Migration is changing one 's abode, quitting one 's place of abode and settling permanently at another place. The burden of proving migration lies on the person setting up the plea of migration. As seen the respondents neither pleaded nor proved that the plaintiff 's family migrated from Mathura to Ahmednagar in Bombay Presidency. When the plain tiff was examined as a witness no attempt Was made to elicit from her that they or their ancestors were migrants from Mathura and settled down in Ahmednagar. On the other hand the specific plea of the plaintiff in her plaint that they were the original residents of Ahmednagar District remained undisputed. In Hindu Law by Raghavachariar, 8th Edition, 1987 edited by Prof. section Venkataraman who was himself an authority on Hindu Law, in paragraph 32 stated that a fami ly 's original place of abode can be inferred from the Chief characteristics of the family. In Keshao Rao Bapurao & Anr. vs Sadasheorao Dajiba, AIR 1938 Nagpur 163. Vivian Bose, J., as he then was, held that wherever a family is found cling ing to its individuality and retaining its identity as Maharashtrian, it must be presumed until the contrary is shown that it hailed from the race of group of people known as Maharashtrians and carried the law of Maharashtra with them. Thus, it is clear that migration cannot be presumed but it must be established by abduction of evidence. The question then arises is whether the recital in Indore State Gazette relied on, at the appellate stage, can form the sole base to establish that the plaintiff 's family were the migrants from Mathura in U.P. Section 37 of the Evidence Act, 1872 postulates that any statement made in a Government Gazette of a public nature is a relevant fact. Section 57(13) declares 765 that on all matters of public history, the Court may resort for its aid to appropriate books or documents of reference, and Section 81 draws a presumption as to genuineness of Gazettes coming from proper custody. Phipson on Evidence, The Common Law Library (Thirteenth Edition) at page 510 paragraph 25.07 stated that the Government Gazettes . , . . are admissible (and sometimes conclusive) evidence of the public, but not of the private matters contained therein. In Rajah Muttu Ramalinga Setupati vs Perianayagum Pillai, [1873 74] L.R. 1 IA 209 at p. 238 the Judicial Committee, while considering the reliability of a report sent by the District Collector to the Commissioner about the management of a temple, held that when the reports express opinions on the private rights of parties, such opinions are not to be regarded as having judicial authority or force. But being the reports of public officers made in the course of duty, and under statutory authority, they are entitled to great consideration so far as they supply infor mation of official proceedings and historical facts, and also in so far as they are relevant to explain the conduct and acts of the parties in relation to them, and the pro ceedings of the Government rounded upon them. Same view was reiterated in Martand Rao vs Malhar Rao, [1927 28] L.R. 55 IA 45 at 48 on the question of reliability of official reports relating to succession to a Zamindari, and held that "their Lordships consider it necessary at the outset to point out that, though such official reports are valuable and in many cases the best evidence of facts stated therein, opinions therein expressed should not be treated as conclu sive in respect of matters requiring judicial determination, however, eminent the authors of such reports may be. In Arunachellam Chetty vs Venkatachellapathi Guru Swamigal, [1919] L.R. 46 IA 204 it was held that while their Lordships do not doubt that such a report (Inam register) would not displace actual and authentic evidence in individual cases; yet the Board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam register. This view was followed by this Court in Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors., ; at p. 788. Same is the view expressed in The Poohari Fakir Sadavarthy of Bomdilipuram vs The Commissioner, Hindu Religious & Charitable Endowments, [1962] Suppl. 2 SCR 276 and held that Inam register is of great evidentiary value but the entries cannot be accepted on the face value without giving due consideration to other evidence on record. In Mahant Shri Srinivasa Ramanuj Das vs Surajnarayan Dass & Anr., [1966] Supp. SCR 436 at p. 447 relied on by Shri Lalit, learned senior counsel for the respondents, it was held that the statements in the Gazetteer can be consulted on matters of public history. This is also 766 the case relating to entries in Inam Register. Inam Fair Registers are maintained while exercising the statutory power and the entries were made in the relevant columns during the course of discharging official duties and so they are entitled to weight and great consideration, while as sessing the evidence. Therefore, this Court did not lay any rule contrary to what has been laid by the Judicial Commit tee or by this Court in the decisions referred to hereinbe fore. The Statement of fact contained in the official Gazette made in the course of the discharge of the official duties on private affairs or on historical facts in some cases is best evidence of facts stated therein and is enti tled to due consideration but should not be treated as conclusive in respect of matters requiting judicial adjudi cation. In an appropriate case where there is some evidence on record to prove the fact in issue but it is not suffi cient to record a finding thereon, the statement of facts concerning management private temples or historical facts of status of private persons etc. found in the Official Gazette may be relied upon without further proof thereof as corrobo rative evidence. Therefore, though the statement of facts contained in Indore State Gazette regarding historical facts of Dhangars ' social status and habitation of them may be relevant fact and in an appropriate case the Court may presume to be genuine without any further proof of its contents but it is not conclusive. Where there is absolutely no evidence on record in proof of the migration of the family of the plaintiff or their ancestors from Mathura area, the historical factum of some Dhangars having migrated from U.P. and settled down in Aurangabad District or in the Central Province by itself cannot be accepted as sufficient evidence to prove migration of the plaintiff family. Further no evidence was placed on record connecting Holkars of Indore with Dhangars of Bombay Province. Shri Lalit, learned counsel, admits that the statement of facts of Dhangars contained in Indore State Gazette is not conclusive evidence but he says that it may be taken into account as evidence connecting the family of the plaintiff. In the absence of any evidence proving migration of the family of the plain tiff or their ancestors from Mathura to Ahmednagar, the historical factum of the migration of Dhangars from U.P. State mentioned in Indore State Gazette is of little assist ance to the respondents so as to hold that they carried with them to Indore the Banaras School of Hindu Law prevailing in Uttar Pradesh. Even as regards the Dhangars as migrants, Thurston on Caste and Tribes of Southern India in Vol. III p. 167 stated that the statement of the census Report of 190 1 establishes that Marathi Caste of Shepard are Dhangars and their home speech is Marathi and they are the residents 767 Of Bombay Presidency. It would, thus, show that even in 1901, Dhangars were held to be original Marathis of Bombay Presidency. We, therefore, hold that the case before us that Bhikubai, the plaintiff, and her family had migrated from Mathura to Ahmednagar District in Bombay Presidency has not been proved and admittedly, they migrated from Ahmednagar to Indore. In India a Hindu is governed by his personal branch of law which he carries with him wherever he goes. But the law of the province wherein he resides prima facie governs him and in this sense and to this extent only the law of domicile is of relevance or importance. But if it is shown that a person came from another Province, the presumption will be that he is governed by the law or the special custom by which he would have been governed in his earlier home at the time of migration. An inference of migration can well be made from the known facts of the chief characteristics of the family, the language, observance of customs and rites though they are not sufficient to prove that they are gov erned by a particular school of law. The presumption can be displaced by showing that the immigrant had renounced the law of the place of his origin and adopted the law of the place to which he had migrated. The onus lies on the person alleging that the family had renounced the law of its origin and adopted that prevailing in the place to which he had migrated vide Hindu Law by Raghavachariar, Eighth Edition, para 32 at pages 30 & 31. The same view was expressed in Mulla 's Hindu Law, edited by Justice S.T. Desai, 15th Edn., in para 13A and 14. In Hindu Law By S.V. Gupta (Vol. 1, Third Edition p. 50) article 10 it is stated that in case of migration of a Hindu from one part of India to another, it is presumed that he and his descendants continue to be governed by the law of the school to which he belonged before migration. Such presumptions are rebuttable. In Balwant Rao & Ors. vs Baji Rao & Ors., AIR 1921 PC 59. Lord Dunedin speaking for the Board held that it is absolutely settled that the law of succession in any given case is to be determined according to the personal law of the individu al whose succession is in question. In that case it was found that Bapuji 's ancestors at one time lived in Bombay Province and his migration at the place of death was ob scured. Therefore, it was held that the original law that prevailed in Bombay Province at the time of migration gov erns the succession to a Maharashtra Brahmin and Bombay School of Mitakshara Law would apply and the daughter would take her father 's property as an absolute owner and her hefts alone would be entitled to succeed to her estate. This was reiterated by Bose, J. in Keshav Rao 's case in consider ing the question of migration by a Maharashtra Brahmin residing in Central 768 Provinces and was held to be governed by the Bombay School of Mitakshara Hindu Law when migration is not proved in the sense that the exact origin of the family cannot be traced. Same view was followed in Udebhan Rajaram vs Vikram Ganu, Accordingly, we hold that the plaintiff and her family carried with them to Indore their personal law, namely, Hindu Law of the Mitakshara applicable to Bombay Province and not Banaras School of Hindu Law. The question then is whether the plaintiff is an heir to Rakhmaji, the last male holder of the estate left by Sonubai, his widow. In Bhagirathibai vs Kahnujirav, ILR 11 Bombay 285 the Full Bench held that under the Hindu Law as prevailing in Bombay Presidency, a daughter inheriting from a mother or a father takes as an absolute estate, which passes on her death to her own heirs, and not to those of the preceding owner. Thereby Hindu female is recognised under the Bombay School of Hindu Law to be an heir to last male holder of the estate and takes the property as an absolute owner. The immediate question, therefore, is wheth er the plaintiff is an heir as bandhu. In Mayne 's Hindu Law, 12th edn., revised by Justice Alladi Kuppuswami, Chief Justice (Retd.) of Andhra Pradesh High Court, in paragraph 504 at p. 735 & 736 stated the meaning of the word 'bandhu ' thus: The term 'bandhu ' or 'bandhava ' meant relations in general and included both agnates and cognates though it was sometimes confined to agnates in some of the Smriti texts relating to succession and gotra kinship, as for instance in the Vishnusmriti and in some of the verses in Manusmriti. The Mitakshara explains that the term 'bandhavas ' in the above test of Manu means Atma Bandhus, Pitrubandhus and Matrubandhus, vide Mit. on Yajn. III, 24 (Setlur edn. 1169)Naraharayya 's translation 56. In paragraph 543, at page 761, dealing with the third division of heirs, namely, 'bandbus ' and of their enumera tion in paragraph 544 it was stated that the enumeration is only illustrative, which read thus: Para 543 "Bandhus The third division of heirs consists of bandhus (Table B). They are the sapindas related through a female, being within five degrees from and inclusive of common ancestor, in the line or lines in which a female or females intervene (paras 121 126), In the portion of his work relating to succes sion, Vijnanesvara styles them as sapindas of a different gotra. The term 'bandhu ' has therefore acquired in the system of the Mitak shara a distinctive and technical meaning and signifies bhinnagotra sapindas. They are the 769 three classes: (1) atmabandhus or one 's own bandhus, (2) pitrubandhus or the father 's bandhus and (3) matrubandhus or the mother 's bandhus. The relevant passage in the Mitaksha ra is as follows: "Cognates are of three kinds; related to the person himself, to his father, or to his mother, as is declared by the following text. The sons of his own fa ther 's sister, the sons of his own cognate kindred. The sons of his father 's paternal aunt, the sons of his father 's maternal aunt, and the sons of his father 's maternal uncle, must be deemed his father 's cognate kindred. The sons of his mother 's paternal aunt, the sons of his mother 's maternal aunt, and the sons of his mother 's maternal uncle, must be reckoned his mother 's cognate kindred. Here, by reason of near affinity, the cognate kin dred of the deceased himself, are his succes sors in the first instance; on failure of them, his father 's cognate kindred; or if there by none, his mother 's cognate kindred. This must be understood to be the order of succession here intended. Para 544 Enumeration only illustrative Evidently, the enumeration of the above nine bandhus was not intended to be exhaustive, but only illustrative. When defining sapinda, Vijnanesvara says, "So also is the nephew a sapinda rela tion of his maternal aunts and uncles and the rest, because particles of the same body (the maternal grandfather) have entered into his and theirs; likewise does he stand in sapinda relationship with paternal uncles and aunts and the rest. In the light of this, his definition of bandhus or bhinnagotra sapindas makes it clear that maternal aunts and uncles and their descendants as well as paternal aunts and their descendants are bandus and that his enumeration is purely illustrative. Visvarupa and Mitra Misra in his Vir amitrodaya recognised this by including the maternal uncle and the like in the term 'bandhu ' purely by way of illustra tion. Referring to the maternal uncle 's sons, the Virami trodaya says that it would be extremely im proper that their sons are heirs but they themselves though nearer, are not heirs. After some fluctuation of opinion, it was finally settled that the enumeration of bandhus in the Mitakshara is not exhaustive but illustrative only. " In paragraph 536, at page 757, it is stated that in Bombay, the daughters of descendants, ascendants and collat erals within five degree 770 inherit as bandhus in the order of propinquity, such as the son 's daughter, the daughter 's daughter, the brother 's daughter, the father 's sister and so on. In Raghavachariar 's Hindu Law at page 412 in para 458, it is stated that the daughters of descendants, ascendants and collaterals upto fifth degree are bandhus and the test of nearness of blood is to be applied in ascertaining their order of succession. In Mitakshara and Dayabhaga by Colebrooke, 1883 Edn., at p. 99, it is stated in Sec. VI on the succession of cognate kindred, bandhu that on failure of gentiles, the cognates are heirs. Cognates are of three kinds; related to the person himself, to his father, or to his mother. At page 100, it is further stated that heir, by reason of near affinity, the cognate kindred of the deceased himself, are his successors in the first instance: on failure of them his father 's cognate kindred: or, if there be none, his mother 's cognate kindred. This must be understood to be the order of succession here intended. In Girdhari Lall Roy vs The Bengal Government, [1867] 79 Moore 's Indian Appeals 448 the question arose whether the maternal uncle of the last male holder is a bandhu entitled to succession of the estate of the deceased. While consider ing the question exhaustively of the texts of Hindu Law on this topic including Sec. VI of Colebrooke 's referred to above of the order of succession by bandhus, it was held by the Judicial Committee that if for the determination of the question under consideration, their Lordships were confined to the four corners of the Mitakshara, they would feel great difficulty in inferring, from the omission of "the maternal uncle" and "the father 's maternal uncle" from the persons enumerated in this text, that either of those relatives is incapable of taking by inheritance the property of a de ceased Hindu in preference to the King. Such an inference, in the teeth of the passages which says that the King can take only if there be no relatives of the deceased, seems to be violent and unsound. For the text does not purport to be an exhaustive enumeration of all Bandhus who are capable to inheriting, nor is it cited as such, or for that purpose, by the Author of the Mitakshara, as is used simply as a proof or illustration of his proposition, that there are three kinds of classes of bandhus, and all that he states further upon it is, the order in which the three classes take, viz., that the bandhus of the deceased himself must be exhausted before any of his father 's bandhus can take, and so on. Accordingly, it was held that 'the maternal uncle is capable of inheriting the estate. This view was followed in Muthus wami Mudaliyar & Ors. vs Sunamedu Muthukumaraswami Mudali yar, [1895] 96 LR 231 A 83. Accordingly, we hold that the enumeration of bandhus in various schools of Hindu Law of the rule of succession to the estate of the last 771 male Hindu as agnates or cognates or collaterals, are only illustrative and not exhaustive. The Hindu Law of succession of Mitakshara School prevailing in Bombay Presidency recog nises that a female is an heir as a bandhu to succeed to the estate of the last male holder through her mother 's side within five degrees to the last male holder. The plaintiff being the only nearest bandhu of Rakhmaji within five de grees through her mother, is entitled to succeed to his estate as an heir. Accordingly, we hold that the plaintiff is entitled to the possession of the plaint schedule House No. 88 with mesne profits from the respondents. The contention of Shri Lalit that the mortgagee respondent is entitled, in equity, to a decree for refund of the mortgage money which was admittedly found to have been paid cannot be accepted as the same was not paid to the plaintiff. So far an the mortgagee 's claim against the mortgagor is concerned, he may pursue any remedy available to him under law. Accordingly, the appeal is allowed, the decree of the High Court is set aside and that of the trial court is restored to the extent of House No. 88, with proportionate costs throughout. R.N.J. Appeal allowed.

One Hariba Bhagwat had a son Appaji and daughter Baja bai. Appaji in turn had a son Rakhmaji and a daughter Bhiku bai, the plaintiff who had flied a suit for possession and mesne profits of two houses. The suit was decreed by the Trial Court but on appeal reversed by the High Court. The Legal representative of the plaintiff then preferred this appeal by special leave confined to one of the houses, the parties having settled their dispute regarding the other house. Bajabal and her husband Ganpat Rao Page being issueless had adopted Rakhmaji. All of them belonged to villages situated in Ahmednagar District of Bombay Province, and are Dhangars (Shepards) by caste but had migrated to Indore. On Rakhmaji 's death Sonubai his childless widow succeeded to the properties as limited owner. She gifted the suit proper ty i.e. house No. 88 to Shanker Lanke a Brahmin, the first defendant by a registered gift deed dated October 31, 1944. Shanker Lanke in turn hypothecated the House to one Hira Lal, the first respondent on September 21, 1948. Sonubai died in 1947. The case of the plaintiff was that the family is gov erned by the Bombay School of Hindu Law wherein female Bandhu is an heir and thereby she was entitled to succeed to the estate of Rakhmaji; Sonubai, the issueless widow of Rakhmaji as limited owner had no power to dispose of the properties, so the gift deed and mortgage are void and do not bind her and the respondents are in unlawful possession as trespassers. The material defence relevant for the dis posal of this appeal is that the persons concerned are governed by the Banaras School of Hindu Law under which a female bandhu is not an heir. Hiralal 's case was that he had no objection to hand over the possession provided he was paid the consideration of Rs. 12,000 borrowed by Shanker Lanke, the donee. 760 The Trial Court came to the conclusion that the parties are governed by the Bombay School and not the Banaras School ,of Hindu Law and the plaintiff is the heir of Rajkhmaji. The gift deed was declared void and not binding on the plaintiff and the suit was decreed and the claim for refund of the mortgage money was rejected. Hira Lal appealed. It was contended before the High Court that the plaintiff 's family belonged to Dhangar caste, being migrants from U.P. (Mathura) to Aurangabad from where they had migrated to Central Province (now Madhya Pradesh) and were governed by the Banaras School of Hindu Law. This contention found favour with the High Court which placing reliance solely on the recital of the Gazetteer concluded that the parties had migrated from Mathura and thereby they were governed by the Banaras School of Hindu Law under. which the female Bandhu is not an heir to succeed to the estate of the last male holder. Reversing the decree passed by the Trial Court, the suit was dismissed. This Court in allowing the appeal by the legal represen tative of the plaintiff, HELD: In India a Hindu is governed by his personal branch of law which he carries with him where ever he goes. But the law of the province wherein he resides prima facie governs him and in this case and to this extent only the law of domicile is of relevance or importance. But if it is shown that a person came from another Province, the presump tion will be that he is governed by the law or the special custom by which he would have been governed in his earlier home at the time of migration. [767B C] Migration is changing one 's abode, quitting one 's place of birth and settling permanently at another place. The burden of proving migration lies on the person setting up the plea of migration. Migration can not be presumed but it mast be established by abduction of evidence. [764D G] Section 37 of the Evidence Act 1872 postulates that any statement made in Govt. Gazette of a public nature is a relevant fact. Section 57(13) declares that on all matters of public history, the Court may resort for its aid to appropriate books or documents of reference and section 81 draws a presumption as to the genuineness of Gazettes coming from proper custody. [764H; 765A] The State of facts contained in the official Gazetteer made in the course of the discharge of the official duties on private affairs or on 761 historical facts in some cases is best evidence of facts stated therein and is entitled to due consideration but should not be treated as conclusive in respect of matters requiring judicial adjudication. [766B C] The onus lies on the person alleging that the family had renounced the law of the origin and adopted that prevailing in the place to which he had migrated. The plaintiff and her family on migration from Ahmednagar carried with them to Indore their personal law, namely the Bombay School of Hindu Law under which a Hindu female is recognised to be an heir to last male holder of the Estate and takes the property as an absolute owner. The Plaintiff being the only nearest bandhu of Rakhmaji, is entitled to succeed to his estate as an heir and thus entitled to the possession of the House in question with mesne profits. [767D; 768B; A] Keshao Rao Bapurao & Anr. vs Sadasheorao Dajiba, AIR 1938 Nagpur 163; Rajah Mattu Ramalinga Setupati vs Peria nayagum Pillai, [1873 74] L.R. 11A 209 at p. 238; Martand Rao vs Malhar Rao, [1927 28] L.R. 551 A 45 at 48; Arunachel lam Chetty vs Venkatachellapathi Guru Swamigal, [1919] L.R. 46 IA 204; Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors., ; at p. 788; The Poohari Fakir Sadavarthy of Bomdilipuram vs The Commission er, Hindu Religious & Charitable Endowments, [1962] Suppl. 2 SCR 276: Mahant Shri Srinivasa Ramanuj Das vs Surajnarayan Dass & Anr., [1966] Snpp. SCR 436 at p. 447; Balwant Rao & Ors. vs Bali Rao & Ors., AIR 1921 P.C. 59; Udebhan Rajaram vs Vikram Ganu, ; Bhagirathibai vs Kah nujirav, ILR 11 Bombay 285; Girdhari Lall Roy vs The Bengal Government, [1867 79] Moore 's Indian Appeals 448 and Muthus wami Mudaliyar & Ors. vs Sunamedu Muthukumaraswami Muddali yar, [1895 96] LR 23 IA 83, referred to.

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Special Leave Petition (Civil) No. 8094 of 1988. From the Judgment and Order dated 16.3.88 of the Andhra Pradesh High Court in (A.A.O.) No. 1152/86 & C.R.P. No. 2728 of 1986. C. Sitaramiah and G. Prabhakar for the Petitioners. R.F. Nariman, K. Prabhakar and R.N. Kishwani for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ. The respondent R.V. Rayanim was, at all material times, a Class I contractor who had entered into an agreement with the Government of Andhra Pradesh for formation of earth dam in gorge portion from chainage 3360 to 3380 M of Raiwada Reservoir Project near Devarapalli village, Chodavaram Taluk, Distt. Visakhapatnam, Andhra Pradesh. Disputes and differences arose between the parties in respect of the aforesaid agreement. A reference was made to the arbitrator as per the arbitrator clause in the agreement between the parties. The respondent made eleven claims claiming various amounts, particulars whereof have been set out by the arbitrator as follows. 56 "I.Payment for forming cross (Rs. in lakhs) 15.89 bund and refund of the (subsequently reduced amount recovered. to Rs.14.89 lakhs) II.Refund of Seigniorage 2.071 (withdrawn) Charges III.Escalation and damages 14.00 IV.Extra load for sand 1.075 (subsequently reduced to Rs.0.575 lakhs). V.Payment for excavation 1.030 under water for probing diaphram wall VI. Compensation for loss 1.500 suffered due to partial prevention by the department. Compensation for loss 2.015 suffered due to non payment for the work done. VIII.Refund of excess hire 0.730 charges recovered. Overheads 0,960 X. Costs O. 100 XI. (a) Interest on II and VIII at 24% from the date of recovery. (b) On Rs.8.30 lakhs at 24% p.a. from 30.11.81 to 12.5. (c) Interest at 24% on the award amount except II and VIII from the date of petition. " The arbitrator gave a non speaking award dated 27th July, 1985 in favour of the respondent, amounting to Rs.19.39 lakhs, wherein he stated as follows: "Claim II has been withdrawn by the petitioner himself on the ground it was subsequently refunded by the respondents. On the balance claims (I and III to X) according to my assessment, I award a consolidated amount of Rs.19.39 lakhs to the extent of the claims judged admissible. The respond ents shall pay Rs. Nineteen lakhs and thirty nine thousand to the petitioner. " It is, therefore, apparent the claim No. II as mentioned above, 57 had been withdrawn. On the balance claims I and III the arbitrator had awarded a consolidated amount of Rs.19.39 lakhs 'to the extent of the claims judged admissible '. The respondent filed a proceeding before the Court to make the award rule of the Court. The petitioner preferred an appli cation for setting aside the award. By a common judgment dated 21st April, 1985, the Second Additional Judge, City Civil Court, Hyderabad, dismissed the petition of the peti tioner for setting aside the award and allowed the judgment in terms of the award. The petitioner preferred an appeal and a civil review petition before the High Court of Hydera bad. By a judgment dated 16th March, 1988 the division bench of the High Court dismissed the appeal and the revision of the petitioner. It held that the non speaking award of the arbitrator was not liable to be set aside by the Court. The petitioner has preferred this special leave petition challenging the said decision of the High Court. The main contention which was sought to be urged on this case was that the award was a nonspeaking award and, as such, was bad. On this ground, on or about 9th December, 1988 this Court directed that the matter should be taken up along with civil appeal No. 5645 and 5645A of 1986 pending before a larger bench. At that time, the question was pending consid eration by the Constitution Bench of this Court. This Court further directed on 9th December, 1988 that the entire amount of award, if not deposited in the trial court, should be deposited in the trial court within two months from that date, and upon the deposit being made the respondent will be at liberty to withdraw 50% of the amount which has not been withdrawn on furnishing security to the satisfaction of the trial court. It was further recorded that 50% had already been withdrawn. As mentioned hereinbefore, the main contention sought to be urged was that the award being a non speaking award, was bad in law. In view of the decision of this Court in Raipur Development Authority etc. vs M/s Chokhamal Contractors etc. , Jmt. Today 2 SC 285, this contention is no longer sustainable. It was then contended that the award has pur ported to grant damages on the basis of escalation of cost and prices; and such escalation was not a matter within the doman of the bargain between the parties and having taken that factor into consideration the award was bad. We have set out the relevant portion of the award. From reading the award, as set out hereinbefore, it is clear that the arbi trator has considered the claim made on the basis of 'esca lation and damages ' but he has awarded a total sum of Rs.19.39 lakhs insofar as he finds admissible in respect of the claims which the arbitrator has adjudged. It speaks no further. In such a situation it is 58 not possible to contend that there was any exercise of jurisdiction by the arbitrator beyond his competence. It is well settled that in matter of challenging the award, there are often two distinct and different grounds. One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction. In the latter 's case the Court can look into the arbitration agree ment but under the former it cannot, unless the agreement was incorporated or recited in the award. An award may be remitted or set aside on the ground that the arbitrator, in making it, had exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction had been exceed ed or not, because the nature of the dispute is something which has to be determined outside the award whatever might be said about it in the award or by the arbitrator. See the observations of this Court in M/s Sudarshan Trading Co. vs Government of Kerala & Anr., ; Only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator; as to what impelled the arbitrator to arrive at his conclusion. In the instant case the arbitrator has not awarded any amount on account of escalation of costs and expenses. At last the arbitrator has not expressly awarded any amount on the ground of such escalation and if so, what amount, is not apparent on the face of the record. In these circumstances, in our opinion, on the basis of well settled principles of law such an award, especially in view of the fact that excluding item No. III the remaining items would also be well over Rs.19.33 lakhs, it is not discernible on the face of the record that arbitrator has exceeded his jurisdiction in awarding damages on account of escalation of charges and expenses which were beyond the arbitration ambit. The fact that the arbitrator has considered the claim made by the respondent on account of escalation, does not make per se the award to be bad. Mr. C. Sitaramiah, learned counsel appearing for the appellant contended that the fact that the arbitrator has taken into consideration the question of escalation would make the award bad because it is not discernible whether he has awarded any amount on account of escalation. We are of the opinion that this argument is not open. In case of an error apparent on the face of the record, it has to be established that an item or an amount which the arbitrator had no jurisdiction to 59 take into consideration, has been awarded or granted. That is not apparent on the face of the award in this case. All that the award states is that he has considered the claim on the basis of escalation. Such a consideration does not make the award on the face of it, bad on the ground of error apparent on the face of the record. Indeed, the arbitrator, when a claim is made, has to take that into consideration either for acceptance or rejection of the claim made. The award states that he has taken the claim made, into consid eration. The award does not state that he has awarded any amount on that account. There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did. In that view of the matter the special leave petition has no merit made must, therefore, fail, and is accordingly dismissed. The petitioners were allowed to withdraw the awarded sum on furnishing security but in view of the deci sion now rendered, they will be entitled to take back the security. We order accordingly. The application is dismissed with aforesaid directions. R.S.S. Petition dismissed.

The respondent contractor had entered into an agreement with the petitioner for formation of an earth dam. Disputes and difference arose between the parties. A reference was made to the arbitrator wherein the respondent made eleven claims out of which one claim was later withdrawn. The arbitrator gave a non speaking award in favour of the re spondent amounting to a consolidated sum of Rs.19.39 lakhs. The respondent flied a proceeding before the Court to make the award rule of the Court. The petitioner preferred an application for setting aside the award which was dis missed. The High Court dismissed the appeal and the revision of the petitioner. Before this Court it was contended inter alia that the award purported to grant damages on the basis of escalation of cost and prices, and such escalation was not a matter within the domain of the bargain between the parties. It was also contended that the fact that the arbitrator had taken into consideration the question of escalation would make the award bad because it was not discernible whether he had awarded any amount on account of excalation. Dismissing the special leave petition, this Court, HELD: (1) In matters of challenging an award, there are often two distinct and different grounds. One is an error apparent on the face of the record and the other is that the arbitrator has exceeded his jurisdiction. In the latter case the Court can look into the arbitration agreement but under the former It cannot, unless the agreement was incorporated or recited In the award. [58A B] M/s Sudarshan Trading Co. vs Government of Kerala & Anr., ; , referred to. 11 55 (2) Only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. [58D] (3) It is not discernible on the face of the record that the arbitrator has exceeded his jurisdiction in awarding damages on account of escalation. All that the award states is that he has considered the claim on the basis of escala tion. Such a consideration does not make the award, on the race of it, bad on the ground of error apparent on the face of the record. ' [58G H; 59A B] (4) The Arbitrator does not state that he has awarded any amount on that account. There is neither any error apparent on the face of the record, nor any material to satisfy that the arbitrator has exceeded his jurisdiction in awarding the amount as he did. [59B C]

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ivil Appeal No. 32 17 of 1988. From the Judgment and Order dated 30.5.88 of the Cus toms Excise and Gold (Control) Appellate Tribunal, New Delhi in E/Misc/ 194/87 A & E/A No. 1365/85 A & Order No. 308/88 A. Gauri Shankar, Mrs. H. Wahi, Manoj Arora and section Rajjappa for the Appellant. Soli J. Sorabjee, Attorney General, V.C. Mahajan, R.P. Srivastava and P. Parmeshwaran for the Respondent. The Judgment of the Court was delivered by KANIA, J. This is an appeal preferred by the appellant (assessee) from a judgment of the Central Excise and Gold (Control) Appellate Tribunal, New Delhi (hereinafter re ferred to as "the said Tribunal"]. As the controversy before us is an extremely limited one, we propose to set out only the facts necessary for appreciating that controversy. The appellant is a public limited company engaged inter alia in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the (hereinafter referred to as "the Central Excises Act"). The period with which we are concerned in this appeal is the period September 9, 1979 to July 26, 1983. The appellant filed several price lists in Part I and Part II in respect of the clearances of paper and 322 paper boards made by the appellant. Section 4 of the Central Excises Act prescribes the mode of valuation of excisable goods for the purposes of charging of the duty of excise. Under clause (a) of subsection (1) of section 4, it is provided, in brief, that the duty of excise is chargeable on any excisable goods with reference to value which shall, subject to the other provisions of the Act, be deemed to be the normal price thereof and the normal price, generally speaking, is the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place or removal, where the buyer is not a related person and the price is the sole consideration for the sale. In the fixation of the normal price of paper and paper boards manufactured by the appel lant for the purposes of levy of excise duty, the appellant claimed several deductions. One of these deductions was described as "trade discount" and another as "service charge discount". The trade discount was the discount paid to the purchaser in accordance with the normal practice of the trade. The appellant had engaged several dealers with a view to promote its sales. A specimen of the usual agreements entered into by the appellant with its dealers has been taken on record. The opening part of the said agreement shows that the appellant is referred to in the agreement as the company and the contracting dealer is referred to as the Indentor. We propose to refer to the dealers engaged by the appellant to promote the sales of its products as "Inden tors" for the sake of convenience. Clause (3) of the agree ment shows that the Indentor agreed to purchase in his own name or procure acceptable indents from third parties for paper and paper boards manufactured by the company would be of such quantities and varieties as set out in the Schedule A to the agreement. The Indentors agreed to deposit with the company a certain amount of money as security. Clause (8) of the agreement shows that the Indentors held themselves responsible for the immediate clearance of the documents relating to the supply of paper on presentation by the bankers and that all bank charges other than discounting charges would be on the consignee 's account. It is common ground that in the invoices in respect of the paper and paper boards supplied and sold pursuant to the aforesaid agreement with the Indentors, in most cases the name of the dealer concerned was shown as the Indentor and the names of the parties to whom the goods were to be deliv ered were shown as the purchasers but in some cases the Indentors were themselves shown as purchasers. It was urged by Dr. Gauri Shankar, learned counsel for the appellant, that although the discount allowed to the Indentors in respect of some of the aforesaid sales might have been described as service charge 323 discount that name could not govern the real nature of the transaction and the discount was really a trade discount. It was submitted by him that this discount should have been allowed as a deduction in the determination of the normal price of the aforesaid goods for the purpose of levy of excise duty. He relied upon the decision of this Court in Union of India & Ors. vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C) and submitted that the nomenclature given to the discount could not be regarded as decisive of the real nature of the discount. There can be no quarrel with this proposition. But it is equally well set tled that in the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a trade discount qualifying for deduction (Coromandel Ferti lizers Limited vs Union of India and Ors., [1984] 17 E.L.T. 607 (S.C.). The correctness of this proposition was not disputed by learned counsel for the appellant but it was submitted by him that in several cases where supplies had been effected pursuant to the aforesaid agreements, the Indentors were really themselves the purchasers and hence, the normal trade discount paid to them should have been allowed as a deduction in the determination of the normal price for the purposes of levy of excise duty. We find from the judgment of the Tribunal and the lower authorities that there is no dispute that wherever the Indentors are shown as the purchasers in the respective invoices, the trade dis count given to them has been allowed as a deduction. More over, to obviate any controversy in this regard, learned Attorney General who appears for the respondent fairly states that when the matter goes back to the Tribunal, the respondent is agreeable that the normal trade discount may be allowed in those cases where the Indentor is also shown as the purchaser in the concerned invoice. It is, however, submitted by learned counsel for the appellant that although in some of the cases the Indentor might not be shown as the purchaser and the purchaser shown is the different party, yet the real nature of the transaction was that the Indentor purchased the goods referred to in the said invoice and in turn sold it to a customer whose name was shown as the purchaser in the invoice for the sake of convenience so that the delivery could be directly effected to him. We are of the view that it is not open to the appellant to raise this contention at this stage. No case has ever been made out right upto the Tribunal and even before the Tribunal that in respect of any particular invoice although the name of the purchaser was other than that of the Indentor, it was really the Indentor who was the purchaser and he in turn has sold the goods to the third party whose name was shown as 324 purchaser or even that the Indentor had entered into the transaction as the agent of the purchaser. If such a conten tion had been raised, the factual position could have been examined and different considerations might have been ap plied. But it is certainly not open to the appellant to raise this contention at this stage, in this appeal, partic ularly keeping in mind that the Tribunal is the final fact finding authority. No other contention has been raised before us. In our opinion, there is no merit in the appeal. There will, however, be one clarification that, as agreed to learned Attorney General, if in any case the purchaser named in the invoice is the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduc tion in the determination of the normal price for the levy of excise duty subject to other relevant considerations. In the result, the appeal fails and is dismissed, save to the extent of the aforesaid clarification. The appellant to pay the costs of the appeal to the respondent. R.S.S. Appeal dis missed.

The appellant who was engaged in the manufacture of paper and paper boards which were assessable under Tariff Item No. 17 of the First Schedule to the . engaged several dealers referred to as Indentors, with a view to promote its sales. In the fixation of the normal price of these items under section 4 of the Act for the purpose of levy of excise duty, the appellant claimed deduction on account of 'service charge discount ' paid to the Indentors, in addition to the 'trade discount ' paid to the purchasers. Having failed before the assessing authority and the Central Excise and Gold (Control) Appellate Tribunal in respect of the deduction claimed on account of 'service charge discount ' the appellant appealed to this court. It was contended on behalf of the appellant that al though in some of the sales the discount allowed to the Indentors might have been described as 'service charges discount ', that name could not govern the real nature of the transaction and the discount was really a 'trade discount '. It was further contended that in several cases the indentors were really the purchasers themselves and hence, the normal trade discount paid to them should have been allowed as a deduction. Dismissing the appeal, this Court, HELD: (1) The trade discount was discount paid to the purchaser in accordance with the normal practice of the trade. In the determination of the normal price for the purposes of levy of excise duty, it is only a normal trade discount which is paid to the purchaser which can be allowed as a deduction and commission paid to selling agents for services rendered by them as agents cannot be regarded as a 321 trade discount qualifying for deduction. [323B C] Union of India & Ors. vs Bombay Tyres International Pvt. Ltd., [1984] 17 E.L.T. 329 (S.C.) and Coromandel Ferti lizers Limited vs Union of India & Ors., [1984] 17 E.L.T. 607 (S.C.), referred to, (2) If in any case the purchaser named in the invoice 18 the same as the Indentor, normal trade discount given to the Indentor will be allowed as a deduction in the determi nation of the normal price for the levy of the excise duty subject to other relevant considerations. [324B C]

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(C) No. 1269 of 1989. 2 (Under Article 32 of the Constitution of India). K.M. Sharma petitioner in person. Soli J. Sorabjee, Attorney General, Santosh Hegde, Additional Solicitor General, A.K. Sen, Manbir Singh, Girish Chandra and Ms. A. Subhashini for the Respondents. The Court delivered the following order: ORDER Two contentions were raised by the petitioner in this writ petition challenging the appointment of Respondent No. 1, Shri Devi Lal as Deputy Prime Minister of India: (i) that the oath administered to him as Deputy Prime Minister was not the oath in accordance with the prescrip tion of the Constitution; and (ii) he was still functioning as the Chief Minister of Haryana when the oath of office of his new assignment was administered to him. Pursuant to notice, two affidavits have been filed one by the Respondent No. 1 and the other on behalf of the Union of India. In the affidavit of Respondent No. 1 certain precedents have been relied upon and the practice which has been followed eversince the Constitution came into force has been referred to. Learned Attorney General appearing on behalf of the Union of India has stated that the form prescribed in the Third Schedule pursuant to the requirement of Article 75(4) of the Constitution is only for a Minister of the Union and there is no separate form even for the Prime Minister. Since the Prime Minister is also a member of the Council of Minis ters, he takes the same oath as the other ministers are required to take. He maintains that yet in view of the fact that the Constitution describes him as the Prime Minister, while being sworn into office, he describes himself as Prime Minister and this practice is in vogue eversince 1950. The oath register is by the incumbent signed as Prime Minister and all other ministers sign as Ministers. He further indi cates that describing Shri Devi Lal as Deputy Prime Minister is descriptive only and for all purposes he is a Minister and there is no 3 constitutional sanction for the post of Deputy Prime Minis ter as such. Relying on a bench decision of this Court in the case of Virji Ram Sutaria vs Nathalal Premji Bhavadia & Ors., , learned Attorney General further contends that the prescribed oath should be divided into two parts, one which is descriptive and the other which contains the sub stantial part. And according to him, as long as the substantial part is properly followed, a mere mistake or error in the descriptive part would not vitiate the oath. This Court in the reported decision said: "In this case, as we have already noted, the essential requirement of Article 173 read with Form VII A was that the person taking the oath or making the affirmation would bear true faith and allegiance to the Constitution and uphold the sovereignty and integrity of India. The words which precede this portion are merely descriptive of the person and of his nomination as a candidate. " In view of the clear statement. made by the learned Attorney General that Respondent No. 1 is just a Minister like other members of the Council of Ministers though he has been described as Deputy Prime Minister but the description of him as Deputy Prime Minister does not confer on him any powers of the Prime Minister, along with his other submis sions, we think the first contention raised by the petition er has no force. So far as the second contention is con cerned, the petitioner himself does not press it. We accordingly reject the writ petition for the reasons indicated above. No costs. P.S. S Petition dismissed.

The petitioner challenged the appointment of Respondent No. 1 as Deputy Prime Minister of India on the ground that the oath administered to him as such was not the oath in accordance with the prescription of the Constitution. The petition was contested by Respondent No. 1 and the Union of India. It was contended for the latter that de scribing Respondent No. 1 as Deputy Prime Minister was descriptive and for all purposes he was a Minister, that the form of oath prescribed in the Third Schedule pursuant to the requirement of Article 75(4) of the Constitution is only for a Minister of the Union, and that there was no separate form even for the Prime Minister. It was further submitted that the prescribed oath is susceptible of division into two parts, descriptive and substantial, and as long as the substantial part is properly followed, as in the instant case, a mere mistake or error in the descriptive part would not vitiate the oath. Dismissing the writ petition, HELD: Respondent No. 1 is just a Minister like other Members of the Council of Ministers though he has been described as Deputy Prime Minister. The description of him as Deputy Prime Minister does not confer on him any power of Prime Minister. It cannot, therefore, be said that the oath administered to him as Deputy Prime Minister was not the oath in accordance with the prescription of the Constitution. [3E, 2D]

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ivil Appeal No. 5055 of 1989. From the Judgment and Order dated 27.2.1989 of the Allahabad High Court in C.M.W.P. No. 12322 of 1984. Satish Chandra, E.C. Agarwala, Atul Sharma, Ms. Purnima Bhatt and V.K. Pandita for the Appellants. G.L. Sanghi, B.D. Agarwal, G. Ganesh, K.L. John and Ms. Shobha Dikshit for the Respondents. 531 The Judgment of the Court was delivered by SHARMA, J. This case arises out of a proceeding under the Indian Stamp Act, 1899. Special leave is granted. A dispute between the appellants and the respondent No. 1, who are members of a family, was referred to an arbitrator, who made an award on 9.10.1973, and filed the same within a few days before the civil court for making it a rule of the court. On objection by the present appellants, the prayer was rejected on 18.3.1976 and the order was confirmed by the High Court on 3.7.1981 in a regular first appeal. An application for special leave was dismissed by this Court on 18.4.1983 and a prayer for review was also rejected. It is stated on behalf of the appellants that in the meantime the respondent No.1 applied before the Collec tor for summoning the award and realising the duty and penalty. A copy of the award was annexed to the application. The respondent 's prayer was opposed by the appellants but was allowed by the Collector on 15.7.1983; and, on a request made to the civil court for sending the award, the civil court asked the office to do so. The appellants moved the Chief Controlling Revenue Authority under section 56 of the Indian Stamp Act (hereinafter referred to as the Act) against the Collector 's order dated 15.7.1983. The Authority in exercise of its revisional power set aside the impugned order of the Collector, inter alia, on the ground of lack of jurisdiction. The respondent challenged this judgment before the High Court in a writ case which was allowed by the impugned judgment dated 27.2.1989. The matter was remanded to the Collector to decide the case afresh in the light of the observations. The High Court also doubted the power of the Chief Controlling Revenue Authority to entertain the appellants ' application under section 56 of the Act. This judg ment is the subject matter of the present appeal. Mr. Satish Chander, the learned counsel for the appellants, contended that there cannot be any doubt about the power of the Chief Controlling Authority to correct an erroneous order of the Collector. Emphasis was laid on the language of section 56 suggesting its wide application. The learned counsel was also right in arguing that the Authority is not only vested with jurisdiction but has the duty to quash an order passed by the Collector purporting to be under Chapters IV and V of the Act by exercising power beyond his jurisdiction. To hold otherwise will lead to an absurd situation where a subordinate authority makes an order beyond its jurisdiction, which will have to be suf fered on account of its unassailability before a higher 532 authority. This Court in Janardan Reddy and Others vs The State of Hyderabad and Others, ; , after refer ring to a number of decisions, observed that it is well settled that if a court acts without jurisdiction, its decision can be challenged in the same way as it would have been challenged if it had acted with jurisdiction, i.e., an appeal would lie to the court to which it would lie if its order was with jurisdiction. We, therefore, agree with the appellants that the Chief Controlling Revenue Authority had full power to interfere with the Collector 's order, provided it was found to be erroneous. Their difficulty, however, is that we do not find any defect in the Collector directing to take steps for the realisation of the stamp duty. It was contended on behalf of the appellants that the respondent No. 1 had no locus standi to move the Collector for impounding the award and sub section (1) of section 33 of the Act had no application. The learned counsel proceeded to say that in the circumstances it has to be assumed that the Collector acted suo motu under sub section (4) of the said section and since the proviso to sub section (5) directs that no action under sub section (4) shall be taken after a period of four years from the date of execution of the instrument, the Collector had no authority to pass the impugned order after about a decade. In reply, Mr. G.L. Sanghi urged that the order for impounding the award was passed by the civil court itself on 18.3.1976, and the further orders of the Collector dated 22.7.1983 and of the civil court dated 27.8.1983 were passed merely by way of implementing the same. The learned counsel is right in relying upon the concluding portion of the order of the civil court dated 18.3.1976 directing the impounding of the award and sending it to the Collector for necessary action. It is true that further steps in pursuance of this judgment were not taken promptly and it was the respondent No. 1 who drew the attention to this aspect, but it cannot be legiti mately suggested that as the reminder for implementing the order came from the respondent, who was motivated by a desire to salvage the situation to his advantage, further steps could not be taken. There is no question of limitation arising in this situation and it cannot be said that what had to be done promptly in 1976 would not be done later. The orders of the Collector dated 15.7.1983 and 22.7.1983 must, therefore, in the circumstances, be held to have been passed as the follow up steps in pursuance of the civil court 's direction dated 18.3.1976, and no valid objection can be taken against them. The Collector, therefore, shall have to proceed further for realisation of the escaped duty. It was next contended that in any event the Collector did not 533 have the power to enquire into the correct valuation of the property which was the subject matter of the award. Reliance was placed on the observations in Himalaya House Co. Ltd. Bombay vs Chief Controlling Revenue Authority, There is no merit in this point either. The case comes from Uttar Pradesh where express provisions have been made by the insertion of section 47 A, authorising the Collector to examine the correctness of the valuation. Lastly Mr. Satish Chandra argued that the respondent No. 1 is taking keen interest in the present proceeding in an attempt to illegally re open the question of making the award a rule of the court, which stood concluded by the impugned judgment of the High Court and the order of this Court dismissing the special leave petition therefrom and he can not be allowed to do so. The reply of Mr. Sanghi has been that this aspect is not relevant in the present pro ceeding for realisation of the duty and need not be decided at this stage. His stand is that an award which is not made rule of the court is not a useless piece of paper and can be of some use, say by way of defence in a suit. He said that this question will have to be considered if and when the occasion arises. Having regard to the limited scope of the present proceeding, we agree with Mr. Sanghi that we may not go into this aspect in the present case, but we would clari fy the position that on the strength of the present judgment it will not be open to the respondent to urge that the effect of the High Court decision dated 8.7.1981 and the orders of this Court dismissing the special leave petition therefrom and later the review application has disappeared or has got modified. The appeal is disposed of in the above terms, but the parties are directed to bear their own costs of this Court. G.N. Appeal disposed of.

A dispute between the appellants and respondent No. 1 was referred to an arbitrator who made an award and filed it before the civil court. On objection by the appellants, the prayer for making the award a rule of the court was reject ed. On appeal, the High Court confirmed the same. This Court refused special leave and a petition for review was also dismissed. Meanwhile, respondent No. 1 applied to the Collector for summoning the award and for realising the escaped duty and penalty. The application was allowed. The appellants moved the Chief Controlling Revenue Authority under Section 56 of the Indian Stamp Act, 1899 and the authority set aside the Collector 's order. The respondents challenged the said order in a writ petition before the High Court which allowed the same and remanded the case to the Collector for deciding it afresh. Aggrieved, the appellants filed this appeal by special leave, contending inter alia, that; (a) Respondent No. 1 had no locus standi to move the Collector for impounding the award: (b) the Collector had no authority to pass the im pugned order after a decade; and (c) the Collector did not have the power to enquire into the correct valuation of the property which was subject matter of the award. Disposing of the appeal, this Court, HELD: 1.1 It is well settled that if a court acts with out jurisdiction, its decision can be challenged in the same way as it would have been challenged if it had acted with jurisdiction, i.e. an appeal would lie to the court to which it would lie if its order was with jurisdiction. [532A] 530 1.2 There is no question of limitation arising and it cannot be said that what had to be done promptly in 1976 could not be done later. The orders of the Collector dated 15.7.1983 and 22.7.1983 were passed as the follow up steps in pursuance of the civil court 's direction dated 18.3.76 and no valid objection can be taken against them. The Col lector, therefore, shall have to proceed further for reali sation of the escaped duty. [532G] 1.3 The Chief Controlling Revenue Authority had full power to interfere with the Collector 's order, provided it was found to be erroneous. But this Court does not find any defect in the Collector directing taking of steps for reali sation of the stamp duty. [532B] Janardan Reddy and Ors. vs State of Hyderabad and Ors. , ; , relied on. The instant case comes from Uttar Pradesh where express provisions have been made by the insertion of Sec tion 47 A, authorising the Collector to examine the correct ness of the valuation. Hence the Collector had the power to enquire into the valuation of the property which was the subject matter of the award. [533A B] Himalaya House Co. Ltd., Bombay vs Chief Controlling Revenue Authority, , referred to. It is clarified that on the strength of the present judgment it will not be open to the respondent to urge that the effect of the High Court decision dated 8.7.1981 and the order of this Court dismissing the special leave petition therefrom and later the review application have disappeared or have got modified. [533D E]

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Civil Appeal No. 10234 of 1983. From the Judgment and Order dated 3.1.19/9 of the Alla habad High Court in Civil Revision No. 3714 of 1978. K.B. Rohtagi for the Appellant. R.K. Garg and D.K. Garg for the Respondent. The Judgment of the Court was delivered by AHMADI, J. The short question which arises for our consideration in this appeal by special leave is whether a tenant of a premises constructed in 1967 is entitled to the protection of Section 39 of the U.P. Urban Buildings (Regu lation of Letting, Rent and Eviction) Act, 1972 (Act No. 13 of 1972 as amended by Act No. 17 of 1985), hereinafter called 'the Act ', in an eviction suit instituted before the commencement of the Act. The Act came into force w.e.f. 15th July, 1972 by virtue of the notification issued by the State Government in exercise of power conferred by Sub Section 4 of Section 1 of the Act, vide Notification No. 3409/XXIX 59 72 dated 27th June, 1972 published in the U.P. Government Gazette, Extra, dated 1st July, 1972. The Act was enacted for inter alia regulation of letting and eviction of tenants from certain classes of buildings situate in urban areas specified in Sub Section (3) of Section 1. Section 2 indicates the buildings to which the Act shall not apply. We are concerned with Sub Section (2) of Section 2, the rele vant part whereof reads as under: "Except as provided in sub section (5) of section 12, sub section (1 A) of Section 21, sub section (2) of Section 24, Sections 24 A, 24 B, 24 C or sub section (3) of section 29, nothing in this Act shall apply to building during a period of ten years from the date on which its construction is completed". Since it is not disputed before us that the construction of the suit property was completed in 1967, we need not set out the provisos and the explanations to the sub section. Section 3 defines the various expressions used in the Act. Under 189 clause (a) 'tenant ', in relation to a building means a person by whom its rent is payable and 'building ' according to clause (i) means a residential or non residential roofed structure including any land, garages and out houses appur tenant thereto. Any person to whom rent is or if the build ing were let, would be, payable, including his agent or attorney or such person, is a 'landlord ' within the meaning of clause (j) of that section. It would thus seem that but for the exemption granted by Section 2(2), the provisions of the Act would have applied to the letting of the suit prem ises. The scheme of Section 2 is that buildings referred to in clauses (a) to (f) are exempt from the operation of the Act for all times (subject of course to legislative changes) whereas the exemption granted by Section 2(2) is for a period of ten years from the date of completion of construc tion. Chapter III regulates to letting. Section 11 provides that no person shall let any building except in pursuance of an allotment order issued by the District Magistrate under Section 16. Chapter IV regulates eviction. Section 20 inter alia prohibits the institution of a suit for eviction of a tenant from any building except on the grounds catalogued in clauses (a) to (g) of sub section (2) thereof. Section 21 provides for the eviction of a tenant if the building is bonafide required by the landlord for his own use or the use of any of his family member. The scheme of Chapters III & IV clearly shows that both the letting of and eviction from the buildings to which the Act applies are regulated by the provisions of the Act. Section 39 of the Act with which we are mainly concerned finds its place in Chapter VII entitled Miscellaneous and Transitional Provisions. That section reads as under: "Pending suits for eviction relating to building brought under regulation for the first time In any suit for evic tion of a tenant from any building to which the old Act did not apply, pending on the date of commencement of this Act, where the tenant within one month from such date of com mencement or from the date of his knowledge of the pendency of the suit, whichever be later, deposits in the court before which the suit is pending, the entire amount of rent and damages for use and occupation (such damages for use and occupation being calculated at the same rate as rent) to gether with interest thereon at the rate of nine per cent per annum and the landlord 's full cost of the suit, no decree for eviction shall be passed except on any of the 190 grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, and parties shall be entitled to make necessary amendment in their pleadings and to adduce additional evidence where necessary. " This Section carried an explanation which came to be omitted by Section 8(iv) (and be deemed always to have been omitted) of the Civil Laws Amendment Act, 1972. Section 40 lays down that where an appeal or revision arising out of a suit for eviction of a tenant from any building to which the old Act did not apply is pending on the date of commencement of this Act, it shall be disposed of in accordance with the provi sions of Section 39, which shall mutatis mutandis apply. The plain reading of Section 39 makes it clear that the said section obliges the court to refuse to pass a decree for eviction, except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, if the following four require ments are satisfied: (i) the building is one to which the old Act (the U.P. (Temporary) Control of Rent and Eviction Act, 1947 U.P. Act No. III of 1947) did not apply; (ii) the eviction suit must be pending on the date of commencement of the Act i.e., 15th July, 1972: (iii) the tenant deposits in court the entire amount of rent/damages for the use and occupation of the building together with interest at 9% per annum and the landlord 's full cost of the suit; and (iv) such deposit is made within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the eviction suit, whichever is later. The benefit of Section 39 is extended mutatis mutandis to an appeal or revision arising out of an eviction suit to which the old Act did not apply provided the said appeal or revi sion was pending on the date of commencement of the Act. On a plain reading of Section 39 it becomes clear that in a suit for eviction to which the said provision applies, the Court trying the suit is 191 precluded from passing a decree for eviction if the tenant deposits in court the entire amount of rent and damages together with interest at 9% per annum and the landlord 's full cost of the suit within the time allowed but this embargo does not apply if eviction is sought on the ground or grounds mentioned in the proviso to Sub section (1) or in clauses (b) to (g) of Sub section (2) of Section 20. The ground mentioned in the proviso to sub section (1) of Sec tion 20 is determination of tenancy by efflux of time where the duration of tenancy is fixed under a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding which is recorded in Court or is otherwise reduced to writing and signed by the tenant. Sub section (2) of Section 20 enumerates the grounds in clauses (a) to (g) on which an eviction suit can be rounded against a tenant. Clause (a) permits the institution of a suit for eviction if the tenant is in arrears of rent for not less than four months and has failed to pay the same within one month from the date of service of a notice of demand upon him. The grounds in clauses (b) to (g) are other than arrears of rent. From the fact that a suit rounded on anyone or more of the grounds set out in the proviso to sub section (1) and clauses (b) to (g) of sub section (2) of Section 20 is exempt from the operation of Section 39, it would seem that the legislature desired to grant protection from eviction where the same is sought on the sole ground of arrears of rent. That is why in the exemption clause con tained in Section 39, clause (a) to sub section (2) of Section 20 which permits eviction on the ground of arrears of rent is deliberately and intentionally excluded and an embargo is created against the passing of an eviction decree if the tenant deposits in court within the time allowed the entire arrears of rent together with interest and costs. If the suit is on anyone or more of the exempted grounds, the landlord is permitted to proceed with the same, if necessary by effecting an amendment in the pleading and by adducing additional evidence. Such a suit may be continued and if the ground or grounds pleaded is/are proved, the court is enti tled to grant eviction. It, therefore, seems clear to us that the legislature intended to protect eviction of a tenant on the ground of arrears of rent if the tenant com plied with the conditions of Section 39. In the present proceedings it is not disputed that the construction of the demised premises was completed in 1967 and the letting had taken place in the same year. It is also not disputed that immediately on the completion of ten years the tenant deposited on 2nd September, 1977 an amount of Rs.4,005 being the arrears of rent inclusive of interest and cost. It is not disputed that this payment was made within one month after the expiry of the period of ten years stipu lated in 192 Section 2(2) of the Act to take advantage of Section 39 of the Act. The eviction suit was admittedly filed on 27th May, 1972 i.e. before the commencement of the Act i.e. 15th July, 1972. There is also no dispute that the provisions of the old Act did not apply to the suit. On these undisputed facts the trial court gave the benefit of Section 39 and refused to order ejectment of the tenant. The landlord filed a revision application which was rejected by the Second Addi tional District Judge, Bulandshahr, on 15th July, 1978. The High Court rejected the landlord 's further revision applica tion on the ground that the question was concluded by the decision in R.D. Ram Nath & Co. & Anr. vs Girdhari Lal & Anr. , It is against the said decision that the present appeal is preferred. The question then is wheth er or not the provision of Section 39 of the Act is attract ed in the backdrop of the above facts. We may now consider the case law on the point to which our attention was called. In Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452, this Court while con struing section 2(2) of the Act observed that the burden is on the landlord to show that his case falls within the exemption engrafted in the said sub Section. In the present case, since the facts are not in dispute the question of onus recedes in the background. In Om Prakash Gupta etc. vs Dig Vijen: drapal Gupta etc. ; , , a three Judge Bench had to consider the effect of section 2(2) read with section 39 of the Act. In that case, an eviction suit was filed against the appellant tenant on the ground that the provisions of the Act did not apply to the demised shop and the tenant was therefore liable to be evicted. The Trial Court decreed the suit on the finding that the construction of the suit shop was completed in 1967 and since 10 years had not elapsed from the date of completion of the construc tion the provisions of the Act had no application. The tenant carried the matter in revision but the judgment and decree of the Trial Court was substantially maintained. The tenant thereupon moved the High Court under section 115, C.P.C. The learned Single Judge who heard the revision remitted the matter to the Trial Court for recording a finding as to on what date the construction of the building could be said to have been completed within the meaning of section 2(2) read with Explanation I(a) thereto. The Trial Court returned a finding to the effect that the construction of the disputed shop must be taken to have been completed on the date of the first assessment, i.e. 1st April, 1968, within the meaning of the said provision. The tenant chal lenged the finding on the ground that the date of occupation should have been taken to be the date of completion of the construction and not the date of the first assessment. The Division 193 Bench to which the case was referred concluded that the construction of the shop must be deemed to have been com pleted on 1st April, 1968 i.e. at the date of the first assessment and not at the date of actual occupation and hence the provisions of the Act had no application to the building till the date of the decision of the revision application on 23rd March, 1978 as the period of 10 years expired later on 31st March, 1978. This Court upheld the finding that the date of construction must be taken, as the date of first assessment i.e. 1st April, 1968 and not the date of actual occupation. To overcome this difficulty it was contended on behalf of the tenant that on a correct reading of section 2(2) the exemption engrafted therein would not embrace buildings constructed prior to the en forcement of the Act. This Court construing the language of section 2(2) of the Act held that the sub section nowhere provided that the building should have been constructed after the commencement of the Act; to so interpret it would tantamount to adding words in it which was not permissible. This Court, therefore, negatived the contention that the exemption under the sub section did not embrace buildings constructed before the Act came into force. As pointed out earlier the revision application was decided on 23rd March, 1978 whereas the period of 10 years from the date of comple tion of the construction i.e. 1st April, 1968 was to end on 31st March, 1978 i.e. a week later. Section 39 of the Act, therefore, clearly did not apply in the facts of that case. Secondly, it was found that the suit was instituted on 23rd March, 1974 long after the commencement of the Act and was therefore not pending on 15th July, 1972 to attract the application of Section 39 of the Act. For these reasons, this Court came to the conclusion that the appellant Om Prakash was not entitled to tile protection of section 39 of tile Act. Two features which distinguish this case from the case on hand are: (i) that the revision application was disposed of by the High Court before the expiry of the moratorium period of 10 years granted by section 2(2) of the Act; and (ii) the suit having been filed long after the commencement of the Act on 15th July, 1972 could not be said to be pending at the date of the commencement of the Act to enable the tenant to seek redress under section 39 of the Act. In Vineet Kumar vs Mangal Sain Wadhera, ; , an , eviction suit was filed on the ground of arrears of rent and damages for use and occupation of the demised premises pendente lite. The tenant was inducted in the building stated to have been constructed in 1971 on 7th February, 1972, on a monthly rent of Rs.250. The building in suit was assessed to house and water tax on 1st October, 197 1. The tenant defaulted in the payment of rent 'despite service of notice dated 24th 194 March, 1977. Admittedly, the suit was filed after the com mencement of the Act. The point for consideration was wheth er the building which was not 10 years ' old on the date of the suit and was therefore exempted from the operation of the Act, would be governed by it on the expiry of the period of 10 years pendente lite. Dealing with this contention this Court observed in paragraph 13 of the judgment as under: "The moment a building becomes ten years old to be reckoned from the date of completion, the new Rent Act would become applicable. " The decision in Om Prakash Gupta 's case (supra) was rightly distinguished on the ground that it was not neces sary in that case to deal with the question whether the tenant would be entitled to the benefit of Section 39 as the building had not become ten years old when the revision was disposed of by the High Court on 23rd March, 1978. Dealing next with the contention that the Court had to decide the case on the basis of the cause of action that had accrued before the institution of the suit and not on a new cause of action, this Court, relying on the observations to the effect that subsequent developments can be looked into made in paragraph 14 of the decision in Pasupuleti Venkates warlu vs Motor and General Traders; , , ob served as under: "Normally amendment is not allowed if it changes the cause of action. But it is well recognised that where the amend ment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already on the record, the amendment would be allowed even after the statutory period of limita tion. The question in the present case is whether by seeking the benefit of Section 39 of the new Act there is a change in the cause of action." After referring to the case of A.K. Gupta & Sons vs Damodar Valley Corporation, ; , this Court further observed: "The appellant in the present case only seeks the protection of the new Rent Act which became applicable to the premises in question during the pendency of the litigation. We see no reason why the benefit of the new Rent Act be 195 not given to the appellant. Section 20 of the new Rent Act 'provides a bar to a suit for eviction of a tenant except on the specified grounds as provided in the section. Subsection (4) of Section 20 stipulates that in any suit for eviction on the grounds mentioned in clauses (a) to sub section (2), viz. the arrears of rent, if at the first hearing of the suit the tenant in default pays all arrears of rent to the landlord or deposits in court the entire amount of rent and damages for use and occupation of the building due from him, such damages for use and occupation being calculated at the same rate as rent together with interest thereon at the rate of nine per cent per annum and the landlord 's cost of the suit in respect thereof after deducting therefrom any amount already deposited by the tenant under sub section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground. Sections 39 and 40 of the new Rent Act also indicate that the benefit of the new Act will be given to the tenant if the conditions contemplated in those sections are satisfied. Section 39 also indicates that the parties are entitled to make neces sary amendment in their pleadings and to adduce additional evidence where necessary. " On this line of reason this Court set aside the judgment and decree of the High Court insofar as it related to evic tion. We find, with respect, that Their Lordships committed an error in overlooking the text of Section 39 of the Act. That section in terms says that the suit must be pending at the commencement of the Act to seek the benefit of that provi sion. Admittedly, the suit in question was filed after the commencement of the Act and hence the tenant was not enti tled to the benefit of Section 39 of the Act. But that apart, in a subsequent decision of this Court in Nand Ki shore Marwah vs Samundri Devi, ; , this Court dissented from the view in Vineet Kumar 's case on the ground that the attention of the Court was not drawn to Om Prakash Gupta 's case (supra) which specifically considered the provisions of the Act and in particular the language of Section 39 of the Act to point out that in order to attract that provision it must be shown that the suit was pending at the commencement of the Act i.e. on 15th July, 1975. Refer ring to Section 20 of the Act, which bars institution of a suit for eviction of a tenant except on grounds specified in clauses (a) to (g) this Court observed as under: 196 "This clearly indicates that the restriction put under Section 20 is to the institution of the suit itself and therefore it is clear that if the provisions of this Act applied then no suit for eviction can be instituted except on the ground 'specified in the sub sections of this sec tion. Keeping in view the language of this section if we examine the provisions contained in sub section (2) of Section (2) it will be clear that for a newly constructed building the provisions of this Act will not apply for 10 years and therefore so far as the restriction under Section 20 is concerned they will not apply and therefore it is clear that within 10 years as provided for in sub section (2) of Section 2 restriction on the institution of suit as provided for in Section 20 subsection (1) quoted above will not be applicable and it is thus clear that during the pendency of the litigation even if 10 years expired the restriction will not be attracted as the suit has been instituted within 10 years and therefore restriction as provided for in Section 20 cannot be attracted. " It may with respect, be pointed out that the comment that the Court 's attention was drawn to Om Prakash Gupta 's case is not correct as this case is specifically mentioned in paragraph 14 of the judgment in that case. Lastly, in Atma Ram Mittal vs Ishwar Singh Punia, ; , the appellant landlord had filed an eviction suit in respect of a shop which had been rented to the respondent in 1978. The suit was filed on the ground that the tenant was in arrears of rent from ist December, 1981 to 31st May, 1982 and the tenancy had been duly terminated by a notice. The suit was filed under sub section (3) of Section 1 of the Haryana Urban (Control of Rent and Eviction) Act, 1973. That sub section provided that "nothing in the Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date of its completion". Section 13(1) enumerated the usual grounds on which possession of a building or land could be obtained from a tenant. In November 1984, the tenant applied for dismissal of the suit on the ground that the moratorium period of 10 years expired in June/984 since admittedly the demised shop was constructed sometime in June 1974. Quoting the following passage from Ram Swaroop Rai 's, case (supra): 197 "The legislature found that rent control law had a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackles of legislative restriction, 'new construc tions ' for a period of ten years. So much so, a landlord who had let out his new building could recover possession with out impediment if he instituted such proceeding within ten years of completion. " this Court held as under: "It is well settled that no man should suffer because of the fault of the court or delay in the procedure. Broom has stated the maxim "actus curiae neminem gravabit" an act of court shall prejudice no man. Therefore, having regard to the time normally consumed for adjudication, the ten years ' exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally. It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within ten years and even then within that time it may not be disposed of. That will make the ten years holiday from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses. The purpose of legislation would thus be defeated. Purposive interpreta tion in a social amelioration legislation is an imperative irrespective of anything else. " Proceeding further, this Court said: "We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law. If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of ten years which is in reality an impossibility, then there would be empty reasons. In our opinion, bearing in mind the well settled principles that the rights of the parties crystallise to the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Digviiendrapal Gupta, the meaningful con struc 198 tion must be that the exemption would apply for a period of ten years and will continue to be available until suit is disposed of or adjudicated. Such suit or proceeding must be instituted within the stipulated period of ten years. Once rights crystallise the adjudication must be in accordance with law. " In order to appreciate the controversy in the correct perspective it would not be out of place to notice the legislative changes. During the second world war certain orders were issued under the Defence of India Rules, 1939, relating to the control and letting of accommodations to cope with the paucity of accommodation. This was followed by an ordinance promulgated in 1946 which was repealed by the U.P. (Temporary) Control of Rent and Eviction Act, 1947 described as the Old Act by Section 3(h) of the Act. The measure which was intended to be of a temporary character only continued till the passing of the Act in 1972. When the old Act replaced the 1946 ordinance, the expectation was that the acute shortage of accommodation was only a tempo rary feature and would disappear with the passage of time. The hope was belied and the stringent restrictions placed on the landlord 's rights in the matter of fixation and recovery of rent and eviction from the rented premises had to be continued indefinitely. These restrictions discouraged building activity which added to the already serious housing problem. There was an urgent need to provide incentives and thereby encourage new constructions. With that in view Section 2(2) provided that nothing in the Act shall apply to a building during a period of ten years from the date on which its construction is completed. In other words the legislature has relieved the owner of a new building from the restrictive provisions relating to rent, etc., contained in Sections 4 to 9 of the Act. So also such owners are granted a holiday or recess of ten years from the restric tive provisions regulating letting (Chapter III) and Evic tion (Chapter IV) contained in the Act. This freedom from the operation of the Act for ten years is given for the obvious purpose of encouraging building activity to ease the problem of scarcity of accommodation. The provisions of the Act in this behalf must, therefore, be understood in this background. Section 2(2) in terms says that the provisions of the Act will not apply to new constructions for a period of ten years from the date of completion of the construction. Read positively it means that the Act will apply to such build ings on the expiry of the recess period. But how are suits already filed during the recess period to be dealt with? Does 199 the Act offer any clue in this behalf? In this connection the only provisions which come to mind are sections 39 and 40 of the Act. Section 39 deals with suits pending on the date of commencement of the Act. Section 40 extends protec tion to an appeal or revision pending on the date of com mencement of the Act provided it has arisen out of an evic tion suit filed against a tenant to which the old Act did not apply. Such an appeal or revision has to be disposed of in the same manner as the suit is required to be dealt with under Section 39 of the Act. In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act. Secondly, if the suit is rounded on the allegation of nonpayment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of the said provision. If both these conditions are satisfied, the law, Section 39. mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of Section 20 of the Act. Similarly Section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commencement of the Act, the benefit of Section 39 will be available to the tenant. What these two provisions emphasise is that in order to avail of the benefit engrafted therein, the proceedings i.e., the suit, appeal or revision application must be pending at the date of commencement of. the Act, i.e., 15th July, 1972, and the tenant must have deposited the arrears of rent and damages together with interest and full cost of the landlord in the court within one month from the date of such commencement. Once the four conditions of Section 39 set out in the earlier part of this judgment are satisfied, the court is debarred from passing a decree in ejectment except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act. Therefore, even in a suit, appeal or revision application pending at the date of commencement of the Act, a decree for eviction can be passed if the case is brought within the exemption clause of Section 39 not withstanding the fact that the tenant has deposited the full amount of arrears of rent and damages together with interest and cost as required by that section. It, therefore, seems clear to us on the plain language of Section 39 of the Act that the legislature desired to grant protection from evic tion where the same was sought on the sole ground of arrears of rent. In cases falling within the exemption clauses of that section, the legislature has 200 itself permitted the landlord to proceed with the suit and claim eviction on any of the grounds enumerated in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act, if necessary by making the required amendment in the pleadings and by adducing additional evidence where necessary. It therefore seems to us that the legislature desired to limit the scope of the application of Sections 39 and 40 to suits, appeals and revisions pending on the date of com mencement of the Act, i.e. 15th July 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date. This is clear from the fact that the section contemplates deposit of arrears of rent and damages together with inter est and cost within one month from "such date of commence ment" meaning the date of commencement of the Act. To put it differently the section expects the tenant to make the deposit within one month from 15th July, 1972. This may not be possible unless the Act is to apply to the building forthwith. Of course the benefit of an extended date is given to those cases where the knowledge about the pendency of the proceedings is gained after 15th July, 1972. For example where a suit is actually filed before the commence ment of the Act but the summons of the suit is served in October 1972, the tenant would be entitled to make the deposit within one month from the service of the summons to avail of the benefit of this provision. So also it can apply to cases where the tenant had died before the Act came into force or before the expiry of one month from the date of commencement of the Act and the landlord took time to bring the legal representative on record; in which case the legal representative would be entitled to seek the benefit from the date of knowledge. Of course this benefit would not be available where the tenant dies after the expiry of the period within which the right is to be exercised. The same would be the case in the case of an appeal or revision application. It seems to us that the legislature intended to give the benefit of Sections 39 and 40 to suits, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date. The expression such preceding the word 'commencement ' is clearly suggestive of the fact that it has reference to the date of commencement of the Act and the payment must be made within one month from such commencement. Unless we give such a restricted meaning to the section we would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act. This interpreta tion is also in tune with the ratio in Ram Swaroop Rai 's case (supra). 201 was argued that the words 'commencement of this Act ' should be construed to mean the date on which the moratorium period expired and the Act became applicable to the demised buildings. Such a view would require this Court to give different meanings to the same expression appearing at two places in the same section. The words 'on the date of com mencement of this Act ' in relation to the pendency of the suit would mean 15th July, 1972 as held in Om Prakash Gupta (supra) but the words 'from such date of commencement ' appearing immediately thereafter in relation to the deposit to be made would have to be construed as the date of actual application of the act at a date subsequent to 15th July, 1972. Ordinarily the rule of construction is that the same expression where it appears more than once in the same statute, more so in the same provision, must receive the same meaning unless the context suggests otherwise Besides, such an interpretation would render the use of prefix 'such ' before the word 'commencement ' redundant. Thirdly such an interpretation would run counter to the view taken by this Court in Atma Ram Mittal 's case (supra) wherein it was head that no man can be made to suffer because of the court 's fault or court 's delay in the disposal of the suit. To put it differently if the suit could be disposed of within the period of ten years, the tenant would not be entitled to the protection of Section 39 but if the suit is prolonged beyond ten years the tenant would be entitled to such protection. Such an interpretation would encourage the tenant to pro tract the litigation and if he succeeds in delaying the disposal of the suit till the expiry of ten years he would secure the benefit of Section 39, otherwise not. We are, therefore, of the opinion that it is not possible to uphold the argument. In the above view of the matter we are of the opinion that the courts below committed an error in giving the benefit of Section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit within a month after the moratorium period expired in 1977. As stated above the legislature intended to limit the application of Sec tions 39 and 40 of the Act to cases where the Act became applicable immediately and the deposit could be made within one month from its applicability and not to cases where the moratorium period was to expire long thereafter. For the reasons stated above we think the courts below were wrong in the view they took. We, therefore, set aside the judgment and decree of the courts below by allowing this appeal. Having regard 202 to the fact that the respondent will have to look for alter native accommodation we give him a year 's time to vacate on condition that he pays all the arrears of rent and damages, if due, within one month and files an undertaking in the usual form within even time. In the circumstances of the case we think the parties may be left to bear their own costs. R.S.S. appeal allowed.

On the completion of construction of the demised prem ises in 1967, the appellant landlord had let it out to the respondent tenant in the same year. Later, on 27th May, 1972 the landlord filed the eviction suit against the tenant. On 15th July, 1972 the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act. 1972 came into force. The tenant deposited in the Court on 2nd September, 1977 an amount of Rs.4005 being the arrears of rent inclusive of interest and cost. This payment was made within one month after the expiry of the period of ten years stipulated in section 2(2) of the Act to take advantage of section 39 of the Act. Section 2(2) inter alia provided that nothing in the Act shall apply to a building for a period of ten years from the date on which its construction was completed, while section 39 dealt with pending suits for eviction relating to building brought under the regulation for the first time. The Trial Court gave the benefit of section 39 and refused to order ejectment of the tenant. The landlord 's revision application was rejected by the Additional District Judge, and his further revision was dismissed by the High Court. Allowing the appeal, this Court. , HELD: (1) In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act. Secondly, if the suit is rounded on the allegation of non payment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of 187 the said provision. If both these conditions are satisfied, the law, section 39, mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of section 20 of the Act. Similarly, section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commence ment of the Act, the benefit of section 39 will be available to the tenant. [199B E] The legislature intended to give the benefit of sec tions 39 and 40 to suit, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date. The expression 'such ' preceding the word 'commencement ' is clearly sugges tive of the fact that it has reference to the date of com mencement of the Act and the payment must be made within one month from such commencement. unless such a restricted meaning to the section is given, it would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act. [200F H] (3) The Legislature desired to limit the scope of the application of sections 39 and 40 to suits, appeals and revisions pending on the date of commencement of the Act, i.e., 15th July, 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date. This is clear from the fact that the section contemplates deposit of arrears to rent and damages together with interest and cost within one month from 'such date of commencement ' meaning the date of commencement of the Act. [200B C] R.D. Ram Nath & Co. & Anr. vs Girdhari Lal & Anr., ; Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452; Om Prakash Gupta etc. vs Dig Vijen drapal Gupta etc. ; , ; Vineet Kumar vs Mangal Sain Wadhera, ; ; Pasupuleti Venkateswarlu vs Motor and General Traders, ; A.K. Gupta & Sons vs Damodar Valley Corporation, [1966] I SCR 796; Nand Kishore Marwah vs Samundri Devi, ; and Atma Ram Mittal vs Ishwar Singh Punia, ; , referred to. (4) The Courts below committed an error in giving the benefit of section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit 188 SUPREME COURT REPORTS [1990] 1 S.C.R. within a month after the moratorium period expired in 1977. [201F]

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Criminal Appeal No. 104 of 1990. From the Judgment and Order dated 1.9. 1983 of the Punjab and Haryana High Court in Crl. A. No. 199 DB/83. B.S. Malik for the Appellants. Mahabir Singh for the Respondent. The Judgment of the Court was delivered by AHMADI, J. Special leave granted. The seven appellants before us were convicted by the learned Additional Sessions Judge, Sonepat on three counts and sentenced as under: (a) rigorous imprisonment for one year under Section 148, I.P.C.; (b) rigorous imprisonment for six months under Section 323/ 149, I.P.C.; and (c) imprisonment for life and a fine of Rs.200 under Section 302/149, I.P.C. All the said substantive sentences were directed to run concurrently. 514 The seven appellants preferred an appeal against the order of conviction and sentence passed by the learned Trial Judge. The High Court while dismissing their appeal clari fied that their convictions were on six counts and altered the fine awarded under Section 302/149, I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant. Being aggrieved by this enhancement of fine the appellants have preferred this appeal limited to the question of this enhancement only. Section 374 of the Code of Criminal Procedure ( 'the Code ' hereinafter) provides for appeals from conviction by a Sessions Judge or an Additional Sessions Judge to the High Court. Section 377 entitles the State Government to direct the Public Prosecutor to present an appeal to the High Court against the sentence on the ground of its inadequacy. Sub section 3 of Section 377 says that when an appeal has been filed against the sentence on the ground of its inadequacy, the High Court shall not enhance the sentence except after giving to the accused a reasonable opportunity of showing cause against such enhancement and while showing cause the accused may plead for his acquittal or for the reduction of the sentence. Admittedly no appeal was preferred by the State Government against the sentence imposed by the High Court on the conviction of the appellants under Section 302/149, I.P.C. Section 378 provides for an appeal against an order of acquittal. Section 386 enumerates the powers of the appellate court. The first proviso to that section states that the sentence shall not be enhanced unless the accused has had an opportunity of showing cause against such enhancement. Section 397 confers revisional powers on the High Court as well as the Sessions Court. It, inter alia, provides that the High Court may call for and examine the record of any proceeding before any inferior criminal court situate within its jurisdiction for the purposes of satisfy ing itself as to the correctness, legality or propriety of any finding, sentence or order recorded or passed and as to the regularity of any proceedings of any inferior court. Section 40 1 further provides that in the case of any pro ceedings, the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of appeal by Sections 386, 389, 390 and 391 of the Code. Sub section 2 of Section 401 provides that no order under this Section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by Pleader in his own defence. Sub section 4 next provides that where under this Code an appeal lies and no appeal is brought, no proceeding by way of revision shall be entertained at the 515 instance of the party who could have appealed. It is clear from a conjoint reading of Section 377, 386, 397 and 401 that if the State Government is aggrieved about the inade quacy of the sentence it can prefer an appeal under Section 377(1) of the Code. The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 40 1 of the Code since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it. Sub section 4 of Section 401 operates as a bar to the party which has a right to prefer an appeal but has failed to do so but that sub section cannot stand in the way of the High Court exer cising revisional jurisdiction suo motu. But before the High Court exercises its suo motu revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and is given an opportunity of being heard on the question of sentence either in person or through his advocate. The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court. Now, in the present case the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge. No appeal was filed by the State under Section 377( 1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149 I.P.C. on the ground of its inadequacy. Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code. If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and heating the convicts on the question of inadequacy of sen tence. Without following such procedure it was not open to the High Court in the appeal filed by the convicts to en hance the sentence by enhancing the fine. The High Court clearly acted without jurisdiction. For the above reasons we are clearly of the opinion that the appeal must succeed. In the result we allow this appeal and set aside the order of the High court insofar as it enhances the sentence by enhancing the fine from Rs.200 to Rs.5,000 per count per appellant. In other words we restore the order of sentence passed by the Trial Court under Section 302/149, I.P.C. The additional fine, if paid, will be refunded. N.P.V. Appeal al lowed.

The appellants were convicted by the Additional Sessions Judge on three counts and sentenced to various terms of imprisonment and a fine of Rs.200 under Sections 148, 323/149 and 302/149 I.P.C. The appellants preferred an appeal against the order of conviction and sentence. Dis missing the appeal, the High Court, clarified that their convictions were on six counts and altered the fine awarded under Section 302/149 I.P.C. from Rs.200 to Rs.5,000 in respect of each appellant per count, i.e. Rs.30,000 per appellant. Hence the appellants preferred appeal, by special leave, in this Court, limited to the question of enhancement of fine only. Allowing the appeal, and setting aside the order of High Court enhancing the fine, this Court, HELD: It is clear from a conjoint reading of Sections 377, 386, 397 and 401 of Code of Criminal Procedure, 1973, that if the State Government is aggrieved about the inade quacy of the sentence, it can prefer an appeal under Section 377(1) of the Code. The failure on the part of the State Government to prefer an appeal does not, however, preclude the High Court from exercising suo motu power of revision under Section 397 read with Section 401 of the Code, since the High Court itself is empowered to call for the record of the proceeding of any court subordinate to it. But before the High Court can exercise its revisional jurisdiction to enhance the sentence, it is imperative that the convict is put on notice and given an opportunity of being heard on the question of sentence either in person or through his advo cate. The revisional jurisdiction cannot be exercised to the prejudice of the convict without putting him on guard that it is proposed to enhance the sentence imposed by the Trial Court. [515A D] 513 In the present case, the appeal was filed under Section 374(2) of the Code by the convicts against the order passed by the Additional Sessions Judge. No appeal was filed by the State under Section 377(1) of the Code against the sentence awarded by the trial court for the offence under Section 302/149, I.P.C. on the ground of its inadequacy. Nor did the High Court exercise suo motu revisional powers under Section 397 read with Section 401 of the Code. If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 401 of the Code by issuing notice of enhancement and hearing the convicts on the question of inadequacy of sentence. Without following such procedure it was not open to the High Court in the appeal filed by the convicts to enhance the sentence by enhancing the fine. The High Court clearly acted without jurisdiction. [515D F]

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s (C) Nos. 2275 86 of 1982 Etc. (Under Article 32 of the Constitution of India) WITH Special Leave Petition (C) No. 4090 of 1985. From the Judgment and Order dated 4.12. 1984 of the Madras High Court in W.A. No. 414/78. B. Datta, Additional Solicitor General, G. Ramaswamy, Additional Solicitor General, M.K. Ramamurthy, V.M. Tar kunde, Gobind Mukhoty, S.C. Manchanda, G.B. Pai, K.K. Venug opal, Mrs. Shyamala Pappu, M.A. Krishnamurthy, Ms. Chandan Ramamurthy, J.D. Jain, MS. Kanwaljit Kochhar, K.B. Rohtagi, B.R. Agarwala, Ms. Sushma Manchanda, R.B. Hathikhanwala, Ms. Sunita Sharma, P.H. Parekh, S.S. Khanduja, Y.P. Dhingra, B.K. Saluja, H.S. Parihar, Vipin Chandra, R.K. Maheshwari, Pramod Dayal, R.P. Saxena, D.K. Garg, A.D. Sanger, Pramod Swarup, Krishna Prasad, P.C. Kapur, A.N. Badriyar, M.P. Jha, V.N. Sharma Petitioner inperson, B.B. Sahoo, section Srinivasan, Vineet Kumar, Ms. Urmila Kapoor, Ms. section Janani, Dalveer Bhandari, C. Ramesh, G.D. Gupta, L.K. Gupta, G. Venkatesh Rao, Ms. A. Subhashini, Ms. Sushma Suri, C.V. Subba Rao, P. Parmeshwaran, J.R. Das, S.K. Patri, Ms. Lira 692 Goswami, D.N. Mishra, V.J. Francis, N.M. PopIi, S.K. Dhin gra, K.J. John, Y.P. Rao, Mahabir Singh, Ms. Bharti Anand, Indra Makwana and S.K. Jain for the appearing parties. The Judgment of the Court was delivered by SAWANT, J. This group of petitions concerns the workers in canteens run in the different railway establishments. The relief claimed in all the petitions is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees. For our purpose, these canteens have to be classified into three categories, viz. (i) Statutory Canteens These are canteens required to be provided compulsorily in view of the provisions of Section 46 of the (hereinafter referred to as the Act) since the Act admitted ly applies to the establishments concerned and the employees working in the said establishments exceed 250; (ii) Non Statutory Recognised Canteens These canteens are run in the establishments which may or may not be governed by the Act but which admittedly employ 250 or less than 250 employees, and hence, it is not obligatory on the railways to maintain them. However, they have been set up as a staff welfare measure where the employees exceed 100 in number. These canteens are established with the prior approval and recog nition of the Railway Board as per the procedure detailed in the Railway Establishment Manual; and (iii) Non Statutory Non Recognised Canteens These canteens are run at estab lishments in category (ii) above but employ 100 or less than 100 employees, and are established without the prior approv al or recognition of the Railway Board 3. The present petitions concern employees in all the three types of canteens. It will be convenient to deal separately with the employees in the three types of can teens, because, the history of litigation and the arguments advanced in respect of each of the categories are different. 4.(i) Statutory Canteens: Section 46 of the Act which makes it obligatory on an occupier of a factory as defined under the Act, to provide a canteen or canteens where more than 250 workers are ordinarily employed runs as follows: "Canteens: (1) The State Government may make rules 693 requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers. (2) Without prejudice to the generality of the foregoing power, such rules may provide for (a) the date by which such canteen shall be provided; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made therefore; (d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen; (dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuff and which shall be borne by the employer; (e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under clause (c). " It is evident from the aforesaid provision that the occupier of a factory (a railway establishment for the purposes of the said provisions is a factory within the meaning of the Act) is not only obliged to run a canteen where more than 250 workers are employed but is also obliged to abide by the rules which the concerned Government may make, including the rules for constitution of a managing committee for running the canteen and for representation of the workers in the management of the canteen. The occupier may also be required to bear a part of the expenses of running the canteen and to comply with the rules prescribing standards in respect of construction, accommodation, furniture and other equipment of the canteen the foodstuffs to be served and the prices to be charged for them. In other words, the whole paraphernalia of the canteen has to conform to the statutory rules made in that behalf. As is pointed out on behalf of the Railways, it appears that there are 89 such statutory canteens function ing in the railway premises. 694 5. It appears that the workers working in the statutory canteen at Loco Carriages and Electrical Workshops of the South Eastern Railways Workshop, Kharagpur had preferred a writ petition in the Calcutta High Court praying for a direction to the Union of India to recognise them as railway employees and grant them a11 service conditions available to the railway employees. A learned Single Judge by his deci sion dated 7.8. 1973 dismissed the said petition holding that the workers were not entitled to the reliefs claimed by them. Against the said decision, the workers preferred an appeal before the Division Bench of the said Court and the Division Bench by its decision of July 16, 1974, allowed the same and directed the respondent Union of India to recognise the workers as employees of the Railway Administration under the , but rejected the demand to pay salary and allowances to them as if they were railway employees. On the other hand, the High Court held that the employment of the workers must be deemed to be on the basis of appointment letters and that they had no statutory or legal right and the Railway Administration had no corresponding statutory or legal obligation to pay salaries etc. above the minimum wages, or dearness allowances as claimed by them. The court held that their service conditions were in the realm of contract or depending on a policy followed by the Railway Administration, at its discretion. Being aggrieved, the Union of India had come in appeal to this Court being Civil Appeal No. 368 of 1978.This Court by its order of October 22, 1980 disposed of the appeal as follows: "The benefits accruing to the workers under the decision of the Calcutta High Court do not require to be interfered with in this appeal. Prima facie we are inclined to agree that the High Court decision is right. Moreover, the learned Attorney General agrees to apply the Act as if it were applicable to canteen employees. In this view, a final pronouncement on this question by this Court need not be given in the present case. We leave it open to Union of India in an appropriate case to raise the point and seek a pronouncement. " The Act referred to in the aforesaid order obviously means the . Therefore, what was confirmed by this Court was the declaration given by the Calcutta High Court that the employees of the Statutory Canteens were railway.employees for the purposes of the and that their service conditions were determined by the con tract as incorporated in their appointment letters or by the policy decision of the Railway Administration which was discretionary. It is 695 necessary to note this fact at the very outset. It has further to be remembered that the Calcutta High Court had given the aforesaid declaration in favour of the statutory canteen workers notwithstanding the fact that the canteens were managed by the Committee of Management nomi nated by the Railway Administration or by a managing commit tee elected or nominated by the employees or by the Corpera tive Society relying on the express provision contained in Chapter XXVIII` Of 'the Railway Establishment Manual. It may, however, be mentioned that the High Court had taken into consideration Note 2 of Para 2834(2) of the Manual which had declared that in cases where the canteens were being run on cooperative basis either by the Co operative Society or the managing committee of the staff, the canteen staff shall not be treated as railway servants because in that case master and servant relationship existed between the Co operative Society (through its managing committee) and the concerned employees. The High Court had relied upon the fact that even in such cases the entire cost of the staff was reimbursed by the Railway Administration to the Co operative Society managing committee and that over all control over the canteen and the staff, vested in the Rail way Administration. In fact, the direction under para 2832 of the Railway Establishment Manual was that where even a Co operative Society was running the canteen, the bye laws of the Society should be suitably amended to provide for such overall control by the Railway Administration since the legal responsibility for the proper management of the can teen vested not with the agent like the Co operative Soceity but solely with the Railway Administration. 6. 1t is undoubtedly true, however, that this Court in its Order dated October 22, 1980 had reserved the right to the Union of India to raise the question as to whether the employees of the Statutory canteens were the employees of the Railway Establishment, finder the and get a pronouncement on the same. It appears that after the said order of this Court, the Railway Board had issued a letter dated May 22, 1981 to the General Manager, South Eastern Railway, Calcutta Conveying the decision of the Ministry of the Railways that the employees of Kharagpur Workshop Statu tory Canteen, (which employees were a party to the said decision) should be deemed to be railway servants with effect from October 22, 1980 and till Government decided otherwise, the said workers would continue to be governed by the conditions of service and emoluments as existed on October 21, 1980. It was also stated there that what was stated in the letter had the sanction of the President and the letter was issued/with 696 the concurrence of the Finance Directorate of the Ministry of Railways. Subsequently, the Board issued another circular letter of June 8, 1981 addressed to the General Managers of all Indian Railways stating therein that it was decided that employees of all other statutory canteens on the railways irrespective of the type and management of the canteens should also be deemed to be railway servants w.e.f. October 22, 1980 and that till Government decided otherwise, the staff of the statutory canteens would continue to be gov erned by the conditions of service and emoluments as existed on October 21, 1980. On March 11, 1982, the Railway Board issued a letter and referred to its earlier communication of June 8, 1981 and September 18, 1981. In this, letter, it was stated that pursuant to the said two earlier communications (where it was stated that the question of pay scale and retirement benefits were under consideration and that a separate commu nication would follow), a Schedule showing revised pay scale applicable to the employees of the statutory canteens of the railways was enclosed for necessary action. The letter stated that the existing employees of these canteens would be entitled to exercise an option under Rule 2019 (F.R. 23) and Rule II either to retain their existing pay scale as presently applicable to them or opt for the revised pay scale. However, on promotion such employees would be compul sorily brought on to the revised pay scales. It was made clear that those who opt for the revised scales would not be eligible to other facilities/perquisites admissible to them in their existing pay scale such as free food, snacks, commission etc. A period of three months was given for exercising the option and it was stated that if no option was exercised it would be assumed that the employees con cerned had elected to be governed by the revised pay scales w.e.f. October 22, 1980. The Schedule annexed to the letter mentioned, among other things, that the canteen employees will be entitled to the dearness allowance, house rent allowance and city compensatory allowance as per the in structions issued by the Railway Ministry; that the age of retirement of employees would be 58 years as in the case of other railway employees; and that the employees of the canteen would be entitled to the benefit of productivity linked bonus on the principles applicable to the stall of the office/establishment to which they were attached from the date of their being declared as railway servants. In a decision of this Court reported in ; , this Court directed that for the purpose of calculating pensionary benefits, the service rendered by the said em ployees prior to October 22, 1980 should also be computed. By its letterr dated May 13, 1983 addressed to 697 all the General Managers, the Ministry of Railways placed on record the fact that pursuant to the Order of this Court dated October 22, 1980 the employees of all the statutory and 11 Delhi based nonstatutory canteens had been treated as railway servants w.e.f. October 22, 1980, and the revised pay scale applicable to the employees had been communicated vide the Railway Board 's letter dated March 11, 1982. On December 4, 1984, a Division Bench of the Madras High Court delivered a Judgment in Writ Appeal No. 414 of 1978, Railway Board & Anr. vs Parthasarthy and Anr., and in Writ Appeal No. 415 of 1978 relying upon the order dated October 22, 1980, passed by this Court and held that can teen employees will have to be treated as railway employees for the purposes of the , in view of th, con cession made by the Railways before this Court and also the con cession made by the counsel appearing for the Railways before the High Court. We have then on record an Office Order dated July 27, 1983 issued to an employee of a statutory canteen con veying to him appointment as a TY/Cleaner in a scale of pay plus usual allowances w.e.f. January 12, 1983. In this order, it is stated that the employee would be eligible for house rent allowance under the Rules in force from time to time, that he will be on probation for a period of one year and that the appointment would be terminated with 14 days ' notice on either side. It is, however, added that no such notice would be required, for the termination of service as and by way of removal or dismissal as a disciplinary measure effected after compliance with the provisions of clause (2) of Article 311 of the Constitution of India. It is also stated that the employee should take oath of allegiance to the Union of India and that he should apply for allotment of quarters within 7 days from the date of his appointment and then alone should apply for house rent allowance. It is now necessary to refer to the relevant provi sions of the Railway Establishment Manual which deal with the canteens. Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the and underwrites the fact that under these provisions, there is a statutory obligation on the Railway Administra tion to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons. The paragraph further mentions that Railway Admin istration should strictly abide by the rules which are framed by the respective State 698 Governments under sub section 2 of the Act regarding the constitution of the Managing Committees of such canteens. Paragraph 2832 then ordains that the staff served by the said canteens should be actively associated in their manage ment, and for this purpose a Committee of management of the staff should be formed in accordance with the rules framed by the concerned State Government. The paragraph further states that although the Administration can employ as agent a Staff Committee or a Co operative Society for management, the legal responsibility for proper management rests not with the agency but solely with the Railway Administration. In case the management is entrusted to a consumer co opera tive society the bye laws of the society are directed by the said paragraph to be amended suitably to provide for an overall control by the Railway Administration. Paragraph 2834 deals with the incidence of cost of the canteens. As regards the statutory canteens, the paragraph directs that in addition to the facilities which are given to the non statutory canteens, the Administration will have also to bear the expenditure on the entire paraphernalia including the furniture as well as the salaries of the cook and the canteen staff. Note 2 of the said paragraph then states that where the canteens are being run on co operative basis either by co operative society or by Managing Committee of the staff and there subsists a relationship of master and servants between the society/ managing committee and the workers, i.e. where the canteen staff has been employed by the society/managing committee and not by the Administration as such, the canteen staff are not to be treated as railway servant even though the cost of this staff is reimbursed by the Administration. We have also on record the second edition (1988) of "ADMINISTRATIVE INSTRUCTIONS ON DEPARTMENTAL CANTEENS IN OFFICES AND INDUSTRIAL ESTABLISHMENTS OF THE GOVERNMENT" issued by the the Deptt. of Personnel & Training, Ministry of Personnel, Public Grievances & Pensions of the Govt. of India, first published in 1980 (hereinafter briefly called as the Instructions). They are applicable to: (a) Canteens/Tiffin Rooms set up on departmental basis and run as per scheme issued by the Deptt. of Personnel and Training; (b) Canteens/Tiffin Rooms set up on Co operative basis by a Society of Government employees with the Head of the Deptt./ Office/Establishment or his nominee as Chairman; and (c) Canteens/Tiffin Rooms set up in Industrial Establish ments 699 (other than those covered under Section 46 of the ) of the Government and which have not been exempted from following the rules in the said Instructions due to the availability of a separate and distinct set of rules and guidelines framed by the controlling Ministries/Departments. (para 1.3) It is made clear in these Instructions that the orders issued under the said Instructions are applicable to all Canteens/Tiffin Rooms functioning or to be set up in any Ministry, Department, Establishment, Office, Installation of the Government of India (industrial or nonindustrial) which should be centrally registered with the office of the Direc tor of Canteens, Deptt. of Personnel & Training, New Delhi including those functioning under the Ministries of Defence, P & T and Railways, unless these three Ministries had previ ously decided to exempt any of their Canteens/Tiffin Rooms from the purview of the said Instructions due to specific reasons, and they had framed or they propose to frame a separate set of instructions for the exempted canteens. (para 1.4). The Instructions further state that the policy matters and coordination on canteen matters will be central ly done by the Deptt. of Personnel and Training (Director of Canteens) (para 1.14). To be entitled to subsidy all the departmental canteens have to get themselves registered centrally with the Director of Canteens and Training (Para 1.15). The canteens are entitled to subsidy on wages and gratuity payable to the workers employed in the canteens and for their uniforms as well as to capital and replacement grants for equipment including utensils, crockeries, cutt lery and furniture and also to interest free loans. In addition to subsidy for equipment, the canteens are also entitled to other facilities such as accommodation on nomi nal rent of Rs. 1 electricity, water etc. The Instructions in terms state that since the canteens are run departmental ly as a measure of staff welfare, the beverages, snacks and meals etc. have to be made available to the staff at econom ic rates and for this purpose the Government has to provide necessary accommodation at the nominal rent and provide the necessary grants, subsidy and loans. (Para 1.2). In, addi tion, the concerned Department/Office has to bear the elec tricity and water bills. In chapter V which deals with the personnel in the canteens, the Instructions lay down the entitlement of Canteens/Tiffin Rooms to the number and categories of employees according to the grades of Canteens/Tiffin Rooms. With regard to the recruitment rules, conditions of service, status and the scales of pay of the canteen workers, the procedure for taking disciplinary action against them as well as for giving training to them, the chapter makes it clear that since the canteen workers have acquired the status of the holders of civil posts 700 w.e.f. October 1, 1979, their recruitment and conditions of service etc. would be governed by the rules framed under proviso to Article 309 of the Constitution contained in GSR 54 issued under Government of India, Department of Personnel and Training Notification dated 23rd December, 1980. It is made clear that the said rules also apply to the employees of the Canteens run by the Co operative Societies in con junction with the bye laws of the Society and local co operative laws in force. It is further made clear that the workers in the non statutory departmental and co operative Canteens/Tiffin Rooms will be paid the pay and allowances at the same rate and on the same basis w.e.f. 26.9. 83 on which the employees of the statutory canteens are paid the same. The chapter also mentions that before taking any disci plinary action against any canteen worker procedure as set out in chapter IV (Conduct and Discipline) of GSR of 1954 dated 23rd December, 1980 published in the Gazette of India Part II Section 3, sub Section (1) dated 17th January, 1981 will be followed. The chapter further directs periodical training programmes to be arranged by the Director of Can teens for managerial, personnel and other canteen staff. Chapter VI contains guidelines for constituting the Managing Committees of the canteens. This chapter ordains that the Chairman of the managing committee should prefera bly be the Head of the Department/Office himself or his Deputy, and that the Honorary Secretary of the managing committee should normally be the Welfare Officer or the Administrative Officer of the Department/ Office of the minimum rank of a Section Officer or a Major or equivalent in services, who shall be nominated by the Office/Establish ment, and in the case of Co operative Canteens may be elect ed as per the bye laws of the Society. One of the officials who should be of the rank of Section Officer/Major or above is to be nominated on the managing Committee by the Chair man. Paragraph 6.11 defines the Legal Status of the Managing Committee. It says that the Committee functions in the Deptt./Office/establishment of the Government of India for the welfare of the Govt. employees, under the orders of the Government of India and its functions are connected with the affairs of the Union. The Committee, therefore does not enjoy an autonomous status. With respect to the contractual obligations, it functions "for and on behalf of the the President of India". The proceedings of the Committee will not be conducted or decided on resolutions or voting system, but the official decision will rest with the Chairman of the Managing Commitsee or the Head of the Department/Office. In the case of canteens run by the co operative societies, this provision is to apply as per the 701 bye laws of the society and the co operative law in force. The presence of the Chairman and the Hony. Secretary is necessary to constitute the quorum for holding the meeting of the Managing Committee. The Head of the Department/Office is given power to depute a Government servant of the rank of Section Officer/equivalent or below if he can be spared, for part time or whole time assistance to the Managing Commit tee. The Department/Office concerned is required to provide stationery, stencils, cyclostyling facilities, postage stamps, office assistance etc. to enable the Managing Com mittee to conduct its business. The annual accounts of the Canteens have to be submitted to the Financial Advisers of the Department/Office concerned with copies thereof to the Director of the can teens, and the audit of the accounts of the Canteens/Tiffin Rooms is to be carried out by the Departmentalised Accounts Organisations of the concerned Ministries/Departments/Of fices. Out of the surplus of net profits of the Canteens, 1/3 amount is required to be remitted to the Director of Canteens Funds for welfare of the canteen employees in general. All the aforesaid provisions apply to all types of Tiffin Rooms classified into Type B and A where the strength of the Department/Office is between 25 49 and 50 99 respec tively and to the Canteens classified in Types D, C, B and A where the strength is between 100 249, 250 499, 500 699 and 700 1200 respectively. Where the strength is above 1200 a further higher classification is given to the Canteens. These provisions contained in the Instructions, therefore, show that the Government has a complete control over the canteens and the workers employed therein are holders of civil posts within the meaning of Article 311 of the Constitution. Their recruitment and service conditions are governed by the rules applicable to the employees of the Government Deptt./Office/Establishment to which the canteens are attached. It is against this background that we have to con sider the question as to whether the staff employed in the statutory canteens m ' the Railway Establishment, industrial or non industrial, are railway employees or not. According to the workers, in view of the aforesaid documents on record there is no reason why the employees in the canteens con cerned should not be given the status of the railway employ ees with all consequential benefits. On the other hand, the 702 contention advanced on behalf of the Railways is that the documents in question show that the employees of the statu tory canteens are to be deemed railway employees only for the purpose of the and for no other purpose. In no case, they can be deemed as holders of civil posts either for Article 309 or for Article 311 or for any other purpose. On behalf of the employees, a preliminary objection was raised, namely, that in view of the order of this Court dated October 22, 1980 in Civil Appeal No. 368 of 1978 and another, it is not open to the Railways to agitate the question whether the employees in the statutory canteens are railway employees or not, and further whether they are railway employees for the purposes of the . We are not inclined to entertain this objection for it is clear from the said order that the Court had left open even the question as to whether the employees of the statutory can teens were railway employees for the purposes of the said Act. Hence, the question whether they are employees of the railways for all purposes necessarily remains res integra. We may reproduce here the said order which is clear enough on the subject: "The benefits accruing to the workers under the decision of the Calcutta High Court do not require to be interfered with in this appeal. Prima facie we are inclined to agree that the High Court decision is right. Moreover, the learned Attorney General agrees to apply the Act as if it were applicable to canteen employees. In this view a final pronouncement on this question by this Court need not be given in the present case. We leave it open to the Union of India in an appropriate case to raise the point and seek a pronouncement. Leave granted in the petition flied by Railway Canteen Karmachari Association. We have in C.A. No. 368 of 1978 passed an order and the point raised by the workmen in this appeal closely resembles the one raised in the sister case just referred to. We apply the same principle as has been decided by the Calcutta High Court to this case also and the workmen will be given the same benefits. We, however, make it clear here also that the Union of India will be free in an appopriate case to challenge the correctness of the legal point 703 decided by the Calcutta High Court. It will be equaly open to the workmen to challenge the decision of the Delhi High Court if it becomes necessary. With these observations we dispose of both the appeals. The appellants in C.A. No. 368/1978 will pay the costs of the respondents. " It must be remembered in this connection that both the Calcutta and the Madras High Courts had taken the view that the employees in the statutory canteens were the employees of the Railways for the purposes of the said Act. The Delhi High Court had distinguished the decision of the Calcutta High Court on the ground that, that decision did not apply to the employees in the non statutory canteens with which it was concerned, and had held that the employees of the non statutory canteens were not railway employees for any pur pose. It is in this circumstance that this Court had given liberty to the Railway Administration as well as the employ ees to challenge the respective decisions of the Calcutta and Delhi High Courts. It will not, therefore, be correct to say that this Court had pronounced its final opinion on the said issue by the said order. It has also to be remembered in this connection that the issue before this Court in those matters was whether the employees either of the statutory or non statutory canteens were the railway employees for the purposes of the . The larger issue whether they were railway employees for all purposes was neither dis cussed nor even tentatively decided in those proceedings. We are, therefore, of the view that both the said issues are at large in the case of the employees of the statutory as well as of the non statutory canteens. Before us therefore two issues arise for considera tion, viz. (a) whether the employees of the statutory can teens are railway employes for the purposes of the said Act? and (b) whether they are railway employees for all other purposes as well? 20. As regards the first contention, namely, whether the said employees are the employees of the Railway Administra tion for the purposes of the said Act, according to us the view taken by the Calcutta High Court in that behalf is correct. Section 2(1) of the defines "worker" as follows: "Worker" means a person employed, directly or through any agency (including a contractor) with or without the knowl edge of the principal employer, whether for remuneration or not in any manufacturing process or in 704 cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work inciden tal to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the Union;" Since in terms of the Rules made by the State Govern ments under Section 46 of the Act, it is obligatory on the Railway Administration to provide a canteen, and the can teens in question have been established pursuant to the said provision there is no difficulty in holding that the can teens are incidental to or connected with the manufacturing process or the subject of the manufacturing process. The provision of the canteen is deemed by the statute as a necessary concomitant of the manufacturing activity. Para graph 2829 of the Railway Establishment Manual recognises the obligation on the Railway Administration created by the Act and as pointed out earlier paragraph 2834 makes provi sion for meeting the cost of the canteens. Paragraph 2832 acknowledges that although the Railway Administration may employ anyone such as a Staff Committee or a Co operative Society for the management of the canteens, the legal re sponsibility for the proper management rests not with such agency but solely with the Railway Administration. If the management of the canteen is handed over to a consumer cooperative society the bye laws of such society have to be amended suitably to provide for an overall control by the Railway Administration. In fact as has been pointed out earlier the Adminis trative Instructions on departmental canteens in terms state that even those canteens which are not governed by the said Act have to be under a complete administrative control of the concerned Department and the recruitment, service condi tions and the disciplinary proceedings to be taken against the employees have to be taken according to the rules made in that behalf by the said Department. In the circumstances, even where the employees are appointed by the Staff Commit tee/ Cooperative Society it will have to be held that their appointment is made by the Department through the agency of the Committee/ Society as the case may be. In addition, as stated earlier, the Railway Board by its circular dated June 8, 1981 had communicated that it was decided to treat the employees of all statutory canteens, as railway servants irrespective of the type and management of the canteens, and to extend to them the conditions of service and emoluments of the railway servants as existed on October 21, 1980, w.e.f. 22nd October 1980. No doubt it was stated in this letter that the said decision would 705 prevail till Government decided otherwise. Subsequently on March 11, 1982, the Board also prescribed the pay scales, dearness allowance, house rent allowance, city compensatory allowance and productivity bonus, and fixed the age of their superannuation. As also pointed out earlier, this court in its decision reported in ; , subsequently directed that for the purpose of calculating pensionary benefits the service rendered by the said employees prior to October 22, 1980 would be computed. What is further, the Ministry of Railways by its letter of May 13, 1983 placed on record the fact that not only the employees of all the statutory canteens but the employees of eleven Delhi based non statutory canteens had been treated as railway servants with effect from October 22, 1980. It must be remembered in this connection that neither the Railway Ministry nor the Railway Board had stated in their letters/orders that the employees of the statutory canteens and of the eleven Delhi based non statutory canteens were being treated as railway servants only for the purposes of the or that they were to be so treated till further decision of this Court. It is possible to place a liberal construction on these letters/ orders and interprete the relevant direction name ly, "till further directions from the Government" as being the directions after the decision of this Court in the present matters, and for the sake of argument we may proceed on that basis while dealing with the present contention. The admitted facts, however, are that these canteens have been in existence at their respective places continuously for a number of years. The premises as well as the entire para phernalia for the canteens is provided by the Railway Admin istration and belong to it. The employees engaged in the canteens have also been in service uninterruptedly for many years. Their wages are reimbursed in full by the Rly. Admin istration. The entire running of the canteens including the work of the employees is subject to the supervision and control of the agency of the Railway Admn. whether the Agency is the staff committee or the society. In fact, as stated by the Rly. Administration in its Establishment Manual the legal responsibility for running the canteen ultimately rests with it, whatever the agency that may intervene. The number and the category of the staff engaged in the canteen is strictly controlled by the Administration. As has been pointed out earlier, much before the order of this Court dated October 22, 1980, the employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification No. 6(2)/23/77 Welfare dated December 11, 1979 which notifi cation is an annexure 4 to the Administrative Instructions 706 referred to above. That notification stated that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and according ly, present and future incumbents of such posts would quali fy as holders of civil posts under the Central Government. The notification further stated that necessary rules govern ing the conditions of service of the employees would be framed under proviso to Article 309 of the Constitution to have retrospective effect from October 1, 1979. Accordingly the service rules were framed under Article 309 as per the Notification No. GSR 54 issued by the Govt. of India, Deptt. of Personnel & Training on December 23, 1980. These rules contained both the recruitment rules and conditions of service of the said employees including the procedure for disciplinary action to be taken against them. As stated earlier the Administrative Instructions are applicable to the canteens/tiffin rooms run by all the Ministries includ ing the Railway Ministry unless they had previously decided to be exempt from them and had framed their own rules in that behalf. On behalf of the respondents, one Shri Sud, Joint Director of Establishment, Ministry of Railways has filed an affidavit contending that Section F of Chapter XXVIII of the Railway Establishment Manual (to the relevant paragraphs of which we have made a reference earlier) con tains the necessary instructions for running the canteens and hence the Railway Administration should be deemed to have been exempted from the operation of the said Adminis trative Instructions. Although there is nothing expressly on record to show that the railway canteens are exempted from the said Instructions, we will proceed on the assumption that they are so exempted by virtue of the relevant provi sions of the Railway Manual. But the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens. Whatever the differences in the nature of work performed by the order staff in the different Ministries, it cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries. Hence, we are of the view that if the said two notifications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways. On behalf of the Railway Admn. no material has been placed before us to treat the employees in their canteens as a class separate from the employees in the canteens run by the other departments of the Government. In the circumstances, it would be highly discriminatory not to apply the said two notification to the employees in the Railway canteens. It would be violative of Articles 14 and 16 of 707 the Constitution. We are, therefore, of the view that the employees in the statutory canteens of the Railways will have to be treated as Railway servants. Thus the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception. Hence, it cannot be gainsaid that for the purposes of the the employees in the statutory canteens are the employees of the Railways. The decision of the Calcutta and Madras High Courts (supra) on the point, therefore, are both proper and valid. The next question is whether the said employees are railway employees for all purposes. Mr. Ramaswamy, the learned counsel appearing for the Railways contended that the Railways undertake varied welfare activities in the nature of handicrafts centres, cooperative stores, banks, housing societies, credit societies, educational institu tions etc. and the Railways spend about a hundred crores annually on these activities. He submitted that if it is decided to treat the employees engaged in the canteens as railway employees it will be difficult to resist the claim from employees of these other institutions numbering over 27,500 for a similar status. He also submitted that the Railways provide financial assistance to various non Railway institutions such as non Railway schools. But teachers and other employees working in these schools are the employees of the respective organisations and cannot be treated as railway servants. Since, according to him, the canteens are run for the benefit of the staff, the Government has only a general responsibility to see that the labour laws are properly followed and not infringed. He further submitted that an indentical responsibility also devolves on the Railways in regard to contractors who execute works for the Railways with their own labour. In addition, the Railways have nearly 2.3 lakh casual labourers who are normally employed on works which are of seasonal nature, intermitant or extending over short periods. These employees are engaged by the contractor to whom the execution of work is entrust ed. In case the employees of the canteens are to be treated as Railway servants, similar demands will be made from such casual labourers. His next contention in this behalf was that the Railways have a primary objective of carrying goods and passengers, and the welfare activities are ancillary to the main objective. Hence, the canteens continue at the discretion of the Railway Administration where there have provided 70% subsidy to the management of the statutory canteens. If at any stage the Government so decides, it can change the form of this welfare measure 708 and may choose to have another set up which in their view may prove more convenient and financially workable such as engaging a contractor or an established agency like Tea Boad, Coffee Board, Women 's Organisation, etc. to run the canteens. For all these reasons, he submitted the employees in the statutory canteens should not be treated as the Railway employees. While discussing above the contention that the employees in the statutory canteens cannot be treated as Railway employees even for the purposes of the said Act, we have referred to the various developments, and documents on record including the court decisions. It is not necessary to repeat them here. In view of the same, the contention ad vanced by Mr. Ramaswamy that the Railway Admn. is engaged in varied welfare activities, and the employees engaged in these activities will also have to be treated as Railway employees, in case, the canteen employees are recognised as Railway employees does not appeal to us. We express no opinion on the subject as to whether the employees engaged in other welfare activities will or will not be entitled to the status of the Railway employees, since neither they nor the facts pertaining to them are before us. Our conclusion that the employees in the statutory canteens are entitled to succeed in their claim is based purely on facts peculiar to them as discussed above. If by virtue of all these facts that they are entitled to the status of Railway employees and they cannot be deprived of that status merely because some other employees similarly or dis similarly situated may also claim the same status. The argument to say the least can only be discribed as one in terroram, and as any other argument of the kind has to be disregarded. (ii) Non Statutory Recognised Canteens: Paragraph 2830 of the Railway Established Manual enjoins upon the Rly. Administration to take steps to develop their canteen organ isation to the maximum possible extent as a measure of staff welfare preferably by encouraging the development of can teens for staff on co operative basis. This injunction is for provision of canteens in addition to the canteens as required by the for which provision is made in paragraph 2829 of the said Manual. Paragraph 2831 lays down the principles governing the setting up of the canteens which apply also to the nonstatutory canteens provided for under paragraph 2830. It says, among others things, that a regular canteen should be provided where the strength of the staff is 100 or more and a scheme for provision of a new canteen should be submitted to the Railway Board for approv al indicating financial implications duly vetted by the F.A.C.O. Paragraph 709 2833 contains provisions for the management of such non statutory canteens. Among other things, it states that such canteens can be run either by a Committee of Management to be formed for the purpose or by a Consumer Cooperative Society. The Committee of Management should consist of the duly elected representatives of the staff and where it is run by a Cooperative Society, it should consist of the representatives of the share holders of the Society. Howev er, in either of the cases, a representative of the Railway Administration is to be nominated either as a Chairman or a Secretary or as a Member of the Committee. This nominee of the Railway Administration is under an obligation to bring to the notice of the Administration any decision of the Managing Commttee which is likely to affect the interests of the Railway Admn. in its capacity as an owner of the prem ises and of the furniture, equipment, etc., or if the deci sion is likely to be of considerable harm to the staff. In such cases, the Management Committee cannot take action on the particular decision till the General Manager of the Railway has recorded his decision thereon. The paragraph further ordains that where the canteens are managed by a co operative society, the society should make a suitable provisions in its bye laws for supervision of the canteen by the Committee of Management. The paragraph also makes provi sion for granting loans to such canteens as initial capital from the Staff Benefit Fund. Paragraph 2834 then details various facilities which are extended to such canteens which include the necessary accommodation, sanitary and 'electric installations, furniture and cooking utensils. The Railway Admn. is also required to bear rent on sanitary and electric installations, service taxes and charges for the electricity and water consumed. These canteens are also entitled to subsidies at present to the extent of 70% of the wages of the employees engaged therein. It is further an admitted position that for the purposes of giving subsidy for wages, the rates of pay and allowances as obtaining in July 1963 were adopted as a basis. In September 1967, on account of a representation received from the canteen employees, the Railway Board left the question of revision of the scales of pay and dearness allowance to the Managing Committees. However to ensure that the canteen employees functioning at the Metropolitan Cities were not affected adversely, the Board prescribed a minimum dearness allowance relief to the said employees. In May 1970, the Board reviewed the question of scales of pay, and decided to enhance the dearness allowance relief in respect of employees working in the Metropolitan Cities, and also fixed the scales of pay of the employees working in all non statutory canteens (vide a Railway Board 's letter No. E(W) 69 710 C.N. 1 12 dated 29 5 1970). These scales of pay were again revised in December 1979, including dearness allowance for employees working in the Metropolitan cities as well as for those working in cities other than Metropolitan cities with effect from 1 10 1979 (Railway Board 's letter No. E (W)/79 C.N. 1 12 dated 14 12 79). A. further revision of pay scales was elfcoted by the Board in May 1983 (Railway Board 's letter No. E(W)/83/C.N. 1 8 dated 13 5 1983 to ensure com pliance with the interim directions given by this Court on April 22, 1983. The direction of this Court was to the effect that the salary and allowances of the employees of the non statutory canteens (recognised) should be at the same rate and on the same basis as applicable to the employ ees of the statutory canteens deemed as railway servants with effect from October 22, 1980. This direction was on the basis of the decision of this Court given on October 22, 1989 (supra). It is further an admitted fact that the Board has made applicable to these employees the scales of pay as recommended by the Fourth Pay Commission with effect from January 1, 1986. The employees in these canteens are also entitled to free medical treatment as out door patients in railway hospitals, to railway passes/PTO 's, one increment as an incentive for adoption of a small family. They are also governed by the provisions of the Employees ' Provident Fund Act. The Board has also framed recruitment rules for these employees vide its letter dated June 7, 1978. These rules, among other things, lay down minimum qualifying age for recruitment, and superannuation age, minimum educational qualifications, the mode of recruitment and eligibility for promotion for various posts. The nominee of the Railway Administration on the Managing Committee of the canteen is to be the Appointing Authority. At present there are about 173 non statutory recognised canteens employing about 2145 workers. As pointed out earlier, from the decision dated March 7, 1980 of the Delhi High Court in Writ Petition No. 269 of 1980 filed on behalf of the employees of eleven Delhi based non statutory recognised canteens, the Railway Canteen Karamchari Association had filed a special leave petition before this Court being SLP No. 4132 of 1980 which was disposed of by this Court by its decision of October 22, 1980 (supra). By that decision, this Court had disposed of the said appeal in terms of the order which was passed in another similar Civil Appeal No. 368 of 1978, and the em ployees were given the same benefits by accepting the prin ciple laid down by the Calcutta High Court. Thus by the said decision, the employees of the non statutory 711 canteens were directed to be treated on par with the employ ees of the statutory canteens, although by giving liberty to the Railway Administration to agitate the point that neither the employees of the statutory nor of the non statutory recognised canteens were railway employees either for the purposes of the or for any other purpose. Shri Ramaswamy advanced the same contentions in the case of these employees as he advanced in the case of the employees of the statutory canteens. He submitted that these employees are appointed by the Staff Managing Committee or Co operative Societies and not by the Rly. Administration, that their service in the canteen is purely in the nature of a private employment as in a private sector undertaking and that the recruitment procedures differ widely from canteen to canteen and they are not akin to the procedure followed by the Railways. The Managing Committee which appoints the employees, supervises and controls the canteens is a non Government body. The said Committee functions as a separate entity independent of the Railway Administration and the control when exercised by the Railway Administration is only to ensure that the canteen is run in conformity with certain requirements. There is no relationship of master and servant between the Rly. Administration and the canteen employees. The letters of appointment issued to the employees make it expressly clear that the employment is non Governmental and purely temporary and does not carry any pensionary or gratu ity benefits. The employees recruited further are not sub jected to rigorous standards as to age limit, educational qualifications, medical fitness, character verification etc. He further submitted that the order dated October 22, 1980 passed by this Court in the case of the employees of the eleven Delhi based non statutory canteens is expressly subject to the liberty given to the Railway Administration to contend in a future appropriate case that they are not railway employees and hence it cannot act as a precedent. He also contended as he did in the case of the statutory can teen employees, that if the employees engaged in these canteens are treated as Railway servants, the employees engaged in other welfare activities, casual labourers etc. may have also to be treated as such. 29. These arguments can be dealt with together. In the first instance, there is hardly any difference between the statutory canteens and non statutory recognised canteens. The statutory canteens are established wherever the railway establishments employ more than 250 persons as is mandatory under the provisions of Section 46 of the Act while non statutory canteens are required to be established under 712 paragraph 2831 of the Railway Estb. Manual where the strength of the staff is 100 or more. In terms of the said paragraph, the non statutory canteens to be recognised have to be approved of by the Railway Board in advance. Every Rly. Administration seeking to set up such canteens is required to approach the Railway Board for their prior approval/recognition indicating financial implications involved duly vetted by the Financial Advisor and Chief Accounts Officer of the Railway concerned. It is only when the approval is accorded by the Railway Board that the canteen is treated as a recognised non statutory canteen. By the sanction, the details in regard to the number of staff to be employed in the canteen, recurring and non recurring expenditure etc. are regulated. The only material difference between the statutory canteen and non statutory recognised canteen is that while one is obligatory under the said Act the other is not. However, there is no difference in the management of the two types of canteens as is evident from the provisions of paragraphs 2832 and 2833 which respective ly provide for their management. Regarding the incidence of cost to be borne by the Railways again, as far as the Manual is concerned, the only additional obligation cast on the Administration, in the case of the statutory canteens is that in addition to the facilities given to the non statuto ry canteens, the Administration has also to meet the statu tory obligations in respect of the expenditure for providing and maintaining canteens arising from the said Act and the rules framed thereunder. A perusal of the relevant provi sions shows that the said Act and the rules made thereunder do not make demands on the Administration for more expendi ture than what is provided for in the Railway Manual for the non statutory canteens. We have already referred to the service conditions applicable to the employees of the statu tory and non statutory canteens. Besides, while discussing the case of the employees in statutory canteens we have pointed out the relevant provisions of the Administrative Instructions on Departmental Canteens in Government Officers and Govt. Industrial Establishments. These Instructions are applicable to both statutory and nonstatutory recognised canteens. The Instructions do not make any difference be tween the two so far as their applicability is concerned. In fact these Instructions require that the canteens run by engaging solely part time daily wage workers may be convert ed to departmental canteens (para 1.3). Hence we donot see why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned. For this very reason, the two notifications of December 11, 1979 and December 23, 1980 (supra) should also be equally applicable to the employees of these canteens. If this is so, then these employees would also be entitled to be treated as rail 713 way servants. A classification made between the employees of the two types of canteens would be unreasonable and will have no rational nexus with the purpose of the classifica tion. Surely it cannot be argued that the employees who otherwise do the same work and work under the same condi tions and under a similar management have to be treated differently merely because the canteen happens to be run at an establishment which employs 250 or less than 250 members of the staff. The smaller strength of the staff may justify a smaller number of the canteen workers to serve them. But that does not make any difference to the working conditions of such workers. We have already dealt with the other arguments advanced by Shri Ramaswamy while dealing with the cases of employees in statutory canteens. It is not necessary to repeat the said discussion here. We are, therefore, of the view that the case of these employees should be treated on par with that of the employees in the statutory canteens and they should also be treated for all purposes as railway servants. This is apart from the fact that by an order of this Court the employees of eleven Delhi based non statutory recognised canteens have already been directed to be treated as railway servants for all purposes. (iii)Non Statutory Non Recognised Canteens: The difference between the non statutory recognised and non statutory nonrcognised canteen is that these canteens are not started with the approval of the Railway Board as re quired under paragraph 2831 of the Railway Establishment Manual. Though, they are started in the premises belonging to the Railways they are so started with the permission of the local officers. They are not required to be managed either as per the provisions of the Railway Establishment Manual or the Administrative Instructions (Supra). There is no obligation on the Railway Administration to provide them with any facilities including the furniture, utensils, electricity and water. These canteens are further not enti tled to nor are they given any subsidies or loans. They are run by private contractors and there is no continuity either of the contractors or the workers engaged by them. Very often than not the workers go out with the contractors. There is further no obligation cast even on the local of fices to supervise the working of these canteens. No rules whatsoever are applicable to the recruitment of the workers and their service conditions. The canteens are run more or less on ad hoc basis, the Railway Administration having no control on their working neither is there a record of these canteens or of the contractors who run them who keep on changing, much less of the workers engaged in these can teens. In the circumstances we are of the view of 714 that the workers engaged in these canteens are not entitled to claim the status of the railway servants. The result, therefore, is that the workers engaged in the statutory canteens as well as those engaged in non statutory recognised canteens in the Railway Establishments are railway employees and they are entitled to be treated as such. The Railway Board has already treated the employees of all statutory and eleven Delhi based non statutory recog nised canteens as railway employees w.e.f. October 22, 1980. The employees of the other non statutory recognised canteens will, however, be treated as railway employees w.e.f. April 1, 1990. They would, therefore, be entitled to all benefits as such railway employees with effect from the said date, according to the service conditions prescribed for them under the relevant rules/orders. The Writ Petitions and appeals of these employees are allowed to the above extent accordingly with no order as to costs. As far as the employees in non statutory non recog nised canteens are concerned their petitions are dismissed. There will, however, be no order as to costs. R.S.S. Petitions and Appeals allowed.

The petitioners in this group of Writ Petitions are workers in canteens run in different railway establishments. The relief claimed in all the petitions is that the workers concerned should be treated as railway employees and should be extended all service conditions which are available to the railway employees. For convenience sake, the canteens have been classified into three categories, viz., (i) Statutory canteens; (ii) Non statutory Recognised Canteens, and (iii) Non Statutory Non Recognised canteens. Chapter XXVIII of the Railway Establishment Manual contains the necessary instructions for running the can teens. Paragraph 2829 of Chapter XXVIII of the Manual refers to the provisions of Section 46 of the and under writes the fact that under these provisions, there is a statutory obligation on the Railway Administration to set up canteens in Railway establishments which are governed by the said Act and which employ more than 250 persons. Paragraph 2831 lays down the principles governing the set ting up of the canteens which apply also to the non statuto ry canteens provided for under paragraph 2830. Paragraph 2832 inter alia states that although the Administration can employ as agent a Staff Committee or a Co operative Society for management, the legal responsibility for proper manage ment rests not with the agency but solely with the Railway Administration. The Department of Personnel & Training, Ministry of Personnel, Government of India, had issued Administrative Instructions on Departmental Canteens in Offices and Indus trial Establishments of the Government. It is made clear in these instructions that the orders issued under the said Instructions are applicable to all Canteens/Tiffin Rooms functioning or to be set up in any Ministry, Department, Establish 688 ment, Office, or Installation of the government of India (Industrial or non industrial), including those functioning under the Ministries of Defence, P & T and Railways unless these three Ministries had previously decided to exempt any of the said Instructions due to specific reasons. It was contended on behalf of the petitioner workers that, in view of the documents on record there is no reason why the employees in the canteens concerned should not be given the status of the railway employees with all conse quential benefits. On the other hand, it was contended on behalf of the Railways that (i) the canteen employees are appointed by the Staff Managing Committees or Co operative Societies and not by the Railway Administration and as such there is no rela tionship of master and servant between the Railwasy Adminis tration and the Canteen employees, and in no case can they be deemed as holders of civil posts, either for Article 309 or for Article 311 of the Constitution; (ii) the control exercised by the Railway administration is only to ensure that the canteens are run in conformity with certain re quirements; (iii) the Railways have a primary objective of carrying goods and passengers and the welfare activities are ancillary to the main objective; (iv) the canteens continue at the discretion of the Railway Administration, and at any stage the Government can change the form of this welfare measure and choose to have another set up; (v) the Railways undertake varied welfare activities, and if it is decided to treat the employees engaged in the canteens as railway employees, it will be difficult to resist the claim from employees of these other institutions for a similar status; and (vi) the Railway Establishment Manual contains the necessary instructions for running the canteens, and hence the Railway Administration should be deemed to have been exempted from the operation of the Administrative Instruc tions on Departmental Canteens in Offices and Industrial Establishments of the Government, issued by the Department of Personnel & Training. Allowing the petitions filed by the employees of the statutory canteens and non statutory (recognised) canteens. and dismissing those of the non statutory (non recognised) canteens. this Court. HELD: Statutory Canteens (1) In terms of the Rules made by the State Governments under Section 46 of the it is obligatory on the Railway Administration to provide a canteen in an establishment which employs 689 more than 250 persons. The provision of the canteen is therefore, deemed by the statute as a necessary concomitant of the manufacturing activity. [692C; G] The employees of the departmental canteens/tiffin rooms were declared as holders of civil posts under the Government of India Notification dated December 11, 1979 which is annexed to the Administrative Instructions on Departmental Canteens in Offices and Industrial Establish ments of the Government. That Notification states that all posts in the said canteens/tiffin rooms are to be treated as posts in connection with the affairs of the Union, and hence the incumbents would qualify as holders of civil posts. Accordingly, service rules were framed under Article 309 as per the notification issued by the Government of India, Department of Personnel & Training on December 23, 1980. [705H; 706A B] (3) The provisions contained in the Administrative Instructions, show that the Government has a complete con trol over the canteens and the workers employed therein 'are holders of civil posts within the meaning of Article 311 of the Constitution. There recruitment and service conditions are governed by the rules applicable to the employees of the Department/Office/Establishment to which the canteens are attached. [701E] (4) Although there is nothing expressly on record to show that the railway canteens are exempted from the said Administrative Instructions, but even assuming that the railway canteens are exempted by virtue of the relevant provisions of the Railway Manual, the fact remains that there are as yet no notifications on the lines of December 11, 1979 and December 23, 1980 issued for the benefit of the employees in the railway canteens. [706E F] (5) It cannot be argued that there is any difference in the work performed by the employees in the canteens run in the establishments of the Ministries. If the said two noti fications are applicable to the employees in the canteens run by the other departments of the Government of India, there is no reason why the same should not apply also to the employees in the canteens run by the Railways. In the cir cumstances, it would be highly discriminatory not to apply the said two notifications to the employees in the Railway canteens. It would be violative of Articles 14 and 16 of the Constitution. The employees in the Statutory canteens of the Railways will therefore have to be treated as Railway serv ants. [706F H; 707A] 690 (6) Thus the relationship of employer and employee stands created between the Railway Administration and the canteen employees from the very inception. Hence, it cannot be gainsaid that for the purposes of the the employees in the statutory canteens are the employees of the Railways. [707B] Order dated 22.10.1980 in Civil Appeal No. 368 of 1978 (Supreme Court); Madras High Court; Writ Appeals Nos. 414 415 of 1978. referred to. (7) If by virtue of all these facts the employees are entitled to the status of Railway employees they cannot be deprived of that status merely because some other employees similarly or dis similarly situated may also claim the same status. The argument to say the least can only be described as one in terroram. and as any other argument of the kind has to be disregarded. [708E] Non Statutory Recognised Canteen (8) These canteens are run in the establishments which employ 250 or less than 2.50 employees; and are established with the prior approval and recognition of the Railway Board. There is hardly any difference between the statutory canteens and non statutory recognised canteens. The only material difference is that while one is obligatory under the , the other is not. However. there is no difference in the management of the two type of canteens. [71 I G; 712C] (9) The Administration Instructions on Departmental Canteens in Government Offices and Government Industrial Establishments do not make any difference between the two so far as their applicability is concerned. Hence, it cannot be seen why any distinction be made between the employees of the two types of canteens so far as their service conditions are concerned. For this very reason, the two notifications of December 11, 1979 and December, 23, 1980 should also be equally applicable to the employees of these canteens. [7 12G H] (10) If that is so, then these employees would also be entitled to be treated as railway servants. A classification made between the employees of the two types of canteens would be unreasonable and will have no rational nexus with the purpose of the classification. Surely it cannot be argued that the employees who otherwise do the same work and work under the same conditions and under a similar manage ment have to be treated differently merely because the canteen happens to be 691 run at an establishment which employees 250 or less than 250 members of the staff. [712H; 713A B] Non Statutory Non Recognised Canteens (11) These canteens are run at establishments which employ 100 or less than 100 employees, and are established without prior approval or recognition of the Railway Board. [692E] The Canteens are run more or less on ad hoc basis, the Railway Administration having no control of their function ing. They are not required to be managed either as per the provisions of the Railway Establishment Manual or the Admin istrative Instructions. In the circumstances the workers engaged in these canteens are not entitled to claim the status of the railway servants. [713H; 714A]

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tition No. 13636/83 & 11760 66/84. (Under Article 32 of the Constitution of India). G. Ramaswamy, A.K. Ganguli, M.K. Ramamurthy, Kapil Sibal, R.K. Garg, section Srinivasan, D.K. Garg, Ms. A. Subha shini, B. Parthasarthi, C.V. Subba Rao, M.A. Krishnamurthy, V. Shekhar, H.S. Mann, Ms. Chandan Krishnamurthy and Ms. Kamini Jaiswal for the appearing parties. The Judgment of the Court was delivered by RANGANATH MISRA, J. These are applications under Article 32 of the Constitution. Petitioner No. 1 in the first Writ Petition is the 341 National Union of All India Radio Staff Artists; petitioner No. 2 is an Announcer of the All India Radio and happens to be the General Secretary of the Union; petitioners No. 3 to 8 are an instrumentalist, a few news readers, announcers and the like. The petitioners in the other writ petitions are seven in number consisting of six announcers and a tanpura player connected with the All India Radio. According to the petitioners, the prevailing practice in All India Radio used to be to offer appointments to various people as Staff Artists at the first instance ordinarily for an initial term of three months and on completion of appropriate formalities appointments used to be offered for a term of three years on contract basis at a minimum monthly fee. After the expiry of the initial period of two years out of the three years period of working which was considered as a period of proba tion contractual engagement up to the age of 55 years was being made available. On selection, as alleged by the peti tioners Staff Artists used to be appointed to various posi tions like Announcer, News Readers, Conductor, Music Com pere, Instrumentalists, Producer and Script Writer in the All India Radio or Producer, Production Assistant, Script Writer, Translator and General Assistant in Doordarshan. In May, 1982 the respondent Union of India bifurcated the Staff Artists into two categories like: (1) Staff Artists to be treated as artists; and (2) Staff Artists to be treated as Government Servants. This decision was conveyed in a letter dated 3.5.82 and opportunity to exercise option to everyone by the end of December, 1983 for final allocation to the two categories was provided. The letter stipulated that those of the Staff Artists who did not opt were to continue under the existing terms and conditions. The first writ petition was filed on 12th December, 1983, challenging the Government 's order of 3.5.82 (Annexure 3) and for a direction to the respondents to treat the Staff Artists at par with regular Government servants and to restrain the respondents from enforcing their direction for exercise of option. The other group of writ petitions was filed on 19th of March, 1984, the challenge therein was also to the same Government letter, and petitioners asked for a direction to the respondents to treat the Staff Artists as Government servants entitled to pensionary benefits. A return was made to the rule in the first writ petition by filing an 342 affidavit by the Under Secretary, Ministry of Information and Broadcasting. The respondents maintained that the Staff Artists did not form one homogeneous group and job require ments of the Staff Artists were different from post to post. It was suggested that the Staff Artists could be convenient ly divided into two groups, namely, those who are appearing or performing before the micro phone and the others who are managing production and connected jobs. It was also pointed out that all Staff Artists did not have the same terms as to remuneration. It was suggested that the terms and conditions governing the Staff Artists after their transformation into Government servants became different. In the interests of quality of broadcasting services, it was claimed, periodical assessments became indispensable and inevitable. The affida vit further stated that the scheme which was enclosed to the letter marked Annexure 3 contained a scheme which had been evolved after due deliberations and there was no prejudice to the Artists if the scheme was allowed to become opera tive. On the 25th of April, 1988, with special reference to the first writ petition and a connected civil appeal which is not before us at this stage, the Director General of All India Radio sent the following communication to the respond ent 's lawyer with a request that the same may be placed before the Court. The letter stated: "Under the directions of Hon 'ble Court, the Government have further examined the aspects of the scheme for artist cate gory to safeguard the rights of the Staff Artists from any arbitrary factors in respect of discharge of duties under their contract of service renewable after satisfactory performance of their services. After careful examination, the Government have now set up three types of committees to protect the rights of the staff artist from any arbitrary factors which are as under: A. Since the renewal of contract is automatic if the records are satisfactory, it would be best to leave it to the Sta tion Director or the Head of the Office concerned to review the contract after verification of the records. In case, the records are not satisfactory, the question of renewal of contract may be considered by a Review Commit tee/Representation Committee as under: B(i) Review Committee (Both for AIR/Doordarshan) 343 (i) Station Director Chairman (ii) Two outside Assessors Members who have expertise in the field to which the Artists belong. B(ii) Representation Committee (Both for AIR/Doordarshan) (i) Director General Chairman Addl. Director General (Programme) (ii) Deputy Director Member General (Administration) (iii) Representatives of Member the Ministry of Information and Broadcasting. I am to request that a Government Counsel may please be briefed accordingly to place the facts before the Honourable Court in the hearing today, i.e., dated 25th April, 88 at 2 P.M." On the basis of what transpired in Court after referring to the said letter, this Court on that date made the following order: "In Civil Appeal No. 384 of 1977 Union of India vs M.A. Chowdhary, AIR 1987 Supreme Court 1526 we have declared that all the Staff Artists of All India Radio are holding civil posts under the Government and they are governed by Article 311(2) of the Constitution of India. In view of the above decision it is no longer necessary to make any further declaration in these petitions that the Staff Artists are Government servants. The Circular dated 3rd May 1982 beating No. 45011/26/80/B(A) issued by the Ministry of Information and Broadcasting, Government of India proceeded on the assumption that the Staff Artists who had entered the service of the All India Radio/Doordarshan under the contracts were not Government servants and that only those Staff Artists specifically mentioned in that Circular could become and be treated as Government 344 Servants provided they satisfied the conditions mentioned therein. In view of the decision referred to above it has now become necessary for the Government to review the entire question covered by the Circular dated 3rd May, 1982. We, therefore, direct the Government of India to review the entire situation and to prepare a fresh scheme in accordance with law having regard to the nature of duties performed by each category of Staff Artists. While preparing such a scheme the Government may also keep in view the cases of Staff Artists who have already exercised their option as provided by the circular dated 3rd May, 1982. Such scheme shall be prepared on or before 31.7.1988. After the scheme is prepared a copy of it shall be made available to all the parties to this case. The parties aggrieved may file objec tions before this Court within August 15, 1988. This case shall come up for directions on 5th September, 1988. " In terms of the direction given on the 25th of April, 1988, a draft scheme framed by the Government has been produced before the Court along with an accompanying affidavit. Paragraph 2 of the said scheme states: "In pursuance of the above mentioned orders, those Staff Artists who opted for becoming 'Government Servants ' and were found fit by duly constituted Screening Committee were treated as Government Servants with effect from 6.3. 1982. Such Staff Artists were made entitled to the same pensionary benefits as are applicable to Government Servants. They were, however, not entitled to any special benefits avail able to them as Staff Artists. Likewise, Staff Artists in the 'Artists ' category. who opted for being treated as 'Artists ' and come over to the new terms and conditions were treated as 'Artists ' with effect from 6.3.1982. " Paragraph 3 provides: "The following categories of Staff Artists/Artists in All India Radio/Doordarshan are, however, still to be treated as Government Servants: 345 (i) Staff Artists who opted for 'being declared as 'Government Servants ' but were not found fit by the Screen ing Committee; (ii) Staff Artists who opted for being treated as 'Artists ' category and were declared as 'Artists ' after screening by the Screening Committee '; (iii) Staff Artists who opted for being treated as 'Artists ' but were not found fit by the Screening Committee for being treated as 'Artists ' and (iv) Staff Artists who did not opt for being treat ed as 'Government Servants ' or for being treated as 'Art ists '. The scheme further indicates: "4. The Government has reconsidered the entire Scheme in the light of the judgment of the Hon 'ble Supreme Court delivered on 25.4.1988 in Writ Petitions Nos. 13636 of 1983 and 11760 66 of 1984 in National Union of All India Radio and Others .v. Union of India. In partial modification of this Ministry 's letter No. 45001/26/80 B(A) dated 3.5.1982 and No. 45011/26/80 B(A) dated 26.8.1983, it has been decided as under: (i) All Staff Artists/Artists working in All India Radio and Doordarshan (except foreign nationals) will be deemed as Government Servants holding civil posts on pre scribed Central Government scales of pay. (ii) All such Staff Artists/Artists working in All India Radio and Doordarshan will be entitled to pensionary and other benefits on the same terms and conditions as are applicable to other Government Servants holding civil posts. They will be governed by all rules and regulations and general instructions issued by Government from time to time like FR and SR, GFR, CCS (CCA) Rules, CCS (Conduct) Rules and Pension Rules etc. All facilities/ benefits avail able to regular Central Government employees will be auto matically applicable to them also on the same terms and conditions as are applicable to regular Central Government servants. However, any special bene 346 fit/concession available to such Staff Artists/Artists of AIR and Doordarshan, in so far these are not in accordance with rules and regulations and general instructions applica ble to Central Government servants, will be withdrawn from the date of issue of these orders. (iii) The date of retirement on superannuation in respect of such Staff Artists/Artists of All India Radio and Doordarshan deemed as Government Servants will be the same as applicable to holders of civil posts in Central Govern ment. (iv) The contribution of such Staff Artists/Art ists working in AIR and Doordarshan made to Contributory Provident Fund (CPF) along with interest thereon will be transferred to their General Provident Fund (GPF). The Staff Artists/Artists working in AIR and Doordarshan deemed as Government Servants will continue to be in their existing categories and grades with regular pay scales. The future recruitment to each grade will be made according to the Recruitment Rules as per procedures prescribed for recruitment to different posts. The posts held by the Staff Artists/Artists working in All India Radio and Doordarshan will stand converted into civil posts from the date of issue of these orders. " The order made by this Court on 25th of April, 1988, was not a final judgment and this Court had directed the Union of India to review the entire situation and to prepare a fresh scheme in accordance with law having regard to the nature of duties performed by each of the categories of Staff Artists. Obviously, the intention of the Court while making the order dated 25th April, 1988, was to have the scheme placed before the Court for consideration. Though the scheme has been styled as a draft scheme, its contents indicate that it has been implemented. The main objection of the petitioners against the present scheme is the stipulation therein that the Staff Artists will be taken as Government servants from the date of the order. According to them, the Allahabad High Court had in its decision dated 12th of July, 1974, given a declaration that all the Staff Artists were Government servants and the said decision was affirmed by this Court in a judgment dated May 7, 1987, reported in ; Union of 347 India vs M.A. Chowdhary. It is the contention of the peti tioners that the benefit of conversion or declaration should be effective from 12.7.1974 and those who were in employment then as Staff Artists should be considered as Government from this date and others who joined after 12.7.74 should be conferred the status of Government servants from the date of joining. There is also a claim by the petitioners to pension for those who have retired after 12.7.1974 and prior to the present scheme. It is the further contention of the peti tioners that while formulating the present scheme the Court 's direction of 25th of April, 1988, has not been strictly kept in view. Reliance has been placed on this Court 's order dated 3rd April, 1984, where it was indicated that failure of Staff Artists to exercise the option should not prejudice their right in any manner and either a fresh opportunity to exercise the option should be given or even in the absence of option the same benefits should be given. Some of the objections which have been raised and are no ticed above seem to be germane and require consideration. This Court 's order of 25th April, 1988, requiring a fresh scheme to be formulated obviously meant that the exercise of option in terms of the order dated 3rd May, 1982, was not taken to be the final date for exercise of option. Opportu nity to exercise fresh option should have been given or perhaps the new scheme could have accepted the position that unless one wanted to be not absorbed he should have been deemed to be accepting absorption. As in the changed setting the class of Staff Artists was really intended to be done away with in due course, such a deeming base should have been accepted for convenient implementation. One class of Staff Artists engaged under contracts wants such status to continue. Otherwise stated, they do not want the contractual base to be changed into employment. While dealing with the Artists as a class it is neces sary that their special status be borne in mind. It is a class of people who are indeed specially privileged either by natural gift or by their own culturing of the article This category of people cannot be equated with ordinary Govern ment servants for every purpose. The All India Radio and the Doordarshan in their normal functioning would to a consider able extent depend upon qualitative and efficient artists in order to make their programmes reach the desired level. The scheme necessarily contemplates a transitional period. The age old practice of the job of the Staff Artists being contractual (whether short or long) is being given up and contractual employment is being substituted by status based Government service. If there are really efficient Artists of different 348 classifications who do not want to be branded as Government servants, there is no immediate justification for discontin uing and disturbing them in toto. The transitional period could be elongated to accommodate the appropriate category of Artists not willing to be absorbed as Government serv ants. Of late, Government themselves are having a re look at the matter. It is their stipulation that All India Radio and Doordarshan should be made into autonomous corporations and for that purpose legislation is in the process. What is in contemplation is contrary to what is in the scheme. This means that the matter is still in a fluid stage. It is, therefore, appropriate that either a deeming position should have been accepted in the scheme as indicated above or a fresh opportunity for exercise of option should have been provided. Again, the demand of the above group of artists should have also been considered. The question of deeming the employees as Government servants from the date of the Allahabad High Court 's judg ment is another issue which requires examination. Connected with it would be the question of entitlement to pension. We are of the view that these are aspects which should first be initially examined by a Committee to be set up by the Gov ernment and after a definite view is taken it would be open to the petitioners to approach the appropriate Court to redress the remaining grievances, if any. The matter is such that administrative scrutiny instead of judicial determina tion would be more helpful. We, therefore, refrain from expressing any final view. We reiterate that the order dated 25th of April, 1988, intended a draft scheme to be drawn up for consideration of the Court. The scheme as produced in the Court along with the accompanying affidavit has also been described as a draft scheme. The objections raised by the petitioners to the said scheme are available on the record. We direct that in the appropriate Ministry a High Power Committee be set up for examination of the objections with reference to the terms of the scheme and the final decision be taken by the Government within six months. The views expressed in the present decision be taken into ac count while dealing with the objections for purposes of finalising the scheme. Liberty is given to the aggrieved parties when final decision is taken by Government to move the Court. These writ petitions are disposed of with these directions. No costs. Y. Lal Petition disposed of.

Staff Artists of All India Radio/Doordarshan, after complying with the initial requirements, used to be appoint ed to various positions like Announcer, News Readers, Con ductor, Music Compere, Instrumentalists, Producer and Script Writer etc., on contract basis upto the age of 55 years. In May 1982, Union of India bifurcated the Staff Artists into two categories like (i) Staff Artists to be treated as artists and (ii) Staff Artists to be treated as Government Servants. These two sets of writ petitions have been filed by the Staff artists challenging the said Government deci sion conveyed through circular dated 3.5.1982 and calling upon the staff to exercise option by the end of December, 1983 for final allocation to the two categories aforesaid. In the first writ petition direction is sought to the re spondents to treat the Staff Artists at par with regular government servants and to restrain the respondents from enforcing their direction in regard to their exercise of option and in the other writ petition, the petitioners have asked for a direction to treat the staff artists as govern ment servants entitled to pensionary benefits. The Court by its order dated 25.4.1988, on perusal of the letter together with the scheme, Sent by the Director General of All India Radio and following its earlier deci sion in Civil Appeal No 384 of 1977 Union of India vs M.A. Chowdhary; , declared that all the staff artists of All India Radio are holding civil posts under the Government, and they are governed by Article 311(2) of the Constitution and accordingly inter alia directed the Govern ment of India to review the entire situation and to prepare a fresh scheme in accordance with law having regard to the nature of duties performed by each category of staff artists and further directed the case to come up for directions on 5.9.1988. Thereafter the Government of India formulated a scheme in compliance with the courts order and submitted it to the Court. 340 Disposing of the writ petitions with directions, this Court, HELD: While dealing with the Artists as a class it is necessary that their special status be borne in mind. It is a class of people who are indeed specially privileged either by natural gift or by their own culturing of the article This category of people cannot be equated with ordinary Govern ment servants for every purpose. [348F] The All India Radio and the Doordarshan in their normal functioning would to a considerable extent depend upon qualitative and efficient artists in order to make their programmes reach the desired level. [348G] The age old practice of the job of the staff artists being contractual (whether short or long) is being given up and contractual employment is being substituted by status based Government service. If there are really efficient Artists of different classifications who do not want to be branded as Government servants, there is no immediate justi fication for discontinuing and disturbing them in toto. [348H; 349A] Administrative scrutiny instead of judicial determina tion would be more helpful. The Court therefore directed that in the appropriate Ministry a High Power Committee be set up for examination of the objections with reference to the terms of the scheme and the final decision be taken by the Government within six months. The views expressed in the present decision be taken into account while dealing with the objections for purpose of finalising the scheme. [349E; F G]

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Appeal No. 301 of 1958. Appeal by special leave from the judgment and order dated February 21, 1958, of the Madhya Pradesh High Court at Jabalpur in Letters Patent Appeal No. 22 of 1958, against the order dated February 20, 1958, of the said High Court in Misc. Petition No. 266 of 1957. M.K. Nambiyar, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellants. M. Adhikari, Advocate General, Madhya Pradesh and 1. N. Shroff, for the respondents. 1443 1958. September 30. The following Judgments were delivered: DAS C.J. There are two appellants in this appeal. The second appellant is the Municipal Committee of Dhamtari constituted under the C. P. and Berar Municipalities Act, 1922 (Act 11 of 1922) and the first appellant is its President having been elected as such on July 10, 1956. He assumed charge of his office as President on July 27, 1956. It may be mentioned that he was returned as a Congress candidate but has since been expelled from that party for having contested the last general election as an independent candidate against the Congress candidate. It appears that there are two factions in the Municipal Committee. The first appellant alleges that one Dhurmal Daga, a member of the committee belonging to the Congress party was on August 7, 1956, deflected importing within the municipal limits certain cloth without paying the octroi duty. Dhurmal Daga, on the other hand, alleged that the first appellant was guilty of grave mismanagement of the affairs of the Municipal Committee and went on hunger strike for securing the appointment of a committee to enquire into the misconduct of the first appellant. Copies of the leaflets containing the demands and charges which are said to have been widely distributed are annexures I and 11 to the present petition. It appears that several persons and firms also preferred charges against the first appellant, the President of the Municipal Committee. The Collector, Raipur, personally intervened and persuaded the said Dhurmal Daga to abandon the fast on an assurance that he would look into the matter. The Collector deputed one Shri N. R. Rana the Additional Deputy Collector to enquire into the complaints of maladministration of the affairs of the Municipal Committee. By a Memorandum No. K/J N. P. Dhamtari dated August 24, 1956, the said N. R. Rana called upon the first appellant as tile President of the second appellant to give detailed explanation of each complaint, a list of which was enclosed therewith. A copy of that memorandum along with its 22 enclosures 1444 is annexed to the petition and marked 111. Annexures IV and V to the petition are copies of the detailed report on the objections and the reply to the charges made against the Municipal Committee submitted from the office of the Municipal Committee by the first appellant as the President of the Municipal Committee. The Additional Deputy Collector thereafter held the enquiry. The High Court states that it had " gone through the materials on which the State Government based its action on enquiry into the charges levelled against the Municipal Committee and that the records of the enquiry showed thaton some occasions the petitioner was present duringthe enquiry ". Thereis no suggestion that the appellants wanted an opportunity to adduce any evidence or were prevented from doing so or that they were in any way hampered in their defence. Presumably the Additional Deputy Collector had made a report which in due course must have been forwarded to the State Government. On November 18, 1957, a notification was published in the Official Gazette whereby the State Government, in exercise of the powers conferred on it by section 53 A of the C. P. & Berar Municipalities Act, 1922, appointed one Shri B. P. Jain, the second respondent before us, as the Executive Officer of the Municipal Committee, Dhamtari, for a period of 18 months with certain powers as therein mentioned. A copy of that notification has been annexed to the petition and marked VIII but as the major part of the arguments can vassed before us turns on the contents of that notification the same is reproduced below in extenso: " Dated, Bhopal, the 18th November, 1957, No. 9262/11538 U XVIII Whereas it appears to the State Government that the Municipal Committee, Dhamtari, has proved itself incompetent to perform the duties imposed on it by or under the Central Provinces and Berar Municipalities Act, 1922 (11 of 1922), inasmuch as it (a)granted grain and building advances to the employees without prior sanction and no efforts were made for their recovery, (b) showed carelessness in cases of embezzlement 1445 of the employees and did not report such cases to Government, (c)failed to control the President who issued orders in cases in which he had no authority (d)spent thousands of rupees on sanitation and other works although there was no provision in the budget, (e)allowed unconcerned persons to interfere in its working, (f)showed partiality in the appointments and dismissals of the employees, further such appointments and dismissals were made against rules, (g)delayed the constitution of the committee and the framing of budget, (h) misused the trucks of the municipality, (i) failed to recover the lease money, (j) shown partiality in the issue of transit passes to certain traders, further excess octroi duty was charged on certain articles and in certain cases where octroi duty is not leviable it was levied just to harass the people, (k)distributed municipal manure to certain persons without any charge, similarly distributed the manure free of cost and used the truck of the municipality for this purpose, (1)failed to control its president who spent the money of the Municipal Committee without any authority, (m)spent huge amount on the maintenance of the roads and drainage but their condition has remained unsatisfactory, (n)failed to give. copies of the documents as allowed under rules, also failed to allow its members to inspect the records as is permissible under rules, (o)failed to invite tenders of purchase of articles, and whereas, the State Government considers that a general improvement in the administration of the Municipality is likely to be secured by the appointment of a servant of the Government as Executive Officer of the Committee. Now, therefore, in exercise of the powers conferred by section 53 A of the Central Provinces and Berar 1446 Municipalities Act, 1922 (11 of 1922), the State Government are pleased to appoint Shri B. P. Jain, Deputy Collector, as executive Officer of the Municipal Committee, Dhamtari, for a period of eighteen months from the date of his taking overcharge and with reference to sub section (3) thereof are further pleased to direct that the Executive Officer shall exercise and perform the following powers and duties of the Committee to the exclusion of the Committee, President, Vice President or Secretary, under the provisions of the Central Provinces and Berar Municipalities Act, 1922 (11 of 1922), namely: Chapter 111. Appointment of Officers and servants Sections 25, 26 and 28. Chapter IV. Procedure in Committee meeting Section 31. Chapter V. Property, contract and liabilities Sections 37 to 45. Chapter VI. Duties of Committee Sections 50 and 51. Chapter VIII. The municipal fund whole. Chapter IX. Imposition, assessment and collection of taxes whole. Chapter X. Municipal Budgets and accounts whole. Chapter XI. Powers to regulate streets and buildings Sections 90 to 94, 96, 98, 99, 103 and 104. Chapter XII. Powers to prevent disease and public nuisance Sections 117, 118(1), 119 and 132. Chapter XVIII. Offences, practice and procedure Sections 218 223. Chapter XIX. Special provisions for recovery of taxes whole. The Executive officer shall exercise general supervising powers in respect of all matters covered by the Central Provinces and Berar Municipalities Act, 1922 (11 of 1922). In Hindi (By order of the Governor of Madhya Pradesh) section section Joshi, Deputy Secretary." 1447 On December 21, 1957, the two appellants before us presented before the Madhya Pradesh High Court the writ petition out of which the present appeal has arisen and on January 11, 1958, obtained an order staying the operation of the order of appointment of the Executive Officer. The writ petition was dismissed on February 20, 1958. There was a Letters Patent Appeal which was dismissed in limine on February 21, 1958. The application for certificate under articles 132 and 133 was refused on March 21, 1958. The present appellants applied for and on April 1, 1958, obtained from this Court special leave to appeal from the judgment of the Madhya Pradesh High Court. The interim stay order made by this Court was eventually vacated on May 13, 1958. The appeal has now come up before us for final disposal. Shri M. K. Nambiar, appearing in support of this appeal, urged three points, namely (i)that though the Notification purports to have been made in exercise of the power,,; conferred on the State Government by section 53 A, in substance and in reality it has been made under section 57 of the Act; (ii)that if the Notification is held to be one made under section 57 it is ultra vires and bad since the statutory requirements of affording reasonable opportunity to explain has not been complied with; (iii)that even if the impugned Notification be held to come within section 53 A it is still ultra vires since before promulgating it the State Government has committed a breach of the rules of natural justice in not giving any opportunity to the appellants to defend themselves. There was a charge of mala fide made against the State Government founded on the fact that the first appellant 's leaving the Congress party had resulted in ill will towards the first appellant of that party which was the ruling party in the State Government, but as that charge has not been pressed before us nothing further need be said about it. I now proceed to deal with the three points formulated above by learned counsel for the appellants. 184 1448 Re. (i) and (ii): These two points are correlated and may be conveniedtly dealt with together. The argument in support of them is developed in two ways. In the first place it is said that the grounds set forth in the impugned notification clearly indicate that in substance and in reality it has been issued rather under section 57 of the Act than under section 53 A. In order to appreciate this argument it is necessary to set out the two sections of the C. P. and Berar Municipalities Act, 1922 in extenso: " 53 A. (1) If a committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in force and the State Government considers that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the executive officer of the committee, the State Government may, by an order stating the reasons therefor published in the Gazette, appoint such servant as the executive officer of the committee for such period not exceeding eighteen months as may be specified in such order. (2)Any executive officer appointed under subsection (1) shall be deemed to be an officer lent to the committee by Government under sub section (3) of section 25. (3)When under subsection (1) an executive officer is appointed for any committee, the State Government shall determine from time to time which powers, duties and functions of the committee, president, vice president or secretary under this Act or any rule or byelaw made thereunder shall be exercised and performed by such officer, in addition to, or to the exclusion of, their exercise and performance by the said committee, president, vice president or secretary. (4) The secretary of the committee shall be subordinate to the executive officer. (5) The executive officer shall have the right to attend all meetings of the committee and any joint committee or sub committee and to take part in the discussion so as to make an explanation in regard to 1449 the subject under discusion, but shall not move, second, or vote on any resolution or other motion. " " 57. (1) If a committee is not competent to perform, or persistently makes default in the performance of, the duties imposed on it or undertaken by it under this Act or any other enactment for the time being in force, or exceeds or abuses its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, dissolve such committee and may order a fresh election to take place. (2)If after fresh election the new committee continues to be incompetent to perform, or to make default in the performance of, such duties or exceeds or abuses its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, declare the committee to be incompetent or in default, or to have exceeded or abused its powers, as the case may be, and supersede it for a period to be specified in the order. (3)If a committee is so dissolved or superseded, the following consequences shall ensue : (a)all members of the committee shall, as from the date of the order, vacate their offices as such members; (b)all powers and duties of the committee may, until the committee is reconstituted, be exercised and performed by such person or persons as the State (Government may appoint in that behalf; (c) all property vested in it shall until the commitee is reconstituted vest in the State Government. (4)On the expiration of the period of supersession specified in the order, the committee shall be reconsti tuted, and the persons who vacated their offices under sub section (3), clause (a), shall not, by reason solely of such supersession be deemed disqualified for being members. (5) No order under sub section (1) or subsection (2) shall be passed until reasonable opportunity has been given to the committee to furnish an explanation. (6) Any person or persons appointed by the State 1450 Government to exercise and perform the powers and duties of a dissolved or superseded committee may receive payment, if the State Government so directs, for his or their services from the municipal fund. " Learned counsel for the appellants points out that action may be taken under section 53 A " if a committee is not competent to perform the duties imposed on it . . . and the State Government considers that a general improvement in the administration of the municipality is likely to be secured Whereas under section 57 action can be taken not only " if a committee is not competent to perform or persistently makes default in the performance of the duties imposed on it or but also if the committee exceeds or abuses its powers to a grave extent It is pointed out that in case of incompetency action can be taken either under section 53 A or section 57 but in case of abuse of power action can be taken only under section 57. Reference is then made to the grounds enumerated in the notification itself and it is argued that except perhaps grounds a, b, c and g which may be indicative of incompetency, the other grounds, which are, by far, greater in number, obviously constitute abuse of powers and from this circumstance the conclusion is sought to be drawn that in substance and in reality the impugned notification must have been made under section 57 and that that being so the notification cannot be sustained because of the non compliance with the provisions of sub section (5) of section 57 which expressly lay down that no order tinder sub section (1) or (2) shall be passed until reasonable opportunity has been given to the committee to furnish an explanation. I am not persuaded to uphold this argument. In the first place it has to be remembered that, the sections under consideration only confer certain powers on the State Government but that the latter is not bound to take any action under either of them. In the next place it should be noted that the two sections differ materially in their scope and effect. Under section 53 A the State Government may only appoint a servant of the Government as the Executive Officer of the committee and may determine, from time to time, 1451 which powers and duties and functions of the committee, its president, vice president or secretary shall be exercised and performed by such officer and indicate whether they should be exercised and performed in addition to, or to the exclusion of, their exercise and performance by the said committee, president, vice president or secretary. The wording of section 53 A makes it quite clear that the action that may be taken thereunder is to be effective for a temporary duration not exceeding 18 months and the purpose of taking such action is to ensure the proper performance and discharge of only certain powers, duties and functions under the Act. The section does not, in terms, affect, either legally or factually, the existence of the committee, its president, vice president or the secretary. Section 57, however, authorises the State Government, in the circumstances mentioned in the opening part of that section, to dissolve the committee itself and order a fresh election to take place so that the committee as a legal entity ceases to exist and all the sitting members of the committee become functi officio. If after such fresh election the same situation prevails, then that section further authorises the State Government to declare the committee to be incompetent or in default or to have exceeded or abused its power as the case may be and to supersede it for such period (not limited by the section) as may be specified in the order. The effect of an order made under section 57 is, therefore, extremely drastic and puts an end to the very existence of the committee itself and, in view of the grave nature of the consequences that will ensue, the legislature presumably thought that some protection should be given to the committee before such a drastic action was taken and accordingly it provided, by sub section (5) of that section, that no order should be passed until reasonable opportunity had been given to the committee to furnish an explanation a provision which clearly indicates that action under section 57 can only be taken after bearing and considering all the explanations furnished by or on behalf of the committee. The legislature did not think fit to provide a similar safeguard in section 53A presumably because 1452 the order under the last mentioned section was of a temporary duration, was not very drastic and did not threaten the very existence of the committee. A cursory reading of the two sections will also indicate that the conditions precedent to the exercise of the powers under both sections overlap to some extent, namely, that action can be taken under both if the committee "is not competent to perform the duties imposed on it. . To the extent that the requirements of the two sections overlap the State Government has the option of taking steps under one section or the other according to its own assessment of the exigencies of the situation. The position, therefore, is that if a committee is not competent to perform the duties imposed on it the State Government has to make up its mind as to whether it should take any action all and, if it thinks that action should be taken, then it has further to decide for itself as to which of the two sections it would act under. If the State Government considers that the incompetency does not run to a grave extent and the exigencies of the situation may be adequately met by appointing an Executive Officer for a short period not exceeding 18 months with certain powers to be exercised by him, either in addition to or in exclusion of their exercise by the committee, the president, vice president or the secretary, the State Government may properly take action under section 53 A. On the other hand if the State Government considers, having regard to all the circumstances of the case, that the incompetency is much too grave to permit the committee, its president, vice president or the secretary to function at all, it may take action under section 57 and dissolve the committee and direct fresh election to take place. In other words incompetency on the part of the committee gives to the State Government an option to apply one of two reme dies under the Act, if, that is to say, it considers it necessary to take action at all. What, then, is the position here ? Certain charges had been made in writing against the committee and its president which were forwarded to the president with a request to submit explanations in detail. The 1453 president, acting in his official capacity, gave detailed explanations in writing and sent the same officially from the office of the municipal committee to the Additional Deputy Collector who was deputed by the Collector to hold the enquiry. The Additional Deputy Collector held the enquiry during which the president appeared in person on several days and came to certain findings and presumably made his report which in due course must have reached the ;State Government. The State Government apparently accepted such of those findings as have been set out in the notification it self Even according to learned counsel for the appellants some of those findings amount only to incompetency and the rest, he contends, amount to abuse of power. I need not pause to Consider whether the abuse of power thus found was of a grave nature so as to fall within section 57 as such or was of a minor character so as to be evidence of mere incompetency Taking the position to be as contended by learned counsel for the appellants the position was that, as a result of the enquiry, the State Government found two things against, the appellant committee, namely, (i) that it was guilty of incompetency and (ii) that it was also guilty of certain abuses of power. I have already stated that the State Government was not obliged to take any action at all either under section 53 A or under section 57. If the State Government considered that it was necessary to take action, it was entirely for the State Government to consider whether it would take action for incompetency or for abuse of power. In the present case the State Government might have thought that the abuse of power so found was not of a very grave nature but evidenced only incompetency. Surely a committee which abused its power might also have been reasonably regarded as incompetent to perform the duties imposed on it That apart, supposing the committee was guilty of incompetency as well as of some abuses, what was there to prevent the State Government, as a matter of policy, to take action for incompetency under section 53 A ? The mere inclusion of the findings of abuse of power in the catalogue of the Committee 's 1454 misdeeds does not obliterate the findings on incompetency. I see nothing wrong in the State Government telling the committee: " You have been guilty of incompetency as well as of abuse of power; but I shall not, just at this moment, take drastic action of ' dissolving you outright, but shall be content to take action and appoint an Executive officer for 18 months and confer some power on him under section 53 A". In my judgment the State Government was well within its tights, in exercise of its option, to take action, under section 53 A as it has in terms purported to do. To say that because some of the findings amount to abuse of power the State Government must act under section 57 is to deprive it of its discretion which the Act undoubtedly confers on it. In my view the fact that the impugned notification records, apart from the findings of incompetency, certain findings of abuse of power, does not lead to the conclusion, as contended for the appellants, that the State Government had taken action under section 57 and not under section 53 A although, in terms, it says it acted under the last mentioned section. Learned counsel for the appellants in support of his contention that the impugned notification was really made under section 57 of the Act, refers us to the, powers and duties conferred on the executive Officer thereby appointed to be exercised and performed by him to the exclusion of the committee, its president, vicepresident, or the secretary. His argument is that although the municipal committee is not ostensibly dissolved, it is in effect and in reality so dissolved, for the substance of the powers of the committee, its president, vice president or the secretary has been taken away from them leaving only a semblance of power which is nothing but mere husk and the conclusion urged by learned counsel is that the impugned notification must be regarded as having been made under section 57. In the first place, section 57 does not contemplate the appointment of any executive Officer or the conferment of any power on him, while such appointment and conferment of power is directly contemplated by section 53 A. In the second place the legal 1455 existence of the municipal committee and the status of its members and its president, vice president or the secretary have not been impaired at all. In the eye of the law the municipal committee still exists and along with it the members of the committee, the president, vice president and the secretary still hold their respective offices. These features clearly militate against the suggestion that action has been taken under section 57. Learned counsel says that we must look beyond mere form and get to the substance of the matter. There can be no doubt that most of the important powers have been taken away from the committee, its president, vice president and the secretary, but that may well be due to the degree of gravity of the incompetency found or inferred from the other findings. Further, a cursory perusal of the Act and of the notification will show that various other powers and duties have not been taken away from the committee or conferred on the Executive Officer. Thus the powers of the committee under sections 128, 130, 131, 133 to 141 and 144, 145 arid 147 to 149 are still vested in and are exercisable by the committee. Likewise the powers under sections 120, 121, 122, 123 to 127, 129, 150, 152 to 160 to 162, 163, 163A and 168 are still vested in and exercisable by the president. These powers that are still left with the committee or the president can hardly or with propriety be described as mere husks. It should not be overlooked that the suggestion that the real power has been taken away leaving only a semblance of it, is really ail argument in aid of a charge of mala fides, but, as here in before stated, the charge of mala fides or fraud on the part of the State Government has not been persisted in or pressed before us. In my judgment, therefore, there is no warrant for contending that the impugned notification, judged by its eftect, must be regarded as having been made under section 57 of the Act. In this view of the matter the argument of invalidity of the action founded on non compliance with the requirements of sub section (5) of section 57 does not arise for consideration at all. I85 1456 Re. (iii): In the writ application, out of which this appeal arises, the principal prayer of the appellants is for a writ in the nature of certiorari for quashing the order passed by the State Government on November 18, 1957. Tile next prayer which is for a writ of mandamus restraining the respondents from giving effect to the impugned order is clearly conse quential on or ancillary to the main prayer. The last prayer is in the nature of the usual prayer for further or other reliefs. Therefore the present petition is essentially one for the issue of a writ of certiorari. The writ of certiorari is a well known ancient high prerogative writ that used to be issued by the Courts of the King 's Bench to correct the errors of the inferior Courts strictly so called. Gradually the scope of these writs came to be enlarged so as to enable the Superior Courts to exercise control over various bodies which were not, strictly speaking, Courts at all but which were, by statute, vested with powers and duties that resembles those that were vested in the ordinary inferior Courts. The law is now well settled that a writ of certiorari will lie to control such a statutory body if it purports to act without jurisdiction or in excess of it or in violation of the principles of natural justice, or commits any error apparent on the face of the records, provided that, on a true construction of the statute creating such body, it can be said to be a quasi judicial body entrusted with quasi judicial functions. It is equally ",well settled that certiorari will not lie to correct the errors of a statutory body which is entrusted with purely administrative functions. It is, therefore, necessary to ascertain the true nature of the functions entrusted to and exercised by the State Government under section 53 A of the Act. In Province of Bombay vs Kusaldas section Advani this Court has discussed at considerable length the nature of the two kinds of act, judicial and administrative, and has laid down certain tests for ascertaining whether the act of a statutory body is a quasijudicial actor an administrative act. It will, therefore, (1) ; 1457 suffice to refer to the celebrated definition of a quasi judicial body given by Atkin L. J. as he then was, in Rex vs Electricity Commissioners and which now holds the field. It runs as follows " Whenever any body of persons having legal authority to determine questions affecting rights of subjects, and having the duty to act judicially act in excess of their legal authority they are subject to the controlling jurisdiction of the King 's Beneh Division exercised in these writs. " This definition was accepted as correct in Rex vs London Count?/ Council (2 ) and many subsequent cases both in England and in this country. It will be noticed that this definition insists on three requisites each of which must be fulfilled in order that the act of the body may be said to be quasi judicial act, namely, that the body of persons (1) must have legal authority, (2) to determine questions affecting the rights of parties, and (3) must have the duty to act judicially. Since a writ of certiorari can be issued only to correct the errors of a court or a quasi judicial body, it would follow that the real and determining test for ascertaining whether an act authorised by a statute is a quasi judicial act or an administrative act is whether the statute has expressly or impliedly imposed upon the statutory body the duty to act judicially as required by the third condition in the definition given by Atkin L. J. Therefore in considering whether in taking action under section 53 A the State Government is to be regarded as functioning as a quasi judicial body or a mere administrative body it has to be ascertained whether the statute has expressly or impliedly imposed upon the State Government a duty to act judicially. Relying on paragraphs 114 and 115 of Halsbury 's Laws of England, 3rd Edition, Volume 11, at pages 5558 and citing the case of R. vs Manchester Legal Aid Committee (1), learned counsel for the appellants contends that where a statute requires a decision to be arrived at purely from the point of view of policy or (1) (3) [1952] 2 (2) 413. 1458 expediency the authority is under no duty to act judicially. He urges that where, on the other hand, the order has to be passed on evidence either under an express provision of the statute or by implication and determination of particular facts on which its jurisdiction to exercise its power depends or if there is a proposal and an opposition the authority is under a duty to act judicially. As stated in paragraph 115 of Halsbury 's Laws of England, Volume 1 1, at page 57, the duty to act judicially may arise in widely differing circumstances which it would be impossible to attempt to define exbaustively. The question whether or not there is a duty to act judicially must be decided in each case in the light of the circumstances of the particular case and the construction of the particular statute with the assistance of the general principles laid down in the judicial decisions. The principles deducible from the various judicial decisions considered by this Court in the Province of Bombay vs K. section Advani (1) at page 725 were thus formulated, namely: " (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 quasijudicial 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. " It is clear that in the present case there is no question of any contest between two contending parties which the State Government is, under section 53 A, to decide and, (1)[1950] S.C.R. 621. 1459 therefore, there is no " lis " in the sense in which that word is understood generally, and the principle referred to under the first heading has no application. We have, therefore, to consider whether the case comes within the principle enunciated under the second head, namely, whether the C. P. and Berar Municipalities Act, 1922, requires the State Government to act judicially when taking action under section 53 A. Learned counsel for the appellant draws our attention to the language in which section 53 A is couched. He concedes that the ultimate order under that section is purely discretionary, that is to say the State Government is not obliged to take any action tinder the section. It may make an order Tender the section or it may not according as it thinks fit. But in case the State Government chooses to act under the section, it can only do so if the conditions therein laid down are fulfilled. A cursory reading of section 53 A will show that there are two prerequisites to be satisfied before the State Government can take action under section 53 A, namely, (1) that the municipal committee is not competent to perform the duties imposed on it and (2) that the State Government considers that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the Executive Officer of the committee. When both these conditions are fulfilled, then and then only may the State Government take action and make an order under section 53 A. Of the two conditions the second one, by the very language in which it is expressed, is left entirely a matter for the State Government to consider, for it depends entirely on the view of its own duty and responsibility that the State Government may take on a consideration of the situation arising before it. In other words, the statute has left that matter to the subjective determination of the State Government. The first requisite, however, is an objective fact, namely, whether the committee is or is not competent to perform the duties imposed on it. The determination of that fact, it is pointed out, has not been left to the subjective determination by 1460 the State Government. Learned counsel for the appellants urges that if it were intended to leave the determination of this fact of incompetency also to the subjective opinion of the State Government, the section would have been framed otherwise. It would have said something like this: " If the State Government considers that a committee is not competent to perform the duties and that the general improvement in the administration of the municipalities is likely to be secured by This the Legislature has not done and has, thus, clearly evinced an intention not to leave it to the ipse dixit of State Government. Section 53 A, it is pointed out, differs materially in this respect from section 3 of the Bombay Land Requisition Ordinance (V of 1947) which was considered by this Court in Kusaldas Advani 's casc (1). That section of the Bombay ordinance opened with the words: " If in the opinion of the Provincial Government which were taken as indicative of the Legislature 's intention to leave the determination of the existence of all the conditions precedent entirely to the subjective opinion of the Provincial Government so as to make the action a purely administrative one. The argument is that the first requirement is the finding of a fact which may be called a jurisdictional fact, so that the power under section 53 A can only be exercised when that jurisdictional fact is established to exist. The determination of the existence of that jurisdictional fact, it is contended, is not left to the subjective opinion of the State Government and that although the ultimate act is an administrative one the State Government must at the preliminary stage of determining the jurisdictional fact act judicially and determine it objectively, that is to say, in a quasi judicialay. It is assumed that whenever there has to be a determination of a fact which affects the rights of the parties, the decision must be a quasijudicial decision, so as to be liable to be corrected by a writ of certiorari. In Advani 's case (1) Kania C. J. with A hom Patanjali Sastri J. agreed, said at page 632 : " The respondent 's argument that whenever there (1) ; 1461 is a determination of a fact which affects the rights of parties, the decision is quasi judicial, does not appear to be sound." Further down the learned Chief Justice said determined by an objective test and when that decision affects rights of someone, the decision or act is quasi judicial. This last statement overlooks the aspect that every decision of the executive generally is a decision of fact and in most cases affects the rights of someone or the other. Because an executive authority has to determine certain objective facts as a preliminary step in the discharge of an executive function, it does not follow that it must determine those facts judicially. When the executive authority has to form an opinion about an objective matter as a preliminary step to the exercise of a certain power conferred on it, the determination of the objective fact and the exercise of the power based thereon are alike matters of an administrative character and are not amenable to the writ of certiorari. " To the like effect is the following observation of Fazl Ali J. in the same case at page 642: " The mere fact that an executive authority has to decide something does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes the difference, and the real test is: Is there any duty to decide judicially ? As I have already said, there is nothing in the Ordinance to show that the Provincial Government has to decide the existence of a public purpose judicially or quasi judicially. " Dealing with the essential characteristics of a quasi judicial act as opposed to an administrative act, I said at page 719: features. Thus a person entrusted to do an administrative act has often to determine questions of fact to enable him to exercise his power. He has to consider facts and circumstances and to weigh pros and cons in his mind before he makes up his mind to exercise his power just as a person exercising a judicial or 1462 quasi judicial function has to do. Both have to act in good faith. A good and valid administrative or executive act binds the subject and affects his rights or imposes liability on him just as effectively as a quasijudicial act does. The exercise of an administrative or executive act may well be and is frequently made dependent by the Legislature upon a condition or contingency which may involve a question of fact, but the question of fulfilment of which may, nevertheless, be left to the subjective opinion or satisfaction of the executive authority, as was done in the several Ordinances, regulations and enactments considered and construed in the several cases referred to above. The first two items of the definition given by Atkin L. J. may be equally applicable to an administrative act. The real test which distinguishes a quasi judicial act from an administrative act is the third item in Atkin L. J. 's definition, namely, the duty to act judicially. " I found support for my opinion on the following passage occurring in the judgment of Lord Hewart C. J. in B. vs Legislative Committee of the Church Assembly (1): " In order that a body may satisfy the required test it is not enough that it should have legal authority to determine questions affecting the rights of subjects; there must be super added to that characteristic the further characteristic that the body has the duty to act judicially. " The above passage was quoted with approval by Lord Radcliffe in delivering the judgment of the Privy Council in Nakkuda Ali 's case I now proceed to apply the principles discussed above to the facts of the present case. The simple fact that the incompetency of the committee goes to the root of the jurisdiction of the State Government to exercise its power under section 53 A does not require that that fact must be determined judicially. The sole question is, does the statute require the State Government to act judicially. There need not be any express provision that the State Government must act judicially. It will be sufficient if this duty may be (1) , 415. (2) 1463 implied from the provisions of the statute. The mere fact that a question of fact has to be determined as a preliminary condition before action can be taken under the statute by itself does not carry that implication. There must be some indication in the statute as to the manner or mode in which the preliminary fact is to be determined. I find nothing in section 53 A which in terms imposes any duty on the State Government to act judicially. No form of procedure is laid down or even referred to from which such a duty could be inferred. On the contrary, one finds a signi ficant omission of any provision like that embodied in sub section (5) of section 57 which requires that no order under that section shall be passed until reasonable opportunity has been given to the committee to furnish an explanation. It is also material to note that whereas an order under section 57 is of a permanent character the one to be made under section 53 A is to be of a limited duration, i.e., for such period not exceeding IS months as may be specified in such order. Further, section 53 A contemplates swift action and a judicial hearing may easily frustrate the very purpose contemplated by section 53 A, for a judicial act will be subject to the powers of superintendence of the superior courts and the operation of the order under section 53 A may be postponed, as it has been done in this very case, by taking, the matter from court to court until it is set at rest by this Court. In this connection reference may also be made to section 25 A of the Act which authorises the State Government to require the committee to appoint, inter alia, a Chief Executive Officer. If such committee fails to comply with the requisition within the period specified, the State Government may, under sub section (3), if it thinks fit, appoint such officer and fix his pay and allowance. Sub section (4) authorises the State Government to require the committee to delegate to the officer so appointed such powers, duties and functions of the committee, its president, vice president or the secretary under this Act or any rule or bye law made thereunder as may be specified in such requisition and if the committee fails to comply with such requisition within a reasonable time, the State Government 186 1464 may determine the powers, duties and functions which shall be exercised and performed by such officer in addition to or to the exclusion of their exercise or performance by committee, its president, vice president or secretary. Nobody will say that the State Government must exercise the powers under section 25 A after holding any judicial enquiry. The only difference in the language of section 25 A and section 53 A both of which were inserted in the Act in 1947 is that action can be taken under section 53 A only when the committee is incompetent to perform the duties imposed on it a fact the determination of which is not in so many words left to the subjective opinion of the State Government, whereas action can be taken under section 25 A on the satisfaction of the State Government as to certain facts which is, in terms, left to the subjective determination of the State Government. If, as I have said, the determination of a jurisdictional fact is not by itself sufficient to indicate that, it has to be done judicially, there is nothing else in section 53 A or in any other section of the Act which will lead to the conclusion that the State Government must act judicially. The only other thing strongly relied on by learned counsel for the appellants is that the State Government may exercise its power under section 53 A " by an order stating reasons therefor published in the Gazette ". The requirement that the State Government must give reasons for the order it makes does not necessarily require it to record a judgment judicially arrived at. The legislature might well have thought that public policy required that the State Government entrusted with large administrative power should record its reasons for exercising the same so as to allay any misgivings that may arise in the mind of the public. In my judgment, the action taken by the State Government under section 53 A is not a judicial or quasi judicial act but is an administrative act. Learned counsel for the appellants relied on the case of Capel vs Child (1). That decision clearly went upon the construction of the statute that came up for consideration. The fact that action could be taken under that statute on affidavits (1) 2 Cr. & Jr, 558; 37 R. R. 761. 1465 was construed as a clear indication that the Bishop had to arrive at a decision as to the negligence of the Vicar on hearing evidence adduced before it by affidavit which led to the next conclusion that the Vicar must be given an opportunity of being heard and of adducing evidence in his own defence. From this circumstance it was inferred that even when the Bishop acted on his knowledge of fact he must also proceed, judicially, for the two modes of procedure were treated on the same footing by the section itself. As I have said, there is nothing in section 53 A or any other sec tion which may lead us to infer a duty to proceed judicially as was done in that case. On the contrary there are indications leading to a different conclusion. To say that action to be taken under section 53 A is an administrative action is not to say that the State Government has not to observe the ordinary rules of fair play. Reference to the observation made by Fortesque J. in Dr. Bentley 's case about God asking Adam and Eve whether they had eaten the forbidden fruit appearing in the judgment of Byles J. in Cooper vs The Wandsworth Board of Works (1) is apposite. The decision in the last mentioned case clearly establishes that in some cases it may be necessary to give an opportunity to a party to have his say before at) administrative action is taken against him. But that is quite different from the well ordered procedure involving notice and opportunity of hearing necessary to be followed before a quasi judicial action, open to correction by a superior court by means of a writ, of certiorari, can be taken. The difference lies in the manner and mode of the two procedures. For the breach of the rules of fair play in taking administrative action a writ of certiorari will not lie. I have already recounted the events and proceedings that preceded the actual passing of the order under section 53 A. If the action taken tinder that section is to be regarded as an administrative action, as I hold it should be, then I have no doubt that the appellants have had more than fair play. It is said that the State Government did not hold any enquiry before (1) ; ; 1466 making the order and that, therefore, it can not be said that the appellants had an opportunity to defend themselves against an order of this kind. I do not consider that there is any substance in this contention. If the State Government wanted to hold any enquiry it would do so through some of its officers. Who would be more appropriate and competent to hold the enquiry except the officers on the spot ? The Additional Deputy Collector is obviously the person to whom the duty of enquiry could properly be entrusted. All the charges levelled against the appellants were forwarded to them, and they submitted explanation. The first appellant, who is the President, personally attended many of the sittings. There is no suggestion that they had been prevented from adducing evidence in their own defence, The enquiry was held into what had been alleged against their conduct. It was surely not a purposeless enquiry. As a result of the enquiry certain findings were arrived at which were accepted by the State Government and an order was made under section 53 A. I do not see what grievance the appellants can possibly have. In my judgment there has been no remissness on the part of the State Government. For reasons stated above I would dismiss this appeal. BHAGWATI J. .I also agree that the appeal should be dismissed with costs but would like to add a few words of my own. I have had the benefit of reading the judgments prepared by my Lord the Chief Justice, Kapur J. and Subba Rao J. I agree with the reasoning and the conclusions reached in those judgments in regard to points Nos. (i) & (ii), viz., (i)that though the Notification purports to have been made in exercise of the powers conferred on the State Government by section 53 A, in substance and in reality it has been made under section 57 of the Act; and, (ii)that if the Notification is held to be one made under section 57 it is ultra vires and bad since the statutory requirement of affording reasonable opportunity to explain has not been complied with. 1467 In regard to point No. (iii), viz., (iii)that even if the impugned Notification be held to come within section 53 A it is still ultra vires since before promulgating it the State Government has committed a breach of the rules of natural justice in not giving any opportunity to the appellants to defend themselves, however, there is a difference of opinion between my Lord the Chief Justice and Kapur J. on the one hand, and Subba Rao J. on the other, as to the character of the act performed by the State Government while arriving at the conclusion that the Committee is not competent to perform the duties imposed on it or undertaken by it. Whereas the former are of the view that in arriving at such conclusion the State Government performs only an administrative function, the latter is of the view that the fact whether the committee is not competent to perform the duties imposed on it or undertaken by it is a jurisdictional fact and in arriving at that conclusion the State Government performs a quasi judicial function. In my opinion, the determination of the question whether the State Government performs an administrative or a quasi judicial function in the matter of arriving at such conclusion is immaterial for the purposes of this appeal, inasmuch as an inquiry had been instituted by the State Government in the matter of the charges levelled against the appellants and full opportunity had been given to them to defend themselves. I need not add anything in this regard to what has been said by my Lord the Chief Justice in the judgment just delivered by him. I only wish to say that the circumstances adverted to therein amply demonstrate that the appellants had notice of the charges which had been levelled against them and had rendered full explanation in regard to the same, and, in the matter of the inquiry in regard to those charges the principles of natural justice had been complied with and the conclusion reached by the State Government in the matter of the incompetence of the committee was unassailable. That being so, I would prefer not to express any opinion on the vexed question as to whether the act 1468 performed by the State Government is quasi judicial or administrative in character. The result, however, is the same and I agree with the order proposed dismissing the appeal with costs. S.K. DAS J. I agree generally with the conclusions reached by my Lord the Chief Justice and the reasons on which those conclusions are founded. But I wish to add a few words with regard to the third question, namely, if in making the impugned notification, the State Government violated the principles of natural justice. The answer to that question depends on whether on a true construction of the relevant statute, the State Government performed an administrative function or what has been called a quasi judicial function in making the impugned notification. I am of the view that the action taken by the State Government under section 53 A of the Act is in its true nature an administrative act. It is said that where there is ' a duty to act judicially ', the function is quasijudicial: that however does not help us very much in understanding the distinction between an administrative function and a quasi judicial function. Where the statute clearly indicates that the function is judicial, there is little difficulty. The difficulty arises in cases where the point taken is that by necessary implication the statute requires an administrative body or executive authority to act judicially. It is indeed Generally correct to say that where an administrative body or authority is under a duty to act judicially, its function is judicial or quasi judicial. But it is, to some extent, a tautology to say that the function is judicial or quasi judicial if it is to be done judicially. To get to the bottom of the distinction, we must go a little deeper into the content of the expression 'duty to act judicially '. As has been repeated so often, the question may arise in widely differing circumstances and a precise, clear cut or exhaustive definition of the expression is not possible. But in decisions dealing with the question several tests have been laid down; for example 1469 (i) whether there is a lis inter partes (ii) whether there is a claim (or proposition) and an opposition; (iii)whether the decision is to be founded on the taking of evidence or on affidavits; (iv)whether the decision is actuated in whole or in part by questions of policy or expediency, and if so, whether in arriving at the decision, the statutory body has to consider proposals and objections and evidence; and (v)whether in arriving at its decision, the statutory body has only to consider policy and expediency and at no stage has before it any form of lis. The last two tests were discussed and considered in R. vs Manchester Legal Aid Committee (1). It is fairly clear to me that tests (i) to (iv) are inappropriate in the present case by reason of the provisions in section 53 A ,is contrasted with section 57 and other sections of the Act. The test which is fulfilled in the present case is test (v), and that makes the function under section 53 A a purely administrative function in spite of the requirement of an initial determination of a jurisdictional fact and the recording of reasons for the decision. I am content to rest my decision on the aforesaid ground, as I am not satisfied that the enquiry held by the Deputy Collector was a proper enquiry if it be held that section 53 A entrusts a quasi judicial function to the State Government and therefore requires compliance with the principles of natural justice. That enquiry was for a different purpose altogether, the charges were not the same, and in my view the Municipal Committee had no real opportunity of meeting the charges on which the State Government ultimately took action. I prefer, therefore, to base my decision on the third question on the short ground that the function which the State Government exercised under section 53 A was administrative in nature and it is settled law that such action is not amenable to a writ of certiorari. On the first two questions I am in entire agreement (1)[1952] 2 Q.B. 4I3. 1470 with my Lord the Chief Justice and have nothing useful to add. KAPUR J. This appeal pursuant to special leave of this Court is directed against the judgment and order of the Madhya Pradesh High Court. The appellants are the Municipal Committee of Dhamtari and its President Radheshyam Khare who are challenging the order of the State Government of Madhya Pradesh appointing an Executive Officer of the Municipal Committee under section 53 A of the C. P. & Berar Municipalities Act (Act 11 of 1922) to be termed in this judgment, the Act. The facts leading to this appeal are that one Dhurmal Daga who was a member of the Dhamtari Municipal Committee (appellant No. 2) was found importing cotton into the municipal area without paying octroi duty. He then went on hunger strike and also distributed pamphlets making allegations against both the appellants. At this stage the Collector of Raipur district personally intervened and persuaded Dhurmal Daga to break his fast on an assurance that he (the Collector) would look into his allegations. In pursuance of that assurance Mr. Rana, Deputy Collector held an enquiry and called the explanation of tile Municipal Committee and its President and submitted his report on November 22, 1956, which was forwarded to the State Government on April 24, 1957. The State Government thereupon took action under section 53 A of the Act and by a notification dated November 18, 1957, appointed a Deputy Collector B. P. Jain respondent No. 3 as Executive Officer of the Dhamtari Municipal Committee for a period of 18 months on the ground that the Municipal Committee was incompetent in the performance of its duties under the Act. The relevant part of the notification was as follows: " Whereas it appears to the State Government that the Municipal Committee, Dhamtari, has proved itself incompetent to perform the duties imposed on it by or under the Central Provinces and Berar Municipalities Act, 1922 (11 of 1922), inasmuch as it (a) granted grain and building advances to the I 1471 employees without prior sanction and no efforts were made for their recovery, (b)showed carelessness in cases of embezzlements of the employees and did not report such cases to Government, (c)failed to control the President who issued orders in cases in which he had no authority, (d)spent thousands of rupees on sanitation and other works although there was no provision in the budget, (e)allowed unconcerned persons to interfere in its working, (f)showed partiality in the appointment and dismissals of the employees, further such appointments and dismissals were made against rules, (g)delayed the constitution of the committee and the framing of budget, (h) misused the trucks of the municipality, (i) failed to recover the lease money, (j) shown partiality in the issue of transit passes to certain traders, further excess octroi duty was charged on certain articles and in certain cases where octroi duty is not leviable it was levied just to harass the people, (k)distributed municipal manure to certain persons without any charge, similarly distributed the manure free of cost and used the truck of the municipality for this purpose, (1)failed to control its president who spent the money of the municipal Committee without any authority, (m)spent huge amount on the maintenance of the roads and drainage but their condition has remained unsatisfactory, (n)failed to give copies of the documents as allowed under rules, also failed to allow its members to inspect the records as is permissible under rules, (o) failed to invite tenders of purchase of articles. " This order of the State Government was challenged under article 226 in the Madhya Pradesh High Court on the allegation that the order passed by the State Government constituted 187 1472 " a flagrant abuse of the powers conferred under section 53 A of the Municipalities Act. The charges enumerated in the notification were never framed. The State Government did not serve any notice on the Municipal Committee or its President to show cause against the charges nor were they afforded any opportunity to have their say in the matter. " The appellants submitted that the finding about the incompetency of the committee was vitiated because no enquiry was held and there was no evidence in support thereof and the order was void and inoperative because (1)" there is non observance of the mandatory provisions. The power has not been exercised within the limits prescribed. (2) there is no determination of the basic facts. (3) there is a violation of the rules of natural justice. (4) the action is mala fide. " The respondents denied the allegations and submitted that the State Government made the order under section 53 A of the Act on the report of Mr. Rana, Deputy Collector who held an enquiry into the allegations made against the appellant under the orders of the Collector of Raipur; that proper notice was given to the Secretary of the Municipal Committee which filed its Written Statement through its President appellant No. 1 who appeared personally during the proceedings of the enquiry, but no opportunity for " leading any evidence" was demanded by the appellant nor was it denied. They also pleaded that no formal enquiry was required under the law and that the Court could not go into the sufficiency or otherwise of the reasons for taking action " and the same will not be enquired into by the Court objectively. " A learned Single Judge of the High Court dismissed the petition holding that whatever be the position under section 57, under section 53 A no explanation was required to be called from the municipal committee and the State Government was authorised under the law to act promptly. The High Court negatived the allegation that the State Government had proceeded against 1473 the Municipal Committee, appellant No. 2, at the instance of Dhurmal Daga. The learned Judge said: " I have gone through the material on which the State Government based its action on enquiry into the charges levelled against the municipal committee and find that there were several other complaints besides those made by Dhurmal Daga. The record of the enquiry shows that on some occasions the petitioner was present during the enquiry. I am satisfied that the invocation of the power of this Court under article 226 of the Constitution is not open to the present petitioner ". A Letters Patent appeal against this judgment was dismissed on February 21, 1958. The appellants have come in appeal to this Court by special leave and have raised four points before us: (1)That the notification though it purports to be under section 53 A of the Act is really under section 57 which is shown by the grounds given in the notification, the powers vested in the Executive Officer and by the effect of the order ; (2)and if it is a notification under section 57 it is ultra vires because the statutory requirements of the section had not been complied with; (3) even if the notification be held to be under s.53 A of the Act it was still null and void and inoperative as it violated the principles of natural justice and (4)that the order made was mala fide inasmuch as it had been passed with an ulterior object of taking away the control of the municipality from the lndependent Party which was in a majority and that this was in accordance with the policy adopted by the State Government of superseding or suspending municipalities which were not controlled by the Congress Party. As further proof of the mala fides of Res pondent No. 1, the State Government, it was alleged that Radheshyam Khare appellant No. 1 was expelled from the Congress Part for six years in about March 1957 because he stood as an Independent 1474 candidate for election to the Lower House of Parliament in the 1957 elections. The allegation of mala fides was not seriously pressed nor is there any material to sustain it. In order to decide the other questions raised in this appeal it is necessary to examine the scheme of the Act and its provisions relating to the powers of the State Government in regard to municipal committees. Chapter I of the Act makes provisions for the constitution of municipalities. Section 4 empowers the State Government to signify by notification it, , intention to declare a local area to be a municipality, to alter its limits or to withdraw the whole of it from a municipality. Section 5 gives the right to the inhabitants of such local area to file objections against anything contained in the notification within a period of 6 weeks and after consideration of such objections if any, the State Government can confirm, vary or reverse its notification under section 4. Sections 6 to 8 deal with consequential orders on inclusion and exclusion of local areas: Section 9 authorises the State Government to give such powers to a municipality as in its opinion it is suited for. It provides: " If the circumstances of any municipality are such that, in the opinion of the State Government, any provision of this Act is unsuited thereto, the State Government may, by notification: (a)withdraw the operation of that provision from the municipality; (b)apply that provision to the Municipality in a modified form to be specified in such notification ; (c)make any additional provision for the municipality in respect of the matter mentioned in the provision which has been withdrawn from, or applied in a modified form to, the municipality." Chapter II deals with the membership of committees and chapter III with Subordinate Agencies. Under this chapter fall Sub Committees, Presidents and other officers of Municipal Committees. Section 25 A which deals with the appointment of a Chief Executive Officer, Health Officer or Supervisor is as under: 1475 (1)" The State Government may, if in its opinion the appointment of (a)a Chief Executive Officer is necessary for general improvement in the administration of the municipality. . . and it is satisfied that the state of the municipal fund justifies expenditure on such appointment, require the committee to appoint any such officer. (2)A requisition under sub section (1) shall state the period within which the committee shall comply therewith. (3)If the committee fails to comply with the requisition within the stated period, the State Government may, if it thinks fit, appoint such officer at the cost of the committee and fix his pay and allowances, the rate of his contribution to the provident fund or to. his pension and other conditions of service. (4)The State Government may require the committee to delegate to the Chief Executive Officer . . . appointed under this section such powers, duties and functions of the committee, president, vicepresident, or secretary under this Act or any rule or bye law made thereunder as may be specified in such requisition, and if the committee fails to comply with such requisition within a reasonable time, the State Government may determine which powers, duties and functions shall be exercised and performed by such officer in addition to, or to the exclusion of, their exercise and performance by the committee, president, vice president or secretary. (5)The secretary of the committee shall be subordinate to the Chief Executive Officer. (6)The provisions of subsection (5) of section 53 A shall apply to the Chief Executive Officer or Health Officer or Supervisor appointed under this section ". Chapter IV deals with the procedure to be followed in Committee Meetings, chapter V with property, contracts and liabilities and chapter VI with duties of committees. Chapter VIII is headed " Control ". It prescribes the authorities which have the power to control the acts of committees and also lays down the 1476 extent of such control and the method of its exercise. Section 52 gives to the Deputy Commissioner the power to examine the proceedings of committees or subcommittees. Section 53 empowers a Deputy Commissioner to suspend the execution of any order or resolution of a committee or a subcommittee and prescribes the circumstances in which this power can be exercised. Then comes section 53 A which empowers the appointment of an Executive Officer by the State Government. Section 54 provides that in the case of emergency the. State Government, on the receipt of the report under section 52 or otherwise may require a municipality to execute any work or perform any act which in its opinion is necessary for the service of the public. Under section 55 the State Government if satisfied after receiving a report under section 52 or after enquiry if any that a municipal committee has made default in performing its duties may appoint " some person to perform " the duty and can direct the municipal committee to pay reasonable remuneration to the person so appointed. If default is made in any such payment the State Government can under section 56 direct a person having custody of municipal funds to make such payment. Section 57 empowers the State Government to dissolve and/or to supersede the municipal committee. Section 58 gives to the State Government the power of revision and an overall control over the actions of officers acting or taking any action under the Act. But it cannot reverse any order unless notice is given to the parties interested and they are allowed to appear and be heard. Section 58 A authorises the State Government to enforce its orders. Section 58 B gives to the State Government the power of review of orders passed by itself and Commissioners and Deputy Commissioners have similar powers of reviewing their own orders provided that no order shall be varied unless notice is given to the parties interested to appear and be heard in support of the order. Under section 59 certain officers appointed by general or special orders of the State Government are entitled to attend any meeting of the committee and address 1477 it on any matter affecting the work of their departments. Section 60 provides for the settlement of disputes between the committees and other local bodies. As sections 53 A and 57 are the subject matter of controversy in this case it is necessary to quote them in full : Section 53 A " (1) If a committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any other enactment for the time being in force and the State Government considers that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the executive officer of the Committee, the State Government may, by an order stating the reasons therefor published in the Gazette, appoint such servant as the executive officer of the committee for such period not exceeding eighteen months as may be specified in such order. (2)Any executive officer appointed under subsection (1) shall be deemed to be an officer lent to the committee by Government under sub section (3) of section 25. (3)When under subsection (1) an executive officer is appointed for any committee, the State Government shall determine from time to time which powers, duties and functions of the committee, president, vice president or secretary under this Act or any rule or bye law made thereunder shall be exercised and performed by such officer, in addition to, or to the exclusion of, their exercise and performance by the said committee. president, vice president or secretary. (4)The Secretary of the committee shall be subordinate to the executive officer. (5)The executive officer shall have the right to attendall meetings of the committee and any joint committeeand to take part in the discussion so as to make an explanation in regard to the subject under discussion, but shall not move, second, or vote on any resolution or other motion ". Section 57 which gives power to the Government 1478 to dissolve or supersede the municipality is as follows: " (1) If a committee is not competent to perform, or persistently makes default in the performance of, the duties imposed on it or undertaken by it under this Act or any other enactment for the time being in force, or exceeds or abuses its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, dissolve such committee and may order a fresh election to take place. (2)If after fresh elections the new committee continues to be incompetent to perform, or to make default in the performance of, such duties or exceeds or abuse. ,; its powers to a grave extent, the State Government may, by an order stating the reasons therefor published in the Official Gazette, declare the committee to be incompetent or in default, or to have exceeded or abused its powers, as the case may be, and supersede it for a period to be specified in the order. (3)If a committee is so dissolved or superseded, the following consequences shall ensue: (a)all members of the committee shall, as from the date of the order, vacate their offices as such members; (b)all powers and duties of the committee may, until the committee is reconstituted, be exercised and performed by such person or persons as the State Government may appoint in that behalf; (c)all property vested in it shall until the committee is reconstituted vest in the State Government. (4)On the expiration of the period of supersession specified in the order, the committee shall be reconsti tuted, and the persons who vacated their offices under subsection (3), clause (a), shall not, by reason solely of such supersession be deemed disqualified for being members. (5)No order under subsection (1) or subsection (2) shall be passed. until reasonable opportunity has been given to the committee to furnish an explanation. (6) Any person or persons appointed by the State 1479 Government to exercise and perform the powers and duties of a dissolved or superseded committee may receive payment, if the state Government so directs for his or their services from the municipal fund. " A review of all these provisions shows that under the Act the municipalities are not independent corporations exercising powers unregulated by Governmental control. They confer regulatory authority on the State Government to keep control over municipalities, the extent of control and the mode of its exercise being dependent on circumstances and expediency varying with the exigencies of every case. The Statute leaves the discretion to the State Government to choose the action to be taken and the provision under which it is to be taken. Wherever the legislature intended an enquiry to be held before taking any action provision is made for it and wherever it intended a person to be allowed to appear and be heard it has specifically provided for it. Generally speaking excepting where all order is to be reversed qua a particular person, there is no provision for a hearing. The nature and extent of regulatory powers of the State Government and the mode of their exercise are matters of policy and expediency and indicate the taking of administrative action by the State Government and not the exercise of any judicial power and would therefore be excluded from judicial review. Counsel for the appellants firstly submitted that although the State Government has purported to act under section 53 A, in fact and in reality the order falls under section 57 and because the provisions of sub section (5) have not been complied with, the order of the State Government is illegal, null and void. A comparison of the two sections 53 A and 57 shows the difference in the powers exercisable by the State Government under the two sections and the consequences that result therefrom. Under section 53 A all that the State Government does is to appoint for a period of not more than eighteen months an Executive Officer who exercises such powers under the Act as are men tioned in the order which may be in addition to or to 188 1480 the exclusion of their exercise by the municipality, etc., a power also exercisable under section 25 A or to a limited degree under section 9. Under section 57 the municipal committee itself is dissolved and may be superseded in which case its members cease to exist and vacate their offices and the powers and duties of the municipal committee then become vested in the person or persons appointed for the purpose by the State Government and its property also vests in the State Government. These consequences do not follow an order Under section 53 A. But it is submitted that in reality the result is the same because of the powers which under the notification have been given to the Executive Officer and what is left with the Committee is only "husk". If this were so then whenever any action is taken whether under section 9 of the Act or under section 25 A in conceivable cases it would amount to supersession of the municipal committee and would therefore fall under section 57 which argurment was neither submitted nor is tenable. According to the language of the two sections, 53 A and 57 of the Act the two classes of actions contemplated are quite different and different consequences follow; one should not be confused with the other. The contention that the action taken under section 53 A is colourable and the matter really falls under section 57 is an allegation of mala fides which has not been made out. If the statute gives to the state Government powers under its various provisions and the State Government chooses in its discretion to use one rather than the other it is beyond the power of any court to contest that discretion unless a case of abuse is made out (per Lord Halsbury L. C. in the West minster Corporation vs London and North Western Railway Co. (1)). And it cannot on that ground alone be held to be a mala fide act. A great deal of stress was laid by the appellants ' counsel on the withdrawal of the powers of the municipality and particularly under section 31 and it was contended that the Committee would not be able to hold its monthly meetings as required under that section. It is difficult to interpret the notification in this manner, (1)[1905] A.C. 426. 1481 because ,so interpreted it would mean that the Executive Officer alone will meet for the transaction of business at least once a month which would amount to an absurdity. The reference in the notification must be to sub section (2) of section 31 which deals with the power of the President, etc., to call a meeting suo motu or on the requisition of a fifth of the members. Similarly the mention of Chapter V in the notification cannot vest the property of the committee in the Executive Officer. The notification deals with powers and duties and not with the vesting of property. It may however be mentioned that even where no Executive Officer is appointed by the State Government it can direct that any property vested in the municipality shall cease to be so vested and it can make such orders as it thinks fit regarding the disposal and management of such property (section 38). No doubt the powers under section 39, which deals with the management of public institutions, powers and duties of the municipality, are taken away and are vested in the Executive Officer but these powers in any case are subject to rules made by Government and these rules are always subject to change by the State Government. The powers of the municipal committee under section 40 to request the State Government for acquisition under the Land Acquisition Act have also been withdrawn. Section 41 deals with transfers of municipal property to the Government and section 42 with power of the municipality to transfer municipal property but under that section the control of the State is not excluded even when there is no Executive Officer. Section 44 deals with the ' 'Making of contracts and the other sections in that chapter do not deal with the powers and duties. of a municipal committee excepting section 49. Chapter VI prescribes the duties of a municipal committee and some of those also have been vested in the Executive Officer. There is no doubt that some very important powers have by the notification been taken away from the municipal committee and have been vested in the Executive Officer but that is a far step from saying that the committee has thereby been suspended. This exercise of its functions by the State Government is of 1482 no different quality leading to different results than what would have happened had action been taken under section 25 A or under B. 9 of the Act. It cannot there. fore be, said under the circumstances of this case that the action of the State Government is cobweb varnish or that it is merely a colourable order or a device to avoid the requirements of sub section 5 of a. 57. , It was then contended that the notification enumerates acts of the municipality some of which axe instances of mismanagement and others of abuse of power. It cannot be said that the allegations in regard to the spending of money without a provision in the budget or showing partiality in the matter of appointment and dismissal or in the matter of issuing of transport passes or distribution of municipal manure or the charge of spending huge amounts on maintenance of roads and drainage without improving their condition are nothing short of gross mismanagement or abuse of power and cannot fall under the charge of incompetency in the performance of duties or in the exercise of powers by the municipality. Assuming that they can only be instances of abuse, there is nothing wrong in the State Government enumerating all the misdeeds and wrongs done by the committee and then saying that it prefers to take action under section 53 A as it has done and not under section 57. If the acts and omissions are instances of abuse the State Government could if it thought fit, take action under section 57. If having two courses open to it the State Government took the lesser of the two actions, its discretion cannot be questioned, in the absence of proof of bad faith. It cannot therefore be said that the State Government has only pretended to act under section 53 A but in reality it was acting under section 57 of the Act. It was lastly contended that the State Government when it acts under section 53 A has a duty to act judicially and the rules of natural justice required that ]the appellants should have been given an opportunity to show cause against action being taken under that section. As said above under section 9 of the Act the State Government has, on the ground of unsuitability, the power to withdraw from the municipality any of the 1483 powers conferred under the Act either wholly or partially and under section 25 A it has the power of appointing a Chief Executive Officer if it is necessary for the general improvement in the administration of the municipality and exactly the same consequences would follow as they do when an Executive Officer is appointed. under section 53 A. There are also sections 52, 53, 54, 55 and 56 which place regulatory control in certain Government agencies. If action taken under those provisions is an exercise of executive functions of the State Government can it be said that the exercise of similar power under section 53 A and for similar object i.e. improving the general administration in case of incompetency of the municipality will change an administrative decision into a judicial or quasijudicial decision ? The real test to distinguish between a quasi judicial and an administrative act of ail authority is based on the duty 'of that authority having power to determine a question ' to act judicially. Lord Hewart, C. J. in R. vs Legislative Committee of the Church Assembly (1) said: In order that a body may satisfy the required test it is not enough that it should have legal authority to determine question affecting the rights of subjects; there must be superadded to that Characteristic the further characteristic that the body has the duty to act judicially ". And thus the authority taking a decision should not merely determine a question it should also be under a duty to act judicially. It is that essential characteristic which the State Government lacks in the present case. When it considers something likely to result from its action it is merely taking executive action and not determining a question or acting judicially. This dictum of Lord Hewart was quoted with approval by Das J. (as he then was) in Kusaldas Advani 's case (2). He said, " Therefore, in considering whether a particular statutory authority is a quasi judicial body or a mere administrative body it has to be ascertained whether, the statutory authority has the duty to act judicially". There is no indication (1) , 415. (2) ; , 720. 1484 in the statute itself that the State Government has a duty to act judicially when it appoints an Executive Officer under section 53 A. nor has any procedure been prescribed as to the manner in which the power under this section is to be exercised by the State Government which may give an indication as to nature of the decision, taken. The municipal committee is a creation of the Act and therefore it has all the powers and is subject to all the controls under the Act which are to be exercised as provided there under. The Act gives different modes of regulatory control to the State Government and the powers of the State Government extend from revision of the actions, orders and resolutions of the municipal committee to the exclusion of local areas from its jurisdiction, taking away powers given under the Act, the appointment of Executive Officers, suspension and supersession of municipalities. In certain sections e. g. section 57 dealing with this regulatory control the statute requires that the explanation of the committee be called for before a particular action is taken by the State Government and in others no such requirement is prescribed. That is a clear indication of the intention of the legislature that an opportunity was to be given in one case and not in the other. In other words a kind of quasijudicial approach was intended in one case and administrative in the other. The Privy Council in Nakkuda Ali 's case (1) (a case under a Ceylon Regulation) said : " But, that apart, no procedure is laid down by the regulation for securing that the license holder is to have notice of the Controller 's intention to revoke the license, or that there must be any enquiry, public or private, before the Controller acts ". In Advani 's case (2) Fazl Ali J. examining the ditty of authorities to act judicially said at p. 641 : There are no express words in section 3 or any other section, to impose such a duty (to determine judicially); nor is there anything to compel us to hold that such a duty is implied (1) ,78. (2) ; 1485 The learned judge took into consideration the fact that certain sections specifically provided an enquiry and others did not, and observed: " the fact remains that there is nothing in the Ordinance to suggest that the public purpose is to be determined in a judicial way ". Therefore where in a statute like the present one some sections prescribe the calling for the explanation of the municipality before any action is taken by the State Government and others do not, it is an indication of the intention of the legislature to exclude the application of principles of audi alteram partem in the latter case. The section (section 53 A) has to be read as one whole and not in compartments. The relevant words are: " If the committee is not competent to perform the duties imposed upon it and the State considers that a general improvement in the administration of the municipality is likely to be secured by " The latter portion i. e. " the State Government considers is likely to be secured " indicates a purely subjective determination and taking a policy decision. The use of the words " considers " and " is likely relate to a subjective and not an objective process. " To consider " means to think, to contemplate mentally, to regard and " likely " means probably; such as might well happen; apparently suitable for. These words cannot have any reference to objectivity but suggest subjectiveness. The opening words of the section " If the committee is not competent cannot be read separately from the latter part. When under section 53 A the State Government appoints an Executive Officer which act it considers likely to im. prove the general administration of the municipality it does not take two decisions, one objective as to the incompetency of the administration of the municipality and the other subjective as to the action likely to improve the administration. The decision is only one. The State Government is the sole judge of both matters, namely, of the incompetency and the remedy needed. Both are parts of one integrated whole a decision taken in the exercise of the administrative 1486 functions of the State Government and admits of no element of judicial process. (Vide The Province of ,Bombay vs Kusaldas Advani (1) (per Kania C.J. at p. 633 635) and per Das J. (as he then was) at p. 703). The State Government must necessarily be the sole judge of the state of incompetency of the municipality otherwise it would not be able to take its administrative decision as to the action which it should take and which it considers is likely to improve the administration. Both the decisions as to the incompetency of the municipality and the exercise of the executive function as to the action to be ' taken thereon are matters of like character i. e. administrative matters. (Kusaldas Advani 's case at p. 633). If that were not so then on the question of incompetency the State Government procedure will be analogous to a judicial process subject to review of Courts and the action it will take will be an administrative decision not subject to judicial review which will not only lead to inconvenience but to confusion. The Privy Council pointed out in Venkatarao vs Secretary of State (2) that " inconvenience is not a final consideration in a matter of construction, but it is at least worthy of consideration, and it can hardly be doubted that the suggested procedure of control by the Courts over Government in the most detailed work of managing its services would cause not merely inconvenience but confusion ". The very fact that an order under section 53 A is in the nature of an emergency action to protect the interests of the rate payer and has a limited duration not exceeding 18 months also negatives the order being founded on an objective determination as to the incompetency of the committee. Such a construction will defeat the very purpose of a., 53 A. Further action under section 57 is of a permanent nature and has accordingly been expressly made subject to an explanation by the municipal committee. The absence of such a provision from section 53 A clearly shows that the legislature did not intend that there should be an elaborate hearing but intended that the State should under section 53 A take a swift administrative decision. The (1) ; (2) (1936) L.R. 64 I.A. 55. 1487 correct position, as indicated above, is that the decision of the State Government as to incompetency and the decision as to the action to be taken were really one decision, one integrated whole a subjective decision of the State Government that it considered that by the appointment of an executive officer a general improvement in the hitherto general administration was likely to be secured. Merely because the fact of incompetency is a preliminary step to the exercise of an administrative function by the State Government, under & 53 A it is not necessary that the fact is to be determined judicially. Where the exercise of the administrative functions of an Executive authority like the State Government are subject to a decision as to the existence of a fact, there is no duty cast on the State Government to act judicially. Both the decision as to the fact and as to the action to be taken are really one and not two decisions, the determination being for the purpose of taking an appropriate administrative decision. As has been said above it is one integrated whole and cannot be separated into parts with different legal qualities. This was the view of Kania C. J. in the Province of Bombay vs Kusaldas Advani (1) where it was observed at p. 633: " Because an executive authority has to determine certain objective facts as a preliminary step to the discharge of an executive function, it does not follow that it must determine those facts judicially. When the executive authority has to form an opinion about an objective matter as a preliminary step to the exercise of a power conferred on it, the determination of the objective fact and the exercise of the executive power based thereon are alike matters of an administrative character Fazl Ali J. in that case said at p. 642: For prompt action the executive authorities have often to take quick decisions and it will be going too far to say that in doing so they are discharging any judicial or quasi judicial functions. The word I decision ' in common parlance is more or less a natural (3) ; 1488 expression and it can be used with reference to purely executive as well as judicial orders. The mere fact that an executive authority has to decide something does not make the decision judicial. It is the manner in which the decision has to be arrived at which makes the difference, and the Teal test is: Is there any duty to act judicially ? The language of sub section (1) of section 63 A indicates that the question whether the State Government considers that the action taken under the section i. e., the appointment of an Executive Officer is likely to secure an improvement in the general administration of the municipality is one of expediency, opinion and policy, matters which are peculiarly for the State Government to decide and of which, always assuming that it is acting bona fide, it is the sole judge. No objective test is possible. Therefore the use of these words "considers " and " is likely " negatives any objective approach or judicial or quasi judicial process. The State Government is not essentially a judicial or a quasi judicial body but its essential function is administrative. The various provisions of the Act show that it takes its decisions as to the mode and extent of control of municipalities in pursuance of its opinion and policy and on grounds of expediency. In arriving at its decision it at no stage has any form of lis or quasi lis before it nor can it be said that there are two parties before it. The Municipal Committee and itself cannot be termed quasi litigants or parties to a proposition and opposition. It is not bound to take action under section 53 A or any other section of the Act. It has to consider the question from the point of view of policy and expediency and the exigencies of the case which shows that it is not under a duty at any stage to act judicially to determine a question. This further supports the view that a correct interpretation of the words " considers " and Is is likely to be secured " indicates a subjective decision and these words make the order of the State Government administrative and not judicial or quasi judicial. The argument that the order is quasi judicial because it affects the rights of I the Municipal 1489 Committee is vacuous because all that the order complained of does is that it restricts the exercise of certain powers by the municipal committee and vests some powers in another authority contemplated by the statute. Besides every decision of the Executive generally affects the rights of one citizen or another. In Advani 's case (1) Kania C. J. said at page 632: ". . it is broadly stated that when the fact has to be determined by an objective test and when that decision affects rights of some one, the decision or act is quasi judicial. This last statement overlooks the aspect that every decision of the executive generally is a decision of fact and in most cases affects the rights of some one or the other. " But it was contended that in its order the State Government has to state reasons for taking action under section 53 A. In a democratic system of government there is always the other party, the electors and citizens, who must know why the State Government takes one particular action rather than another. Besides the mere requirement of giving reasons would not change what was an administrative body into a judicial body or an administrative decision into a judicial or quasi judicial determination. The following passage from Halsbury 's Laws of England, Vol. II, p. 56 (3rd Edition) aptly states the law and may usefully be quoted: " If, on the other hand, an administrative body in arriving at its decision has before it at no stage any form Of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any time to act judicially ". See also R. vs Manchester Legal Aid Committee In B. Johnson & Co. (Builders) Ltd. vs Minister of Health (3) it was also held that the Minister was entitled to inform his mind by informal machinery of an enquiry and merely because in order to inform his mind the enquiry had to be held it could not be said that the Minister was not performing his administrative (1) ; (2) (3) (I947) 2 A.E.R. 395. 1490 function. At p. 405 Cohen L. J. went further and said: " His duty as regards information received by him in his executive capacity is to use that information fairly and impartially. This may involve that he should give an opportunity to the authority or to the objector, as the case may be, of dealing with some allegation in a communication he has received before the quasi lis started, but, if he fails to do so, he is responsible only to Parliament for the discharge of his executive duties, and cannot be made responsible in these courts. " Appellants ' counsel relied on some English cases, the first of which was Cooper vs Wandsworth Board of Works (1) where Byles J. said at p. 420: ". although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature. " This view is not in accord with the modern exposition of the law in Nakkuda Ali 's case (2) or Franklin 's case (3). Lord Shaw in Arlidge '3 case (4 ) rejected the concept of natural justice in the following language : ". . in so far as it attempts to reflect the old jus naturale it is a confused and unwarranted transfer into the ethical sphere of a term employed for other distinctions; and, in so far it is resorted to for other purposes, it is vacuous." In R. vs Manchester Legal Aid Committee (5) the court observed : " The true view, as it seems to us, is that, the duty to act judicially may arise in widely different circumstances which it would be impossible, and, indeed, inadvisable, to attempt to define exhaustively. Where the decision is that of a court then, unless, as in the case, for instance, of Justices granting excise licences, it is acting in a purely ministerial capacity, it is clearly under a duty to act judicially. When, on the (1) [1863]14 C.B. (N.S.) 180; ; , 420. 2,0.7 (2) ,78. (4) ,138. (3) ; (5) [I952] 2 Q.B. 413, 431. other hand, the decision is that of an administrative body and is actuated in whole or in part by questions of policy, the duty to act judicially may arise in the course of arriving at that decision. " But at page 431 it was said: " If, on the other hand, an administrative body in arriving at its decision at no stage I has before it any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at, any stage to act judicially. " That was a case of a debtor who applied for and obtained a certificate of legal aid under the Legal Aid and Advice Act, 1949, in connection with his claim for damages against a company but was thereafter adjudicated bankrupt and at his instance the certificate was cancelled as his claim vested in the trustee in bankruptcy. The trustee then applied for and obtained a certificate of legal aid. The National Assistance Board and the local Committee considered only the financial circumstances of the bankrupt and not of the trustee whose disposable income was in excess of the lowest limit entitling a certificate of legal aid. The debtor company applied for an order of certiorari to quash the certificate alleging that the Committee had exceeded its jurisdiction. Under the Legal Aid (General) Regulation, 1950, reg. 4(1), it was a condition precedent to the grant of a certificate that there should have been a determination by the National Assistance Board of the disposable income of the trustee who was personally liable vis a vis his opponent. It was held that the Board having legal authority to determine questions affecting rights of subjects had a duty to act judicially and that it had exceeded its jurisdiction. The case has some distinguishing features, wanting in the case before us. The statute there prescribed the limit of income of applicant for a certificate of legal aid and the regulations required the determination by the National Assistance Board of the disposable income and disposable capital of such applicant which was a condition precedent to the 1492 grant of the certificate. Clearly without such deter mination the grant of the certificate was not within the jurisdiction of the Board and therefore the Board had to determine a question and was required to act judicially within the rule laid down in the majority judgment in Kusaldas Advani 's case (1). The Board under that statute was bound to give aid, if certain conditions were fulfilled and was quite unconcerned with questions of policy. " They have to decide the matter solely on the facts of a particular case, solely on the evidence before them and apart from any extraneous considerations. In other words, they must act judicially, not judiciously." In Capel vs Child (2) the words " Whenever it shall appear to the satisfaction of the Bishop " were held to imply a duty to act judicially and therefore the principles of natural justice applied. This rule is inconsistent with the decision of the Privy Council in Nakkuda Ali 's case (3) or the decision of the House of Lords in Franklin 's case (4) or the interpretation placed upon the word " satisfied " in some of the later English cases, Robinson vs Minister of Town and Country Planning (5) and B. Johnson & Co. (Builders) Ltd. vs Minister of Health (6). This Court in Kusaldas Advani 's case (1) also held this word to indicate a subjective approach. See also Wijeysekra vs Festing (7) where the words of the Statute were " whenever it shall appear to the Governor See also R. vs Metropolitan Police Commissioner (8) where also the words were " if he is so satisfied and it was held that these words did not imply " a judge or a quasi judge ". The decision in these cases laying down the rule of application of natural justice must be confined to their own facts and the language of the particular statute they interpreted. No general rule can be deduced therefrom nor can they be applied to other statutes and other circumstances. The case before us is not one where no enquiry has (1) ; , 720. (2) [1832] 2 Cr. & Jr. 558; 37 R.R. 761. (3) [1951] A.C66,78.(4) ; (5) (7) 1493 been hold. There was an enquiry against the appellants in regard to specific allegations made against them and after hearing them a report was made by a Deputy Collector which was forwarded to the State Government before it took action. One Dhurmal Daga made a number of allegations Annexures I and II and those allegations were supported by others like Dear & Co., Poonam Chand Somraj, Dhamtari Traders and Shilaram and the affidavit of the State Government in the High Court shows that the notice was issued to both the appellants to reply to the allega appellant No. 1 appeared before a long explanation denyDhurmal Daga and others. It was after this that the Enquiry Officer made his report which was sent to the State Government and it took action which it considered apposite and that is the action complained of But it was submitted that no notice was given to the appellants as to the nature of the complaint against them and the various charges which have been enumerated in the notification were never specifically brought to their notice and they were not called upon to show cause why action should not be taken under section 53 A. In the first place the word,% of the section as explained above do not contemplate any such notice and the argument based on the opening words of the section that the municipality was guilty of incompetence was an objective fact cannot be accepted. It cannot be said in this case that in point of fact the appellants did not know what the complaint against them was or that they had no opportunity of giving their explanation in regard to the charges. All the acts which are enumerated in the notification are contained in the various allegations which were made against the appellants by Dburmal and others. The appellants put a long explanation giving their version of the facts contained in the complaint and the Enquiry Officer sent his report after hearing the appellants and on the consideration of this report the State Government passed its order under section 53 A. The High Court after going through 1494 the record of the enquiry was satisfied as to the propriety and legality of the enquiry and that portion of its judgment has been quoted above. Then it was submitted that the enquiry by Mr. Rana was unautborised by the State Government and was no substitute for the enquiry required by the statute. But the statute has prescribed no procedure for enquiries under section 53 A even if it were to be said that the section contemplates an enquiry. And it is no defect affecting the final decision of the State Government whether the enquiry originates in the manner it did or the State Government ordered it. In these circumstances the third point raised by the appellants cannot be sustained and the submission of the appellants is without substance. The appeal therefore fails and is dismissed with costs throughout. SUBBA RAO J. I have had the advantage of reading the judgment prepared by my Lord, the Chief Justice and my learned brother, Kapur J. I regret my inability to agree with them in their views on the follwing two questions: (1) Whether under section 53 A of the C. P. & Berar Municipalities Act (Act II of 1922), hereinafter called the Act, the Government performs a judicial act; and (2) whether in fact the Government complied with the principles of natural justice in making the, Order dated November 8, 1956, under section 53 A of the Act. As the facts have been fully narrated by my Lord, the Chief Justice, it would suffice if the facts relevant to the aforesaid questions are briefly stated here. The second appellant is the Municipal Committee, Dhamtari, and the first appellant is its President. He was elected as President on July 10, 1956, and took charge of his office on July 27, 1956. On August 8,1956, one Dhurmal Daga went on a hunger strike for the redress of his grievances against the appellants. The Collector, Raipur, intervened and persuaded him to break his fast and ordered an inquiry into the charge of maladministration. The Deputy Collector, who made the inquiry, gave notice of the said inquiry to the Secretary to the Committee and the first appellant 1495 filed a written reply on September 7, 1956, and personally appeared at the inquiry. Presumably, the result of the inquiry was forwarded to the Government. On November 18, 1957, the Government issued an Order, A under a. 53 A of the Act, enumerating fifteen charges involving acts of nonfeasance, misfeasance, gross negligence and fraud, and stating that, by reason of the said act,%, it appeared to the Government that the Committee had proved itself incompetent to perform the duties imposed on it by or under the said Act. The order further proceeded to state that the Government considered that a general improvement in the administration of the Municipality was likely to be secured by appointing a servant of the Government as the Executive Officer of the Committee. The said Order also appointed Shri B. P. Jain as Executive Officer and entrusted to him most of the important powers and duties of the Committee and the President. Before the drastic action was taken, no opportunity was given either to the President or to, the Committee to explain their conduct in regard to any one of the charges. The previous inquiry made by the Deputy Collector was to attempt to persuade Dhurmal Daga to give up his fast and that inquiry by the Deputy Collector could not, in any sense of the term, be regarded as an inquiry for taking action under section 53 A of the Act. Records also do not disclose whether that inquiry related to the same charges which were the foundation for the Government taking action under the Act. 1, therefore, proceed on the footing that the Government acted under section 53 A of the Act without giving any opportunity to the appellants to explain their conduct in regard to the grave charges levelled against them, on the basis of which they were held to be incompetent Within the meaning of section 53 A of the Act. The material part of section 53 A reads: " If a committee is not competent to perform the duties imposed on it or undertaken by it by or under this Act or any, other enactment for the time being in force and the State Government considers that a general improvement in the administration of the 190 1496 municipality is likely to be secured by the appointment of a servant of the Government as the executive officer of the committee, the State Government may, by an other Order stating the reasons therefor published in the Gazette, appoint such servant as the executive officer of the committee for such period not exceeding eighteen months as may be specified in such order. " The learned Advocate General, appearing for the State, contended broadly that under this section the Government performs only an administrative act by appointing an Executive Officer for a short period and therefore no opportunity need be given to the affected parties before action is taken thereunder. Mr. M. K. Nambiar, counsel for the appellants, argued that under this section the Government is empowered to deprive the Municipal Committee, duly elected, under the Act, of its powers, though for eighteen months, on the basis of its incompetency and it is against all principles of natural justice to stigmatize such a body as incompetent without giving it an opportunity to explain its conduct. He would say that whether the Committee is competent or not is an objective and jurisdictional fact to be decided judicially by the State Government and, therefore, the act of the Government is a judicial act, which can only be discharged by following the principles of natural justice. Before considering the validity of the arguments based upon the provisions of the section, it would be convenient at this stage to notice briefly the distinction between a judicial and an administrative act and the criteria laid down by decisions for ascertaining whether a particular act is a judicial act or an administrative one. The said criteria have been laid down with clarity by Lord Justice Atkin in Rex vs The, Electricity Commissioners (1), elaborated by Lord Justice Scrutton in Rex vs London County Council (2) and authoritatively restated in Province of Bombay vs Kusaldas section Advani (3). The aforesaid decisions lay down the following conditions to be complied with: (1) The body of persons must have legal authority; (2) the authority should (1) (2) (3) ; 1497 be given to determine questions affecting the rights of subjects; and (3) they should have a duty to act judicially. So far there is no dispute. The question raised in this case is what do the words " a duty to act judicially " mean. If the statute in express terms says that the decision should be arrived at judicially, then it is an obvious case. If it does not expressly say so, can the intention of the Legislature be gathered or implied from the terms of the statute ? If it can be so gathered, what are the guiding factors for implying such a duty on the part of a tribunal or authority ? In this context a brief discussion of some of the 'relevant cases will be helpful. This Court, as I have already stated, restated the law laying down the criteria for ascertaining whether an act is a judicial act or not in Kusaldas 's case (1). There the question was whether the Provincial Government was acting judicially in making the order of requisition under a. 3 of the Bombay Land Requisition Ordinance (Bom. Ordinance V of 1947). The material part of the section under discussion read as follows: " If in the opinion of the Provincial Government it is necessary or expedient to do so, the Provincial Government may, by order in writing requisition any land for any public purpose. " To ascertain the nature of the act of the Government under that section, this Court reviewed the law on the subject and held, by a majority, that on a proper construction of section 3 of the Ordinance, the decision of the Bombay Government that the property was required for a public purpose was not a judicial or a quasijudicial decision but an administrative act and the Bombay High Court had, therefore, no jurisdiction to issue a writ of Certiorari in respect of the order of requisition. Das J. as he then was, after considering the law on the subject summarized the principles at page 725 thus: " (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 (1) [I950] S.C.R. 621. 1498 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 quasijudicial act provided the authority is required by the statute to act judicially. " The propositions so stated appear to me to be unexceptional. But the further difficulty is whether the duty to act judicially should be expressly so stated in the statute or whether it can be gathered or implied from the provisions of the statute. I do not think that Das J. as he then was,, meant to lay down as a condition that the duty to act judicially should be expressly stated in the statute, for rarely any statute would describe the character of disposal of a particular proceeding. If it was intended to insist upon an express condition in the statute, the learned Judge would not have scrutinized the provisions of the Ordinance to ascertain whether the order thereunder was intended to be a judicial act or not. A useful discussion bringing out in bold relief the difference between a judicial and an administrative act is found in R. vs Manchester Legal Aid Committee (1). There a debtor applied to a local aid committee, set up under the Legal Aid and Advice Act, 1949, for a certificate for legal aid to pursue a claim for alleged breach of contract against a limited company. As he was adjudicated insolvent, the certificate was revoked and on application made by his trustee, it was granted to him again. One of the questions raised was whether the legal aid committee in issuing the certificate was acting judicially and therefore subject to an order of certiorari. The court held that the said body was under a duty to act (1) [I952] 2 Q.B. 413. 1499 judicially. Parker J. delivering the judgment of the Court, summarized the law on the subject at page 428 thus: " The true view, as it seems to us, is that the duty to act judicially may arise in widely different circumstances which it would be impossible, and, indeed, inadvisable, to attempt to define exhaustively. Where ' the decision is that of a Court, then, unless, as in the case, for instance, of justices granting excise licences, it is acting in a purely ministerial capacity, it is clearly under a duty to act judicially. When, on the other hand, the decision is that of an administrative body and is actuated in whole or in part by questions of policy, the duty to act judicially may arise in the course of arriving at that decision. Thus, if, in order to arrive at the decision, the body concerned had to consider proposals and objections and consider evidence, then there is the duty to act judicially in the course of that inquiry. . Further, an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of and are not in accordance with the practice of a court of law. . . . If, on the other hand, an administrative body in arriving at its decision at no stage has before it any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any stage to act judicially. " On the basis of the aforesaid principles, the learned Judge held that the local committee, though an administrative body, was acting judicially in issuing the certificates as in ascertaining the facts for issuing the certificate it was quite unconcerned with any question of policy. I respectfully agree with the principles enunciated by the learned Judge and they are not in any way inconsistent with the principles laid down by this Court. The law has been neatly summarised in Halsbury 's Laws of England, Third Edition, Volume 11, at pages 55 and 56 and it is as follows: 1500 " It is not necessary; that it should be a court: 'an administrative body in ascertaining facts or law may be under a duty to act judicially notwithstanding that its proceedings have none of the formalities of, and are not in accordance with the practice of, a court of law. It is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition. A body may be under a duty, however, to act judicially (and subject to control by means of these orders) although there is no form of lis inter partes before it; it is enough that it should have to determine a question solely on the facts of the particular case, solely on the evidence before it, apart from questions of policy or any other extraneous considerations." " Moreover an administrative body, whose decision is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that decision. . . . If, on the other hand, an administrative body in arriving at its decision has before it at no stage any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any time to act judicially. " It is not necessary to multiply citations. The concept of a ,judicial act", has been conceived and developed by the English Judges with a view to keep the administrative tribunals and authorities within bounds. Unless the said concept is broadly and liberally interpreted, the object itself will be defeated, that is, the power of judicial review will become innocuous and ineffective. The comprehensive phraseology of article 226 of the Constitution supports rather than negatives the liberal interpretation of that concept. The argument that the Court shall not obstruct the smooth working of the administrative machinery does not. appeal to me, for the simple reason that the exercise of the power of judicial review or, to be more precise, the existence of such power in courts for hardly one act in thousands come before courts eliminates arbitrary action and enables the 1501 administrative machinery to function without bias or discrimination. With this background, the principles, as I apprehend them, may be concisely stated thus: Every act of an administrative authority is not an administrative or ministerial act. The provisions of a statute may enjoin on an administrative authority to act administratively or to act judicially or to act in part administratively and in part judicially. If policy and expediency are the guiding factors in part or in whole throughout the entire process culminating in the final decision,, it is an obvious case of administrative act. On the other hand, if the statute expressly imposes a duty on the administrative body to act judicially, it is again a clear case of a judicial act. Between the two there are many acts, the determination of whose character creates difficult problems for the court. There may be cases where at one stage of the process the said body may have to act judicially and at another stage ministerially. The rule can be broadly stated thus: The duty to act judicially may not be expressly conferred but may be inferred from the provisions of the statute. It may be gathered from the cumulative effect of the nature of the rights affected, the manner of the disposal provided, the objective criterion to be adopted, the phraseology used, the nature of the power conferred or the duty imposed on the authority and other indicia afforded by the statute. In short, a duty to act judicially may arise in widely different circumstances and it is not possible or advisable to lay down a hard and fast rule or an inexorable rule of guidance. In the present case, section 53 A of the Act itself provides the necessary criteria to answer the question. Before the Government can take action under the section, three preliminary conditions for the exercise of the power are laid down: (1) The Committee is not competent to perform the duties imposed on it; (2) the State Government considers that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government; (3) an order stating the reasons therefor. The first condition depends upon the determination of 1502 an objective fact, namely, whether the committee is competent to perform the duties imposed upon it. It is a jurisdictional fact that confers jurisdiction on the Government to take further action. The determination of this fact is not left to the subjective satisfaction of the Government. Indeed, the different phraseology used in regard to the second condition, namely, " the State Government considers ", brings out in bold relief the distinction between the two; while in the former an objective fact has to be determined, in the latter the fact is left to the subjective satisfaction of the Government. If the facts covered by both the conditions are left to the subjective satisfaction of the Government, the phraseology would have been different and the clause would have run thus: ".If the Government considers that, the committee is not competent to perform the duties imposed on it or under taken by it by or under this Act or any other enactment for the time being in force and that a general improvement in the administration of the municipality is likely to be secured by the appointment of a servant of the Government as the Executive Officer of the Committee. . To accept the argument of the Counsel for the respondents will be to rewrite the section in the above manner which is not permissible. There is also a good reason and a justification for the difference in the phraseology used in the section. The municipality is an elected corporate body and is entrusted with responsible statutory functions. While it may be necessary, in public interest, to deprive the committee of some powers for a short period when it is proved to be demonstrably incompetent, such a body cannot easily be relegated to a subordinate position on the mere will and pleasure of the Government. The section reconciles the public good and the committee 's rights and prestige, by conditioning the exercise of the power of the Government to depend upon the objective determination of the jurisdictional fact. Whatever ambiguity there may be in the section, it is dispelled by the third condition, namely, that which enjoins on the Government to give reasons. What is the object of the Legislature in imposing the said condition, if 1503 the matter is left to the subjective satisfaction of the Government ? The concept of subjective satisfaction of the Government does not involve any attempt to satisfy the mind or appeal to the good sense of another. The working of the mind need not be disclosed and the validity of the section need not depend upon any objective standard. The condition to pass a speaking order is destructive of any idea of invulnerability, for the said condition implies that the order should satisfy the mind of a reasonable man. It is contended that a comparative study of the provisions of sections 53 A and 57 shows that the Government has to give notice before taking action under section 57, whereas no such duty is cast upon it under section 53 A and that would indicate the intention of the Legislature that the Government is not expected to act judicially under section 53 A. There. is some force in this contention, buy that is not decisive of the question to be decided in this case. If the provisions of a particular section necessarily imply a duty to act judicially, the mere fact that there is no express provision to issue a notice to the affected parties cannot convert a judicial act into an administrative one. Nor does the argument that the order of appointment of an Executive Officer is only for a temporary period indicate the administrative character of the act. The finding of incompetency carries a stigma with it and what is more derogatory to the reputation of the members of the committee than to be stigmatized as incompetent to discharge their statutory duties ? Would it be reasonable to assume that public men in a democratic country are allowed to be condemned unheard ? What is material is not the period of the tenure of the executive officer, but the ground for the appointment of the officer, namely, the incompetency of the committee. Shortly stated, the position is this: The committee is comprised of elected representatives of the respective constituencies; they are presumably competent men in whom the electorate has confidence. The Government has to arrive at the finding of their incompetency on the basis of objective facts to be ascertained and to 191 1504 give reasons for its finding. It is against all canons of natural justice that a tribunal should arrive at a finding of far reaching consequence without giving an opportunity to explain to the persons who would be affected by such a finding. For the aforesaid reasons, I have no doubt that the section imposes a duty on the Government to act judicially in ascertaining the objective and jurisdictional fact, namely, whether the committee is incompetent. It is a necessary condition of such a duty to give an opportunity to the committee to explain the grave charges levelled against it. Admittedly, no such opportunity was given to the committee and I cannot agree with the learned Advocate General that the inquiry by the Deputy Collector at an earlier stage for a different purpose had in effect given an opportunity to the committee. It is not known what were the charges for which that inquiry was held. The record discloses that the inquiry was held by a subordinate officer there is nothing on record to show that the Government authorised either the Collector or the Deputy Collector to make the inquiry in connection with the fast of Dhurmal Daga. In my view, the inquiry cannot presumably take the place of reasonable opportunity to be given by the Government for the proposed action under section 53 A of the Act. In the result, it follows that the Order of the High Court should be set aside and that of the Government appointing the Executive Officer quashed. I do it accordingly. ORDER PER CURIAM: This appeal is dismissed with costs, in this court and the courts below. Appeal dismissed.

The main point for decision in this appeal by the Municipal Committee of Dhamtari and its President was, whether in appointing an Executive Officer in exercise of its powers under section 53A of the C. P. and Berar Municipalities Act, 1922, the State Government acted in a judicial capacity or in an administrative one Complaints having been made against the appellants, the additional Deputy Collector was directed to hold an enquiry and on his report the State Government, by a notification under that section, appointed an Executive Officer of the Municipal Committee for 18 months with specified powers and duties. The appellants were given notice of the said enquiry, filed objections 1441 and the President was personally present on some occasions during the enquiry. The notification charged the appellants with incompetency as well as abuse of power. Against that notification the appellants moved the High Court under article 226, of the Constitution for a writ of certiorari quashing the same, but their application was rejected by the judge sitting singly. An appeal under the Letters Patent against his decision was summarily dismissed. It was contended before this Court on behalf of the appellants that, (1) although the notification purported to be one under section 53A of the Act, it was in effect and reality one under section 57 Of the Act, that (2) it was, therefore, incumbent on the Government under section 57(5) of the Act to afford the appellants an opportunity to furnish explanation and that (3) even if the notification was one under section 53A of the Act, the Government was bound by the rules of natural justice to give the appellants an opportunity to defend themselves. Held (per curiam), that sections 53A and 57 of the C. P. and Berar Municipalities Act, 1922, differed materially in their scope and effect, but it was not obligatory under either of them for the Government to take any action at all. Although a finding of incompetency of the Municipal Committee was a condition precedent to action under both the sections, the Government was free to choose its remedy as the occasion demanded and it could not be contended that because a notification made under section 53A of the Act, along with a finding of incompetency, contained some instances of abuse of power as well, it must be held to have been made under section 57 of the Act. Nor could the vesting of power in the Executive Officer by the notification, however substantial in character, be said, in effect and reality, to amount to a dissolution of the Municipal Committee under section 57 Of the Act. Per Das C. T. and Kapur J. The real test whether the State Government functioned in a quasi judicial capacity or in an administrative capacity in exercising its powers under section 53A of the Act was whether the statute required it to act judicially either expressly or by implication. The Act contained no express provision to that effect, nor could the determination of the fact of incompetency as a condition precedent to any action under that section, by itself, carry such an implication. In making the notification under section 53A of the Act, therefore, the Government functioned in an administrative capacity and not in a quasi judicial one. Even so, by the enquiry held, the State Government afforded the appellants ample opportunity to defend themselves and there could hardly be any ground for complaint. Province Of Bombay vs Kusaldas section Advani, [1950] S.C.R. 621, Rex vs Electricity Commissioners, , Rex vs London County Council, , R. vs Legislative Committee Of the Church Assembly, (1928) 1 K.B. 411 and Nakkuda Ali 's Case, , referred to. 1442 Per Bhagwati J. Since the enquiry held in this case fully satisfied the requirements of natural justice, it was unnecessary to determine for the purpose of this case whether the State r Government in acting under section 53A of the Act did so in a quasi judicial capacity or in an administrative one. Per section K. Das J. If the question was one of compliance with the rules of natural justice, the enquiry held in the present case could hardly be said to have complied with such rules; but since the State Government in acting under section 53A of the Act had only to consider policy and expediency and did at no stage have any form of lis before it, its action thereunder was purley of an administrative character not amenable to a writ of certiorari. Manchester Legal Aid Committee, , applied. Per Subba Rao J. On a proper appreciation of the criteria laid down by section 53A of the Act itself, there could be no doubt that it imposed a duty on the State Government to act judicially in ascertaining the fact of the incompetency of the Municipal Committee to perform its duties. It is clear that the determination of such a jurisdictional fact could not have been left to the subjective satisfaction of the Government but was intended to be arrived at objectively and, therefore, it was incumbent upon the Government to give a reasonable opportunity to the appellants to explain the charge levelled against them. Such enquiry as was held in the instant case could hardly take the place of reasonable opportunity to be given by the Government for the proposed action under section 53A of the Act. Rex vs The Electricity Commissioners, (1924) i K. B. 171, Province of Bombay vs Kusaldas section Advani, ; and R. vs Manchester Legal Aid Committee, , referred to.

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Civil Appeal No. 1577 (NCE) of 1987. From the Judgment and Order dated 24.4. 1987 of the Madras High Court in Election Petition No. 1 of 1986. Ram Jethmalani, Ms. Rani Jethmalani and M.G. Ramachan dran for the Appellant. R.K. Garg, section Padmanabhan, K. Raj. Choudhary, R. Mohan, K. Chandrashekharan, R. Ayyam Perumal, V. Krishnamurthy, section Thananjayan, K.V. Vijaya Kumar, A.V. Rangam and V.R. Kari thi~ kayan for the Respondents. 770 The Judgment of the Court was delivered by KANIA, J. This is an appeal from a judgment and order delivered by a learned Single Judge of the Madras High Court on April 24, 1987 dismissing an election petition filed by the appellant. The appellant herein was the petitioner before the High Court and the respondents nos. 1 to 8 herein were arraigned as respondents in the same order in the election petition. The dispute pertains to the election of six Members to the Rajya Sabha by the elected Members of the Tamil Nadu Legislative Assembly. The election was held, as scheduled, on June 28, 1986. The appellant and respondents nos. 1 to 7 were the eight candidates in the field, all the nominations having been found valid. The 8th respondent was the Returning Officer. The polling took place, as scheduled, on June 28, 1986 and, immediately thereafter, the ballot box was opened and the votes were sorted out. The election was under the preferential system of voting and the particulars of the first preferences votes cast and secured by the candidates are as follows: Candidates First Preference Votes 1. Appellant 33 2. 1st Respondent 35 3. 2nd Respondent 31 4. 3rd Respondent 33 5. 4th Respondent 32 6. 5th Respondent 34 7. 6th Respondent 34 8. 7th Respondent nil Out of the 33 first preference votes cast in favour of the appellant, one ballot paper was rejected by the 8th respondent, the Returning Officer, on the ground that the said ballot paper was marked by the voter otherwise than with the article supplied for that purpose. It may be men tioned here that the first preference was indicated on the said ballot paper by a ball point pen with green ink whereas in the ball point pen kept along with the ballot box had blue ink. The working result sheets of the counting were prepared and announced by the 8th 771 respondent. The particulars of the said working result sheets are as follows: 1. Appellant 3219 2. 1st Respondent 3301 3. 2nd Respondent 3270 4. 3rd Respondent 3300 5. 4th Respondent 3301 6. 5th Respondent 3301 7. 6th Respondent 3301 In consequence, respondents nos. 1 to 6 were declared as duly elected and the appellant was declared as having lost the election. It is submitted by learned counsel for the appellant, that (1) the first preference vote in his favour in which first preference was indicated on the ballot paper in green ink was wrongly rejected. The rejection of the said ballot paper by the Returning Officer was duly objected to by the appellant at the time of counting. The said ballot paper is hereinafter referred to as "the said rejected ballot paper". If the said rejected ballot paper had been received as valid, the appellant would have the proportionate number of preference votes and would have been declared elected. The second contention raised by the appellant was that three ballot papers which did not contain the figure 1 in the space intended for marking the said figure should have been rejected and the same were wrongly accepted. These ballot papers had been used for casting first preference votes in favour of the first respondent and if the same had been rejected, first respondent would not have been elected and in his place the appellant would have been elected. Both the mistakes according to the appellant materially affected the result of the election. Before going into the controversy raised before us, we may note the relevant provisions of the Election Law. The election petition was filed under Chapter II of the Repre sentation of the People Act, 1951 (hereinafter referred to as "the said Act"). Section 59 of the said Act provides that at every election where a poll is taken votes shall be given by ballot in such manner as may be prescribed. We are not 772 concerned here with the special procedure for voting pro vided in certain cases provided for under section 60 said Act. Section leo of the said Act deals with the grounds for during elections to be void. The relevant portion of the said section reads thus: "100(1) Subject to the provisions of sub section (2) if the High Court is of opinion (a) x x x (b) x x x (c) That any nomination has been improperly rejected; or (d) that the result of the election, in so far as it con cerns a returned candidate, has been materially affected (i) by the improper acceptance or any nomination, or (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) by the improper reception, refusal or rejection of any vote or the reception of any vote which is void, or (iv) by any non compliance with the provisions of the Con stitution or of this Act or of any rules or orders made under this Act, the High Court shall declare the election of the returned candidate to be void". Conduct of Election Rules, 1961 (referred to hereinafter as "the Election Rules") came into force on 25th of April, 1961. Rule 30 of the Election Rules prescribes the form of the ballot papers. Rule 31 of the Election Rules provides for arrangements at polling stations. Sub rule (3) of Rule 31 runs as under: "(3) the returning officer shall provide at each polling station a sufficient number of ballot boxes, copies of the relevant part of the electroal roll, ballot papers, instru ments for stamping the distinguishing mark on ballot 773 papers and articles, necessary for electors to mark the ballot papers. " Rule 39 of the Election Rules deals with the maintenance of secrecy of voting by electors within polling stations and the voting procedure. The material portion of sub rule (2) of that rule runs as follows: "(2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments: (b) there make a mark on the ballot paper with the instru ment supplied for the purpose on or near the symbol of the candidate for whom he intends to vote." Rule 70 lays down rules for the conduct of polls. The portion of Rule 70 material for the purposes of the case runs as follows: "(a) x x x x (b) to every election in a council unless voting by postal ballot has been directed in the whole of that constituency under clause (b) of rule 68, subject to the following modifications, namely: (i) clause (a) of sub rule (1) of rule 31 shall not apply to an election by assembly members; (ii) in lieu of rules 37 to 40, the following rules shall apply: 37A. Method of voting. (1) Every elector has only one vote at an election irrespective of the number of seats to be filled. (2) An elector in giving his vote (a) shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance; and 774 (b) may, in addition, place on his ballot paper the figure 2 or the figures 2 and 3 or the figures 2, 3 and 4 and so on, in the space opposite the names of the other candidates in the order of his preference. 38A. x x x x 39A. Maintenance of secrecy of voting by electors within polling station and voting procedure (1) Every elector, to whom a ballot paper has been issued under rule 38A or under any other provision of these rules, shall maintain secrecy of voting within the polling station and for that purpose observe the voting procedure hereinafter laid down. (2) The elector on receiving the ballot paper shall forth with (a) proceed to one of the voting compartments; (b) record his vote in accordance with sub rule (2) of rule 37A with the article supplied for the purpose. (c) fold the ballot paper so as to conceal his vote; (d) insert the folded paper in the ballot box; and (e) quit the polling station: (It is not necessary to quote the rest of Rule 39A for the purposes of this Judgment) It was submitted by learned counsel for the appellant that the express on "article supplied for the purpose" used in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules was misconstrued by the High Court. It was submitted by him that in the context of the election law and the instructions contained in the hand books to which reference will be made that expression should be interpreted as meaning "actually given" or "handed over". In this regard, reference was made to instructions given to the Presiding Officer in respect of elections to Lok Sabha and State Assemblies. The relevant instructions in the said hand book provide that the proce dure followed in respect of the election to Lok Sabha and State Assemblies is that the Polling Officer or 775 Polling Assistant must give the rubber stamp properly inked to the voter before he proceeds into the voting booth for marking his choice and the Polling Officer or Polling As sistant must take back the said rubber stamp from the voter after he comes out from the voting both having cast his vote and then hand it over to the next voter and so on. It was urged that the same procedure should have been followed mutatis matandis in the case of an election to the Legisla tive Council like the one in question before us, and if this were done, it would imply that the ball point pen for mark ing the preference should have been personally handed over to the voter with instructions to use it for marking his preference. This argument is not worthy of acceptance. As pointed out by the High Court, the nature of the elections to the Lok Sabha and the State Assemblies is different from that of elections to a Legislative Council or Rajya Sabha and this difference has to be taken into account in inter preting the relevant words used in the rules relating to an election. The election to Lok Sabha and the State Assemblies is a direct election on the basis of a single member con stituency where the voter has only one choice whereas in the case of an election to the Rajya Sabha, the said election is by members of the Legislative Assemblies of the States and the election is an indirect election conducted on the prin ciple of proportional representation by means of a single transferable vote. In the case of elections to the Lok Sabha and State Assemblies, a rubber stamp with arrow cross mark is provided with which the voter has to make a mark on the symbol of the candidate of his choice in the ballot paper. Many of the voters are not familiar with the election proce dure and it is in these circumstances that the requirement has been provided that a rubber stamp containing the cross mark properly inked should be handed over to each voter with instructions to use the same for marking his vote or choice. In the case of the election to the Rajya Sabha or a Legisla tive Council, the situation is entirely different. The number of voters is limited. One could assume that they are reasonably familiar with the procedure of voting; and the article supplied for marking the preference is a fountain pen or ball point pen. In these circumstances, there is hardly any warrant for requiring that the procedure of handing over personally to each voter the article for mark ing his preference should be followed and it is quite/ ' adequate if the article for marking the preference, namely, the fountain pen or ball point pen is made available in the voting booth with clear instructions that the same should be used in marking the preference. It must also be borne in mind that there is no express rule or instruction in connec tion with the elections to the RaRajya Sabha by Members of the State Assemblies or elections to the Legislative Coun cils of States which specifically requires that the arti 776 cle for marking the preference should be handed over to each voter personally. In these circumstances, in our view, the High Court was right in interpreting the expression "article supplied for the purpose" in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules as meaning "made available for the purpose" or "provided for the purpose". Reliance was placed by learned counsel for the appellant on the decision of this Court in Ram Utar Singh Bhaduria vs Ram Gopal Singh & Ors., ; and particularly, the observations at page 200 of the said report. We are of the view that that decision as well as the other decisions in this connection cited before us are in connection with the elections to the Lok Sabha or the State Assemblies and have no application to an indirect election like the election to the Rajya Sabha by Members of State Assemblies. Rule 56 of the Election Rules deals with counting of votes. The material portion of sub rule (2) of Rule 56 of the Election Rules runs as follows: "56. Counting of Votes. (1) The ballot papers taken out of each ballot box shall be arranged in convenient bundles and scrutinized. (2) The returning officers shall reject a ballot paper (a) x x (b) If it bears no mark at all or, to indicate the vote it bears a mark elsewhere than on or near the symbol of one of the candidates on the face of the ballot paper or, it bears a mark made otherwise than with the instrument supplied for the purpose, or . " Rule 73 deals with the scrutiny of opening of ballot boxes and packets of postal ballot papers. The material portion of sub rule (2) of Rule 73 runs as follows: "(2) a ballot paper shall be invalid on which (a) the figure 1 is not marked; or (b) the figure 1 is set opposite the name or more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply; or 777 (c) x x x (d) x x x (e) there is any figure marked otherwise than with the article supplied for the purpose. " It would now be convenient to deal with the first con tention of the learned counsel for the appellant. As we have already pointed out, the said rejected ballot paper was rejected on the ground that it was marked otherwise than with an article supplied for the purpose. As we have already pointed out, the figure 1 indicating the first preference in the said ballot paper was marked in green ink whereas in the ball point pen kept in the voting booth with the ballot box, the ink used was blue. The returning officer took the view that the said marking of preference in green ink clearly established that it was done with a bail point pen other than the one which was supplied for marking the preference and hence the vote was invalid. It was urged by Shri Jeth malani in this connection that although the marking of preference was done in green ink, there was no doubt that the intention of the over concerned was to give the first preference vote to the appellant. It was submitted by him that the fundamental rule of election law is that effect should be given to the intention of the voter and this could be done only by treating the vote as valid, as the intention of the voter was quite clear. Mr. Jethmalani may be right when he contends that the intention of the voter could be clearly gathered and it was to cast the first preference vote for the appellant. However, it is not enough for the vote to be valid that it is possible to gather the intention of the voter to vote for a particular candidate as pointed out by the Constitution Bench of this Court in the leading case of Hari Vishnu Kamath vs Syed Ahmad Ishaque and Others, ; at page 1132. This Court held that ( 1132): "But when the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed. An intention not duly expressed is, in a court of law, in the same position as an intention not expressed at all." In the present case Rule 39(2)(b) which is applicable to the election petition before us clearly prescribes that the vote must be cast by the voter in accordance with the said sub rule (2) of Rule 39 of the Election Rules, with the article supplied for the purpose. Rule 39A(2)(b) read with Rule 37A(2)(a) prescribes that an elector in giv 778 ing his vote shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance with the article sup plied for the purpose. Hence, unless the ball point pen kept with the ballot box is not to be regarded as the article supplied for marking the preference, the intention of the elector in the present case cannot be given effect to as it was expressed in a manner inconsistent with the provisions in the rules. Clause (b) of sub rule (2) of Rule 56 of the Election Rules provides inter alia that if a ballot paper contains a mark made on it otherwise than with the instru ment supplied for the purpose, the returning officer shall reject the said ballot paper. Rule 73 is included in Part VII of the Election Rules and that Part applies to the counting of votes at elections by Assembly members. Clause (e) of sub rule (2) of Rule 73 of the Election Rules set out earlier that a ballot paper shall be invalid on which there is any figure marked otherwise than with the article sup plied for the purpose. Rule 73 is directly applicable to the case of the election in question and as aforesaid it pre scribes that if on the ballot paper there is any figure marked otherwise than with the article supplied for the purpose, the ballot paper shall be invalid. Assuming that the voter in this case had expressed his intention clearly by marking the figure 1 in green ink, he did so in violation of the express provisions of the Rules which have a statuto ry force and hence no effect can be given to that intention. It was next argued in this connection that the expres sion "article supplied for the purpose" as used in the said Rules 39A(2)(b) and 73(2)(e) was misconstrued by the Presid ing Officer and the High Court in the present case. It was submitted by learned counsel for the appellant that Rule 56(2)(b) was not complied with by making a ball point pen available in the polling compartment near the ballot box for the use of the electors in marking their preference as law required that the Polling Officer should personally hand over the bali point pen to the voter before he proceeds to the voting booth with instructions to mark his preference with that ball point pen. He referred to the hand book dealing with the procedure prescribed in elections to the Lok Sabha and to the Legislative Assemblies and submitted that the said procedure was applicable mutatis mutandis to elections to the Rajya Sabha and the Legislative Councils. It was urged by him that the second proviso to clause (e) of sub rule (2) of Rule 73 of the Election Rules provides that if the returning officer is satisfied that any such defect as is mentioned in the said clause has been caused by any mistake or fault on the part of the Presiding Officer or Polling Officer, the ballot paper shall not be rejected merely on the ground of the said defect. It was contended by him that the Polling Officer was bound to hand over to 779 each voter individually the ball point pen to be used for marking his preference on the ballot paper. He submitted that the duty of the Polling Officer was to hand over the ball point pen to the voter to use the same for marking his preference and it was also his duty to take back the said pen from the voter after he has cast his vote and given the same to the next voter. He urged that merely providing a bail point pen for voting did not constitute substantial compliance with Rule 39A(2)(b) or Rule 73(2)(e). He urged that the mistake in the present case, namely, marking of the preference with green ink on the ballot paper, had occurred because no bail point pen was handed over as aforesaid to the voter concerned. We are unable to accept this submis sion. The procedure followed in an election to the Lok Sahba or the State Assembly is to give to the voter a rubber stamp for voting with an arrow mark properly inked with instruc tions to use the same for voting before the voter enters the voting compartment to put his mark against the name of the candidate for whom he desires to vote and to take the rubber stamp back from the voter when he comes out of the voting compartment and to repeat this process for every voter. In the first place, it must be noticed that there is no rule or standing order requiring the Presiding Officer or to follow this procedure in the case of an election to the Rajya Sabha or Legislative Council of a State. There is a material difference between an election to Lok Sabha or a Legislative Assembly which is a direct election with one constituency for each seat and only vote is to be cast and an election to Rajya Sabha which is an indirect election with the preferen tial system of voting. Sub rule (2) of Rule 39 which is applicable to such an election to a Legislative Assembly provide that the elector on receiving the ballot paper has to make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbol of the candi date for whom he intends to vote. It is only in the case of an election like this that it becomes necessary to provide a rubber stamp properly inked to the voter to mark his prefer ence. It must be remembered that in such an election case, the number of voters or electors is extremely large and many of them might be unfamiliar with the voting procedure. An election to the Rajya Sabha, on the other hand, is an indi rect election with multiple candidates ' constituency and the system of voting followed is the preferential system of voting. Rule 37A of the Election Rules which is applicable to such an indirect election by virtue of the provisions of Rule 70 provides that an elector in giving his vote shall place on his ballot paper figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance. This difference in the case of an election to the Rajya Sabha makes it wholly unnecessary that the Presiding Officer or the Polling Officer should hand over to 780 every voter individually a bail point pen to mark his vote and it would quite wholly be adequate if the article for marking the preference, namely, a ball point pen, is provid ed to the voter to use the same for marking his preference or if the pen is placed in such a way as to make it clear that the marking of the preference is to be done with that pen and instructions given to use that pen for marking the preference. The evidence of the returning officer, which has been accepted by the High Court is to the effect that there were two voting compartments in the polling booth and in each of them a ball point pen with blue ink was kept as soon as an elector went into the polling booth, one Polling Assistant gave him his identity slip and another Polling Assistant gave to the elector printed copies of Rules 37A and 39A of the Election Rules and a copy of the guidelines. Then the elector went to the first Polling Officer who obtained his signature in the counter foil of the ballot paper and instructed the elector that he should mark his preference on the ballot paper with the article kept for the purpose inside the voting compartment. Another Polling Officer gave the ballot paper to the voter and again in structed him to go into the voting compartment and mark the ballot paper with the article kept there for that purpose, fold the ballot paper before coming out and put in into the ballot box in front of the Polling Officer. In the light of this evidence, we are of the view that the ball point pen with blue ink kept in the voting compartment for marking the preference must be regarded as the article supplied for that purpose, namely, the purpose of the voter marking his pref erence on the ballot paper. It was submitted by learned counsel for the appellant that it was possible that a voter might have used his own pen if the pen kept in the voting compartment was not working and such a vote cannot be re garded as invalid. We are not concerned with a case of that kind here as there is no evidence that in any voting com partment the ball point pen kept there was not working. It was next urged that if a voter had used another ball point pen, that is, other than the one kept in the voting compart ment containing the blue ink, it would not have been possi ble to find out that the preference marked with such a bail point pen had been used for marking the preference and not the pen supplied. This is of no relevance here. The possibility that in a given case a breach of the rules may be difficult to detect cannot lead to the conclusion that the mandatory requirement that preference on the ballot paper must be marked with the article supplied for the purpose should be regarded as not binding in law. We are, therefore, of the view that the said ballot paper was right ly rejected by the returning officer and the arguments urged by learned counsel for the appellant in that contention must be rejected. 781 The next point is regarding the three first preference votes cast in favour of respondent No. 1 which were accepted by the returning officer as stated earlier. In respect of these three votes, the figure 1 is marked, not in the right hand column opposite the name of respondent No. 1, but in the left hand column containing the name of candidate and opposite the name of respondent No. 1. The appellant unsuc cessfully objected to the validity of these three ballot papers on the ground that the first preference had not been marked in the space provided for that purpose opposite the name of the candidate concerned, namely, respondent No. 1, as required by Rule 37A(2). It was submitted by learned counsel for the appellant that the returning officer as well as the High Court were in error in holding that the said three ballot papers were valid. We propose to discuss this controversy very shortly because we are in full agreement with the reasoning and conclusions given by the High Court in its impugned judgment in coming to the conclusion that the returning officer was justified in rejecting the objec tions preferred by the appellant to the said three votes and holding that the same were valid. The relevant portion of Rule 37A(2) of the Election Rules has already been quoted earlier. Clause (a) of sub rule (2) of that Rule only pro vides that the voter shall place on his ballot paper the figure i in the space opposite the name of the candidate for whom he wishes to vote in the first instance. it is signifi cant that this rule does not specifically say that the figure 1 must be placed in the column earmarked for marking the preference but only requires that the figure 1 should be placed opposite the name of the candidate. Sub rule (4) of Rule 71 which is a definition runs as follows: "71(4): 'first preference ' means the figure 1 set opposite the name of a candidate; 'second preference ' means the figure 2 set opposite the name of a candidate; 'third pref erence ' means the figure 3 set opposite the name of a candi date, and so on;" It is significant that in this sub rule also there is nothing to indicate that the preference must be indicated in the column reserved for that purpose, the only requirement being that the figure 1 should be written opposite the name of the candidate. Similarly, sub rule (2)(b) of Rule 73 only lays down that if the figure 1 is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it applied, the ballot paper would be invalid. Sub rule 12) of Rule 73 deals with the invalidity of ballot papers and that subrule nowhere states that merely by reason of the preference being 782 marked in the wrong column, if the marking is opposite the name of the candidate concerned, the ballot paper shall be rendered invalid. It is true that the column in which the preference should have been marked and intended for that purpose was the column on the righthand side of the first column where the name of the candidate was to be put; but there is no express provision to the effect that unless the preference is marked in the correct column, the ballot paper would be invalid. In such a situation, the principle enunci ated by this Court in several judgments and reiterated in section Sivaswami vs V. Malaikannan & Ors., ; that the primary task of the Court in a case where the question is whether the ballot paper is invalid is to ascertain the intention of the voter, must be applied. In that case, the Court held that the ballot paper shall not be rejected as invalid if it is reasonably possible to gather a definite indication from the marking so as to identify the candidate in favour of whom the vote had been intended to be given. This, of course, is subject to the rule that before a ballot paper is accepted as valid the ballot paper must not be invalid under any other express provision and the intention of the voter must not be expressed in a manner which is contrary tO or totally inconsistent with the manner pre scribed under the said Act or the Election Rules for ex pressing the same. In the case of the said, three votes in question, the figure 1 was clearly marked opposite the name of respondent No. 1, being the candidate concerned, as required by the express provision of the said Rule 37A and the intention of the voter was clearly to cast the first preference in favour of respondent No. 1. In these circum stances, the ballot papers were rightly accepted by the returning officer as valid and the High Court was justified in coming to the conclusion to which it has arrived. In the result, the appeal fails and is dismissed. Howev er, considering the facts and circumstances of the case, there will be no order as to costs. R.S.S. Appeal dis missed.

Election of six Members to the Rajya Sabha by the elect ed Members of the Tamil Nadu Legislature Assembly was held in June 1986. The appellant and respondent nos. 1 to 7 were the eight candidates in the field. Respondent Nos. 1 to 6 were declared duly elected and the appellant was declared as having lost the election. The appellant thereupon filed an election petition which was dismissed by the High Court. Before this Court it was contended on behalf of the appellant that: (1) the first preference vote in his favour in which the first preference was marked on the ballot paper in green ink had been wrongly rejected on the ground that it was marked otherwise than with the article supplied for the purpose, i.e., the ball point pen with blue ink which had been kept in the voting booth; and (2) the three ballot papers indicating the first preference in favour of the first respondent, which did not contain the figure 'I ' in the space intended for marking the said figure, had been wrongly accepted. In support of the first contention it was argued that: (1) the expression "article supplied for the purpose" used in Rule 39A(2)(b) and Rule 73(2)(e) of the Conduct of Election Rules, 1961, was misconstrued by the High Court; (2) in the context of the election law, the instructions contained in the hand books, and the procedure followed in respect of the election to Lok Sabha and State Assemblies, the expression "article supplied for the pur pose" should be interpreted as meaning "actually given" or "handed over", and as such the ball point pen for marking the preference should have been personally handed over to the voter with instructions to use it for marking his pref erence; (3) the mistake in the present case, namely, marking 768 of the preference with green ink on the ballot paper, had occurred because no bail point pen was handed over to the voter concerned; and (4) the fundamental rule of election law is that effect should be given to the intention of the voter and this could be done only by treating the vote as valid. Dismissing the appeal, this Court, HELD: (1) There is a material difference between an election to Lok Sabha or a Legislative Assembly which is a direct election with one constituency for each seat and only the vote is to be cast, and an election to Rajya Sabha which is an indirect election with the preferential system of voting. This difference has to be taken into account in interpreting the relevant words used in the Rules relating to an election. [779D E] (2) Rule 39A(2)(b) read with Rule 37A(2)(a) of the Conduct of Election Rules 1961 prescribes that at an elec tion in a council an elector in giving his vote shall place on his ballot paper the figure 'I ' in the space opposite the name of the candidate for whom he wishes to vote in the first instance with the article supplied for the purpose. Further, Rule 73 which is directly applicable to the count ing of votes at elections by Assembly Members, prescribes that if on the ballot paper there is any figure marked otherwise than with the article supplied for the purpose, the ballot paper shall be invalid. [777H; 778A; D] (3) The High Court was right in interpreting the expres sion "article supplied for the purpose" in Rule 39A(2)(b) and Rule 73(2)(e) of the Election Rules as meaning "made available for the purpose" or "provided for the purpose. " [778E] Ram Utar Singh Bhaduria vs Ram Gaopal Singh & Ors., ; distinguished. (4) The difference in the case of an election to the Rajya Sabha makes it wholly unnecessary that the Presiding Officer or the Polling Officer should hand over to every votor individually a hall point pen to mark his vote and it is enough if the article for marking the preference, namely, bail point pen, is provided to the voter to use the same for marking his preference or if the pen is placed in such a way as to make it clear that the marking of the preference is to be done with that pen and instructions given to use that pen for marking the preference. [779H; 780A B] (5) It is not enough for the vote to be valid that it is possible 769 to gather the intention of the voter to vote for a particu lar candidate. When the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed. [777E G] Hari Vishnu Kamath vs Syed Ahmad Ishaque & Ors., ; , refterred to. (6) Assuming that the voter in this case had expressed his intention clearly by marking the figure 1 in green ink, he did so in violation of the express provisions of the Rules which have a statutory force and hence no effect can be given to that intention. [778D] (7) Clause (a) of sub rule (2) of Rule 37A only provides that the voter shall place on his ballot paper the figure 1 in the space opposite the name of the candidate for whom he wishes to vote in the first instance. It is significant that this rule does not specifically say that the figure 1 must be placed in the column earmarked for marking the preference but only requires that the figure 1 should be placed oppo site the name of the candidate. [781D E] (8) In the case of the three first preference votes cast in favour of respondent No. 1 the figure 1 was clearly marked opposite the name of respondent No. 1, being the candidate concerned, as required by the express provision of the said Rule 37A, and the intention of the voter was clear ly to cast the first preference in favour of respondent No. 1. [782E] section Sivaswami vs V. Malaikannan & Ors., ; , referred to.

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ivil Appeal No. 2998 of 1980. From the Judgment and Order dated 17.11.1980 of the Aliahabad High Court in S.A. No. 2954 of 1979. M.S. Gujral and Mohan Pandey for the Appellant. Satish Chandra, Praveen Swarup and Pramod Swarup for the Respondent. The Judgment of the Court was delivered by 801 THOMMEN, J. This appeal by special leave arises from the judgment of the Allahabad High Court in Second Appeal No. 2954 of 1979 whereby the learned Judges of the High Court, allowing the defendants ' appeal set aside the decrees of the courts below. The High Court held that the suit was barred by reason of Section 49 of the U.P. Consolidation of Hold ings Act, 1953 (hereinafter referred to as 'the Act '). Hence the present appeal by the plaintiff. The plaintiff is an illiterate person. Her daughter Rameshwari Devi is the wife of the 6th defendant, Yogendra Prasad Singh. Arjun Singh and Janardan Singh, defendant Nos. 3 and 4, are the brothers of the 6th defendant. Defendants Nos. 3 and 4 had gained the confidence of the plaintiff and she confided in them her desire to make a gift of her entire properties in favour of her daughter. Defendant Nos. 3 and 4 readily agreed to make arangements to execute and register the necessary deed. On 18.9.1971, these defendants took the plaintiff to the Office of the Sub Registrar. The plaintiff paid the amount needed for expenses. The defendants pur chased stamp papers in the name of the plaintiff. On two deeds, which had been prepared at the instance of the de fendants, the plaintiff was made to put her thumb impres sions. Being an illiterate person, she could not read the contents of the documents or understand their character. She had been told, and she honestly believed, that she was executing a gift deed in favour of her daughter, as desired by her, in respect of her properties. She had in fact exe cuted two deeds, one of which was a gift in favour of her daughter and the other a sale deed in favour of all the defendants. The consideration for the sale shown in the document was Rs. 14,000. This was a clear case of fraud practised upon her by the defendants. The defendants and the Sub Registrar as well as the document writer had all con spired together to perpetrate the fraud. The plaintiff did not know that she had executed a sale deed in favour of the defendants in respect of her property until 25th June, 1974 when she found defendant Nos. 3 and 4 interfering with her possession of the property. They told her that she had executed a sale deed in their favour. It was only on 2nd July, 1974 that she came to know of the full facts. Accord ingly, she filed a suit for cancellation of the sale deed. The suit was decreed by the trial court and that decree was confirmed in appeal by the first appellate court. Setting aside the decree in the defendant 's second appeal, the High Court held that the plaintiff was totally deceived as to the character of the document which she executed and the docu ment was, therefore, void and of no effect whatsoever. Accordingly, the suit was barred under section 49 of the Act under which consolidation proceedings had been pending at the time of the 802 institution of the suit in respect of the property in ques tion. The facts are not in dispute. It is not disputed that the documents in question came to be executed in the manner alleged by the plaintiff. The appellant, however, contends that since it was a case of the document having been vitiat ed by fraud, the transaction was viodable, but not void, and, therefore, the suit to set aside the sale was rightly instituted by her and the bar of section 49 was not attract ed. The appellant contends that the suit is perfectly main tainable and the High Court was wrong in holding to the contrary. Mr. Satish Chandra, appearing for the respondents, rightly, in our view, submits that two principles enunciated by this Court in Gorakh Nath Dube vs Hari Narain Singh & Ors., ; and Ningawwa vs Byrappa & 3 Ors.; , squarely apply to the facts of this case and the document in question evidenced a void transaction, and not a mere voidable transaction, and no suit was, there fore, maintainable in view of the bar contained in section 49 of the Act. In Gorakh Nath Dube, (supra), this Court held that the object of the relevant provision of the Act was to remove from the jurisdiction of any civil court or revenue court all disputes which could be decided by the competent author ity under the Act during the consolidation proceedings. Questions relating to the validity of a sale deed or a gift deed and the like had to be examined in proceedings before the statutory authorities. The Court, however, drew a dis tinction between void and voidable documents and said a voidable document was one which remained in force until set aside, and such a document could be set aside only by a competent civil court, and a suit for that purpose would, therefore, be maintainable. On the other hand, a claim that a transaction was void was a matter which could be adjudi cated upon by the consolidation courts. This is what this Court stated: "We think that a distinction can be made between cases where a 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. An alienation made in excess of power to transfer would be, to the extent of the excess of power, invalid. An adjudication on the effect of such a purported alienation would be necessarily implied in the decision of a dispute involving conflicting claims to rights or interests in 803 land which are the subject matter of consolidation proceed ings. The existence and quantum of rights claimed or denied will have to be declared by the consolidation authorities which would be deemed to be invested with jurisdiction, by the necessary implication of their statutory powers to adjudicate upon such rights and interests in land, to de clare such documents effective or ineffective, but, where there is a document the legal effect of which can only be taken away by setting it aside or its cancellation, it could be urged that the consolidation authorities have no power to cancel the deed, and, therefore, it must be held to be binding on them so long as it is not cancelled by a court having the power to cancel it. In the case before us, the plaintiffs claim is that the sale of his half share by his uncle was invalid, inoperative, and void. Such a claim could be adjudicated upon by consolidation courts." (emphasis supplied) In Ningawwa vs Byrappa & 3 Ors., (supra), this Court referred to the well established principle that a contract or other transaction induced or tendered by fraud is not void, but only voidable at the option of the party defraud ed. The transaction remains valid until it was avoided. This Court then said: "The legal position will be different if there is a fraudu lent misrepresentation not merely as to the contents of the document but as to its character. The authorities make a clear distinction between fraudulent misrepresentation as to the character of the document and fraudulent misrepresenta tion as to the contents thereof. With reference to the form er, it has been held that the transaction is void, while in the case of the latter, it is merely voidable. In Foster vs Mackinon, , the action was by the endorsee of a bill of exchange. The defendant pleaded that he endorsed the bill on a fraudulent representation by the acceptor that he was signing a guarantee. In holding that such a plea was admissible, the Court observed: It (signature) is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the 804 contract to which his name is appended . . The defendant never intended to sign that contract or any such contract. He never intended to put his name to any instrument that then was or thereafter might become negotiable. He was deceived, not merely as to the legal effect, but as to the 'actual contents ' of the instrument." (emphasis supplied) From the facts narrated above, about which, as stated earlier, there is no dispute, it is clear that this is a case where the plaintiffappellant was totally ignorant of the mischief played upon her. She honestly believed that the instrument which she executed and got registered was a gift deed in favour of her daughter. She believed that the thumb impressions taken from her were in respect of that single document. She did not know that she executed two documents, one of which alone was the gift deed, but the other Was a sale of the property in favour of all the defendants. This was, therefore, a case of fraudulent misrepresentation as to the character of the document executed by her and not merely as to its contents or as to its legal effect. The plaintiff appellant never intended to sign what she did sign. She never intended to enter into the contract to which she unknowingly became a party. Her mind did not accompany her thumb impressions. This is a case that fails within the principle enunciated in Ningawwa vs Byrappa & 3 Ors., (supra) and it was, therefore, a totally void transaction. Accordingly, as stated in Gorakh Nath Dube (supra), the suit is not maintainable by reason of the bar contained in the Act. The High Court has, in our view, rightly held that the remedy of the plaintiff lies in the proceedings pending before the consolidation authorities and it is open to the parties to approach them for appropriate relief. In the circumstances, we see no merit in this appeal. It is, ac cordingly, dismissed, but we make no order as to costs. P.S.S. Appeal dismissed.

Section 49 of the U.P. Consolidation of Holdings Act, 1953 puts a bar on the civil and revenue courts in respect of disputes in regard to which proceedings could or ought to have been taken under the Act. The plaintiff appellant, an illiterate lady, wanted to make a gift of her properties in favour of her daughter. Defendant Nos. 3 and 4, who undertook to make arrangements to execute and register the necessary deed, however, prac tised a fraud on her. They made her put her thumb impression on two documents which she had been told and she honestly believed were the gift deed in favour of her daughter. She had in fact executed two deeds, one of which was a gift in favour of her daughter and the other a sale deed in favour of the defendants. Later when she tame to know of the facts, she filed a suit for cancellation of the sale deed. Consoli dation proceedings were then pending in respect of the property in question. The suit was decreed by the trim court and that decree was confirmed in appeal by the First Appellate Court. The High Court, however, found that the plaintiff was totally deceived as to the character of the document which she had executed and the document was, therefore, void and of no effect whatsoever. Accordingly, it held that the suit was barred by reason of section 49 of the Act. In the appeal by special leave it was contended for the appellant that since it was a case of the document having been vitiated by fraud, the transaction was voidable but not void and, therefore, the bar of section 49 of the Act was not attracted. Dismissing the appeal, the Court, HELD: 1.1 A voidable document is one which remains in force 800 until set aside and such a document can be set aside only by a competent civil court. A suit for that purpose would, therefore, be maintainable. A claim that a transaction is void is, however, a matter which can be adjudicated upon by the consolidation authorities. [802E F] Gorakh Nath Dube vs Hari Narain Singh & Ors., ; , referred to. 1.2 In the instant case, the plaintiff appellant was totally ignorant of the mischief played upon her. She hon estly believed that the instrument which she executed and got registered was a gift deed in favour of her daughter. She believed that the thumb impressions taken from her were in respect of that single document. She did not know that she had executed two documents, one of which alone was the gift deed, but the other was a sale of the property in favour of the defendants. This was, therefore, a case of fraudulent misrepresentation as to the character of the document executed by her and not merely as to its contents or as to its legal effect. The plaintiff appellant never intended to sign what she did sign. She never intended to enter into the contract to which she unknowingly became a party. Her mind did not accompany her thumb impressions. It was thus a totally void transaction. [804C E] Ningawwa vs Byrappa & Ors., ; , applied. No suit was, therefore, maintainable by reason of the bar contained in section 49 of the Act. [804E] 2. The remedy of the plaintiff lies in the proceedings pending before the consolidation authorities and it is open to the parties to approach them for appropriate relief. [804F]

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Appeal No. 355 of 1981. From the Judgment and Order dated 27.10.1980 of the Delhi High Court in S.A.O. No. 241 of 1979. G.L. Sanghi and S.L. Aneja for the Appellant. K. Parasaran, Gopal Subramanium, Arvind Verma and Mukul Mudgal for the Respondent. The Judgment of the Court was delivered by PUNCHHI, J. For the view we take in this appeal by special leave and leaning as we would be on our discretion ary power under Article 136 of the Constitution, no elabo rate details are necessary of the facts involved therein and for its disposal by a brief order. The appellant, Subhash Mehta, more than two decades ago obtained a residential lease of the first floor in premises bearing No. D 32, South Extension, Part II, New Delhi from Dr. S.P. Choudhary (now dead) the landlord who was himself residing on the ground floor thereof. The settled rent was Rs.800 per mensem. The landlord on 508 November 27, 1972 served a notice on the tenant demanding arrears of rent from September 1, 1972 onwards. The demand having not been met he instituted an eviction petition before the Rent Controller, Delhi on March 13, 1973 on grounds of non payment of rent as also on other grounds. On June 1, 1973 the Rent Controller passed an order under section 15(1) of the Delhi Rent Control Act, 1958 (hereinaf ter referred to as the 'Act ') directing the tenant to depos it arrears of rent within one month from the date of the order and further to pay month to month rent by the 15th of every calendar month. The appellant, within the period allowed, deposited Rs. 10,000 to cover arrears of rent as well as to cover future rent uptill September 15, 1973. Thereafter neither on October 15, 1973 nor on November 15, 1973, did the tenant deposit monthly rent as required by the aforesaid order of the Rent Controller. He was alleged to have defaulted on that count. Yet on December 1, 1973 he made a deposit of Rs.2,800 partly covering the default of the previous period. The landlord took objection to the late deposit and after much debate the Rent Controller struck off the defence of the appellant. The Rent Appellate Tribunal, Delhi set aside the order of the Rent Controller striking out the defence of the tenant on appeal by the tenant and remitted the case back to the Rent Controller for further proceedings. Second appeal to the High Court of Delhi by the landlord was dismissed. The Additional Rent Controller who became seisin of the matter on remand went into all the grounds as originally raised in the eviction petition; the other grounds, besides the tenant being in arrears of rent, being sub letting, conversion of the user of premises from residential to commercial, the tenant having acquired vacant possession of a residential house in M 18, Green Park Extension, New Delhi and for bona fide requirement of the daughter of the land lord who being a student of M.B.B.S, was expected to set up medical practice. The Additional Rent Controller by his order dated December 12, 1978 ordered eviction of the tenant on the sole ground of non payment of future rent in terms of his order passed under section 15(1) of the Act, granting the tenant two months ' time to vacate the premises. The other grounds of eviction were rejected. The tenant 's appeal before the Rent Control Tribunal centered round the sole question of delayed payment of arrears of rent and of the scope and rigour of section 15(1) of the Act. In assailing the order of the Additional Rent Controller, reliance was placed by the tenant on a judgment of this Court in Hem Chand vs Delhi Cloth Mills, to contend that even if the tenant had not strictly complied 509 the terms of the order made under section 15(1) of the Act in as much as depositing future rent late it was not impera tive in all events of the defence of the tenant being struck off and a fair amount of discretion had been left with the Rent Controller under section 15(7) which should have been exercised in his favour and before his defence was to be struck off the Rent Controller had to come to the view that his conduct was wilful or contumacious in disobeying the order made under section 15(1) of the Act, and which in the instant case he had failed to record. Even being aware of these principles the Rent Control Tribunal on August 18, 1979 dismissed the appeal observing that no infirmity in the order of the Additional Rent Controller could be found. On the same lines and reasoning second appeal of the tenant was dismissed by the High Court of Delhi on October 27, 1980 keeping maintained the ejectment of the tenant for non compliance of the order made under section 15(1) of the Act. This has led to the instant appeal on the grant of special leave. The landlord Dr. S.P. Choudhary as hinted earlier died in the year 1981 during the pendency of this appeal leaving behind a widow and a daughter; the latter now being a divor cee rearing a minor son. This is the uncontroversial asser tion of the successor landlords. The eviction order in their favour has been assailed by Mr. Sanghi, learned counsel for the tenant appellant on the strength of the decision of this Court in Ram Murti vs Bhola Nath and Another, stressing the point that the words 'as required by section 15(1) of the Act ' occurring in sub section (7) of section 15 must be construed in a reasonable manner and that the said provision confers a wide discretion on the Rent Controller not to strike off the defence of the tenant which indicates that defences could still be open to the tenant under the Act to claim plain protection under section 14(2) thereof. In that case this Court ruled that the Rent Con troller necessarily by legal implication has power to con done the default on the part of the tenant for deposit of future rent or to extend time for such deposit. On the said plea advanced on behalf of the tenant the result sought to be achieved is that the delay in making deposit of future rent be excused saving him from eviction. The tenant had before the Rent Controller while explaining cause for late deposit of future rent put up the plea that the counsel present at the time of the passing of the order under sec tion 15(1) in place of his engaged counsel had only intimat ed to him about the payment of arrears of rent and not about the deposit of future rent by the 15th of every calendar month. On that basis the order of eviction was sought to be upset by accepting such plea of the tenant. On the other hand, learned counsel for the successor landlords 510 tactically took shelter behind the other grounds of eviction which were rejected by the Additional Rent Controller and besides raising them vehemently before us projected that in the facts and circumstances of this case and the subsequent events which have come by, this Court should refrain from interfering in the matter under Article 136 of the Constitu tion. On such stance adopted it is plain that the ground on which eviction has been maintained before the Tribunal and the High Court concurrently the successor landlords seeming ly had an uphill task to have it maintained in view of Ram Murti 's case (supra). Yet, without conceding on that score other grounds of eviction were pressed despite opposition by learned counsel for the tenant that these grounds were neither pressed in the court of the Rent Control Tribunal nor in the High Court while supporting the order of eviction and no cross appeals in these two forums were filed by the landlord, which if serious he legitimately could. It is true that the Tribunal and the High Court are both silent on the point. The order of the Additional Rent Controller suggests that the tenant is an industrialist. His finding is that within the years 1971 to 1974 he was active in incorporating three companies and that he was a proprietor of M/s. Globe Marketing and Management Limited, a Director of M/s. Sports Equipment Private Limited and again a Director in M/s. Indian Consultants Private Limited. His further finding is that while living in the demised premises he had floated these companies and later taken in other directors. In so far as the latter two companies were concerned, this act of the tenant was not sub letting, assigning or parting with the possession of the disputed premises as held by the Rent Controller. Sequelly the finding further recorded was that there was no misuser of the disputed premises inasmuch as the respective offices run by the companies therein had caused no damage to the premises. With regard to the fact that the tenant had acquired another premises at M 18, Green Park Extension, New Delhi the Rent Controller took the view that factually the father of the tenant had acquired the same and the tenant could not live in that premises with his father as a matter of right. Lastly with regard to the bona fide requirement of the landlord the Rent Controller took the view that the landlord 's family comprising of himself, his wife and daughter had sufficient accommodation in their possession even though his daughter had to estab lish practice as a doctor. The additional plea of the suc cessor landlords as given out in their counter affidavits now is that the telephone connections standing in the name of afore referred three companies, with which the tenant is intimately connected, are at the demised premises as per the Mahanagar Telephone Nigam Directory 511 and that the tenant is a rich and well:connected industrial ist deserving no protection of the rent laws, misplacedly sought by him. We have pondered over the matter and have weighed every aspect of the case. The facts and circumstances now emerging are that the successor landlords are two ladies; one a widow and the other a divorcee. If we were to allow the appeal by releasing and relaxing the rigour of the order of eviction relying on Ram Murti 's case, we unhesitatingly then would take the step to have the matter remitted back at an appro priate stage where the successor landlords could convenient ly have the other grounds of eviction adjudicated upon and overrule the objection that the landlord could have filed an appeal before the Rent Appellate Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the eviction was ordered. This course, however, appears to us to be not only unfair and unreasona ble in the facts and circumstances of this case but time consuming and inequitous as well to the successor landlords who, as said before, are two ladies brought in the fray by operation of law. Now since almost eighteen years have passed by, we feel there should be an end to the dispute and this course is in the interest of all concerned as well as the State. Instead of putting the parties to a fresh bout of litigation we would in these circumstances prefer and opt to let remain the order of eviction sustained however on slen der ground, and consequently order dismissal of this appeal but without any order as to costs. Still we do not wish to dislocate the appellant abruptly, concerned as we are for him also, and for that purpose grant him sufficient time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking before this Court for vacation on or before the said date but on payment of rent to the landlords as has fallen due for the period uptill and by March 31, 1990 and future monthly rent by the tenth of each calendar month. Let the undertaking be filed by March 10, 1990 in the Registry in the usual manner. P.S.S. Appeal dismissed.

In the proceedings for eviction under the Delhi Rent Control Act, 1958 for arrears of rent, subletting, conver sion of user from residential to commercial and bona fide need, the appellant tenant committed breach of the Control ler 's directions under section 15(1) of the Act in the matter of payment of monthly rent. Consequently, his defence was struck off and the suit decreed on the sole ground of de layed payment of future rent. All the other grounds were rejected. The tenant assailed the order before the Rent Control Tribunal relying on Hem Chand vs Delhi Cloth Mills, on the rigour of section 15(1) of the Act. The Tribunal found that there was no infirmity in the order. The High Court maintained the ejectment. In the appeal by special leave, it was contended for the appellant on the strength of the decision in Ram Murti vs Bhola Nath, that section 15(7) of the Act con fers a discretion on the Rent Controller not to strike off the defence of the tenant and consequently the delay by him in making deposit of future rent should have been excused, and that since no cross appeals were filed by the landlord against the rejection of other grounds in the court of the Rent Control Tribunal or in the High Court nor those grounds were pressed in these two forums by the landlord, those grounds were no more available to him. The landlord died during the pendency of the appeal and his widow and divorced daughter respondent succeeded to him as landlords. It was contended for them that the tenant was a rich and well connected industrialist deserving no protection of the rent laws. Dismissing the appeal, the Court, HELD: 1. If the appeals were to be allowed by releasing and relaxing the rigour of the order of eviction, the matter then would have to be 507 remitted back at an appropriate stage where the successor landlords could conveniently have the other grounds of eviction adjudicated upon, by overruling the objection that the landlord could have filed an appeal before the Rent Control Tribunal and the High Court seeking eviction of the tenant on grounds other than the ground on which the evic tion was ordered. [51 lB C] 2. The successor landlords are two ladies, one a widow and the other a divorcee, brought in the fray by operation of law. Remitting the case back would not only be unfair and unreasonable but time consuming and inequitous as well to them. Since almost eighteen years have passed by there should be an end to the dispute. This course is in the interest of all concerned as well as the State. Instead of putting the parties to a fresh bout of litigation the order of eviction should, therefore, be sustained. ]51 IC E] 3. The appellant is granted time ending on March 31, 1991 for vacating the premises subject to his giving an undertaking for vacation on or before the said date and payment of rent to the landlords. [511E F]

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Criminal Appeal No. 197 of 1990. From the Judgment and Order dated 15.9.1989/18.9.1989 of the Bombay High Court in Crl. A. No. 284 of 1987. Mr. Satish Vig for the Appellant. Mr. A.S. Bhasme for the Respondent. The Judgment of the Court was delivered by 857 section RATNAVEL PANDIAN, J. Special leave granted. The notice was issued on the Special Leave Petition limited to the question whether the High Court had jurisdic tion to enhance the sentence without issuing notice and affording to the appellant an opportunity of showing cause against such enhancement of the sentence, or in the absence of an appeal by the State for enhancement of sentence on the ground of inadequacy. This appellant along with two others were convicted for murdering Kumari Mangala in furtherance of their common intention and causing disappearance of evidence of the said offence with the intention of screening themselves from legal punishment under Section 302 read with Section 34 IPC and under Section 201 read with Sec. 34 IPC respectively and sentenced to suffer imprisonment for life under the first count and to suffer rigorous imprisonment for a period of 3 years and to pay a fine of Rs.2,500 each with a default clause and directed both the substantive sentences to run concurrently. They all preferred criminal appeal No. 284 of 1987 before the High Court of Bombay Bench at Aurangabad which set aside the conviction of all the convicted accused inclu sive of this appellant under Section 302 read with Sec. 34 IPC and the conviction of other two under Section 20 1 read with Sec. 34 IPC but confirmed the conviction of this appel lant under Section 201 IPC and enhanced the sentence to seven years rigorous imprisonment. The High Court neither issued notice to the appellant nor afforded him any opportunity of showing cause against the said enhancement while enhancing the sentence. Admitted ly, there was no appeal by the State for enhancement of sentence under Section 377 Cr. P.C. on the ground of its inadequacy. 'Let punishment fit the crime ' is one of the main ob jects of the sentencing policy. To achieve this object, the Code of Criminal Procedure empowers the High Court to en hance the sentence in appropriate cases where the sentence awarded by the Subordinate Courts is grossly inadequate or unconscionably lenient or 'flea bite ' or is not commensurate with the gravity of the offence. The High Court enjoys the power of enhancing the sentence either in exercise of its revisional jurisdiction under Section 397 read with Sec. 401 or in its appellate jurisdiction under Section 37 read with Sec. 386(c) of the Criminal Procedure Code (hereinafter referred to as the 'Code ') subject to the 858 provisos (1) and (2) to Sec. 386 of the Code. It may be stated in this connection that it is permissible for the High Court while exercising its revisional jurisdiction under Section 397 read with Sec. 401 IPC to exercise the power of a Court of Appeal under Section 386(c) for enhance ment of sentence. This Court in Bachan Singh etc. vs State of Punjab, [1980] 1 SCR 645 while dealing with the revisional powers of the High Court has ruled thus: "in respect of the petition which was filed under Section 401 Cr. P.C. for the exercise of the High Court 's power of revision, it was permissible for it to exercise the power of a Court of appeal under Section 386 for enhancement of the sentence . . . The High Court 's power of revision in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge, has been stated in section 401 Cr. P.C. to which reference has been made above. That includes the power conferred on a Court of Appeal under Section 386 to enhance or reduce the sentence." Under Section 377(1) of the Code, the State Government in any case of conviction on a trial held by any Court other than the High Court is empowered to direct the public prose cutor to present an appeal to the High Court against the sentence on the ground of its inadequacy. Under sub section (2) of Section 377, the Central Government under the circum stances stated therein is empowered to direct the public prosecutor to present an appeal to the High Court for en hancement of sentence. Before the introduction of this Section 377 on the recommendation of the Law Commission in its 4 1st Report, any error in sentencing could be remedied only by the exercise of the revisional power. of the High Court. However, the High Court notwithstanding of the exer cise of its powers under the appellate jurisdiction in an appeal preferred under Section 377 of the Code have powers to act suo motu to enhance the sentence in appropriate cases while exercising its revisional jurisdiction even in the absence of an appeal against the inadequacy of the sentence as provided under Section 377. In Nadir Khan vs The State (Delhi Administration), [1975] 2SCC 406 wherein a question was raised that the High Court, in revision under Section 40 1 Cr. P.C. has no juris diction or power to enhance the 859 sentence in the absence of an appeal against the inadequacy of sentence under Section 377, Goswami. J. characterised that question as an unmerited doubt on the undoubted juris diction of the High Court in acting suo motu in criminal revision in appropriate cases and said "The attempt has to be nipped in the bud". Dealing with that question, he ob served as follows: "It is well known and has been ever recognised that the High Court is not required to act in revision merely through a conduit application at the instance of an aggrieved party. The High Court, as an effective instrument for administra tion of criminal justice, keeps a constant vigil and wherev er it finds that justice has suffered, it takes upon itself as its bounden duty to suo motu act where there is flagrant abuse of the law. The character of the offence and the nature of disposal of a particular case by the subordinate court prompt remedial action on the part of the High Court for the ultimate social good of the community, even though the State may be slow or silent in preferring an appeal provided for under the new Code. The High Court in a given case of public importance e.g. in now too familiar cases of food adulteration, reacts to public concern over the problem and may act suo motu on perusal of newspaper reports dis closing imposition of grossly inadequate sentence upon such offenders. This position was true and extant in the old Code of 1898 and this salutary power has not been denied by Parliament under the new Code by rearrangement of the sec tions. It is true the new Code has expressly given a right to the State under Section 377 Cr. P.C. to appeal against inadequacy of sentence which was not there under the old Code. That however does not exclude revisional jurisdiction of the High Court to act suo motu for enhancement of sen tence in appropriate cases. What is an appropriate case has to be left to the discretion of the High Court . . . Section 401 expressly preserves the power of the High Court, by itself, to call for the records without the intervention of another agency and has kept alive the ancient exercise of power when something extraordinary comes to the knowledge of the High Court. The provisions under Section 401 read with Section 386(c)(iii) Cr. P.C. are clearly supplemental to those under Section 377 whereby appeals 860 are provided for against inadequacy of sentence at the instance of the State Government or Central Government, as the case may be. " See also Lingala Vijay Kumar and Others vs The Public Prosecutor, ; In Surjit Singh and Others vs State of Punjab, [1984] Supp. SCC 5 18 the facts disclosed that the High Court while disposing an appeal preferred under Section 374 sub section (2) enhanced the sentence by imposing additional sentence of a fine of Rs. 5,000 with a default clause in addition to the sentence of life imprisonment inflicted by the Trial Court without issuing show cause notice and without affording an opportunity to be heard. This Court while allowing the appeal held thus: "Rules of natural justice as also the prescribed procedure require that the sentence imposed on the accused cannot be enhanced without giving notice to the appellants and the opportunity to be heard on the proposed action. " In a recent judgment in Sahab Singh & Others vs State of Haryana, JT , it has been observed: "If the High Court was minded to enhance the sentence the proper course was to exercise suo motu powers under Section 397 read with Section 40 1 of the Code by issuing notice of enhancement and heating the convicts on the question of inadequacy of sentence. Without following such procedure, it was not open to the High Court in the appeal filed by the convicts to enhance the sentence by enhancing the fine. The High Court clearly acted without jurisdiction. " Section 386 of the Code deals with the power of the appellate Court in disposing of an appeal preferred under Section 374 and also in case of an appeal under Section 377 or 378 of the Code. Under clause (b) (iii) of Section 386, the appellate Court may in an appeal from a conviction with or without altering the finding, alter the nature or the extent, or the nature and extent, of the sentence, but not so as to enhance the same. Under clause (c) (iii) of Section 386, the Appel late Court may in an appeal for enhancement of sentence with or without altering the finding, alter the nature or the extent or the 861 nature and extent, of the sentence so as to enhance or reduce the same. From the above discussion, it is clear that the High Court both in exercise of its revisional jurisdiction under Section 397 read with Sec. 40 1 Cr. P.C. and its appellate jurisdiction under Section 377 read with Sec. 386(c) of Cr. P.C. in matters of enhancement of sentence should give the accused a reasonable opportunity of showing cause against such enhancement as comtemplated under the first proviso to Section 386 as well under Sub Section (3) of Section 377 of the Code. As pointed out in Surjit Singh 's case, the rules of natural justice as also the prescribed procedure require issuing of notice to the appellant and affording an opportunity to be heard on the proposed action for enhancement of sentence. In the back drop of this legal position, we may revert to the case on hand. The High Court has enhanced the sen tence unmindful of the relevant provisions of the Code of Criminal Procedure and also the rules of natural justice and by over stepping its jurisdiction adopted a leeway enhancing the sentence from 3 years to 7 years for the conviction under Section 201 IPC which exercise of powers in violation of the prescribed procedure, is impermissible for the rea sons stated albeit. We, therefore, set aside the order of the High Court enhancing the sentence to 7 years and restore the order of the trial Court inflicting the sentence of three years rigorous imprisonment and the fine of Rs.2,500 with the default clause. The appeal is allowed to the extent herein indicated. G.N. Appeal allowed.

The appellant and two others were convicted for life and 3 years rigorous imprisonment or fine of Rs.2500 each for offences under Section 302 read with Section 34 IPC and Section 201 read with Section 34 IPC, respectively. On appeal by the accused the High Court set aside the convic tion of all of them under Section 302 read with Section 34 IPC, and also the conviction of two of them under Section 201 read with Section 34 IPC. In respect of the appellant the High Court not only confirmed the conviction under Section 201, but also enhanced the sentence to 7 years rigorous imprisonment. While doing so, the High Court did not issue notice to the appellant; nor did it afford an opportunity of showing cause against the proposed enhance ment of sentence. Before the High Court, the State did not prefer an appeal for an enhancement of sentence under Sec tion 377 Cr. P.C. on the ground of inadequacy. Allowing the appeal, this Court, HELD: 1.1. 'Let punishment fit the crime ' is one of the main objects of the sentencing policy. To achieve this object, the Code of Criminal Procedure empowers the High Court to enhance the sentence in appropriate cases while the sentence awarded by the Subordinate Courts is grossly inade quate or unconscionably lenient or 'flea bite ' or is not commensurate with the gravity of the offence. The High Court enjoins the power of enhancing the sentence either in exer cise of its revisional jurisdiction under Section 397 read with Section 401 or in its appellate jurisdiction under Section 377 read with Section 386(c) of the Criminal Proce dure Code subject to the provisos (1) and (2) to Section 386 of the Code. It is permissible for the High Court while exercising its revisional jurisdiction under Section 397 read with Section 401 IPC to exercise the power of a Court of Appeal under Section 386(c) for enhancement of sentence. [857G H; 858A] 856 1.2. The High Court, notwithstanding its powers under the appellate jurisdiction in an appeal preferred under Section 377 of the Code, have powers to act suo motu to enhance the sentence in appropriate cases while exercising its revisional jurisdiction even in the absence of an appeal against the inadequacy of the sentence as provided under Section 377. [858F G] Bachan Singh etc. vs State of Punjab, [1980] 1 SCR 645; Nadir Khan vs The State (Delhi Administration), ; and Lingala Vijay Kumar and Others vs The Public Prose cutor; , , relied on. The High Court both in exercise of its revisional jurisdiction under Section 397 read with Section 401 Cr. P.C. and its appellate jurisdiction under Section 377 read with Section 386(c) of Cr. P.C. in matters of enhancement of sentence should give the accused a reasonable opportunity of showing cause against such enhancement as contemplated under the first proviso to Section 386 as well under sub section (3) of Section 377 of the Code. The rules of natural justice as also the prescribed procedure require issuing notice to the appellant and affording an opportunity to be heard on the proposed action for enhancement of sentence. [861A B] Surjit Singh and Others, vs State of Punjab, [1984] Supp. SCC 518 and Sahab Singh & Others vs State of Haryana, JT , relied on. In the instant case, the High Court has enhanced the sentence unmindful of the relevant provisions of the Code of Criminal Procedure and also the rules of natural justice and by over stepping its jurisdiction adopted a leeway in en hancing the sentence from three years to seven years for the conviction under Section 201 IPC which exercise of powers in violation of the prescribed procedure, is impermissible. ]861C D]

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enunciated in various decisions of foreign courts is not applicable in the Indian context. In India, as the Constitution was enacted or was framed, after having the experience of various countries in the world, the concept of fundamental rights and rights like life, liberty, procedure established by law and various legislative functions which were divided between the States and the 640 Union, left no scope for any power except which could be derived from any provision in the Constitution coupled with an Entry in one of the three Lists which would indicate that the power vested in either the State or the Centre. Apart from it, the scheme of our Constitution is that there are no residuary powers which vest in the State and scheme of our Constitution also reveals that in case of any conflicts it is the Centre which prevails and not the State and, there fore, applying the doctrine of police powers will only mean to do violence to the scheme of the Constitution. In fact, under our Constitution no powers could be conceived for which there is no provision in any one of the entries in the three Lists or which could not be justified under any spe cific Article of the Constitution. Thus, even under the concept of the doctrine of police powers, the levies imposed by the State on alcohol or alcoholic liquors cannot be justified. [689E, G H, 690A C] & ORIGINAL JURISDICTION: Writ Petition No. 182 of 1980 Etc. (Under Article 32 of the Constitution of India). F.S. Nariman, M.H. Baig, A.B. Divan, Rajinder Sacher, L.M. Singhvi, R.N. Banerjee, K.J. John, Harish N. Salve, S.C. Sharma, S.S. Shroff, Mrs. P. Shroff, Ms. section Sharma, J.B. Dadachanji, A.P. Hathi, section Ganesh, section Sukumaran, D.N. Misra, Mrs. A.K. Verma, Sandip I. Thakore, R.F. Nariman, P.H. Parekh, Shishir Sharma, Poppat, Ms. Shalini Soni, Sunita Sharma, M.L. Lahoty, Shiv Prasad Sharma, Himanshu Shekhar, D.D. Gupta, Ms. M. Gupta, A.T.M. Sampath, Mrs. Swaran Mahajan, Ms. Anuradha Mahajan, K.K. Mohan, Laxmi Kant Pandey, R.B. Mehrotra, K.C. Dua, K.R. Nagaraja, P.D. Sharma, V. Balachandran, O.P. Sharma, A.K. Sangal, Anil Kumar, D. Goburdhan, K.D. Prasad and Mrs. Naresh Bakshi for the Peti tioners. K. Parasaran, Attorney General, C. Shivalha, G. Rath, V.M. Tamaskar, Altar Ahmed, N.N. Gooptu, Dinesh Chandra Swami, A.S. Bobde, K. Alagiri Swamy, V.Venkataramaniah, Inder Singh, Advocate Generals, R.N. Trivedi, Additional Adv. Genl., Yogeshwar Prasad, S.K. Dholakia, P.S. Poti, A.K. Ganguli, Satish Chandra, R.B. Datar, G.L. Sanghi, P.R. Ramasesh, R.K. Mehta, S.K. Bhattacharya, H.K. Purl. Probir Chowdhary, N.K. Sharma, M.N. Shroff, Ashok K. Srivastava, R.S. Rana, A.S. Bhasme, A.M. Khanwilkar, Sunil Gupta, T.T. Kunhikanan, V. Krishnamurthy, P. Venugopal, T.V.S.N. Chari, D.R.K. Reddy, Jagan M. Rao, Ms. A. Subhashini, 641 A. Subba Rao, K.C. Dua, Satish K. Agnihotri, Ashok Singh, Indra Makwana, Ms. Amrita Sanghi and N.K. Sharma for the Respondents The following Judgments of the Court were delivered: SABYASACHI MUKHARJI, J. These writ petitions, civil appeals and review petitions relate to the right of the States to levy vend fee or duties in respect of industrial alcohol under different legislations in different States. We will first deal with writ petition No. 182/80. In Writ Petition No. 182/80 (Synthetics & Chemicals Ltd. vs State of U.P. & Ors.), we are concerned with the notification dated 31st May, 1979, substituting new rule 17(2) for old rule 17(2) and providing for a vend fee of Rs. 1.10 per bulk liter for all issues from distillery but in case of FL 39 Licence (like the petitioner in this case), the vend fee would be so charged that the amount of this fee and purchase tax together does not exceed 25 paise per bulk litre; Then there are three review petitions, namely, Review Petition Nos. 202 04/80 (Synthetics & Chemicals Ltd. vs State of U.P. ) and Review Petition No. 17 of 1980 (Kesar Sugar Works Ltd. vs State of U.P.). These are directed against the judgment and order of this Court dated 19th December, 1979 in State of U.P., etc. vs Synthetics & Chemicals Ltd. & Ors. ; , re agitating the challenge to sections 24A & 24B of the U.P. Excise Act, 1910 as amended in 1972 and 1976 declaring exclusive privilege of the Government for manufacture and sale of foreign liquor as defined (which includes denatured spirit and industrial alcohol). Then there is Writ Petitions Nos. 3163 64 of 1982 (All India Alcohol Based Industries Development Association vs State of Maharashtra, ) which challenges the amendment to section 49 of the Bombay Prohibition Act, 1949 treating exclusive privilege for State in liquor trade and imposing a transport fee of Rs. 1.15 per bulk litre. There is Writ Petition No. 4501/78 (Chemicals & Plastics India Ltd. vs State of Tamil Nadu), Writ Petition No. 2580/82 (Kolhapur Sugar Mills and Anr. vs S.R. Hegde & Anr. ), which challenge the Bombay Prohibition Act, 1949 as amended from time to time along with Ordinance No. 15 of 1981 which amended the Bombay Prohibition Act, 1945 and section 49 added by reason of which the State was granted exclusive privilege of import ing, exporting, transporting, manufacturing, bottling, selling, buying, processing, or using any intoxicant. There after, the Bombay Rectified Spirit (Transport in Bond) Rules, 1951 were amended and transport fee was increased from the rate of 17 paise to the rate of Rs. 1.25 paise. Thereafter, the Bombay Rectified Spirit (Transport in Bond) Amendment Rules, 1982 were amended and the transport fee was reduced from Rs. 1.25 per litre to 0.40 paise per litre. Then there is Writ Peri 642 tion No. 1892/73 (Hindustan Polymers Ltd. vs State of A.P.) which seeks a declaration that alcohol plant of the peti tioner company is not covered by the A.P. Excise Act, 1968, A.P. Distillery Rules, 1970 and A.P. Rectified Spirit Rules, 1971 and further to declare that the alcohol plant of the company is not a 'distillery ' within the meaning of the said expression under the A.P. Distillery Rules and therefore, the Distillery Rules have no application thereto. It seeks also an order to restrain from interfering with and/or regulating and controlling the production, distribution, movement and supply of alcohol from the alcohol plant of the company and also a writ of prohibition with the appropriate directions. Civil Appeal No. 4384/84 also challenges the A.P. Excise Act, 1968 and A.P. Distillery Rules. Similar is the position in C.As. 466 67 of 1980 which challenge the Tamil Nadu Prohibition Act. The main question that falls for consideration in these matters is whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States is valid. The question is. is the vend fee and impost leviable or extractable by the States under different Acts. The question mainly involved in all these matters is a common question of law but we will have to deal with diverse factual situations as well as the particular provisions of the various Acts. The questions with which we are mainly concerned are the following: (i) whether the power to levy excise duty in case of industrial alcohol was with the State legislature or the Central legisla ture? (ii) what is the scope and ambit of entry 8 of list II of the Seventh Schedule of the Constitution? (iii) whether, the State government has exclusive right or privilege of manufacturing, selling, distributing, etc. of alcohols in cluding industrial alcohol. In this connec tion, the extent, scope and ambit of such right or privilege has also to be examined. It is necessary to bear in mind that in the last four to five decades there has been a tremendous change in the industrial horizon of this country. During the initial stages of the Constitution, the only well known industrial sectors in India were iron and steel, textiles, jute and cement. The rest of the production was raw materials geared to feed and supply the industrial base of the foreign power. After independence, an Industrial Policy Resolution was adopted to achieve 643 rapid industrialisation in a big way. In the last few dec ades, there has been a great transformation and tremendous upsurge not only in industry and commerce, but also in sophisticated technology and industries. The chemical, fertilizer, plastic and engineering industries are only some of the fields in industrial development. In this background, the views expressed previously relating to 'intoxicating liquor ' and 'alcoholic liquor for human consumption ' have to be borne in mind. It is, in this connection, also necessary to refer to Article 47 of the Constitution. The said Article which deals with the duty of the State to raise the level of nutrition and the standard of living and to improve public health, enjoins that the State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. We were invited on behalf of the petitioners by Mr. Nariman, Mr. Divan, Mr. Banerjee, Mr. Baig and others that though this direction and this commit ment to improvement of the standard of living must be kept in view but it must be borne in mind that this improvement can be achieved primarily by industrialisation involving increased production and employment and giving priority to the core sectors. Entry 52 of list I of the Seventh Schedule to the Constitution deals with "industries", the control of which by the Union is declared by Parliament by law to be expedient in the public interest. It is the contention of the petitioners and appellants that the Industries (Develop ment & Regulation) Act, 1951 (hereinafter called the 'IDR Act ') was enacted with a view to developing and controlling various important industries. Section 2 of the IDR Act declares that it is expedient in the public interest that Union should take under its control the industries specified in the First Schedule. The cases in this bunch are in re spect of industries which are not concerned with potable alcohol for the purpose of human consumption. These are predominantly and primarily concerned with using ethyl alcohol (rectified spirit) as an industrial raw material. This industrial alcohol is required as an input for further manufacture of downstream products. For this purpose, some of the industries have their captive plants. Reference in this connection may be made and our attention was drawn to the report of the Alcohol Committee, 1956. This Report indicates that (a) that industrial alcohol is an input and should be available at reasonable price. (b) there should be uniform railway freight. 644 (c) larger capacities of molasses etc. ,should be available, and (d) uniform taxation policies are essential for the development of these indus tries. In order to appreciate the controversy in these matters, it is, therefore, necessary to keep these objectives in mind. In these matters, this Court is concerned with the taxing power of the States to impose and levy excise duty on industrial alcohol and/or imposts as vend fees. This has been, and as has been noticed hereinbefore, claimed as a part of the exclusive privilege of the States to impose a levy as a consideration or price for manufacturing of and/or dealing with industrial alcohol. It is essential that there should be uniformity in the industry so that these are free from the vagaries and arbitrary and differential treatment meted out from State to State and even in the same State from time to time. Arbitrary and excessive imposts under the so called privilege are a great disincentive for development of industries in the public interest and for industrial development in general and can render units unviable and sick. In the above background, it is necessary to refer to certain facts and as such it would be appropriate to refer to the facts and contentions in writ petition No. 182/80, i.e. Synthetics & Chemicals Ltd. vs State of U.P., which is under article 32 of the Constitution, filed by M/s. Synthetics & Chemicals Ltd. a registered Company in Bombay, and one Mr. A.K. Roy, Director and shareholder of the said company. The respondent therein is the State of Uttar Pradesh and the Excise Commissioner, Uttar Pradesh. In the said writ petition, a notification of the State of Uttar Pradesh, being No. 4840E/XIII 330/79, dated Lucknow May 31, 1979 was made in exercise of the power under sub section (1) of section 40 of the U.P. Excise Act, 1910 (hereinaf ter referred to as 'the U.P. Act ') read with clause (d) of sub section (2) of the said section. However, in order to appreciate the position, we should bear in mind the history of the legislative powers and different lists in the 7th Schedule, regarding impost in respect of industrial alcohol. It appears that local legis latures of Uttar Pradesh had enacted the United Provinces Act, 1910 being Act IV of 1910, and it received the assent of the Governor on 18th December, 1909 and of the Governor General on 14th February, 1910. Before 1920 there was as such no distinct dis 645 tribution of legislative subjects between the Central Legis lature and the State Legislatures. It appears that the local legislatures enacted with the assent of the Governor Gener al, Excise Acts imposing duties and regulating production, supply and distribution of alcoholic liquors including denatured spirits and methylated spirits. These were done under the Indian Councils Act, 1861 and the Indian Councils Act, 1909. The provisions of the Indian Council Act, 1861 were initially applicable only to the Presidencies of Fort St. George and Bombay, but were later made applicable to other provinces by virtue of the Indian Councils Act, 1892 and 1909. Section 43 of the Indian Councils Act, 1861 enjoined that it shall not be lawful for the Governor in Council of either of the Presidencies, except with the sanction of the Governor General, previously communicated to him, to make regulations or take into consideration any law or regulation for any of the purposes mentioned therein and one of the purposes, inter alia, mentioned was, anything affecting the public debt of India or the Customs Duties, or any other tax or duty then in force and imposed by the authority of the Govt. of India for the general purposes of such Government. The Government of India Act, 1915 was amended from time to time with a view to consolidate and amend the enactment relating to the Govt. of India. The Governor General in Council with the sanction of the Secretary of State in Council made Devolution Rules. Rule 3(1) thereof provided for distinguishing the functions of the local governments and local legislatures of governors ' provinces and of the province of Burma from the functions of the Governor General in Council. It was provided that any matter which is includ ed in the list of provincial subjects set out in Part II of Schedule I of the said Act shall, to the extent of such inclusion, be excluded from any central subject of which, but for such inclusion, it would form part. Part II of the Government of India Act, 1915 provided that any matter which is included in the provincial subjects set out in Part II of Schedule I shall, to the extent of such inclusion be exclud ed from any central subject of which, but for such inclu sion, it would form part. Part II dealt with provincial subjects. Item 16 of Part II provided as under: "Excise, that is to say, the control of pro duction, manufacture, possession, transport, purchase, and sale of alcoholic liquor and intoxicating drugs, and the levying of excise duties and licence fees on or in relation to such articles, but excluding, in the case of opium, control of cultivation, manufacture and sale for export. " 646 It appears that the Govt. of U.P. levied a vend fee on denatured spirit for the first time @ 8 annas per bulk gallon, vide notification dated January 18, 1937 under section 40(2) of the U.P. Excise Act, 1910. It was levied as a duty. By this notification Rule 17(2) was added which enjoined that in case of issues from a distillery a vend fee of annas 8 per bulk gallon shall be payable in advance before the spirit is issued. The fee was not made chargeable in case of issues to hospitals, dispensaries and other charitable and educational institutions upto a quantity allowed to be issued by the Excise authorities, and also on the issues for export out of the provinces. Thereafter, on 1st April, 1937 the Govt. of India Act, 1935 came into effect. The federal legislative list in the 7th Schedule to the said Act contained entry 45 which in cluded duties of excise on tobacco and other goods manufac tured or produced in India except alcoholic liquors for human consumption. The provincial legislative List being List II of the 7th Schedule. contained entry 31 on intoxi cating liquors and narcotic drugs, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors, opium and other narcotic drugs, but subject, as respects opium, to certain provi sions. It also included entry 40 which was on duties of excise including, inter alia, all these items and alcoholic liquors, opium, Indian hemp and medicinal and toilet prepa rations containing alcohol. It was contended on behalf of M/s Synthetic Chemicals Ltd. that the duties previously levied by the local legisla tures continued in force by virtue of section 143(2) of the Govt. of India Act, 1935 only if these were levied before 31st January, 1935, and that only these duties were to be so continued until provisions to the contrary were made by the Federal Legislature. The Constituent Assembly which derived from the people all power and authority, was convened. On 15th August, 1947 the British Parliament passed the Indian Independence Act, 1947 making provisions for the setting up in India of two independent dominions. Under section 6(1) of the said Act, the legislature of each of the new dominions was to have full powers to make laws for that dominion including laws having extra territorial operations. Under section 8(2) read with section 9(1) of the Indian Independence Act, 1947 the Governor General adopted the provisions of the Govt. of India Act, 1935. It appears that on 3rd April, 1948 the Constituent Assembly acting as the Dominion Legislature passed the which received the assent of Governor General on the same day. By this Act, the Central 647 Government took under its control the Power Alcohol Indus try. This was in pursuance of the declaration made by the Dominion Legislature under entry 34 of List I of the 7th Schedule to the Government of India Act, 1935. The entry was: "Development of Industries where development under Dominion control is declared by Dominion Law to be expedient in public interest". "Power Alcohol" was defined as meaning Ethyle Alcohol containing not less than 95.5% by volume of Ethanol measured at 60 degree F, corresponding to 74.4 over proof strength. It may be mentioned that Rectified Spirit is Ethyl Alcohol or Ethanol with 96% alcohol v/v. ON dehydration, Ethyl Alcohol with 99.5% volume of Ethanol is produced. It was suggested that take over by the Dominion of the potable liquor industry was precluded by virtue of entries 29 & 31 of list II read with entry 34 of list I of the Govt. of India Act, 1935. It may be mentioned that the word 'indus tries ' is the analogous provision in the State list under the Constitution of India, 1950, hence, the meaning given to it in that list, must be applied. According to the petition ers/appellants, the expression 'industries ' has been given a restricted meaning so as not to entrench on the State 's power with respect to other industries specifically assigned to the State under other entries in the State list. See Calcutta Gas Co., [1962] Suppl 3 SCR 1. By virtue of the Constitution of India which came into effect from 26th January, 1950 the powers of legislation in respect of alcohol were distributed between list I and list II of the 7th Schedule to the Constitution. Duties of excise on tobacco and other goods manufactured or produced in India except, inter alia, alcoholic liquors for human consumption, and opium, Indian hemp and other narcotic drugs and narcot ics, but including medicinal and toilet preparations con taining alcohol or any such substance were given to Parlia ment under entry 84, list 1. But duties of excise on goods manufactured or produced in the State and countervailing duties at the similar rates, inter alia, alcoholic liquors, the State was given power by entry 51 of list II to legis late. By entry 8 of list II, States were given power to legislate on liquors, that is to say production, manufac ture, processing, transport, purchase and sale thereof. On or about 8th May, 1952 the Parliament enacted the Industries (Development & Regulation) Act, 1951. Chapter IIIB of the said Act contains section 18G whereby the Central Govt. was empowered for securing equitable distribution and availability at fair prices of any article or 648 class of articles relatable to any scheduled industry to provide for regulating the supply and distribution thereof, and trade and commerce therein by a notified order. The notified order was also to provide for controlling the prices at which such article or class of articles could be bought or sold. The said Act was amended in 1956. Item 26 was inserted in the First Schedule to the said Act and empowered the Central Govt. to control the Fermentation Industries including alcohol industries. Item 26 was as follows: "26. Fermentation Industries. (1) Alcohol (2) Other products of Fermentation Industries." The Govt. of India issued licences for the manufacture of alcohol based industries. It is asserted by M/s Synthetics & Chemicals Ltd. that one Tulsidas Kilachand, who had promoted the said Company, was invited by the U.P. Govt. to set up a synthetic rubber factory in the State of Uttar Pradesh. It is stated that the Govt. of Uttar Pradesh assured the said Tulsidas Kilachand of the supplies of alcohol necessary for the factory upto 20 million gallons, on payment only of Rs.7.50 kilo litre as administrative charges. It is the case of M/s Synthetics & Chemicals that there was no assertion or claim or privilege on behalf of the State Govt. in respect or ' denatured spirit nor was the said company or its promoters informed that there might be a charge of rental or consideration for parting with any such privilege. On 30th December, 1960 the Govt. of U.P. issued a noti fication under section 4(2) of the U.P. Excise Act, 1910 by which all "rectified, perfumed, medicated and denatured spirits wherever made" was included under the definition of 'foreign liqour '. Thereafter, the said notification was embodied in Rule 12 of the U.P. Excise Rules. On or about 28th November, 1952 the Power Alcohol Au thority and Excise Commissioner of U.P. issued an order for allotment of alcohol to M/s Synthetics & Chemicals Ltd. and also provided a condition that "the denatured alcohol meant for supply to M/s Synthetics & Chemicals Ltd. is exempted from payment of vend fee". Paragraph 2 of the said order provided that M/s Synthetics & Chemicals Ltd. shall pay an administrative charge at the rate of Rs.7.50 per kilo litre of 649 denatued alcohol. The denatured alcohol meant for supply to M/s Synthetics & Chemicals Ltd. was exempted from payment of vend fee. It was stipulated that alcohol shall be denatured with 5% Ethyl Ether or 0.2% crotonaldehyde at distilleries. It appears that in May, 1963 M/s Synthetics & Chemicals Ltd. established a factory in Bareilly. Industrial alcohol is said to be one of the basic raw materials for the manu facture of synthetic rubber. Accordingly, the Govt. of U .P. on or about 30th July, 1963 issued a notification excluding from the levy of vend fee the alcohol issued to industries engaged in the manufacture of synthetic rubber on terms and conditions the State Government might determine. Rule 17(2) was accordingly modified. On or about 3rd November, 1972 the Govt. of U.P. issued a notification (being U.P. Excise Third Amendment Rules, 1972) substituting a new rule 17(2) which is now embodied in para 680(2) of the U.P. Excise Manual at p. 20 1. In the new rule, vend fee @ Rs. 1.10 per bulk litre was imposed on denatured spirit without examining industries engaged in the manufacture of synthetic rubber. Supplies to the hospitals of certain quantity, and exports out of the State were exempted. In December, 1972 when a demand was raised for payment of the vend fee, it was asserted on behalf of M/s Synthetic & Chemicals that they had to close down their factory, and filed a writ petition, No. 8069 of 1972 in the Allahabad High Court challenging the validity of the notification dated 30th November, 1972 whereby vend fee on denatured spirit was introduced for the first time. The Division Bench of the Allahabad High Court vide judgment dated 24th March, 1973 struck down the said notification holding that the vend fee could not be justified either as a tax or fee or as excise duty. Relying on the decision of this Court in the case of Nashirwar etc. vs The State of M.P.; , and stating the same in the Preamble to the Act, the U.P. Legislature passed Act No. 5 of 1976 being U.P. Excise Amendment (Re enactment and Validation) Act, 1976 inter alia, introducing sections 24A and 24B in the U.P. Excise Act, 1910 and making other amendments with retrospective effect. Sections 24A and 24B are as follows: "24 A. (1) Subject to the provisions of Sec tion 31, the Excise Commissioner may grant to any person a licence or licence for the exclu sive or other privilege: 650 (a) of manufacturing or of supply by whole sale, or of both; or (b) of manufacturing or of supplying by whole sale, or both and selling by retail; or (c) of selling by wholesale (to wholesale or retail vendors); or (d) of selling by retail at shops (for con sumption 'off ' the premises only); any foreign liquor in any locality. (2) The grant of licence or licences under clause (d) of sub section (1) in relation to any locality shall be without prejudice to the grant of licences for the retail sale of foreign liquor in the same locality in hotels and restaurants for consumption in their premises. (3) Where more licences than one are proposed to be granted under clause (d) of sub section (1) in relation to any locality for the same period advance intimation of the proposal shall be given to the prospective applicants for every such licence. (4) The provisions of section 25, and proviso to section 39 shall apply in relation to grant of a licence for an exclusive or other privi lege under this section as they apply in respect of the grant of a licence for an exclusive privilege under section 24. 24 B. For the removal of doubts, it is hereby declared: (a) that the State Govt. has an exclusive right or privilege of manufacture and sale of country liquor and foreign liquor; (b) that the amount described as licence fee in clause (c) of section 41 is in its essence the rental or consideration for the grant of such right or privilege by the State Govern ment; 651 (c) that the Excise Commissioner as the head of the Excise Department of the State shall be deemed while determining or realising such fee, to act for and on behalf of the State Government. " It is stated that in May, 1976 the State of U.P. filed an appeal against the decision of the Allahabad High Court in writ petition No. 8069/72; and that between 1976 and 1978, relying on the judgment of the Allahabad High Court certain wholesale dealers in denatured spirit filed writ petitions in the High Court of Allahabad claiming refund of vend fee already paid by them. These writ petitions were heard and allowed by the learned Single Judge of the Allaha bad High Court. Against the judgment of the Single Judge, special appeals to a Division Bench were preferred by the State of U.P. and all were allowed on 6th October, 1978, relying upon sections 24A and 24B of the said Act. In 1976, the State Government issued the U.P. Licence for the possession of Denatured Spirit and Special Denatured Spirit Rules, 1976 requiring a licence for possession of denatured spirit and specially denatured spirit for indus trial purposes. "Special Denatured Spirit" was defined as "Spirit rendered unfit for human consumption". Licences for possession of denatured spirit including Specially Denatured Spirit for industrial purposes were to be of 3 kinds, ac cording to the parties. (1) Form F.L. 39 for use in industries in which alcohol is destroyed or converted chemically in the process into other product and the product does not contain alcohol, such as Ether, Styrene, Butadiene, Acetone, Polythene etc. (2) Form F.L. 40 for use in industries in which alcohol is used only as a solvent or processing agent and the product does not contain alcohol, which is generally recovered for re use, such as Cellulose and its derivatives, Pectin etc. (3) Form F.L. 41 for use in industries in which alcohol is used directly or alcohol is used as solvent or vehicle and ap pears in the final produce to some extent such as Lacquers, Varnishes, Polishes, Adhesives and antifreezers etc. The Allahabad High Court in W.P. No. 8096 of 1972, referred to hereinbefore, held that the State did not have the legislative competence to impose a tax under entry 8 of list II of the Seventh Schedule to the Constitution follow ing the decision of Sheopat Rai & Ors. vs State of U.P. [1972] All L.J. 1000. The High Court held that the power of 652 regulation does not carry with it the power of taxation and thus vend fee could not be justified. The High Court also held that the levy could not be justified as a fee as there was no quid pro quo. It appears that in view of the judgment of the High Court, a telegram was issued to the distilleries by the Excise Commissioner that vend fee should not be charged from the petitioner. Instead the State Government resorted to imposition of sales tax. It may be mentioned herein that this decision of the Allahabd High Court was set aside by this Court by a Bench of two judges in State of U.P vs Synthetics & Chemicals, (supra). In view of the fact that review petition in respect of the same is pending, it may be necessary to refer to the said decision. This Court held that the levy of vend fee is for parting with the exclusive right of the State with regard to intoxicating liquors and for conferring a right on the licensees to sell such liquors. A conspectus of the decisions of this Court, according to the said decision, establishes: (i) that there is no fundamental right of a citizen to carry on trade or to do business in liquor be cause under its police power, the State can enforce public morality, prohibit trade in noxious or dangerous goods; (ii) the State has power to enforce an absolute prohibition on manufacture or sale of intoxicating liquors pursuant to Article 47 of the Constitution; and (iii) the history of excise jaws in the country shows that the State has the exclusive right or privilege to manufacture or sell liquors. Reference was made to the decision of this Court in the State of Bombay & Anr. vs F.N. Balsara, 1195 1] SCR 682. This Court further held that the term "intoxicating liquor" is not confined to potable liquor alone but would include all liquors which contain alcohol. The term "liquor", ac cording to the said decision, used in Abkari Acts not only covers alcoholic liquor which is generally used for beverage purposes and which produces intoxication but would also include liquids containing alcohols. It was further held that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as entry 33 in the Concurrent List enables a law to be made regarding production, supply and distribution of products of notified industries. The exclusive power of the State to provide for manufacture, distribution, sale and possession of intoxicat ing liquors is vested in the State. The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquors has been recognised as could be seen from the various State Acts regulating the manufacture, sale, etc. of intoxicating liquors. It was further held that the term "foreign liquor" cannot be given a restricted meaning because the word consumption cannot be confined to consumption of beverages only. When liquor is 653 put to any use such as manufacture of other articles. the liquor is all the same consumed. The State is empowered to declare what shall be deemed to be country liquor or foreign liquor. "Foreign liquor" is defined as meaning all recti fied, perfumed, medicated and denatured spirit wherever made. Therefore, this Court in that case held that the plea that the Excise Commissioner had no right to accept payment in consideration for the grant of licence for the exclusive privilege for selling in wholesale or retail, foreign liquor which includes denatured spirit cannot be accepted. It was further held that the definition of "alcohol" includes both ordinary as well as specially denatured spirit. The special ly denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants. Specially denatured spirit and ordinary denatured spirit are classified accord ing to their use and denaturants used. Therefore, the con tention that specially denatured spirit for industrial purposes is different from the ordinary denatured spirit has no force, according to the said decision. Reference was made to the decisions of this Court in Har Shankar & Ors. etc. vs The Dy. Excise & Taxation Commissioner & Ors., ; In this connection, it may be necessary to refer to the observations of this Court in Hat Shankar & Ors. 's case (supra), where Chandrachud, J. (as the learned Chief Justice then was) stated: "In our opinion, the true position governing dealings in intoxicants is as stated and reflected in the Constitution Bench decision of this Court in the State of Bombay & Anr. vs F.N. Balsara; , , Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and Ors., , State of Assam vs A.M. Kidwai, Commis sioner of Hills Division and Appeals, Shil long, [1957] SCR 295, Nagendra Nath Bora and Anr. vs The Commissioner of Hills Division and Appeals, Assam and Ors. , ; , Amar Chandra Chakraborty vs Collector of Excise, Govt. of Tripura & Ors., and State of Bombay vs R.M.D. Chamarbaugwala, ; as interpreted in State of Orissa & Ors. vs Harinarayan Jaiswal and Ors., ; and Nashirwar etc. vs State of Madhya Pradesh and Ors. Civil Appeals Nos. 1711 1721 and 1723 of 1974 decided on November 27, 1974. There is no fundamental right to do trade or business in intoxicants. The State under its regulatory powers, has the right to prohibit absolutely every form 654 of activity in relation to intoxicants its manufacture, storage, export, import, sale and possession." Though most of the cases dealt with the right of the State Government as regards auction of country liquor, in Balsara 's case, Nashirwar 's case and Har Shankar 's case, this Court was concerned with the right of the State Govern ment over foreign liquor. After considering all the deci sions of five Constitutional Benches, Chandrachud, J. summed up the position at page 274 of the Report in Har Shankar 's case (supra) as follows: "These unanimous decisions of five Constitu tional Benches uniformly emphasised after a careful consideration of the problem involved that the State has the power to prohibit trades which are injurious to the health and welfare of the public is inherent in the nature of liquor business, that no person has an absolute right to deal in liquor and that all forms of dealings in liquor have, from their inherent nature, been treated as a class by themselves by all civilised communities. " Review Petition has been moved by Synthetics & Chemicals Ltd. which was purchaser or user and not manufacturer or dealer. It is contended that the Synthetics & Chemicals Ltd. were never manufacturers of denatured spirit and they were and have been purchasers of denatured spirit. It is contend ed that this Court in Synthetics & Chemicals Ltd. 's case (supra) had proceeded on the basis that State 's privilege is with respect to manufacture or sale of foreign liquor or denatured spirit. It is contended that they were not liable to pay the vend fee. The judgment aforesaid had not dealt with that submission and, therefore, it was claimed that there was an error and that this judgment should be reviewed. It was contended that the fee charged is not a vend fee but fee in respect of licence for possession of denatured spirit. It was contended that the judgment had not held that the pur chasers are liable to pay vend fee. The State 's appeal should have been dismissed and the petitioner 's appeal should have been allowed, it was pleaded in the review petition. There was an error, it was contended. It may be at the outset made clear that in these mat ters, we will dispose of the contention whether vend fee is leviable in respect of industrial alcohol. If it is so leviable, who should actually pay or from 655 whom the same should be realised, would not be the subject matter of this adjudication. Whether the manufacturer or the purchaser or the user should pay them, must be decided in separate appropriate proceedings, if necessary. In order to complete the narration of events, however, it may be mentioned that Ordinance No. 6 of 1973 was promul gated by the Government of U.P. purporting to amend the U.P. General Sales Tax Act, 1948 so as to authorise the State Govt. to impose sales tax on alcohol at the rate upto Rs.2 per litre. By the said notification, the first schedule to the Act was amended and the new entry read as follows: "Spirits and spirituous liquors of all kinds including the rectified spirit, methyl alcohol and absolute alcohol but excluding denatured spirit and country liquor. " Ordinance 9 of 1974 being the Uttar Pradesh Sales of Motor Spirit & Diesel Oil Taxation (Amendment) Ordinance 1974 was promulgated by the Government of U.P. By virtue of the amendment, the definition of alcohol in section 2 was amended as follows: "(aaa) Alcohol means ethyl alcohol not being alcoholic liquor for human consumption and includes rectified spirit, absolute alcohol. " Notification was issued thereafter by the Government of U.P. in exercise of power under section 3(1) of the U.P. Sales of Motor Spirit and Diesel Oil Taxation Act 1939. Several other notifications were issued. This Ordinance was struck down by the division bench and the Government was made liable to refund. Writ Petition was filed by Synthetics & Chemicals Ltd. Thereafter, no appeal was filed by the State Government. The other facts are not relevant for the present controversy. There was an application challenging the purchase tax. The State of U.P. filed an appeal against the judgment and order dated 24th March, 1973 of the divi sion bench of the Allahabad High Court in Writ Petition No. 8069/72 striking down the vend fee notification. The appeal was numbered as Civil Appeal No. 1130(NCL)/76. After the sales tax levy was struck down the government proposed a purchase tax. Aggrieved by the aforesaid Act, writ petition was filed, and the hearing of the petition had been stayed by the order of this Court. Meanwhile, certain wholesale dealers in denatured spirit filed writ petitions in the High Court of Judicature at Allahabad, claiming refund of the vend fee paid by them. Against the judgment of the High 656 Court of Allahabad dated 6th October, 1978, appeals were admitted being Civil Appeal Nos. 2191 98/78. All these have been disposed of by the bench of two learned Judges of this Court, as mentioned hereinbefore. It appears that Kesar Sugar Works Ltd. filed writ petition challenging the validi ty both of licence fee and vend fee on the ground that the fees charged have all the characteristics of a duty of excise which is beyond the legislative competence of the State and that the alcohol industry is covered by the IDR Act. Writ Petition Nos. 4663 4664 of 1978 were also disposed of by the judgment of this Court in Synthetics & Chemicals Ltd. (supra). Notification was issued thereafter by the Government of U.P. in 1979 in exercise of powers under section 40, sub section (1) of the U.P. Excise Act of 1910, read with clause (d) of sub section (2) of the said section, amending the U.P. Excise (Amendment) Rules 1979. By virtue of this amendment, rule 17 was substituted and in the case of FL 39 licence, vend fee, was to be so charged that the amount of vend fee and purchase together did not exceed 25 paise per bulk litre. It is not necessary to set out in detail the exact provisions. Another notification was is sued. It was challenged in the High Court. It was kept pending. The other matter herein is writ petition No. 3 163 64/82 (All India Alcohol Based Industries Development Association vs State of Maharashtra) which challenges the amendment to section 49 of the Bombay Prohibition Act, 1949. It may be rele vant to refer to the said section as amended in 1981. The section is titled "Exclusive privilege of Government to import etc., intoxicants and fees levied include rent or consideration for grant of such privileges to persons con cerned. " In this connection, it is significant to refer to the Statement of Objects for the amendment. The section is as follows: "49. Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bot tling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whenever under this Act or any licence, permit, pass, thereunder any fees are levied and collected for any licence, permit, pass, authorisation or other permission given to any person for any such purpose, such fees shall be deemed to include the rent or consideration for the grant of such right or privilege to that person by or on behalf of the State Govern ment. " The power was contained in the Prohibition Act, 1949 which was 657 an Act to amend and consolidate the law relating to the promotion and enforcement of and carrying into effect the policy of prohibition and also the Abkari law in the State of Bombay. It may be mentioned that the Bombay PrOhibition Act, 1940 was brought into force on 25th May, 1949. Then there was the ' Bombay Rectified Spirit (Transport inBond) Rules, 1951 brought into force. On 23rd October, 1981 the amendment was made introducing section 49. The provision of the Andhra Pradesh Act was challenged by impugning the allotment of alcohol under the Andhra Pradesh Excise Act No. XVII of 1968. The Andhra Pradesh Act receive, the assent of the President on 26th August, 1968. This was an Act to consolidate and amend the law relating to production, manufacture, possession, transport, purchase and sale of intoxicating liquors and drugs, the levy of duties of excise and countervailing duties of alcoholic liquor for human consumption and opium, Indian hemp and other narcotic drugs and narcotics and to provide for matters connected therewith in the State of Andhra Pradesh. Writ Petition No. 1892/73 Hindustan Polymers Ltd. vs State of Andhra Pradesh challenges the Andhra Pradesh Dis tillery Rules, 1970 and Andhra Pradesh Rectified Spirit Rules, 1971. The Tamil Nadu Prohibition Act is also chal lenged in C.A. Nos. 466 67/80 as well as writ petition No. 4501/78. In all these the point is similar and we have heard learned counsel and respective Advocate Generals. Appearing for the petitioners S/Shri Nariman, Diwan, Baig and Banerjee and others have made their submissions. We have also heard Mr. Trivedi, learned Additional Advocate General of U.P., Mr. Yogeshwar Prasad, Dr. Singhvi, Mr. Sanghi, learned Advocate Generals of Andhra Pradesh and other States. We had also the advantage of the submissions made by learned Attor ney General on behalf of Union of India. It was submitted in the statement on behalf of Union of India that the legislative competence of the State enactment in the various States will have to be determined by refer ence to following entries in list I of the 7th Schedule entries 7, 52, 59, 84, 96, 97 & entries in list II, being 8, 24, 26, 27, 51 52, 54, 56, 62 and entries in list III 19 & 33. It was urged that there is a dichotomy between entry 84 list I and entry 51 of list II but this would not control the interpretation of other entries. There is no such dichotomy in entry 8. It has also been stated on behalf of the Union of India that while opium was in entry 19 of list III and entry 59 of list I of the 7th Schedule, it means that Parliament will have power with regard to opium. But the power to levy excise duty on 658 opium is given to the State, similarly medicinal and toilet preparations which contained alcohol and are fit for human consumption, the power to levy excise duty is given to Parliament and not to the State legislature. Entry 8 of list Il similarly is not subject to entry 52 of list I for the reason that the aspect with regard to .subject matters of these two entries are different, it was submitted. The aspect in list I entry 52 is industry while that in entry 8 of list II is intoxicating liquor. Entry 8 is, therefore, to be read on its own terms. The power to levy taxes is to be read from the entry relating to taxes and not from the general entry. Exception in entry 50 of list II where tax on mineral rights is subject to any limitation imposed by Parliament relating to mineral development, and this power of Parliament is in general entry i.e. entry 54 of list I. According to Union of India, none of the taxing entries in list II is controlled by entry 52 of list I. Union of India stated that 'industry ' is a topic of legislation. Certain entries are left to Parliament and certain others are left to State Legislatures. Identifying of entries is by refer ence to a declaration under entry 7 of list I and entry 52 of list I. The aspect of legislation with regard to subject matter of entries will be topic 'industry '. On the other hand, the subject matter of legislation under entry 8 of list II will be topic 'intoxicating liquors '. Therefore, there is no conflict according to the Union of India. The only question which has to be determined is whether intoxicating liquor in entry 8 in list II is confined to potable liquor or includes all liquors. According to the Union of India, in view of the difference of language in entry 8 and entry 51 of list II, it is reasonably possible to take the view that intoxicating liquors include both liquors. It was submitted by the Union of India that there are no grounds for overruling Balsara 's case (supra) decided in 1951 after 38 years particularly when it has been fol lowed and applied in later decisions. In that case it upheld the power of the States to completely prohibit, manufacture, sell etc. of potable liquor, it struck down the provisions of the Bombay Act in so far as it imposed restrictions on medicinal and toilet preparations as violative of article 19(1)(f) of the Constitution. It is stated that this deci sion had proceeded on the basis that there could not be a complete prohibition in regard to medicinal preparations containing alcohol. Hence, it was submitted that so far as alcohol not fit for human consumption is concerned, it cannot be held that trade in such an article cannot be considered to be a noxious trade. It will be a noxious trade only where it is produced or manufactured for purposes of human consumption. It was submitted that in Indian Mica & Micanite Industries Ltd. vs State of Bihar & Ors., this Court was dealing with denatured spirit and had held that the Bihar 659 Orissa Excise Act, insofar as it related to denatured spir it, was regulating trade and business in public interest; and that entry 8 of list II comprehends all liquors contain ing alcohol. The State 's privilege to completely prohibit or farm out liquor containing alcohol for human consumption does not comprehend, according to the Union of India, a similar right of a State with regard to other intoxicating liquids containing alcohol. According to the Union of India, to so prohibit or collect fee for farming out, would be unconstitutional under article 19(1)(g) of the Constitution on the same principle on which the provisions of the Bombay Act were struck down in Balsara 's case. It was further stated on behalf of Union of India that Parliament has legislative competence with regard to power alcohol providing for levy of central excise duty. See the Central Excises & Salt Act, 1944, Schedule I, item 6; Motor Spirit. Similarly, Parlia ment has legislated the Central Excise Tariff Act, 1985 tariff item No. 22.04. The said item reads: "Ethyl alcohol, of any grade (including such alcohol when denatured or otherwise treated), which either by itself or in admixture with any other substance, is suitable for being used as fuel for spark ignition engines. " It was stated that under article 277 of the Constitution, any taxes, duties, cesses or fees which immediately before the commencement of the Constitution, were being lawfully levied by the Govt. of any State or municipality or other local authority or body for the purpose of the State, munic ipality, district or other local area may, notwithstanding that these taxes, duties, casses or fees are mentioned in the Union list, continue to be levied and to be applied for the same purpose until provisions to the contrary are made by Parliament by law. According to the Union of India, there was a similar provision in the Govt. of India Act, 1935 (See section 143(2)). Reference was made to the decision in Town Municipal Committee, Amraoti vs Ramachandra Vasudeo Chimote & Anr., ; Learned Attorney General drew our attention to the fact that Parliament has exclusive power to levy duties of excise on goods manufactured or produced in India including medici nal and toilet preparations containing alcohol for opium or Indian hemp or other narcotic drugs. But Parliament has no legislative competence to levy excise duty on (a) alcoholic liquor for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics (entry 84 of list II). The State Legislature has legislative competence to levy excise duty on the following goods manufactured or produced in the State 660 and countervailing duties on similar goods manufactured in India (a) alcoholic liquor for human consumption; (b) opium, Indian hemp and narcotics. But learned Attorney General emphasised that State Legislature has no power to levy excise duty on medicinal and toilet preparations which contain alcohol or opium or Indian hemp and other narcotic drugs in such medicinal and toilet preparations. Under entry 51 of list II State Legislature, it was submitted by him, had no power to levy excise duty on industrial alcohol as the latter is not fit for human consumption. State Legisla ture has power to levy taxes on entry of goods in local areas for consumption, use or sale therein. This will in clude taxes on entry of all alcohol. See entry 52 of list II. The State Legislature has further power to levy taxes on goods carried by road or by inland water. The goods therein will include both alcohol fit for human consumption as well as alcohol not fit for human consumption. See entry 56 of list II of the 7th Schedule. State legislature will have to levy taxes on possession of alcoholic liquors fit for human consumption because these are luxuries. But alcohol not fit for human consumption are not luxuries and as such the State Legislatures, according to learned Attorney General, will have no power to levy taxes on such alcohol. Parliament will have power to levy on all alcohol taxes not covered by any other entries in lists I and II. See list I entry 97. The State Legislature will have power to levy fee in respect of all alcohol. See entry 66 read with entry 6 of list II. State Legislature has power to legislate on the topic 'intoxicating liquors ' under entry 8 of list 1I. It being a general entry, will not comprehend a power of taxa tion but will comprehend a power to levy fee read with entry 66. According to the learned Attorney General, with regard to industries, the control of which by the Union is declared by Parliament by law to be expedient in public interest, Parliament will have exclusive legislative competence. See entry 52 of list I. This power includes the power to declare by Parliament that control by the Union of industries relat ing to all types of alcohol is expedient in public interest. Once Parliament makes such a declaration, the State Legisla ture will be denuded of its power under list II, entry 24 on the aspect 'industry ' with respect to all subject matters. The power to collect the lump sum amount by way of auction by any right or otherwise conferring the right to sell alcohol is neither a power to levy tax nor a power to levy fee but it will fail within the legislative competence of the State Legislature under entry 8. But this power will extend only, according to learned Attorney General, to alcohol for human consumption. He said that there can be complete prohibition with regard to manufacture and sale of alcohol fit for human consumption because there is no funda mental 661 right to carry on business in alcohol even for human con sumption. And that this power to completely prohibit exists in the State as recognised by article 47 of the Constitution. The State can, therefore, collect an amount called vend fee, shop rent etc. for conferring on a citizen the right to manufacture and sell alcoholic liquors if it is for human consumption. This power cannot extend to industrial alcohol or alcohol contained in the medicinal or toilet prepara tions. According to the learned Attorney General, there is no power to levy such rent or fee with regard to industrial alcohol because (a) industrial alcohol and alcoholic liquor for medicinal and toilet preparations cannot be completely prohibited; (b) as there is a right to carry on business in industrial alcohol any prohibition on manufacture of indus trial alcohol would be violative of article 19(1)(g) of the Constitution. Accordingly, in. absence of a power to com pletely prohibit there will be no power to collect sums for conferring rights to manufacture or sell except the levy of taxes and fee. On behalf of the State of U.P. both the learned Addi tional 'Advocate General Mr. Trivedi as well as Mr. Yogesh war Prasad made exhaustive submissions and submitted that in order to appreciate the controversy it is necessary to realise that the real problem arises from the fact that the denaturants can be converted into renaturants in the illicit process. According to the counsel appearing in support of the levy, one bottle of spirit of Rs. 1.50 on renaturing yields a profit of Rs.25 to 30 at least. In this connection, reference was made to the report of Baweja Committee. It was further emphasised that the victims are the weaker section and the sufferers are the "wailing workers, weeping wives and crying children '?, not only when the earning member dies, but in their lifetime too, the alcohol consumes, snatches their two morsels, their health, nutrition and standard of living. Reference was made to the observations of this Court in P.N. Kaushal etc. vs Union of India; , where Mr. Justice Krishna 1yet referred to the utterances of George Bernard Shaw that drinking is the chloroform that enables the poor to endure the painful operation of living. It was submitted on behalf of the State that the vend fee on denatured alcohol or Denatured Spirit or what is known as industrial alcohol has been challenged on mainly two grounds, namely, (a) States lack legislative competence and (b) after the enactment of the IDR Act, 1961 the States power is completely lost. The contention of the State was that there is no dichotomy between Ethyl Alcohol to be used for beverages and to be used for industrial purposes. In any case, the levy is on manufacture, according to Mr. Yogeshwar Prasad and Mr. 662 Trivedi, learned Additional Advocate General of U.P., of the ethyl alcohol; use is different, and the collection at a later stage. The levy was stipulated jointly or severally both under entries 8 of list II, entry 51 of list II, entry 33 of list III and what is described as police powers regu latory and other incidental charges, according to them. It was submitted that levy was justified being a regulatory power under Article 19(6), 19(6)(ii). It was further urged that State has a monopoly in alcohol trade; and that article 31C grants immunity to the challenge under Articles 13, 14 & 19 of the Constitution. It was submitted that quid pro quo was not necessary and even if it was necessary, the require ments were met. Under article 298 trading powers of the Stare must be recognised, it was submitted, coupled with century old monopoly of the State in alcohol. It was submitted that vend fee is a pre Constitution levy. The U.P. Excise Act, 1910 and the vend fee levied thereunder were pre Constitution Act/levy by a competent authority and will not cease to continue after the enforce ment of the Constitution, merely because the authority lost its legislative competence over the subject matter. It was submitted that the levy was a pre Constitution levy, so saved under article 277 of the Constitution. According to the State of U.P., the law continued under article 277 and is not a law either under article 246 nor under article 254 of the Consti tution, so outside the purview of the Central Act. At the outset, it may be noted that in view of the subsequent amendment and the additions to the levies it cannot, in our opinion, be with legitimate force contended that the levies which are sought to be impugned in the present litigation are pre Constitutional levies. So, these submissions on behalf of the State do not require any seri ous consideration. It was further submitted that the Union of India has no power to effect the levy as levy was pre Constitutional law and further as the expression 'alcoholic liquor for human consumption ' in list I and the residuary entry 97 of list I of the 7th Schedule, will not operate as against its own legislative intent. It was further urged that the IDR Act, 1951 does not preclude or eclipse the legislative powers of the State. This Act on its own terms, does not apply to the levy; these operate on different tracks, according to the counsel for the State. It was further urged that review was not maintainable. Reference was made to the distillation process and detailed submissions were made before us ex plaining the same. 663 It was submitted that sugarcane is raw material of sugar and manufacture of sugar molasses is the waste product. Molasses when mixed with yeast fermentation starts and alcohol is produced. 10 12% strength of alcohol is toxic to yeast, hence, fermentation stops. According to the State of U.P., so fermented alcohol has maximum 12% strength of alcohol, the products being beer, cider, champangine, and liquor etc. For higher strength (above 12%) distillation of fermented alcohol is necessary. By distillation process firstly 96% strength of alcohol is produced. It is known as ethyl alcohol or rectified alcohol. Counsel for the State of U.P. submitted that this ethyl alcohol is potable and used both for beverage and industrial purposes; and that it is at this stage of manufacture that the charge of levy is made. It has to be stated in view of the language used in the specific provisions the levy is not on the manufacture of alcohol as such, therefore, in our opinion, these levies cannot in essence be sustained as duty of excise. It was contended on behalf of the State that rectified alcohol is diverted to different warehouses for being used as beverages (country liquor, foreign liquor) and industrial liquor. it was submitted that this potable alcohol can be used for industrial purposes, but for public welfare, a lower levy is charged and to prevent its misuse denaturants are added and for denaturing in public interest, the State has to incur expenses, cost of denaturants, process and regulation etc. However, this submission, by itself, does not help the controversy herein in essence. No attempt had been made on behalf of the State to indicate that the levy has any element of quid pro quo or certain element which can possibly have some correlation with the expenses incurred in that connection. It was submitted that ethyl alcohol is diluted to the requisite concentration for the concerned beverage and subjected to other processes like reduction, blending and flavouring etc. and ethyl alcohol is further distilled for higher concentration 99.4% power alcohol and 100% absolute alcohol. It was submitted that no alcohol as such is fit for human consumption. It was contended that the effect is ultimate consumption, whether delayed or instanta neous. The effect of alcohol is fatal, it was stated, may be spread out on long span or instant depending upon the concentration, dose and the person drinking it. Sleeping pills are illustrative, overdose puts the man to eternal sleep. It is in this background that we were reminded that the State being a welfare State, would be guilty in levying a lower levy on the alcohol. It is the duty of the State for being a welfare State to denature by incurring extra cost and effort. The industry does not need the denaturing. 664 Our attention was drawn to various observations of Krishna Iyer, J. in P.N. Kaushal 's case (supra). There is indeed great deal of attempt made by some for wrong utilisa tion of alcohol and thereby endangering the community and people at large but the need to protect the community from the evil effects of drinking does not by itself empower the State to levy duty or impost of fee not warranted by the Constitution nor sanctioned by the specific provisions of the Constitution and the laws. It was submitted that indus trial alcohol and denatured spirit are intoxicating liquor and or alcoholic liquor for human consumption. These submis sions were supported by reference to the Dictionary meaning, Organic Chemistry, the definition in U.P. Excise Act, 1910 and various case laws. It is used as being consumed by humanity. The industry needs potable alcohol and the dena turants are not required by it rather some of them are avoided, according to the State of U.P. In particular indus try they hamper the manufacture of the final product. Dena tured spirit or industrial alcohol is basically potable alcohol; it is denatured in public interest to prevent its use as potable alcohol, according to the State of U.P. This alcohol cannot be treated differently from other alcohols only because some denaturants are added in public interest and welfare. It was submitted that the State has legislative competence to impose the levy since the impugned levy is both on its language and in pith and substance legislation failing under, according to the State of U.P., entry 8 list II intoxicating liquor, entry 51, list II alcoholic liquor for human consumption. Counsel for the State emphasised the significant omission of the expression "fit for". What is required is intoxicating liquor and/or alcoholic liquor for human consumption, according to counsel for the State of U.P. Entry 33 list Ill trade and commerce in, and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in public interest, and imported goods of the same kind as such products. Under its police powers the State has to regulate health, morality, welfare of society and incidental pauper ism and crime it was submitted. It was further submitted by the State that the State has exclusive right to deal in liquor. This power according to the counsel for the State, is reserved by and/or derived under articles 19(6) and 19(6)(ii) of the Constitution. For parting with that right a charge is levied. It was empha sised that in a series of decisions some of which have been referred to hereinbefore, it has been ruled that the charge is neither a fee nor a tax and termed it as privilege. The levy is on the manufacture, possession of alcohol. The rate of levy differs on its use, accord 665 ing to the State of U.P. The impost is also stipulated under the trading powers of the State under article 298 and it was contended that the petitioners and/or appellants were bound by the terms of their licence. It was submitted that the Parliament has no power to legislate on industrial alcohol, since industrial alcohol was also alcoholic liquor for human consumption. Entry 84 in list I expressly excludes alcoholic liquor for human consumption; and due to express exclusion of alcoholic liquor for human consumption from list I, the residuary entry 97 in list I will not operate as against its own legislative interest. These submissions have been made on the assumption that industrial liquor or ethyl alcohol is for human consumption. It is important to emphasise that the expression of a Constitution must be understood in its common and normal sense. Industrial alcohol as it is, is incapable of being consumed by a normal human being. The expression 'consumption ' must also be understood in the sense of direct physical intake by human beings in this context. It is true that utilisation in some form or the other is consumption for the benefit of human beings if industrial alcohol is utilised for production of rubber, tyres used. The utilisation of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Constitution, be understood to mean that the alcohol has been for human consumption. We have no doubt that the framers of the Constitution when they used the expression 'alcoholic liquor for human consumption ' they meant at that time and still the expres sion means that liquor which as it is consumable in the sense capable of being taken by human beings as such as beverage of drinks. Hence, the expression under entry 84, list I must be understood in that light. We were taken through various dictionary and other meanings and also invited to the process of manufacture of alcohol in order to induce us to accept the position that Denatured Spirit can also be by appropriate cultivation or application or admix ture with water or with others, be transformed into 'alco holic liquor for human consumption ' and as such transforma tion would not entail any process of manufacture as such. There will not be any organic or fundamental change in this transformation, we were told. We are, however, unable to enter into this examination. Constitutional provisions specially dealing with the delimitation of powers in a federal polity must be understood in a broad commonsense point of view as understood by common people for whom the Constitution is made. In terminology, as understood by the framers of the Constitution, and also as viewed at the relevant time of its interpretation, it is not possible to proceed otherwise, Alcoholic or intoxicating liquors must be understood as these are, not what these are capable of or able 666 to become. It is also not possible to accept the submission that vend fee in U.P. is a pre Constitution imposition and would not be subject to article 245 of the Constitution. The present extent of imposition of vend fee is not a pre Con stitution imposition, as we noticed from the change of rate from time to time. On behalf of the State of Maharashtra Mr. Dholakia submitted that the first issue is whether entry 8 in list II of the 7th Schedule of the Constitution, covers alcohol unfit for human consumption. The second issue, according to him, is, whether assuming that the entry does not include alcohol unfit for human consumption, its scope in that respect is curtailed because of item 26 of the Schedule to the IDR Act, 1951. The third issue, according to him, is, whether having regard to entry 51 in list II, the State can (a) impose regulations by creating economic disincentives for consumption of drinkable alcohol and (b) prevention of misuse of non drinkable alcohol for consumption. On behalf of the State both Mr. Trivedi and Mr. Yogesh war Prasad contended that regulatory power of the State was there and in order to regulate it was possible to impose certain disincentives in the form of fees or levies. Imposi tion of these imposts as part of regulatory process is permissible, it was submitted. Our attention was drawn to the various decisions where by virtue of "Police Power" in respect of alcohol the State has imposed such impositions. Though one would not be justified in adverting to any police power, it is possible to conceive sovereign power and on that sovereign power to have the power of regulation to impose such conditions so as to ensure that the regulations are obeyed and complied with. We would not like, however, to embark upon any theory of police power because the Indian Constitution does not recognise police power as such. But we must recognise the exercise of sovereign power which gives the State sufficient authority to enact any law subject to the limitations of the Constitution to discharge its func tions. Hence, the Indian Constitution as a sovereign State has power to legislate on all branches except to the limita tion as to the division of powers between the Centre and the States and also subject to the fundamental rights guaranteed under the Constitution. The Indian State, between the Centre and the States, has sovereign power. The sovereign power is plenary and inherent in every sovereign State to do all things which promote the health, peace, morals, education and good order of the people. Sovereignty is difficult to define. This power of sovereignty is, however, subject to Constitutional limitations. This power, according to some constitutional authorities, is to the public what necessity is to the individual. Right to tax or levy 667 imposts must be in accordance with the provisions of the Constitution. It was contended that the question, necessarily arises as to whether these regulations under the Bombay Prohibition Act, 1949 are intended as measures of revenue or as measures to advance the cause of prohibition. Mr Dholakia invited us to the phrase "intoxicating liquor" which has been the subject matter of interpretation by the Federal Court, this Court and the United States Supreme Court. It has been held that the expression is of widest import and must be given liberal interpretation. According to him, this Court in Balsara 's case (supra) held that even toilet articles con taining alcohol as such would be intoxicating liquors. Mr. Dholakia suggests that United States Supreme Court has expressly held that "Denatured Spirit" is intoxicating liquor because of necessity to prevent its misuse. It was further contended that the I.D.R. Act, was made by the Parliament and it is traceable to entry 52, list I. This entry enables the Union Legislature to legislate in respect or ' an industry the control of which is declared by Parlia ment to be expedient in public interest. Entry 52, according to him, speaks of control of an industry in its establish ment. Ordinarily, States have the authority to allow or not to allow any industry to be established under entry 24 of list I1. This power is not taken away by the I.D.R. Act. According to Mr. Dholakia, if industry is allowed to be established by law within the policy of the State then its control thereafter would vest with the State. Ordinarily, a citizen has fundamental right to establish an industry and only reasonable restrictions can be placed on these. Howev er, the case of intoxicating liquor is different. By virtue of article 47 of the Constitution the State may impose absolute prohibition in respect of intoxicating liquor. In such a case, the State is authorised to deny a citizen the right to establish an industry in intoxicating liquor. No person can claim that he is entitled to establish an industry for manufacturing whisky in any particular State. The true test, according to Mr. Dholakia, is to ascertain if there was no I.D.R. Act to which entry of the State List, various regula tions in respect of "alcohol industry" would be traced. It was submitted that the regulations would have to be traced to entry 24 of list 11 and not to entry 8. It was submitted that in case of alcohol ordinarily used for human consump tion, the extent of regulation may go to the extent of complete prohibition. It may go to a lesser extent of par tial prohibition. It may assume a variety of forms including one of imposing economic disincentives. If the price of drinkable alcohol becomes higher and higher, the person given to drinking might think it better to give it up, according to Mr. Dholakia. The price fixation is a valid method in regulation of consumption, and if the above analy sis is fully 668 valid for drinkable alcohol, it is equally valid for the non drinkable alcohol for the following reasons, according to Mr. Dholakia: the major difference in non drinkable alcohol and drinkable one is that the former is often the legitimate activity while in the latter no such claim can be made. The distinction is important for the purpose of deter mining the extent of regulations but it is of no assistance for deciding the nature of the regulation. It is true, he says, that a State may not be entitled to prohibit the business of non drinkable alcohol but the State can impose regulation by which it can make nondrinkable alcohol more expensive to ensure that it is not available cheaply to a would be bootlegger. Mr. Dholakia invites us to hold that Denatured Spirit is made by addition of malodorous or nox ious substance to alcohol in order to make it unfit for human consumption. Denaturing is not done for making such alcohol fit for machine; it is done for the purpose of ensuring that such alcohol is avoided by would be drinkers. Even so, lacking the easy availability of drinkable alcohol, those given to drinking would make an attempt to drink denatured spirit after distillation. Such process of distil lation is what the bootleggers undertake. The process is a simple one, according to Mr. Dholakia. We need not detain ourselves in examining the process as suggested by him. He insisted that the dividing line between relative importance of prohibition and industry should be left to each individual State because the conditions in all States are not identical. He suggested that Gujarat attaches great importance to the cause of prohibition. There are historical and social factors responsible for this policy. According to Mr. Dholakia, the Govt. of that State is prepared to sacri fice revenue running into hundreds of crores of rupees but the same may not be true of a State like Punjab. According to him, the historical and social conditions there are quite different. The power of the State Govt. with regard to potable liquor was sustained in the dissenting judgment of Justice Hidayatullah in the case of M/s Guruswamy & Co. etc. vs State of Mysore & Ors., 1t was, howev er, suggested that levies in the instant case are not duties of excise as understood in the said decision. For these reasons, Mr. Dholakia submitted that the Bombay Prohibition Act cannot be challenged. According to him, the relevant section of the said Act and the Denatured Spirit Rules, 1959 have to impose and advance the cause of prohibition while at the same time assuring a reasonable availability of Dena tured Spirit and Rectified Spirit at reasonable prices. Learned Advocate General of the State of Andhra Pradesh has 669 also submitted in support of the imposition made under the A.P. Excise Act. He has referred us to the relevant defini tions and sections contending that the Act falls within the legislative competence of the Andhra Pradesh State Legisla ture by virtue of entries 8 and 51 of list II and entry 33 of list III of the 7th Schedule. He contended that the levy of excise duty falls within entry 51 of list II of the 7th Schedule to the Constitution inasmuch as the Andhra Pradesh Act received the assent of the President and is a later enactment than the I.D.R. Act. The provisions of the Andhra Pradesh Act, according to him, will prevail over any earlier Central Law under article 254 of the Constitution. The said Central legislation is enacted under entry 52 of list I. Learned Advocate General also insisted that there is no fundamental right in the business of liquor; and that Recti fied Spirit is nothing but alcohol which can be diluted and rendered fit for human consumption by additions of certain substances. It can also be utilised for industrial purposes as raw material for manufacturing other products. This multifarious user does not bring about any change in the essential character of alcohol after distillation. In re spect of these legislations, learned Advocate General sub mitted that even if such an assumption were to be regarded as conceivable, State legislation has the predominant effect prevailing over the Central Legislature in respect of the State of A.P. in view of the assent by the President and the enactment being later in point of time in accordance with article 254 of the Constitution of India. It was submitted that the dichotomy attempted to be drawn in entry 84 of list I of the 7th Schedule to the Constitution, on the basis of the development of the concept of industrial alcohol and the inapplicability of the concept of potable liquor to the industry of alcohol is not valid. There is no question of fundamental right to trade in dan gerous or hazardous alcohol. It was submitted that it is consistent with wider interpretation of alcoholic liquor based on pre existing legislative history. It was further submitted that the test of potability of liquor is in no way rendered invalid in relation to industrial alcohol as it still permits of conversion to potability by addition of flavours and dilution. When two interpretations are possi ble, it was submitted that the choice must fall on that interpretation which validates existing State legislations designed to raise revenues and rejection of the other inter pretation which is destructive of the scheme of distribution of powers. According to him, the words 'alcoholic liquor ' in lists I & II of the 7th Schedule to the Constitution must be interpreted so as to mean and take within its sweep alcohol as first obtained in the process of or as a product of fermentation industry. At this stage, it is capable of 670 being rendered potable. The fact that it may be rendered unfit for human consumption, does not render the substance any less liable for taxation. Learned Advocates General for the States of Gujarat and Kerala have also made their submissions, and referred to several decisions and the concept of police power, and contended that imposition of a fee would be the most effec tive method of regulating intoxicating liquor other than alcohol. According to the Advocate General of Kerala, that would be justified as the reasonable measure in regard to intoxicating liquor. According to him, it has been accepted by courts all along that the 'police power ' of the State enables regulations to be made regarding manufacture, trans port, possession and sale of intoxicating liquor. Such police power could be exercised as to impose reasonable restrictions as to effectuate the power. He referred to the observations of this Court in Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors., ; which quoted the passage from Crowley vs Christensen, [1890] 34 Lawyers ' Edn. 620. Reference was also made to Hari Shankar 's case (supra) where this Court quoted Vol. 38 of the American Jurisprudence where it was stated that the higher the fee is imposed for a licence, better is the regulation. Reliance was also placed on P.N. Kaushal 's case (supra). It was contended that it has been accepted by this Court that the police power is exercisable for regulation of an activity of a legislature within the permissible field or impost as regulatory measure. It may be valid though it may neither be fee nor a tax in the limited sense of the term. See the observations of this Court in Southern Pharmaceuticals & Chemicals, Trichur & Ors. etc. vs State of Kerala & Ors. etc. ; , at 537. Re garding regulatory measures in connection with medicinal preparations containing alcohol it was observed by this Court that the impugned provisions had to be enacted to ensure that the Rectified Spirit is not misused under the pretext of being used for toilet and medicinal preparations containing alcohol. Such a regulation is a necessary concom itant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. The American doctrine of police power is not perhaps applicable as such in India, but powers of the sovereignty to regulate as part of the power of the competent legisla ture to effectuate its aim are there. It is true that in the State of West Bengal vs Subodh Gopal Bose & Ors., [1954] V SCR 587 at 601 604 and Kameshwar Prasad & Ors. v The State of Bihar & Anr. , ; the concept of 671 poliCe power was accepted as such, but this doctrine was not accepted in India as an independent power but was recognised as part of the power of the State to legislate with respect to the matters enumerated in the State and Concurrent Lists, subject to Constitutional limitations. It was stated that the American jurisprudence of police power as distinguished from specific legislative power is not recognised in our Constitution and is, therefore, contrary to the scheme of the Constitution. In interpreting the provisions of our Constitution, we should go by the plain words used by the Constitution makers and the importing of expression like 'police power ', which is a term of variable and indefinite connotation, can only make the task of interpretation more difficult. It was contended that in enacting a law with respect to intoxicating liquor as part of the legislative power measures of social control and regulation of private rights are permissible and as such may even amount to prohi bition. We are of the opinion that we need not detain ourselves on the question whether the States have police power or not. We must accept the position that the States have the power to regulate the use of alcohol and that power must include power to make provisions to prevent and/or check industrial alcohol being used as intoxicating or drinkable alcohol. The question is whether in the garb of regulations a legislation which is in pith and substance, as we look upon the instant legislation, fee or levy which has no connection with the cost or expenses administering the regulation, can be im posed purely as regulatory measure. Judged by the pith and substance of the impugned legislation, we are definitely of the opinion that these levies cannot be treated as part of regulatory measures. In this view of the matter we do not detain ourselves with examining the numerous American deci sions to which our attention was drawn by learned counsel very elaborately and thoroughly. We recognise power of the State to regulate though perhaps not as emanation of police power, but as an expres sion of the sovereign power of the State. But that power has its limitations. We have noted the submissions made to this effect by the learned Advocates General of different States, including the State of Gujarat. Some of the interveners have also made the submissions. We have considered the submis sions made by M/s. Kantilal & Co. as interveners in respect of the Constitutional validity of the Bombay Prohibition Act as amended by the Bombay Prohibition (Gujarat Amendment) Act, 1978. We have also the advantage of the submissions made on behalf of Advocate General of Madhya Pradesh by Mr. R.B. Datar. He submit 672 ted that the substance of the case put forward by the peti tioners and/or appellants, is that the vend fee in respect of industrial alcohol is not a fee for any services ren dered, it is a compulsory exaction of money. The answer to the question posed lies not in the labels used, according to Mr. Datar for describing the commodity in question. It lies in the examination of the chemical reality of the substance. He says that no process of interpretation can alter the law of chemistry or the chemical structure of the substance described in common parlance as industrial alcohol or pota ble alcohol, or alcohol for human consumption. He referred us to Organic Chemistry and other books but, as mentioned before, the meanings must be found but in the conditions as these are. On behalf of State of U.P. Mr. Trivedi, learned Addi tional Advocate General further submitted that entry 52 of list I is an exceptional entry. It not only prescribes the field of legislation but also enables and empowers the Parliament to make laws to the exclusion of the State. According to him, being exclusionary in nature unlike en tries merely delineating fields of legislation, entry 52 has to be strictly and, therefore, narrowly construed. The other question that has to be judged, according to him, is that whenever the Constitution intended the Parliament to assume legislative competence in respect of the entire field, a declaration of an unqualified nature is provided for, unlike a qualified provision like entry 52 of list I. The words 'control ' and 'regulation ' are at times, held to be inter changeable or used synonymously, their use in the various entries either singly or jointly, indicates that they are sought to convey a different sense. The word 'control ' has in the context, a narrower meaning, excluding details of regulatory nature by the State. According to him, comparing entries 7, 23, 24, 27, 62, 64 & 67 of list I with entry 52, would demonstrate that under entry 52 it is not the entire field which is sought to be covered but only the control of industries; and that the absence of inclusion of qualifying, words like 'the control of which ' cannot be brushed aside. By referring to the several decisions, he contended that in view of the declaration made in section 2 of the I.D.R. Act and the provisions made therein the entire field was not occu pied and the vend fee or other impost by the State Legisla tures were not infringing in the field treaded by the Cen tral Legislature. Before we deal with the contentions of the petitioners/appellants, it is necessary to reiterate the principles by which these questions will have to be judged. It is well to remember that the meaning of the expressions used 673 in the Constitution must be found from the language used. We should interpret the words of the Constitution on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. It is also well settled that a Constitution must not be construed in any narrow or pedan tic sense and that construction which is most beneficial to the widest possible amplitude of its power, must be adopted. An exclusionary clause in any of the entries should be strictly and, therefore, narrowly construed. No entry should, however, be so read as not to rob it of entire content. A broad and liberal spirit should, therefore, inspire those whose duty it is to interpret the Constitu tion, and the courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory. Constitutional adjudication is not strengthened by such an attempt but it must seek to declare the law but it must not try to give meaning on the theory of what the law should be, but it must so look upon a Constitu tion that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted. It has also to be borne in mind that where division of powers and jurisdiction in a federal Constitution is the scheme, it is desirable to read the Constitution in harmonious way. It is also necessary that in deciding whether any particular enactment is within the purview of one Legislature or the other, it is the pith and substance of the legislation in question that has to be looked into. It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by article 246 and other Articles of the Constitution. The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which the appropriate legislatures can oper ate. It is well settled that widest amplitude should be given to the language of the entries in three lists but some of these entries in different fists or in the same list may override and sometimes may appear to be in direct conflict with each other, then and then only comes the duty of the court to find the true intent and purpose and to examine the particular Legislation in question. Each general word would be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be interpreted as the Constitution must be interpreted as an organic document in the light of the experience 674 gathered. In the Constitutional scheme of division of powers under the legislative lists, there are separate entries pertaining to taxation and other laws. The aforesaid princi ples are fairly well settled by various decisions of this Court and other courts. Some of these decisions have been referred to in the decision of this Court in civil appeal No. 62(N)/ 70 The India Cement Ltd. etc. vs The State of Tamil Nadu etc. , The Balsara 's case (supra) was in the context of the business of potable alcohol. Problems arose with regard to auctions, vends, licences and the business of manufacturing, selling, etc. of potable alcohol. Until the case of Synthet ics & Chemicals (supra), which is under challange here, all other cases since then have dealt with potable alcohol. The only case which has dealt with alcohol used for industrial purposes was the case of Indian Mica and Micanite Industries Ltd. vs State of Bihar & Ors., (supra). The Constitution of India, it has to be borne in mind, like most other Constitu tions, is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the coun try. This Court should, therefore, endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of indisputed national goals, as permitted by the Constitution. As mentioned here inbefore, the relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are close ly linked and supplement one another. In this connection, reference may be made to entry 84 of fist I which deals with the duties of excise on tobacco and other goods manufactured or produced in India except, inter alia, alcoholic liquors for human consumption. Similarly, entry 51, fist II is the counterpart of entry 84 of fist I so far as the State List is concerned. It authorises the State to impose duties of excise on alcoholic liquors for human consumption and opium, etc. manufactured or produced in the State and the counter vailing duties at the same or lower rates on similar goods produced or manufactured elsewhere in India. It is clear that all duties of excise save and except the items specifi cally excepted in entry 84 of list 1 are generally within the taxing power of the Central Legislature. The State Legislature has power, though limited it is, in imposing duties of excise. That power is circumscribed under entry 51 of list II of the Seventh Schedule to the Constitution. As we have noted hereinbefore, the correct principles of harmo nious interpretation of legislative entries have been laid down in several cases. We have mentioned hereinbefore some of the decisions as noted in the decision of this Court in India Cement (supra). In M.P.V. Sundarara 675 mier & Co. vs State of A.P., ; at pages 1480 82, this Court has laid down that (i) legislative entries are to be fiber ally construed. But when a topic is governed by two entries, then they have to be recon ciled. It cannot be that one entry is to be fiberally construed and the other entry is not to be liberally construed. (ii) under the Constitutional scheme of division of powers under legislative lists, there are separate entries pertaining to taxation and other laws. A tax cannot be levied under a general entry. (iii) a Constitution is an organic document and has to be so treated and con strued. (iv) if there is a conflict between the entries, the first principle is to reconcile them. But the Union power will prevail by virtue of Article 246(1) & (3). The words "notwithstanding" and "subject to" are impor tant and give primacy to the central legisla tive power. In the Central Provinces and Berar Sales of Motor Spirit and LubriCants Taxation Act, 1938, at 37 38, the Federal Court had emphasised that Constitution of a Government is a living and organic thing which of all in struments has the greatest claim to be so construed as to make it live. In Indian Mica & Micanite India vs State of Bihar, (supra), a bench of five Hon 'ble Judges stated as under: "Under the 1935 Act as under our present Constitution, the power to levy duties on alcoholic liquor fit for human consumption was allocated to the provincial legislature where as the power to levy duty on alcoholic liquor not fit for human consumption was allocated to the central legislature. " In the aforesaid case, an impost was sought to be placed on denatured spirit which was used in the manufacture of micanite. It was held that the impost could not be justified as a tax, under the taxing power and therefore, an enquiry was ordered to find out whether it was justified as a fee. In Adhyaksha Mathur Babu 's Sakti Oushadhalaya Dacca (P) 676 Ltd. and Ors. vs Union of India, , at pages 966, 969, 975, 976 of the report, it was observed by this Court that only the Central Government has the power to tax liquids containing liquor which was an ayurvedic medicine even though such medicines were capable of being used as intoxicating things. In M/s Guruswamy & Co. etc. vs State of Mysore & Ors., at pages 549, 556, 557, 564, 571,572 of the report, it was held that it is clear that imposts which were not in the nature of excise duty were held to be ultra vires entry 51 of list II of the Seventh Schedule to the Constitution. In State of Mysore vs S.D. Cawasji & Co. & Ors., ; at pp. 804, 805 and 806 of the report, this Court rejected the contention that under entry 8 of list II of the Seventh Scheduly to the Constitution the State was competent to legislate for levy of cess in respect of "intoxicating liquor" that is to say, the production, manufacture, transport, purchase and sale of intoxicating liquors. Legislative power normally includes all incidental and subsidiary powers, but the power to tax is neither incidental nor subsidiary to the power to legis late on a matter or topic. Reference was made to M.P.V. Sundararamier 's case (supra). Entries in lists I and II, dealing with certain specific topics, it was held, do not grant power to levy tax on transactions relating to those topics. Power to tax must be derived from a specific taxing entry. Tax could not, therefore, be levied, it was held on intoxicating liquors relying upon entry 8 of list II of the 7th Schedule. It was further held that the taxing power in respect of alcoholic liquors for human consumption is, therefore, circumscribed and it might only be levied as excise duty, that is a duty levied on the production and manufacture of alcoholic liquors. Reliance was placed on R.C. I all vs Union of India, [1962] Supp. 3 SCR 436. In Om Prakash vs Giriraj Kishore, ; at pages 158 and 163 of the report, Venkataramiah J., as the learned Chief Justice then was, held that no tax can be levied in the guise of a fee. It was held at p. 158 of the report as follows: "As observed in M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr., ; , in list II of the Seventh Schedule to the Constitution Entries 1 to 44 form one group mentioning the subjects on which the States can legislate and entries 45 to 63 in that list form another group dealing with taxes that may be levied by States. Entry 64 refers to offences against laws with respect to any of the matters in List II and Entry 65 refers to jurisdiction of Courts. Entry 66 empowers the State to levy 677 fees in respect of any of the matters in List I1. Unless the cess in question can be brought under any of the Entries from 45 to 63 it cannot be levied as a tax at all. " It was further observed at p. 163 of the report as follows: "It is constitutionally by impermissible for any State Government to collect any amount which is not strictly of the nature of a fee in the guise of a fee. If in the guise of a fee the legislation imposes a tax it is for the Court on scrutiny of the scheme of the levy to determine its real character. If on a true analysis of the provisions levying the amount, the Court comes to the conclusion that it is, in fact, in the nature of a tax and not a fee, its validity can be justified only by bringing it under any one of the entries in list II of the Seventh Schedule to the Consti tution under which the State can levy a tax. " It has to be borne in mind that by common standards ethyl alcohol (which has 95%) is an industrial alcohol and is not fit for human consumption. The petitioner and the appellants were manufacturing ethyl alcohol (95%) (also known as rectified spirit) which is an industrial alcohol. ISI specification has divided ethyl alcohol (as known in the trade) into several kinds of alcohol. Beverage and industri al alcohols are clearly and differently treated. Rectified spirit for Industrial purposes is defined as "spirit puri fied by distillation having a strength not less than 95% of volume by ethyl alcohol". Dictionaries and technical books would show that rectified spirit (95%) is an industrial alcohol and is not potable as such. It appears, therefore, that industrial alcohol which is ethyl alcohol (95%) by itself is not only non potable but is highly toxic. The range of spirit of potable alcohol is from country spirit to whisky and the Ethyl Alcohol content varies between 19 to about 43 per cent. These standards are according to the ISI specifications. In other words, ethyl alcohol (95%) is not alcoholic liquor for human consumption but can be used as raw material input after processing and substantial dilution in the production of Whisky, Gin, Country Liquor, etc. In many decisions, it was held that rectified spirit is not alcohol fit for human consumption. Reference may be made in this connection to Delhi Cloth and General Mills Co. Ltd. vs The Excise Commissioner, U.P. Allahabad and Anr. Special Appeal No. 177 of 1970, decided on 29th March, 1973. In this connection, it is important to bear in mind the actual provision of entry 8 of list II. Entry 8 of list II cannot support a tax. The above entry contains the 678 words "intoxicating liquor". The meaning of the expression "intoxicating liquor" has been tightly interpreted by the Bombay High Court in the Balsara 's case (supra). The deci sion of the Bombay High Court is reported in AIR 1951 Bombay 210, at p. 214. In that light, perhaps, the observations of Fazal Ali, J. in Balsara 's case (supra) requires considera tion. It appears that in the light of the new experience and development, it is necessary to state that "intoxicating liquor" must mean liquor which is consumable by human being as it is and as such when the word "liquor" was used by Fazal Aft, J., they did not have the awareness of full use of alcohol as industrial alcohol. It is true that alcohol was used for industrial purposes then also, but the full potentiality of that user was not then comprehended or understood. With the passage of time, meanings do not change but new experiences give new colour to the meaning. In Har Shankar 's case (supra), a bench of five judges have surveyed the previous authorities. That case dealt with the auction of the right to sell potable liquor. The position laid down in that case was that the State had the exclusive privilege or right of manufacturing and selling liquor and it had the power to hold public auctions for granting the right or privilege to sell liquor and that traditionally intoxicating liquors were the subject matters of State monopoly and that there was no fundamental right in a citizen to carry on trade or business in liquor. All the authorities from Coo verji Barucha 's case to Har Shankar 's case (supra) dealt with the problems or disputes arising in connection with the sale, auction, licensing or use of potable liquor. Only in two cases the question of industrial alcohol had come up for consideration before this Court. One is the present decision which is under challenge and the other is the decision in Indian Mica & Micanite Industries 's case (supra). In the latter case, in spite of the earlier judg ments including Bharucha 's case, denatured spirit required for the manufacture of micanite was not regarded as being within the exclusive privilege of the State. It appears that in that decision at p. 321 of the report, it was specifical ly held that the power of taxation with regard to alcoholic liquor not fit for human consumption, was within the legis lative competence of central legislature. The impost by the State was held to be justifiable only if it was a fee there by impliedly and clearly denying any consideration or price for any privilege. For the first time, in the Synthetics & Chemicals Ltd. 's case (supra), the concept of exclusive privilege was introduced into the area of industrial alcohol not fit for human consumption. Balsara 's case (supra) deal with the question of reasonable restr 679 iction on medicinal and toilet preparations. In fact, it can safely be said that it impliedly and sub silentio clearly held that medicinal and toilet preparations would not fall within the exclusive privilege of the State. If they did there was no question of striking down of section 12 (c) & (d) and section 13(b) of the Bombay Prohibition Act, 1949 as unreasonable under Article 19(1)(f) of the Constitution because total prohibition of the same would be permissible. In K.K. Narula 's case ; , it was held that there was right to do business even in potable liquor. It is not necessary to say whether it is good law or not. But this must be held that the reasoning therein would apply with greater force to industrial alcohol. Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health. If the meaning of the expression "intoxicating liquor" is taken in the wide sense adopted in Balsara 's case, it would lead to an anamolous result. Does Article 47 oblige the State to prohibit .even such industries as are licensed under the IDR Act but which manufacture industrial alcohol? This was never intended by the above judgments or the Constitution. It appears to us that the decision in the Synthetics & Chemi cals Ltd. 's case (supra) was not correct on this aspect. Reference in this connection may be made to the decision in Inspector of Taxes vs Australian Mutual Provident Socie ty, [1959] 3 All England Law Report 245, at p. 256 of the report, Lord Denning in his dissenting judgment observed as follows: "My Lords, I ask myself: What authority is to be given in these circumstances to the deci sion of this House in 1947? Is it to be fol lowed from step to step regardless of conse quences? Are we to hold that the tax under r. 3 is a tax on the profits of the business for all purposes, including the purposes of the Double Taxation Agreement, which this House never had in mind at all? I think not. The doctrine of precedent does not compel your Lordships to follow the wrong path until you fall over the edge of the cliff. As soon as you find that you are going in the wrong direction, you must at least be permitted to strike off in the right direction, even if you are not allowed to retrace your steps. And that is that I would ask your Lordships to do. I would invite your Lordships to say that the decision of this House in 680 1947 has no application to the meaning of the word "profits" in the Double Taxation Agree ment." Justice Jackson in his dissent in the case of Common wealth of Massachusetts Et A.I vs USA, 92 Lawyers, Edition p. 968 also upheld the right to set right what was said wrongly in the past. It was submitted that the activity in potable liquor which was regarded safe and exclusive right of the state in the earlier judgments dealing with the potable liquor were sought to be justifiable under the police power of the State, i.e., the power to preserve public health, morals, etc. This reasoning can never apply to industrial alcohol manufactured by industries which are to be developed in the public interest and which are being encouraged by the State. In a situation of this nature, it is essential to strike a balance and in striking the balance, it is difficult to find any justification for any theory of any exclusive fight of a State to deal with industrial alcohol. Restriction valid under one circumstance may become invalid in changing cir cumstances. Reference may be made to the observations of Justice Brandeis in Nashiville, Chattangooga & St. Louis Railway vs Herbert section Waiters, 79 Lawyers Edition 949. See also Leo Nebbia vs People of the State of New York, 78 Lawyers ' Edn. 940 at p. 941. Similar is the effect of the approach of this Court in Motor General Traders & Anr. vs State of Andhra Pradesh & Ors. etc. ; , It is not necessary for us here to say anything on the imposts on potable alcohol as commonly understood. These are justified by the lists of our legislature practised in this country see the observations of Hidayatullah J. as the Chief Justice then was, in M/s Guruswamy vs State of My sore, at p. 573 574 and other decisions mentioned hereinbefore. In that view of the matter, it appears to us that the relevant provisions of the U.P. Act, A.P. Act, Tamil Nadu Act, Bombay Prohibition Act, as mentioned hereinbefore, are unconstitutional in so far as these purport to levy a tax or charges imposts upon industrial alcohol, namely alcohol used and usable for industrial purposes. Having regard to the principles of interpretation and the Constitutional provisions, in the light of the language used and having considered the impost and the composition of industrial alcohol, and the legislative practice of this country, we are of the opinion that the impost in question cannot be justified as State imposts as these have 681 been done. We have examined the different provisions. These are not merely regulatory. These are much more than that. These seek to levy imposition in their pith and substance not as incidental or as merely disincentives but as attempts to raise revenue for States ' purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate. Furthermore, in view of the occupation of the field by the IDR Act, it was not possible to levy this impost. After 1956 amendment to the IDR Act bringing alcohol industries (under fermentation industries) as item 26 of the First Schedule to IDR Act the control of this industry has vested exclusively in the Union. Thereafter, licences to manufacture both potable and nonpotable alcohol is vested in the Central Government. Distilleries are manufacturing alcohol under the Central Licences under IDR Act. No privi lege for manufacture even ii one existed, has been trans ferred to the distilleries by the State. The State cannot itself manufacture industrial alcohol without the permission of the Central Government. The States cannot claim to pass a right which these do not possess. Nor can the States claim exclusive right to produce and manufacture industrial alco hol which are manufactured under the grant of licence from the Central Government. Industrial alcohol cannot upon coming into existence under such grant be amenable to States ' claim of exclusive possession of privilege. The State can neither rely on entry 8 of list I1 nor entry 33 of list III as a basis for such a claim. The State cannot claim that under entry 33 of list III, it can regulate industrial alcohol as a product of the scheduled industry, because the Union, under section 18G of the IDR Act, has evinced clear intention to occupy the whole field. Even otherwise sections like section 24A and 24B of the U.P. Act do not constitute any regulation in respect of the industrial alcohol as product of the scheduled industry On the contrary, these purport to deal with the so called transfer of privilege regarding manufacturing and sale. This power, admittedly, has been exercised by the State purporting to act under entry 8 of list II and not under entry 33 of list III. The position with regard to the control of alcohol industry has undergone material and significant change after the amendment of 1956 to the IDR Act. After the amendment, the State is left with only the following powers to legis late in respect of alcohol: (a) it may pass any legislation in the nature of prohibition 682 of potable liquor referable to entry 6o of list II and regulating powers. (b) it may lay down regulations to ensure that non potable alcohol is not divert ed and misused as a substitute for potable alcohol. (c) the state may charge excise duty on potable alcohol and sales tax under entry 52 of list II. However, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Orders, sales tax cannot be charged by the state on industrial alcohol. (d) however, in case State is rendering any service, as distinct from its claim of so called grant of privilege, it may charge fees based on quid pro quo. See in this con nection, the observations of India Mica 's case (supra). On an analysis of the various Abkari Acts and Excise Acts, it appears that various Provinces/States reserve to themselves in their respective States the right to transfer exclusive or other privileges only in respect of manufacture and sale of alcohol and not in respect of possession and use. Not all but some of States have provided such reservation in their favour. The price charged as a con sideration for the grant of exclusive and other privileges was generally regarded as an excise duty. In other words, excise duty and price for privileges were regarded as one and the same thing. So called privilege was re served by the State mostly in respect of country liquor and not foreign liquor which included denatured spirit. On an analysis of the aforesaid decisions and practice, we are clearly of the opinion that in respect of industrial alcohol the States are not authorised to impose the impost they have purported to do. In that view of the matter, the contentions of the petitioners must succeed and such imposi tions and imposts must go as being invalid in law so far as industrial alcohol is concerned. We make it clear that this will not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any imposition of levy on industrial alcohol fee where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will not affect any regulating measure as such. We must, however, observe that these imposts and levies have 683 been imposed by virtue of the decision of this Court in Synthetics & Chemicals Ltd. 's case (supra). The States as well as the petitioners and manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu. In that view of the matter, it would be necessary to state that these provisions are de clared to be illegal prospectively. In other words, the respondents states are restrained from enforcing the said levy any further but the respondents will not be liable for any refund and the tax already collected and paid will not be refunded. We prospectively declare these imposts to be illegal and invalid, but do not affect any realisations already made. The writ petitions and the appeals are dis posed of accordingly. The review petitions, accordingly, succeed though strictly no grounds as such have been made out but in the view we have taken, the decision in the Synthetics & Chemicals Ltd. 's (supra) cannot be upheld. In the view we have taken also, it is not necessary to decide or to adjudicate if the levy is valid as to who would be liable, that is to say, the manufacturer or the producer or the dealer. With regard to writ petition No. 405 1/78 (Chemicals & Plastics India Ltd. vs State of Tamil Nadu), certain orders were passed by this Court on 1st November, 1978, 1st Septem ber, 1986, 1st October, 1986 and 10th October, 1986. It is stated that the present demand of the Central Excise Depart ment from 1st March, 1986 on alcohol manufactured by the company in their captive distillery is over Rs.4 crores. This Court by its order dated 1st October, 1986 as confirmed on the 16th October, 1986 had permitted the State Government to collect the levy on alcohol manufactured in company 's captive distillery subject to adjustment of equities and restrained the central excise authorities from collecting any excise duty on such alcohol. It is, therefore, necessary to declare that in future no further realisation will be made in respect of this by the State Government from the petitioners. So far as the past realisations made are con cerned, we direct that this application for that part of the direction, should in accordance with our decision herein be placed before a division bench for disposal upon notice both to the State Government and the Central Government. In the facts and the circumstances of the case, the parties will bear and pay their own costs. OZA, J. While I agree with my learned brother Hon. Mukharji, J. as regards the conclusions but I would like to add the following reasons. In these matters the main question that arise for considera tion is 684 about the validity of the levies made by the respondent States on Alcohol which is utilised by the industries for manufacturing the products where Alcohol is the raw materi al. Some of these industries themselves manufacture Alcohol as they have their own distilleries and from their distill eries through pipelines it goes to their industrial units where this is used as a raw material whereas some are indus tries which purchase Alcohol or denatured spirit on being allotted by the Government. It is alleged that in addition to excise duty levied by the Central Government, excise duty and various levies in various names like vend fee, transport fee and others numbering about eight levies are imposed by the State Government. The main contention on behalf of the industries is that the State Legislature has no authority in view of Entry 84 of List I read with Entry 51 of List II to impose such levies. This being Alcohol which does not fall within the ambit of "Alcoholic liquors for human consump tion". It is only the Centre which has the authority under Entry 84 of List I to tax. Entry 51 of List II authorises the State Legislature to impose a tax on "Alcoholic liquors for human consumption. " It is further contended that Entry 8 in List II which talks of intoxicating liquors only authorises the State Legislature to enact laws to regulate but does not empower the State Legislature to impose any levy and the various levies which have been imposed by the State Legislature on industrial alcohol and even Mithylated spirit could not be brought within the ambit of regulatory duties for purposes of regulation only and therefore could not be justified under Item 8 of List II. It was also contended that the State ultimately falls back on the consideration for parting with the privilege to sell alcoholic liquors which has been the basis of series of decisions of this Court based on English and American deci sions but according to the learned counsel for the petition ers this doctrine of privilege and consideration for sale of privilege also could be available to the State only in respect of alcohol or alcoholic liquors which are for human consumption. According to the learned counsel by merely widening the definition of intoxicating liquors in respec tive excise laws enacted by the State the ambit of authority of taxation could not be enlarged by the State Legislature when in List II Item 51 the words used are Alcoholic liquors for human consumption. Entry 84 in List I reads: "84. Duties of excise on tobacco and other goods manufactured or produced in India ex cept 685 (a) alcoholic liquors for human consumption. (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet prepara tions containing alcohol or any substance included in sub paragraph (b) of this entry. " Entry 51 in List 11 reads: "51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or pro duced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet prepa rations containing alcohol or any substance included in sub paragraph (b) of this entry. " A comparison of the language of these two entries clear ly demonstrates that the powers of taxation on alcoholic liquors have been based on the way in which they are used as admittedly alcoholic liquor is a very wide term and may include variety of types of alcoholic liquors but our Con stitution makers distributed them into two heads: (a) for human consumption (b) other than for human consumption Alcoholic liquors which are for human consumption were put in Entry 51 List II authorising the State Legislature to levy tax on them whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of exise. This scheme of these two entries in List I and II is clear enough to indi cate the line of demarcation for purposes of taxation of alcoholic liquors. What has been excluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. 686 Entry 8 in List 2 reads: "8. Intoxicating liquors, that is to say, the production, manufacture, possession, trans port, purchase and sale of intoxicating liq uors. " This Entry talks of intoxicating liquors and further on refers to production, manufacture, possession, transport, purchase and sale of these liquors. It appears that the State has levied some kind of duties in various names at each of these stages used in this Entry i.e. production, manufacture, possession, transport, purchase and sale. But from the scheme of entries in the three lists it is clear that taxing entries have been specifically enacted confer ring powers of taxation whereas other entries pertain to the authority of the Legislature to enact laws for purposes of regulation. If we compare Entry 8 in List II with entry 51 it is clear that when Entry 51 authorises the State Legisla ture to levy tax and duties on alcoholic liquors falling in Entry 51, Entry 8 confers authority on the State Legislature to enact laws for regulation. Similarly are Entries in List I. As regards regulation or regulatory fees it was contended that Entry 52 in List I empowers the Parliament to declare the industries which the Union proposes to control in public interest under Industries Development and Regulation Act. Entry 52 List I reads as under: "52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. " Such a declaration is made by the Parliament and this industry i.e. industry based on fermentation and alcohol has been declared to be an industry under that Act and therefore is directly under the control of the Centre and therefore even in respect of regulation the authority of the State Legislature in Entry 8 List II could only be subject to the Industries Development and Regulation Act or Rules made by the Centre. Under these circumstances therefore it is clear that the State Legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre. The main emphasis it appears is that this duty on alco hol and alcoholic liquors is a substantial revenue of State and it appears that it 687 was this obsession which was reflected and demonstrated when this concept of consideration for parting with privilege was invented by our courts on the basis of some judgments from United States based on some judgments from England and it is on this basis that all through the States have been justify ing their respective levies and duties on alcohol and alco holic beverages and overcome the test of reasonableness, double taxation and of limitation as it being a considera tion for transfer of privilege it could be anything and no limits could be placed thereupon. The main edifice of the argument on behalf of the State is that the State has the sole privilege to deal with in Alcohol and alcoholic substances. This, according to the arguments, is equally applicable to alcohol for human con sumption and also for denatured spirit or other categories of alcoholic liquors which though may be described as not for human consumption but are potential substances which easily could be converted as intoxicating liquors fit for human consumption. It is on this basis that the learned counsel appearing for the States and the Advocate General of the States drew our attention to various extracts of the text books on organic chemistry as it was contended that there are so many types of alcohol known in the organic chemistry of which ethyl alcohol is one which is used as a beverage when dilut ed upto a particular percentage and also is used for indus trial purposes in high concentration or sometimes denatured. The main theme of the argument was that ethyl alcohol which is a product of distillation after fermentation is extracted in various concentrations and can also be extracted in a very high concentration above 90 percent which generally is termed as rectified spirit. It is not in dispute that this high concentration of ethyl alcohol is a raw material for various industries. Sometimes it is supplied after being mixed by Mithylated alcohol or being denatured by other processes only to safeguard against its use for conversion into alcoholic beverages for human consumption. As it is well known that when the ethyl alcohol is diluted by water and its percentage is brought to 40 or 45 or below then it become fit for human consumption and it was therefore argued that various duties for purposes of regulation are imposed by the State itself to prevent the conversion of rectified spirit or mithylated alcohol to be diverted from industrial to portable use. The basis of the privilege doctrine appears to be that alcoholic drinks or intoxicating drinks are expected to be injurious to health and therefore the trade in these commod ities is described as obnoxious and 688 therefore a citizen has no fundamental right under Article 19(1)(g) of the Constitution and therefore the trade in alcoholic drinks which is expected to be injurious to health and obnoxious is the privilege of the State alone and the State can part with this privilege on receipt of the consid eration. This basis of the privilege doctrine has to be examined in the context of our Constitution especially Article 21 and Article 47. The concept of royal privilege has been derived histori cally from England as Great Britain continues to be a Monar chy with democracy. The Head of the State is the Crown. It was on these bases that what has not been provided for was supposed to be the privilege of the Crown but under Indian Constitution the Head of the State and the three function aries of the State, the Executive, the Legislature and the Judiciary have their powers defined under the Constitution. There is nothing like privilege vested in any one of the functionaries of the State and in the background of this basic feature of our Constitution the doctrine of privilege is difficult to reconcile with. If we examine this privilege of trading in commodities injurious to health and dangerous to life in the context of Article 21 and Article 47 of our Constitution. Article 21 of the Constitution reads: "21. Protection of life and personal liberty No person shall be deprived of his life or personal liberty except according to procedure established by law." This Article casts a duty on the State to protect the life of every citizen except as is provided under Article 21. If we compare this duty of the State with the scheme of privi lege which means that the State has a privilege to endanger human life (the life of a citizen) such a privilege runs contrary to Article 21. Another significant article of our Constitution is Article 47. It reads as under: "47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. " This Article appears in the Chapter of Directive Principles of State 689 Policy. Inclusion of this Article in this Chapter clearly goes to show that it is the duty of the State to do what has been enacted in Article 47 and in fact this Article starts with the phrase "Duty of the State" and the duty is to improve public health and it is further provided that this duty to improve public health will be discharged by the State by endeavouring to bring about prohibition. It sounds contradictory for a State which is duty bound to protect human life, which is duty bound to improve public health and for that purpose is expected to move towards prohibition claims that it has the privilege of manufacture and sale of alcoholic beverages. which are expected to be dangerous to human life and injurious to human health, transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endan gering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47. In view of articles 21 and 47 with all respect to the learned Judges who so far accepted the privilege doctrine it is not possible to accept any privi lege of the State having the right to trade in goods obnox ious and injurious to health. The other stand of States to justify these levies is based on the doctrine of police powers. The doctrine of police powers enunciated in number of decisions of the American Courts and which has been the subject matter of discussion by various authors in texts on jurisprudence as referred to in Indian context under our Constitution does not appear to be applicable. In the Constitution of U.S.A. basic factor which must be kept in mind is: that various States after getting independence from their European Mas ters came together to form a Federal State and therefore what was not conceded to the Federal State i.e. the residu ary powers vested in the State and as it was not conceded to the Federal Government that this residuary power of mainte nance of law and order peace so essential for the develop ment in a civilised society was evolved as a doctrine of police powers vested in the State. In India as the Constitu tion was enacted or was framed after having the experience of various countries in the World, the concept of fundamen tal rights and rights like life, liberty, procedure estab lished by law and various legislative functions which were divided between the States and the Union left no scope for any power except which could be derived from any provision in the Constitution coupled with an Entry in one of the three Lists which would indicate the power vested in either the State or the Centre. Apart from it the scheme of our Constitution is that there are no residuary powers which vest in the State and the scheme of our Constitution also reveals that in case of 690 any conflicts it is the Centre which prevails and not the State and therefore trying to apply the doctrine of police powers which has been conceived of in the American decisions which the Government of a State in the United States and to apply it to a State under Indian Constitution, will only mean to do violence to the scheme of our Constitution. What police powers have been enunciated under the American Con stitution clearly will fall within the ambit of Articles 19, 21, 22 and respective entries in the Schedule of the Consti tution. In fact, under our Constitution no powers could be conceived for which there is no provision in any one of the entries in the three Lists or which could not be justified under any specific Article of the Constitution. Thus even this concept of the doctrine of police powers could not be of any help to justify the levies imposed by the State on alcohol or alcoholic liquors. These questions about the privilege and the doctrine of police powers in fact would be material to be considered when the question about the various levies imposed by the State in respect of alcoholic beverages is considered and so far as the present cases are concerned which pertain to only alcoholic liquors which are not for human consumption i.e. which are meant for industrial use. The only question will be as to whether the State could justify the respective levies under any of the entries in List II. The main theme of the argument on behalf of the States has been that they have imposed levies because the alcohol which is not for human consumption is a commodity which could be easily converted into alcoholic liquors for human consumption and therefore the levies have been imposed assuming that it is for human consumption or in other words the contention has been that these levies have been imposed in order to prevent the conversion of alcoholic liquors which are not for human consumption to those which are for human consumption. A contention therefore was suggested that these levies could be justified as regulatory fees although it was frankly conceded that although the revenue earned out of it is substantial and may not be justifiable as fees but have been imposed and it was therefore that the main theme on behalf of the respondents has been based on the doctrine of the privilege of the State to trade in these commodities as that trade is considered to be obnoxious and injurious to public health. In our opinion, therefore as far as the present case is concerned the State in exercise of powers under Entry 8 of List II and by appropriate law regulate and that regulation could be to prevent the conversion of alcoholic liquors for industrial use to one for human 691 consumption and for purpose of regulation, the regulatory fees only could be justified. In fact, the regulation should be the main purpose, the fee or earning out of it has to be incidental and that is why the learned counsel appearing for the State attempted to use this terminiology by saying that the purpose is regulation, the earnings are incidental but frankly conceded that in fact the earnings are substantial. In fact in some of the excise laws in the States they have even used terminiology relying on the doctrine of privilege and parting with privilege but in my opinion it is not necessary for us to go into those questions in greater detail as we are not here concerned with the trade in alco holic liquors meant for human consumption and therefore in view of clear demarcation of authority under various items in the three Lists, Entry 8 List II could not be invoked to justify the levies which have been imposed by the State in respect of alcoholic liquors which are not meant of human consumption. N.P.V. Petitions & Appeals allowed.

Writ Petitions/Civil appeals challenging the notifica tion dated 31st May, 1979 which substituted a new rule 17(2) of U.P. Excise Rules and provided for a vend fee, the amend ment to section 49 of the Bombay Prohibition Act, 1949 treating exclusive privilege for State in liquor trade and imposing a transport fee, the Bombay Prohibition Act, 1949 as amended from time to time along with ordinance No. 15 of 1981 amending the Bombay Prohibition Act, 1949 and Section 49 added by reason of which the State was granted exclusive privilege of importing, exporting, transporting, manufactur ing, bottling, selling, buying, processing or using any intoxicant; and seeking a declaration that alcohol plant of the petitioner company was not covered by the A.P. Excise Act, 1968. 'A.P. Distillery Rules, 1970, and A.P. Rectified Spirit Rules. 1971 and that alcohol plant of the company was not a 'distillery ' within the meaning of the said expression under the A.P. Distillery Rules and, therefore, the Distill ery Rules had no application thereto and seeking an order to restrain from interfering with and/or regulating and con trolling production, distribution, movement and supply of alcohol from the plant of the company and the Tamil Nadu Prohibition Act, were filed in this Court. Review Petitions against the judgment and order of this Court dated 19th December, 1979 in State of U.P. etc. vs Synthetics and Chemicals Ltd. and Ors. ; , re agitating challenge 625 to sections 24A and 24B of the U.P. Excise Act, 1910 as amended in 1972 and 1976, declaring exclusive privilege of the Government for manufacture and sale of foreign liquor as defined, which included denatured spirit and industrial alcohol, were also filed. The petitioners/appellants contended that the levies made by the respondent States on alcohol, which was utilised as raw material by the industries for manufacturing the products were invalid. Some of three industries 'themselves manufactured alcohol as they had their own distillaries ' and from where it passed through pipelines to their industrial units, where this was used as a raw material, whereas some purchased alcohol or denatured spirit on being allotted by the Government. It was alleged that, in addition to excise duty levied by the Central Government, excise duty and various levies in various names like vend lee, transport fee and others numbering about eight levies were imposed by the State Government. It was also contended that the State Legislature had no authority, in view of Entry 84 of List I read with Entry 51 of List I1 to impose such levies; this being alcohol which did not within the ambit of alcoholic liquors for human consumption. It is only the centre which had the authority to tax under Entry 84, and that Entry 8 In List II only authorised the State Legislature to enact laws to regulate but did not empower it to impose any levy and the various levies which hod been imposed by the State Legislature on industrial alcohol and even methylated spirit could not be brought within the ambit of regulatory duties for purposes of regulation only, and, therefore, could not be justified under Entry 8 of List H, that doctrine of privilege and consideration for sale of privilege could be available to the State only in respect of alcohol or alco holic liquors which were for human consumption. that by merely widening the definition of intoxicating liquors in respective excise laws enacted by the States, the ambit of authority of taxation could not be enlarged by the State Legislature when in List II Entry 51 the words used were alcoholic liquors for human consumption. It was further contended that though the direction and commitment to im provement of the standards of living contained in Article 47 of the Constitution must be kept in view, this improvement could be achieved primarily by industrialisation involving increased production and employment and giving priority to the core sectors, that the Industries (Development & Regula tion) Act, 1951 was enacted with a view to developing and controlling various important industries and that the peti tioners/appellants were predominantly and primarily con cerned with using ethyl alcohol (rectified spirit) as an industrial raw material and this industrial alcohol is required as an input for further manufacture of downstream products. 626 It was submitted on behalf of Union of India that the legislative competence of the State enactments in the var ious States would have to be determined by reference to Entries 7, 52, 59, 84, 96 and 97 of List I and Entries 8, 24, 26, 27, 51, 52, 54, 56, 62 of List II and Entries 19 and 33 of List III, that then was a dichotomy between Entry 84 of List I and Entry 52 of List II, but this would not con trol the interpretation of other entries and that there was no such dichotomy in Entry 8 of List II, that the power to levy taxes had to be read from entry relating to the taxes and not from general entry, that none of the taxing entries in List II was controlled by Entry 52 of List I, that State 's privilege to completely prohibit or farm out liquor containing alcohol for consumption did not comprehend a similar right of the State with regard to other intoxicating liquids containing alcohol and to so prohibit or collect fee for farming out, would be unconstitutional under Article 19(1)(g) of the Constitution, that under Entry 51 of List II, State Legislature had no power to levy excise duty on industrial alcohol, as it was not fit for human consumption, and though the State could collect an amount called vend fee, shop rent, etc. for conferring on a citizen the right to manufacture and sell alcoholic liquors if it is for human consumption, this power did not extend to industrial alcohol or alcohol contained in the medicinal or toilet prepara tions; On behalf of the respondent States; it was contended that: (a) Entry 52 of List I was an exceptional entry, which not only prescribed the field of legislation but also ena bled and empowered the Parliament to make laws to the exclu sion of the State and that, being exclusionary in nature unlike entries merely delineating fields of legislation, this entry had to be strictly and, therefore, narrowly construed; (b) whenever the Constitution intended the Parliament to assume legislative competence in respect of the entire field, a declaration of an unqualified nature was provided for unlike qualified provi sion like Entry 52 of List 1, (c) the words 'control ' and 'regulation ' were, at times, held to he interchangeable or used synonymously, but their use in the various entries either singly or jointly, indi cated that they were sought to convey a different sense and the word 'control ' had in the context, a narrower meaning, excluding details of regulatory nature by the State; (d) comparing Entries 7, 23, 24, 27, 62, 64 and 67 of List I with Entry 52, would demonstrate that under entry 52, it was not the entire 627 field which was sought to be covered but only the control of industries; and that the absence of inclusion of qualifying words like 'the control of which ' could not be brushed aside; (e) in view of the declaration made in Section 2 of the I.D.R. Act, 1951 and the provisions made therein, the entire field was not occupied and the vend fee or other impost by the State legislatures were not infringing in the field treaded by the Central Legislature; the Act did not preclude or eclipse the legislative powers of the State; the Act also did not apply on its own terms to the levy; these operated on different tracks; (f) the Parliament had no power to legislate on indus trial alcohol, since industrial alcohol was also alcoholic liquor for human consumption and Entry 84 in List I express ly excluded this category and, therefore, the residuary Entry 97 of List I would not operate as against its own legislative intent; (g) the State had legislative competence to impose the levy since it was, both on its language and in pith and substance, legislation failing under Entry 8 List II, intox icating liquor, and Entry 51 List II, alcoholic liquor for human consumption, and what was required was intoxicating liquor and/or alcoholic liquor for human consumption; (h) that the State had exclusive right to deal in liq uor, and this power was reserved by and/or derived under, Article 19(6) and 19(6)(ii) of the Constitution, for parting which a charge was levied, and in a series of decisions it had been ruled that the charge was neither a fee nor a tax and was termed as privilege; (i) there was no dichotomy between Ethyl Alcohol, to be used for beverages and for industrial purposes, and in any case the levy was on manufacture of the Ethyl Alcohol, and the dichotomy attempted to be drawn in Entry 84 of List I on the basis of the development of the concept of industrial alcohol and the inapplicability of the concept of potable liquor to the industry of alcohol was not valid. (j) the levy was consistent with wider interpretation of alcoholic liquor based on pre existing legislative history; (k) when two interpretations were possible, the choice must fall on that interpretation which validated existing State legislations designed to raise revenues and rejection of the other interpretation 628 which was destructive of the scheme of distribution of powers; (1) the words 'alcoholic liquor ' in Lists I & II of the 7th Schedule to the Constitution must be interpretated so as to mean and take within its sweep alcohol as first obtained in the process of or as a product of fermentation industry at which stage, it was capable of being rendered potable, and the fact that it may be rendered unfit for human con sumption, did not render the substance any less liable for taxation; (m) imposition of a fee would be the most effective method of regulating intoxicating liquor other than alcohol and could be justified as the reasonable measure in regard to intoxicating liquor as it is the duty of the State, being a welfare State, to denature by incurring extra cost and effort; quid pro quo was not necessary and, even if it was necessary, the requirements were met; and the price fixation was 'a valid method in regulation of consumption; (n) under its police powers, the State had to regulate health, morality, welfare of society and incidental pauper ism and crime; (o) in enacting a law with respect to intoxication liquor as part of the legislative power, measures of social control and regulation of private rights were permissible and as such may even amount to prohibition; (p) it has been accepted by Courts all along that the 'police power ' of the State enabled regulations to be made regarding manufacture, transport, possession and sale of intoxicating liquor; and such police power could be exer cised as to impose reasonable restrictions as to effectuate the power; (q) trade in alcoholic drinks or intoxicating drinks, being obnoxious and injurious to health, a citizen had no fundamental right under Article 19(1)(g) of the Constitution and it Is the privilege of the State alone and it can part with this privilege on receipt of a consideration; (r) the levy was stipulated jointly or severally, both under ' Entries 8 of List II, Entry 51 of List II, Entry 33 of List III and what was described as police powers regula tory and other incidental charges, and the levy was justi fied, being a regulatory power under Article 19(6), and 19(6)(ii); the State had. a monopoly in alcohol trade and Article 31C 629 granted immunity to the challenge under Articles 13, 14 and 19 of the Constitution, and under Article 298, trading power of the State must be recognised, coupled with century old monopoly of the State in alcohol; and (t) the vend fee was a pre constitutional levy, and so saved under Article 277 of the Constitution: it was not a law either under Article 246 or Article 254 and was, there fore, outside the purview of the Central Act. On the questions: (i) whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States was valid; (ii) whether the power to levy excise duty m case of industrial alcohol was with the State legislature or the Central legislature; (iii) what was the scope and ambit of Entry 8 List Ii of the Seventh schedule of the Constitution; and (iv) whether, the State Government had exclusive right or privilege of manufactur ing, selling, distributing, etc. of alcohols including industrial alcohol, and what was the extent, scope and ambit of such right of privilege, Allowing the Writ Petitions, Civil Appeals and Review Petitions, this Court, HELD: Majority: (E.S. Venkataramiah, C.J.I, Sabyasachi Mukharji, Ranganath Misra, B.C. Ray, K.N. Singh and section Natarajan, JJ.) Per Sabyasachi Mukharji, J. 1.1 The relevant provisions of the U.P Excise Act, 1910, A.P. Excise Act, 1968, Tamil Nadu Act, and Bombay Prohibi tion Act, 1949 are unconstitutional insofar as these purport to levy a tax or charge imposts upon industrial alcohol, namely, alcohol used and usable for industrial purposes. [680G H] 1.2 Having regard to the principles of interpretation and the Constitutional provisions, in the light of the language used and, having considered the impost and the composition of industrial alcohol, and the legislative practice of this country. the imposts in question cannot be justified as State imposts. [680G H] 1.3 The different provisions, in question are not merely regulatory, but are much more than that. These seek to levy imposition in their pith and substance, not as incidental or as merely disincentives, 630 but as attempts to raise revenue for States ' purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate. Furthermore, in view of the occupation of the field by the Industrial Development and Regulation Act, it was not possi ble to levy this impost. Besides, in view of the language used in the specific provision the levy is not on the manu facture of alcohol as such. Therefore, these levies cannot in essence be sustained as duty of excise, [681A B] 2.1 The meaning of the expressions used in the Constitu tion must be found from the language used. The words of the Constitution should be interpreted on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. [672H, 673A] 2.2 A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. [673B] 2.3 It is also well settled that a Constitution must not be construed in any narrow or pedantic sense and that con struction which is most beneficial to the widest possible amplitude of its power, must be adopted. An exclusionary clause in any of the entries should be strictly and, there fore, narrowly construed. No entry should, however, be so read as not to rob it of entire content. A broad and liberal spirit should, therefore, inspire those whose duty it is to interpret the Constitution, and the Courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory. Constitu tional adjudication is not strengthened by such an attempt but it must seek to declare the law. It must not try to give meaning on the theory of what the law should be, but must so look upon a Constitution that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted. Where division of powers and jurisdiction in a federal Constitution is the scheme, it is desirable to read the Constitution in harmoni ous way. Further, in deciding whether any particular enact ment is within the purview of one Legislature or the other, it is the pith and substance of the legislation in question that has to be looked into. [673B E] 3.1 It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by Article 246 and other Articles of the Constitution. The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over 631 which the appropriate legislatures can operate. [673F] 3.2 It is also well settled that widest amplitude should be given to the language of the three entries but some of these entries in different lists or in the same list may over ride and sometimes may appear to be in direct conflict, with each other, then and then comes the duty of the Court to find the true intent and purpose and to examine the particular legislature in question. Each general word should be held to extend to all anciliary or subsidiary matters which can fairly and reasonably be comprehended in it. [673F G] 3.3 In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be inter preted that the Constitution must be interpreted as the organic document in the light of the experience gathered. [673H] 3.4 In the Constitutional scheme of division of power under the legislative lists, there are separate entries pertaining to taxation and other laws. [674A] The relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are closely linked and supplement one another. [674E] The Constitution of India like most other Constitutions is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the coun try. This Court should, therefore, endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of undisputed national goals, as permitted by the Constitution. [674C D] M.P.V. Sundararamier & Co. vs State of A.P., ; at pages 1480 82, relied on. The India Cement Ltd. etc. vs The State of Tamil Nadu etc., and Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938 at 37 38, referred to. 4.1 The expression of a Constitution must be understood in its common and normal sense. Industrial alcohol as it ISI, is incapable of 632 being consumed by a normal human being. The expression 'consumption ' must also be understood in the sense of direct physical intake by human beings in this context. No doubt, utilisation in some form or the other is consumption for the benefit of the human beings, if industrial alcohol is uti lised for production of rubber, tyres used. But the utilisa tion of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Consti tution, be understood to mean that the alcohol has been used for human consumption. [665C D] 4.2 The expression 'alcoholic liquor for human consump tion ' was meant and still means that liquor which, as it is, is consumable in the sense capable of being taken by human beings as such as beverage of drinks. Hence, the expression under Entry 84 List I must be understood in the light. [665E] 4.3 Constitutional provisions specially dealing with delimitation of powers in a federal polity must be under stood in a broad commonsense point of view as understood by common people for whom the Constitution is made. In termi nology, as understood by the framers of the Constitution and as also viewed at the relevant time of its intepretation it is not possible to proceed otherwise. Alcoholic or intoxi cating liquors must be understood as these are, what these are capable of or able to become. [665G H] 5.1 By common standards ethyl alcohol (which has 95%) is an industrial alcohol and is not fit for human consumption. The petitioners and the appellants were manufacturing ethyl alcohol (95%) (also known as rectified spirit) which is an industrial alcohol. ISI specification has divided ethyl alcohol (as known in the trade) into several kinds of alco hol. Beverage and industrial alcohols are clearly and dif ferently treated. Rectified spirit for industrial purposes is defined as "spirit purified by distillation having a strength not less than 95% of volume by ethyl alcohol". Dictionaries and technical books would show that rectified spirit (95%) is an industrial alcohol and is not potable as such. Therefore, industrial alcohol which is ethyl alcohol (95%) by itself is not only non potable but is highly toxic. The range of spirits of potable alcohol is from country spirit to whisky and the Ethyl Alcohol content varies be tween 19 to about 43 per cent. These standards are according to the ISI specifications. Therefore, ethyl alcohol (95%) is not alcoholic liquors for human consumption but can be used as raw material input after processing and substantial dilution in the production of whisky, Gin, Country Liquor, etc. [677D G] 633 Delhi Cloth and General Mills Co. Ltd. vs The Excise Commissioner, U.P. Allahabad and Anr., Special Appeal No. 177 of 1970, decided on 29.3.1973, referred to. 6.1 Entry 8 of List I which contains the words "intoxi cating liquor ' ' cannot support a tax. The meaning of this expression has been rightly interpreted by the High Court in Balsara ' s case. Hence, the observations of this Court in Balsara 's case require consideration. [677H, 675A B] 6.2 In the light of the new experience and development, "intoxicating liquor" must mean liquor which is consumable by human being as it is. When the word "liquor" was used by this Court, it did not have the awareness of full use of alcohol as industrial alcohol. It is true that alcohol was used for industrial purposes then also, but the full poten tiality of that user was not then comprehended or under stood. With the passage of time, meanings do not change but new experience give new colour to the meaning. [675B C] F.N. Balsara vs State of Bombay, AIR 1951 Born 210 & 214, approved. State of Bombay & Anr. vs F.N. Balsara, ; Har Shankar & Ors. etc. vs The Dy. Excise & Taxation Commissioner & Ors., ; ; Adhyaksha Mathur Babu 's Sakti Oushadhalaya Dacca (P) Ltd. vs Union of India, ; M/s Guruswamy & Co. etc. vs State of Mysore & Ors. , ; State of Mysore vs S.D. Cawasji & Co. & Ors., ; ; R.C. Jallv. Union of India, [1962] Suppl 3 S.C.R. 436; Om Prakash vs Giriraj 'Kishore; , ; Inspector of Taxes vs Australian Mutual Provident Society, [1959] 3 All England Law Report 245 and Commonwealth of Massachusetts Et AI vs USA, 92 Lawyers, Edition p. 968, referred to. 6.3 Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health. If the meaning of the expression "intoxicating liquor" is taken in the wide sense adopted in Balsara 's case, it would lead to an anamolous result and would oblige the State to prohibit even such industries as are licensed under the IDR Act but which manufacture industrial alcohol. This was never intend ed by the Constitution or judgments of this Court. There fore, the decision in the Synthetics & Chemicals Ltd. 's case was not correct on this aspect. [679C D] State of U.P., etc. vs Synthetics & Chemicals Ltd. & Ors. etc., 634 ; and State of Bombay & Anr. vs F.N. Balsara, , overruled. K.K. Narula vs State of J & K, ; , referred to. The Indian Constitution does not recognise police power as such. But, the exercise of sovereign power, which gives the State sufficient authority to enact any law, subject to the limitations of the Constitution to discharge its functions must be recognised. The Indian Constitution as a sovereign State has power to legislate on all branches except to the limitation as to the division of powers be tween the Centre and the States, and also subject to the fundamental rights guaranteed under the Constitution. The Indian State, between the Centre and the States, has sover eign power. The sovereign power is plenary and inherent in every sovereign State to do all things which promote the peace, morals, education and good order of the people. Sovereignty is difficult to define. This power of sovereign ty is, however, subject to Constitutional limitations. [666F H] 8.1 In interpreting the provisions of the Constitution, one should go by the plain words used by the Constitution makers. Importing of expression like 'police power ', which is a term of variable and indefinite connotation, can only make the task of interpretation more difficult. [671B] State of West Bengal vs Subodh Gopal & Ors., at 601 604 and Kameshwar Prasad & Ors. vs The State of Bihar & Anr., ; , referred to. 8.2 The power of the State to regulate, though not as emanation of police power, but as an expression of the sovereign power of the State is recognised, but that power has its limitations. [671G] 8.3 Whether the States have the police power or not, they have the power to regulate the use of alcohol, and that power must include power to make provisions to prevent and/or check industrial alcohol, being used as intoxicating or drinkable alcohol. However, the question is whether, in the garb of regulations, a legislation which is in pith and substance, fee or levy which has no connection with the cost or expenses administering the regulation, could be imposed purely as regulatory measure. [671D E] In the instant case, judged by the pith and substance of the legisla 635 tion in question, these levies cannot be treated as part of regulatory measures.[671E] 9.1 The activity in potable liquor, which was regarded as a safe and exclusive right of the State earlier, cannot be justified under the police power of the State, i.e., the power to preserve public health, morals, etc. This reasoning can never apply to industrial alcohol manufactured by indus tries which are to be developed in the public interest, and which are being encouraged by the State. In such a situa tion, it is essential to strike a balance, and while doing so, it is difficult to find any justification for any exclu sive right of a State to deal with industrial alcohol. Restriction valid under one circumstance may become invalid in changing circumstances. [680C D] Nashville, Chattangooga & St. Louis Railway vs Herbert section Walters, 79 Lawyers ' Edition 949; Leo Nebbia vs People of the State of New York, 78 Lawyers ' Edn. 940 at p. 941 and Motor General Traders & Anr. vs State of Andhra Pradesh 9.2 Arbitrary and excessive imposts under the so called privilege of the States are a great disincentive for devel opment of industries in the public interest and for indus trial development in general and can render units unviable and sick. It is essential that there should be uniformity in the industry so that these are free from the vagaries and arbitrary and differential treatment meted out from State to State and even in the same State from time to time. [644C D] 9.3 Right to tax or levy must be in accordance with the provisions of the Constitution. It is clear that all duties of excise, save and except the items specifically excepted in entry 84 of List 1, are generally within the taxing power of the Central Legislature. The State Legislature has power, though limited in imposing duties of excise. That power is circumscribed under Entry 51 of List II of the 7th Schedule to the Constitution. [666H, 667A, 674G] 10. In view of the subsequent amendments and additions to the levies, the levies in question are not pre Constitu tional levies. [662E] 11.1 After 1956 amendment to the Industries (Develop ment and Regulation) Act, 1951 bringing alcohol industries (under fermentation industries)as item 26 of the First Schedule to the Act, the control of this industry has vested exclusively in the Union. Thereafter, licences to 636 manufacture both potable and non potable alcohol is vested in the Central Government. Distilleries are manufacturing alcohol under the Central Licences under IDR Act. No privi lege for manufacture even if one existed, has :been trans ferred to the distilleries by the State. The State cannot itself manufacture industrial alcohol without.the permission of the Central Government. The States cannot claim to pass a right which these do not possess. Nor can these States claim exclusive right to produce and manufacture industrial alco hol which are manufactured under the grant of licence from the Central Government. Industrial alcohol cannot upon coming into existence under such grant be amenable to States ' claim of exclusive possession of privilege. The State can neither rely on Entry 8 of List II nor Entry 33 of list III as a basis for such a claim. It cannot claim that under Entry 33 of List III, it can regulate industrial alcohol as a product of the scheduled ,industry, because the Union, under section 18 G of the IDR Act, has evinced clear intention to occupy tile whole field. Even otherwise, sec tions like Section 24A and 24B of the U.P. Act do not con stitute any regulation in respect of the industrial alcohol as product of the scheduled industry. On the contrary, these purport to deal with the so called transfer of privilege regarding manufacturing and sale. This power, admittedly, has been exercised by the State purporting to act under Entry 8 of list II and not under Entry 33 of list III. [681C F] 11.2 The position with regard to control of alcohol industry has, therefore, undergone material and significant change and the State is left with only powers to pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of list II and regulating powers, lay down regulations to ensure that non potable alcohol is not diverted and misused as a substitute for potable alcohol, and charge excise duty on potable alcohol and sales tax under Entry 52 of list II; however, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Orders, sales tax cannot be charged by the State on industrial alcohol; and in case State is rendering any service, as distinct from its claim of so called grant of privilege, it may charge fees based on quidpro quo. [681G H, 682A C] Indian Mica and Micanite Industries vs State of Bihar, , relied on. 12.1 On an analysis of the various Abkari Acts and Excise Acts, it is clear that various provinces/States reserve to themselves in their respective States the right to transfer exclusive or other privileges only in respect of manufacture and sale of alcohol and not in respect of 637 possession and use. Not all but some of States have provided such reservation in their favour. The price charged as a consideration for the grant of exclusive and other privi leges was generally regarded as an excise duty. In other words, excise duty and price for privileges were regarded as one and the same thing. So called privilege was reserved by the State mostly in respect of country liquor and not for eign liquor which included denatured spirit. [682D E] 12.2 On an analysis of various decisions and practice, it is clear that is respect of industrial alcohol the States are not authorised to impose the impost they have purported to do. Hence, such impositions and impost must go as being invalid. However, this would not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any impositions of levy on industrial alco hol fee, where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will also not affect any regulating measure as such. [682F G] The provisions are, therefore, declared to be illegal and invalid prospectively. The Respondent States are re strained from enforcing the said levy any further but they will not be liable for any refund and the tax already col lected and paid will not be refunded. [683B] In respect of Tamil Nadu, no further realisations will be made in future by the State Government from the petition ers. Regarding past realisations, the application for that part of the direction should be placed before a Division Bench, for disposal upon notice both to the State and the Central Governments. [683F] Calcutta Gas Co. (Proprietory) Ltd. vs The State of West Bengal . and Ors., [1962] Suppl. 3 SCR 1; Nashirwar etc. vs The State of M.P.; , ; SheopatRai & Ors. vs State of U. P., [1972] All. L.J. 1000; Indian Mica & Mican ite Industries Ltd. vs State of Bihar & Ors., [1971] Suppl. SCR 319; Town Municipal Committee, Amraoti vs Ramachandra Vasudeo Chimote & Anr., ; ; P.N. Kaushal etc. vs Union of India; , ; M/s Guruswamy & Co. etc. vs State of Mysore & Ors., ; Coo verjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors., [19541 SCR 873; Crowley vs Christensen, [1890] 34 Lawyers ' Edn. 620 and Southern Phar maceuticals & Chemicals Trichur & Ors. vs State of Kerala & Ors. etc. ; , at 537, referred to. 638 Per Oza, J. (Concurring) 13.1 The State Legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre. [686G] 13.2 A comparison of the language of Entries 84 of List I and 51 of List II clearly demonstrates that the powers of taxation on alcoholic liquors have been based on the way in which they are used. Admittedly, alcoholic liquor is a very wide term and may include variety of types of alcoholic liquors, but our Constitution makers have distributed them into heads, namely, (a) for human consumption, and (b) other than for human consumption. Alcoholic liquors which are for human consumption were put in Entry 51 List II authorising the State Legislature to levy tax on them whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise. This scheme of these two entries in List I and II is clear enough to indicate the line of demarcation for pur poses of taxation of alcoholic liquors. What has been ex cluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. [685E H] 13.3 From the scheme of entries in the three lists, it is clear that taxing entries have been specifically enacted conferring powers of taxation, whereas other entries pertain to the authority of the Legislature to enact laws for pur poses of regulation. If Entry 8 in List II is compared with Entry 51 it is clear that while Entry 51 authorises the State Legislature to levy tax and duties on alcoholic liq uors failing under this entry, Entry 8 confers authority on the State Legislature to enact laws for regulation. Similar ly are Entries in List I. But since a declaration has been made by the Parliament under Entry 52, List I, declaring the industry based on fermentation and alcohol to be an industry under the Industrial (Development and Regulation) Act, 1951, and placing it directly under the control of the Centre, even in respect of regulation, the authority of the State Legislature in Entry 8, List II could only be subject to the Act or rules made by the Centre. Therefore, in view of clear demarcation of authority under various items in the three Lists, Entry 8 List II could not be invoked to justify the levies which have been imposed by the State in respect of alcoholic liquors which are not meant for human consumption. [686C D, F G] The State, in exercise of powers under Entry 8 of List II and by appropriate law may, however, regulate and that regulation could be to 639 prevent the conversion of alcoholic liquors for industrial use to one for human consumption and for the purpose of regulation, the regulatory fees only could be justified. In fact, the regulation should be the main purpose, the fee or earning out of it has to be incidental. [690H, 691A] 14.1 There is nothing like privilege vested in any one of the functionaries of the State. In the background of this basic feature of our Constitution, the doctrine of privilege is difficult to reconcile with when this privilege of trad ing in commodities injurious to health and dangerous to life is examined especially in the context of Article 21 and Article 47 of our Constitution. [688C D] 14.2 Article 21 castes a duty on the State to protect the life of every citizen except as is provided under the Article. If this duty of the State is compared with the scheme of privilege, it means that the State has a privilege to endanger human life (the life of a citizen). Such a privilege runs contrary to Article 21 [688F] 14.3 Article 47 appears in the Chapter of Directive Principles of State Policy. Inclusion of this Article in this Chapter clearly goes to show that it is the duty of the State to do what has been provided in this Article. It has provided that it is the duty of the State to improve public health and this duty will be discharged by endeavouring to bring about prohibition. It, therefore, sounds contradictory for a State, which is duty bound to protect human life, to claim that it has the privilege of manufacture and sale of alcoholic beverages which are expected to be dangerous to human life and injurious to human health and transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endan gering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47. [688H, 689A C] Therefore, in view of Articles 21 and 47, the State cannot claim the privilege of having the right to trade in goods obnoxious and injurious to health. [689D]

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vil Appeal Nos. 16 16 17 of 1990. From the Judgment and Order dated 22.5.1989 of the Allahabad High Court in Writ Petition No. 2777/78 & dated 5.7.89 Review Petition No. 68(W)/89 in W.P. No. 2777/78. K. Parasaran, Amitabh Misra, section Murlidhar and M.S. Ganesh for the Appellant. P.P. Rao, Raja Ram Aggarwal, E.C. Aggarwala, Atul Shar ma, Ms. Purnima Bhatt, Mrs. Shobha Dikshit, Lokesh Kumar, R.D. Kewalramani and M.K. Garg for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. Special Leave granted. The Chancellor of the Lucknow University while exercis ing power under Section 31(8)(a) of the Uttar Pradesh State Universities Act, 1973 ("The Act") has directed that Km. Neeliam Misra, the appellant herein should be appointed as Reader in Psychology in the University. That order has been quashed by the High Court of Allahabad, Lucknow Bench in Writ Petition No. 2777 of 1978 ,at the instance of Dr. Harinder Kaur Paintal, respondent (1). This appeal is from that judgment of the High Court. 90 The background of the case in the barest outline may be stated as under. The Lucknow University invited applications for appoint ment of Reader in Psychology from candidates who possessed the prescribed qualifications. In response to the advertise ment, several candidates filed their applications. The appellant and respondents I to 5 were some of them who offered themselves as candidates. The Committee which was constituted for selection of candidates called them for interview along with some others. After considering their qualifications, experience and relative performance in the interview, the Selection Committee graded them as follows: "All the candidates who appeared for the interview possess a Ph. D. degree. Neelima Misra does not possess a Ph. D. degree. Her thesis is nearing 'completion. Her thesis work alongwith her publication were scrutinised and it was found that she satisfies the condition of published work of a high standard in the subject, provided as an alternative to Ph. D. degree. All the candidates have a consistently good academic record and more than 54% marks in the M.A. Examina tions, except Dr. C.B. Dwivedi, who has a 3rd Division in the High School, Dr. Ratan Singh who has 3rd Division in High School and B.A. 2. All the candidates possess the requisite teaching experi ence of post graduate classes. And the basis of the research work, publications, experi ence and performance at the interview, the Committee graded the candidates as follows: 1. Ms. Neelima Misra 2. Dr. (Km.) Mukta Rani Rastogi 3. Dr. (Smt.) Harinder Kaur Paintal 4. Dr. S.N. Rai The rest of the candidates were found unsuitable. The view of the above Committee recommended that Km Neelima Misra be appointed to the post of Reader in Psychology." 91 Km. Neelinia Misra was found to have to her credit a published work of high standard in the subject of Psychology though she had no Ph. D. degree. Besides she was considered to be more suitable on the basis of research work, publica tion, experience and performance at the interview. The Selection Committee, therefore, recommended her for appoint ment to the post of Reader in Psychology. That recommendation came before the Executive Council. The Executive Council, by a split majority disagreed with the recommendation and preferred the appointment of respond ent (5) Dr. (Km) M.R. Rastogi. It has expressed the view that the appellant did not possess the essential qualifica tions prescribed for the post of Reader and therefore, not suitable for appointment. The opinion expressed by the Executive Council is as under: perusal of the bio data of Km. Neelima Misra shows that she does not possess Ph.D. degree nor has she submitted her thesis so far. Yet it is strange to say that her pub lished work is of a high standard. Thus she does not fulfil requirement of essential qualifications and not suitable for the post. The bio data of Dr. (Km) M.R. Rastogi shows that she possesses 11 years teaching experience of post graduate classes. She has a consistently good academic record and should be appointed Reader in Psychology as she has been graded No. 2 by the Selection Committee. Dr. (Smt.) Harmder Kaur Paintal is a Lecturer since November 1972 and has also a consistently good academic record and is suitable for the post. As a consequence there is no question of relaxa tion of essential qualification as candidate of requisite merit are available. " When there is thus disagreement with the recommendation of the Selection Committee, the matter must be referred to the Chancellor for his decision. That is the mandatory requirement of Section 31(8)(a) of the Act. Accordingly, the Executive Council referred the matter to the Chancellor. The Chancellor, however, by order dated August 16, 1978 did not approve of the Executive Council 's opinion to appoint Dr. (Km) M.R. Rastogi. The Chancellor rejected the opinion of the Executive Council and accepted the recommendation of the 92 Selection Committee and directed that the appellant should be appointed as Reader. The Chancellor observed: "The Selection Committee has unanimously recommended that Km. Neelima Misra be appointed to the post of Reader in Psychology. Instead of accepting this recommendation, the Executive Council held by a majority of 6:5 votes that Kumari Neelima Misra does not fulfil the requirement of essential qualifications and is not suitable for the post. It was of opinion that Dr. (Km) M.R. Rastogi who has been graded No. 2 by the Selection Committee should be appointed and that Dr. (Smt) H.K. Paintal is also suitable for the post. Neelima Misra does not possess a Doctorate in the subject of study, but the Selection Committee has re corded that her thesis alongwith her publications were scrutinised and it was found that she satisfies the condi tion of published work of a high standard on the subject, which is an alternative to the Doctorate degree, as provided in Statute 11.01 read with Statute 11.02 of the First Stat utes of Lucknow University. Thus Km. Neelima Misra possess the essential prescribed minimum qualification. She has also been adjudged to be the most suitable candidate on the basis of research work, publications and experience and perform ance at interview, among all the candidates, by the Selec tion Committee which was in a better position to Judge the merits of the suitability of the appointment. After considering all the facts and circumstances of the case, I approve the report of the Selection Committee and direct that the appointment order be issued accordingly. Sd/ G.D. Tapase, Chancellor" As per the decision of the Chancellor, the appellant was appointed as Reader in Psychology. Dr. (Smt) Harmder Kaur Paintal, respondent 1, moved the High Court under Article 226 of the Constitution challenging the Chancellor 's order. The Writ Petition was filed on 17 August 1978 before the Lucknow Bench of the Allahabad High Court and it was admitted on 93 30 March 1979. Ten years later i.e. on 3 May 1989 the writ petition was listed for hearing before the Division Bench of the High Court. On 22 May 1989, the judgment was delivered by allowing the writ petition and quashing the Chancellor 's order with d direction to reconsider the matter. It seems that learned Judges had little discretion in the matter in view of an earlier decision of the High Court on the nature and scope of the Chancellor 's power under Section 31(8)(a) of the Act. In L.N. Mathur vs The chancellor, Lucknow Uni versity, Lucknow & Ors. , , the Full Bench of the High Court by majority, inter alia, has held that the Chancellor must state explicitly the reasons for his deci sion. The Chancellor in order to arrive at a decision has to make a judicial approach to the question and he is enjoined by the Act to act quasi judicially. To reach that conclu sion, the Full Bench has relied upon the observations in the Division Bench judgment in Dr. U.N. Roy vs His Excellency Sr. G.D. Tapase, (The Ex Governor, State of Uttar Pradesh), Chancellor Allahabad University (1981 UPLBEC 309.) Following those authorities, the learned Judges in the present case have set aside the Chancellor 's order making some more observations: "When difference of opinion between the Selection Committee and Executive Council is referred to the Chancellor, his position is that of an Arbitrator and there is a sort of 'lis ' before him and in case the Chancellor has to agree with the Selection Committee with which the Executive Coun cil has differed assigning particular reason, the Chancellor has to assign reasons as to why he has agreed with the recommendation made by the Selection Committee. The dispute having been raised, was to be decided atleast like a dis pute" At this point, we may interrupt the narration and ana lyse Section 1 of the Act which provides procedure for selection of University eachers. Omitting unnecessary clauses, the Section reads: "31(1) Subject to the provisions of the Act, the teachers of the University and the teachers of an affiliated or associ ated college (other than a college maintained exclusively by the State Government) shall be appointed by the Executive Council or the Management of the affiliated or associated college, as the case may be, on the recommendation of a Selection Committee in the manner hereinafter provided. XXXX XXXXX XXXXX 94 (4)(a)The Selection Committee for the appointment of a teacher of the University (other than the Director of an Institute and the Principal of a constituent college) shall consist of (i) the Vice Chancellor who shall be the Chairman thereof,; (ii)the head of the Department concerned: XXX XXX XXX (iii) in the case of a Professor or Reader, three experts, and in any other case, two experts be nominated by the Chancellor; XXX XXX XXX (6) No recommendation made by a Selection Committee referred to in sub section (4) shall be considered to be valid unless one of the experts had agreed to such selection. XXX XXX XXX (7 A) It shall be open to the Selection Committee to recom mend one or more but not more than three names for each post. (8)(a) In the case of appointment of a teacher of the Uni versity, if the Executive Council does not agree with the recommendation made by the Selection Committee, the Execu tive Council shall refer the matter to the Chancellor along with the reasons of such disagreement, and his decision shall be final. Provided that if the Executive Council does not take a decision on the recommendations of the Selection Committee within a period of four months from the date of meeting of such Committee, then also the matter shall stand referred to the Chancellor, and his decision shall be final. " Three authorities are involved in the selection of University teachers; (i) Selection Committee, (ii) Executive Council and (iii) Chancellor. 95 The Selection Committee for appointment of University teachers is a recommendatory body the composition of which has been prescribed under section 31(4)(a). It is a high power Committee of which the Vice Chancellor shall be the Chairman. The Head of the department concerned shall be a member. There shall also be expert members in the particular subject. The experts shall be drawn from outside the Univer sity and the Chancellor must nominate them. In the case of appointment of Professor or Reader, there shall be three experts and in any other case two experts in the Selection Committee. In the case of selection of teachers of the University, the recommendation of the Selection Committee shall not be valid unless atleast one of the experts agrees to such selection. The Selection Committee has the liberty to recommend one or more candidates but not more than three names for each post. The Executive Council is the principal executive body of the University whose powers and duties are provided under Section 21 of the Act. Subject to the provisions of the Act, the Executive Council has power to appoint officers, teach ers and other employees of the University. The appointment shall be made on the basis of recommendation made by the Selection Committee, which means in the order of merit of candidates arranged by the Selection Committee. The Selec tion Committee has expert members and it has thus the exper tise to judge the relative suitability of competing candi dates. The Executive Council has no such experts on the subject for selection. Therefore, the Executive Council shall make appointments as per the position or ranking obtained in the recommendation, unless any other rule re quires otherwise. Section 31(8)(a) seems to suggest that if the Executive Council wants to agree with the recommendation and appoint candidates in the order of merits, no reasons are to be given. But if it wants to disagree with the recom mendations made by the Selection Committee, it must give reasons for disagreement. It has however, no power to over ride the recommendation and appoint a candidates of its own choice. It may disagree, but should give reasons for disa greement and refer the matter under section 31(8)(a) to the Chancellor. Then the decision of the Chancellor shall be binding on the Executive Council. The nature of the Chancellor 's power located under Section 31(8)(a) is now to be considered. The High Court has held that the Chancellor 's power is quasi judicial. There is a 'lis ' before the Chancellor for determination and he has to decide the dispute as an arbitrator. 96 The suggested analogy with the position of an arbitrator was not even supported by counsel for the respondents. The essence of the attack of Mr. Parasaran, learned counsel for the appellant is that there is no legal or equitable fight of parties or any dispute relating thereto for determination by the Chancellor and therefore, there is no duty to act judicially. The Chancellor has only to consider the recom mendation of the Selection Committee in the light of disa greement if any, expressed by the Executive Council and direct appointment of a candidate in the select list. The order of the Chancellor, and his function, it was argued, are purely administrative in nature. Mr. K.P. Rao for re spondent (3) was indeed very fair in his submission. He did not say that there is a 'lis ' before the Chancellor for determination. He urged that the Chancellor is required to exercise his powers properly and not improperly even though there is no 'lis ' before him for adjudication. The argument of Mr. Agarwal for the respondent No. 5, however, ranged a good deal under than his counter part appears to have done in the High Court. The power of the Chancellor, he contend ed, is quasijudicial and he must determine the issue that is referred to him with reasons in support of his conclusion. The question raised is of considerable importance and it has general application in Universities governed by similar pattern of statutory provisions. Reference may be made to some of such enactments. Section 27(4) of the provides that if the Executive Council is unable to accept any recommendation made by Selection Committee, it may remit the same for reconsidera tion and if the difference is not resolved, it shall record its reasons and submit the case to the Visitor for orders. Similar are the provisions under the Calcutta University Act, 1979. Section 32(2) therein provides that if the Syndi cate does not accept the recommendation of the Selection Committee it shall refer back the matter for reconsideration and if the Syndicate does not accept the reconsidered views, the matter shall be referred to the Chancellor whose deci sion shall be final. Section 57(2)(e) of the Bombay Univer sity Act, 1974 is almost parallel and it states that if the Executive Council does not choose to appoint from amongst the persons recommended by the Selection Committee, it shall for reasons recorded refer to the Chancellor whose decision shall be final. The by Section 27(5) also provides that if the Executive Council is unable to accept the recommendations made by the Selection Committee, it shall record its reasons and submit the case to the Visitor for final orders. Section 49(2) of the M.P. Vishwavidhayalaya Adhiniyam, 1973 likewise requires where the Executive Council pro 97 poses to make the appointment otherwise than in accordance with the order of merit arranged by the Select Committee it shall record its reasons and submit its proposal for sanc tion of the Kuladhipati. The pattern in the Kerala University Act, 1974 is slightly different. The First Statute under that Act empow ers the Syndicate to make appointments contrary to recommen dation of the Committee but With the sanction of the Chan cellor. The First Statute under the Delhi University Act, 1922 by clause 6 provides that the Executive Council shall appoint from time to time Professors and Readers etc. on the recommendations of the Selection Committee constituted for the purpose. Under the Act and Statute with which we are concerned, the Executive Council has no power to ask the Selection Committee to reconsider the recommendation. It must for reasons recorded refer the matter under Section 31(8)(a) to the Chancellor for decision. The Full Bench of the Allahabad High Court in L.N. Mathur, case (supra) had analysed the concept of quasi judicial function with reference to the power of the Chan cellor under Section 31(8)(a) and expressed the view that the reference to the Chancellor showed the existence of a disagreement between two University Authorities with respect to the claims of competing candidates. The Chancellor has to decide the issue by examining the reasons given by the Executive Council and the records of the candidate. The decision of the Chancellor is final and not subject to any appeal/revision and his power is quasi judicial. The fact that the Chancellor is not required to follow any set proce dure or sit in public or take evidence does not make his function administrative. Such are the reasonings for the conclusion of the High Court to hold that the Chancellor must act as a quasi judicial authority. We find it difficult to accept the reasoning underlying the aforesaid view. Before we consider the correctness of the proposition laid down by the High Court we must, at the expense of some space, analyse the distinctions between quasi judicial and administrative functions. An administra tive function is called quasi judicial when there is an obligation to adopt the judicial approach and to comply with the basic requirements of justice. Where there is no such obligation. the decision is called 'purely administrative ' and there is no third category. This is what was meant by Lord Reid in Ridge vs Baldwin, ; , 75 76: 98 "In cases of the kind with which I have been dealing the Board of Works . . was dealing with a single isolated case. It was not deciding, like a judge in a law suit, what were the rights of the persons before it. But it was decid ing how he should be treated something analogous to a judge 's duty in imposing a penalty . " "So it was easy to say that such a body is performing a quasi judicial task in considering and deciding such a matter and to require it to observe the essentials of all proceedings of a judicial character the principles of natu ral justice. Sometimes the functions of a minister or de partment may also be of that character and then the rules of natural justice can apply in much the same way . " Subba Rao, J., as he then was, speaking for this Court in G. Nageshwara Rao vs Andhra Pradesh State Transport Corporation, 19 put it on a different empha sis (at 353): "The concept of a quasi judicial act implies that the act is not wholly judicial, 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 execu tive power . " Prof. Wade says "A judicial decision is made according to law. An administrative decision is made according to administrative policy. A quasi judicial function is an administrative function which the law requires to be exer cised in some respects as if it were judicial. A quasi judicial decision is, therefore, an administrative decision which is subject to some measure of judicial procedure, such as the principles of natural justice." (Administrative Law by H.W.R. Wade 6th Ed. p. 46 47). An administrative order which involves civil conse quences must be made consistently with the rule expressed in the Latin Maxim audi alteram partem. It means that the decision maker should afford to any party to a dispute an opportunity to present his case. A large number of authori ties are on this point and we will not travel over the field of authorities. What is now not in dispute.is that the person concerned must be informed of the case against him and the evidence support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken. Ridge vs Baldwin, (supra) and state of 99 Orissa vs Dr. Binapani Dei & Ors., ; The shift now is to a broader notion of "fairness" of "fair procedure" in the administrative action. As far as the administrative officers are concerned, the duty is not so much to act judicially as to act fairly (See: Keshva Mills Co. Ltd. v: Union of India; , at 30; Mohinder Singh Gill vs Chief Election Commissioner, ; at 434; Swadeshi Cotton Mills vs Union of India, and Management of M/s M.S. Nally Bharat Engineering Co. Ltd. vs The State of Bihar & Ors., Civil Appeal No. 1102 of 1990 decided on February 9, 1990. For this concept of fairness, adjudicative settings are not necessary, not it is necessary to have lis inter partes. There need not be any struggle between two opposing parties giving rise to a 'lis '. There need not be resolution of lis inter partes. The duty to act judicially or to act fairly may arise in widely differing circumstances. It may arise expressly or impliedly depending upon the context and considerations. All these types of non adjudicative administrative decision making are now covered under the general rubric of fairness in the administration. But then even such an administrative deci sion unless it affects one 's personal rights or one 's property rights, or the loss of or prejudicially affects something which would juridically be called atleast a privi lege does not involve the duty to act fairly consistently with the rules of natural justice. We cannot discover any principle contrary to this concept. In the light of these considerations, we revert to the central issue, that is with regard to the nature of the Chancellor 's power under Section 31(8)(a). It may be noted that the Chancellor is one of the three authorities in the Statutory Scheme for selecting and appointing the best among the eligible candidates in the academic field. The Chancel lor is not an appellate authority in matters of appointment. He is asked to take a decision, because the Executive Coun cil who is the appointing authority has no power to reject the recommendation of the Selection Committee and take a decision deviating therefrom. The Chancellor 's decision is called for when the Executive Council disagree with the recommendation of the Selection Committee. What is referred to the Chancellor under Section 31(8)(a) of the Act, is therefore, not a dispute between the Selection Committee and the Executive Council on any issue. Nor it is a dispute between two rival candidates on any controversy. What is referred to the Chancellor is the recommendation of the Selection Committee with the opinion, if any, recorded thereon by the Executive Council. In fact, even without any opinion of the Executive Council, the matter stands automat ically 100 remitted to the Chancellor if the Executive Council delays its decision on the recommendation of the Selection Commit tee. The proviso to Section 31(8)(a) provides for this contingency. It reads: "Section 31(8)(a) xxxxx xxxxx Proviso: Provided that if the Executive Council does not take a decision on the recommendation of the Selection Committee within a period of four months from the date of the meeting of such Committee, then also the matter shall stand referred to the Chancellor, and his decision shall be final. " The matter thus goes to the Chancellor for decision since the Executive Council could not take a decision on the recommendation of the Selection Committee. The Chancellor in the circumstances has to examine whether the recommendation of the Selection Committee should be accepted or not. If any opinion by way of disagreement has been recorded by the Executive Council on that recommendation, the Chancellor has also to consider it. He must take a decision as to who should be appointed. It is indeed a decision with regard to appointment of a particular person or persons in the light of the recommendation and opinion if any, of the two statu tory authorities. Such a decision appears to be of an admin istrative character much the same way as the decision of the Executive Council with regard to appointment. In matters relating to public employment whether by promotion or direct recruitment, only requirement to be complied with is the mandate of Articles 14 and 16 of the Constitution. There shall be equality of opportunity and no discrimination only on ground of religion, race, caste, sex, dissent, place of birth or residence or any of them. The eligible candidate has a right to have his case considered in accordance with law. In the instant case, that require ment has been complied with by the Selection Committee. There is no further right with the candidates to make repre sentation to the Executive Council and much less to the Chancellor. Reference however, was made to the observation of this Court in Dr. G. Sarana vs University of Lucknow and Ors., ; at 592. While dismissing the writ petition challenging the recommendation made by the Selec tion Committee of the Lucknow University for appointment of a candidate as Professor, it was observed that "the ag grieved candidate has remedy by way of representation to the Executive Council and an application for re 101 ference under Section 68 of the Act to the Chancellor". We have carefully perused the decision and that observation. We find that it is of little assistance to the present case. We are concerned with the scope of Section 31(8)(a) of the Act which was not considered in that case. Apart from that, Section 31 confers no such right to make representation to the Executive Council or to the Chancellor against the recommendation of the Selection Committee. There is no provision in the Section for hearing any candidate or the Executive Council. There is also no provision for receiving evidence. The material in respect of every candidate has already been collected and collated by the Selection Commit tee. Every material is on the record and the Chancellor has no power to take further evidence. The Chancellor is autho rised to take a decision and he must take it on the avail able records since the Executive Council has not taken a decision on the recommendation of the Selection Committee. The decision of the Chancellor in the exercise of this Statutory function does not, in our opinion, expressly or impliedly require the application of the principles of natural justice. See also the observations of K.N. Singh, J., in R.S. Dass vs Union of India, at 633. It has been argued that the order of the Chancellor becomes final and binding which is one of the features of judicial power. It is true that the conclusiveness of the decision without the need for confirmation or adoption by any other authority is generally regarded as one of the features of judicial power. But it must be added that the order made by a statutory authority even it is given finali ty does not thereby acquire judicial quality if no other characteristic of judicial power is present. Power to make orders that are binding and conclusive is not, by itself a decisive factor to hold that the power is judicial. Prof. De Smith makes a similar point in his book 'Judicial Review of Administrative Action ' (4th Edition p. 82). Taking all these factors into consideration, we would sum up our opinion m this way. The power of the Chancellor under Section 31(8)(a) is purely of administrative character and is not in the nature of judicial or quasi judicial power. No judicial or quasi judicial duty is imposed on the Chancellor and any reference to judicial duty, seems to be irrelevant in the exercise of his function. The function of the Chancellor is to consider and direct appointment of a candidate on the basis of the relative performance assessed by the Expert Selection Committee and in the light of the opinion, if any, expressed by the Executive Council. His decision nonetheless is a decision on the recommendation of the Selection Committee. Such a power cannot be considered as a quasi judicial power. And we see nothing in that to justify our thinking 102 that it must conform to the principles of natural justice. The contention urged to the contrary is, therefore, unac ceptable to us. We also do not agree with the contrary view taken by the High Court in the Full Bench decision in L.N. Mathur, case (supra). The Chancellor, however, has to not properly for the purpose for which the power is conferred. He must take a decision in accordance with the provisions of the Act and the Statutes. He must not be guided by extraneous or irrele vant consideration. He must not act illegally, irrationally or arbitrarily. Any such illegal, irrational or arbitrary action or decision, whether in the nature of a legislative, administrative or quasi judicial exercise of power is liable to be quashed being violative of Article 14 of the Constitu tion. As stated in E.P. Royappa vs State of Tamil Nadu & Anr., ; "equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other to the whim and caprice of an absolute monarch". The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative executive, or quasijudicial. See Mrs. Maneka Gandhi vs Union of India & Anr., [1978] 1 SCC 248 at 283 84; Ajay Hasia & Ors. vs Khalid Mujib Sehravardi & Ors., ; at 740 41 and Som Raj & Ors. vs State of Haryana, JT 1990 1SC 286 at 290. The order of the Chancellor impugned in this case indi cates very clearly that he has considered the recommendation of the Selection Committee and the opinion expressed by the Executive Council. He has stated and in our opinion, very rightly that the appellant possesses the prescribed qualifi cation for appointment as Reader. The decision of the Chan cellor gets support from the Statute 11.01 of the First Statute. The Statute 11.01 is in these terms: "11.01. (1) In the case of the Faculties of Arts, Commerce and Science, the following shall be the minimum qualifica tions for the post of Lecturer in the University, namely (a) a Doctorate in the subject of study concerned or a published work of a high standard in that subject; and (b) Consistently good academic record (that is to say, the overall record of all assessment throughout the academic career of a candidate), with first class of high second class (that is to say, with an aggregate of more than 54% marks Master 's Degree in the subject concerned or equivalent Degree of a foreign University in such subject .) 103 (2) Where the selection committee is of the opinion that the research work of a candidate, as evidenced either by his thesis or by his published work, is of a very high standard, it may relax any of the qualifications specified in sub:clause of clause (1). " The minimum qualification prescribed for the post is a Doctorate in the subject of study concerned or a published work of high standard in the subject. The appellant then was found to have an alternate qualification though not a Doc torate in the subject. The Selection Committee has accepted the alternate qualification as sufficient and did not relax the essential qualification prescribed for the post. The Executive Council appears to have committed an error in stating that the appellant has lacked the essential qualifi cation and the Selection Committee has relaxed the essential qualification. The Chancellor was, therefore, justified in rejecting the opinion of the Executive Council. It is not unimportant to point out that in matters of appointment in the academic field the Court generally does not interfere. In the University of Mysore & Ant. C.D. Govind Rao, , this Court observed that the Courts should be slow to interfere with the opinion ex pressed by the experts in the absence of mala fide alleged 2against the experts. When appointments based on recommenda tions of experts nominated by the Universities, the High Court has got only to see whether the appointment had con travened any statutory or binding rule or ordinance. The High Court should show due regard to the opinion expressed by the experts constituting the Selection Committee and its recommendation on which the Chancellor has acted. See also the decisions in Dr. J.P. Kulshreshtha & Ors. vs Chancellor, Allahabad University, Raj Bhavan & Ors., ; at 912 and Dalpat Abasahed Solunke vs B.S. Mahajan, at 309 310. In the result, tile appeals are allowed, the judgment of the High Court is set aside. We also set aside the conse quential order dated June 16, 1989 made by the Registrar of the University reverting the appellant to her substantive post of Lecturer in Psychology. Needless to state that her original appointment as Reader pursuant to the decision of the Chancellor shall remain undisturbed with all the conse quential benefits. In the circumstances of the case, however, we make no order as to costs. T.N.A. Appeals allowed.

The appellant and the respondents applied for the post of Reader in Psychology in Lucknow University. Under the University Statute, the minimum qualification for the post was a Doctorate degree or a published work of high standard in the subject. The respondents possessed Ph.D. degree, while the appellant 's thesis was nearing completion. On the basis of her experience, performance at the interview and published work, which was found to be of high standard on the subject, the Selection Committee recommended the appellant 's appointment by grading her No. 1. 85 By a split of the majority, the Executive Council disa greed with the recommendation of the Selection Committee on the ground that the appellant did not possess the essential qualification for the post of Reader and it preferred the appointment of respondent No. 2. In view of the Council 's disagreement, the matter was referred to the Chancellor for his decision under Section 31(8)(a) of the U.P. State Universities Act, 1973. The Chancellor rejected the opinion of Executive Council and accepted the recommendations of the Selection Committee and directed that the appellant should be appointed as a Reader. Respondent No. 1 challenged the Chancellor 's order by filing a writ petition in the High Court, which following its earlier Full Bench decision wherein it was held that the Chancellor must explicitly state the reasons for his deci sion and was enjoined by the Act to act quasijudicially quashed the Chancellor 's order with a direction to reconsid er the matter. In the appeal to this Court on the question of the nature of the Chancellor 's power under Section 31(8)(a) of the U.P. State Universities Act, 1973: Allowing the appeal and setting aside the order of the High Court, this Court, HELD: 1. Three authorities are involved in the Selection of University teachers ' (i) Selection Committee, (ii) Execu tive Council and (iii) The Chancellor. The Selection Commit tee for appointment of University teachers is a recommenda tory body the composition of which has been prescribed under section 31(4)(a). The Executive Council is the principle executive body of the University. Subject to the provisions of the Act, it has power to appoint officers, teachers and other employees of the University. Section 31(8)(a) seems to suggest that if the Executive Council wants to agree with the recommendation and appoint candidates in the order of merits, no reasons are to be given. But if it wants to disagree with the recommendations made by the Selection Committee, it must give reasons for disagreement. It has however, no power to override the recommendation and appoint a candidate of its own choice. It may disagree, but should give reasons for disagreement and refer the matter under section 31(8)(a) to the Chancellor. Then the decision of the Chancellor shall be binding on the Executive Council. The Chancellor is not an appellate authority in matters of appointment. His decision is called for when the Executive Council disagree with the recommendation of the Selection Committee. What is referred to him 86 under section 31(8)(a) of the Act, is therefore, not a dispute between the Selection Committee and the Executive Council on any issue. Nor it is a dispute between two rival candidates on any controversy. It is indeed a decision with regard to appointment of a particular person or persons in the light of the recommendation and opinion if any, of the two statutory authorities. [94H; 95A, IL F G; 99F H] 1.1 The power of the Chancellor under Section 31(8)(a) is purely of administrative character and is not in the nature of judicial or quasijudicial power. No judicial or quasi judicial duty is imposed on the Chancellor and any reference to judicial duty, seems to be irrelevant in the exercise of his function. Such a power cannot be considered as quasi judicial power. [101 F H] L.N. Malhur vs The Chancellor, Lucknow University, Lucknow & Ors., ; Dr. U.N. Roy vs G.D Tapase, [1981] UPLBEC, 309, disapproved. Section 31 confers no right to make representation to the Executive Council or to the Chancellor against the recommendation of the Selection Committee. There is no provision in the Section for hearing any candidate or the Executive Council. There is also no provision for receiving evidence. The decision of the Chancellor in the exercise of this statutory function does not expressly or impliedly require the application of the principle of natural justice. [ I 01 B 1)] Dr. G. Sarana vs University of Lucknow and Ors., ; ; held inapplicable. R.S. Dass vs Union of India. [1966] (Supp.) SCC 617; re ferred to. 2.1 The Chancellor, however, has to act properly for the purpose for which the power is conferred. He must take a decision in accordance with the provisions of the Act and the Statutes. He must not be guided by extraneous or irrele vant consideration. He must not act illegally, irrationally or arbitrarily. Any such illegal. irrational or arbitrary action or decision, whether in the nature of a legislative, administrative or quasi judicial exercise of power is liable to be quashed being violative of Article 14 of the Constitu tion. [102B C] 2.2 The order of the Chancellor impugned in this case indicates very clearly that he has considered the recommen dation of the question Committee and the opinion expressed by the Executive Council. The 87 minimum qualification prescribed for the post is a Doctorate in the subject of study concerned or a published work of high standard in the subject. The appellant was found to have an alternate qualification though not a Doctorate in the subject. The Selection Committee has accepted the alter nate qualification as sufficient and did not relax the essential qualification prescribed for the post. The Execu tive Council appears to have committed an error in stating that the appellant has lacked the essential qualification and the Selection Committee has relaxed the essential quali fication. The Chancellor was, therefore, justified in re jecting the opinion of the Executive Council. His decision gets support from the Statute I 1.01 of the First Statute of the Lucknow University. Accordingly the judgment of the High Court and the consequential order made by the Registrar of the University reverting the appellant to her substantive post of Lecturer are set aside. Her original appointment as Reader pursuant to the decision of the Chancellor shall remain undisturbed with all consequential benefits. [102E, 103B C, G] 3. An administrative function is called quasi judicial when there is an obligation to adopt the judicial approach and to comply with the basic requirements of justice. Where there is no such obligation, the decision is called 'purely administrative ' and there is no third category. 197G H] Ridge vs Baldwin, ; ; G. Nageshwara Rao vs Andhra Pradesh State Transport Corporation, ; Administrative Law by H.W.R. Wade 6th Ed. p. 46 47, referred to. 3.1 The conclusiveness of the decision without the need for confirmation or adoption by any other authority is generally regarded as one of the features of judicial power. But the order made by a statutory authority even it is given finality does not thereby acquire judicial quality if no other characteristic of judicial power is present. Power to make orders that are binding and conclusive is not, by itself a decisive factor to hold that the power is judicial. [101 E F] Prof. Desmith, 'Judicial Review of Administrative Ac tion ' 4th Ed., p. 82; referred to. 3.2 An administrative order which involves civil conse quences must be made consistently with the rule expressed in the Latin Maxim audi alteram partem. The person concerned must be informed of the case against him and the evidence in support thereof and must be given a fair opportunity to meet the case before an adverse decision is taken. [98G H] 88 State of Orissa vs Dr. Binapani Dei & Ors., ; ; Ridge vs Baldwin, ; ; referred to. 3.3 So far as the administrative officers are concerned, the duty is not so much to act judicially as to act fairly. For this concept of fairness, adjudicative settings are not necessary, nor it is necessary to have lis inter parties. There need not be any struggle between two opposing parties giving rise to a 'lis '. There need not be resolution of lis inter parties. The duty to act judically or to act fairly may arise in widely different circumstances. It may arise expressly or impliedly depending upon the context and con siderations. All these types of non adjudicative administra tive decision making are now covered under the general rubric of fairness in the administration. But then.even such an administrative decision unless it affects one 's personal rights or one 's property rights, or the loss of or prejudi cially affects something which would juridically be called atleast a privilege does not involve the duty to act fairly consistance with the rules of natural justice. [99A E] Keshva Mills Co. Ltd. vs Union of India, ; ; Mohinder Singh Gill vs Chief Election Commissioner. ; ; Swadeshi Cotton Mills vs Union of India, ; Management of M/s M.S. Nally Bharat Engi neering Co. Ltd. vs The State of Bihar & Ors., Civil Appeal No. 1102 of 1990 decided on 9.2.1990; ' referred to. In matters of appointment in the academic field the Court generally does not interfere. The Courts should be slow to interfere with the opinion expressed by the experts in the absence of mala fide alleged against the experts. When appointments are based on recommendations of experts nominated by the Universities, the High Court has got only to see whether the appointment had contravened any statutory or binding rule or ordinance. The High Court should show due regard to the opinion expressed by the experts constituting the Selection Committee and its recommendation on which the Chancellor has acted. [103D E] University of Mysore & Anr. C.D. Govinda Rao, ; Dr. J.B. Kulshreshtha & Ors. vs Chancellor, Allahabad University, Raj Bhavan & Ors. , ; ; Dalpat Abasaheb Soluke vs B.S. Mahajan, ; followed. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive or quasi judicial. [102C D] 89 E.P. Royappa vs State of Tamil Nadu & Anr., ; ; Mrs. Maneka Gandhi vs Union of India & Ant., [1978] 1 SCC 248; Ajay Hasia & Ors. vs Khalid Mujib Sehravardi & Ors., [1981] I SCC 722; Som Raj & Ors. vs State Of Haryana, JT ; referred 5.1 In matters relating to public employment whether by promotion or direct recruitment, only requirement to be complied with is the mandate of Articles 14 and 16 of the Constitution. There shall be equality of opportunity and no discrimination only on ground of religion, race, caste, sex, dissent, place of birth or residence or any of them. The eligible candidate has a right to have his case considered in accordance with law. [100F]

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ivil Appeal No. 1924 of 1990. From the Judgment and Order dated 6.8.1986 of the Kerala High Court in E.S.A. No. 15 of 1979. 543 K.K. Venugopa|, M.K. Sasidharan and P.K. Pillai for the Appellants. T.S. Krishnamoorthy Iyer, P.S. Poti, section Balakrishnan, Deepak Nargoalkar, E.M.S. Anam, R.M. Keshwani, M.K.D. Nam boodiri and Irfan Ahmed for the Respondents. The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J. Special leave granted. The unsuccessful appellants herein have preferred this appeal against the judgment of the High Court of Kerala dated 6.8.1985 passed in E.S.A. (Execution Second Appeal) No. 15 of 1979 whereby the High Court dismissed the said appeal filed by the appellants. The relevant facts giving rise to this appeal are necessary to be recapitulated and they are as follows: Othayath Gopalan Nambiar (since dead) and Othayath Lekshmy Amma (who is the first appellant herein) filed an Execution Application No. 556 of 1970 in Original Suit No. 817 of 1943 in the court of the Munsiff of Badagara under Section 13(B) of the Land Reforms Act, as amended by the Amending Act 35 of 1969 (hereinafter referred to as the 'Act ') for restoration of possession of the properties mentioned in the schedule of the application, which were sold in court auction for arrears of rent in pursuance of the decree made in O.S. No. 817 of 1943.1t seems that during the pendency of the proceedings before the Munsiff, Othayath Gopalan Nambiar died and thereafter the first appellant 's son claiming to be the karnavan of the tavazhi got himself impleaded as the third petitioner in the said Execution Application, who is figuring as the second appellant herein. In order to decide the questions that arise for consid eration, certain salient and material facts may be recapitu lated. The suit, O.S. 'No. 817 of 1943 was filed for recov ery of arrears of rent of Rs.815 for the Malayalam years 1116 to 1118, corresponding to English era 1941 to 1943. There were 11 defendants of whom Othayath Gopalan Nambiar and the first appellant were the defendants 2 and 3. A preliminary decree was passed on 26.5.1944 followed by the final decree on 29.11. The decree holder assigned the decree to another member of his family, who in turn assigned it to one Kunhikannan. The rights of Kunhikannan devolved on Respondents 2 to 4 in the Execution Application who are Respondents 4 to 6 in this appeal and who brought the 544 property to sale. The sale took place on 26.11. One Thekkayil Kanaran who was the first Respondent in the Execu tion Application, i.e. the third Respondent herein purchased the property in the Court auction held on 26.11.1962, which sale was confirmed on 14.8. 1964 and consequently obtained delivery of the disputed scheduled property extending to 8.70 acres of double crop wet land through court on 9.1. 1965 from the possession of the appellants. exhibit C 3 is the delivery account and report submitted by the Amin. The remaining extent of the property was in the possession of the sub tenants in respect of which there was resistence with which we are not concerned here. After the delivery has been effected, Gopalan Nambiar and the first appellant herein trespassed into the suit property. Therefore, the Court auction purchaser filed O.S. 6 of 1966 in the court of the Subordinate Judge of Badagara for recovery of possession. The suit was decreed as per the judgment exhibit B 16 dated 27.7.1966. exhibit B 15 is the decree. Ex B 49 dated 25.8.1966 and exhibit B 50 dated 22.8.1966 are the respective certified copies of the delivery account submit ted by the Amin and the delivery warrant issued to Amin in O.S. No. 6 of 1966. The auction purchaser, i.e. third re spondent in this appeal assigned portions of the property under sale deeds Exts. A2 and A3 dated 5.12.1966 to the 5th and 6th respondents in the Execution Application, who are the first and second respondent in this appeal. 1t is stated that while the first respondent is stranger, the second respondent is none other than the wife of the fourth re spondent. As we have pointed out earlier, this fourth re spondent is among the three respondents on whom the rights of Kunhikannan devolved. While it is so, Act 9 of 1967 came into force. So Gopa lan Nambiar and the first appellant filed Execution Applica tion No. 1711 of 1967 for restoration of possession under the said amended Act after making the necessary deposit. While this E.A. was pending, Act 35 of 1969 tame into force (Kerala Land Reforms Amendment Act) repealing Act 9 of 1967. So the appellants filed E.A. 556/70 under Section 13 B of the Act for restoration of possession with a prayer that earlier deposit made under Act 9 of 1967 be treated as a deposit under Act 35 of 1969 and also under took to pay the balance, if any, as would be found by the Court. The third respondent (court auction purchaser) and his assignees Respondents 1 and 2 contended that the appellants have no interest in the properties and the delivery of the property had already been taken. The appellants attacked the validity of exhibit A2 and A3 contending that the assignments in favour of Respondents 1 and 2 were made without consideration and bona fides and that auction 545 purchaser Thekkayil Kanaran, Respondent No. 3 was only a benamidar of the decree holder in the matter of the Court auction purchase. This application (E.A. 556/70) was stoutly opposed by the respondents inter alia contending that the properties did not belong to the Tavazhi of the appellants and the appellants have no right to the suit properties and are not entitled to apply for restoration of possession. According to the respondents, there is no valid deposit and after the delivery of the property has been effected, Gopa lan Nambiar trespassed into the properties and he was eject ed by recourse to a suit and thereafter the properties were assigned to Respondents 1 and 2 for proper consideration and bona fides and they are in possession of the properties on the strength of the said sale deeds. The Trial Court held that the appellants were the tenants of the properties when they were dispossessed and the deposit made by the appel lants was sufficient and the Respondents 1 and 2 are not bona fide purchasers for consideration. On the said finding it allowed E .A. 556/70 and set aside the sale. Aggrieved by the order of the Trial Court, the Respond ents 1 and 2 filed A.S. 49/74 before the Sub Court, Badaga ra, which for deciding the appeal posed the following four points for its consideration, namely: 1. Are the Petitioners entitled to maintain the application? 2. Is the deposit sufficient? 3. Are the appellants bona fide purchaser for consideration? 4. Whether the court sale is liable to be set aside and the restoration of possession claimed allowable? If so, are the petitioners liable to pay anything by way of value of improvements? The learned Judge answered the first point "that the petitioners are competent to maintain the applica tion," and the second point holding " . . that the deposit when it was made is sufficient. However the interest accrued till date of the present appli cation will be directed to be deposited in case the peti tioners are found entitled to restoration of possession. " 546 Coming to the third point it has been held thus "The first respondent (third respondent in S.L.P.) had absolutely no necessity to execute any sham documents. The fact that respondents 5 and 6 (Respondents 1 and 2 in the SLP) came into possession and exercised their rights under Exhibits A2 and A3 by payment of rent and revenue and pay ment of consideration spoken to by both the vendor and vendee are sufficient to hold that they are bona fide pur chasers for consideration. " Under the fourth point, the relief claimed by the appellants was held to be rejected. In the result, the order of the Trial Court was set aside and the appeal was allowed dis missing E.A. 556/70. The learned Subordinate Judge has also expressed his opinion in his judgment that in summary proceedings under Section 13B of the Act, the plea of the appellants that the third respondent was a benamidar of the fourth respondent cannot be allowed to be raised in the light of Section 66 of the Civil Procedure Code. On being dissatisfied with the judgment of the Subordi nate Judge, the appellants preferred E.S.A. No. 15/79. The respondents filed their cross objections. Though the High Court admitted the appeal on being satisfied that the appeal involves as many as 11 substantial questions of law, it disposed the appeal on a short ground that the documents and the evidence adduced by the respondents 1 and 2 (Govindan Nair and Ambrolil Ammalu) clearly show that the respondents 1 and 2 are bona fide purchasers of the properties in ques tion for consideration and the plea of benami put forth by the appellants has to be negatived. The contentions in the cross objections were that for filing an application under Section 13(B)(1) of the Act, a deposit of the purchase money together with the interest at the rate of 6 per cent per annum in the court is a condition precedent and that the finding of the lower Appellate Court that the earlier depos it made under Act 9 of 1967 was sufficient and the interest accrued till the date of the Execution Application under Act 35 of 1969 would be directed to be deposited in case the appellants were found entitled to restoration of possession of the property is erroneous. The High Court disposed the contentions in the main appeal observing thus: "It is not necessary for me to examine this question and finally adjudicate it, since I have upheld the decision of the 547 lower appellate Court on other grounds. I only indicate that the respondents ' counsel thought to sustain the conclusion of the lower appellate court on other grounds as well. " In the result, the High Court affirmed the decree of the lower Appellate Court and dismissed the second Appeal with costs. So far as the cross objections are concerned, the High Court passed the following order: "There is no need to dispose of the cross objections on the merits. It is ordered accordingly. " Hence the appellants by this appeal are impunging the judg ment of the High Court. Mr. K.K. Venugopal, Sr. Counsel appearing on behalf of the appellants, Mr. T.S. Krishnamurthy lyer, Sr. Counsel and Mr. P.S. Poti, St. Counsel appearing on behalf of the first and second respondents respectively took us very meticulous ly and scrupulously through the judgments of all the three courts and put forth the case of their respective parties. Having heard the learned counsel on either side for a considerable length of time, we are clearly of the view on a conspectus of the relevant Section 13(B) of the Act and on the factual matrix of the case that the result of the case would depend upon the decision of two substantial questions involved, they being (1) Whether respondents 1 and 2 are bona fide purchasers of the scheduled land in dispute for adequate consideration entitling to the benefit of the proviso to Section 13(B)(1)? (2) Whether the appellants are entitled to the benefit of subSection (1) of Section 13(B) of the Act? Before making a more detailed and searching analysis on different aspects of the case, it would be necessary for proper understanding of the issues involved to reproduce the relevant provisions of Section 13(B)(1) of the Act, on the pivotal of which both the questions revolve. Section 13B: There is no requirement in any of the clauses 548 that an offer of readiness to comply with any order for deposit of costs must be expressed in any judgment, decree or order of court, where any holding has been sold in execu tion of any decree for arrears of rent, and the tenant has been dispossessed of the holding after the 1st day of April, 1964 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969, such sale shall stand set aside and such tenant shall be entitled to restoration of possession of the holding, subject to the provisions of this Section; Provided that nothing in this sub Section shall apply in any case where the holding has been sold to a bona fide purchas er for Consideration after the date of such dispossession and before the date of publication of the Kerala Land Re forms (Amendment) Bill, 1968 in the Gazette. If the answer to the first question is in the affirma tive, then there is no need to consider the second question as it would be only academic. We, therefore, shall now address ourselves in the first instance whether the concur rent finding of facts by both the Appellate Courts relating to the first question warrant interference. Before the Trial Court whilst the appellants examined PWs 1 to 4 and filed Exhibits A 1 to A22, the respondents examined RWs 1 to 4 and marked Exhibits B. 1 to B .58. Besides, exhibit X 1, X 2, X 3, X 5 and X 6 and C. 1 to C.4 were also exhibited. The Respondents 4 to 6 admittedly are brothers. Though at the initial stage, Mr. Krishnamurthy Iyer did not accept the relationship of the third Respondent with Respondents 4 to 6 on the ground of lack of evidence, subsequently no serious dispute was raised about the said relationship. The Trial Court has proceeded on the ground that the Respondents 3 to 6 are brothers being the sons of Kunhikannan in whose favour the decree had been assigned. However, it is admitted during the course of hearing of this appeal that the third Respondent is not a direct brother of Respondents 4 to 6, but son of the step mother of Respondents 4 to 6. The second Respondent Ambrolil Ammalu is admittedly the wife of the fourth Respondent Krishnan. The first Respondent Govindan Nair is a stranger. The third Respondent, the Court auction purchaser sold the property extending 4.35 acres in favour of the first Respondent and the remaining half in favour of the second Respondent under sale deeds Exts. A.2 and A.3 dated 549 5.12. Consideration mentioned in each of the sale deeds Exts. A.2 and A.3 is Rs.3,000. Out of Rs.3,000 shown as consideration for A.2 a sum of Rs.2,500 is said to have been left with the first Respondent for payment of arrears of rent. In exhibit A.3, it is recited that the third respondent is said to have already received Rs.2,000 on a promissory note from the second Respondent for meeting the expenses incurred by him for conducting O.S. No. 6/66. The said sum of Rs.2,000 is stated to have been adjusted towards the consideration under exhibit A3. The first Respondent has produced a receipt (exhibit B28) showing that out of the amount of Rs.2,500 left with him he had paid a sum of Rs. 100. There is no other document evi dencing the discharge of the entire alleged arrears of rent out of Rs.2,400. When the third Respondent was questioned about the promissory note on the strength of which he is stated to have borrowed a sum of Rs.2,000, he has stated that he had returned the promissory note. This evidence as rightly pointed out by Mr. Venugopal is highly unacceptable because in usual practice whenever a debt, borrowed on a promissory note is discharged that promissory note is re turned to the borrower and never left with the lender. Moreover, the evidence of the third Respondent is contra dicted by RW. 3, the son of the second Respondent. According to RW. 3, when exhibit A.3 was executed, the promissory note was returned to the third Respondent. According to Mr. Venugo pal, this contradictory version betwixt the evidence of the first Respondent and RW. 3 clearly shows that the recital regarding payment of consideration to the extent of Rs.2,000 in exhibit A.3 is not genuine and acceptable and that exhibit A.3 is not fully supported by consideration. As per the recitals of consideration under Exhibits A.2 and A.3 the total cash consideration received by the third Respondent was only Rs. 1,500 i.e. Rs.500 from the first Respondent and Rs.1000 from the second Respondent. It is vehemently urged on behalf of the appellants that the third Respondent after purchasing the property for Rs.815 in 1962 would not have parted with it after fighting several litigations for a cash considera tion of Rs.1,500 only. The evidence of the third Respondent that he left a sum of Rs.2,500 with the first Respondent for discharging arrears of rent and earlier received a sum of Rs.2,000 from the second Respondent on a promissory note is not credit worthy in the absence of any supporting contempo rary documentary evidence. His assertion that he paid the amount for the Court auction purchase in the year 1962 out of the money in his possession as well as from borrowings shows that he was a man of slender means. When he was con fronted from whom he borrowed that amount, his answer was that he did not remember from whom and how much he borrowed. The 550 Trial Court has rightly pointed out in paragraph 19 of its Order that the third Respondent did not leave any impression that he was conversant with the various pending litigations regarding the present property. Mr. Venugopal drew out attention to another piece of evidence of RW3, deposing that his father was never consult ed with regard to exhibit A3 and assailed his evidence as in credible and bereft of truthfulness and trust worthiness. Coming to the sale deed, exhibit A2 it is stated that the first Respondent is residing about 11 miles away from Palayed Amson where the property is situated. He has no other property in Amson. The reason given by him for purchasing this property which was already riddled with litigation is not at all convincing. The first appellate Court while perfunctorily rejecting the reasoning of the Trial Court with regard to the consid eration part of exhibit A2 and A3 disposed of that contention in a summary manner holding: "The apparent inadequacy is no ground to think that there is no consideration . . I don 't think that the recitals in Exhibits A2 and A3 can be overlooked for this or the other reasons stated by the learned Munsiff." Then relying on Exhibits B 17, B28, B31, B41 and B45 and other documents it concluded: "that the Respondents 1 and 2 came into possession of the properties and exercised their rights under Exhibits A2 and A3 by payment of rent and revenue and payment of considera tion spoken to by both the vendor and vendee and as such they are bona fide purchasers for consideration." The High Court accepting the reasons given by the sub Judge held thus: "Most of these documents are public records or registers kept in the respective village office and proceedings in courts. There is no more of law in placing reliance on such documents. The finding entered by the learned Subordinate Judge that respondents 5 and 6 are bona fide purchasers for consideration is based on substantial evidence. It cannot be said to be arbitrary or unreasonable or perverse. ' ' 551 But both the Appellate Courts have conveniently ignored even the relationship of the parties which assumes much importance and significance in evaluating the evidence in the light of the facts and circumstances of the case for reaching a satisfactory conclusion and seem to have summari ly disposed of the case of the appellants. The question is not the mere inadequacy of consideration as pointed by the lower appellate Court, but lack of evi dence in substantiating the recitals of both the documents. The next contention advanced by Mr. Venugopal is that though the High Court has formulated as many as 11 substantial questions of law. it has not dealt with any of them enumer ated as (a) to (e) and examined the question No. (f) in the proper perspective. Further the important question No. (g) reading "rs not the admitted fact that the 6th respondent is the wife of the 2nd respondent prima facie proof that she is not a bona .fide purchaser for value" is not at all dealt with. It may be noted in this connection that the 6th re spondent and the 2nd respondent referred to in that question are Ambrolil Ammalu (2nd respondent herein) and Krishnan (4th respondent herein). As pointed out supra the High Court itself has expressed that it was inclined to dispose of the appeal 'on a short ground '. The bone of contention of Mr. Krishnamurthy Iyer and Mr. Poti is that it is not open to the appellants to reagitate the matter and request this Court to disturb the concurrent finding of facts arrived at by both the appellate Courts which had rendered their findings on the proper evaluation of the evidence and there can be no justification to review or re appreciate the evidence to take a contrary view in the absence of any contemporaneous document in support of the plea of the appellants. In addition to the above, Mr. Poti urged that the appellants have not properly and satisfacto rily discharged the onus of proof cast upon them and the concurrent findings based on voluminous documents, the copies of which are not annexed to the SLP for perusal of this Court, do not call for interference. In reply to the above arguments, Mr. Venugopal has pointed out that none of the documents referred to in the judgments of the appellate Courts would either improve the case of the respondents or deny the claims of the appel lants. Of the documents relied upon by the appellate Courts, exhibit B 17 and B31 are the true extracts showing payment of tax in the Village Officer Day Book. exhibit B28 is a rent receipt dated 23.2.1969 issued by the receiver appointed in O.S. 1/64 on the file of the Sub Court (lower appellate Court). B. 42 is a true extract 552 from the Foodgrains Cultivation Register and B.46 is a true extract from the Peringathor Village Account. exhibit B.41 to B.45 are the levy notices and revenue receipts for the years 1967, 1968. 1969 and 1973. Exhibits B.55 to B.59 are copies of orders in M.C. No. 3/71. As rightly pointed out by Mr. Venugopal, it is but natural that the receipt for the pay ment of tax, rent receipt, revenue receipt etc., are in the names of the persons in whose names the properties stand and therefore those documents cannot by themselves dispel the claim of the appellants. Besides, urging with aH emphasis that Exhibits A2 and A3 are only sham and nominal documents, it has been incidentally urged by Mr. Venugopal that the transaction under these two sale deeds is benami in nature. This argument was stoutly resisted by Mr. Krishnamurthy Iyer stating that in the teeth of Section 66 of the Code of Civil Procedure and in the absence of any proceedings to set aside the sale in favour of respondents 5 and 6 on the ground of fraud etc. , the plea of benami transaction cannot be counte nanced. He also cited the decision in Mithilesh Kutnari and Another vs Prem Behari Khare, ; But Mr. Venugopal explained his argument that he has not advanced that argument to set aside the sale deeds on the ground of benami transaction, but only for scrutinising the circum stances of the transaction in examining the validity of the sale deeds. However, as the plea of benami transaction is not pressed into service, it need not detain us any more. We shah now examine whether this Court would be justi fied in interfering with the concurrent finding of facts in exercise of its discretionary powers under Article 136 of the Constitution of India. In a recent decision in Dipak Banerjee vs Lilabati Chakraborty, ; it has been observed thus: "That jurisdiction (under Article 136 of the Constitution of India) has to be exercised sparingly. But, that cannot mean thai injustice must be perpetuated because it has been done two or three times in a case. The burden of showing that a concurrent decision of two or more courts or tribunals is manifestly unjust lies on the appellant. But once that burden is discharged, it is not only the right but the duty of the Supreme Court to remedy the injustice." No doubt, this discretionary power has to be exercised sparingly; Out when there are exceptional and special cir cumstances justifying the exercise of the discretionary powers and where manifest injustice or grave miscarriage of justice has resulted by overlooking or ignoring or 553 excluding material evidence resulting in unduly excessive hardships, this Court will be justified in stepping in and interfering with the concurrent finding of facts in the interest of justice and it is also the duty of this Court to remedy the injustice, so resulted. Vide Basudev Hazra vs Meutiar Rahaman Mandal; , and Bhanu Kumar Shastri vs Mohan Lal Sukhadia and Others, at pages 385 and 386. The present case, in our view, suffers from the infirmi ty of excluding, ignoring and overlooking the abundant materials and the evidence, which if considered in the proper perspective would have led to a conclusion contrary to the one taken by both the appellate Courts. The relation ship of the parties inter se has been completely and conven iently ignored and excluded from consideration. In fact, the High Court has not rendered any finding on question No. (g) which is one of the eleven substantial questions of law formulated in paragraph 3 of its judgment. The lack of evidence in support of the recital in regard to the consid eration is completely overlooked. Therefore, in view of the above exceptional and special circumstances appearing in this case, this Court will not be justified in refusing to exercise its discretionary powers merely on the ground that the conclusion of both the Courts is concurrent. For the discussions made above, we are of the view that the conclusion arrived at by both the appellate Courts is only backed by assertions rather than by acceptable reason ing based on the proper evaluation of evidence and so we are unable to subscribe to the concurrent finding that the respondents 1 and 2 are bona fide purchasers of the proper ties in dispute for consideration. On the other hand, we hold that the evidence and circumstances of the case coupled with the evidence on record do establish that the respond ents 1 and 2 are not bona fide purchasers for consideration. In the result, we hold that the respondents 1 and 2 are not entitled to the benefit of the proviso to sub Section (1) of Section 13(B) of the Act and answer the first ques tion against the respondents and in favour of the appel lants. We shall now pass on to the next question whether the appellants are entitled to the benefit of Section 13(B)(1) of the Act. The Kerala Land Reforms Act of 1963 came into force on 1.4.1964. Amended Act 9 of 1967 was a temporary enactment which 554 remained in force till 31.12. Thereafter, Act 35 of 1969 came into force from, 1.1.1970 containing Section 13(B) which is substantially on the same terms as Section 6 of Act 9 of 1967 with a proviso superadded. To invoke this benevo lent provision, the satisfaction of two primary conditions are sine qua non. Those conditions are: (1) Any "holding" to which a tenant is entitled to resto ration of possession should have been sold in execution of any decree for arrears of rent. (2) The tenant should have been dispossessed of the "holding" after the first day of April 1964 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969. If these two essential conditions are fulfilled, then the sale in execution of any decree for arrears of rent shall stand set aside notwithstanding anything to the con trary contained in any law or in any judgment, decree or order of court and the tenant shall be entitled to restora tion of possession of such holding, but subject to the provisions of this Section 13B. The only bar for the resto ration of possession under this Section 13(B)(1) is the sale of the holding to a bona fide purchaser for consideration after the date of such dispossession and before the date of publication of the Kerala Land Reforms (Amendment) Bill 1968 in the Gazette. For invoking the benefit of sub Section (1) of section 13(B) the person entitled to restoration of possession of his holding should within a period of 6 months from the commencement of the Kerala Land Reforms (Amendment) Act, 1969 deposit the purchase money together with interest at the rate of 6 percent per annum in the court and apply to the court for setting aside the sale and for restoration of possession of his holding. Once these legal formalities are satisfactorily complied with then the Court by holding a summary enquiry shall set aside the sale and restore the applicant to possession of his holding. The explanation to that section says that the term 'holding ' includes a part of holding. The expression "holding" is defined in Section 2(17) of the Act. The language of Section 13(B) is plain, clear and unam biguous representing the real intention of the legislature as reflected not only from the clear words deployed but also from the very purpose of the vesting of rights on the dis placed tenants. To construe the provisions of a statute especially of a benevolent provision like the one in ques tion, we have to take into consideration the dominant pur pose of the statute, the intention of the legislature and the policy underlying. Vide 555 P. Rami Reddy & Others vs State of Andhra Pradesh & Others, ; ; Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan & Others, [1987] 2 SCC 654 and M/s Doypack Systems Pvt. Ltd. vs Union of India & Others, ; Admittedly, the third respondent obtained delivery of the property in question through court on 29.1.1965 from the possession of the appellants, who were the tenants of the said property which was sold for arrears of rent and there after the appellants preferred a petition for restoration of possession of their holdings in Execution Application No. 1711/67 under Section 6 of Act 9 of 1967 after depositing the sale amount of Rs.815 and the interest of Rs.255. Thus the appellants have satisfied the conditions for entitlement of the possession of the property. While this proceeding was pending, Act 35 of 1969 came into force repealing Act 9 of 1967. Therefore, the appellants filed the Execution Applica tion No. 566/70 in O.S. 817/43 praying that the present application should be treated as a proceeding in continua tion of the earlier Execution Application and the amount deposited already in the previous Execution Application should be treated as deposit for the present application with an undertaking to deposit the balance, if any. Though it has been contended by the respondents that the appellants have failed to establish that they were tenants at the time of the dispossession, both the Trial Court as well as the first appellate Court have concurrently found that the appellants were holding the property as tenants and they were dispossessed. Before the High Court, it was contended that at the time of dispossession of the holding, the appel lants were not tenants but only trespassers, that the dis possesion was only pursuant to the decree in O.S. No. 6/66 and that both the lower Courts have not applied their minds to these salient and vital facts. The learned Judge of the High Court has answered this contention in the penultimate paragraph of his judgment observing thus: " This is a serious legal error. It is not necessary for me to examine this question and finally adjudicate it, since I have upheld the decision of the lower appellate court on other grounds. " Suffice to mention here that the High Court has not specifi cally dislodged the findings of the lower Courts that the appellants were tenants at the time of the dispossession. However, we will deal with this question presently. The main thrust of the argument of Mr. Krishnamurthy Iyer is 556 that the appellants are not entitled to restoration of the possession of their 'holding ' because of an intervening cause, that being, that the third respondent, got the pos session of the property which is now sought to be disturbed not in execution of the decree for arrears of rent, but by filing a suit subsequent to 'the court auction purchase. That intervening cause is explained by the learned counsel 'stating that after the property was delivered over to the third respondent on 29.1.1965, Gopalan Nambiar (since dead) and the first appellant trespassed into the land which necessitated the third respondent to institute a suit O.S. No. 6/66 in the Sub Court of Badagara which was decreed on 27.7. 1966 as evidenced by the judgment (exhibit B16). He con tinues to state that the third respondent, only in pursuance of the execution of this decree in O.S. 6/66 obtained pos session of the property on 23.8. 1966 and therefore Section 13(B)(1) in view of the said intervening cause cannot be availed of since the third respondent though 'got possession earlier by the auction purchase was dispossessed by the subsequent event of trespass by the appellants and got possession by instituting the suit O.S. 6/66. One other argument of the learned ' counsel is that as the sales under Exhibits A2 and A3 are only subsequent to the decree in O.S. No. 6/66, these transactions cannot be brought into the dragnet of Section 13(B) and the said provision will have no application to the facts of the present case. We are afraid, we cannot permit this inconceivable argument to be advanced. Admittedly, the third respondent purchased the property in court auction sale in pursuance of the decree for arrears of rent in O.S. No. 817/43 and obtained the possession by dispossessing the tenants, namely, the appellants. It was only thereafter there was trespass by the appellants. There fore, the subsequent event of obtaining possession of the property in pursuance of the decree in O.S. No. 6/66 will not in any way alter the position that the appellants had been dispossessed in pursuance of the decree for arrears of rent. The decree in O.S. No. 6/66 for obtaining possession from the trespassers does not confer any new right or title over the property in favour of the third respondent. Mr. Venugopal countered this argument stating that this new plea should not be allowed to be raised because this plea was never taken both before the trial and the first appellate Courts. The reply given by Mr. Krishnamurthy Iyer is that since it is a question of law, it is permissible to raise this question even at this stage. As we have said earlier, even assuming that this plea could be raised, it has no substance in any way affecting the claim of the appellants for the reasons stated supra. Mr. Poti after giving a brief note about the legislative history that Act 4 of 1961 was declared as void on 5.12. 1961 in respect of certain 557 provisions and that thereafter Act 1 of 1964 was enacted which came into force on 1.4.1964 repealing earlier Act 4 of 1961 advanced a hesitant argument that the application is liable to be dismissed as the entire amount has not been deposited in compliance with sub Section (2) of Section 13(B) which is a condition precedent to claim the restora tion of the possession of the property. Admittedly the appellants filed an application in the year 1967 for resto ration of the possession of the property under Section 6 of Act. 9 of 1967 and during the pendency of that application, Act 35 of 1969 came into force. The applicant who had al ready deposited the purchase amount together with interest has made the request to treat that application as the one in continuation of the later proceeding and undertook to pay the deficiency of the amount, if any. The lower appellate Court in paragraph 6 of its judgment found that the deposit already made was sufficient and that the interest accrued thereafter would be directed to be deposited in case the appellants were found entitled to restoration of possession. This finding of the first appellate Court concurring with the Trial Court has not been dislodged by the High Court. It may not be out of place to mention that on account of cer tain divergent views expressed by Judges of the Kerala High Court on this point the question was referred to a Division Bench of that Court which drawing strength on the ratio laid down by this Court in State of Punjab vs Mohar Singh, ; observing: "The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them." and agreeing with the view expressed by Krishnamurthy Iyer, J (as he then was and who is now appearing before us for the first respondent in different capacity) in Civil Revision Petition Nos. 1090 and 109 1 of 1972 wherein this precise question came up for consideration held that the application filed under Section 6 of Act 9 of 1967 which was pending on the date of the commencement of the Act 35 of 1969 was liable to be continued and dealt with under the provisions of the earlier Act, untrammelled by the provisions of the later Act. We approve the view taken in the above Parameswa ran Narnbudiri 's case and hold that the deposit made in the earlier application under Section 6 of Act 9 of 1967 which was pending on the date of commencement of Act 35 of 1969 was liable to be continued uneffected by the provisions of the later Act. 558 In Summation: We, for the aforementioned discussion, disagree with the findings of the High Court, set aside the impugned judgment and restore the judgment of the Trial Court holding that the sale of the 'holdings ' of the appellants was in execution of the decree in O.S. No. 817/43 for arrears of rent and the appellants who are tenants were dispossessed of the holdings after 1.4.64 and before the commencement of the Kerala Land Reforms (Amendment) Act, 1969 and the respondents 1 and 2 are not bona fide purchasers for consideration. In view of our above conclusion the appellants are entitled to recover possession of the properties in dispute, but without preju dice to the rights, if any, of the respondents 7 to 10 who are the wife and children of Gopalan Nambiar and who have got themselves impleaded as parties to the present proceed ings. The amount under deposit made by the appellants is permitted to be withdrawn by the respondents 1 to 3. In the result, the appeal is allowed with costs. S.B. Appeal al lowed.

The appellants fried an Execution Application in 1970 in the Court of Munsiff under Section 13(B) of the Land Reforms Act 1969 for the restoration of the possession of the properties which were sold in Court auction in pursuance of a decree for arrears of rent. The decree holder and Court auction purchasers were close relatives. The sale took place on 26.11. 1962 and was confirmed on 14.8.1964. It is the 3rd Respondent a stranger in the present appeal who purchased the property in the Court auction and got the possession of the same on 9.1.1965 from the appellants. The appellants trespassed into the suit property again and were ejected in 1966 pursuant to a decree in a suit. Thereafter the 3rd Respondent i.e. the auction purchaser assigned the property in favour of Respondents No. 1 & 2 who were the close rela tives vide sale deeds dated 5.12.1966 (Exts A2 and A3). The appellants had already filed Execution Application, for restoration of possession after making necessary deposit for the purchase money under section 6 of Act 9 of 1967. The same was pending when Act 35 of 1969 came into force and so the appellants made an application with a prayer that the earlier deposit be treated as a deposit under section 13(B) of 1969 Act. The Court auction purchaser i.e. 3rd Respondent and his assignees Respondents No. 1 & 2 strongly contended that appellants have no interest in the properties. The appel lants attacked the validity of the sale deeds being made without consideration. The trial Court held that the appel lants were tenants when they were dispossessed and also held that the deposit made by the appellants was sufficient for restoration of possession, and Respondents No. 1 & 2 are not bona fide purchasers for consideration, and hence set aside the sale. The Respondents No. 1 & 2 made application before the sub court 540 and the court held the petitioners were competent to main tain the application and were bona fide purchasers as per records such as revenue and tax receipts plus the admission of the vendor and vendee as to the payment of consideration. As to the deposit made by the appellants it was considered to be sufficient in case they were found entitled for resto ration of possession; set aside the Trial Court order and allowed the appeal. The appellants therefore filed E.S.A. in the High Court and the High Court upheld that the decision and the decree of the lower Appellate Court as per evidence, and as circum stances of the case complied with public records establish ing that Respondents 1 & 2 are the bona fide purchasers for consideration. But the first appellate court concurred with the Trial Court regarding the deposit already made to be sufficient and the interest accrued would be directed to be deposited if the appellants were found entitled to restora tion of possession. The said finding has not been dislodged by the High Court. Allowing the Special Leave Petition, this Court, HELD: In the instant case, two substantial questions are involved i.e. (1) whether respondents 1 & 2 are bona fide purchasers of the scheduled land in dispute for adequate consideration and thereby entitled to the benefit of the proviso inserted vide Act 35 of 1969 to sec. 13(B)(1). [547F] (2) Whether the appellants are entitled to the benefit of subsection (1) of section 13(B) of the Act. [547F G] As per section 13(B) where any holding has been sold in execution of any decree for arrears of rent and the tenant has been dispossessed of the holding after the 1st day of April 1964 and before the commencement of the Kerala Land Reforms (Amendment) Act 1969, such sale shall stand set aside and such tenant shall be entitled to restoration of possession of the holding subject to the provisions of this section. [558 B C] Provided that nothing in this sub section shah apply in any case where the holding has been sold to a bona fide purchaser for consideration after the date of such dispos session and before the date of the publication of Kerala Land Reforms (Amendment) Bill 1968 in the Gazettee. [554D E] 541 The concurrent finding of facts by both the appellate courts that Respondents No. 1 & 2 are bona fide purchasers for consideration warrant interference because both the appellate courts have conveniently ignored and excluded from consideration even the relationship of the parties inter se i.e. the decree bolder, court auction purchaser are close relatives and have assigned the property in favour of their close relatives and a stranger This assumes much importance and significance in evaluating the evidence in the light of the facts and circumstances of the case for reaching satis factory conclusion. The court has failed to render any finding on substantial question of Law. The lack of recitals with regard to the consideration has also been completely ignored It seemed to have disposed of the case summarily. [553B D] It is not merely the inadequacy of consideration as pointed out by the lower appellate court but there is lack of evidence in substantiating the recitals of the documents that Respondents No. 1 & 2 are bona fide purchasers. The receipts for the payment of tax, rent or revenue are by themselves cannot dispel the claims of the appellants. [545C] The conclusion arrived at by both the courts is only backed by assertions rather than by acceptable reasoning based on the proper evaluation of evidence. So the evidence and circumstances of the case coupled with the evidence on record do establish that the Respondents 1 & 2 are not bona fide purchasers for consideration. [553E F] Discretionary powers under Article 136 has to be exer cised sparingly but when there are exceptional and special circumstances justifying the exercise of discretionary powers and where manifest injustice or grave miscarriage of justice has resulted by overlooking or ignoring or excluding material evidence resulting in undue hardships, this Court will be justified in stepping in and interfering with the concurrent findings of facts in the interest of justice and it is also the duty of this Court to remedy the injustice so resulted. Dipak Baneriee vs Lilabatichakraborty, ; , relied on. [552H; 553A B] On the question whether the appellants are entitled to the benefit of section 13(B)(1) of the Act, it was held: [553G] The Kerala Land Reforms Act of 1963 came into force on 1.4.1964, Act 9 of 1967 was a temporary Act and remained in force till 31.12.1969, Act 35 of 1969 came into force from 1.1.1970 and section 13(B) is substantially on the same terms as section 6 of 1967 Act with a 542 proviso super added. To invoke section 13(B) two conditions are sine qua non. (1) Any holding to which a tenant is entitled to restoration of possession should have been sold in execution of any decree for arrears of rent. (2) The tenant should have been dispossessed of the holding after 1.4.1964 and before the commencement of 1969 Act. [553H; 554A C] Thus the tenant shall be entitled to restoration of possession under section 13(B) provided the holding is not sold to a bona fide purchaser for consideration, after the date of dispossession and before the publication of the Kerala Land Reforms (Amendment) Bill 1968 in the Gazettee. The appellants are entitled to have the benefit of sub section (1) of section 13(B) only if they have made the deposit of the purchase money together with interest at the rate of 6% Per Annum in the Court and applied to the Court for setting aside the sale and for restoration of the hold ing. The appellants in the instant case had already made deposit under 1967 Act and it was pending when Act 35 of 1969 came into force. So the appellants made an application with a prayer to treat the said deposites continuation unaffected by the provisions of 1969 Act. [554D F] The Language of section 13(B) is plain, clear and unam biguous and the very purpose of the section is to vest rights on the displaced tenants, which is the dominant purpose of the statute, which should be considered. [554G H] P. Rami Reddy & Ors. vs State of Andhra Pradesh & Ors. , ; Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan & Ors., [1987] 2 SCC 654 and M/s. Doypack Systems Pvt. Ltd. vs Union of India & Ors., ; relied on. The sale of holdings of the appellants was in execution of the decree for arrears of rent in O.S. No. 817 of 1943, and appellants are tenants who were dispossessed of the holdings after 1.4.1964 and before the commencement of 1969 Act. They are therefore entitled to restoration of posses sion of the properties in dispute but without prejudice of the rights if any of the Respondents Nos. 7 to 10 who are the wife and children of Gopalan Nambiar. The amount under deposit made by the appellants is permitted to be withdrawn by respondents 1 to 3. [558B C]

6436.txt

ivil Appeal No. 2054 of 1990. From the Judgment and Order dated 23.1. 1987 of the Central Administrative Tribunal, Calcutta in Transfer Appli cation No. 1263 of 1986. A.P. Chatterjee, G.S. Chatterjee (NP) and Ms. Ratna Bhattacharya for the Appellants. R.B. Dattar (NP), Anil Dev Singh, B.K. Prasad, C.V. Subba Rao and R.B. Misra for the Respondents. 816 A. Bhattacharya for the Intervener. The Judgment of the Court was delivered by R.M. SAHAI, J. Special leave granted. Station Masters of South Eastern Railways are aggrieved by implementation of the scheme of re structuring by the Chief Personnel Officer framed by the Railway Board for 'C ' and 'D ' cadre. Their claim was not accepted by the Central Administrative Tribunal as implementation as such, was beneficial to the majority. It was further found that alter native 'I ' of the scheme meant for the combined cadre was rightly adopted as the cadre of Assistant Station Master (ASM) and Station Master (SM) in the South Eastern Zone was combined before 1983. The appellants have challenged cor rectness of these findings. They also claim that implementa tion of scheme is highly unjust and inequitable. Prior to re structuring the cadre comprised of Assistant Station Masters at the bottom and Station Superintendent at the top. Initial appointment of ASM was made in the scale of Rs.360 540. The promotional ladder bifurcated into (i) ASM to ASM and (ii) ASM to SM, both in the scale of Rs.425 640 (non selection) and then Rs.455 700 (selection) before becoming one common source for promotion to Deputy Station Superintendent/SM Rs.550 750 (non selection) Rs.700 800 Station Superintendent (selection) and Rs.840 1010 Station Superintendent (non selection). For moving up the promotion al ladder every ASM was required to opt if he would proceed on the channel of ASM to ASM or ASM to SM. Re structuring was done in 'C ' and 'D ' cadres in the scales, designation and percentage in selection and non selection posts. Two alternatives were framed described as alternative 'I ' for the combined cadre and alternative 'II ' for the separate cadres. They were to be adopted by the respective zones depending on the cadre pattern prevalent there. One of the principles visualised for group 'C ' was that if all posts in an existing grade were en bloc placed in a higher grade the existing regular incumbents thereof were to be allowed the higher grade without subjecting them to any selection. For ASM/SM two alternatives were provided to be adopted by the respective zones depending on whether the existing cadre was separate or combined. In alternative 'I ' meant for the combined cadre SMs in the scale of Rs.425 640 and Rs.455 700 were designated as Deputy Station Superin tendents and 817 Station Superintendents in the scale of Rs.550 750 and Rs.700 900 respectively. Therefore, the appellants claim that if alternative 'I ' was adopted, then it should have been given full play and the SMs who were working in the aforesaid scales should also have been placed en bloc in the re designated posts without any further process of selec tion. In pursuance of the re structuring, the Chief Personnel Officer issued a letter to the Divisional Manager, South Eastern Railway that it had been decided that alternative 'I ' enunciated by 'the Board shall be followed on the South Eastern Railway. It further provided that the existing system of calling for options from ASMs for the post of SMs/ ASMs in the higher grade was being dispensed with and sen iority of staff in each grade shall be determined on the basis of non fortuitous service rendered in such grade. Other paragraphs of the letter are not relevant for the resolution of the present controversy. Since the direction of the Chief Personnel Officer worked to prejudice of numer ous persons who had exercised their options to the promo tional channel of Station Master, they approached the High Court or Tribunal by way of Writ Petition or Claim Petition but without any success. Some of such disputes came up for disposal before this Court in Civil Appeal Nos. 1536 41 of 1987 which were disposed of by order dated 30th July, 1987, directing the Railway Board to consider if the Chief Person nel Officer while implementing the scheme deviated from its terms and implemented it to the prejudice of those appel lants. Since it was conceded that the scheme did not affect present status and emoluments, this Court then made it clear that implementation should not be done to prejudice of appellants. It further protected the interests of those who due to wrong implementation might have got benefit by di recting that they shall not be disturbed. The direction given by this Court was not complied with; therefore, con tempt proceedings were filed the hearing of which was de ferred till the disposal of the present appeals. When these appeals were taken up for hearing, it tran spired that total number of employees of the appellants ' category were not more than 206. Therefore, the Court passed the order on 26th JUly, 1989 that if relief was granted to these 206 employees. by implementing the scheme in the manner indicated in the earlier order of 1987, they shall be satisfied and the litigation shall come to an end. But nothing more was done and on 8th September, 1989 this Court after heating learned counsel for the parties at great length recorded that two questions were required to be looked into: (i) if the cadre of ASM and SM was common or different and (ii) if alternative 'I ' was adopted, then why 818 the SMs could not be re designated and Deputy Station Super intendents and wanted response of the Administration about them. On both these aspects an affidavit was filed by the Chief Personnel Officer. Regarding the first, it is stated that cadre of ASM and SM before restructuring was a common one in South Eastern Railway for all 'intents and purposes '. It is explained that separate cadre meant that the ASMs and SMs would have sought their advancement separately, 'in a way different from them in the entire non gazetted cadre '. And then ASM and SM had to combine again to work as Deputy Station Superintendent/SM. In respect of automatic re desig nation, the explanation is that eight different scales of pay existing before re structuring were reduced to six and designation of ASM in the scale of Rs.455 700 and SM in scale of Rs.425 640, were abolished and the post belonging to six revised designations have been distributed on the prescribed percentage basis. It is further stated that incumbents of the existing grades were promoted according to their positions of seniority against the posts which were available on percentage basis distribution. Therefore, the contention of the petitioners that the Station Masters should be automatically designated as Deputy Station Super intendent was not correct. According to the Chief Personnel Officer the appellants along with ' others in accordance with their seniority were required to be subjected to the proce dure of selection/suitability test as per procedure envis aged in the re structuring scheme. The affidavit also at taches a letter from the Railway Board addressed to the General Manager, reiterating that the implementation of the scheme by the Chief Personnel Officer was as intended by the Board. Facts as they ultimately emerge do not appear to have been adequately indicated in the affidavit of the senior officer even when the aspects were pointedly indicated by this Court. It is not disputed that in the South Eastern Zone the practice of option by ASM for promotional channel was in vogue before 1983. Dispute is about the time when it was exercised. According to appellant it was at the time of recruitment and appointment even on pain of disciplinary action. And option once exercised was irrevocable. Whereas according to officials it used to be offered when vacancy arose according to seniority. Unfortunately it was accepted by the Tribunal as well without any foundation in the record by shutting its eyes to various letters which clinch the issue in favour of the appellants, for instance the letter dated 14th May, 1965, and 20th May, 1970, issued by the Divisional Superintendent Railway filed before Tribunal, produced along with supplementary affidavit shows that options were required to be exercised by ASMs irrespective of availability of vacancy before the target 819 date and if it was not exercised then they were liable to disciplinary action. And options, for or against could not be changed when once exercised. Where it was not exercised on or before the date it was deemed to have been opted for ASM to SM. No effort was made to meet these letters; yet an affidavit was filed that option was exercised when vacancy arose. Options was thus exercised by appellants at the stage of appointment and recruitment. But it appears to have resulted in dissatisfaction because even though the pay scales were identical those who became SM were entrusted with superviso ry control and administrative responsibility. For this the ASM recruited in the same batch must have been unhappy. And the SM must, also, have had the grievance as promotion in higher scale was obviously delayed because the post of SM must have been fewer in number as compared to ASM. There fore, it was rightly abolished and was hailed by the two unions of employees. But what happened to those who due to irrevocable option exercised prior to 1983 had been waiting for moving up and due to abolition of option and implementa tion of the alternative 'I ' lost the opportunity while ASMs junior to them availed it? No provision for them was made. Even in this Court despite repeated directions, the Chief Personnel Officer or the Administration instead of resolving it have taken an uncharitable stand by asserting that those who opted for promotional channel of SM having enjoyed benefit of day duty and supervisory control on their own volition cannot be compared with ASMs whose working condi tions were different. That is a person who worked with greater responsibility, and under strain must suffer. What is surprising is that such unreasonable stand is supported even by the Board by relying on 'intents and contents '. Even the claim of the Administration that cadre of ASM/SM was combined cadre in South East Railway was not substantiated by any document, letter or order. On the other hand, from letter dated 10th May, 1984 issued by Additional District Pay Commissioner to General Manager recognises existence of separate cadre: "It is evident from the details furnished in the enclosure to your above quoted letter that your Railway had a separate cadre for ASMs/SMs and a decision had been reached prior to the issue of the restructuring orders No. PC. III/80/ UPG/19 dated 29.7.83 to switch over to a combined cadre, except where in respect of any cadre or cadres avenues of advance ment have been prescribed by this Ministry, laying 820 down avenues of promotion in respect of non gazetted Railway staff, is within the competence of the General Managers of the zonal railways. Since the matter has been processed on your railway in consultation and agreement of the two recog nised Trade Unions in the permanent Negotiating Machinery, the action by your Railway to switch over to a combined percentages scheme is within your powers. ' ' Existence of separate cadres prior to 1983 and changing over to a combined system is not the same thing as claiming that the cadre which existed prior to 1983 was a combined cadre. Explanation in the affidavit while replying to the issue as to whether the cadre of ASM and SM was common or a different cadre is given thus: "The Railway Board 's letter dated 10.8.84 refers to only merging these two grades which should not mean that the cadre was separate. In other words, the Railway Board 's said letter means that the action of the Railway to combine the two grades also is in order and it does not imply that the entire cadre was separate. " It cannot be accepted either as correct or satisfactory. Cadres of ASM/SM before 1983 was separate and different. With abolition of option it has become one. The letter of the Railway Board required revised percentages prescribed for the category depending on whether the existing cadre structure was a combined one or a structured one. Since the cadre in South Eastern Railway was a separate one, the Chief Personnel Officer deviated from the scheme by applying alternative 'I ' which was to be adopted by a zone where combined cadre existed. And if alternative 'I ' was adopted then the SMs should have been automatically designated as Deputy Station Superintendents and they should not have been subjected to the selection procedure. The explanation in the affidavit of Chief Personnel Officer that the grade Rs. 425 640 having been abolished as a consequence of restruc turing is not acceptable. In alternative 'I ' SM in scale of Rs.425 640 automatically stood redesignated as Deputy Sta tion Superintendent. But the scale does not find place in alternative 'II '. But both the employees unions have accept ed the implementation of the letter of Chief Personnel Officer as it is beneficial to a majority of the employees. Therefore, it may not be disturbed. At the same time all those 204 employees who had opted before 1983 must be enti tled to the benefit which would have been available to them on theft options. 821 In the result this appeal is disposed of by directing that the respondent authorities shall grant promotional benefit to those 204 SMs who had exercised options before 1983 in the same manner as it would have been if option had not been abolished in accordance with the earlier procedure provided they fulfilled the other requirements. While doing so those who had been promoted shall not be disturbed as directed by this Court on 30th July, 1987. Further if as a result of this exercise posts in higher grade fall short, the respondents shall create adequate number of additional posts to overcome the difficulty. The respondents are fur ther directed to complete all this exercise within six months. Persons promoted in pursuance of this order shall be entitled to all consequential benefits from the due dates. Appellants shall be entitled to consolidated costs which are assessed at Rs.5,000 to be payable by respondent No. 2. N.V.K Appeal disposed of.

In the South Eastern Railway the cadre initially com prised of Assistant Station Masters at the bottom and the Station Masters at the top. Initial appointment of ASM was made in the scale of Rs.360 540. The promotional ladder bifurcated into: (i) ASM to SM, and (ii) ASM to SM, both in the scale of Rs.425 640 (non selection), and then Rs.455700 (selection); before becoming one common source for promotion to Deputy Station Superintendent/SM Rs.550 750 (non selec tion) Rs.700800 Station Superintendent (selection), and Rs.840 1010 Station Superintendent (non selection). For moving up the promotional ladder every ASM was required to opt if he would proceed on the channel of ASM to ASM, or ASM to SM. Later, re structuring was done in 'C ' and 'D ' cadres in the scales, designation and percentage; in selection and non selection posts. Two alternatives were framed described as alternative 'I ' for the combined cadre, and alternative 'II ' for the separate cadres; which were to be adopted by the respective zones depending on the prevailing cadre pattern. For ASM/SM two alternatives were provided to be adopted by the respective zones depending on whether the existing cadre was separate or combined. In alternative 'I ' meant for the combined cadre SMs in the scale of Rs.425 640 and Rs.455 700 were designated as Deputy Station Superin tendents and Station Superintendents in the scale of Rs.540 750 and Rs.700 900 respectively. Pursuant to the re structuring, the Chief Personal Officer issued a letter to the Divisional Manager, South Eastern Railway that it has been decided that alternative 'I ' enunciated by the Board shall be followed on the said railway, and the existing system of calling for options from ASMs for the post of SMs/ASMs in the higher grade was being dispensed with seniority of staff in each grade shall be determined on 814 the basis of non fortutious service rendered in such grade. Since the aforesaid direction of the Chief Personnel Officer worked to the prejudice of numerous persons who had exercised their options to the promotional channel of Sta tion Master, they approached the High Court/Tribunal by way of writ petitions/claim petitions but without any success. Some of these disputes came up in appeal before this Court which were disposed of on July 30, 1987 by directing the Railway Board to consider if the Chief Personnel Officer while implementing its scheme deviated from its terms, and implemented it to the prejudice of those appellants. The appellants Station Masters of South/Eastern Railway aggrieved by the implementation of the scheme of re struc turing by the Chief Personnel Officer approached the Central Administrative Tribunal, which rejected their claim, as the implementation was beneficial to the majority, and further found that the alternative 'I ' of the scheme meant for the combined cadre was rightly adopted as the cadre of Assistant Station Masters and Station Masters in the South Eastern Zone was combined before 1983. The appellants in their appeal to this Court challenged the correctness of the aforesaid findings and also claimed that the implementation of the scheme was highly unjust and inequitable. It was claimed that if alternative 'I ' was adopted then it should have been given full play and the SMs should have been placed en bloc in the re designated posts without any further process of selection. Disposing of the appeal by directing that the respond ents shall grant promotional benefit to those 204 SMs who have exercised option before 1983, this Court, HELD: 1. It is not disputed that in the South Eastern Zone the practice of obtaining option by ASM for promotional channel was in vogue before 1983. The dispute was about the time when it was exercised. According to the appellant it was at the time of recruitment and appointment even on pain of disciplinary action whereas according to the officials it used to be offered when vacancy arose according to seniori ty. Unfortunately, it was accepted by the Tribunal as well without any foundation in the record by shutting its eyes to the letters dated 14th May, 1965 and 20th May, 1970, issued by the Divisional 815 Superintendent which shows that options were required to be exercised by ASMs irrespective of availability of vacancy before the target date, and if it was not exercised then they were liable to disciplinary action. [818F H; 819A] 2. Even the claim of the Administration that cadre of ASM/SM was combined cadre in South East Railway was not substantiated by any document, letter or order. On the other hand, the letter dated 10th May, 1984 issued by Additional District Pay Commissioner to the General Manager recognises existence of separate cadre. [819F] 3. Existence of separate cadres prior to 1983 and chang ing over to a combined system is not the same thing as claiming that the cadre which existed prior to 1983 was a combined cadre. [820C] 4. Since the cadre in South Eastern Railway was a sepa rate one, the Chief Personnel Officer deviated from the scheme by applying alternative 'I ' which was to be adopted by a zone where combined cadre existed and if alternative 'I ' was adopted then the SMs should have been automatically designated as Deputy Station Superintendents and they should not have been subjected to the selection procedure. In alternative 'I ' SM in scale of Rs.425 640 automatically stood redesignated as Deputy Station Superintendents. But the scale does not find place in alternative II. But both the employees unions have accepted the implementation of the letter of the Chief Personnel Officer as h is beneficial to a majority of the employees. Therefore, it may not be dis turbed. At the same time all those 204 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options. [820F H]

6463.txt

Civil Appeal No. 3951 (NCE) of:1987. From the Judgment and Order dated 19.11.1987 of the Kerala High Court in E.P. No. 3 of 1987. K.K. Venugopal, E.M.S. Anam, E. Ahmad and V.K. Beeram for the Appellant. Dr. Y.S. Chitale, M.K. Damodaran, V.J. Mathew, Aseem Mehrotra and K.M.K. Nair for the Respondents. The Judgment of the Court was delivered by SAWANT, J. This is an appeal under Section 116A of the Representation of the People Act, 1951 (hereinafter referred to as the 'Act ') against the judgment of the High COurt of Kerala in Election Petition No. 3 of 1987, by which the election of the appellant to the Kerala Legislative Assembly from Mattancherry Constituency No. 73 was declared void on the ground that the appellant had committed two corrupt practices within the meaning of Section 123(4) of the Act. The admitted facts are that election to the Kerala Legislative Assembly from all the constituencies was held on March 23, 1987. The main contest in almost all the constitu encies was between the United Democratic Front (UDF) con sisting of Congress I, Kerala Congress, Indian Union Muslim League (IUML) and others on the one hand, and the Left Democratic Front (LDF) consisting of the Communist Party of India Marxist (CPI M), Revolutionary Socialist Party and others on the other. The appellant was the candidate of the LDF and the first respondent was the candidate of the UDF. In the said election, the appellant was declared elected by a margin of 1873 votes over his nearest rival, the first respondent. On May 8, 1987, the first respondent filed an elec tion petition claiming a declaration that the appellant 's election was void and that he was entitled to be declared duly elected from the said constituency. In support of the petition, the first respondent alleged various corrupt practices on the part of the appellant. However, the High Court negatived all the said corrupt practices except two, viz., (i) printing and publication on March 22, 1987, a day prior to the election, pamphlets containing a news item in daily "Malayala Manorama" dated May 22, 1983, and (ii) publication of a wall poster, both maligning the personal character and conduct of the first respondent. The High Court held that both these acts amounted to corrupt prac tices within the meaning of Section 123(4) of the Act and were sufficient to 726 void the election. The pamphlet containing the reprint of the daily "Malayala Manorama" was marked as exhibit P 1 and two photographs of the wall poster were marked as Exs. P 14 and P 15 before the High Court and would be referred to herein after as such. exhibit P 14 is the close up and exhibit P 15 is the distant photograph of the same wall poster. 4. Before we refer to the rival contentions and the material on record, it would be convenient if we reproduce here the contents of exhibit P 1 and Exs. P 14 and P 15 to understand the allegations made in the said documents. exhibit P 1 is a reprint of a page of the issue of 22nd May, 1983 of a daily newspaper "Malayala Manorama". It contains the names and the photographs of four men, who were admit tedly murdered in May 1983. It also carries two other photo graphs, one showing two killed bodies lying and the other showing the front part of the court building where allegedly all the four were killed. It also carries a photograph of the appellant with his election symbol which was 'ladder ' and a photograph of the then Prime Minister, Rajiv Gandhi. Apart from the contents of the said newspaper as they ap peared in the said old issue, it carries additions on the left hand, the English translation of which is as follows: "ELECT ZAKHARIA THE UNITED FRONT CANDIDATE MATTANCHERRY. On March 23rd a decisive election is taking place in our State. We wish to have a Government who will protect life and property of the people. In the light of past expe rience the only front acquired legitimate claim to give protection is the United Democratic Front under the leader ship of Congress (I). Marxist Party has only created insecu rity in the country. X X X X X The Marxist Comrades who create lawlessness and commit murders while in power and out of power, is a chal lenge to peace loving inhabitants of Mattancherry. Mattan cherry is a constituency which has witnessed terrible cruel ties of the Marxists. The Mattancherry Town, once the centre of commerce, today became equal to a grave 727 yard only due to violent activities of the Marxist people. The wounds created by their cruelties are always unhealed. They need not be detailed by one. X X X X X You may remember only the cruel murder that shocked Mattancherry in 1983. Four youngsters were cut to death in the road in broad day light. The relevant portion of the Malayala Manorama which published that news is given herewith as, such; everybody knows the hands behind that murder. The Marxist leader arrested is also known. X X X X X Dear sisters, brothers, you may think a while. Should we have the rule of the Marxist terrorists. We believe that the people of Mattancherry who wish peaceful life in the country will defeat Marxists. X X X X X Believers in democracy should be specially careful not to split their votes. It is possible to defeat Marxists only through unity of the believers in democracy. That is why the Indian National Congress lead by Shri Rajiv Gandhi ' the stalvert of democratic Bharath is giving leadership to the democratic front. It is the necessity of peace lovers that United Democratic Front should win for law and order and stable administration. Therefore, it is humbly requested that M.J. Zakharia may be elected with big majority casting votes to his Ladder Symbol. Photo of Vote Democratic Front Photo of candidate to avoid Marxist Rule Rajiv Gandhi M.J. Zakharia of Terror Constituency Election Committee Give Strength United Democratic Front, to Rajiv Gandhi 's Mattancherry hands 728 VOTE FOR UNITED DEMOCRATIC FRONT CANDIDATE M.J. ZAKHARIA IN LADDER SYMBOL Printed at Veekshanam. " The High Court has found that the following statement in paragraph 3 above, viz., "everybody knows the hands behind that murder. The Marxist leader arrested is also known" was in relation to the personal character/conduct of the first respondent. P 14 and P 15 are the photographs, as stated earlier, of the poster pasted on a wall, with the pamphlet (exhibit P 1) pasted on its left side. The contents of the wall poster are as follows: "Defeat murderer T.M. Mohammed who murdered four Christian brothers at Fort Cochin. Our Symbol. " The symbol is the ladder. This poster directly accused the first respondent as being murderer of the said four killed persons and requested the voters to vote for the appellant. As regards exhibit P 1, there is no mention of the first respondent directly by his name anywhere in the poster. However, the first respondent has alleged that there is an innuendo by which he is projected there as the murderer of the four victims. The High Court has accepted that the first respondent is referred to in the said pamphlet by innuendo. The High Court has also found that the pamphlets were got printed by one Latif who was appellant 's agent, on behalf of his Election Committee and at the instance of and with the consent and connivance of the appellant and his election agent and was distributed by them among the electors knowing the imputation to be false and calculated to affect the prospectus of his election. As regards Exs. P 14 and P 15, the High Court has recorded a finding that the said wall poster was pasted on a wall at the instance and with the consent of the appellant 's election agent. Thus, the High Court has recorded a finding that the first respondent had proved that the appellant was guilty of the corrupt prac tices within the meaning of Section 123(4) of the Act. Before we proceed to discuss the relevant evidence on record, it is necessary to understand the correct posi tion of law on the subject. The corrupt practices and elec toral offences are mentioned in Part 7 of the Act. Chapter I of the said Part deals with corrupt practices and contains Section 123 whereas Chapter III thereof enumerates electoral offences. and penalties therefore, and contains Sections 125 to 136. 729 Section 123(4) with which alone we are concerned in the present appeal reads as follows: "123(4) The publication by a candidate or his agent or by any other person with the consent of a candidate or his election agent, of any statement of fact which is false, and which he either believes to be false or does not believe to be true, in relation to the personal character or conduct of any candidate, or in relation to the candidature, or with drawal, of any candidate, being a statement reasonably calculated to prejudice the prospectus of that candidate 's election. " It is obvious from the aforesaid provisions of Section 123(4) that for a publication to constitute the corrupt practice (a) it must be a statement of fact: by (i) a candi date; or (ii) his agent; or (iii) any other person with the consent of the candidate or his election agent; (b) the statement must be false or the candidate must believe it to be false or should not believe it to be true; (c) the state ment should refer to the personal character and conduct of another candidate and (d) that it must be reasonably calcu lated to prejudice the prospects of that other candidate 's election. Explanation 1 to Section 123 states that in that Section the expression "agent" includes election agent, a polling agent and any person who is held to have acted as an agent in connection with the election with the consent of the candidate. The expression "election agent" is defined in Section 40 and is accorded a special status of almost an alter ego of the candidate so much so that whatever is done by the election agent or with his consent is deemed to have been done by the candidate himself whether it is with the candidate 's consent or not. It is further sufficient to note that the election agent is empowered to discharge almost all the functions that a candidate can himself perform. The further provisions of the Act which are necessary to be noted are those of sub sections (1)(b), (1)(d) and (2) of Section 100. They read as under: "100. Grounds for declaring election to be void (1) Subject to the provisions of sub section (2) if the High Court is of opinion (a). . . 730 (b) that any corrupt practice has been committed by a re turned candidate or his election agent or by any other person with the consent of a returned candidate or his election agent; or (c). . . (d) that the result of the election, in so far as it con cerns a returned candidate, has been materially affected (i). . . (ii) by any corrupt practice committed in the interests of the returned candidate by an agent other than his election agent, or (iii) . . . . . . . . the High Court shall declare the election of the returned candidate to be void. (2) If in the opinion of the High Court, a returned candi date has been guilty by an agent, other than his election agent of any corrupt practice but the High Court is satis fied (a) . . . . . . . . (c). . . . . . . . . (d). . . . . . . . . then the High Court may decide that the election of the returned candidate is not void". The aforesaid provisions of Section 100 show that where the corrupt practice is committed not by the candidate or his election agent or any other person with the consent of the candidate or his election agent but by an agent other than the election agent and in his interest, and the corrupt practice by such agent has materially affected the result of his election, the High Court is enjoined to declare the election of the candidate to be void. Sub section (2) of Section 100 enacts a rider to sub section (1) thereof, and states that even if the 731 agent has committed the corrupt practice in the interest of the returned candidate, if the High Court is satisfied that the said corrupt practice was not committed by the candidate or his election agent and every such corrupt practice was committed contrary to the orders and without the consent of the candidate or his election agent and that the candidate and his election agent took all reasonable means for pre venting the commission of the corrupt practice at the elec tion, and that in all other respects the election was free from any corrupt practice the part of the candidate or any of his agents, the High Court may decide that the election of the returned candidate is not void. With this statement of law in mind, we may now refer to the two corrupt practices alleged to have been committed by the appellant. We will first deal with exhibit P 1 the print ing, publication and distribution of which is held to have been one of the two corrupt practices committed by the appellant 's agent at his instance and with his consent and connivance as well as of his election agent. As far as the petition is concerned, the relevant averments with regard to exhibit P 1 are as follows: "13. Another important aspect which will amount to corrupt practice is the publication of pamphlets by the candidate, his agents and his workers with his consent and knowledge. Malayala Manorama dated 23.5.1983 was reported by the candidate at the expenses of the first respondent. This re printing is intended to propagate false statements which the candidate, his agents and as workers . . X X X X X 19. It is clear from these that the reprinting of Malayala Manorama by the candidate was with a view to create a false impression among the electorate that the petitioner is a murderer and hence the electorate shall not vote in favour of him. This was done with a mala fide intention to propa gate false news among the electorate. X X X X X 46. Malayala Manorama daily dated 22nd May, 1983 was re printed with certain additions and also with photographs 732 of Prime Minister and the candidate with the candidate 's symbol. This was reprinted from the Veekshanam Press at Ernakulam and got printed by the Election Committee of the first respondent . 47. Annexure I reprinted Malayala Manorama was widely dis tributed in the constituency. It was distributed on 22nd March, 1987. March 22, 1987 was a Sunday and May 1983 was also a Sunday. The petitioner is reliably informed that about 25,000 copies of Annexure I were printed and those copies of reprinted Malayala Manorama were distributed throughout the constituency. " In paragraphs 48 to 53 of the petition, the first re spondent has proceeded to give the names of the persons who distributed the said pamphlet in different divisions of the constituency and of the persons whom he was going to examine as witnesses to prove the same. In paragraph 54, he has made further averments in connection with the said pamphlet as follows: "Annexure was really the reproduction of Malayala Manorama daily dated 22.5.1983. Since a news item regarding the murder of 4 persons was reported in the daily mentioned above, to mislead the electorate, the Malayala Manorama printed and published on 22.5.1983 was reprinted . " 9. It will be apparent from these averments in the petition that although the first respondent has stated in his petition that the pamphlet was printed and distributed with a view to create a false impression among the elector ate that he was a murderer, he has not stated as to why it will create such an impression among the electorate. It was necessary for him to state so in the petition because admit tedly the pamphlet nowhere names him as a murderer of the said four victims. What was, however, argued by Dr. Chitale on behalf of the first respondent was that the statements in the pamphlet, viz., "everybody knows the hands behind that murder. The Marxist leader arrested also is known" were a clear and a direct reference to the first respondent, be cause it was an admitted fact that the first respondent was arrested for an offence of harbouring the accused in that murder case. There was also a protest meeting held in that connection, and the appellant who was his agent at that time had also addressed the said meeting condemning his arrest. According to Dr. Chitale, therefore, 733 the arrest of the first respondent though for the offence of harbouring the murderers, was in connection with the murder and the statement in the pamphlet that "The Marxist leader arrested is also known" read with the earlier statement that "Everybody knows the hands behind that murder" was clearly calculated to create an impression in the mind of the elec torate that it was the first respondent who was the murder er. Admittedly, therefore, even according to Dr. Chitale, these were the only two statements which could be said to have had a reference to the first respondent as the murderer and there was no direct reference to or implication of the first respondent as the murderer of the said four victims. In other words, the first respondent even in his petition had relied upon an innuendo, and the innuendo was based upon the fact that, firstly, the first respondent was a Marxist leader and, secondly, he was arrested for harbouring the murderers. However, in the petition, no averment is made anywhere that it was because he was a Marxist leader and was also arrested for harbouring the murderers that the elector ate was likely to construe the said two statements as accus ing him as the murderer. The facts and/or particulars which spell out the innuendo where one is alleged or relied upon to constitute a corrupt practice are themselves material facts and it is necessary to state them in the petition in view of the mandatory provisions of Section 83(1) of the Act. The provi sions of Section 83(1) are as follows: "83. Contents of petition (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings: Provided that where the petitioner alleges any corrupt practice, the petitioner shall also be accompanied by an affidavit in the prescribed form in support of the allega 734 tion of such corrupt practice and the particulars thereof. " It is clear from the provisions of both clauses (a) and (b) of the Section that election petition has to contain (i) a concise statement of the material facts on which the petitioner relies and also (ii) give full particulars of any corrupt practice that the petitioner alleges. In a case therefore, where what constitutes a corrupt practice is not a bare statement/statements published but those which are not published, and yet are implied, a statement of material facts will not be complete without the statement of such implicit facts. In other words, without the statement of the said facts, the statement will not be a statement of materi al facts within the meaning of the said Section. This provi sion of law is indisputable. Much of the debate that took place before us cen tered round this aspect which has assumed all importance in the context of the first charge of the corrupt practice. Various authorities were cited on both sides in support of the respective contentions on the subject. We may briefly refer to them to the extent they are relevant for our pur pose. In Hough vs London Express Newspaper Ltd., it was a case of an action for an alleged libel pub lished in the newspaper. The plaintiff, Florence Sarah Hough, married Frank Hough in 1933 and lived with him in Battersea as his wife and had one child from him. In Febru ary, 1936, he deserted her, and in June 1936 he was ordered to pay maintenance for the child. He was known at Battersea, where he lived at the time of the order, and after the desertion also he continued to live there. He acquired some notoriety as a boxer, and the plaintiff became known in the district as his wife. On December 22, 1937, an article appeared in Daily Express, a newspaper owned by the defend ants, containing the words: "Frank Hough 's curly headed wife sees every fight. "I should be in more suspense at home. " she says, "I always get nervous when he gets in the ring although I know he won 't get hurt. Nothing puts him off his food. He always eats a cooked meal last thing at night, however late it is when he gets in". " From the description given of the wife, it was obvious to those who knew the wife that another person was referred to. Hence, the plaintiff brought an action for libel alleging that the words by innuendo meant that she was falsely repre senting herself to be the wife and that she was 735 an unmarried woman who had cohabited with and had children by the boxer. On these facts, the Court of Appeal held: (i) the words were defamatory as reasonable persons knowing the circumstances would understand the words in defamatory sense (ii) it was not necessary for the plaintiff to prove that one or more persons understood the words in a defamatory sense. 1t is sufficient that reasonable persons might so understand them. The decision, therefore, shows that it is not necessary that a person publishing a defamatory state ment should intend that the statement should refer to the defamed person. It is sufficient that reasonable persons should understand it to refer to him or her. The words need not be defamatory in the primary sense. They are actionable if the existence of certain circumstances makes it reasona ble that persons to whom those circumstances are known, might understand them in a defamatory sense. It is not necessary to prove that in fact persons with such knowledge did so understand them. What is necessary, however, is that the special circumstances which are known to others and by which they are likely to understand the reference as being one to that defamed persons must be pleaded and proved. In Fullam vs Newscastle Chronicle and Journal Ltd. & Anr. , the facts were that prior to 1962, the plaintiff was a Roman Catholic priest and a curate in the dioceses of Salford near Manchester. In 1962, he gave up the priesthood and became a schoolteacher. In 1964, he married and in 1965 he and his wife had their first child. The plaintiff took a teaching post at Wakefield. South Yorkshire, where he lived. In July 1973, he applied for the deputy headmastership at a school in Redcar on Teesside, which was about 80 miles north of Wakefield, and he was appointed to that post. There had been a controversy about the previous deputy headmaster. On 21st July, a local news paper which circulated in the districts of Teesside and Newscastle Upon Tyne but not in the Wakefield area, pub lished an article about the plaintiff 's appointment which stated inter alia that he was a former Catholic priest, that he had left his parish in the Salford diocese and later had married and that it was claimed by the general secretary of the National Association of School masters that he "went off very suddenly from the parish where he was curate 'about seven years ago '. " The plaintiff pleaded in his statement of claim that the words in the article meant and would be understood to mean that he (a) had lathered a child whilst still a priest serving in a parish, (b) had lathered an,,illegitimate child, (c) had wrongly continued to serve as a priest after his marriage, (d) had wrongly withheld the fact of his marriage from his eclesiastical 736 superiors and parishioners and accordingly was unfit to be deputy headmaster of the school at Redcar. Pursuant to RSC Order 82, rule 3(1), the plaintiff gave as the particulars of the facts on which he relied in support of innuendoes (i) that he had married on 15th February, 1964 and (ii) that his eldest child had been born in May 1965. He did not give particulars of the persons who knew one or the other of those extrinsic facts and who, therefore, having regard to the statement in the article that he had left the parish suddenly "seven years ago", might have derived from the article the imputations alleged in (a) to (d) of para 5 of the statement of claim. The defendants applied to strike out para 5 of the claim on the ground that it disclosed no reasonable cause of action. The Court of Appeal held as follows: "(i) Although it was not the usual practice in libel actions to plead particular acts of publication if the words com plained of had been published in a newspaper, in cases where the action was based on a legal, or 'true ', innuendo and the ordinary readers of the paper would not have derived from the words complained of the innuendo alleged, the plaintiff was required, under RSC Order 18, rule 7(I) and Order 82, rule 3(I) to particularise not only the special circum stances which were alleged to give rise to the innuendo but also the identity of the readers of the paper who were alleged to know of those special circumstances, since the identity of those readers was a material fact on which the plaintiff relied in support of his cause of action. (ii) Since the only readers of the article who could have concluded that the plaintiff had lathered a child or married while he was still a priest were readers who new either the date of birth of his 'eldest child or the date of his mar riage but did not know both those facts and such readers would be rare and exceptional, having regard in particular to the area where the paper circulated, the plaintiff should be ordered to give particulars identifying those readers. Accordingly, unless such particulars were given, para 5 of the statement of claim should be struck out. " While discussing the law on the subject, Lord Denning MR observed as follows: "The essence of libel is the publication of written words to 737 a person or persons by whom they would be reasonably under stood to be defamatory of the plaintiff. But those words may give rise to two separate and distinct causes of action . . First, the cause of action based on a popular innuendo. If the plaintiff relies on the natural and ordi nary meaning of the words, he must in his statement of claim satisfy the person or persons to whom they were published, save in the case of newspaper or periodical which is pub lished to the world at large, when the persons are so numer ous as to go without saying. Secondly, the cause of action based on a legal innuendo. If the plaintiff relies on some special circumstances which convey some particular person or persons knowing the circum stances, a special defamatory meaning other than the natural and ordinary meaning of the words when he must in his state ment of claim specify the particular person or persons to whom they were published and the special circumstances known to that person or persons for the simple reason that these are the material facts on which he relies and must rely for this cause of action. It comes straight within the general rule of pleading contained in RSC Order 82, rule 3. In the second cause of action, there is no exception in the case of a newspaper because the words would not be so understood by the world at large but only by the particular person or persons who know the special circumstances." (emphasis supplied) Lord Denning further observed that this rule of pleading was not observed in Cassidy vs Daily Mirror Newspapers, or in Hough vs London Express Newspaper Ltd., (supra) because the defendant did not ask for particu lars. After referring to paragraph 5 of the plaint, he then observed that paragraph 5 was utterly inadequate as it stood and that no ordinary reader could ever derive those imputa tions about "fathering a child" etc. from the article. It would have to be some particular person with knowledge of some special circumstances. He further observed that the pleading in that case told the circumstances, viz., the marriage in 1964 and the birth of a son in 1965 but it did not tell as to who were the persons who knew of the circum stances and derived the imputations from the article. In the same case, Scarman LJ stated that it was obvious that a 738 material fact in such a cause of action was that the persons to whom the words were published knew the extrinsic facts. In principle, therefore, their knowledge being a material fact should be pleaded. He further observed that there may be a case where the facts may be very well ' known in the area of the newspaper distribution in which even it would suffice to plead merely that the plaintiff would rely on inference that some of the newspaper readers must have been aware of the facts which are said to give rise to the innu endo. But that was not the case in that action and, there fore, justice required that the plaintiff should fully particularise the publication relied on so that the defend ants may understand the nature of the case they have to make. These two decisions, however, are in libel action and not in election matters. In Sheopat Singh vs Ram Pratap, ; , one of the questions that directly arose for consideration was of the burden of proving the ingredients of the corrupt practice under Section 123(4). The facts were that an alle gation was made against the personal character and conduct of one of the candidates in the election, viz., that a cinema theatre of Rs.7 lakhs in Ganganagar was the barkat of the cement of the Rajasthan Canal. The candidate concerned was at the crucial time the Minister in charge of the Rajas than Canal Project. During the election, a cinema theatre known as Adarsh Theatre was being put up at Ganganagar. There was no dispute that the theatre referred to in the poster was the said Adarsh Theatre and it belonged to the concerned candidate and his sons. In that context, there fore, it was manifest that the poster meant to convey the idea that the candidate had misappropriated the cement of the Rajasthan Canal of which he was in charge and built a big theatre in the name of his sons. Hence, it was a clear reflection on the candidate 's personal character and con duct. The argument advanced on behalf of the returned candi date was that there was no evidence in the case that the said statement was one reasonably calculated to prejudice the prospects of the election of the candidate against whom the said statement was meant, viz., Ramchander Chowdhary. In that connection, it was argued that if the voters did not know that the cinema theatre which was being built in Ganga nagar belonged to Ramchander Chowdhary or his sons, the statement concerned would not deflect the voters from voting in favour of Chowdhary. It was also argued that there was no evidence in the case that all or any of the voters knew the fact that the cinema theatre belonged to Chowdhary or his sons. This Court stated in that case that they were not dealing with a libel action and, therefore, the 739 cases cited at the Bar on libel action such as Nevill vs Fine Art and General Insurance Co. Ltd., and the Capital and Counties Bank Ltd. vs George Henty & Sons, had no relevance for determining the ques tion under Section 123(4) of the Act. The only question is whether the statement in question was reasonably calculated to prejudice the prospects of Chowdhary 's election. The Court then pointed out that on behalf of the returned candi date it was not contended either before the Election Tribu nal or before the High Court that the voters had no knowl edge of the fact that the cinema theatre at Ganganagar belonged to Chowdhary or his sons. The Court further ob served that apart from that the object with which the state ment was made was the crucial test. Since it was proved that Ganganagar cinema theatre belonged to Chowdhary 's sons and that Chowdhary was the Minister in charge of the Rajasthan Canal and he was also the only effective candidate against the returned candidate who was the appellant in that case, the appellant 's intention in making that statement was obvious and that was to attack the personal character of Chowdhary in order to prejudice his prospects in election. The appellant must have reasonably calculated that the voters, or at any rate the voters in and about the locality where the cinema theatre was being put up, had knowledge or the tact that It was being constructed by the Minister of his sons. It cannot also be said that when a big cinema theatre at a cost of Rs.7 lakhs was being put up in Gangana gar the voters in and about that place would not have known about the ownership of that building. Hence, the fact that the building was brought in for attacking the personal character of Chowdhary merely indicated that the appellant knew that the voters had knowledge of its ownership and expected that it would create the impression which it mani festly indicated to convey. Hence, this Court held that the High Court 's finding that the statement was reasonably calculated to prejudice Chowdhary 's prospects in election could not be said to be unsupported by evidence or by the. admitted facts placed before the High Court. It was a rea sonable inference from the facts found by the High ' Court. It must be said that in this case the question whether it was necessary for the election petitioner to state in the petition the extrinsic facts which would connect the person concerned with the libelous statement was not raised and, therefore, was not answered. The only question which was agitated was whether the voters without knowing that the theatre belonged to the defamed candidate would be deflected from voting and this Court upholding the finding of the High Court, observed that it was not contended either before the Election 740 Tribunal or before the High Court that the voters had no knowledge of the fact that the cinema theatre belonged to Chowdhary or his sons. Secondly, it was held that whether the voters had such knowledge was immaterial since what was crucial for the corrupt practice under Section 123(4) of the Act is the object with which it was made. Since the election petitioner had proved that the theatre belonged to Chowd hary 's sons and that Chowdhary was the Minister in charge of the Rajasthan Canal, it must be held that the returned candidate had reasonably calculated that the voters or at any rate the voters in and about the locality where the theatre was being put up, had knowledge of the fact that it was being constructed by the Minister or his sons, and that such extrinsic facts could not have been unknown to the voters. This decision may be construed as laying down that even if the petition does not state the extrinsic facts but the electorate is well aware of them, the petitioner can lead evidence and prove them. Whether the petition in that case did or did not state the extrinsic facts is not clear from the decision. It is also not clear from the judgment whether any evidence was led that in fact the voters had understood the said statement to refer to Chowdhary. On the other hand, one of the observations made in the judgment shows that the proof of such an impression of the voters is dispensable for the purpose of establishing a corrupt prac tice under Section 123(4) of the Act. That observation is as follows: "To be within the mischief of sub section (4) of Section 123 of the Act such a statement shall satisfy another test, namely, it shall be a statement reasonably calculated to prejudice the prospects of the election of the candidate against whom it is made. The word "calculated" means de signed: it denotes more than mere likelihood and imports a design to affect voters. It connotes a subjective element, though the actual effect of. the statement on the electoral mind reflected in the result may afford a basis to ascertain whether the said statement was reasonably calculated to achieve that effect. The emphasis is on the calculated effect, not on the actual result, though the latter proves the former. But what is important to notice is that it is not necessary to establish by positive evidence that the voters, with the knowledge of the contents of the statement were deflected from voting for the candidate against whom the statement was made. " In Kumara Nand vs Brijmohan Lal Sharma. ; the 741 facts were that the complaining candidate was called "the greatest of the thieves" in a poem recited at a public meeting in the presence of the returned candidate. It was held that it was not a mere expression of opinion but was a statement of fact. It was further held that in such circum stances, particulars are not necessary before a bald state ment with respect to personal character or conduct of the candidate can be said to be a statement of fact. It was also observed that whether particulars are necessary will depend on the facts and circumstances of each case. We may state here that the discussion in that case mainly centered around the question whether the particular statement was a state ment of fact or an expression of opinion. In Habib Bhai vs Pyarelal & Ors. , AIR 1964 MP 62 dealing with the question of innuendo the High Court referred to certain English cases on the point and held that "in view of these decisions, it is obvious that an innuendo is simply an averment that such a one, means such a particular person; or that such a thing, means such a particular thing: and, when coupled with the introductory matter, it is an averment of the whole connected proposition by which the charge may be brought home to the person concerned. The whole attempt of the learned counsel for the appellant before us was to suggest that the words, though not per se defamatory of the third respondent, were definitely so in their secondary meaning read in the context of circumstances. But, as no attempt was made in the pleadings to plead the extrinsic facts to show by those facts as to how the allegations contained in annexure I were related to the third respond ents, we are of opinion that it must he held that by refer ring to any possible meaning of the words used, no imputa tion could be read in the words as against him. " It can, therefore, be said that in this case the Court had insisted that it was necessary to plead the extrinsic facts to show all those facts as to how allegations were related to the defamed or complaining candidate. In Manmohan Kalia vs Yash & Ors., ; which is more or less on par with the present case, it was alleged by the election petitioner that the returned candidate through speeches either made by him or his friends had carried on a vilifying campaign to show that the complaining candidate was directly connected with the murder of one Asa Ram, a Harijan and one of the supporters of Congress (I) Party so as to wean away the votes of the harijans of the locality and members of the Congress (I) Party. The High Court had disbelieved oral evidence and found no nexus with the news items etc. and had 742 dismissed the petition. This Court held that where the doctrine of innuendo is applied, it must be clearly proved that the defamatory allegation was made in respect of a person though not named, yet so fully described that the allegation would refer to that person and that person alone. Innuendo cannot be proved merely by inferential evidence which may be capable of two possibilities. On the facts, the Court held that after having gone through the evidence, statement of witnesses and the documents placed before the Court, it was difficult to find any close connection or direct link between the imputations made against the appel lant in 1978 and those made in 1980. In none of the docu ments produced by the complaining candidate which referred to the activities of the returned candidate, there was the slightest possibility that the appellant had anything to do with the murder of Asa Ram. The Court further observed as follows: "It is now well settled by several authorities of the Su preme Court that an allegation of corrupt practice must be proved as strictly as a criminal charge and the principle of preponderance of probabilities would not apply to corrupt practices envisaged by the Act because if this test is not applied a very serious prejudice would be caused to the elected candidate who may be disqualified for a period of six years from fighting any election, which will adversely affect the electoral process". In W. Hay & Ors. vs Aswini Kumar Samanta, AIR 1958 Cal. 269 a Division Bench of the Calcutta High Court held that it is well settled that in a "libel action" the ordinary defam atory words must be set out in the plaint. Where the words are per se or prima facie defamatory only the words need be set out. Wherever the defamatory sense is not apparent on the face of the words, the defamatory meaning or as it is technically known in law, the innuendo must also be set out and stated in clear and specific terms. Where again the offending words would be defamatory only in the particular context in which they were used, uttered or published, it is necessary also to set out except where as in England, the law is or has been made expressly otherwise, the offending context (colloquium) in the plaint, and to state or ever further that this context or the circumstances constituting the same, were known to the persons to whom the words were published, or, at least, that they understood the words in the defamatory sense. In the absence of these necessary averments, the plaint would be liable to be rejected on the ground that it does not disclose any cause of action. 743 13. What exactly should be pleaded in an action for defamation has been stated also in Halsbury 's Laws of Eng land Vol. 28 4th ed. In paragraphs 174, 175, 176, 177 and 178 of the said Volume, we have discussion with regard to natural and ordinary meaning of the words complained of, and about the innuendo and the facts and matters supporting innuendo which should be pleaded and proved. It is stated there that in drafting a statement of claim in libel or slander, it is necessary to distinguish between cases in which the words complained of are alleged to be defamatory in their natural and ordinary meaning, whether the literal or the inferential meaning, and those in which the defamato ry meaning is a secondary meaning derived from extrinsic or special facts or matters, so that a legal or true innuendo must be pleaded. If it is claimed that the words are defama tory in their natural and ordinary meaning and the words bear only one literal meaning, which is clear and explicit, it is not necessary to plead the meaning in the statement of claim. However, if the words are reasonably capable of bearing more than one literal meaning or if the defamatory meaning relied on is inferential (a "false or popular" innuendo), it is desirable and may even be necessary to plead the defamatory meaning or meanings. Where the plain tiff wishes to claim that the words complained of were understood to be defamatory in a secondary or extended meaning by those persons having knowledge of some special facts or matters, such a meaning constitutes a separate cause of action and the same should be pleaded expressly in a separate paragraph in the statement of claim (emphasis supplied). Particulars must be given of the facts and mat ters on which the plaintiff relies in support of any second ary or extended defamatory meaning which it is decided to plead. These special facts or matters may be extrinsic to the words used or there may be some special meaning of the words themselves. The plaintiff should plead that particular words bore the innuendo meaning. In Gatley on Libel and Slander (8th ed.) in para graph 95, while dealing with "True and False Innuendoes", it is observed that in distinguishing between the ordinary and natural meaning and the innuendo meaning or words, the substantive law cannot be separated from the requirements of pleadings and the rules of evidence. When the plaintiff wishes to rely on any special facts as giving the words a defamatory or any particular defamatory meaning, he must plead and prove such facts including, where necessary, any special knowledge possessed by those to whom the words are published which gives the words that meaning, and must set out the meaning in his pleading. Where words are not defama tory in their natural and ordinary mean 744 ing but are so only by reason of extrinsic circumstances, the plaintiff must plead also those circumstances and the precise defamatory meaning conveyed by them to those persons to whom the words were published. Otherwise, the statement of claim will disclose no cause of action. Such an innuendo is required to be pleaded whenever the plaintiff relies on any extrinsic facts as giving to the words the meaning he alleges. The plaintiff must plead the words, the extrinsic facts and knowledge of those facts on the part of one or more of those persons to whom the words were published. He can also give evidence of any facts and circumstances which he has pleaded and which would lead reasonable persons to infer that the words were understood in that meaning provid ed such facts or circumstances were known to those persons to whom the words were published. The evidence required is the evidence of special facts causing the words to have a meaning revealed to those who knew the special facts. Street in his treatise on Torts (6th ed.) at page 294, has stated that where nothing is alleged to give an extended meaning, words must be construed by the judge in their ordinary and natural meaning. The whole of the statement must be looked at, not merely that part on which the plain tiff relies as being defamatory, although, of course, it may be relevant to take account of the greater importance of some part of a statement, e.g., the headlines of an article in a newspaper. There may be circumstances where the plain tiff alleges that the statement is defamatory because spe cific facts known to the reader give to the statement a meaning other than or additional to its ordinary meaning; this is known as a true or legal innuendo. In that case, the plaintiff must plead and prove such facts, for the defendant is entitled to know that meaning of the statement on which the plaintiff relies so that he is able to argue either that the statement in that meaning is not defamatory or that it is then true of the plaintiff. There is a third possibility. The words may have a meaning beyond their literal meaning which is inherent in them and arises by inference or impli cation: this is sometimes known as the "false" innuendo. The plaintiff has to plead separately any such "false" innuendo. A "false" innuendo differs from a "true" innuendo in that the pleader of a "false" innuendo does not set out any extrinsic facts in support of his plea. Duncan & Neil in their book on defamation (1978 ed.) while referring to "innuendo" on page 17 onwards have stated that the law of defamation recognises that (a) some words have technical or slang meaning or meanings which depend on some special knowledge possessed not by the general public but by a limited number of persons 745 and (b) that ordinary words may on occasions bear some special meaning other than their natural and ordinary mean ing because of certain extrinsic facts and circumstances. The plaintiff who seeks to refer to an innuendo meaning has to plead and prove the facts and circumstances which give words a special meaning '. He has also to prove that the words were published to one or more persons who knew these facts or circumstances or where appropriate, the meaning of the technical terms etc. While referring to the test where identification depends on extrinsic facts, the learned authors have stated that where identification is in issue, the matter can sometimes be decided by construing the words themselves in their context. More often, however, the plaintiff will be seeking to show that the words would be understood to refer to him because of some facts or circumstances which are extrinsic to the words themselves. In these cases the plaintiff is required to plead and prove the extrinsic facts on which he relies to establish identification and, if these facts are proved, the question becomes: would reasonable persons knowing these facts or some of them, reasonably believe that the words referred to the plaintiff. Where identification depends on extrinsic facts these extrinsic facts must be pleaded because they form part of the cause of action. The conspectus of the authorities thus shows that where the defamatory words complained of are not defamatory in the natural or ordinary meaning, or in other words, they are not defamatory per se but are defamatory because of certain special of extrinsic facts which are in the knowl edge of particular persons to whom they are addressed, such innuendo meaning has to be pleaded and proved specifically by giving the particulars of the said extrinsic facts. It is immaterial in such cases as to whether the action is for defamation or for corrupt practice in an election matter, for in both cases it is the words complained of together with the extrinsic facts which constitute the cause of action. It is true that Section 123(4) of the Act states that the statement of fact in question must be "reasonably calculated to prejudice the prospects" of the complaining candidate 's election. However, unless it is established that the words complained of were capable of being construed as referring to the personal character or conduct of the candi date because of some specific extrinsic facts or circum stances which are pleaded and proved, it is not possible to hold that they were reasonably calculated to prejudice his prospects in the elections. For, in the absence of the knowledge of the special facts on the part of the 746 electorate, the words complained of cannot be held to be reasonably calculated to prejudice such prospects. Once, however, it is proved by laying the foundation of facts that the words in question were, by virtue of the knowledge of the special facts, likely to be construed by the electorate as referring to the personal character or conduct of the complaining candidate, it may not further be necessary to prove that in fact the electorate had understood them to be so. That is because all that Section 123(4) requires is that the person publishing the complaining words must have in tended and reasonably calculated to affect the prospects of the complaining candidate in the election. It is in the light of this position in law that we have to examine as to whether the first respondent (elec tion petitioner) had discharged this primary burden cast on him. We have already shown above by referring to the por tions of the petition relating to exhibit P 1, that beyond alleging that the pamphlet in question and particularly the two statements therein, viz., "everybody knows the hands behind that murder. The Marxist leader arrested also is known", the first respondent has not shown as to how the said two statements or the rest of the contents of exhibit P 1 had projected him as the murderer in the eyes of the elec torate. Dr. Chitale, learned counsel appearing for the first respondent relied upon the contents of paragraphs 14 and 19 of the petition to contend that the extrinsic facts to spell out the innuendo were sufficiently set out there and those facts being known to the electorate the said two offending statements were enough to point to the first respondent as the murderer in the eyes of the electorate. We have already referred to the relevant portions from the said paragraphs. We do not find any facts pleaded there whereby the elector ate would gather an impression that the first respondent was the murderer of the Said four victims. Barring his own testimony, all other evidence led by the first respondent is also totally silent on this aspect of the matter. None of his witnesses has stated anywhere that the contents of exhibit P 1 had made out the first re spondent as the murderer of the four victims or even that they were capable of doing so. On the other hand, all his witnesses without exception are unanimous that after reading exhibit P 1 the impression it created on them was that it referred to an incident which had taken place on the previ ous day or to an earlier incident and nothing more. None of the witnesses has stated that exhibit P 1 even remotely connect ed the first respondent with the murders. This is what the witnesses have stated: 747 V.H. Ashraft, PW 2 states in his examination in chief as follows: "I read exhibit P 1. The impression that it created in me was that it referred to an incident that took place on the previous day. " In cross examination, the witness states: "On seeing a copy of exhibit P 1 my first impression was that it is an issue of the daily paper for that day . . I did not go through exhibit P 1 in full. Immediately I have gone through the daily issue also. At that time I realised that Ex P 1 did not relate to an incident that took place on the previous day. After that when I read exhibit P 1 I further realised that it relates to some incident on an earlier occasion". VSA Muthaliff, PW 3 in his examination in chief states as follows: "On reading exhibit P 1 I thought that it is a supplement pub lished in connection with the election. I thought that it is a supplement of Malayala Manorama Daily for that day. I thought that it was the report regarding murders in connec tion with the election". M.K. Saidalavi, PW 4 in his examination in chief states as follows: "On reading exhibit P 11 thought that it was the news about a murder that took place the previous day. The impression that 1 gathered was that murder was committed by the Communists . I thought that exhibit P 1 is likely to affect Left United Front adversely. " In cross examination, the witness says as follows: "I had occasion to talk to my friends about exhibit P 1. After reading exhibit P 11 understood that it was not the news of a recent incident. I had occasioned to read about that inci dent earlier in 1983. On going through exhibit P 1 I understood that it related to an incident that took place in 1983. " C.J. Dominic, PW 5 in his examination in chief states as follows: 748 "On reading the headlines I went to the market. When I returned home the talk there was as if murder took place the previous day. Then in order to clear doubt I went to the reading room. On going through the daily issue of the Ma layala Manorama I was not able to find the news in exhibit P 11 felt sorry that such a murder took place on the eve of the election." K.D. Abdu, PW 6 states in his examination in chief as fol lows: "I read the copy of exhibit P 1 I realised that it was a con scious attempt on the part of the United Democratic Front to defeat the petitioner in the election. Copies of exhibit P 1 were supplied by them in almost all the houses in the local ity. Majority of the voters in that locality was ladies and they were illiterate also. " In cross examination, the witness states as follows: "Regarding exhibit P 1 my enquiry revealed that almost all the persons of the locality had complained. I went through the entire copy of exhibit P 1. " Then it appears that there is a note by the court that the witness says that exhibit P 1 was purposely intended to defame the petitioner. The witness further stated in cross examina tion as follows: "When I talked to the petitioner (i.e., the first respond ent) about the speeches I made mention of the copy of exhibit P 1 also. He did not ask for a copy. ' ' K. Prakash, PW 7 in his examination in chief states as follows: "On reading such posters exhibit P 1 the news appeared to me to be true. It was only after the election that I came to know that the impression was not correct." Though T.M. Darar, PW 8 states in his examination in chief that he had seen copies of exhibit P 1 being distributed in 7th Division and he also alleges that he had seen the copy of the said pamphlet and the wall posters containing the photographs of the appellant seen pasted there, he does not give the impression about the same. However, in crossex amination he states as follows: 749 "I went through the copy of exhibit P 1. On reading I understood that it is an old story. " Thanhapen, PW 9 in examination in chief has nothing to state. However, in cross examination he states as follows: "1 did not read the copy of exhibit P 1 in full when it was given to me. Even before reading I was pained to see it. Pain was because I saw that four persons were murdered. After going over to my daughter 's residence on the same day I read another copy of exhibit P 1 in full. On reading I under stood that it is an old story. Then the pain that I felt at first was slightly relieved. But the pain continued because after all murder is murder. " C.S Devadas, PW 10 in his cross examination states as fol lows: "The impression that I gathered was that the Marxists are murderers and therefore instead of giving votes to them it must be given to the 1st respondent (i.e., the appellant). " Sathyan, PW 13 in his examination in chief states as fol lows: "In exhibit P 1 there was also a statement of the 1st respond ent. The reading of the news regarding 4 murders appears at first sight to be an item of news going adverse to the petitioner. This news item was a general discussion in the locality. " In cross examination he states as follows: "When I got exhibit P 1 I read through the same. Even after reading exhibit P 1 in full I was not able to realise that it was the news of murders committed much earlier. Even after discussions with others I did not realise that it was an earlier incident. It had news importance. It was only after the election that I came to understand that the news item in exhibit P 1 related to an earlier incident. Discussion was with my colleagues. They said that they also got the copies of exhibit P 1. They are persons without politics. I did not bring this news item to the notice of the petitioner (i.e., the first respondent). 750 5. The workers of the petitioner (i.e., the first respond ent) also used to come to me for canvassing. I asked them about the news in exhibit P 1. They said they knew about it. This was after lunch on the date previous to election. When Rajappan and Vasukutty gave a copy of exhibit P 1 to me others were waiting outside. On seeing and reading a copy of exhibit P 1 it appeared to me to be a supplement of Malayala Manora ma daily for that day. Even after reading. the news item in exhibit P I, on account of the importance of the news, I had no occasion to think about it further to ascertain whether it is a recent news or an old news. " P.M. Kaviraj, PW 14 in his examination in chief has only this to say: "I heard ladies saying that the news contained in exhibit P 1 is a cruel act. " In cross examination he says as follows: "On getting PW 1, I read through it in entirety. Even then 1 understand (sic) that it is the news of an old incident. My impression was that it was the news relating to an inci dent which took place on that date. I did not inform the petitioner that I read EX. I wanted to tell him but I did not do so. Till now I did not inform him. That is be cause I am not interested. I told my friends. It was then that I knew that it was an old news. " T.A. Guide, PW 15 in his examination in chief states as follows: "The persons mentioned in exhibit P 1 who have been murdered are my neighbours. " In cross examination he states as follows: "On reading of exhibit P 11 understood that it related to an earlier incident. We discussed the matter at home. I also discussed the matter with some friends. Thus, it is clear from the testimony of the first respondent 's witnesses that the contents of exhibit P 1 gave them an impression variously as either the incident had occurred the previous day or that it was 751 an old story or that the Communists or Marxits were murder ers or that it was a cruel act or that it was unfavourable to the first respondent. The impression conveyed by the document that the Marxists or Communists were murderers and therefore the electorate should not ' vote for them and hence it was unfavourable to the first respondent, was not an impression about his personal character/conduct. It was an impression at best about his political character/conduct. In particular there was no impression that he was the murderer or one of the murderers. As far as the petitioner himself is concerned, in paragraph 2 of his deposition in examination in chief he makes a general statement as follows: "Personally against me the propaganda on behalf of the first respondent (i.e., the appellant) was that I am a murderer, a non religious man and one who is unfit to be elected as a member of the legislative assembly. " Thereafter in paragraph 19 of his deposition he says with reference to exhibit P 1 as follows: "The original of exhibit P 1 was printed and published on a Sunday which was 22.5.83, distribution was on a Sunday which was 22.3.1987. Four murders were described as incidents which took place on the previous day. Out of the 4 murdered, the photos of two dead bodies lying in the hospital were also published therein. exhibit P 1 mainly contained the news about murders alone. The intention behind the publication was to make the electors understand 4 murders that took place in 1983 as murders that took place on the previous day. That paper also contains a request by the committee with the photos of 1st respondent (i.e., the appellant) and Rajiv Gandhi. In the request it is specifically stated 'that it is only common knowledge as to who is behind the murder. So also it is written that the Marxist leader who is arrest ed is also known to all. That was the result of a conspiracy consciously entered into for the purpose of maligning and exposing me as a murderer and an undesirable person. I was never an accused of any murder case. In connection with the 4 murders described in exhibit P 1 a 752 case was registered against me for having given shelter to the accused in that case. There were several meetings in protest against my rest in connection with that case stating that it is a false case. 1 had absolutely no involvement in giving protection or shelter to those persons. Subsequently that case ended in acquittal. In the main protest meeting held at Thoppumpadi one of the speakers was the 1st respond ent himself. (i.e., the appellant). At the time of those murders in 1983 Mr. Vayalar Ravi was the Home Minister. He was also the leader of the Union in the Cochin Port Trust. I was also a worker of a rival union there. There were differ ences of opinion between myself and Mr. Vayalar Ravi. There fore it was at his instigation that I was implicated in a false case." (emphasis supplied) Then there is a Court question: Whether the murders of those persons were political murders? The answer is: Those four murdered persons were anti social elements. There was no politics involved in it. Then he continues to state: "The publication of exhibit PW 1 on the date previous to the election had the effect of creating an impression among the impartial electors that I am a person involved in murders . . If such a propaganda is made as was done in this case the opposite candidate will not be getting an opportunity to rectify the result. 1st respondent and his workers were fully aware of the fact that I am completely innocent in connection with the murders of the said four persons. Since they were fully aware of the fact that I am sure to succeed in the election, this story was purposely manipulated as a result of conspiracy." "22. exhibit PW 1 when it was published had the appearance of a real issue of Manorama. Daily People on reading the report went under the impression that what was contained therein was the news of an incident which took place the previous day. On seeing copies of exhibit PW 1, many of my workers and electors also telephoned and told me that a supplement of Malayala Manorama was seen. They also inquired about the murders mentioned therein. Since I was not able to get an opportunity of bringing the real facts 753 before the electors, myself and my workers were in a help less condition." (emphasis supplied) In his cross examination he states in paragraph 32 of his deposition as follows: "The fight hand side of exhibit P 1 contains a true copy of the Malayala Manorama. In that portion there is no difference. On the left hand side and the lower portion of the right side there are certain additions. The news item in exhibit P 1 regarding murders are correct in all details. What is wrong is only that it was published as if to appear that it was an incident that took place on the previous day. My complaint is that an impression was created among the people that it was an incident that took place on 21.3.1987. Even after reading the whole of exhibit P I people go only under the im pression that the incident happened on the previous day. My memory is that I have specifically alleged in the petition that such an impression was created. It was unfavourable to my interest only on account of the creation of such an impression that it was an incident that happened on the previous day. My complaint is that I did not get an opportu nity to correct the impression before the polling. I have alleged in the petition that such an impression was created among the voters and I did not get time to correct the impression before the polling. In the true copy of Malayala Manorama contained in exhibit P 1 there is nothing against me. On the left hand side of exhibit P 1 is the request to vote for the 1st respondent even though my name was not mentioned it was intended against me. Even without mentioning my name it is possible to know that it was intended against me. The writings in that request capable of identifying me as the culprit are the statements that the persons responsible are known to all and the Marxist leader who was arrested was also known to all." (emphasis supplied). He was then asked the question: "Have you so stated in the petition?" The answer was "My memory is that it is so stat ed". He then proceeds to state as follows: "If I remember correct I have stated in the petition that the person intended by the arrested Marxist leader is my self. 754 Many persons who gathered such an impression contacted me over phone. I did not examine anybody among them. I have examined several persons for proving the distribution of exhibit P 1. None of those witnesses were asked by my counsel wheth er any of them understood the reference in the request contained in exhibit P 1 as concerning me. I was present in court when those witnesses were examined. I did not ask any of them whether they continued to hold the impression that the murder took place on the previous day . . My impres sion is only from what my workers told me." (emphasis supplied) 20. We have supplied the emphasis at the proper places in the first respondent 's testimony reproduced above. He has himself admitted that all those who read exhibit P 1 gathered an impression that the incident had occurred on the day previous to its publication. If that is so, then even the statements in exhibit P 1 that "Every body knows the hands behind that murder. The Marxist leader arrested is also known" were not connected by the people with his arrest for harbouring the accused in the old murder case and vice versa. The first respondent has repeated his allegation that the people had thought that the incident had taken place on the day previous to the publication of exhibit P 1 at places more than one in his testimony. He has also placed his own interpretation on the said publication which is incompatible with the extrinsic facts stated by him in support of the innuendo meaning of the publication. According to him (i) the four murders were described as incident which had taken place on the previous day; (ii) the intention behind its publication was to make the electorate believe that the murders which had taken place in 1983 were murders that had taken place on the previous day; (iii) it is in the context of this intention that it was specifically stated that it was only common knowledge as to who was behind the murders. So also in the context of this intention that it was written that the Marxist leader who was arrested was also known to all; (iv) again it is to explain this intention that he has given the extrinsic facts, viz., that in connection with the four murders described in the publication a case was registered against him for having given shelter to the accused in that case. He has also stated that there were several meetings in protest against his arrest and that in the main protest meeting the appellant was one of the speakers on his behalf; (v) according to him further the people on reading the report gathered the impression that what was stated in the publication was the news of an incident which had taken place the previous day; (vi) further what 755 was wrong with the publication, according to him, was only that it was published as if to appear that it was an inci dent that had taken place on the previous day. He has reit erated this by specifically stating that his complaint was that an impression was created among the people that it was an incident that had taken place on March 21, 1987. Accord ing to him, further even after reading the whole of exhibit P 1 people went only under the impression that the incident had occurred on the previous day. It is his case further that he has specifically alleged in the petition that such an im pression was created and that it was unfavourable to his interest only on account of the creation of such an impres sion, viz., that it was an incident that had happened on the previous day. He has then stated that even though his name was not mentioned, it was intended against him, and that even without mentioning his name it was possible to know that it was intended against him and that the publication was capable of identifying him as the culprit because of the statements that "the persons responsible were known to all" and "the Marxist leader arrested was also known to all. Although he has also added at the end that many persons who gathered such an impression, viz., that he was meant by the publication, had contacted him over phone, he admitted that he did not examine anyone from among the said persons. This is a telling circumstance against him because he had followed as a witness after all his witnesses were examined, and he knew that none of his witnesses had stated that they had connected the imputations in the publication with him. On the other hand, as stated earlier, not only all his witnesses had stated that they had gathered the impression that the incident had taken place the previous day but he himself was of the view that the publication was meant to create such impression and that it did so. Hence, there was no reason for the electorate to connect him with the said incident even remotely. On his own testimony as well as on the testimony of his witnesses, therefore, it is clear that the publication was intended to create an impression and did create an impression that the incident of murders had taken place a day previous to the election. If that is so, then the publi cation and the two allegedly offending statements in the same did not connect him with the murders much less had they called him a murderer. Even his arrest for harbouring the accused in the old incident of murders was not capable of identifying him as the murderer in the eyes of the people. None knew who were the accused and who were arrested in connection with the murders which were committed the previ ous day. The people, however, certainly knew that the first 756 respondent was not arrested in connection with the said murders. Hence the extrinsic facts which the first respond ent stated in his testimony for the first time even if they were given in the pleadings would not have spelt out the corrupt practice. For those facts in the face of the asser tion of the first respondent himself were incapable of identifying him as the murderer in the eyes of the elector ate. For these reasons, we are of the view that the extrin sic facts given for the first time by the first respondent in his testimony were incapable of identifying him as the hand behind the murders or as the murderer in the eyes of the people. We are also of the view that in the absence of the extrinsic facts supporting the innuendo meaning of the publication, the petition lacked the statement of material facts for spelling out the corrupt practice complained of. Either, therefore, the allegation of the corrupt practice should have been struck off or the petitioner ought not to have been allowed to lead evidence in support of it. For, as stated earlier, whenever an innuendo is alleged, a statement of material facts as required by Section 83(i)(a) of the Act is not complete without stating the extrinsic facts spelling out the innuendo meaning. It is the publication together with the extrinsic facts which in such circumstances consti tute the corrupt practice. The absence of the statement of such facts is not an absence of the particulars of corrupt practice but an absence of the averment of material facts themselves. Hence, it is not necessary for us to deal with the controversy raised before us with regard to the respon sibility of furnishing of or asking for particulars. It is necessary, in this connection, to make a distinction between a purely libel action and an allegation of corrupt practice in an election petition. Both, for libel action as well as for an allegation of corrupt practice in an election petition, it is necessary to plead as well as to prove the extrinsic facts to spell out the innuendo meaning of the words complained of. However, whereas in a libel action it may further be necessary to prove that those with special knowledge of the extrinsic facts were likely to interpret or understand the words complained of in a defama tory sense, in an election action, it may not be necessary to do so and all that is necessary is to prove that the words complained of were reasonably calculated to prejudice the prospectus of the defamed candidate 's election. However, this latter distinction does not obliterate the similarity between the two actions, viz., that in each case in the first instance the defamation is to be spelt out by pleading the necessary extrinsic facts. In a libel action, the ex trinsic facts constitute a cause of action whereas in the election action they 757 constitute the corrupt practice. In other words, without them, there is no cause of action in the libel suit and no allegation of corrupt practice in an election petition. Dr. Chitale, however, contended that the appellant had nowhere stated that the first respondent was not intend ed to be referred to by the said publication. In this con nection, he invited our attention to the appellant 's deposi tion. In his cross examination on the subject. In paragraph 25 the appellant has stated as follows: "The statement contained in exhibit P 1 may give an impression that it was in the name of the Election Committee. On a reading of that statement, it would appear that it was on behalf of the Election Committee. " There were then the following questions and answers: Question: Do you agree to the contents of the statement included in exhibit P 17 Answer: I do not have any disagreement. Question: In the statement contained in exhibit P 1 it is stated that everyone knows persons behind the murder and also the Marxist leader who was arrested in that connection. What is your opinion regarding those statements? Answer: That is only a repetition of an incident that took place in 1983. I cannot say what was the intention behind that statement and who was intended thereby. Question: No Marxist leader was arrested in connection with that case. Further on a reading of that statement the impression that could be gathered is that the Marxist leader in the election was responsible for the murder and he was arrested. Is it so? Answer: I have nothing to do with that statement. And I was not able to gather such an impression on reading it. I do not think that anybody else also will go under that impression. Question: When any such statement is reprinted and published, it must be intended for upsetting the candidate. Answer: That de pends upon the intention entertained by the person. I cannot give an opinion. Question: When the petitioner (the first respondent) was the Deputy Mayor of the Cochin Corporation, was he not arrested in connection with that case under the false accusation that he gave shelter to the accused? An swer: I remember that the petitioner (the first respondent) was arrested in connection with such a case. He then pro ceeds as follows: "I was a speaker in a meeting in protest against his arrest. I spoke in that meeting because I felt that it is a politi cally motivated false case. In 1983, I have gone to the hospital 758 where the dead bodies were taken for post mortem." In the first instance, in the absence of the statement of the material facts in the petition as stated above, the appellant was not called upon to join issue with them in his written statement. Secondly, there is nothing in his testi mony referred to above, which helps the first respondent in his case that the publication had referred to him as the murderer. This is more so, because, as stated above, the first respondent himself has interpreted the publication as creating an impression of a different murder. The next corrupt practice of which the High Court has found the appellant guilty is the wall poster affixed on the Palace Road on the northern side of the City Rationing Office, within 25 yards from the polling station. Near this wall poster was also affixed exhibit P 1. The contents of the wall poster are as follows: "Defeat murderer T.M. Mohammed who murdered four Christian brothers at Fort Cochin. Our symbol. " exhibit P 14 is the close up photograph of the said poster whereas exhibit P 15 is a photograph from a distance as stated earlier. There is no doubt that the contents of this wall poster directly named the first respondent as the murderer of the four victims, and if it is proved that the said poster was affixed prior to the election by the workers of the appellant with his knowledge and consent as alleged in the petition, nothing more has to be established to hold the appellant guilty of the corrupt practice within the meaning of Section 123(4) of the Act. The finding of the High Court on this corrupt practice is recorded in paragraph 50 of its judgment. The High Court has stated there that the writings were at the instance of the appellant and with the consent of his election agent and that it was published in the presence of and under the supervision of the appellant 's election agent and hence it attracts all the requirements of Section 123(4) of the Act. This finding is attacked on behalf of the appellant before us. It is necessary, there fore, first to find out the allegations made by the first respondent in his election petition in that behalf. The first respondent has alleged in paragraphs 17, 34, 84 and 120 of his petition as follows: "17. The wall posters and writings on the walls arc done by the first respondent, his agents and his workers with a view to propagate false aspects against the petitioner and to mis 759 lead the electorate that the petitioner is a murderer and if anyone votes in favour of him the law and order of the society will be adversely affected. This has misled the whole electorate which has caused serious prejudice in the election of the petitioner. X X X X X 34. On the Palace Road, on the northern side of the City Rationing Office the workers of the first respondent with the knowledge and consent of the first respondent affixed wall poster that the petitioner had murdered 4 Christian brothers at Fort Cochin and hence the electorate shall vote against the petitioner and they have to vote in favour of the first respondent. It is also relevant to note that this is within 25 yards from the polling station and near this writing they have affixed the reprinted Malayala Manorama daily on 22nd March, 1987 morning. This is to mislead the public that the petitioner is a murderer and he had murdered four Christian brothers . . X X X X X 84. To prove Annexures 20 and 21 the wall posters pasted on the walls near the City Rationing Office, Palace Road, COchin, the petitioner is examining two witnesses namely, (1) K. Prakash, House No. 8/796, T.D. East Raod, Cherali, Cochin 2 and (2) J. Sundaram, Kocherry Junction, Pandikuddy, Cochin 2. X X X X X 120. Even before the distribution of reprinted Malayala Manorama the first respondent has specifically instructed his workers to write on the walls and also paste handwritten wall posters throughout the constituency publishing that the petitioner is a murderer. The hand written wall poster was pasted near the City Rationing Office on the Palace Road, a photostat copy of which is produced and marked as Annexure 20. This was pasted by Anil Raj section Thamaraparambu, Amarava thy, Cochin 1. This wall poster was written at the specific instruction of the Chief Agent and convener of the election committee and in their 760 presence Anil Raj pasted this wail poster on the wails. This fact was witnessed by K. Prakash and J. Sundaram. Really these writings misled the whole electorate and give a bad impression about the petitioner that he is a murderer, and he is responsible for the murder of 4 Christian brothers. This is absolutely falsehood. This publication was done by the candidate, his agents and by his workers with the con sent and knowledge of the candidate and they knew that this statement is false in relation to the petitioner. The allegations in the petition were denied by the appellant in his written statement as follows: "12. Averments in paragraphs 30 to 35 are also false and are hereby denied. Neither the first respondent nor his agents or workers have any knowledge of the wail writings filed by the petitioner as Annexures 15 to 22. Nor were any such writings made by any person with the consent or knowledge of this respondent. Nor do the writings show anything beyond a criticism of the Marxist party on grounds of law and order. However, the wall writings shown as Annexure 20 were not seen anywhere in the constituency nor made by the respondent or his workers. It is deliberately concocted by the peti tioner. In these paragraphs also no material facts required to impute a corrupt practice against the first respondent have been stated. The entire allegations in the aforesaid paragraphs have been falsely made. X X X X X 18 . The annexure 20 appears to have been deliberate ly concocted by the petitioner with an ulterior motive and the rest of the aforesaid annexures are also similarly concocted nor do they show any corrupt practice. The further contention in para 98 that these writing and wall posters appeared in the constituency between 10th and 14th March 1987 is absolutely false. Nor were they done by this re spondent or by his agents or workers of the UDF. Neither, with the consent of the knowledge of the respondent. The witness mentioned in paragraph 98 also appears to be parti sans of the petitioner. X X X X X 761 25. The averments in paragraph 120 that the reprinted Ma layala Manorama was pasted and hand written wallposter was published stating that the petitioner is a murderer is entirely false and the averment that the first respondent instructed his workers to do so is false. The averment that annexure 20 is a photo copy of a handwritten wall poster near the City Rationing Office on the Palace Road and this was pasted by Anil Raj and they are written on the specific instruction of the Chief Agent and convener of the election committee is wholly untrue and is denied . . . X X X X X 26. The averments in paragraph 121 that this respondent has spent more than two lakhs for the election purpose is wholly untrue. The expense incurred by this respondent for the election has been strictly within the limits prescribed by law, and the ejection accounts of this respondent have been duly submitted as required by law. The petitioner is fur nishing a wholly fanciful idea of Auto rikshaws and cars etc. out of his imagination in paragraph 121. It will thus be seen that in paragraph 17 of the petition, the first respondent has averred generally that it was the appellant, his agents and his workers who had pasted the wall posters. Secondly, in this paragraph he has not specified any wail or walls on which the poster was pasted. Thirdly, he has attributed the pasting only to the appel lant, his agents and his workers. There is no mention of the election agent. What is further in this paragraph he has not said whether the workers had done it with the Appellant 's consent or knowledge. As regards the averments in paragraph 34 of the peti tion, the first respondent does state that the workers of the appellant had pasted the wall poser with the knowledge and consent of the appellant. But it is necessary to remem ber here that he does not mention in this paragraph either the agent or the election agent nor does he state here that the pasting was ,done with the knowledge and consent of the election agent. What is further important to note is that in this paragraph he mentions the pasting of the poster only on one wall and that is the Palace Road wall near the City Rationing Office. 762 In paragrah 84 again, he specifies that he is going to examine witnesses in connection with the pasting only on one wall, viz., the same wall on the Palace Road near the City Rationing Office, and he gives the names of two witnesses and one of them, viz., K. Prakash (PW 7) has been examined in that connection. In the last paragraph where there is a reference to the said posters. P 14/P 15, viz., paragraph 120, al though there is a vague mention of the "walls", the only wall specified is the same wall on the Palace Road. In this paragraph, again the averment is that the said pasting was done by the workers and agents with the knowledge and con sent of the appellant. In this paragraph, for the first time he has introduced the "Chief Agent" and the convenor of the Election Committee, and the allegation is that the wall poster was written at the specific instructions of the said Chief Agent and the Convenor. He has not specified who the Chief Agent and the Convenor of the Election Committee were. Although Dr. Chitale submitted that the expression "Chief Agent" should be construed to mean election agent, it is not possible for us to accept the submission for reasons more than one. In the first instance, the pleadings with regard to corrupt practice have to be specific since everyone who is guilty of the corrupt practice is liable to be prosecuted for the offence. Secondly, except in this paragraph, we don 't find there is a reference to any such person as Chief Agent. Wherever the first respondent wanted to refer to the election agent, he has done so. It cannot, therefore, be argued that he does not know the difference between the election agent and the Chief Agent. The averments in the petition, therefore, bring out two facts in particular prominently. One is that, though the first respondent has alleged vaguely in paragraphs 17 and 120 of the petition, that the wall posters were on more walls than one he has specified no wall in paragraph 17 and he has referred to only one wall, i.e., the Palace Road wall in all the other relevant paragraphs, viz. ,, 34, 84 and 120. What is more, in paragraph 84, he had made it clear that he was going to examine witnesses only in connection with the pasting of the poster on the said one wall and no more. Secondly, even with regard to the pasting of the wall poster on the said wall, he is not sure as to who had done it and with whose knowledge and consent. As pointed out above, in paragraph 17 he has stated that only the appel lant 's agents and workers had pasted it. He has not stated that his workers had done it with the appellant 's consent or with the consent of the election agent. In paragraph 34 no doubt he states that the appellant 's workers had done it with the knowledge of the appellant, but in paragraph 120, he 763 states that it was done at the specific instructions of the Chief Agent of the appellant and in the presence of the Chief Agent and the convenor of the Election Committee. Nowhere in the petition it is stated that it was done with the knowledge and consent and at the instance of or in the presence of the appellant 's election agent. This assumes importance because his witness, K. Prakash (PW 7) as will be pointed out hereafter, has come out with a version which is inconsistent with the averments in the petition and has stated that the pasting of the poster on the Palace Road wail was being done under the supervision among others of Joseph Katithara, who was the appellant 's election agent. As regards the evidence which the petitioner has led to prove Exs. P 14 and P 15. we find that although he had cited two witnesses, viz., K. Prakash and J. Sundaram, to prove the lone wallposter on the Palace Road only one wit ness, viz. K. Prakash is examined. Though K. Prakash (PW 7) was cited to prove the lone wail poster on the Palace Road, he has from the witness box deposed to the fact that he had seen "wall posters" being pasted on the Saturday, a week prior to the election. Since he is the only witness who has been examined to prove the actual pasting of the wall poster and the appearance of the wail poster prior to the election, his deposition has to be scanned carefully. He has stated that he resided in the 8th Division of the Mattancherry Assembly Constituency. In examination inchief, he stated that he was a medical wholesale distributor. He had also an occasion to see a copy of exhibit P 1. It was given to him at his residence on the date previous to the election. He has also named the appellant and M/s. M.K. Latif, Naveen Kumar, Radhakrishnan and others as being the persons who had brought the copy of exhibit P 1 to his residence. Indeed he seems to be a very important man, since not only the workers of the appellant but the appellant himself had, according to him, gone to his residence specially to deliver a copy of exhibit P 1 to him. Then he has deposed to the fact that he had seen copies of Exs. P 14 and P 15 being pasted on the "wails" and not only one wail near the City Rationing Office on the Palace Road. He admits that exhibit P 14 is the close up photo and exhibit P 15 is the distant photo of the same poster. It is, therefore, difficult to understand how he could have seen both being pasted. May that be as it is. It has further to be remembered that both Exs. P 14 and P 15 are the photographs of not only the wail poster but also of exhibit P 1 which was pasted by its side. Because, he has gone on to say that he had seen "wall posters" being pasted on Saturday, one week prior to the election. Since it is the case of the first respondent himself that exhibit P 1 was printed and pub lished only a day prior to the election, it is difficult to understand as to how this witness 764 could have seen the wall poster together with exhibit P 1 being pasted one week prior to the election. He has then named Anil Raj, Joseph Katithara who is the election agent of the appellant, K.M. Mohammed, Radhakrishnan and other unnamed workers of the UDF being persons present to supervise the pasting of the wail posters. ' Thereafter, he has corrected himself by saying that at that time the "photo" of exhibit P 1 was not there, a statement difficult to follow. According to him at the time he saw the pasting being done, his co worker was also there. He has not named him nor is he examined. It is then his case that on the day previous to the election, he also saw a copy of exhibit P 1 being pasted near the wall poster. Of course, this witness has also deposed to the writings on walls which are Exs. P 16, P 17 and P 18 with which we are not concerned in this appeal but about which the first respondent had made serious complaint in the petition before the High Court which has been rejected by the High Court. He is thus a witness not only for the past ing of Exs. P 14/P 15 on all the walls in the City but for a similar pasting of all other exhibits complained of. An omnipresent witness indeed. In cross examination he was asked whether he was not the Secretary of the Election Committee of the first respondent in Division No. 8 and also the branch Secretary of the Marxist Communist Party. He denied the said suggestion and stated that he did not work in the election for the first respondent and that he had no politics and he was not a member or sympathizer of any political party. He has also gone on to maintain that he had seen wail posters similar to exhibit P 14 in other places and has named some of the places as Anavadil, UCO Bank, Cherlai, Pandikuddy Junction. He has then stated contrary to what he had stated in his examina tion in chief, that he had not seen the act of pasting of exhibit P 1 and he did not know who pasted exhibit P 1 near exhibit P 14 although in examination in chief he has categorically stated as follows: "On the day previous to the election I saw copy of exhibit P 1 being pasted near the wall poster. Time and again, the courts have uttered a warning against the acceptance of a non corroborated oral testimony in an election matter because it is not only difficult to get a non partisan witness but is also easy to procure partisan witnesses in such disputes. The courts have, there fore, insisted upon some contemporaneous documentary evi dence to corroborate the oral testimony when in particular such evidence could have been maintained. The dangers of accepting only 765 the oral testimony are illustrated by this witness. In the first instance, this witness was cited by the first respond ent himself to prove only Exs. P 14/P 15 pasted on one wail, viz., the City Rationing Office wall on the Palace Road as has been stated clearly in paragraph 84 of the petition. Even if we construe the said paragraph in the petition liberally, it can only mean that this witness was cited to prove the "wallposters" being pasted on the "walls" near the City Rationing Office on the Palace Road. He was not cited to depose to posters on walls in any other part of the City. Secondly, the petitioner has not produced any documentary evidence such as the photographs of the posters on the other walls even near the City Rationing Office not to speak of the walls in other parts of the City. exhibit P 15 shows the long length of the wall. But except for this poster there is no poster on any other part of that wall seen in the photograph. Assuming that there were posters on the other walls, even near the City Rationing Office, we have no evidence in that behalf much less of the posters on the walls in the other parts of the City. The witness has, however, chosen to depose to his having seen posters on walls in other pans of the City to which again there is no specific reference in the petition. It was the duty of the petitioner to give the particulars of the posters on the other wails or in other parts of the City. His testimony is also suspect for other reasons as well. Firstly, this wit ness has also deposed to the fact that he had received a copy of exhibit P 1 on the day prior to the election and what is ' further, he has gone to the extent of saying that it was the appellant himself who along with his election agent and other workers had gone to his residence to deliver the said copy. It is difficult to believe that on the day prior to the election the appellant and his election agent in partic ular, will have no other work but to go from house to house distributing exhibit P 1. Secondly, the witness has also deposed to the fact that he had not only seen the wall poster, Exs. P 14/P 15 but he had also seen other wall posters which were the subject matter of the petition. What is further, according to him, he had also seen Exs. P 14/P 15 being pasted in his presence by one, Anil Raj under the supervi sion of the appellant 's election agent Joseph Katithara and the workers of the UDF one week prior to the election. We have pointed out above that in the petition there is no reference to the election agent in this connection anywhere and the reference to the Chief Agent cannot be construed as a reference to him. What is further, he has also in his examinatiOn in chief gone to the extent of saying that even when exhibit P 1 was pasted near exhibit P 14, a day prior to the election, he had seen the actual pasting. This, of course, he retracted in his cross examination when he stated that he had not seen the said act of pasting. We have, therefore, a witness here who is 766 omnipresent at all crucial times and places and has no compunction in contradicting himself on vital matters. It is this witness that we are asked to believe in support of the first respondent 's case that the wail poster Exs. P 14/P 15 was pasted by the appellant 's agents and workers under the supervision of the appellant 's election agent. Needless to say that his testimony has to be discarded being of a very doubtful nature. The only other witness who is examined in connection with Exs. P 14/P 15 is the photographer, K.J. Simon (PW 25). Even according to this witness, he had taken the photo graphs, Exs. P 14/ P 15 on March 25 and 26, 1987, i.e., two days after the election. Therefore, even if we accept his evidence that he had taken the photographs in question on the said days, that will not support the first respondent 's case that the said posters were there prior to the election day. The appellant 's cross examination of this witness was directed to prove that he had not taken the photographs even on 25th and 26th March, 1987 but at a much later date and just prior to the filing of the present election petition. The appellant 's case both in his written statement as well as in the Court is that the wall poster of which Exs. P 14 and P 15 are the photographs was concocted much after the election and only for the purpose of the election petition. It is in the light of this case of the appellant that we have to scrutinise the testimony of this witness. The wit ness says that exhibit P 14 is the chose up photograph of the wail writing near the City Rationing Office and exhibit P 15 is its long distance view and that he had taken the photographs in question on March 25 and 26, 1987. In cross examination, he was asked whether since he was a professional photogra pher and had his studio, he kept accounts. His answer was that he kept accounts only for the indoorwork and not for the out door work an answer which is very difficult to appreciate. The answer was given obviously to forestall the further investigation in the matter by compelling him to produce his accountbooks which would have shown the date on which he had actually taken the photographs. He was then asked as to how he had remembered the dates on which he had taken the photographs of various other posters including Exs. P 14/P 15. To that he replied that he had given the dates of the photographs from his memory. To test his memo ry, he was asked that since he was also taking photographs of marriage ceremonies which were on an average three or four times in a month, he could give the dates on which he had taken photographs in connection with some of the mar riages. To that question, of course, he answered in the negative. This witness, further, who was called only to depose to the fact that he had taken the photographs in question, has 767 gone further and stated that all the wall writings and wall posters appeared to him to be old and he had "seen them earlier". According to him, further, they were written even two days prior to the date of election. He also goes on to say that exhibit P 1 was seen by him on the day prior to the election. Although he stated that he was paid Rs.800 for the photographs and Rs.1,000 for copies thereof, he did not enter the amounts in his accounts. He stated that he had a Bank account but he did not remit the amount to the Bank. He then stated that in his studio there would be no record to show that the photographs were taken. He also stated that he had not given any receipt for receiving the payment. It was then suggested to him that he was a sympathizer of the Marxist Party which suggestion, of course, he denied. His testimony not only fails to impress us, but leads us to believe that there is much force in the contention of the appellant that the poster in question was concocted at a later day. For otherwise it is difficult to explain as to why the witness who in the ordinary course should maintain his accounts and other documents should keep them from the court on pretexts which are not only far from convincing but positively doubtful. There is yet another and a very important reason as to why the entire version with regard to Exs. P 14/P 15 has to be rejected. The first respondent has come to the court with a version that the wall poster and such other posters were pasted on walls in the different parts of the constitu ency at least a week prior to the election. Admittedly, such false propaganda is an electoral offence punishable both under Section 127A of the Act and Section 17 I C of the Indian Penal Code. The first respondent or his agents and workers could have made complaints both to the Election Officer as well as to the police in that connection immedi ately, and a regular panchnama of the same could also have been made at the time. That would have been the best evi dence of the said allegation. We have no doubt that the first respondent and his workers would not have failed to do so had the posters been pasted at the time alleged by them. We are, therefore, impelled to reject the evidence produced by the first respondent in connection with the publication of the wallposter represented by Exs. P 14/P 15. In the circumstances, the finding of the High Court in respect of both the alleged corrupt practices will have to be set aside and 768 is hereby set aside. Hence, we allow the appeal, set aside the order of the High Court and dismiss the election peti tion. Interim order passed by this Court also stands vacat ed. In the circumstances of the case, the parties will bear their own costs. The Registry will take immediate action under Section 116C (2) of the Act. G N. Appeal al lowed.

In the 1987 election to Kerala Legislative Assembly the appellant contested against the first respondent. The appellant and respondents belonged to two different fronts, each consisting of several political parties. The appellant was declared elected, by a margin of 1873 votes over his nearest rival, the first respondent. The first respondent filed an election petition in the High Court claiming that the appellant 's election was void and that he should be declared elected in place of the appellant. In support of his contention, he alleged various corrupt practices on the part of the appellant. The High Court negatived all except two of the allegations, viz., (i) printing and publication on March 22, 1987, a day prior to the election, pamphlets containing a news item in daily "Malayala Manorama" dated May 22, 1983, and (ii) publication of a wail poster, maligning the 720 personal character and conduct of the first respondent. The High Court held that both the said acts amounted to corrupt practices within the meaning of Section 123(4) of the Representation of People Act, 1951 and were sufficient to void the election. This appeal under section 116A of the Representation of People Act, is against the High Court 's judgment. Allowing the appeal, this court, HELD: 1.1. As regards the pamphlets, the first respond ent in his election petition had relied upon an innuendo, and the innuendo was based upon the fact that, firstly, he was a Marxist leader and, secondly, he was arrested for harbouring the murderers. However, in the election petition, no averment was made that it was because he was a Marxist leader and was also arrested for harbouring the murderers that the electorate was likely to construe the said two statements as accusing him as the murderer. No facts were pleaded in the Election Petition whereby the electorate would gather an impression that the first respondent was the murderer of the said four victims. [733B C; 746 E F] 1.2. Barring his own testimony, all other evidence led by the first respondent is also totally silent on this aspect of the matter. None of his witnesses has stated anywhere that the contents of the pamphlet had made out the first respondent as the murderer of the four victims or even that they were capable of doing so. On the other hand, all his witnesses without exception are unanimous that after reading the pamphlet the impression it created on them was that it referred to an incident which had taken place on the previous day or to an earlier incident and nothing more. None of the witnesses has stated that the said pamphlet even remotely connected the first respondent with the murders. The impression conveyed by the document that the Marxists or Communists were murderers and therefore the electorate should not vote for them and hence it was unfavourable to the first respondent, was not an impression about his per sonal character/ conduct. It was an impression at best about his political character/ conduct. In particular there was no impression that he was the murderer or one of the murderers. Although the first respondent has also added at the end that many persons who gathered such an impression, viz., that he was meant by the publication, had contacted him over phone, he admitted that he did not examine anyone from among the said persons. This is a telling circumstance against him because he had 721 followed as a witness after all his witnesses were examined, and he knew that none of his witnesses had stated that they had connected the imputations in the publication with him. On the other hand, as stated earlier, not only all his witnesses had stated that they had gathered the impression that the incident had taken place the previous day but he himself was of the view that the publication was meant to create such impression and that it did so. Hence, there was no reason for the electorate to connect him with the said incident even remotely. On his own testimony as well as on the testimony of his witnesses, therefore, it is clear that the publication was intended to create an impression and did create an impression that the incident of murders had taken place a day previous to the election. If that is so, then the publication and the two allegedly offending statements in the same did not connect him with the murders much less had they called him a murderer. Even his arrest for harbour ing the accused in the old incident of murders was not capable of identifying him as the murderer in the eyes of the people. None knew who were the accused and who were arrested in connection with the murders which were committed the previous day. The people, however, certainly knew that the first respondent was not arrested in connection with the said murders. Hence the extrinsic facts which the first respondent stated in his testimony for the first time even if they were given in the pleadings would not have spelt out the corrupt practice. For those facts in the face of the assertion of the first respondent himself were incapable of identifying him as the murderer in the eyes of the elector ate. For these reasons, the extrinsic facts given for the first time by the first respondent in his testimony were incapable of identifying him as the hand behind the murders or as the murderer in the eyes of the people. [746F H; 751A B; 755D H; 756A B] 1.3. In the absence of the extrinsic facts supporting the innuendo meaning of the publication, the petition lacked the statement of material facts for spelling out the corrupt practice complained of. Either, therefore, the allegation of the corrupt practice should have been struck off or the petitioner ought not to have been allowed to lead evidence in support of it. [756C] 2.1. Where the defamatory words complained of are not defamatory in the natural or ordinary meaning, or in other words, they are not defamatory per se but are defamatory because of certain special or extrinsic facts which are in the knowledge of particular persons to whom they are ad dressed, such innuendo meaning has to be pleaded and proved specifically by giving the particulars of the said extrinsic facts. It is immaterial in such cases as to whether the action is for 722 defamation or for corrupt practice in an election matter, for in both cases it is the words complained of together with the extrinsic facts which constitute the cause of action. It is true that Section 123(4) of the Act states that the statement of fact in question must be "reasonably calculated to prejudice the prospects" of the complaining candidate 's election. However, unless it is established that the words complained of were capable of being construed as referring to the personal character or conduct of the candi date because of some specific extrinsic facts or circum stances which are pleaded and proved, it is not possible to hold that they were reasonably calculated to prejudice his prospects in the elections. For, in the absence of the knowledge of the special facts on the part of the elector ate, the words complained of cannot be held to be reasonably calculated to prejudice such prospects. Once, however, it is proved by laying the foundation of facts that the words in question were, by virtue of the knowledge of the special facts, likely to be construed by the electorate as referring to the personal character or conduct of the complaining candidate, it may not further be necessary to prove that in fact the electorate had understood them to be so. That is because all that Section 123(4) requires is that the person publishing the complaining words must have intended and reasonably calculated to affect the prospects of the com plaining candidate in the election. [745E H; 746A B] 2.2. Whenever an innuendo is alleged, a statement of material facts as required by Section 83(i)(a) of the Act is not complete without stating the extrinsic facts spelling out the innuendo meaning. It is the publication together with the extrinsic facts which in such circumstances consti tute the corrupt practice. The absence of the statement of such facts is not an absence of the particulars of corrupt practice but an absence of the averment of material facts themselves. Sheopat Singh vs Ram Pratap, ; ; Kumara Nand vs Brijmohan Lal Sharma, ; ; Habib Bhai vs Pyarelal & Ors., AIR 1964 MP 62; Manmohan Kalia vs Yash & Ors. , ; ; W. Hay & Ors. vs Aswini Kumar Saman ta, AIR 1958 Cal. 269; Hough vs London Express Newspaper Ltd., ; Fullam vs Newscastle Chronicle and Journal Ltd. & Anr., ; Cassidy vs Daily Mirror Newspapers, ; Nevill vs Fine Art and General Insurance Co. Ltd., and Capital and Counties Bank Ltd. vs George Henty & Sons, , referred to. Halsbury 's Laws of England, Vol. 28, 4th Edn. paras 174 178; Gatley on Libel and Slander, 8th Edn. paragraph 95; Street on Torts, 723 6th Edn., p. 294 and Duncan & Neil on Defamation, [1978] Edn., p. 17, referred to. Both, for libel action as well as for an allegation of corrupt practice in an election petition, it is necessary to plead as well as to prove the extrinsic facts to spell out the innuendo meaning of the words complained of. Howev er, whereas in a libel action it may further be necessary to prove that those with special knowledge of the extrinsic facts were likely to interpret or understand the words complained of in a defamatory sense, in an election action, it may not be necessary to do so and all that is necessary is to prove that the words complained of were reasonably calculated to prejudice the prospects of the defamed candi date 's election. However, this latter distinction does not obliterate the similarity between the two actions viz., that in each case in the first instance the defamation is to be spelt out by pleading the necessary extrinsic facts. In a libel action, the extrinsic facts constitute a cause of action whereas in the election action they constitute the corrupt practice. In other words, without them, there is no cause of action in the libel suit and no allegation of corrupt practice in an election petition. [756F H; 757A] 4.1. As regards the wail posters in which the first respondent was described as a murderer and it is stated that hence he should be defeated, the first respondent in his petition has stated generally that it was the appellant, his agents and his workers who had pasted the wallposters. He has not specified any wail or wails on which the poster was pasted. He has not mentioned either the agent or the elec tion agent nor did he state that the pasting was done with the knowledge and consent of the election agent. It is important to note that he mentioned the pasting of the poster only on one wail, though there was a vague reference to "walls". [761F H; 765B] 4.2. Time and again, the courts have uttered a warning against the acceptance of a non corroborted oral testimony in an election matter because it is not only difficult to get a non partisan witness but is also easy to procure partisan witnesses in such disputes. The courts have, there fore, insisted upon some contemporaneous documentary evi dence to corroborate the oral testimony when in particular such evidence could have been maintained. Such a danger is illustrated by the testimony of PW. 25 in the instant case. It is not only contradictory, and fails to impress this court but also leads to the belief that there is much force in the contention of the appellant that the poster in ques tion was concocted at a later day. It is difficult to ex plain as to why the witness a 724 professional photographer who in the ordinary course should maintain his accounts and other documents should keep them off from the court on pretexts which are not only far from convincing but positively doubtful. Although he stated that he was paid Rs.8,00 for the photographs and Rs.1,000 for copies thereof, he did not enter the amounts in his ac counts. He stated that he had a Bank account but he did not remit the amount to the Bank. He then stated that in his studio there would be no record to show that the photographs were taken. He also stated that he had not given any receipt for receiving the payment. [764G H; 767A D] 4.3. "Election agent" as defined in Section 40 of the Act is accorded a special status of almost an alter ego of the candidate so much so that whatever is done by the elec tion agent or with his consent is deemed to have been done by the candidate himself whether it is with the candidate 's consent or not. He is empowered to discharge almost all the functions that a Candidate can himself perform. 1729E FI 4.4. It was alleged that the wall poster was written at the specific instructions of the Chief Agent and the Conven or. It was not specified who the Chief Agent and the Conven or of the Election Committee were. The argument that the expression "Chief Agent" should be construed to mean elec tion agent, cannot be accepted since the pleadings with regard to corrupt practice have to be specific since every one who is guilty of the corrupt practice is liable to be prosecuted for the offence. And except in one place, there is no reference to any such person as Chief Agent. Wherever the first respondent wanted to refer to the election agent, he has done so. It cannot, therefore, be said that he did not know the difference between the election agent and the Chief Agent. [762B E] 4.5. The first respondent has come to the court with a version that the wail poster and such other posters were pasted on wails in the different parts of the constituency at least a week prior to the election. Admittedly, such false propaganda is an electoral offence punishable both under Section 127A of the Act and Section 171 C of the Indian Penal Code. The first respondent or his agents and workers could have made complaints both to the Election Officer as well as to the police in that connection immedi ately, and a regular panchnama of the same could ,also have been made at the time. That would have been the best evi dence of the said allegation. The first respondent and his workers would not have failed to do so had the posters been pasted at the time alleged by them. [767E F] 725

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Appeal No 498 of 1975. 438 From the Judgment and Order dated 31.7.1974 of the Madhya Pradesh High Court in Misc. Petition No. 3 16 of 1973. Prithvi Raj, Satish K. Agnihotri and Ashok Singh for the Appellants. Shankar Ghosh, Vivek Gambhir and Parveen Kumar for the Respondent. The Judgment of the Court was delivered by PUNCHHI, J. This is an appeal by special leave against the judgment and order of the High Court of Madhya Pradesh at Jabalpur whereby the petition under Articles 226 and 227 of the Constitution of India preferred by Orient Paper Mills Ltd., the sole respondent herein, was allowed and sequally the order dated 15.3.1973 of the State Government declining to grant the respondent exemption from payment of electrici ty duty for the period from 16.2.1965 to 15.2.1970 and pursuant demand notices dated 20.3.1973 and 3.4.1973 were quashed. The aggrieved State of Madhya Pradesh and its concerned Officers are the appellants challenging the same The respondent had need to go to the High Court to have an assurance dated 1.8.1961 regarding exemption from payment of electricity duty given by the State of Madhya Pradesh in its declared industrial policy observed, which may well be reproduced here at the outset: "Where power has to be generated by industri alists themselves, exemption from electricity duty shah be granted for a period of five years from the date of plant goes into produc tion. The concession shall be applicable only to new generating sets installed during the Third Plan period. " Factually it was not disputed before the High Court, that the case of the respondent squarely fall within the scope of the assurance reproduced above since the industrial plant of the respondent had gone into production w.e.f. 16.2.1965, the generating set put up was new, and had been installed during the Third Plan period. To formalise the matter, the respondent had corresponded with the Government for the grant of the requisite exemption. Since the same was rejected and demands for payment of electricity duty creat ed, the High Court was requested to issue suitable writs, directions and orders cancelling the 439 aforesaid orders and demand notices and granting exemption from payment of electricity duty in respect of electricity self generated by the respondent during the said period of five years, and also commanding the State to carry out the assurance and promises made in the said industrial policy dated 1.8.1961 extracted above and then requiring the State to issue a Notification under Section 3 B of the Madhya Pradesh Electricity Duty Act, 1949 granting exemption or exception to the respondent from payment of electricity duty and other allied consequential reliefs. Before the High Court voluminous documentary evidence was given by the parties in support of their respective pleadings. The High Court, on consideration of the entire material placed before it, spelled out a promissory estoppel in favour of the respondent and concluded as follows: "To conclude, we are of opinion that the petitioner is entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of electricity duty for a period of five years from 16.2.1965 to 15.2.1970 in terms of the assurance of the State Government, dated 1.8.1961. Of course, as indicated earlier it is not for us to issue any writ directing the State Government to grant the petitioner exemption in terms of section 3 A (vii) or Section 3 B of the M.P. Electric ity Duty (Amendment) Act, 1949. But in view of the unambiguous and unequivocal assurance given by the State Government on 1.8.1961 we can certainly quash the order of the State Government, dated 15.3.1973 as also the demand notices, dated 20.3.1973 (Petitioner 's Annex ure 48) and dated 3.4.1973 (Petitioner 's Annexure 50) and leave the matter at that. It would be for the Government to work out its own course of action on that basis. ' ' Mr. Prithvi Raj, learned counsel for the appellant urged that on the facts and circumstances of the case there was no occasion to invoke the doctrine of promissory estoppel. It was asserted that though the industrial policy was published by the State Government on 1.8.1961 containing the assurance extracted above, the respondent had not in any manner acted thereon to its own prejudice, but had rather on its own been taking steps to set up a generating plant much before the industrial policy was announced and had factually set up the generating plant as per its earlier resolve. The facts highlighted were that the 440 respondent Paper Mill, had been set up at Amlai in Vindhya Pradesh, when a Part C State under the administration of the Central Government. It had in its application dated 3.5. 1955 to the Government indicated that about 5000 K.W. elec tricity would be required by it to run its paper plant and. it would by itself make arrangements for obtaining the necessary generating equipment. It appears that the State Government had at that time its oven project in view for installing a power plant. On that basis some correspondence ensued between the respondent and the State Government with regard to its annual requirement of electricity. That exer cise was abandoned for some reasons which are not relevant here. Thereafter the respondent applied for import licence for the import of a production plant as also a power plant to run it. The respondent was granted an import licence on the strength of which it started negotiation with an Ameri can supplier. While negotiations were in process the Ameri can supplier increased the price. It became impossible for the respondent to import the production plant and the power plant within the funds allotted to it by the World Bank and in these circumstances, the American suppliers advised the appellant to drop procurement of the power plant. At the same time the American supplier warned the respondent that if the power plant was not purchased along with the produc tion plant, it would make the project unsound and it would not be able to fulfil its guarantees as desired by the respondent. The respondent in these circumstances became of two minds, whether to have the power plant or not. When it was in that state of mind, the industrial policy was an nounced by the Government on 1.8.1961. Thereafter, on 21.8.1961, the respondent applied to the Government of India for sanction of permission to import 3.5 million dollar worth goods more than the sanctioned amount. Finally, the respondent with the consent of the Government of India and with the aid of the World Bank was able to import the pro duction plant and the power plant and after its installation was able to go on production w.e.f. 16.2.1965. The course of the events set out earlier were not dis puted as such by the appellants before the High Court but it was maintained as now before us, that the respondent would have on its own gone on to install the power plant even without the announcement of the industrial policy dated 1.8.1961. Additionally, it was maintained, in the like manner, that the respondent had not acted to its prejudice on the basis of the aforesaid assurance dated 1.8.1961 and so that doctrine of promissory estoppel was not invokable. The defence of the State thus raised was rejected by the High Court in the following words: 441 "We have already dealt with that aspect earli er and we have already held that the petition er 's action in setting up a power plant was postponed on account of certain circumstances and ultimately on the advise of the manufac turers who refused to continue the guarantee, the petitioner decided to set up its own power plant. In the meantime, the assurance of the State Government, dated 1.8.1961 had already been given and the petitioner 's action in making a final decision to set up its own power plant can be directly connected with the State Government 's assurance dated 1.8. 1961. No sooner the petitioner took the final deci sion in that behalf, it applied to the State Government for grant of an exemption, although that application was premature, because the petitioner 's paper mill had not started func tioning. As such, the petitioner would cer tainly be entitled to claim exemption in terms of the assurance of the State Government dated 1.8.1961 with effect from the date the paper mill started functioning, namely, 16.2.1965 and the exemption would last for a period of five years upto 15.2. 1970. " Whether the respondent was of one mind right from the beginning to set up a power plant, with or without the assurance of the State Government dated 1.8.1961, as assert ed by the State, is neither borne out nor is the view of the High Court arrived at from the record. Rather, on the con trary, the view taken is that the respondent 's indecision in that regard ended and it became decisive on the announcement of the assurance dated 1.8.1961. Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance. The effort here to re do the exercise in this regard must inevi tably fail, for this Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to us to be an exception. In this situation, the view taken by the High Court was unexception al warranting it to be left uninterferred with. Some attempt was made by learned counsel for the appel lant to contend that the doctrine of promissory estoppel could not be pressed into service to command the State Government under Section 3 A (vii) (before its amendment) and Section 3 B of the Madhya Pradesh Electricity Duty Act, 1949 (as amended) to issue a Notification exempting the respondent from payment of electricity duty. The 442 answer to this argument is available in the conclusion arrived at by the High Court extracted above. Without com manding the State Government to issue such a Notification, it has granted relief to the respondent to which there was no bar. Accordingly, no provision of Madhya Pradesh Elec tricity Duty Act, 1949 or any other law can be said to have been transgressed. We thus reject this argument too. Thus for the foregoing reasons this appeal fails and is hereby dismissed. No costs.

In its industrial policy, the State Government declared on 1.8.1961 that where power has to be generated by indus trialists themselves, exemption from electricity duty would be granted for a period of five years from the date of plant goes into production, and that the concession would be applicable only to new generating sets installed during the Third Plan period. The Respondent indicated to the Government on 3.5.1955 that about 5000 K.W. of electricity would be required by it to run its paper plant and that it would by itself make arrangements for obtaining the necessary generating equip ment. It also applied for import licence for the import of a production plant as also a power plant to run it. The import licence was granted and the Respondent started negotiation with the foreign supplier. Since the price had gone up it was rather impossible for the Respondent to import both the production plant and the power plant, and if the power plant was not purchased along with the production plant, it would make the project unsound. Hence the Respondent was in two minds whether to have the power plant or not. Meanwhile, the above said industrial policy was announced and the Respond ent on installation of the power plant was able to start its production w.e.f. 16.2.1965. Thereafter to formalise the matter, the Respondent corre sponded 437 with the appellant for the grant of the requisite exemption, which was rejected, and the Respondent approached the High Court by way of a petition under Articles 226 and 227 of the Constitution of India. The High Court held that the Peti tioner was entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of elec tricity duty for a period of five years from 16.2.1965 in terms of the assurance of the State Government dated 1.8.1961. Against this order of the High Court the State has come in appeal by Special Leave. On behalf of the appellant State it was urged that there was no occasion to invoke the doctrine of promissory estop pel, since the Respondent had not in any manner acted on the assurance of the Government to its own prejudice but on its own it was taking steps to set up a generating plant much before the industrial policy was announced. Dismissing the appeal, this Court, HELD: 1. Whether the respondent was of one mind right from the beginning to set up a power plant, with or without the assurance of the State Government dated 1.8.1961, as asserted by the State, is neither borne out nor is the view of the High Court arrived at from the record. On the con trary, the view taken is that the respondent 's indecision in that regard ended and it became decisive on the announcement of the assurance dated 1.8.1961. Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance. [441E F] 2. This Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to be an exception. The view taken by the High Court was unexceptional warranting it to be left uninter ferred with. [441F] 3. Without commanding the State Government to issue such a Notification, the High Court has granted relief to the respondent to which there was no bar. Accordingly no provi sion of Madhya Pradesh Electricity Duty Act, 1949 or any other law can be said to have been transgressed. [442A]

6435.txt

251&558of 1987. (Under Article 32 of the Constitution of India) R.K. Jain and R.P. Gupta for the Petitioners. Kapil Sibal, R.B. Misra, B.B. Sawhney, R.K. Mehta (N.P.) and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by SAWANT, J. The petitioners in Writ Petition No. 25 1 of 1987 are Dairy Mates whereas, those in Writ Petition No. 558 of 1987 are Junior Plant Operatives and Semi Skilled Opera tives, all working with the Delhi Milk Scheme. The first petition is on behalf of about one thousand workers, where as, the second petition is on behalf of about 280 of work ers. The grievance of the Dairy Mates is that although they perform the duties and functions of semi skilled work ers, they have been wrongly classified as un skilled workers and paid salary as such, as recommended by the 4th Pay Commission namely, Rs.750 940 instead of Rs.800 1 150 which is the salary recommended to the semiskilled workers. The grievance of the Junior Plant Operatives and Semi Skilled Operatives is that they are actually ' doing the work of skilled workers, but are classified similarly as unskilled workers and paid salary as such. Both, further, have a grievance that their counterparts in other departments, particularly in Railways, have been properly classified and are paid salary accordingly. The petitions were resisted by the respondent Union of India by filing counter affidavits denying the conten tions of the petitioners that their work was of a semi skilled or skilled character as alleged. In view of the disputed questions relating to the nature and functions of the workmen involved, this Court by its order of July 29, 1988 referred the matter to the Central Govt. Industrial Tribunal cumLabour Court, New Delhi to report to the Court on what would be the appropriate pay scales admissible to the concerned workers, after looking into the record and giving an opportunity to the parties to produce before it such further material as they may desire to do. Pursuant to the order, the Tribunal submitted its report dated October 325 28, 1988. It appears from the report that the Tribunal had given opportunities to both the parties to make additional submissions, if any, and to file further material which they wished to do. Pursuant to the opportunity given, the workers in both the petitions produced additional material and evidence. The respondent Union of India, however, did not produce any further material or evidence. On the basis of the material which was already on record, and the further material produced before it, the Tribunal made its report. The relevant portions of the report may be reproduced here under: 3. "There are 4 categories of workmen in the DMS viz. Dairy Mates, (DM), Junior Plant Operatives (JPO), Semi Skilled Operatives (SSO) and Skilled Operatives (SO). The deploy ment registers of the various units read with the evidence of Shri Lajpat Rai Saxena Dairy Supervisor, conclusively prove that the var ious categories of workmen are performing similar duties and their positions are inter changeable with the result that there is no clear demarcation as to what function is to be performed by which category of workmen. Shri Lajpat Rai Saxena has clearly stated that the nature of duties and the degree or skill of S.O., S.S.O., and J.P.Os and D.Ms is almost same and that sometimes the work done by S.S.Os is performed by S.O. and J.P.Os subject to the availability of the category of work men. To a question by this Tribunal he replied that if an S.O. is available he will be posted as an S.O. only but when no S.O. is available, then S.S.O. is put in his place and sometimes J.P.Os and Dairy Mates may be put to work in his place. He further stated that generally there is a shortage of S.Os and then they have to put other categories of workmen in their places. The position is fully borne out by the various deployment registers . . " 4." . . . The position of deployment of the various categories of workmen clearly goes to show that their duties are inter changeable without any consideration for their grades/designations. The position obtaining on the ground clearly repells the contentions of the respondents contained in affidavit of Shri K.G. Krishnamurty that the functions of the various categories of workmen are distinct and separate. The respondents have not been able to produce any document in support of their contention to show that the duties of the various categories of workmen as enumerated in the affidavit of Shri K.G. Krishnamurty 326 were even published or actually followed. On the other hand, Shri Lajpat Rai Saxena has stated that since the time he joined service in the year 1972 he had not come across any roster of duties for the different categories of workers such as S.O., SSO, JPOs and Mates and no such roster had been issued after 1972. He had heard that there was a roster of duties issued prior to his joining of service but he had not seen any such roster. It would thus appear that if there was any such roster prior to 1972 it got into disuse and was never enforced." 5. "The nature of functions performed by various workmen shows that they require a good degree of skill. In other words, the functions can be performed only by skilled and semi skilled workers and not by unskilled workers. Shri Lajpat Rai Saxena has stated that there are 5 milk pasteurisers and 2 cream pasteuris ers in the plant unit of Process Section. There are also two chillers in R.S.M. There are 13 machines in the product section. All these machines can be operated only by skilled workers. He further stated that the bottle filling plant is automatic and the entire working is also automatic. They have got a separate pest control section for cleaning and sweeping. Sweepers of Pest Control Section are not used for cleaning machines which is done only by the SO, SSOs, JPOs and Dairy Mates. This further goes to show that even the clean ing of machines requires skill and the job cannot be performed by unskilled workers. Even the Management of DMS recognises that the duties performed by the mates and junior plant operatives who have been clubbed with the unskilled category of peons, chowkidars etc., are much more onerous in nature and they deserve a better deal (see the letter dated 4 9 86 addressed by the Chairman D.M.S. to the Joint Secretary Ministry of Agriculture). The first petitioners have placed on record a photo copy of the identity card issued to the mates (page 110 Vol. 1) which shows that the D. Mates were being treated as Technical Personnel for the purpose of issue of identity cards. The job cards annexures 1 to 6 (Vol. II) further go to show that the mates have been performing skilled/semi skilled duties such as repairing of Driver seats vulcanising of punctures, other repairs of vehicles and servicing. All these jobs could not have been done by unskilled workers. Under the circum stances, I have no hesitation in holding that the 327 mates and junior plant operatives have 'been unfairly treated by the 4th Pay Commission by giving them lowest pay scale of unskilled category of workmen like peons, sweepers, chowkidars etc. This category of workmen difinitely deserves to be given a higher grade than the lowest meant for unskilled category of workmen. While it may be conceded that due to the diffuse nature of duties, the Dairy Mates and Junior Plant Operatives of DMS cannot be compared with the Gangmates in the Railways, yet the case of the Dairy Mates and Junior Plant Operatives of the DMS has intrin sic merit. No doubt the workmen categorised as semi skilled (SSOs) at present are carrying out the functions of Skilled Operatives (SOs) frequently, yet, so are the Mates and JPOs. However, all the workmen cannot be given the grade of SOs because the considerations of career planning and promotions etc. have to be kept in view. Already it is being represented that the various categories of workmen are stagnating in their respective grades for the last 20 25 years. The same complaint will arise afterwards if all the workmen are given the grades of SO at the same time. It also militates against the principles of sound administration because there will be double jumping of grades in some category of workmen. It will also not be desirable to create any fresh scales of pay as it would run counter to the recommendations of the pay commission which has reduced the number of pay scales prevailing previously. " 6. "Taking into consideration all the facts and circumstances, it is recommended that the Mates and JPOs may be given the pay scale of Rs.800 1150 and semi skilled operatives may be given the scale of Rs.825 1200. The grades as provided by the 4th Pay Commission and those now recommended by this Tribunal will compare as under: S1. No. Category of workmen Pay Scale Pay Scale recommended by recommended 4th Pay by this Commission Tribunal 1. Skilled Operatives (SO) 950 1150 950 1400 2. Semi Skilled Operatives 800 1150 825 1200 (SSO) 3. Mates/JPOs 750 940 800 1150. " 328 5. While the workmen accepted the report, arguments were advanced on behalf of the respondent mainly criticising the report with regard to the pay scales recommended to the Mates deployed in Transport (Distribution Section). It was contended that the Mates working in the said section consti tuted 60% of the total number of Mates deployed in the different units of the Scheme, and their work merely con sisted of loading and unloading of the crates. That work by no stretch of imagination could be described as other than unskilled. It was, therefore, wrong to give them a scale different from that admissible to the unskilled workers. This contention ignores the admitted fact that Mates from one Unit are transferable to another at any time, and when so transferred they do the work of the Units to which they are transferred without any additional remuneration. What is more as is stated in the report, there is no roster of duties and functions of the Mates in any Unit, and all Mates have to do the work of the Units to which they are assigned on any particular day. The mates have thus to be versatile with the work in all the Units, both unskilled and semi skilled. This is certainly not the case with the Sweepers, Chowkidars and Malis who are categorised as unskilled work ers. This being the case, we do not see any merit in the contention that the Mates should be treated on par with the unskilled workers. There was no contention raised on the report with regard to the mates working in the other Units or with regard to the Junior Plant Operatives and Semi Skilled Operatives. In the circumstances, we accept the report and direct the respondent to pay to the workers the pay scales recom mended in the report which are as follows: A. Mates and Junior Plant Operatives Rs.800 1 150 B. Semi Skilled Operatives Rs.825 1200 8. The above pay scales should come into effect from 1st January, 1990. It is made clear that none of the workers i.e. Mates, Junior Plant Operatives and Semi Skilled Operatives will refuse to do any part of the work which is assigned to them at present merely because they are hereby given the above pay scales. Writ Petitions are allowed accordingly. The parties to bear their own costs. R.N.J. Petitions allowed.

The firsf petition is on behalf of one thousand Dairy Mates and the other on behalf of 280 workers as Junior Plant Operatives and semiskilled Operatives. The grievance of Dairy Mates is that although they perform the duties of semi skilled workers they have been wrongly classified as unskilled workers and paid salaries as such. Similarly the grievance of the Junior Plant Operatives and semi skilled Operatives is that they are actually doing the work of skilled workers but are classified as unskilled workers and paid salary as such. In view of the disputed questions relating to the nature and functions of the workmen involved, the Court referred the matter to the Central Govt. Industrial Tribunal cum Labour Court to report to the Court as to what would be appropriate pay scales admissible to the concerned workers. On the basis of additional material and evidence produced by the workers, the Tribunal made its report and recommended that taking into consideration all the facts and circum stances, the Mates and JPOs may be given the pay scale of Rs.800 1150, the semi skilled operatives may be given the scale of Rs.825 1200 and the skilled operatives may be given the scale of Rs.950 1400. The Union of India criticised the pay scale recommended to the Mates contending that their work was of unskilled nature. Accepting the report of the Tribunal while allowing the Petitions in terms of the re port, this Court, HELD: There is no roster of duties and functions of the Mates in any Unit and all Mates have to do the work of the Units to which they are assigned on any particular day. The Mates have thus to be versatile with the work in all the Units, both unskilled and semi skilled. This is certainly not the case with the Sweepers, Chowkidars and Malls who are categorised as unskilled workers. This being the case, there is no merit in the contention of the Union of India that the Mates should be 324 treated on par with the unskilled workers. [328C D]

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ivil Appeal No. 698 of 1980. From the Judgment dated the 2.5.1979 of the Kerala High Court in M.F.A. 346 of 1978. M.M. Abdul Khader, Darshan Singh and Praveen Kumar for the Appellant. P.S. Poti, P.K. Pillai (N.P.), T.T. Kunnhikannan and Ms. Malini Poduval for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. This appeal by leave from a Full Bench judgment of the Kerala High Court raises a short question of construction of the plain words of a term 'private forest ' as defined in a statutory enactment called "The Kerala Private Forest (Vesting and Assignment) Act, 197 1 (called shortly "The Vesting Act"). The High Court has decided the question in favour of the State and against the appellant. The judgment of the High Court has since been reported in AIR 1980 Kerala 137. The view expressed by the High Court has been subsequently affirmed by another Full Bench in State of Kerala vs Malayalam Plantation Ltd., AIR 1981 Kerala 1 and reiterated by a larger Bench of five Judges in State of Kerala vs K.C. Moosa Haji & Ors., , Losing the construction argument, the appellant has appealed to this Court. The facts of the case are immaterial for the purpose of this judgment, save to state in the barest outline that the appellant is the Rayon Silk Manufacturing Company registered in the State of Madhya Pradesh. One of its industrial under takings is located in Bilakootam, Mavoor in Kozhikode Dis trict, Kerala State. This establishment pro 405 duces Rayon Grade Pulp, using Bamboo Eucalyptus and other species of wood as basic raw material. It has a large euca lyptus plantation coveting thousands of acres, maintained as captive raw material for use in the factory. The State says that as a consequence of the Vesting Act, the eucalyptus 8plantation being a private forest and not excluded there from is vested in the State with no fight, title and inter est subsisting with the company. The claim of the company, however, is that the term 'private forest ' as defined under the Vesting Act, excludes the eucalyptus plantation. 'Private forest ' has been defined in the Vesting Act as well as under the Kerala Land Reforms Act (Act 1 of 1964) as amended by Amendment Act 35 of 1969 ("The KLR Act"). Since counsel for the appellant largely depends upon the judicial construction of the definition of 'private forest ' in the KLR Act, it is necessary that we should set out hereunder both the definitions placed alongside with each other: THE KERALA PRIVATE FORESTS THE KERALA LAND REFORMS (VESTING AND ASSIGNMENT) ACT (ACT 1 OF 1964) AS ACT, 1971 AMENDED BY THE KERALA LAND REFORMS (AMENDME NT ACT 35/1969) (Act 26 of 1971) (AS AMENDED BY ACT 5 OF 2. Definitions. In this 1978) Act unless the context otherwise requires 2. Definitions: In this Act (47) 'private forest ' unless the context otherwise means a forest which is requires not owned by the Govern ment but does not inclu de (f) 'private forest ' means (1) in relation to the Mala (i) areas which are waste bar district referred to in and are not enclaves sub section (2) of Section within wooded areas; 5 of the (ii) areas which are gardens or nilams; (Central Act 37 of 1956) (i) any land to which the (iii) areas which are Madras Preservation of Pri planted with tea, coffee, vate Forests Act, 1949 (Madras cocoa, rubber, cardomom Act XXVIII of 1949) applied or cinnamon; and immediately (iv) other areas which are culti 406 before the appointed day excluding vated with (A) Lands which are gardens or pepper, arecanut coco nilams as defined in the Kerala nut, cashew or other Land Reforms Act, 1963 (1 of fruit bearing trees or 1964) are cultivated with any other agricultural crop;. (B) Lands which are used princi pally for the cultivation of tea, coffee, cocoa, rubber, cardomom, or cinnamom and lands used for any purpose ancillary to the cultiva tion of such crops or for the pre paration of the smae for the market. Explanation Lands used for the construction of office buildings, godowns, factories, quarters for workmen, hospitals, schools and playgrounds shall be deemed to be lands used for purposes ancillary to the cultivation of such crops; (C) lands which are principally cultivated with cashew or other fruit bearing trees or are princi pally cultivated with any other agricultural crop; (D) sites of buildings and lands appurtenant to and necessary for the convenient enjoyment or use of, such buildings; (ii) any forest not owned by the Government, to which the Madras Preservation of Private Forests Act, 1949 did not apply, inclu ding waste lands which are encla ves within wooded areas. 407 (2) in relation to the remaining areas in the State of Kerala, any forest not owned by the Government, including waste lands which are enclaves within wooded areas. Explanation: For the purposes of this clause, a lane shall be deemed to be a waste land notwithstanding the existence thereon of scattered trees or shrubs;" We may first examine the scope of the definition of 'private forest ' under Section 2(47) of the KLR Act. It means a forest which is not owned by the Government, excluding thereby four kinds of areas specified under sub clauses (i) to (iv). The latter part of sub clause (iv) contains the words" . . Other areas cultivated with any other agricultural crop". The terms 'agriculture ' and 'agricultural crop ' have wider as well as narrower connotation. The wider concept covers both the primary or basic as well as the subsequent operations. It takes within its fold among other things, the products of the land which have some utility either for consumption or for trade and commerce including forest products such as timber, sal and piyasal trees, casuarina plantations, tendu leaves, horranuts etc. (See: Commis sioner of Income Tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy, ; at 156. Of course there must be present all throughout the basic idea that there must be cultiva tion of land in the sense of tilling of the lands, sowing of the seeds, planting and similar work done in the land. The forest growth or spontaneous growth of any product, plants or trees, however, would be outside the characteristic of agricultural products or operations. In Malankara Rubber and Produce Co. vs State of Kerala & Ors., ; , this Court while examining the scheme of KLR Act with particular reference to Chapter III therein observed that 'lands under eucalyptus or teak which are the result of agricultural operations normally would be agricultural lands, but not lands which are covered by eucalyptus or teak growing spontaneously as in a jungle or a forest. ' This is the wider concept of agricultural crop, perhaps attributed to the latter part of sub clause (iv) of the definition under Section 2(47) of the KLR Act. The latter part of sub clause (iv) of Section 2(47) of the KLR 408 Act, counsel for the appellant contended, is practically the same as the second limb of sub clause (C) of Section 2(f)(1)(i) of the Vesting Act. It was claimed that since eucalyptus plantation is covered by the expression 'any other agricultural crop ' in Section 2(47) sub clause (iv) of the KLR Act, Section 2(f)(1)(i) sub clause (C) of the Vest ing Act with similar words must also carry the same meaning. It was emphasised that the KLR Act and the Vesting Act constitute a Code of agrarian reform and they are cognate legislations with the Vesting Act as supplementary to the KLR Act. The expression 'any other agricultural crop ' used in both the enactments while defining 'private forest ' must therefore, receive the same meaning as otherwise, it would lead to anomalies. This is the line of argument for the appellant. This whole line of arguments with respect, is hard to accept. As Felix Frankfurter, J. said: "Legislation is a form of literary composition. But construction is not an abstract process equally valid for every composition, not even for every composition whose meaning must be judicially ascertained. The nature of the composition demands awareness of certain presuppositions . And so, the significance of an enactment, its antecedents as well .,as .its later history, its relation to other enactments, all may be rele vant to the construction of words for one purpose and in one setting but not for another. Some words are confined to their history; some are starting points for history. 'Words are intellectual and moral currency. They come from the legislative mint with some intrinsic meaning. Sometimes it remains unchanged. Like currency, words sometimes appreciate or depreciate in value". The learned Judge further stated: "Legislation has an aim; it seeks to obviate some mischief, to supply an inadequacy, to effect a change of policy, to formulate a plan of government. That aim, that policy is not drawn, like nitrogen, out of the air; it is evinced in the language of the statute, as read in the light of other external manifestations of purpose. That is what the Judge must seek and effectuate. " (See: Courts, Judges and Politics by Walter F. Murphy: 'Some Reflections of the Reading of Statutes ' by Felix Frankfurter). Judicial interpretation given to the words defined in one statute does not afford a guide to construction of the same words in another statute unless the Statutes are pari materia legislations. In the present case, the aim and object of the two legislations are not similar in the first place. Secondly, the definition of 'private forest ' in the KLR Act is not just the same as the definition of 'private forest ' in the Vesting Act. Indeed, there is a vast differ ence in between the two. The object of the Vesting Act was to provide for the Vesting in the Government 409 of private forest in the State of Kerala for the assignment thereof to the agriculturists and agricultural labourers for cultivation. The preamble of the Act provides that such agricultural lands should be so utilised as to increase the agricultural production in the State and to promote the welfare of the agricultural population in the State. Two separate definitions have been provided in the Vesting Act; the first is applicable to the Malabar district where the Madras Preservation of Private Forests Act, 1949 ( 'The MPPF Act ') applied immediately before the appointed day; the second concerned is in relation to the remaining areas in the State of Kerala. The definition of 'private forest ' as is applicable to the Malabar district is not general in terms but limited to the areas and lands to which the MPPF Act applied and exempts therefrom lands described under sub clauses (A) to (D). This significant reference to MPPF Act in the definition of 'priVate forest ' in the Vesting Act makes all the difference in the case. The MPPF Act was a special enactment. It was enacted by the erstwhile Madras State to preserve the private forests in the district of Malabar and erstwhile South Kannara District. The Scheme of that Act has been explained by several decisions of the Kerala High Court and that scheme appears to be that if the land is shown to be private forest on the date on which the MPPF Act,came into force, it would continue to be a forest, even if there was subsequent replantation. (See: State of Kerala vs Anglo American D.T.T. Co., and State of Kerala vs K.C. Moosa Haji, (supra) (FB) AIR at 154 155.) It is not in dispute that the lands involved in this appeal were all forests as defined in the MPPF Act, 1949 and continued to be so when the Vesting Act came into force in 1971. In Malankara case (supra), this Court was not con cerned with the lands covered by the MPPF Act, and denuded thereafter of forest growth and cultivated with fresh re plantation. Therefore, it seems inappropriate to transplant the meaning accorded to 'private forest ' from the KLR Act to the Vesting Act. That wide concept cannot fit into the new legal source. In State of Kerala vs Gwalior Rayon Sm. (Wvg.) Co. Ltd.; , 1, this Court while upholding the constitutional validity of the Vesting Act has observed that the Forest Lands in the State of Kerala has attained a peculiar character owing to the geography and climate and the evidence available showed that the vast areas of these forests are still capable of supporting a large agricultural plantations. That much is clear from the following observa tions (at 683): "It is therefore, manifest that when the legislature stated in 410 the preamble that the private forests are agricultural lands, they merely wanted to convey that they are lands which by and large could be prudently and profitably ex ploited for agricultural purposes. " There is thus a judicial recognition of the distinction between private forest in Travancore Cochin area in Kerala State and the private forest in Malabar district. This distinction by itself is sufficient to dispel the anomalies suggested by counsel for the appellant. Look at the definition. Sub clause (A) refers to gardens or nilams as defined in the KLR Act. 'Garden ' means lands used principally for growing coconut trees, arecanut trees or pepper vines or any two or more of the same. 'Nilam ' means lands adapted for the cultivation of paddy. Sub clause (B) deals with what may be called plantation crops, cultiva tion of which in the general sense would be cultivation of agricultural crops. Such agricultural crops are by name specified. Lands used for any purpose ancillary to such cultivation or for preparation of the same for the market are also included thereunder. Next follows sub clause (C). It first refers to lands which are principally cultivated with cashew or other fruit bearing trees. It thus refers to only the fruit beating trees. It next refers to 'lands which are principally cultivated with any other agricultural crop. If the legislature had intended to use the term 'agricultur al crop ' in a wide sense so as to take within its fold all species of trees fruit beating or otherwise, it would be unnecessary to have the first limb denoting only the cashew or other fruit beating trees. It may be significant to note that the Legislature in each sub clause (A) to (C) has used the words to identify the different categories of crops or trees. The words used in every sub clause too have "associa tions, echoes and overtones". While construing such words, judges must, as Felix Frankfurter, J., said "retain the associations, hear the echoes and capture the overtones" (supra p. 414). When so examined and construed, we do not discover any indication that the words in sub clause (C) "any other agricultural crop" are quite wide enough to comprehend all species of trees including eucalyptus planta tions. It is said, indeed rightly, that in seeking legislative intention, judges not only listen to the voice of the legis lature but also listen attentatively to what the legislature does not say. Let us compare the wordings in Section 3 with those of sub clause (C). Under Section 3 sub section (1), private forests vest in Government. Sub clause (2) however, excludes from such vesting lands within the ceiling limits 411 applicable to an owner if they are under his personal culti vation. Cultivation for this purpose "includes cultivation of trees or plants of any species". The explanation to sub section (2) makes this aspect beyond doubt. The lands used for the cultivation of any kind of tree, fruit bearing or yielding only timber or pulp are not vested under Section 3 sub section (2). The legislature has thus excluded from vesting under Section 3 sub section (2) the trees of every variety. But while providing for exclusion under sub clause (C), the legislature could not have again thought of trees or plants of all kinds. It seems to have considered only fruit bearing trees and not of other species. If the inten tion was otherwise, the sub clause(C) would have been in a different language. In our view as a matter of pure construction untram melled by authority, the words used in the latter part of sub clause (C) could not take within its fold all varieties of trees and it could exclude only fruit bearing trees. This is also the conclusion of the High Court not only in the impugned judgment under appeal but also in the subse quent two decisions; Malayalam Plantation Limited and K.C. Maosa Haji cases (supra). In the result the appeal fails and is dismissed. In the circumstances of the case, however, we make no order as to costs. T.N.A. Appeal dis missed.

The appellant company was maintaining a large eucalyptus plantation for captive consumption in its production of Rayon Grade Pulp. The State of Kerala claimed that as a consequence of the Kerala Private Forests (Vesting and Assignment) Act, 1971, the eucalyptus plantation being a 'private forest ' stood transferred to and vested in it. The company resisted the State 's claim on the ground that the term 'private forest ' excludes the eucalyptus plantation. The High Court decided the question in favour of the State and against the appellant. 402 In the appeal to this Court, it was contended on behalf of the appellant that since the eucalyptus plantation was covered by the expression 'any other agricultural crop ' in section 2(47)(iv) of the Kerala Land Reforms Act, 1963 the similar expression used in section 2(f)(1)(i)(C) of the Vesting Act, 1971 must also carry the same meaning. Dismissing the appeal, this Court. HELD: 1. Judicial interpretation given to the words defined in one statute does not afford a guide to construc tion of the same words in another statute unless the stat utes are pari materia legislations. [408G] 1.1 The definition of 'private forest ' in the Kerala Land Reforms Act is not just the same as the definition of 'private forest ' in the Vesting Act. Indeed, there is a vast difference between the two. Two separate definitions have been provided in the Vesting Act; the first is applicable to the Malabar district where the Madras Preservation of Pri vate Forests Act, 1949 applied immediately before the ap pointed day; the second concerned is in relation to the remaining areas in the State of Kerala. The definition of 'private forest ' as is applicable to the Malabar district is not general in terms but limited to the areas and lands to which the Madras Preservation of Private Forests Act ap plied, and exempts there from lands described under sub clauses (A) to (D). This significant reference to this Act in the definition of 'private forest ' in the Vesting Act makes all the difference in the case. The scheme of this Act appears to be that if the land is shown to be private forest on the date on which the Act came into force, it would continue to be a forest, even if there was subsequent re plantation. [408H; 409A D] 1.2 The lands involved in this appeal were all forests as defined in the Madras Preservation of Private Forests Act and continued to be so when the Vesting Act came into force. Therefore, it seems inappropriate to transplant the meaning accorded to 'private forest ' from the Kerala Land Reforms Act to the Vesting Act. [409E F] State of Kerala vs Anglo American D.T.T. Co., and State of Kerala vs K.C. Moosa Haji, A.I.R. referred to. Malankara Rubber and Produce Co. vs State of Kerala & Ors. , ; , Held inapplicable. 403 State of Kerala vs Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd.; , , referred to. The term 'agriculture ' and 'agricultural crop ' have wider as well as narrower connotation. The wider concept covers both the primary or basic as well as the subsequent operations. It takes within its fold among other things, the products of the land which have some utility either for consumption or for trade and commerce including forest products such as timber, sal and piyasal, trees, casuarina plantations, tendu leaves, coconuts etc. Of course there must be present all throughout the basic idea that there must be cultivation of the land in the sense of tilling of the lands, sowing of the seeds, planting and similar work done in the land. The forest growth or spontaneous growth of any product, plants or trees, however, would be outside the characteristic of agricultural products or operations. [407D F] Commissioner of 1. T. West Bengal vs Raja Benoy Kumar Sahas Roy, ; , referred to. 2.1 Under Section 3(1), private forests vest in Govern ment. Subsection (2) however, excludes from such vesting lands within the ceiling limits applicable to an owner if they are under his personal cultivation. Cultivation for this purpose 'includes cultivation of trees or plants of any species '. The explanation to sub section (2) makes this aspect beyond doubt. The lands used for the cultivation of any kind of tree, fruit bearing or yielding only timber or pulp are not vested under section 3 sub section (2). The legislature has thus excluded from vesting under section 3 sub section (2) the trees of every variety. But while pro viding for exclusion under sub clause (C) of section 2(f)(1)(i), the legislature could not have again thought of trees or plants of all kinds. It seems to have considered only fruit bearing trees and not of other species. Sub clause (C) refers to lands which are principally cultivated with cashew or other fruit bearing trees. It next refers to lands which are principally cultivated with any other agri cultural crop. If the legislature had intended to ' use the term 'agricultural crop ' in a wide sense so as to take within its fold all species of trees fruit bearing or other wise, it would be unnecessary to have the first limb denot ing only the cashew or other fruit bearing trees. Therefore, there is no indication that the words 'any other agricultur al crop ' in sub clause (C) are quite wide enough to compre hend all species of trees including eucalyptus plantations. These words exclude only fruit bearing trees. [410H; 41 1A D] State of Kerala vs Amalgamated Malabar Estates, A.I.R. 1980 404 Ker. 137; State of Kerala vs Malayalam Plantation Ltd., A.I.R. 1981 Ker. 1 and State of Kerala vs K.C. Moosa Haji & Ors., A.I.R. , approved. In seeking legislative intention, judges not only listen to the voice of the legislature but also listen atten tively to what the legislature does not say. [410G H]

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vil Appeal Nos. 2044 45 of 1990. From the Judgment and Order dated 18.8.1989 of the Madras High Court in C.R.P. Nos. 4797 and 4798 of 1984. C.S. Vaidyanathan, K.V. Vishwanathan, K.V. Mohan, S.R. Bhat and S.R. Setia for the Appellant. 785 K. Parsaran and V. Balachandran for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. Special leave to appeal is granted and the appeals are disposed of by a common order. On 9.6.1936, Ramaswamy Gounder (the predecessor in interest of the respondents) executed a lease deed in favour of Gopal Sait (the predecessor in interest of the appellant). Certain passages from an English translation of the lease deed (which was in vernacular) are relevant for the purposes of the present case and they read thus: "Whereas the property viz. vacant land well and Kaichalai etc. belongs to the party of the First part as his ancestral property; Whereas the said property was leased out to party of the Second Part on a monthly rental of Rs.12 8 0 for 15 years and taken possession by the party of the second part from party of the First part on 3.12.1935 . . and the party of the Second part for his convenience and at his own ex penses and costs (was) permitted to construct in the said vacant land and install petrol selling business . . After the expiry of lease period of 15 years i.e. on 12.2. 1950 the lessee shall at his own expense remove the struc ture put up by him and deliver possession of the vacant land together with well and kaichalai in the present state . SCHEDULE . vacant land situated in this bounded on the North by vacant land leased out for Burmah Oil Co. by the said Ramas wamy Gounder Gopalji Ratnaswami . . all these vacant lands together with in the fourth plot measuring East to west 84 and North to South 16 together with half share in well therein together with tiled Kaichalai . together with door, doorways etc. There is no number for Kaichalai. It is common ground that the total vacant area covered by the 786 lease was 3600 sq. and that the kaichalai, referred to therein, was thirty seven and a half by sixteen and a half feet i.e. of the extent of about 600 sq. It also appears that even though there was initially no door number for the Kaichalai, it was eventually given door No. 82 and the suit premises we are concerned with bear door Nos. 80, 81 and 82. The lease was extended for a period of two years from 1.1.51 by a fresh deed dated 15.1.51 at an enhanced rent. This lease deed recited: "On the expiry of two years, i.e. on 31.12.52, the lessor has no objection for the removal of the structure put up by Burmah Shell petrol pump etc except the extent of structure of thirty seven and a half feet by sixteen and a half feet put up by the lessor . " There was a fresh lease deed, again, executed on 2.1.53 for a further period of three years at a higher rent. This deed also required the lessee, when delivering possession back to the lessor on the expiry of the lease, to remove the struc tures put up by him or the Burmah Shell Co. Ltd. "except the structure measuring thirty seven and a half ft. by sixteen and a half ft.". The lessee appears to have continued to occupy the property even beyond 31.12.55 at a further enhanced rent. In 1962, we are told, the lessor flied a petition to evict the lessee under section 10(3)(a)(i) and 14(1)(b) of the Madras Buildings (Lease and Rent Control) Act 1960, alleging that he required the premises for personal occupation and for bona fide immediate demolition. "The lessee defended the petition saying that the premises do not require any immedi ate demolition, that the premises are used for non residen tial purposes and kept in good condition and that the peti tioner 's requirement for personal occupation is not bona fide." The petition was dismissed by the Rent Controller observing that the premises did not need demolition and further that, as the premises had been leased out for non residential purposes and the landlord could not seek its conversion into residential use without the controller 's application, the petitioner 's allegation that he required it for personal use was neither tenable nor bona fide. Ramaswamy Gounder filed a petition again in 1979 for the eviction of the respondent but he died in February 1979 and the petition filed by him was dismissed for default. There after his legal representatives (the present respondents) instituted a petition for eviction 787 (R.C.O.P. 19/79 out of which the present proceedings have arisen) of the respondents on the grounds of demolition and re construction and of wilful denial of title within the meaning of Ss. 14(1)(b) and 10(2)(vii) of the Tamil Nadu Buildings (Lease and Rent Control) Act. In the meantime, the provisions of the Madras City Tenants ' Protection Act, 1922 (Later renamed the Tamil Nadu City Tenants ' Protection Act) were extended to the municipal limits of Udumalpettai within which the premises in question were located. Taking advantage of this, the respondent filed O.P. 1/79 (in the same court of District Munsif cum Rent Controller) claiming the benefit of compulsory purchase conferred on tenants of land under the said Act. The Dis trict Munsif cum Rent Controller allowed the lessor 's peti tion for eviction and dismissed the lessee 's petition. The sub judge, on appeal, dismissed the appeals with a slight modification. He was of the view that, except for the kai chalai, the other buildings had been put up by the respond ents with the permission of the lessor and that, hence, he was entitled to obtain compensation therefore by institution of separate appropriate proceedings. The respondent filed two revision petitions before the High Court which declined to interfere. The learned Judge held: "I do not see any reason to interfere with the orders of the courts below negativing the claim of the revision petition er. In as much as admittedly the property situated in door No. 82 belonged to the landlord, this is a case to which section 14(1)(b) of the Tamil Nadu Buildings (Lease and Rent Control) Act 1960 will apply. However, the property bearing door Nos. 80 and 81 belonged to the petitioner is the find ing. On that all that the tenant could ask for will be for removal of the superstructure. Beyond that his claim for compensation also could not be ordered since there was no prayer for the same. The decision in M/s. Larsen & Toubro Ltd. vs The Trustees of Dharmamoorthy Rao Bahadur, Calvala Cunnan Chetty 's Charities by its Trustees, [1988] 2 LW 380 is distinguishable because this is a case of only one and a half grounds wherein there is a kaichalai of 600 sq. The removal shall take place within a period of three months from today. The Civil revision petitions are dismissed. " Hence these two appeals. 788 Though there have been claims made under the Rent Con trol Act by the lessor and under the City Tenants ' Protec tion Act by the lessee, the claim under the latter has not been pressed before us by the learned counsel for the appel lant who has confined his arguments before us to the only question whether the demised premises constitute a "build ing" within the meaning of section 2(2) of the Rent Control Act. Sri C.S. Vaidyanathan, learned counsel for the appel lants submitted that the first appellate court has found, modifying the trial court 's findings in this regard, that the original lease comprised only of the vacant site, well and kaichalai and that all the other superstructures found in the demised premises had been put up by the appellant. He contended that the 'kaichalai ' was merely in the nature of a shed put up for the tethering of cattle and that it was not a 'building ' within the meaning of the Rent Control Act. Alternatively, he contended, even if the Kaichalai could be considered to be a building this was not a case of the lease of a building or hut with its appurtenant land: it was really a case of the lease of a vacant site to the petition er on which was situated a small hut in one corner. The lease deed itself recites that the appellant had taken the premises for putting up a petrol pump. In fact he did put in an underground storage tank, a petrol pump and other struc tures and carried on a petrol and kerosene business thereon. Though the small Kaichalai was situate in a corner of the site, the lease intended by the parties was only that of the site. The Kaichalai was no doubt not demolished and, per haps, the appellant also made use of it for the purposes of his business but, says Sri Vaidyanathan, this made no dif ference to the obvious and clear and dominant intention of both parties that it was the site that was leased out for a petrol pump business. Sri Vaidyanathan contended that the issue is directly governed by the decision in the Larsen & Toubro case ; , to which one of us was a party. He submitted that, where a lease is a composite one of land and buildings, the court has to address itself to the primary or dominant intention of the parties. If this is to lease a building the lease of land being adjunct or incidental as in the Larsen & Toubro, case (supra), the Rent Control Act would apply. On the other hand, if the dominant intention is to lease a site the presence of a building thereon not being considered material by either party the lease would not be one of a 'building ' covered by the Rent Control Act, whether or not it can be considered as a lease only of a vacant site governed by the City Tenant 's Protection Act. Counsel contended that it is possible that there may be a grey area of leases which might fall under neither Act and proceedings in respect of which 789 may continue to be governed by the Transfer of Property Act, unaffected by these special laws. The Rent Control Act contains a definition of the ex pression 'building ' which reads as follows: "2(2) 'building ' means any building or hut or part of a building or a hut, let or to be let separately for residen tial or non residential purposes and includes (a) the gardens, grounds and out houses, if any, appurtenant to such building, hut or part of such building or hut and let or to be let along with such building or hut, (b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut, but does not include a room in a hotel or boarding house. " We have not been able to get at the exact meaning of the Tamil word 'kaichalai '. It, however, seems to denote a structure or a roof put up by hand. Whatever may be the precise meaning of the term, we think that the definition in section 2(2) clearly includes the kaichalai in the present case. Since the Act applies to residential and non residential buildings alike, the expression 'hut ' cannot be restricted only to huts or cottages intended to be lived in. It will also take in any shed, hut or other crude or third class construction consisting of an enclosure made of mud or by poles supporting a tin or asbestos roof that can be put to use for any purpose, residential or non residential, in the same manner as any other first class construction. The kaichalat is a structure which falls within the purview of the definition. Counsel for the appellant is perhaps under stating its utility by describing it as a mere cattle shed. The area of the shed is quite substantial and, as will be explained later, the parties also appear to have attached some importance to its existence on the site. It is very difficult to hold, in view of the above definition, that the kaichalai is not a 'building ' within the meaning of section 2(2). On behalf of the respondents, it is contended that, in a composite lease, the existence of a building or hut on the land (however small, insignificant or useless it may be) is sufficient per se to bring the lease within the scope of the Rent Control Act. It is suggested for the respondent that it would be inarguable, once it is admitted or held 790 that the Kaichalai is a building and that the same has been let out, that still there is no letting out of a building within the meaning of the Act. In support of his contention, Sri Parasaran, for the respondent, placed considerable reliance on Irani vs Chidarnbaram Chettiar, AIR 1953 Mad. 650. He pointed out that, in that case there was a vast vacant land with only some stalls in one corner and a com pound wall but it was nevertheless held to be a case of lease of a building. According to him, this case was not disapproved, but indeed indirectly approved, by this Court in Salay Md. Sait vs J.M.S. Charity, [1969] 1 MLJ SC 16 though certain other cases (where leases of vacant sites with only the lessees ' buildings thereon were held to be leases of buildings) were overruled in that decision. This case, according to him, decides that, once there is a build ing on the land, however insignificant, and it is let out, the case will be governed by the Rent Control Act. We do not think this case is an authority for such an extreme posi tion. It rather seems that the case was one decided on its own special facts. At the time of the original lease by the landlord there was only a vacant site and a few small stalls. But, by the time the relevant lease deed (which came up for consideration) was executed, it had become the site of a theatre. No doubt the theatre did not belong to the lessor; nevertheless for several years the leased property had been sued as a theatre and the purpose of the parties was clearly that the leased premises should continue be used as a cinema theatre. It was in this special situation that the Court came to the conclusion that it was plausible to hold the lease to be one of a building though if the struc tures not belonging to the landlord were left out of ac count, there was only a vacant site and a few stalls. We think it would not be correct to draw support from this decision for the extreme proposition contended for on behalf of the respondent. In our opinion, we have to travel beyond this solitary fact, go further to look at the, terms of the lease and the surrounding circumstances to find out what it is that the parties really intended. There is no difficulty in determining the scope of the lease where a building and a piece of land are separately let out. But in the case of composite lease of land and building, a question may well arise whether the lease is one of land although there is a small building or hut on it (which does not really figure in the transaction) or one of a lease of the building (in which the lease of land is incidental) or a lease of both regardless of their respec tive dimensions. In determining whether a particular lease is of the one kind of another, difficulties are always bound to arise and it will be necessary to examine whether the parties intended to let out the building along with the lands or vice 791 versa. The decisions in Sivarajan vs Official Receiver, AIR 1953 Trav. Co. 105; Nagamony vs Tiruchittambalam, AIR 1953 Trav. Co. 369; Official Trustee vs United Commercial Syndi cate, and Raj Narain vs Shiv Raj Saran, AIR , relied upon by Sri Vaidyanathan, were in stances where what the parties had in mind was only the lease of land, although there were certain petty structures thereon which were not demolished or kept out of the lease but were also let out. They were clearly cases in which, we think, the applicability of the Rent Act was rightly ruled out. On the other hand, Larsen & Toubro, ; is a case where there was the lease of a building although a vast extent of land was also included in the lease. That was not a case which arose under the Rent Control Act but it illustrates the converse situation. Sri Vaidyanathan wants to derive, from the case referred to above and certain cases which deal with other aspects which become relevant while considering a composite letting, a proposition that the dominant purpose of the letting should govern. For instance, there are cases where factories, mills or cinema theatres are leased out and cases have held that the dominant object is to lease a factory, mill or theatre and that, even though in all these cases, the letting out of a building would be involved, the provisions of the Rent Control Act would not apply vide Venkayya vs Subba Rao, AIR 1957 A.P. 619; Uttam Chand vs Lalwani. AIR 1965 SC 716 and Dwarka Prasad vs Dwarkadas; , But we think that this approach also seeks to over simplify the problem. When we come down to consider the terms of a particular lease and the inten tion of the parties, there are bound to be a large variety of cases. If the transaction clearly brings out a dominant intention and purpose as in the cases cited above, there may be on difficulty in drawing a conclusion one way or the other. But it is not always necessary that there should be a dominant intention swaying the parties. There may be cases where all that is intended is a joint lease of both the land and the building without there being any considerations 'suf ficient to justify spelling out an intention to give primacy to the land or the building. For instance, where a person owns a building surrounded by a vast extent of vacant lands (which may not all be capable of being described appurtenant thereto, in the sense of being necessary for its use and enjoyment) and a party comes to him and desires to take a lease thereof, he may do so because he is interested either in the building or the land (as the case may be). But the owner may very well say: "I am not interested in your need or purpose. You may do what you like with the land (or building). 1 have got a compact property consisting of both and I want to let it out as such. You may take it or leave it. " The fact in such cases is that the owner has a building and land and he lets them 792 out together. He is not bothered about the purpose for which the lease is being taken by the other party. In such cases, it is very difficult to say that there is no lease of build ing at all unless there is some contra indication in the terms of the lease such as, for example, that the lessee could demolish the structure. The test of dominant intention or purpose may not be very helpful in such cases in the context of this legislation. Sri Vaidyanathan sought to contend that the words of section 2(2) "any building . . and gardens, grounds . . let or to be let along with it", import the concept that the dominant purpose should be a letting of the building. We do not think that this is necessarily so. The decision of this Court in Sultan Bros. P. Ltd. vs C.I.T., [ ; is of some relevance in this context. There the Supreme Court was concerned with the interpretation of section 12(4) of the Indian Income tax Act, 1922 which read: "(4) Where an assessee lets on hire machinery plant or furniture belonging to him and also buildings, and the letting of the buildings inseparable from the letting of the said machinery, plant or furniture, he shall be entitled to allowances in accordance with the provisions of the clauses (iv), (v) and (vii) of sub section (2) of section 10 in respect of such buildings. " The High Court took the view that the plant and machinery and buildings should not only be inseparably let out but also that "the primary letting must be of the machinery, plant or furniture and that together with such letting or along with such letting there (should be) letting of build ings." 1n that case, the High Court held, the primary let ting was of the building and so section 12(4) would not apply. The Supreme Court did not approve of this reasoning. It said: "Now the difficulty that we feel in accepting the view which appealed to the High Court and the Tribunal is that we find nothing in the language of sub section (4) of section 12 to support it. No doubt the sub section first mentions the letting of the machinery, plant or furniture and then refers to the letting of the building and further uses the word 'also ' in connection with the letting of the building. We, however, think that this is too slender a foundation for the conclu sion that the intention was that the primary letting must be of the machinery, plant or furnitures. In the absence of a much 793 stronger indication in the language used, there is no war rant for saying that the sub section contemplated that the letting of the building had to be incidental to the letting of the plant, machinery or furniture. It is pertinent to ask that if the intention was that the letting of the plant, machinery or furniture should be primary, why did not the section say so? Furthermore, we find it practically impossi ble to imagine how the letting of a building could be in cidental to the letting of furniture, though we can see that the letting of a factory building may be incidental to the letting of the machinery or plant in it for the object there may be really to work the machinery. If we are right in our view, as we think we are, that the letting of a building can never be incidental to the letting of furniture contained in it, then it must be held that no consideration of primary or secondary lettings arises inconstruing the section for what must apply when furniture is let and also buildings must equally apply when plant and machinery are let and also buildings. We think all that sub section (4) of section 12 contem plates is that the letting of machinery, plant or furniture should be inseparable from the letting of the buildings." The Court proceeded then to consider the concept of 'insepa rable letting ' and observed: "It seems to us that the inseparability referred to in sub section (4) is an inseparability arising from the intention of the parties. That intention may be ascertained by flaming the following questions: Was it the intention in making the lease and it matters not whether there is one lease or two, that is, separate leases in respect of the furniture and the building that the two should be enjoyed together? Was it the intention to make the letting of the two practically one letting? Would one have been let alone or a lease of it accepted without the other? If the answers to the first two questions are in the affirmative, and the last in the nega tive then, in our view, it has to be held that it was in tended that the lettings would be inseparable. This view also provides a justification for taking the case of the income from the lease of a building out of section 9 and putting it under section 12 as a residuary head of income. It then be comes a new kind of income, not covered by section 9, that is, income not from the ownership of the building alone but an income which 794 though arising from a building would not have arisen if the plant, machinery and furniture had not also been let along with it. " Though the context was somewhat different, the observations in that case are of great assistance. We think that, in the context here also, we should be guided not by any theory of dominant purpose but by the consideration as to whether the parties intended that that the building and land should go together or whether the lessor could have intended to let out the land without the building. The latter inference can perhaps be generally drawn in certain cases where only the lease of land dominated the thoughts of the parties but the mere fact that the building is small or that the land is vast or that the lessee had in mind a particular purpose cannot be conclusive. Let us now turn, in the above background, to a consider ation of the lease deed in the present case. As already mentioned, counsel for the appellant strongly relies on the purpose of the lease and seeks to make out that the building (kaichalai) was not really a significant part of the lease. This contention is stoutly refuted on behalf of the respond ents. It is pointed out that the kaichalai was of substan tial dimensions and that counsel for the appellant is not fight in characterising it as a mere cattle shed. It is pointed out that the shed was also admittedly used by the appellants for the purposes of its business and there is nothing to show that this was also not in contemplation at the time of the lease. Again it is pointed out that, in some parts of the lease deeds, the vernacular version gives first place to the kaichalai rather than to the vacant site. Also, every one of the lease deeds attaches special emphasis that the kaichalai should not be removed but should be returned to the lessor without any damage. We may also advert to one more circumstance which shows beyond doubt that the kaicha lai was not an insignificant structure. We have earlier referred to the fact that Ramaswamy Gounder had filed an earlier eviction petition on the ground that he needed the premises for personal occupation and immediate demolition. The lessee 's defence to this was not that the kaichalai was a cattle shed unfit for personal occupation, The defence was that it had been let out for a non residential purpose and could not be converted to residential use without permis sion. This certainly demonstrates that the kaichalai was capable of use both for residential and non residential purposes. Counsel for the respondent, in fact, wanted to go a little further and hold it against the appellant that he had not taken in those proceedings the plea, now put for ward, that the Rent Control Act could not at all be invoked. We will not, however, 795 hold this against the appellant 'as, at that time, the benefits of the Tenants ' Protection Act had not been extend ed to Udumalpettai and the tenant would not have gained anything by raising any such point. But the pleadings in those proceedings as well as the order of the Rent Control ler therein leave no doubt that the kaichalai was a material structure let out as such to the lessee for non residential purposes and which, with necessary permission, could also have been used for residential purposes. Having regard to all these circumstances, the correct inference appears to be that what the lessor intended was a lease of both the land and the building. The land was to be put to use for a petrol pump; so far as the building was concerned, the lessee was at liberty to use it as he liked but he had to maintain it in good condition and return it at the end of the lease. This was a composite lease with a composite purpose. It is difficult to break up the integrity of the lease as one of land alone or of building alone. In these circumstances, we think this letting would come in within the scope of the Rent Control Act, for the reasons already explained. Before concluding, we may touch upon two more relevant aspects. The first is the use of the word "separately" in section 2(2). This, however, does not affect our above construction of the section. That word is intended to emphasise that, for purposes of the Act, a building means any unit comprising the whole or part of a building that is separately let out. It does not mean it cannot mean that composite leases of land and building would not be covered by it. That would be clearly contrary to the language of the whole clause which specifically talks of joint letting of land and building. The second is the restriction of the applicability of section 2(2) to cases of letting of building and appurtenant lands only. It may be suggested that the lands here are not "appurtenant" except perhaps to the extent required for providing access to the Kaichalai. This argument is not very helpful to the appellants. At best, it can mean that the Kaichalai and only a part of land needed for its enjoyment or use would be governed by the Rent Control Act. But this was not the contention of the appellant and no attempt has been made to ascertain what the extent of such "appurtenant" land could be. That apart, we are inclined to think that the word "appurtenant" has, in the context, a much wider mean ing. It is not just restricted to land which, on a consider ation of the circumstances, a court may consider necessary or imperative for its enjoyment. It should be construed as comprehending the land which the parties considered appro priate to let along with the building. To hold to the con trary may give rise to practical difficulties. Suppose there is, in the middle of a metropolis, a bungalow with a vast extent of land sur 796 rounding it such as for e.g. in the Larsen & Toubro case and this is let out to a tenant. If a very strict and narrow interpretation is given to the word "appurtenant", it is arguable that a considerable part of the surrounding land is surplus to the requirements of the lessee of the building. But, we think, no argument is needed to say that such a lease would be a lease of building for the purposes of the Rent Control Act. Where a person leases a building together with land, it seems impermissible in the absence of clear intention spelt out in the deed, to dissect the lease as (a) of building and appurtenant land covered by the Rent Control Act and (b) of land alone governed by other relevant statu tory provisions. What the parties have joined, one would think, the court cannot tear as under. In fact, we may point out that a wider meaning for this word was convassed in Irani vs Chidambaram Chettiar, AIR 1953 Madras 650 which the court had no necessity to go into in the view taken by it on the interpretation of the lease deed. In this case also no contention has been raised in regard to this aspect and so we shall also leave open the precise connotation of the word except to say that it may warrant a wide meaning in the context. For the reasons discussed above, we see no grounds to interfere with the judgments of the courts below. The appeal is dismissed but we make no order as to costs. R.S.S. Appeal dis missed.

On 9.6.1936 the predecessor in interest of the respond ents executed a lease deed in favour of the predecessor in interest of the appellant, for a period of 15 years. The property leased out was vacant land, well and Kaichalai, and the lessee was permitted to construct on the vacant land and install petrol selling business. It was further stipulated that after the expiry of the lease period the lessee shall at his own expense remove the structure put up by him and deliver possession of the vacant land together with well and Kaichalai. The lease was extended from time to time. The lessor had filed petitions in 1962 and 1979 to evict the lessee under the Madras Buildings (lease and Rent Control) Act, 1950 but without success. Thereafter, in 1979 the present respondents instituted a petition for eviction of the lessee on the ground of demolition and reconstruc tion, and of wilful denial of title, within the meaning of Sections 14(1)(b) and 10(2)(vii) of the Tamil Nadu Buildings (Lease and Rent Control) Act. In the meantime, the provisions of the Tamil Nadu City Tenants ' Protection Act, 1922 were extended to the municipal limits of Udamalpettai. Taking advantage of this, the lessee filed petition claiming the benefit of compulsory purchase conferred on tenants of land under the said Act. The Dis trict Munsif cum Rent Controller allowed the lessor 's peti tion for eviction and dismissed the lessee 's petition for compulsory purchase. The Sub Judge dismissed the appeals. The lessee fried two revision petitions before the High Court which declined to interfere. Before this Court it was contended on behalf of the appellant that the original lease comprised only of the vacant site, well and Kaichalai; the kaichalai was merely in the nature of a shed put up for the tethering 783 of cattle and it was not a 'building ' within the meaning of Section 2(2) of the Rent Control Act; though the small Kaichalai was situated in a corner of the site, the lease intended by the parties was only that of the site. It was further contended that where a lease was a composite one of land and buildings, the court had to address itself to the primary or dominant intention of the parties; if the inten tion was to lease a building the lease of land being ad junct or incidental, the Rent Control Act would apply; on the other hand, if the dominant intention was to lease a site the presence of a building thereon not being consid ered material by either party the lease would not be one of a 'building ' covered by the Rent Control Act. Larsen & Toubro case ; , relied upon. On behalf of the respondents it was contended that, in the case of a composite lease; the existence of a building or hut on the land (howsoever small, insignificant or use less it may be) was sufficient per se to bring the lease within the scope of the Rent Control Act. Irani vs Chidambaram Chettiar, AIR 1953 Madras 650 and Salay Mohd. Sait vs J.M.S. Charity, [1969] 1 MLJ SC 16, relied upon. Dismissing the appeals, this Court, HELD: (1) The Tamil word "kaichalai" seems to denote a structure or a roof put up by hand. Whatever may be the precise meaning of the term, the definition in Section 2(2) of the Rent Act clearly includes the 'kaichalai ' in the present case. [789D] (2) Since the Rent Act applies to residential and non residential buildings alike, the expression 'hut ' cannot be restricted only to huts or cottages intended to be lived in. It will also take in any shed, hut or other crude or third class construction consisting of an enclosure made of mud or by poles supporting a tin or asbestos roof that can be put to use for any purpose, residential or non residential, in the same manner as any other first class construction. [789E F] (3) In the case of composite lease of land and building, a question may well arise whether the lease is one of land although there is a small building or hut (which does not really figure in the transaction) or of a lease of the building (in which the lease of land is incidental) or a lease of both regardless of their respective dimensions. [790G] 784 (4) It is not always necessary that there should be a dominant intention swaying the parties. There may be cases where all that is intended is a joint lease of both the land and the building without there being any consideration sufficient to justify spelling out an intention to give primacy to the land or the building. The test of dominant intention or purpose may not be very helpful in such cases in the context of this legislation. [791F; 792B] Sivarajan vs Official Receiver, AIR 1953 Trav. Co. 105; Nagamony vs Tiruchittambalam, AIR 1953 Trav. Co. 369; Offi cial Trustee vs United Commercial Syndicate, ; Raj Narain vs Shiv Raj Saran, AIR ; Ven kayya vs Subba Rao, AIR 1957 AP 619; Uttam Chand vs Lalwani, AIR 1965 SC 716 and Dwarka Prasad vs Dwarkadas, ; (5) In the context of this case, we should be guided not by any theory of dominant purpose but by the consideration as to whether the parties intended that the building and land should go together or whether the lessor could have intended to let out the land without the building. [794B] Sultan Bros. P. Ltd. vs C.I.T., ; , referred to. (6) Having regard to all the facts and circumstances, the correct inference appears to be that what the lessor intended was a lease of both the land and the building, this being a composite lease with a composite purpose. In these circumstances, this letting would come in within the scope of Rent Control Act. [795C] (7) Where a person leases a building together with land, it seems impermissible in the absence of clear intention spelt out in the deed, to dissect the lease as (a) of build ing and appurtenant land covered by the Rent Control Act and (b) of land alone governed by other relevant statutory provisions. What the parties have joined, the court cannot tear as under. [796B]

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ivil Appeal No. 1135 of 1981. From the Judgment and Order dated 15.12.1980 of the Allahabad High Court in Civil Writ Petition No. 1096 of 1974. R.N. Trivedi, R. Ramachandran and Ms. Sadhna Ramachan dran (N.P.) for the Appellant. Anil Deo Singh, Gopal Subramanium, Ms. section Dikshit, S.S. Hussain, S.A. Syed, R.S.M. Verma and Shakil Ahmed Syed for the Respondents. The Judgment of the Court was delivered by KULDIP SINGH, J. Karamat Husain Muslim Girls College, Luc know (hereinafter called the 'College ') is being managed by Anjuman Muslimat e Hind which is a society registered under the . The avowed object of the society is to advance the cause of education among the women of India. The College has been recognised by the State of Uttar Pradesh as a religious 701 minority institution within the meaning of Article 30(1) of the Constitution of India and is an affiliated associate of Lucknow University. The post of lady Principal in the degree section of the college was advertised on April 5, 1974 indicating the following qualifications/ requirements: (1) First or good second class Masters Degree in any of the subject taught in the institution; (2) At least five years experience of teaching degree classes as also administrative experience; (3) Must possess working knowledge of Urdu; (4) Willing to reside in the college premises. In response to the advertisement the appellant along with others applied for the post. The appellant did not fulfil the qualification of five years experience. She alone appeared for the interview and the Selection Committee relaxed the qualification of experience in her favour and selected her. The Management thereafter sought the approval of the University to appoint the appellant as required under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 (hereinafter called the 'Act '). The University, howev er, declined to approve and directed the management to re advertise the post. The appellant challenged the decision of the University by way of a writ petition under Article 226 of the Constitution of India before the Lucknow Bench of the Allahabad High Court on the ground that the college being a minority institution any interference by the University under the Act is violative of Article 30(1) of the Constitu tion. It was also contended that there was no basis or justification to withhold the approval. The High Court rejected the attack on the ground of Article 30 of the Constitution of India by holding that the provisions of the Act are regulatory and are primarily for the purpose of maintaining uniformity, efficiency and stand ards of education in the minority institutions. On the merits the High Court held that the Selection Committee was not justified in relaxing the qualification without reserv ing that fight to itself in the advertisement. The High Court also found that the qualification "possessing working knowledge of Urdu" was unjust On the above findings the writ petition was dismissed. This 702 is how the appellant is before us via Article 136 of the Constitution of India. The High Court has tightly held the relaxation granted by the Selection Committee to be arbitrary. In the absence of statutory rules providing power of relaxation, the adver tisement must indicate that the Selection Committee/Appoint ing Authority has the power to relax the qualifications. Regarding "Working knowledge of Urdu" we do not agree with the High Court that the said qualification is unjust. The college being a Muslim minority institution prescribing the said qualification for the post of Principal, is in conform ity with the object of establishing the institution. In the view which we are taking in this case it is not necessary to go into the argument based on Article 30(1) of the Constitution of India. We heard the arguments in this case on February 23, 1990 and adjourned the case with the following order: "It is admitted by the parties that as a result of the Court orders the appellant Ms. Shainda Hasan is continuing to work as Principal in the Karamat Husain Muslim Girls College, Lucknow since 1974. Having served the institution for over 16 years it would be unjust to make her leave the post. Under the circumstances let the University reconsider the whole matter sympathetically. " The case was taken up in Chambers on April 20, 1990 when Mrs. Shobha Dixit learned counsel for the State after ob taining instructions from the University agreed with us that asking the appellant to leave the job after sixteen years would be doing injustice to her. Keeping in view the facts and circumstances of the case and in the interest of justice we direct the Lucknow Univer sity and its Vice Chancellor to grant the necessary approval to the appointment of the appellant as Principal of Karamat Husain MusIim Girls College, Lucknow, with effect from the date she is holding the said post. We further direct that the appellant shall be entitled to the salary,allowances and all other consequential benefits to which a regular princi pal of the said college would have been and is entitled. We dispose of the appeal with the above directions. There shall be no order as to costs. T.N.A. Appeal dis missed.

The respondent college, a religions minority institu tion, invited application for the post of Principal from candidates possessing First or Second class Master 's Degree, five years teaching experience and possession of working knowledge of Urdu. The Selection Committee selected the appellant by relaxing the qualification of experience in her favour but the University declined its approval to the appointment under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 and directed the Management Committee to readvertise the post. The appellant challenged the University 's decision before the High Court contending that the college being a minority institution any interference by the University under the Act was violative of Article 30(1) of the Consti tution and that there was no justification to withhold the approval. The High Court rejected the attack on the ground of Article 30 by holding that the provisions of the Act were regulatory but held that the Selection Committee was not justified in relaxing the qualification and that the quali fication 'possessing working knowledge of Urdu ' was unjust. Hence this appeal by special leave. 700 Dismissing the appeal, this Court, HELD: 1. In the absence of statutory rules providing power of relaxation, the advertisement must indicate that the Selection Committee/Appointing Authority has the power to relax the qualifications. The High Court has rightly held the relaxation granted by the Selection Committee to be arbitrary. [702B] 2. The college being a Muslim minority institution, the prescribing of the qualification of possession working knowledge of Urdu for the post of Principal, is in. conform ity with the object of establishing the institution. The said qualification is not unjust. [702B] [In the interest of justice and in view of the facts and circumstances of the case, the Lucknow University and its Vice Chancellor are directed to grant the necessary approval to the appointment of the appellant to the post of Principal of College, which the appellant is holding as a result of the Court orders, with effect from the date she is holding the said post, and the appellant shah be entitled to salary, allowances and all other consequential benefits to which a regular Principal of the said college would have been enti tled.] [702G]

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ON: S.L.P. (Criminal) No. 2485 of 1989. From the Judgment and Order dated 12.12.1989 of the Delhi High Court in C.W.P. 589 of 1989. Harjinder Singh and R.N. Joshi for the Petitioner. Soli J. Sorabjee, P.K. Goswamy, Udai Lalit, C.V.S. Rao, P. Parmeshwaran and Sushma Suri for the Respondents. The Judgment of the Court was delivered by REDDY, J. This is a petition under Article 136 of the Constitution of India against the judgment and order of the High Court of Delhi dismissing the writ petition filed on behalf of the detenu challenging the detention. Notice was given and after hearing counsel for both the parties at length the matter is being disposed of at the admission stage. The detenu was detained under Section 3(1) of the Con servation of Foreign Exchange and Prevention of Smuggling Activities Act (hereinafter referred to as 'the Act ') by an order dated 13.7.89. On 7.6.89 Officers of Directorate of Revenue Intelligence, New Delhi intercepted a Maruti Car in which one Mahesh Kumar Chauhan and three others were present but no recovery was effected on the spot. But later on the Car was thoroughly rummaged in presence of two independent witnesses and the occupants of the car and 206 foreign marked gold biscuits of ten tolas each were recovered from the cavities of the car meant for fitting speakers in the rear portion of the car. The occupants did not give any explanation for the possession of gold biscuits. On personal search of Mahesh, a slip was recovered which contained a telephone number and Mahesh Kumar in his statement admitted that he was to hand over the smuggled goods to one Vijay Kumar. The premises of these two peoples were searched and a receipt of token tax in respect of the car was recovered. Mahesh Kumar admitted that he was visiting Dubai frequently to bring con 320 sumer goods and gold ornaments for being sold in the local market. One Avtar Singh who was engaged in smuggling of foreign gold biscuits, agreed to sell the gold biscuits to Mahesh Kumar on commission. He also gave some more details about Avtar Singh. Similarly Vijay Kumar also made a state ment. From these statements it is also revealed that peti tioner herein Sanjeev Kumar Aggarwal had made arrangements for selling the gold biscuits. The residential premises of the petitioner was searched and he was taken into custody. The officers of the Directorate of Revenue Intelligence questioned the petitioner and he gave a statement. On the basis of this material the detaining authority passed an order of detention on 13.7.89 and the same was served on 24.7.89. The grounds were also served in time. The learned counsel submitted that there is a total non application of mind by the detaining authority inasmuch as he was failed to note that the detenu was in jail and that there is no possibility of his being released and the failure on the part of the detaining authority to consider the same renders the detention invalid. It is true that the petitioner was in judicial custody in connection with crimi nal proceedings. An application was filed in the court of A.C.M.M. Delhi for extending the remand and the remand was granted upto 6.7.89. However, two detenus who figured as co accused in that criminal proceedings were also in the judicial custody and on their behalf an application for bail was filed. As mentioned in the grounds of detention the detaining authority has noted these circumstances. In para graph No. 16 it is mentioned that: 'I am aware that all of you are under judicial custody and possibility of your release on bail in near future cannot be ruled out. Also nothing prevents Mahesh Kumar Chauhan, Vijay Kumar Dharne and you from moving bail application and get ting release on bail." Then in paragraph No. 24 it is mentioned thus: "From the foregoing facts and circumstances and statements recorded in this connection as disclosed herein above, it is evident that you have engaged yourself in abetting the smuggling of goods unless prevented you will continue to do so in similar manner or otherwise in future when released on bail. " The further submission of the learned counsel is that the petitioner 321 alongwith two others were in judicial custody and they were further remanded upto 20.7.1989 and no bail application was filed or pending as on the date of passing orders of deten tion. Therefore it must necessarily be inferred that there is no awareness on the detaining authority of this aspect. Reliance is placed on some of the decisions of Supreme Court of India in this context. In Abdul Razak Abdul Wahab Sheikh vs S.N. Sinha, Commis sioner of Police, Ahmadabad and Anr., ; it is held that there must be awareness in the mind of the detain ing authority that the detenu is in custody at the time of service of order of detention and that cogent and relevant material and fresh facts have been disclosed necessitating making of an order of detention. In the course of the judg ment it is noted that the detaining authority also was not aware that application for bail filed on behalf of the detenu was rejected by the designated court and therefore, there was no application of mind. In Binod Singh vs District Magistrate, Dhanbad, 16 it is laid down "If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised. In the instant case when the actual order of detention was served upon the detenu, the detenu was in jail. There is no indica tion that this factor or the question that the said detenu might be released or that there was such a possibility of his release, was taken into consideration by the detaining authority properly and seriously before the service of the order." In Vijay Kumar vs State of Jammu and Kashmir, ; the detention order was quashed because it did not give the slightest indication that the detaining authority was aware that the detenu was already in jail. But in the case before us the detaining authority has noted in the grounds that the petitioner alongwith other two coaccused have been remanded to judicial custody and the bail applica tion was filed on behalf of the other two detenues and there is every likelihood of the petitioner also being released on bail and as such the possibility cannot be ruled out. The other material relied upon by the detaining authority in apprehending that the detenus are likely to be released on bail is that their remand to the judicial custody was upto 20.7.89 and that the other two co accused have also filed bail applications and they were pending and that this mate rial is sufficient to indicate that petitioner also may file bail application and is likely to be released on bail. 322 We have carefully examined the material relied upon by the detaining authority in this regard and we are of the opinion that it cannot be said that there was no awareness in the mind of the detaining authority about the detenu being in custody and that if he is released on bail he is likely to indulge in the prejudicial activities. At this juncture we may also notice another decision of the Supreme Court. In Ramakrishna Rawat vs District Magistrate, Jabal pur, , the detention order was upheld since the custody was obviously of a short duration and on the basis of the antecedent activities of the detenu in the proximate past, the detaining authority could reasonably reach its subjective satisfaction in respect of the detenu that he was in custody. The learned counsel, however, submitted that in case the bail application is filed, the same can be opposed or even if enlarged the same can be questioned in a higher court and that a mere bald statement that the person would repeat his criminal activities after release would not be enough. In Smt. Shashi Aggarwal vs State of U.P. and Ors. , ; it is observed: "The possibility of the court granting bail may not be sufficient. Nor a bald statement that the person would repeat his criminal activities would be enough. There must also be credible information or cogent reasons apparent on the record that the detenu, if enlarged on bail, would act prejudicially to the interest of public order. " This is a case of detention on the ground of likelihood of disruption of public order by the detenu. The detention order shows that the order had been made only on the sole ground that the detenu was trying to come out on bail. Learned counsel also relied upon the decision in Ramesh Yadav vs District Magistrate, Etah & Ors., wherein it is observed: "Merely on the ground that an accused in detention as an under trial prisoner was likely to get bail, an order of detention under the National Security Act should not ordi narily be passed. If the apprehension of the detaining authority was true, the bail application had to be opposed and in case bail was granted, challenge against that order in the higher forum had to be raised. " 323 But as already held in the instant case the detaining au thority was not only aware that the detenu was in jail but also noted the circumstances on the basis of which he was satisfied that the detenu was likely to come out on bail and continue to engage himself in the smuggling of goods. There fore the detention was not ordered on the mere ground that he is likely to be released on bail but on the ground that the detaining authority was satisfied that the detenu was likely to indulge in the same activities if released on bail. At this stage it is useful to refer to another impor tant decision rendered by the Constitution Bench in Ramesh war Shaw vs District Magistrate, Burdwan, ; , wherein the detention order was served while the detenu was in custody. The detenu was in jail by virtue of a remand order. The Constitution Bench considered the effect of the detenU 's subsisting ' detention and it was indicated that the detenu 's subsisting detention did not by itself invalidate the detention order but facts and circumstances justifying the order of preventive deten tion notwithstanding his custody were necessary to sustain such an order. It is observed in the said case that: "Whether the detention of the said person would be necessary after he is released from jail, and if the authority is bona fide satisfied that such detention is necessary, he can make a valid order of detention a few days before the person is likely to be released. The antecedent history and the past conduct on which the order of detention would be based would, in such a case, be proximate in point of time and would have a rational connection with the conclusion drawn by the authority that the detention of the person atter his release is necessary . " It was further observed that: "Therefore. we are satisfied that the question as to whether an order of detention can be passed against a person who is in detention or m jail, will always have to be determined in the circumstances of each case. " The principles laid down by the Constitution Bench are followed in a number of subsequent decisions. In Alijan Mian vs District Magistrate, Dhanbad, [1983] 4 SCC 301 the detention order was upheld even though the detenu was in jail custody on the date of passing of the detention order because the 324 detention order showed that the detaining authority was alive to the fact yet it was satisfied that if the detenu was enlarged on bail, which was quite likely, he could create problems of public order. In N. Meera Rani vs Government of Tamil Nadu & Anr., [ 18 all these earlier cases have been referred to extensively and the conclusions are deduced as follows: "Subsisting custody of the detenu by itself does not invali date an order of his preventive detention and the decision must depend on the facts of the particular case, preventive detention being necessary to prevent the detenu from acting in any manner prejudicial to the security of the State or to the maintenance of the public order etc. ordinarily it is not needed when the detenu is already in custody; the de taining authority must show its awareness to the fact of subsisting custody of the detenu and take that factor into account while making the order; but, even so, if the detain ing authority is reasonably satisfied on cogent material that there is likelihood of his release and in view of his antecedent activities which are proximate in pint of time he must be detained in order to prevent him from indulging in such prejudicial activities, the detention order can be validly made even in anticipation to operate on his release. This appears to us, to be the correct legal position. " In one of the latest judgments of this Court in Shri Dhar mendra Suganchand Chelawat etc. vs Union of India and Ors. JT , once again all the authoritative pro nouncements including that of the Constitution Bench in Rameshwar Shaw 's case are referred to and the Bench which consisted of three Judges observed thus: "The decisions referred to above led to the conclusion that an order for detention can be validly passed against a person in custody and for that purpose it is necessary that the grounds of detention must show that (i) the detaining authority was aware of the fact that the detenu is already in detention; and (ii) there were compelling reasons justi fying such detention despite the fact that the detenu is already in detention. The expression "compelling reasons" in the context of making an order for detention of a person already in custody implies that there must be cogent materi al before the detaining authority on the basis of which it may be 325 satisfied that (a) the detenu is likely to be released from custody in the near future and (b) taking into account the nature of the antecedent activities of the detenu, it is likely that after his release from custody he would indulge in prejudicial activities and it is necessary to detain him in order to prevent him from engaging in such activities. " It could thus be seen that no decision of this Court has gone to the extent of holding that no order of detention can validly be passed against a person in custody under any circumstances. Therefore the facts and circumstances of each case have to be taken into consideration in the context of considering the order of detention passed in the case of a detenu who is already in jail. We have already, in the instant case, referred to the grounds and the various cir cumstances noted by the detaining authority and we are satisfied that the detention order cannot be quashed on this ground. Learned counsel, however, strongly relied on Smt. Shashi Aggarwal 's case and Ramesh Yadav 's case and contended that in the instant case also the bail application could be opposed if moved or if enlarged the same can be questioned in a higher court and on that ground the detention order should be held to be invalid. In N. Meera Rani 's case a Bench of three Judges noted the above observations in Smt. Shashi Aggarwal 's case and Ramesh Yadav 's case and it is said that they were made on the facts of those particular cases and the Bench also observed thus:. "A review of the above decisions reaffirms the position which was settled by the decision of a Constitution Bench in Rameshwar Shaw case. The conclusion about validity of the detention order in each case was reached on the facts of the particular case and the observations made in each of them have to be read in the context in which they are made. None of the observations made in any subsequent case can be construed at variance with the principle indicated in Ra meshwar Shaw case for the obvious reason that all subsequent decisions were by benches comprised of lesser number of judges. We have dealt with this matter at some length be cause an attempt has been made for some time to construe some of the recent decisions as modifying the principle enunciated by the Constitution Bench in Rameshwar Shaw 's case. " 326 AS a matter of fact, in Shri Dharmendra Suganchand Chela wat 's, case there is a reference to Smt. Shashi Aggarwal 's, case and Ramesh Yadav 's, case and a Bench of three Judges following the decision of the Constitution Bench in Ramesh war Shaw 's Case, laid down the above principles which we have already referred to. Therefore we see no force in the submission. The next submission of the learned counsel is that the detaining authority has not applied his mind properly in rejecting the representation made by the detenu. It is submitted that in Annexure X 3, an application sent by Vijay Kumar, the co detenu, it is clearly mentioned that his statement was recorded under torture and duress. Likewise in Annexure X 4, a petition filed in the Court of A.C.M.M. New Delhi, it is complained that the statement was recorded under torture and duress. According to the learned counsel, this petition as well as the medical reports of the Doctors who examined Vijay Kumar have not been referred to and considered by the authority while rejecting the representa tion. Reliance is also placed on a judgment of the Delhi High Court in Sat Pal Manchanda vs M.L. Wadhawan and Ors., (Criminal Writ No. 333 of 1986) decided on 30.10.86. In that case it is held that all the relevant material should be taken into consideration by the detaining authority while disposing of the representation. But in the instant case the circumstances are different. As a matter of fact, it is referred in paragraph 15 of the grounds that a telegram dated 8.6.89 was received in the Ministry of Finance alleg ing that the detenu was picked up by the DRI officers and that the allegations made therein were found false and baseless. In paragraph 17, it is also mentioned that the detenu alongwith his accomplices retracted from their state ment dated 8.6.89. It can therefore be seen that the detain ing authority has considered the allegations that the detenu was manhandled etc. At any rate, the detaining authority has clearly noted that the detenu has retracted from the alleged statement, therefore it can not be said that there is non application of mind in this regard, namely, in considering the representation. The same principle applies to the Advi sory Board also. According to the submissions of the learned counsel, these documents were not placed before the Advisory Board in its meeting on 18.9.89. Whatever statement was made by the petitioners on 22.6.89 prior to the detention and the grounds clearly disclose that there was retraction. It must also be noted in this context that in the grounds in para graph 10 also it is mentioned that a telegram was received on 9.6.89) alleging about the wrongful arrest and extraction of the statements and the detaining authority has also taken note of the allegations made against the DRI officers which were round to 327 be false and baseless. The same material was there before the Advisory Board. Therefore there is no force in this submission. It is lastly submitted that there was 11 days delay in serving the detention order. It is true that the order of detention was passed on 13.7.89, but the same was served on 24.7.89. According to the learned counsel, there is a viola tion of Section 3(3) of the Act. The said provision lays down that for the purpose of Article 22(5) of the Constitu tion, the order should be served as soon as possible but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days from the date of detention. Learned counsel for the State submitted that firstly the point of delay was not taken up in the special leave petition, there fore he had no opportunity to counter the same. However, from the record he submitted that it took quite sometime for translating the documents to Hindi and Gurumukhi. We have seen the documents filed before us and we are satisfied that there are valid and sufficient reasons for delay in serving the detention order. Thus, we find no merit in anyone of the submissions. The petition is, therefore, dismissed. N.V.K. Petition dismissed.

The petitioner was detained under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act by an order dated 13.7.1989. The facts lead ing to his arrest and detention are: On 7.7.1989 officers of Directorate of Revenue Intelli gence New Delhi intercepted a Maruti Car in which one Mahesh Kumar Chauhan and three others were present. On search of the car no recovery was made on the spot, but later on when the car was thoroughly rummaged in presence of two independ ent witnesses and the occupants of the car, 206 foreign marked gold biscuits of ten tolas each were recovered from the cavities of the car meant for fitting speakers in the rear portion of the car. The occupants did not give any explanation for the possession of the. said gold biscuits. However on personal search of Mahesh, a slip was recovered which contained a telephone number and Mahesh Kumar in his statement admitted that he was to hand over the smuggled goods to one Vijay Kumar. Mahesh Kumar admitted that he was visiting Dubai frequently to bring consumer goods and orna ments for being sold in the local market. According to him one Avtar Singh who was engaged in smuggling of foreign gold biscuits, agreed to sell the gold biscuits to Mahesh Kumar on commission. He also gave some details about Avtar Singh. Similarly Vijay Kumar also made a statement. From these statements it is also revealed that petitioner Sanjeev Kumar Aggarwal had made arrangements for selling the gold bis cuits. the residential premises of the petitioner was searched and he was taken into custody. The petitioner made a statement before the officers of the Directorate or Reve nue Intelligence. On the basis of the material the detaining authority passed an order of detention on 13.7.1989 which was served on the petitioner on 24.7.1989. The grounds of detention were also served on the petitioner in time. 318 The petitioner challenged his detention by means of a writ petition before the Delhi High Court, and having re mained unsuccessful, he filed this petition for Special Leave to Appeal against the order of the Delhi High Court dismissing his writ petition. Before this Court two main points have been urged viz., (i) that there is a total non application of mind by the detaining authority inasmuch as he has failed to note that the petitioner was in jail, and that there was no possibili ty of his being released, and the failure to consider this aspect on the part of the detaining authority renders his detention invalid; and (ii) that the detaining authority has not applied his mind properly in .rejecting his representa tion and that there was delay in serving the detention order on him. Dismissing the petition, this Court, HELD: Whether an order of detention can be passed against a person who is in detention or in jail, will always have to be determined in the circumstances of each case. No decision of this Court has gone to the extent of holding that no order of detention can validly be passed against a person in custody under any circumstances. [326B] Section 3(3) of the Act lays down that for the purpose of Article 22(5) of the Constitution the order should be served as soon as possible but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days from the date of detention. [320B] In the instant case from the record it was submitted that it took quite sometime for translating the documents to Hindi and Gurmukhi, and the Court is satisfied that there are valid and sufficient reasons for delay in serving the detention order. [327C D] Abdul Razak Abdul Wahab Sheikh vs S.N. Sinha, Commisioner of Police, Ahmedabad & Anr., ; ; Binod Singh vs District Magistrate, Dhanbad, ; ; Vijay Kumar vs State of Jammu & Kashmir, ; ; Ramakrishna Rawat vs District Magistrate, Jabalpur, ; Smt. Shashi Aggarwal vs State of U.P. & Ors., ; ; Ramesh Yadav vs District Magistrate, Etah & Ors. , ; Rameshwar Shaw vs District Magistrate Burdwan, ; ; Alijan 319 Mian vs District Magistrate, Dhanbad, [1983] 4 S.C.C. 301; N. Meera Rani vs Government of Tamil Nadu & Anr., ; Shri Dharmendra Suganchand Chelawat etc. vs Union of India & Ors., J.T. Sat Pal Man chanda vs M.L. Wadhawan & Ors., Crl. Writ No. 333 of 1986, decided by Delhi High Court on 30.10.1986.

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No. 1275 of 1989 etc. (Under Article 32 of the Constitution of India). Ms. Rani Chhabra, K. Ramkumar, Govind Mukhoty and Vimal Dave for the Petitioners. M.K. Ramamurthy (NP), K.K. Venugopal, H.S. Gururaj Rao, Ms. Chandan Ramamurthi, M.A. Krishnamurthi, T.V.S.N. Chaff, section Markandeya, W.A. Nomani, G.S. Giri Rao and A.K. Raina for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. These are petitions under article 32 of the Constitution. Petitioners are promotee Engineers of the Roads & Buildings Wing of the Andhra Pradesh Engineering Service and challenge mainly is to certain earlier decisions of this Court resolving similar disputes by judgments ren dered in writ petitions and to the guidelines formulated by the State Government in the matter or ' the drawing up of the seniority list by way of implementation of this Court 's directions. 705 Facts are not in dispute. Shortly stated, under the Rules substantive vacancies in the category of Assistant Engineers have to be filled up from two sources 37 I/2 per cent by direct recruitment and the remainder of 62 1/2 per cent by transfer of Supervisors and Draughtsmen and by promotion of Junior Engineers. Regular direct recruitment had not been made as and when due and promotees beyond the limit had been put in in the place of direct recruits. While disposing of a group of petitions in a contest of this type in K. Siva Reddy & Ors. vs State of A.P. & Ors. , ; , a two Judge Bench of this Court instead of disturbing the entire group of promotee Engineers in excess of the quota, made the following direction: "Reopening the question of inter se seniority on the basis of non enforcement of the rules from the very beginning may create hardship and that would be difficult to mitigate but we see no justification as to why the benefit of the scheme under the rules should not be made available to direct recruits at least from 1982. When the State Government by rules duly framed prescribed the method of recruitment and put the scheme into operation it had the obligation to comply with it. The explanation offered by the State Govern ment for non compliance of the requirements of the rules does not at all impress us. We, therefore, direct that as on December 31, 1982, the State Government must ascertain the exact substantive vacancies in the category of Assistant Engineers in the service. On the basis that 37 1/2 per cent of such vacancies were to be filled up by direct recruit ment, the position should be worked out. Promotees should be confined to 62 1/2 per cent of the substantive vacancies and in regard to 371/2 per cent of the vacancies the shortfall should be filled up by direct recruitment. General Rules shall not be applied to the posts within the limits of 37 1/2 percent of the substantive vacancies and even if promo tees are placed in those posts, no seniority shall be count ed. The State Government shall take steps to make recruitment of the shortfail in the direct recruitment vacancies within the limit of 37 1/2 per cent of the total substantive vacan cies up to December 31, 1987 within four months from today by following ,the normal method of recruitment for direct recruits. The seniority list in the cadre of Assistant Engineers shall be redrawn up, as directed by the Tribunal, by the end of September 1988, keeping the directions re ferred to above in view. There 706 shall be a direction issued to the State of Andhra Pradesh to make recruitment to the category of Assistant Engineers by strict compliance of Special Rules henceforth. " The State Government came forward to implement the direction and published the draft seniority list drawn up on the basis of discussed guidelines. Keeping the directions in view the draft list placed the 1982 direct recruits from serial nos. 234 to 269 without disturbing promotees upto serial No. 233 and the remainder of promotees given promo tion prior to 1982 were placed against serial nos. 270 to 300. Writ petition No. 369 of 1989 C. Radhakrishna Reddy & Ors. vs State of A. P. & Ors., had earlier raised the same dispute. By judgment dated November 10, 1989, while dismiss ing the said writ petition a two Judge Bench of this Court said: "In Siva Reddy 's case this Court found that promotees had exceeded the quota and even got regularised in respect of the posts in excess of the limit. Taking into consideration the fact that regularisation had been done after the promo tees had put in some years of service and disturbing regu larisation would considerably affect the officers concerned, regularisation was not interfered with. This Court 's inten tion obviously was not to take away the benefit of regulari sation in respect of the officers belonging to the promotee group in excess of their quota but the Court did not intend to allow such regularised officers in excess of the quota to also have the benefit of such service for purposes of sen iority. A reading of the judgment in Siva Reddy 's case clearly indicates that this Court intended what the Govern ment have laid down by way of guideline. We see no justifi cation to interfere with the Government direction. A draft seniority list on the basis of such direction has already been drawn up and has been circulated. We are told that objections have been received and would be dealt with in usual course by the appropriate authorities. This writ petition had been entertained in view of the allegation that the Government direction was on a misconception of what was indicated in the judgment and in case there was any such mistake the same should be rectified at the earliest. Now that we have found that the Government order is in accord with the Court direction, this writ petition must be dis missed and individual grievances, if any, 707 against the draft seniority list would, we hope, be consid ered on the basis of objections filed by the competent authority. " At the hearing Mr. Mukhoty, appearing in support of the main petition, vehemently contended that serious injustice had been done to the promotees and accrued rights of theirs had been disturbed. He submitted that some of the direct recruits had been given the benefit of seniority by counting service prior to their actual recruitment and relied upon observations made by this Court in some cases to the effect that for computation of length of service the period prior to selection was being counted by a deeming position of employment prior to recruitment. When called upon to sub stantiate his allegation, he has not been able to do so. On the other hand, the Court had taken a very equitable view in not disturbing the regularisation contrary to the quota and had taken every care to ensure that the cause of justice was not made to suffer and a balance was maintained by an appro priate admixture of relief by confining the reconsideration for a period after 1982. The year 1982 was fixed, as the reasonings indicate, on account of two features (i) that regular disputes had been raised from that time; and (ii) a period of 5 6 years was not too long a period to give rise to a sense of conclusiveness generated by long lapse of time. The promotee Engineers should have been happy and thankful to their lot that their regularisation was not disturbed and even seniority prior to 1982 was not being affected. Oblivious of these benefits which they have re tained though acquired out of turn, they have proceeded on the footing that their cause has been affected and justice to them has been denied by placing a group of them below the 1982 recruits. We do not think that for dismissing this group of petitions anything more should be said excepting to quote with approval what this Court had said in Dr. G. Marulasiddaiah vs Dr. T.G. Siddapparadhya & Ors., ; "The canker of litigiousness has spread even to a sphere of life where discipline should check ambition concerning personal preferment. " A government servant is justified in taking legal action when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile himself to his lot suppressing disappointment when he finds a co worker raised to a position which he himself aspired after. 708 Ordinarily, we would have awarded exemplary costs but with a view to allowing an appropriate reconciliation of the petitioners to their lot and not to give them a feeling of infliction of any new injury, we refrain from doing so. P.S.S. Petitions dis missed.

Sub rule 3(a) of rule 3 of the Andhra Pradesh (Roads and Buildings) Engineering Service Rules, 1965 prescribes that the substantive vacancies in the category of Assistant Engineers 37 1/2 per cent shall be filled up by direct recruitment and the remaining 62 1/2 per cent by transfer and promotion of junior officers. In K. Siva Reddy vs State of Andhra Pradesh, ; , filed by direct recruits, the Court had directed the State Government to ascertain the exact sub stantive vacancies in the category of Assistant Engineers in the service as on December 31, 1982, work out the quota prescribed under rule 3(3)(a) of the Rules and draw up a seniority list accordingly. In the draft seniority list drawn up by the State Gov ernment on the basis of the guidelines, it placed the 1982 direct recruits from serial Nos. 234 to 269 without disturb ing promotees upto serial No. 233 and the remainder of promotees given promotion prior to 1982 were placed against serial Nos. 270 to 300. In C. Radhakrishna Reddy vs State of A.P., W.P. No. 369 of 1989 decided on November 10, 1989 the Court found the said list in accord with the directions. In these writ petitions preferred by the promotee As sistant Engineers, it was contended for them that serious injustice had been done to them as the accrued rights of theirs had been disturbed and some of the direct recruits had been given the benefit of seniority above them by count ing service prior to their actual recruitment. Dismissing the writ petitions, the Court, HELD: 1. A Government servant is justified in taking legal action 704 when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile to his lot suppressing disappointment when he finds a co worker raised to a position which he himself aspired after. [707G] Dr. G. Marulasiddaiah vs Dr. T.G. Siddapparadhya & Ors., ; , referred to. In K. Siva Reddy 's case, the Court had taken a very equitable view in not disturbing the regularisation contrary to the quota and had taken every care to ensure that the cause of justice was not made to suffer and a balance was maintained by an appropriate admixture of relief by confin ing the reconsideration for a period after 1982. The year 1982 was fixed on account of two features, (i) that regular disputes had been raised from that time, and (ii) a period of 5 6 years was not too long a period to give rise to a sense of conclusiveness generated by long lapse of time. The promotee engineers should have been happy and thankful to their lot that their regularisation was not disturbed and even seniority prior to 1982 was not being affected though they had acquired these benefits out of turn. [707C E]

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ivil Appeal No. 539 of 1976. From the Judgment and Order dated 26.8.1975 of the Gujarat High Court in Spl. Civil Application No. 1627 of 1972. Soli J. Sorabjee, Attorney General, A. Subba Rao, C.V.S. Rao, P. Parmeswaran and Ms. Nisha Bache for the Appellants. S.K. Dhingra for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. By this appeal Union Government has challenged correctness of construction by High Court of Gujarat of notification No. 163 of 1965 issued under Rule 8 framed under Central Excise and Salt Act allowing exemption to all sorts of papers by "any factory commencing produc tion" to refer "not to the production of excisable goods paper in general failing under Item 17, but to pro duction of these specified exempted categories of paper in Column 2 of this notification" and canvasses for acceptance of the construction put on it by the Collector, Central Excise "that the factory must have commenced production on or after that date and not that the production of these items must have been commenced after the date". M/s. Arvind Boards & Paper Products Limited, Antalia, Bilimora, Gujarat State, was established in 1942. From 1944 when it went into production till 1964 it manufactured only straw boards and mill boards. It expanded its activities in 1965 and commenced manufacture of duplex board. The packing and wrapping paper was manufactured 661 on experimental basis in 1966 and on commercial basis after 1967. In December, 1971 the company wrote a letter to the Assistant Collector of Central Excise inquiring as to wheth er the company would be entitled to exemption under notifi cation No. 163/65 both in respect of the production at tributable to its installed capacity as in 1967 as well as in respect of the production attributable to its expanded capacity. In 1972 it was informed that it would be entitled to concession under Column 5 of the Table of the notifica tion in respect of the production attributable to the en larged capacity, namely, the third machine only. Consequent ly the claim of the petitioners for exemption on capacity as it existed in 1967 was not accepted. The order was main tained in appeal as well. The Appellate Collector held: "I do not agree with the appellant 's contention that the Assistant Collector erred in holding that "any factory which commenced production" related to any factory manufacturing paper falling under Item 17 of the said schedule irrespec tive of the varieties manufactured thereof. The exemption contained in the aforesaid Notification No. 163/65 as amend ed is in respect of the goods. Said exemption is conditional i.e. it is applicable to paper produced in a factory which commenced production on or after a specific date. Therefore, the condition is that the factory must have commenced pro duction on or after that date and not that the production of these items must have been commenced after that date. " The High Court did not agree with the construction of the Notification made by the Collector (Appeal) and held: "That is why the whole controversy has arisen as regards these key words "commencement of production". On a plain literal construction, bearing in mind the context of the exemption, where only certain specified categories of paper which is excisable item as specified in Column 2 had been exempted, it is obvious that the commencement of production must refer not to the production of excisable goods paper in general falling under item 17, but to production of these specified exempted categories of paper in Col. 2 of this notification. Any other interpretation would make the speci fication of various kinds of paper in Column 2 which alone attracted exemption redundant and would make even this condition in Cols. 3, 4 and 5 unworkable. " Excise duty was leviable under the Act on manufacture and clearance of paper under Item 17 of Schedule 1 to the Act. It reads as 662 "MANUFACTURED GOODS CLASSIFIED CHIEFLY BY MATERIAL 17. PAPER, all sorts (including pasteboard, millboard. straw board and cardboard), in or in relation to the manu facture of which any process is ordinarily carried on with the aid of power '. XXX XXX XXX (3) Printing and writing paper, packing and wrapping paper, straw board and pulp board, including grey board, corrugated board, duplex and triplex boards, other sorts . . 35 paise per kg." In 1965 the Central Government issued notification exempting papers of all sorts, from so much of the excise duty levi able thereon under the said item read within notification for the time being in force issued by the Central Government in relation to the duty so leviable, as is specified in the corresponding entry in Columns 3, 4, 5(a), 5(b) & 5(c) of the Table as the case may be: TABLE section Des Any factory Any factory Any factory commen cription which comm which comm production for the enced pro enced pro time on or after the duction duction on 1st March, 1964, or before the or after the any factory existing 1st April, 1st April, immediately, before 1961. 1961 but the 1st March 1964 before the whose production 1st March capacity has been 1964. enlarged and brought into operation on or after the extent such production is attributable to the enlarge capacity. During the During During the first 12 the period months of second subsequent the com 12 mon to the first mencement mence 24 months of produc ment of of the com duction. produc mencement of produc tion. 663 1 2 3 4 5(a) 5(b) 5(c) Entitlement of exemption depends on construction of the expression "any factory commencing production" used in the Table extracted above. Literally exemption is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially in a growing economy. For instance tax holiday to new units, concessional rate of tax to goods or persons for limited period or with the specific objective etc. That is why its construction, unlike charging provi sion, has to be tested on different touchstone. Infact an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative inten tion or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to aug ment state revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about ap plicability is lifted and the subject fails in the notifica tion then full play should be given to it and it calls for a wider and liberal construction. Therefore, the first exer cise that has to be undertaken is if the production of packing and wrapping material in the factory as it existed prior to 1964 is covered in the notification. From the table extracted above it is clear that it is in two parts and exemption is allowable in the first part to the factory commencing production on or after 31st March, 1964, and in the second part to the existing factory to extent of enlarged capacity. If the first part is read in isolation it is susceptible of construction as was adopted by the High Court. But the notification has to be read in its entirety and constured as a whole. Once that is done cloud of uncertainty disappears. A close reading of both the parts together leaves no room for doubt that it was intended to be exhaustive granting exemption to all factories produc ing packing and wrapping paper whether existing or commenc ing production from 1st March, 1964. To the former to the extent of enlarged capacity and to latter to full extent. The ambiguity arose because of absence of words new before 'factory ' or goods after the word 'production ' in the first clause. To harmonise it the High Court added the words 'goods '. But what was lost sight of that the words 'commenc ing ' in the first part and 'existing ' in the second part had to be read in juxtaposition. That is all those factories which were existing from before 664 were entitled to exemption on production of goods to the extent of enlarged capacity. This enlargement could be as a result of installation of additional machinery. The word 'capacity must necessarily relate to capacity of factory and not to goods. For instance a factory with capacity of say 1 lakh kg. of paper but producing only 75 thousand kg. achiev ing maximum after 1964 could not be covered in the clause as the production cannot be held to be due to enlarged capaci ty. That could be only if the capacity to produce goods increased due to installation of additional machinery. If this be true and correct, as it appears to be, then the first part presents no difficulty. The expression 'commenc ing production ' has to be read as commencing production of goods by a factory which was not existing and has started production on or after 1st March, 1864. Any other construc tion shall result in discrimination. A factory like respond ent existing from 1942 producing straw board and mill board shall be entitled to exemption on production of wrapping and packing paper on construction of the expression 'commencing production ' by the High Court even though it switched over from straw board and mill board to packing and wrapping paper after the relevant date whereas another unit existing and producing wrapping and packing paper itself from before 1st March, 1964 could not be entitled to exemption except to the extent of enlarged capacity. That is if an existing unit would have installed a new machinery it would have been entitled to exemption of production only to that extent whereas any unit producing goods other than the exempted goods would become entitled to exemption in respect of entire production. That could not have been the intention. A construction which results in inequitable results and is incongruous, has to be avoided. Therefore, production of packing and wrapping paper by respondent was entitled to exemption only to the extent it was attributable to enlarged capacity and not to the existing capacity. Hansraj Goverdhan vs H.H. Dave, Asstt. Collector, Central Excise & Customs, Surat and Others, relied on behalf of respondent demonstrates mis conception about interpreting an exemption provision. It was a case where goods of third persons were manufactured by cooperative society. But once initial hurdle was crossed and it was held that goods had been produced by cooperative society it was found squarely covered in the notification and the Court extended it to goods manufactured by third persons and repelled the submission that object of granting exemption was to encourage formation of cooperative societies and it should be confined to goods manufactured by its members and not others. Similarly in Commissioner of Income Tax vs Madho Prasad, ; the provision 665 allowing exemption to 'such part of the income in respect of which the said tax is payable. under the head 'property ' as is equal to the amount of rent payable for a year ', was construed liberally and it was held that the expression 'equal to the amount of rent payable for a year ' did not 'warrant the inference that the benefit of exemption ' could 'be claimed only once ' because the amount of rent which was sought to be deducted in more than one years was found squarely to fall in Item 36 of notification. It was again a case of interpreting an exemption notification at later stage. Recently in Tata Oil Mills Co. Ltd. vs Collector of Central Excise, ; , exemption was to soap made from indigenous rice bran oil as against edible oil. The assessee was engaged in manufacture of soap from rice bran fatty acid which was extracted from rice bran oil, in assesses factory. It was found rice bran oil as such could not be used unless it was converted into fatty acid. Therefore the assessee was covered in the notification. Once the ambiguity or about manufacture of soap from rice bran fatty acid was removed the Bench proceeded to construe the word "indigenous" in the notification liberally. In Collector of Central Excise vs Parle Exports (P) Ltd., AIR 1989 644 this Court while accepting that exemption clause should be construed liberally applied rigorous test for determining if expensive items like Gold Spot base or Limca base or Thums Up base were covered in the expression food products and food preparations used in item No. 68 of First Schedule of Central Excise and Salt Act and held 'that it should not be in consonance with spirit and the reason of law to give exemption for non alchoholic beverage basis under the notification in question. ' Rationale or Ratio is same. Do not extend or widen the ambit at stage of applicability. But once that hurdle is crossed construe it liberally. Since the respondent did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by respondent mentioned in the notification were entitled to benefit. In the result this appeal succeeds and is allowed. The order of the High Court is set aside and the Writ Petition is dismissed with costs. R.N.J. Appeal allowed.

The Respondent Company which was established in 1942 went into production in 1944 manufacturing Straw Boards and Mill boards only uptil the year 1964. In 1965 it expanded its activities by manufacturing duplex board. In the follow ing year it started manufacturing packing and wrapping paper on experimental basis and on commercial basis after 1967. Sometime in 1971 the Company wrote to the Assistant Collec tor of Central Excise enquiring as to whether it would be entitled to exemption from duty under Notification No. 163/1965 both in respect of production attributable to its installed capacity as in 1967 as well as in respect of production attributable to its expanded capacity. The As sistant Collector passed an Order holding the company was entitled to concession under column 5 of the Table of the Notification No. 163 of 1965 in respect of production at tributable to its enlarged capacity namely, the third ma chine and rejected its claim for exemption on production attributable to its capacity as it existed in 1967. Dissat isfied the company preferred appeal to the Appellate Collec tor who maintained the order of the Assistant Collector. The Respondent Company thereupon moved the High Court by a writ petition under Article 226 of the Constitution of India. In allowing the writ Petition the High Court held that on a plain literal construction it is obvious that the commencement of production must refer not to the production of excisable goods paper in general failing under item 17. but to production of those specified exempted categories of paper in column 2 of the aforesaid notification. Hence this appeal by the Union of India. Allowing the appeal and dismissing the Writ Petition of the Company. this Court. HELD: When the question is whether a subject falls in the Notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is removed and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction. [663D E] A close reading of both parts of the Notification together leaves no 660 room for doubt that it was intended to be exhaustive grant ing exemption to all factories producing packing and wrap ping paper whether existing or commencing production from 1st March. 1964 to the former to the extent of enlarged capacity and to latter to the full extent. [663G H] As the Respondent Company did not fall in the first clause of the notification there was no question of giving the clause a liberal construction and hold that production of goods by the Respondent mentioned in the Notification were entitled to the benefit. Production of packing and wrapping paper by Respondent was entitled to exemption only to the extent it was at tributable to enlarged capacity and not to the existing capacity. [665F; 664F] Hansraj Goverdhan vs H.H. Dave, Asstt. Collector, Cen tral Excise & Customs, Surat and Others, [1969] 2 S.C.R. 2.52; Commissioner of Inome tax vs Madho Prasad, ; ; Tara Oil Mills Co. Ltd. vs Collector of Central Excise, ; referred to.

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tition (Civil) Nos. 507 and 1260 of 1989. (Under Article 32 of the Constitution of India). M.K. Ramamurthy, Rajinder Sachhar, Dr. Francis Julion, Ms. Aruna Mathur, A. Mariarputham, Ms. section Dikshit, section Va sudevan and Pradeep Misra for the Petitioners. For the Respondents Nemo. The following Order of the Court was delivered by 496 section RANGANATHAN, J. This order will dispose of a prelimi nary objection raised on behalf of the respondents that these writ petitions should be dismissed because the peti tioners have suppressed certain material facts from this Court and have also tried to abuse the process of court in the manner hereinafter appearing. Writ Petition No. 507 of 1989 has been filed by the All India State Bank Officers ' Federation (hereinafter called 'the Federation ') through its President. It was filed in this Court on 21st April, 89 and was supported by an affida vit of Umed Singh, President of the Federation, affirming the contents of the petition to be true to his personal knowledge. By this writ petition the Federation seeks to impugn a new promotion policy decided upon by the State Bank of India (hereinafter called 'the Bank '). In paragraph 9(mm) of the petition it is stated that the petitioners are ap proaching this Court in great haste as the Bank is moving with great speed and is likely to constitute Departmental Promotion Committees and declare the results of the inter views in implementation of the new promotion policy within the next two or three days. In the affidavit of Umed Singh, referred to earlier, it has been stated in para 4 that the petitioners have not filed any other similar writ petition in this Honourable Court or any other High Court. In the counter affidavit filed on behalf of Bank, it is stated that the statement in paragraph 4 of the petition in support of the writ petition is false. It is pointed out that the Federation through its Deputy General Secretary had filed Writ Petition No. 5286 of 1989 in the High Court of Andhra Pradesh at Hyderabad along with an application No. 6969 of 1989, seeking stay of the promotion policy. On 13.4.89 the Andhra Pradesh High Court admitted the writ petition but the learned judge rejected the application for interim stay observing "that he was prima facie satisfied that the selection is going on according to a fair procedure and that there is no need to stay any of the interviews or the appointment". It is further pointed out that another petition has also been filed by the State Bank of India Officers ' Association (Karnataka) having its office at Bangalore in the Karnataka High Court, being Writ Petition No. 7848 of 1989. It is, therefore, submitted that the petitioners have suppressed from this Court the material fact that a writ petition has already been filed by them in the Andhra Pradesh High Court and that an application for stay had been made and rejected by the said court. A second objection to the 497 maintainability. of the petition raised on behalf of the Bank in paragraph 3 of its counter affidavit was that since promotions had already been made they could not be disturbed "as the promoted officers have not been made parties". It is common ground that 58 officers had been promoted w.e.f. 24th April, 89 but no steps were taken to implead these officers, who would be directly affected as a result of the prayer made in the writ petition. To these objections, a rejoinder was filed on behalf of the petitioners, supported again by an affidavit of Umed Singh on the 23rd of October, 1989. The two objections raised by the Bank were sought to be refuted in the follow ing manner: "1. That the contents of para 1 are denied and it is reiter ated that the writ petition is maintainable as there is clear violation of fundamental rights guaranteed to the petitioners. The writ petition filed in the Andhra Pradesh High Court has since been withdrawn as per the undertaking given to the Supreme Court during arguments on 24.4.89. The deponent had no knowledge of the writ petition filed before the High Court of Andhra Pradesh, hence as soon as it came to his knowledge the same has been withdrawn. Even otherwise the deponent understands that in the said writ petition the stay of interviews was prayed and the same was declined on representation made by the respondent bank. It is indeed regrettable that even before Hon 'ble High Court the bank made incorrect statements. A perusal of the order of High Court would show the same. Regarding the question of making such employees who have been promoted as a party respondent, it is submitted that firstly it is the promotion policy which had been challenged being arbitrary, discriminatory and framed in gross violation of the prescribed procedure and provisions of law, secondly the petitioners even today do not know the names of all such 58 candidates who have been promoted favoured." (emphasis added) It may be mentioned here that Writ Petition No. 507 of 1989 came up for admission before a Bench of this Court on 26th April, 1989. Apparently, the counsel for the State Bank of India was present and accepted notice on behalf of the bank. The Bench passed the following order: 498 "Issue notice, Mr. S.S. Sharma, learned counsel accepts notice on behalf of the State Bank of India. Counter affida vit shall be filed within four weeks from today. Reply, if any, shall be filed within two weeks thereafter, the matter will be placed for final disposal on 24.10.1989 subject to overnight part heard. The promotion if given in the meantime will be subject to the decision in the writ petition. Mr. K.K. Venugopal, learned counsel states that the writ peti tion which has been filed before the High Court will be withdrawn." The Writ Petition came on for hearing before us on 5th April, 1990. Sri G. Ramaswamy, counsel for the Bank, put the above objections in the forefront as preliminary objections. After hearing him and the counsel for the petitioner, we directed the petitioner federation to file a better affida vit explaining the correct position. In compliance with the direction given by us, another affidavit has been filed by Sri Umed Singh. In this affidavit, again, although purport ing to "tender an unqualified apology" for the misstatement in the earlier affidavit, the deponent reiterated "that he did not know on the date of swearing of the affidavit on 21.4.89 that some other office bearer of the petitioner federation has filed such a petition". He claims to have come to know of it only on the 23rd April, 1989 from a telephonic conversation with the Deputy Secretary and wishes to take credit for the fact that he at once informed his counsel about it who in turn brought it to the notice of the Court at the time of the preliminary hearing on 26th April, 1989. The truth of these allegations is refuted on behalf of the Bank. It is submitted that the counsel for the petition er did not, even at the time of hearing on 26.4.89, bring to the notice of this Court the fact that he had filed a peti tion in the Andhra Pradesh High Court. On the other hand, it is claimed, it was the counsel for the Bank who was present and who took notice on behalf of the Bank, that brought to the notice of the Court that the petitioner had already moved the Andhra Pradesh High Court in regard to the same relief and it was only thereafter that the counsel for the petitioner made a statement that the petitioner would with drew the petition filed in the Andhra Pradesh High Court. Even this, it is pointed out, they did not do immediately as stated in Umed Singh 's affidavit for the said petition was withdrawn only much later on 27th of July, 1989. On behalf of the Bank it is also pointed out that the statement made in the rejoinder filed by Umed Singh, sup ported by his affidavit, 499 that the addresses of the 58 promotees was not known to the petitioner is again a total falsehood as is demonstrated by two circumstances. In the first place, in the writ petition filed in the Karnataka High Court, the petitioner there has joined all the 58 officers as parties and an application was moved before the said High Court on 27th April, 89, seeking stay of promotion of the said respondents. That apart, on 1st May, 89, a fortnightly bulletin issued by the State Bank of India Officers ' Association (Mumbai circle), which is admitted to be one of the associations affiliated to the petitioner Federation, carries a message of congratulations to all the 58 officers, who had been promoted w.e.f. 24th April, 89. The names of all the 58 officers so promoted has been set out in this bulletin. In this state of the record, learned counsel for the Bank strongly urges that we should dismiss the writ petition straightaway on the ground that the petitioner has not come to Court with clean hands. We have heard learned counsel on both sides at length. There is no doubt left in our minds that the petitioner has not only suppressed material facts in the petition but has also tried to abuse judicial process. The explanation that the President of the Federation when he filed the writ in this Court on 21st April, 89, was not aware that a petition had been filed in the Andhra Pradesh High Court (repeated for a second time in the affidavit of 5th April ' 90) is, in our opinion, is totally unacceptable. Admittedly the federa tion was considerably agitated by the new promotion policy. The matter was considered to be very urgent and the federa tion was too keen to obtain a stay of implementation of the policy which, it feared. the Bank might do any day. In this situation, not even the most gullible of persons would be credulous enough to accept the explanation that the Deputy General Secretary of the Federation had not apprised the President of their failure to obtain the stay order from the Andhra Pradesh High Court. It is totally unbelievable that between 13.4.89, when the interim application in the Andhra Pradesh High Court was rejected and 21.4.89 when the writ petition was filed, the President was not aware of what had happened in the High Court. It is deplorable that such an explanation should have been not only put forward in the original rejoinder but should have been repeated again in the latest affidavit. The petitioner had, in our opinion, deliberately suppressed from the petition this crucial and important fact. As to the credit sought for having brought this fact to the notice of the Court on 25.4.89. the circum stances suggest that perhaps they would not have brought it to the notice of the court at all had not counsel on behalf of the Bank been present. to receive notice 500 when the matter was moved for admission on 26.4.89. whether, as asserted by the counsel for the petitioner, the petition er considered it prudent, in view of the presence of the Bank 's counsel, to volunteer at the time of the said hearing the information that a petition had been filed in the Andhra Pradesh High Court and to offer an undertaking that it would be withdrawn or whether, as alleged in a "statement of facts" ' placed before us by Sri S.S Sharma, the learned counsel for the Bank who appeared at the hearing, even this information had to be supplied to the Court by the Bank, is a controversy into which we need not enter. We shall proceed on the assumption that the statement made by the counsel for the petitioner is correct, but even that does not explain why a reference to the writ petition in the High Court was not made in the writ petition as it had to be made. The statement in the affidavit of Umed Singh that no petition had been filed in any High Court was clearly and plainly false. It is equally clear that the statement made in the rejoinder affidavit that "till today (i.e. 23rd October, 1989) the petitioner federation is not aware of the names of the promoted officers" is again an incorrect statement. These officers had been impleaded in the interim application for the relief sought against them in the Karnataka High Court as early as 27.4.89. That apart the federation could not have been unaware of the contents of the bulletin issued by the Mumbai circle of the SBI Officer 's Association issued on 1.5.89. There is no doubt that the petitioner did not deliberately implead the 58 promoted officers. Sri Sachhar, for the petitioner, sought to contend that these 58 officers may be proper parties but not necessary parties and he referred us to the judgments of this Court in The General Manager, South Central Railway, Secunderabad and Another vs A.V.R. Siddhantti and Ors., and Col. D.D. Joshi & Ors. vs Union of India & Ors. , [1983] 2 S.C.C. 235. We are not here concerned with the question whether these officers were necessary or proper parties and, indeed, this issue is no longer alive as, subsequently, the peti tioner itself has undertaken to implead these 58 officers and notices have been issued to them in both the writ peti tions. What we are concerned here with is the statement, in the rejoinder affidavit that the Federation was not aware of the names of the 58 officers till November 1989 which, in the circumstances is a clear misstatement. Apart from misstatements in the affidavits filed before this Court, the petitioner Federation has clearly resorted to tactics which can only be described as abuse of the process of court. The simultane 501 ous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associ ations of the Officers of the Bank, is a practice which has to be discouraged. Sri Sachhar and Sri Ramamurthy wished to pinpoint the necessity and importance of petitions being filed by different associations in order to discharge satis factorily their responsibilities towards their respective members. We are not quite able to appreciate such necessity where there is no diversity but only a commonness of inter est. All that they had to do was to join forces and demon strate their unity by filing a petition in a Single Court. It seems the object here in filing different petitions in different Courts was a totally different and not very laud able one. Again an attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed. In this the petitioners were able to obtain only an order that any promotions made during the pendency of the petition would be subject to the deci sion in the writ petition. But, having obtained this order on 26.4.89, it is curious and inexplicable that an affiliat ed association should have made an application on 27.4.89 in the Karnataka High Court praying for a stay of the promo tions. These are only tactics that it will be indulged in by a chronic and compulsive litigant and not by a federation like the petitioner. We have set out the facts in this case at some length and passed a detailed order because we are deeply grieved to come across such conduct on the part of an association, which claims to represent high placed officers of a premier bank of this country. One expects such officers to fight their battles fairly and squarely and not to stoop low to gain, what can only be, temporary victories by keeping away material facts from the court. It is common knowledge that, of late, statements are being made in petitions and affida vits recklessly and without proper verification not to speak of dishonest and deliberate misstatements. We, therefore, take this opportunity to record our strong and emphatic disapproval of the conduct of the petitioners in this case and hope that this will be a lesson to the present petition er as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility. The question that now remains to be considered is wheth er the petition is liable to be dismissed for this conduct of the President of the Federation. Sri Rajendra Sachhar, appearing on behalf of the petitioners, sought to get over the Bank 's objections by addressing certain technical argu ments. He submitted that even if Writ Petition No. 507/ 89 was liable to be dismissed for mis statement and suppression there 502 would be no reason to dismiss C.W.P. No. 1260 of 1989 which has been filed by another association of the same officers. He also sought to contend that, since it had been brought to the notice of this Court on 26.4.89 that a petition had been filed in a High Court and that it was being withdrawn, the order passed by this Court on 26.4.89 should be taken as having condoned any mis statement or mis conduct or defects in the writ petition. We are not inclined to accept these submissions. However, it is not necessary to discuss this aspect further as we do not wish to penalise the various officers who may suffer as a consequence of the new policy, which they wish to challenge, for the misstatements or wrong steps taken by the Officers of the federation perhaps, in their over anxiety to get quick interim relief. We do not wish to decline them an opportunity to put forward their grievances before the court by dismissing these writ peti tions on the preliminary objections raised by the Bank. In fact, we should like to place on record our appreciation of the stand taken by Sri G. Ramaswamy, learned counsel for the Bank in this respect. He fairly stated that, as he is ap pearing for a public sector undertaking, he is quite pre pared to contest the writ petitions on their merits and that his preliminary objections were primarily intended to bring to our notice the conduct of the petitioners in this case. We are glad he did it as this was a matter which needed serious notice. We should like to record our dis approval of the way in which the proceedings have been conducted on behalf of the Federation. However, as mentioned above, we overrule the preliminary objections and will proceed to dispose of the writ petitions on their merits. The Writ Petitions are adjourned, as per separate order, to 17.7.90 for further hearing.

The All India State Bank Officers ' Federation filed a Writ Petition in this Court on the 24th April, 1989 seeking to impugn a new promotion policy initiated by the State Bank of India. The petition was supported by an affidavit of the President of the Federation affirming the contents of the petition to be true to his personal knowledge, and submit ting in paragraph 9(mm) of the petition that the petitioners were approaching this Court in great haste as the Bank was moving with great speed to implement its new promotion policy and was likely to constitute a Departmental Promotion Committee, and declare the results. In para 4 it was submit ted that the petitioners had not filed any other similar petition either in this Court or any other High Court. When the writ petition came up for admission before a Bench of this Court on April 26, 1989, counsel for the State Bank of India was present and accepted notice on behalf of the Bank. The Writ Petition was contested by the Bank which sub mitted in its counter affidavit that the statement in para 4 of the petition in support of the writ petition was false, and pointed out that the Federation through its Deputy General Secretary had filed a Writ Petition in the High Court of Andhra Pradesh along with an application seeking stay of the promotion policy, and that the High Court admit ted the Writ Petition on April 13, 1989 but rejected the application for interim stay, and further pointed out that another petition had been filed by the State Bank of India Officers ' Association (Karnataka) in the Karnataka High Court. A second objection as regards the maintainability of the 494 petition was raised in para 3 that since the promotions had already been made they could not be disturbed and that no steps were taken to implead those officers, who would be directly affected as a result of the prayer made in the writ petition. To the aforesaid objections raised by the Bank the petitioner filed a rejoinder supported by an affidavit of the President of the Federation, submitting that the depo nent did not have any knowledge of the writ petition filed in the High Court of Andhra Pradesh, and that as soon as it came to his knowledge it was withdrawn. and that the peti tioners did not know the names of all the 58 candidates who had been promoted favoured. When the Writ Petition was taken up for further hearing on April 5, 1990, counsel for the Bank objected to the maintainability of the writ petition on the grounds of suppression of material facts and abuse of the process of court. The Court directed the petitioner to file a better affidavit, and the petitioner Federation filed a better affidavit explaining the correct position and tendering an unqualified apology for the mis statements in the earlier affidavit, but still reiterated that they came to know of the writ petition in the Andhra Pradesh High Court only on April 23, 1989 and that, at the time of the preliminary hearing, it was brought to the notice of the Court by the Respondent 's counsel. The respondent pointed out that the statements made in the rejoinder filed by the petitioners that they were not aware of the names of the promoted officers till November, 1989 was a total falsehood because; (i) the writ petition filed in the Karnataka High Court made all of them parties to the writ petition, and (ii) the names of the promoted officers were listed in the fortnightly bulletin of the State Bank Officers ' Association dated 1st May, 1989 carry ing a message of congratulations to all of them. Disposing of the preliminary objections and adjourning the writ petition for further hearing on merits, the Court, HELD: 1. Apart from mis statements in the affidavits filed before this Court the petitioner federation has clear ly resorted to tactics which can only be described as abuse of the process of court. The simultaneous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associations of the Officers of the Bank, is a practice which has to be discour aged. [500H; 501A] 495 2. An attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed. In this the petitioners were able to obtain only an order that any "promotions made during the pendency of the petition would be subject to the decision in the writ petition. But having obtained this order on April 26, 1989, it is curious and inexplicable that an affiliated association should have made an application on April 27, 1989 in the Karnataka High Court praying for a stay of the promotions. These are only tactics that will be indulged in by a chronic and compulsive litigant and not by a Federation like the petitioner. [501C D] 3. One expects that officers fight their battles fairly and squarely and not stoop low to gain what can only be temporary victories by keeping away material facts from the court. [501E] 4. It is common knowledge that, of late, statements are being made in petitions and affidavits recklessly without proper verifications not to speak of dishonest and deliber ate misstatements. Strong and emphatic disapproval of the conduct of the petitioners in this case is recorded in the hope that this will be a lesson to the present petitioners as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility. [501F G] 5. The Court does not wish to penalise the various officers who may suffer as a consequences of the new policy, which they wish to challenge, and decline them an opportuni ty to put forward their grievances before the Court, for the mis statements or wrong steps taken by the officers of the Federation in their over anxiety to get quick interim re lief. [502B C]

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No. 3 of 1990. IN Civil Appeal No. 4131 of 1989. 478 From the Judgment and Order dated 4.9.1989 of the Cal cutta High Court in Original Order No. 241 of 1989. Ashok Desai, Solicitor General, Amal Datta, D.K. Sinha and J.R. Das for the Petitioners. A.K. Sen, Ms. Mridula Ray, T.U. Mehta (NP) and D.P. Mukherjee for the Respondents. The following Order of the Court was delivered by section RATNAVEL PANDIAN, J. This application is filed by the State of West Bengal for clarification of the two orders of this Court dated 7th September and 27th September of 1989 in SLP (Civil) No 10670/89 in the context of the order dated 4th September and order report dated 15th September of 1989 passed by a Division Bench of High Court of Calcutta in Writ Appeal Nos. 240 and 24 1 of 1989 in the Matter No. 1436 of 1988. This case has got a chequered history, the facts of which are set out in clear terms in the judgment dated 10.7.1989 of the High Court of Calcutta vide Annexure 1 to this application. Therefore, it is not necessary to reiter ate the entire facts, but suffice to refer a few relevant facts for the disposal of this application. A batch of employees of the State of West Bengal belong ing to the West Bengal Civil Service (Executive) filed Writ Petition being Matter No. 1436 of 1988 under Article 226 of the Constitution of India. Subsequently some more members of the said cadre were added as respondents on their applica tion and they also supported the Writ Petition. The original respondents to the Writ Petition who are also in the same cadre as well the State Government which is made a party opposed the Writ Petition. The main pleading in the Writ Petition is that there was no rule relating to determination of seniority as between promotees and direct recruits of the West Bengal Civil Service and the prayer on the above pleading is for issuance of a Writ of Mandamus directing the State Government to frame appropriate seniority rules in that behalf. On 5.4.1988, a learned single Judge of the High Court, Ajit Kumar Sengupta, J. passed an interim order directing the State Government 479 to frame seniority rules and determine inter se seniority on the basis of the seniority rules within one month from the date of the communication of the order. On 29.4.1988 on an application moved by the writ petitioners, the same learned Judge passed an interim order to the effect that if any seniority rules have been framed pursuant to his order dated 5.4.1988 the same would not be given effect to without the leave of the Court and without giving any notice to the writ petitioners. On 10.6.1988 the writ petitioners moved another interim application in the Writ Petition before the same learned single Judge for setting aside the draft seniority rules. On the same day, the learned Judge passed the interim order restraining the State Government from taking any further action on the basic of the draft rules of seniority which were in the meantime prepared in compliance with the earlier order dated 5.4.1988. On 23.3.1989 Ajit Kumar Sengupta, J. pronounced his judgment, the operating portion of which reads thus: "The application is allowed. The draft rules are ultra vires as I have already held in my judgment. Following the direc tions given in my judgment, the inter se seniority will be done. There will be a stay of the operation of the judgment and order for four weeks but the interim order granted by this Court will continue also for four weeks. " The State Government preferred an appeal against the judg ment and order dated 23.3.1989 before a Division Bench of the High Court in Appeal No. 240/89. The original respond ents to the Writ Petition also preferred another Appeal against that judgment in Appeal No. 241/89. Both the appeals are with reference to Matter No. 1436/88. In both the ap peals, stay applications were filed before the Division Bench comprised of Justice Roy and Justice Sudhangshu Sekhar Ganguly. The said DiviSion Bench delivered its Judgment on 10.7.1989 disposing the interim applications, the relevant portion of which is as follows: "On a consideration of all the submissions made before us, we are inclined to hold, therefore that the appellant peti tioners have made out a prima facie case for staying the operation of the judgment and order passed by the learned Judge. Since the respondents have not been able to establish that the prima facie case is in theft favour, it cannot be held that the balance of convenience and inconvenience title in their favour. The learned Judge has restrained 480 the appellant State from filling up a number of important posts till the making of the Seniority Rules and determina tion of seniority of the respondents. Such a stay order has been there since the filing of the original writ petition. It is obvious that the Government has been suffering because of this embargo and it is also obvious to these officers who would have otherwise been appointed to these posts been suffering financially. The operation of this order of in junction shall also, therefore, have to be stayed along with the operation of the judgment and decree passed by the learned Judge. In the circumstances stated it is hereby ordered that the operation of the judgment and order dated 23rd March, 1989 passed by the Honable Mr. Justice Ajit Kumar Sengupta in the Matter No. 1436/88 together with all interim orders passed by His Lordships in the said matter are hereby stayed. Pending the disposal of this appeal the Government will be at liberty to proceed with the finalisation of the Seniority Rules governing the members of the unified W.B.C.S. The Government will be also at liberty to fill up all the vacan cies and award all service benefits including appointments to higher posts or higher scale which will be subject to the results of these appeals. Since many such posts are lying vacant at present, the Court desires the Government to consider, if it will take in its consideration, the cases of the writ petitioners and the respondents Nos. 9 to 15, while filling up these posts. " In the same order, the Division Bench after disposing this application has made the following order: "The operation of this judgment together with the order shall remain stayed for eight weeks. " The stay of the operation of the judgment evidently has been made on the request of the aggrieved party, namely, the respondents to the appeal to enable them to approach this Court. Aggrieved by this order, the writ petitioners who are respondents in the Appeals filed SLP No. 9920/89 challenging the judgment and order of the Division Bench dated 10.7. 1989 along with a petition for 'stay in I.A. No. 1/89 pray ing "to stay the operation of the 481 impugned Judgment and Order dated 10th July 1989 passed by the Division Bench of the Calcutta High Court in Appeal No. Nil/89 in Matter No. 1436/88 till the disposal of the S.L.P . . . " A Bench of this Court to which one of us (Ratnavel Pandian, J.) was a party after hearing the learned counsel for the petitioners and respondents to the SLP passed the following order on 29.8.1989: "As the Special Leave Petition is directed against the Interim order of the Division Bench of the High Court, we are not inclined to interfere in the matter. The Special Leave Petition is dismissed. We, however, request the High Court to dispose of the Writ Petition pending in the High Court as expeditiously as possible preferably within two months from today. " It seems on 4.9.1989 Justice M.N. Roy, who was a party to the order dated 10.7.1989 expressed his inability to hear the appeals in the course of the said week in view of other matters being listed before him and released these appeals in question. Thereafter these two appeals had been assigned to another Division Bench comprised of the learned Judges Bimal Chandra Basak and Amarava Sengupta, JJ. This Bench on the same day i.e. on the afternoon of 4.9. 1989 itself extended the stay of eight weeks, granted by the earlier Division Bench dated 10.7.1989 till the disposal of the appeals and directed the status quo. On being aggrieved by the order dated 4.9.1989 extending the order of stay, the original respondents in the Writ Petition filed Special Leave Petition No. 10670/89 before this Court which came up before the Bench of this Court presided over by the Hon 'ble Chief Justice along with K.N. Singh, J. This Bench passed an interim order on the above SLP on 7.9. 1989, the operative portion of which reads thus: "In the meanwhile the order passed by this Court on 29.8. 1989 shall hold the field notwithstanding any contrary order passed by the Division Bench of the Calcutta High Court. " This SLP was finally listed before another Bench comprised of Murari Mohan Dutt, J. and one of us (Ratnavel Pandian, J.). This Bench passed the following order on 29.7.89 in Civil Appeal No. 4131 of 1989 482 (arising out of SLP (Civil) No. 10670/89): "Special leave is granted. Perused the report. After hearing the learned counsel for both the parties, we direct that in view of the order dated September 7, 1989, passed by this Court, no further order need be made on this appeal. The appeal is disposed of as above. There will be no order as to costs. " The submissions made on behalf of the applicants in the present Interlocutory Application (3 of 1990) are that the ex parte order extending the stay and granting status quo as on 4th September 1989 passed by the Division Bench consist ing of Bimal Chandra Basak and Amarava Sengupta, JJ was in violation of the earlier order of this Court made on 29th August 1989 and that since the appeals though heard on a number of days are not yet disposed of, the State Government is constrained to approach this Court for necessary orders and directions/clarifications in the interest of smooth administration and eliminating stagnation and frustration among the members of West Bengal Civil Service (Executive) cadres. According to the State Government, there are number of posts lying vacant in the cadre of Deputy Secretary and equivalent posts in different Departments of the State Government including core Departments like Revenue, Finance, Education, Milk Supplies, Hospitals, Administrative Reforms, Power etc., that the State Government is unable to fill up the same in view of the interim order of status quo passed on 4.9.1989, that the State Government is unable even to make transfers on promotion or sending officers on deputa tion to equivalent posts and that no service benefits could be awarded to those officials. The second respondent on his behalf and on behalf of respondents 1, 3, 4 and 5 has filed a counter stating that the order of extension of stay passed by the Division Bench on 4.9. 1989 is no way inconsistent or in contravention of the order of this Court and the delay in disposal of the appeal is only on account of a dialectic tactics adopted by the applicants and the order obtained from this Court on 7th September 1989 was without any notice to and behind the back of the respondents Nos. 1 to 5 and that most of the posts (as shown in Annexure 'A ' to the counter) have understandably been filled up by the State Government during the pendency of the interim orders and that the grievance expressed by the State Govern 483 ment in filling up the posts is totally a false statement since all the posts mentioned have been filled up and that in case the extended stay order is disturbed, the respond ents would be put to immeasurable hardships. As the two Appeals Nos. 240/89 and 24 1/89 in Matter No. 1436/ 88 are now pending before the High Court for final disposal, we, without making any detailed discussion on the issues involved, are inclined to dispose of this application by making only a clarification. is the admitted case that the Division BenCh consisting of Justice Roy and Justice Sudhangshu Sekhar Ganguly by their order dated 10.7. 1989 stayed the operation of the order of the learned single Judge dated 23.3. 1989 in Matter No. 1436/88 and allowed the Government to fill up all the vacan cies and award all service benefits including appointments to higher posts or higher scales which will be subject to the results of the two appeals. However, the same Bench stayed the operation of this order for a period of 8 weeks, admittedly to enable the respondents in these two appeals to approach this Court. When the matter came up before this Court for admission in SLP No. 9920/89 with the petition (I.A. No. 1/89) to stay the operation of the order dated 10.7.89 staying the order of the single Judge of the High Court, this Court dismissed that SLP by its order dated 29.8.89 after hearing the counsel for both the parties. The copy of the order has already been reproduced above. This Court, observing "We are not inclined to interfere in the matter", has upheld the order of stay dated 10.7.89. In other words the order of stay passed by the Division Bech on 10.7.89 has been upheld. The result was on the expiry of 8 weeks period, the original order of stay dated 10.7.89 passed by the earlier Division Bench has been revived and come into operation. The 8 weeks period from which the order dated 10.7.89 has been stayed by the Division Bench would have in the normal course expired by 9.9.89. It seems that meanwhile, the respondents in the two appeals have ap proached another Division Bech to which the appeals have been assigned for the reasons already indicated and obtained an order of extension of stay of the operation of the judg ment of the Division Bench dated 10.7.1989. Feeling ag grieved, the appellants in the two appeals namely, Sabyasachi Sengupta and others filed SLP No. 10670 of 1989. This Court by its order dated 7.9.89 directed that the order passed by this Court on 29.8.89 i.e. the order passed in SLP No. 9920/89 shall hold the field notwithstanding any con trary order passed by the Division Bench of the Calcutta High Court. The 'contrary order ' is referrable to the order passed by the second Bench of the Calcutta High Court on 4.9.1989. Mr. Ashok Desai, the learned Solicitor General and Mr. Ashok Sen, Sr. counsel appearing for the applicants forcibly arti 484 culated that in the teeth of the order passed by this Court on 7.9.1989 observing "notwithstanding any contrary order passed by the Division Bench of the Calcutta High Court", the order of the Court dated 29.8.1989 shall hold the field, it is made clear that the order of the High Court dated 4.9.1989 has become otiose and further request that this Court, however, be pleased to clarify the position in the context of the subsequent order/report dated 15.9.1989. Mr. D.P. Mukherji appearing on behalf of the respondents made a fervent plea that even assuming that the order dated 4.9.1989 is in infraction of the order dated 7.9. 1989, it would amount only to a technical infraction and as such there can be no justification to grant the relief asked for by the applicants in this interlocutory application and if the relief, as prayed for is granted, it would be causing substantial and grave injustice to the respondents. On a careful analysis of the facts and circumstances of the case, we hold that the plea of Mr. Mukherji is illogical and inconceivable and does not merit consideration. If his plea is to be accepted, then it will be only a mockery of justice because it will be tantamount to nullifying our own order which has reached its finality. It is the settled principle of law that any order or direction pronounced by this apex Court in exercise of its jurisdiction in any matter pending before it, that order or direction is binding on all courts within the territory of India and should be implemented and executed in all its rigour. Form the report sent by the Division Bench of the Cal cutta High Court dated 15th September 1989 it seems the latter Division Bench extended the 8 weeks stay on the grounds firstly that the order of this Court dated 29.8.1989 has not prevented the Division Bench from passing such order and secondly that the 8 weeks stay stood vacated w.e.f. 4th September 1989. But in fact, the order of this Court dated 29.8.1989 has restored the order of the first Division Bench of the High Court dated 10.7.1989 on the expiry of 8 weeks and that the 8 weeks stay had expired only by 9.9.1989 and not on 4.9. Be that as it may, the order of this Court dated 7.9.1989 in SLP No. 10670/89 has clarified that position to the effect that the order of this Court dated 29.8.1989 shall hold the field notwithstanding of the contrary order passed by the Division Bench of the Calcutta High Court. The "contrary order" mentioned in the order dated 7.9.1989 refers to the order dated 4.9. The resultant position is that this 485 Court by the order dated 7.9.1989 has rendered the order of the second Division Bench of the High Court dated 4.9.1989 inoperative and ineffective. Subsequently, this SLP No. 10670/89 was disposed of after grant of leave. Thus the matter now stands concluded that from 10.9. 1989 onwards the order of the first Division Bench dated 10.7.1989 has become operative and executable and the interim direction given by that order is brought back to life and resuscitated. There fore, it is open to the State Government to act in accord ance with the order dated 10.7.1989. With this clarifica tion, the above application is disposed of with no order as to costs. G.N. Application dis posed of.

Some employees belonging to West Bengal Civil Service (Executive) filed a writ petition before the High Court, praying for a direction to the State Government to frame appropriate seniority rules. The High Court passed an inter im order directing the State Government to frame seniority rules and determine the inter se seniority on that basis within one month of the order. On an application moved by the petitioners the same Judge passed an interim order that the seniority rules framed pursuant to the Court 's order would not be given effect to without leave of the Court and without notice to the writ petitioners. On another applica tion moved by the writ petitioners, the same Judge re strained the State Government from taking any further action on the basis of the draft rules of seniority. Later, the Judgment was delivered allowing the writ petition, holding that the draft rules were ultra vires. Aggrieved, the State Government preferred an appeal before a Division Bench. The Division Bench stayed the operation of the judgment and decree passed by the Single Judge. The Division Bench also directed that the State Government may proceed with the final assessment of the seniority rules. Aggrieved against the said order the writ petitioners filed a Special Leave Petition which was dismissed with a request to the High Court to dispose of the pending writ petition expeditiously within two months. The High Court extended the stay till the disposal of the appeal and directed status quo. Against this order, the original respondents in the writ petition filed a Special Leave Petition before this Court. This Court passed an interim order to the effect that the order passed by this Court earlier would hold the field, not with standing any contrary order passed by the High Court. Later, granting special leave, this Court observed 377 that in view of the interim order no further order need be passed. The present application has been filed by the State for clarification of the two orders of this Court in the context of the order dated 15.9.1989 of the High Court. Disposing of the application, this Court. HELD: 1.1 It is the settled principle of law that any order or direction pronounced by this apex Court in exercise of its jurisdiction in any matter pending before it, that order or direction is binding on all courts within the territory of India and should be implemented and executed in all its rigour. [484D] 1.2 From the report sent by the Division Bench of the High Court dated 15th September, 1989 it seems the latter Division Bench extended the 8 weeks stay on the grounds firstly that the Order of this Court dated 29.8.1989 has not prevented the Division Bench from passing such order and secondly that the 8 weeks stay stood vacated w.e.f. 4th September, 1989. But in fact, the Order of the Court dated 29.8.1989 has restored the order of the first Division Bench of the High Court dated 10.7.1989 on the expiry of 8 weeks and that the 8 weeks stay had expired only by 9.9.1989 and not on 4.9.1989. [484E F] 1.3 It is open to the State Government to act in accord ance with the order dated 10.7.1989 of the High Court. The Order of this Court dated 7.9.1989 in SLP No. 10670/89 has clarified the position to the effect that the Order of this Court dated 29.8.1989 shall hold the field notwithstanding the contrary order passed by the Division Bench of the High Court. The "contrary order" mentioned in the order dated 7.9.1989 refers to the order dated 4.9.199. The resultant position is that this Court by the order dated 7.9.1989 has rendered the order of the second Division Bench of the High Court dated 4.9.1989 inoperative and ineffective. Subse quently, SLP No. 10670/89 was disposed of after grant of leave. Thus the matter now stands concluded that from 10.9.1989 onwards the order of the first Division Bench dated 10.7.1989 has become operative and executable and the interim direction given by that order is brought back to life and resuscitated. [484G H; 485A B]

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nch of two members in their reasoned order pointed out what they perceived to be an error of law in the earlier decision and stated the points for the President to make a, reference to a larger Bench. Accordingly the Bench of two members acted within their power is stating the points of law which required clarification and the President acted equally within the bounds of his power in constituting a larger Bench to hear and decide those points. [795E; 796C] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3955 of 1990. From the Judgment and Order dated 7.12.1989 of the Delhi High Court in C.W. No. 1060 of 1987. Dr. V. Gauri Shanker, C.V. Subba Rao, section Rajappa and M. Chandershekharan (N.P.) for the Appellants. G.L. Sanghi. Raju Ramachandran, Dhruv Mehta and R.K. Sanghi for the Respondent. 792 The Judgment of the Court was delivered by THOMMEN, J. Special Leave is granted. This appeal by the Union of India arises from the Judg ment dated 7.12.1989 of the Delhi High Court in Civil Writ No. 1060 of 1987 setting aside Orders dated 22.10.1986 and 4.3.1987. The former order was made by a Bench of two mem bers of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter called the 'Tribunal ') and the latter order was made by the President of the Tribunal. By their Order dated 22.10.1986, the Bench of two members of the Tribunal stated that they doubted the correctness of an earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. Bombay & Anr. vs Collector of Cus toms, Bombay & Anr., and directed that the case of the present respondent, Paras Laminates (P) Ltd., be placed before the President of the Tribunal for referring it to a larger Bench of the Tribunal. The President by his Order dated 4.3. 1987 referred the case to a larger Bench of five members. These two orders were struck down by the High Court stating that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 Judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline. In Bakelite Hylam, (supra) a Bench of three members had held that the goods in question fell under Tariff Item 84.60 as claimed by the importer in the Bills of Entry. In the present case, the importer claimed in its Bills of Entry that the goods imported by it fell under Tariff Item 84.60. But the customs authorities rejected the contention of the importer and classified the goods under Tariff Item 73.15(2). The importer appealed to the Collector of Customs, but without success. In its second appeal before the Bench of two members, the importer relied upon the earlier deci sion in Bakelite Hylam (supra) and contended that an identi cal classification ought to have been adopted by the Customs Authorities for identical goods. The Bench of two members, however, referred the case to the President of the Tribunal for referring the same to a larger Bench. The order of the Bench of two members and that of the President have been struck down by the High Court by the impugned judgment for the reasons stated above. Mr. V. Gauri Shanker, appearing for the appellant Union of India, submits that section 129 C of the contains 793 express provisions enabling the President of the Tribunal to constitute larger Benches to resolve conflicts in opinion arising between members of a Bench or between Benches of the Tribunal. The Tribunal has ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf. Counsel contends that the Tribunal has inherent or incidental or ancillary powers to effectuate the statutory powers expressly granted to it. Counsel submits that the statute must be so construed as to make the confer ment of power efficacious and meaningful. To deny the power of a Bench of two members to doubt the correctness of an earlier decision and to refer the case to the President for being heard by a larger Bench is to fetter the jurisdiction expressly vested in the Tribunal and thus stifle the growth of law evolving from the decisions of the Tribunal exercis ing judicial powers like a Court, albeit within the statuto ry limits of its jurisdiction. Mr. G.L. Sanghi, appearing for the respondent (the importer) submits that the Tribunal is a creature of the statute. Its jurisdiction is limited to the specific powers conferred by the statute. It has no inherent jurisdiction and its powers are not plenary and are limited to the ex press provisions contained in the statute. While the powers of a civil court are plenary and unlimited unless expressly curtailed by statute, the powers of a tribunal are the result of express grant and cannot exceed the bounds limited by the constituting statute. In the present case the powers of the Tribunal are expressly specified in the and those powers, counsel says, do not contain any provision enabling the President to refer a case to a larger Bench whenever a doubt about an earlier decision is ex pressed by another Bench of the same Tribunal. According to Mr. Sanghi, the Bench should have followed the earlier decision even if the members doubted its correctness, and should have left it to this Court to correct the error, if any. The Tribunal is constituted by the Central Government under section 129 of the Act. One of the members of the Tribunal is appointed by the Central Government as its President. Section 129 C says that the powers and functions of the Tribunal may be exercised and discharged by Benches constituted by the President from amongst its members. Subject to certain exceptions, a Bench shall consist of one judicial member and one technical member [section 129c(2)]. Sub section (5) of section 129 C provides for a reference of a case by the President in the event of differences in opinion arising amongst members on any point. This sub section reads: 794 "(5) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ and the case shall be referred by the President for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first heard it: Provided that where the members of a Special Bench are equally divided, the point or points on which they differ shall be decided by the President. " Sub section (6) Section 129C says that the Tribunal shall have the power to regulate its own procedure. It reads: "(6) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or the discharge of its functions, including the places at which the Benches shall hold their sitting. " Sub sections (7) and (8) of this Section provide that the Tribunal shall, for certain specific purposes, be deemed to be a civil court. There is no doubt that the Tribunal functions as a court within the limits of its jurisdiction. It has all the powers conferred expressly by the statute. Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recog nised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised, the powers of the Tribunal are no doubt limited. Its area of jurisdiction is clearly defined, but within the bounds of its jurisdiction, it has all the powers expressly and im pliedly granted. The implied grant is, of course, limited by the express grant and, therefore, it can only be such powers as are truly incidental and ancillary for doing all 795 such acts or employing all such means as are reasonably necessary to make the grant effective. As stated in Maxwell on Interpretation of Statutes, (eleventh edition) "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. " See also: Income Tax Officer, Camanore vs M.K. Mohammed Kunhi, ; , 819. It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a larger Bench. The ration ale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the adminis tration of justice. It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings being to light what is perceived by them as an erroneous decision in the earlier case. In such circum stances, it is but natural and reasonable and indeed effica cious that the case is referred to a larger Bench. This is what was done by the Bench of two members who in their reasoned order pointed out what they perceived to be an error of law in the earlier decision and stated the points for the President to make a reference to a larger Bench. That the President has ample power to refer a case to a larger Bench is not in doubt in view of sub section (5) of section 129 C, which we have set out above. That provision clearly says that in the event of the members of a Bench differing in opinion on any point, and the members are equally divided, the case shall be referred to the President for hearing on any such point by one or more of the members of the Tribunal, and such point shall be decided according to the opinion of the majority of the members. It is true that sub section (5) refers to difference of opinion arising amongst members of a Bench in a particular case, and not specifically where the members of a Bench doubt the correctness of an earlier decision. However, section 129 C confers power of reference upon the 796 President. That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to What they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree. In such cases, it is necessary for the healthy functioning of the Tribunal that the Presi dent should have the requisite authority to refer the case to a larger Bench. That is a power which is implied in the express grant authorising the President to constitute Bench es of the Tribunal for effective and expeditious discharge of its functions. In our view, the Bench of two members acted within their power in stating the points of law which required clarifica tion and the President acted equally within the bounds of his power in constituting larger Bench to hear and decide those points. In the circumstances, we set aside the impugned judgment of the High Court. The appeal is allowed with costs here and in the High Court. T.N.A. Appeal allowed.

The respondent imported certain goods and claimed in its Bills of Entry that the imported goods fell under Tariff Item No. 84.60. The Customs Authorities rejected the claim by holding that the goods were classifiable under Tariff Item No. 73.15(2). The respondents preferred an appeal before the Collector of Customs which was also dismissed. Thereafter, the respondent filed a second appeal before the Customs, Excise and Gold (Control) Appellate Tribunal con tending that in view of the earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. Bombay E.L.T. 240 an identical classification ought to have been adopted by the Customs authorities for identical goods. By its order dated 22.10.1986 a Bench of two members of the Tribunal stated that they doubted the correctness of the earlier decision of a Bench of the three members of the Tribunal and they referred the case to the President of the Tribunal for constituting a larger Bench. By its order dated 4.3.1987 the President of the Tribunal referred the case to a larger Bench of five members. The respondent filed a writ petition in the High Court challenging the orders of the Bench of two members and that of the President of the Tribunal, which struck down both the orders by holding that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline. In appeal to this Court, it was contended on behalf of the Union of India that Section 129 C of the empowers the Presi 790 dent of the Tribunal to constitute larger Benches to resolve conflicts in opinion arising between members of a Bench or between Benches of the Tribunal. The Tribunal has ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf. On behalf of the respondent, it was contended that the Tribunal is a creature of the Statute. Its jurisdiction is limited to the specific powers conferred by the statute. It has no inherent jurisdiction and its powers are not plenary and are limited to the express provisions contained in the statute. Allowing the appeal, this Court, HELD: 1. There is no doubt that the Tribunal functions as a. Court within the limits of its jurisdiction. It has all the powers conferred expressly by the statute. Further more, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised. [794F G] 1.1 Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. [795A] Maxwell on Interpretation of Statutes, Eleventh edition and Income Tax Officer, Cannanote vs M.K. Mohammad Kunhi, 15, referred to. 2. It is true that sub section (5) refers to difference of opinion arising amongst members of a Bench in a particu lar case, and not specifically where the members of a Bench doubt the correctness of an earlier decision. However, section 129 C confers power of reference upon the President. That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree. In such cases, it is necessary for the healthy functioning of the Tribunal that the President should have the requisite authority to refer the case to a larger 791 Bench. That is a power which is implied in the express grant authorising the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions. [795H; 796A B] 2.1 It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a larger Bench. The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice. Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the adminis tration of justice. It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case. In such circum stances, it is but natural and reasonable and indeed effica cious that the case is referred to a larger Bench. [795B E]

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ivil Appeal No. 3492 of 1990. From the Judgment and Order dated 3.8.1988 of the Jammu & Kashmir High Court in L.P.A. No. 110 of 1988. N.S. Mathut, Ramesh C. Pathak, G. Venkatesh Rao and Baby Lal for the Appellant. E.C. Agarwala, Ms. Purnima Bhatt, V.K. Pandita and Atul Sharma, for the Respondents. The Judgment of the Court was delivered by KULDIP SINGH, J. Special leave granted. The School of Buddhist Philosophy, Leh (hereinafter called the 'School ') is an affiliate institution of the Sampurnanand Sanskrit University, Banaras. The management of the School is in the hands of a society called Central Institute of Buddhist Studies, Leh which is registered under the Jammu and Kashmir Registration of Societies Act. Ap pointments to various posts in the School are regulated by the rules framed by the Board of management in the year 1973. The academic and other qualifications for the post of Principal under the rules, are as under: 517 "Academic Qualification At least Master 's Degree in Humanities or Social Sciences, with knowledge of Rules and Regulations, procedures and Accounts. Experience Minimum experience of 7 years, out of which at least 2 years should be in administration such as administrative Asstt. and not less than 3 years in teaching in Higher Secondary and/or Degree classes. " The qualifications for the post of Administrative Officer under the 1973 rules are identical. M.L. Mattoo (Respondent No. 1), who was functioning as the Administrative Officer, was given the additional charge of the post of Principal by an order dated March 26, 1973 issued by the Ministry of Education and Social Welfare, Government of India, New Delhi. The Board of Management in its meeting held on August 22, 1978 decided that apart from the qualifications pre scribed under the Rules, the person selected for the post of Principal should have a thorough academic background in Buddhist Philosophy. Pursuance to the said decision the qualifications/experience for the post of Principal pre scribed under the Rules were revised as under: "Essential: (a) A consistently good academic record possessing eminent scholarship in Buddhist Philosophy as a subject of specialisation at M.A. or Doctoral level. or Acharya Degree with research experience to Buddhist Philoso phy or equivalent. or An equivalent degree of traditional monastic education in Buddhism. 518 (b) Evidence of research work and/or public work in the field. Desirable: (a) 5 years teaching experience in Buddhist Philosophy and allied subject at the degree level. (b) 5 years of administrative experience. " The Board of Management constituted a selection commit tee to appoint a suitable person as Principal of the School. By an order dated January 9, 1979 one Shri Tashi Pal jot, who fulfilled the revised qualifications, was appointed as Principal of the School. Aggrieved by the said appointment M.L. Mattoo filed Civil Writ Petition No. 256 of 1979 in the High Court of Jammu and Kashmir on the ground that he was removed from the additional charge without affording an opportunity of heating to him and further that he was not considered by the selection committee. He contended that selection was liable to be quashed being violative of Arti cle 16 of the Constitution of India. The writ petition was resisted by the Management on the ground that it was not a 'State ' under Article 12 of the Constitution of India and as such the writ petition was not competent. At the hearing of the writ petition the counsel for the Management conceded that the society was a 'State ' within Article 12 of the Constitution of India and as such the writ petition could not be dismissed on that ground. The High Court rejected the contention of M.L. Mattoo that he was entitled to an oppor tunity of hearing or Article 311 was attracted. The High Court, however, allowed the writ petition on the ground that the petitioner was not considered for the post of Principal and as such his right under Article 16 of the Constitution of India stood infringed The operative part of the High Court judgment is as under: "Mr. V.K. Gupta has on the authority of Ajay Hasia 's case (supra) frankly conceded that the society being an instru mentality or agency of Government of India, was 'state ' for the purpose of Part III of the Constitution as such, the petitioner had a fundamental right to be considered for the post alongwith the third respondent. He not having been so considered, and it also being admitted that he possessed the requisite qualifications, the rule of equality enshrined in Articles 14 and 16 of the Constitution stood clearly violat ed. That being so, as in fact it is, the impugned order 519 passed by the second respondent appointing the third re spondent as the Principal of the School has to be quashed. " Thereafter the Management advertised the post of Princi pal to be filled by direct recruitment on the basis of revised qualifications. The advertisement was published in the 'Kashmir Times ' of January 5, 1982. M.L. Mattoo filed another writ petition being Civil Writ Petition No. 29 of 1982 challenging the advertisement on the ground that the revised qualifications had not been validly prescribed and as such the post of Principal could only be filled on the basis of the pre revised qualifications. According to him the revised qualifications were advertised only to make him ineligible for the post. The main thrust of Mattoo 's argument was that his earlier writ petition was decided by the High Court on October 29, 1981 wherein the counsel for the Management conceded that he possessed the requisite qualifications for the post of Principal. Admit tedly Matto does not possess the revised qualifications. According to him the earlier writ petition was filed in the year 1979 and had the qualifications been revised by amend ing the rules in 1978, the counsel for the management would have certainly brought the same to the notice of the Court and since it was not done there was factually no amendment to the rules. The High Court accepted the contention of Mattoo and allowed the writ petition by its judgment dated June 9, 1988 on the following reasoning: "It is stated in para No. 13 of their counter that qualifi cations were changed in August, 1978 with the approval of the Govt. of India. This statement is not accepted for two reasons one, that this was not the defence of the respond ents in writ petition No. 256/1979 in which petitioner 's eligibility was granted by the High Court for the post of Principal; and second, that after the decision of the High Court granting eligibility to the petitioner for the post of Principal in writ petition No. 256/1979, the respondents plea on the basis of some policy or note whereby qualifica tions were changed in 1978 prior to the filing of the writ petition No. 256/1979 cannot be now pressed into service nor would be permitted to be made because same will be barred by doctrine of constructive res judicata. " The High Court quashed the advertisement dated January 5, 520 1982 and restrained the management from filling the post of Principal on the basis of the impugned advertisement. The management has come up to this Court in appeal against the above said judgment of the High Court of Jammu and Kashmir. The learned counsel for the appellant has invited our attention to the proceedings of the meeting of the manage ment of the School held on August 22, 1978. It was decided in the said meeting that the person selected for the. post of Principal of the School must have academic background in Buddhist Philosophy in addition to the qualifications pre scribed under the Rules. Thereafter the amended qualifica tions which have been reproduced above were prescribed by the Board of Management. 3 It is not disputed that the recruitment Rules could be altered by the Board of Management at any time with the sanction of the Government of India. Mr. E.C. Agarwala appearing for the respondent M.L. Mattoo has, however, contended that the recruitment rules were never amended and in any case there was no sanction of the Government of India regarding the amended Rules. Learned counsel for the appellant has invited our atten tion to the affidavit of Dr. (Mrs.) Kapila Vatsyayan, Chair man, Board of Management of the School filed before the High Court. Dr. Kapila Vatsyayan is the Additional Secretary to Government of India in the Ministry of Education and Cul ture. Para 13 of the affidavit is as under: "When in the year 1978, the question of appointment of a Principal of the school on regular basis was under the consideration of the Board of Management, it was held that keeping in view the objects of the school being a research Institution to propogate Buddhist Philosophy a thorough academic background in Buddhist Philosophy was considered as one of the essential qualifications for the post of Princi pal of the School as will be evident from the extract from brief note on Agenda item I considered in the meeting of the Board of Management held on 22nd August, 1978 Annexure IV. Shri Tashi Paljore was appointed as Principal as stated in para No. 5 of the petition as he possessed this qualifica tion and was selected by a duly appointed Selection Commit tee. The contention of the petitioner that this qualifica tion has been added now after the decision of writ petition No. 256 of 1979 is incorrect. As 521 stated above, the qualifications were changed in August 1978 with the approval of Govt. of India. These qualifications are obviously very necessary for the fulfilling of the objectives of the Schools of Buddhist Philosophy, Leh (Ladakh). In the absence of these qualifications, the very object for which the Institution exists is bound to be defeated. The qualification has been provided the interest of the Institution and for the attain ment of the object for which it exists, namely imparting and propagating Buddhist Philosophy. The Recruitment Rules of 1975, Annexure 'D ' to the petition were framed by the Board at that time. Under the Rules and Regulations of the Board, the Board of Management is competent to amend the same. ' ' it is obvious from the affidavit of Dr. Kapila Vatsyayan reproduced above that the qualifications for the post of Principal were revised by amending the Rules and the revised qualifications were approved by the Government of India. No. 1 rejoinder was filed by M.L. Mattoo to the above affidavit, The High Court was not justified in disbelieving the contents of the affidavit. The rules are not statutory. The Board of Management is fully competent to alter or amend the rules in any manner and at any time. The affidavit by the Chairman of the Board of Management who is additional Secre tary to Government of India to the effect that the rules were amended in 1978 with the approval of the Government of India, should have put an end to the controversy. We have no hesitation in holding that the qualifications for the post of Principal of the School stood validly revised by the amendment of the Rules in August, 1978. Since respondent No. 1 Shri M.L. Mattoo does not possess the revised qualifica tions, he is not eligible to be considered for the said post. In the earlier writ petition No. 256/1979 the question as to whether the qualifications for the post of Principal had been revised was not before the High Court. The main contention of the Management, before the High Court, was that the Management society was not a 'State ' under Article 12 and as such no writ petition was competent. At the hear ing the counsel for the management, however, conceded that the society was a 'State ' under Article 12 of the Constitu tion of India. It is no doubt that the High Court has men tioned that it 522 was admitted by the counsel for the Management that Mattoo possessed the requisite qualifications for the post but we do not understand how in the face of categoric affidavit of Dr. Kapila Vatsyayan such a statement could be made before the High Court. We, therefore, hold that the qualifications/experience for the post of Principal were validly revised by amending the Rules in August, 1978. The advertisement issued on January 5, 1982 was in accordance with the Rules and the High Court was not justified in quashing the same. We, therefore, allow the appeal, set aside the judgment of the High Court and dismiss the writ petition filed by M.L. Mattoo before the High Court. There shall be no order as to costs. Y. Lal Petition dismissed.

Appointments to various posts in School of Budhist Philosophy, Leh, were governed by the Rules framed by the Board of management in the year 1973. According to the said rules, the qualifications prescribed for the post of Princi pal as also for the Administrative Officer were identical. In March 1973, one M.L. Mattoo, Respondent No. 1, who at that time was working as the Administrative Officer of the School was given the additional charge of the post of Prin cipal. Thereafter the Board of management at its meeting held on 22.8.1978, decided that qualifications prescribed for the post of Principal should be revised, so as to make it obligatory for the Principal to have a thorough academic knowledge of Buddhist Philosophy the primary object of the institution being research and propagation of Budhist phi losophy. A selection committee was constituted by the Board of management to appoint a suitable person as Principal of the school and one Tashi Paljor, was appointed as Principal. Being aggrieved by the said appointment, Respondent No. 1, filed a writ petition in the High Court contending that he was removed from the additional charge without affording him an opportunity of being heard and further that he was not considered by the selection committee. The High Court re jected the first contention but allowed the writ petition on the ground that he was not considered for the post of Prin cipal and thus his right under Article 16 was infringed. Thereupon the management advertised the post of Principal to be filed by direct recruitment on the basis of the revised qualifications. Respondent Mattoo challenged the advertise ment by means of a writ petition on the ground that the revised qualifications were not validly prescribed and as such the post of Principal could only be filled in on the basis of the pre revised qualifications. He based his con tention on the concession made by the counsel for the man agement, when his earlier petition was heard, that the petitioner possessed the requisite qualifications. According to him the rules have not been amended. The High Court accepted the contention of Mattoo 516 and allowed the writ petition, quashed the impugned adver tisement and directed the management not to make appointment on the basis of the advertisement in question. Hence this appeal by the Board of management of the school. Allowing the appeal, this Court, HELD: The Board of management is fully competent to alter or amend the rules in any manner and at any time. [521E] The qualifications/experience for the post of Principal were validly revised by amending the rules in August 1978. The advertisement issued on January 5, 1982, was in accord ance with the Rules and the High Court was not justified in quashing the same. [522B] Since respondent No. 1 does not possess the revised qualifications, he is not eligible to be considered for the said post. [521F]

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Criminal Appeal No. 96 of 1979. From the Judgment and Order dated 9.11.1977 of the Patna High Court in Criminal Appeal No. 332 of 1971. Khanna for the Appellants. D. Goburdhan for the Respondent. The Judgment of the Court was delivered by FATHIMA BEEVI, J. This appeal by special leave is di rected against the judgment and order dated 9.11.1977 of the High Court of Patna whereby the conviction and sentences of the appellants for the offences under Sections 302,394 and 34, I .P.C., have been confirmed. The three appellants are brothers. The deceased, Bigna Bedia, lived with his wife Sohagia Bedia and sons in village Karmatola. The incident happened on the night of 5/6.9. Bigna was sleeping 574 along with his son Jhalku in the verandah while Sohagia was sleeping along with Malku on cot. At about midnight, the intrud ers entered the house by cutting the tatti and attacked Sohagia and her husband. Binga Bedia sustained fatal injuries and died instantaneously. Sohagia was injured. The intruders took away the utensils and two she goats kept at one end of the verandah. Jiwan Bedia, the brother of the deceased, on being informed by Jhalku and Lalku about the incident reached the house and after making enquiries, he lodged the first information report at the police station at about 10.00 A.M in the next morning. The crime was registered against unidentified persons. In the course of the investigation these appellants were arrested and were finally charge sheeted. There had been ill feeling between the appellants on the one hand and the deceased and his wife on the other, though the appellants are the sons of the eider sister of Sohagia. The prosecution case is that on account of enmity, the three appellants committed the crime. Sohagia claimed to be an eye witness. According to this witness, the three appellants were armed. Gurja had a tangi, Birja had a lathi and Mukund had a pharsa. On entering the house Gurja and Birja dealt blows on Sohagia with the weapons they had. She got injured and cried. On hearing the alarm, the deceased was awakened from sleep and when he was trying to get up, all the three appellants left her and killed her husband. P.W. 14 asserted that Gurja had been flashing a torch and that she had iden tified all the three appellants. She also stated that she became unconscious and regained consciousness only the next day when the police arrived at the scene. According to the prosecution, P.W. 14 is the only eye witness. Lalku and Jhalku who ran to the house of P.W 1 had not seen the as sailants. The trial court accepted the testimony of P.W. 14 corroborated by the medical evidence and other circumstances as the basis for the conviction. The High Court agreed with the trial court in holding that the prosecution has succeed ed to bring home the guilt of all the appellants. The learned counsel for the appellants urged before us that the testimony of P.W. 14 suffers from serious infirmi ties casting reasonable doubt as to the identity of the assailants and the conviction is therefore unwarranted. The circumstances relied on by the learned counsel is that in the first information report the identity of the accused had not been revealed. It is argued that if P.W. 14 had identi fied the assailants, it would have been possible for P.W. 1 to disclose the identity of the accused at the time the first information report was lodged and the circumstances are such that the statements 575 of P.W. 14 are inspired and the prosecution has introduced the theory of unconsciousness of P.W. 14 only in an attempt to explain away the lacuna. To appreciate this contention, it is necessary to scrutinise the first information report in detail. P.W. 1, Jiwan Bedia, is the full brother of the deceased. He has been residing in village Jawabera which is at a distance of about half a kilometer from Karmatola. Lalku and Jhalku reached his house at about midnight and raised hulla that some thieves had entered their house and killed their father and were also killing their mother. On hearing this, P.W. 1 got up and went to village Jawabera where he informed his gotias about the incident. Then taking Sawna Bedia, Jhopra Bedia and others along with him he went to the house of Bigna Bedia. There he did not find any thief. On entering the house, he found Bigna Bedia lying dead with bleeding injuries on his head and legs. The wife of Bigna was also injured with a cut injury on her face. He learnt there from the wife and both the sons of Bigna that 5 or 6 persons had entered the house by cutting the tatti and had inflicted injuries on Bigna and his wife with tangi, bhujali etc. and they also removed the lock and peg and took away utensils and two she goats from the house. P.W. 1 then went to the villagers of Karmatola and told them about this incident. P.W. 1 also contacted the Mukhia of the village Hindebilli and others before going to the police station. P.W. 1 in narrating the incident in the Fard byan stated that he learnt from the wife and sons of the deceased that 5 or 6 persons had entered the house and committed the crime and details could be furnished by the widow and the sons of the deceased. P.W. 1, no doubt, in cross examination supported the version of P.W. 14 that Sohagia was lying unconscious when he reached the house at night and she narrated the incident after regaining consciousness the next day when the police reached there. The statement of P.W. 1 at the earliest point of time belies the truth of what he has deposed before the court. He had been categoric that he made enquiries with the wife and sons of the deceased before proceeding to the police station and asserted that 5 or 6 unknown persons had committed the crime. It clearly indicates that an attempt had been made by the prosecution to introduce the case of unconsciousness of P.W. 14 to explain the infirmity. It may be that P.W. 14 on account of the shock could not have been so eloquent and depressed, but P.W. 1 had been in the house the whole night and he had contacted all the concerned persons and also made enquiries. The statement in exhibit p. 6 that details would be given by the wife and sons who were present in the house also affirms that he could not gather any 576 useful information regarding the identity of the assailants. The courts below have failed to appreciate the evidence of P.W. 14 in the correct perspective in the light of the clinching evidence in the case. The circumstances that the identity of the assailants was unknown until the police arrived at the scene is clear indication that P.W. 14 or her children had not identified the assailants at the time of the occurrence. It could be that on account of enmity and ill will their suspicion has turned against these appellants and inspired by that suspicion, the investigation had been misdirected. We do not therefore consider it safe to sustain the conviction when there is reasonable doubt regarding the participation of the appellants. The benefit of doubt must necessarily go to the appellants. In the result, the appeal is allowed. The convictions and sentences are set aside. The bail bonds shall stand canceled. P.S.S. Appeal allowed.

The appellants were convicted for offences under sections 302,394 and 34 IPC. They were alleged to have entered the house of the deceased at midnight and attacked him and his wife, PW 14, with sharp edged weapons. He sustained fatal injuries and died instantaneously. His wife was injured. Their two sons ran to the house of uncle PW 1, at a distance to inform him of the incident. They had not seen the assail ants. By the time PW 1 reached the scene the assailants had fled. He had been in the house the whole night and contacted all the concerned persons. In the FIR that he lodged at about 10 a.m. the next morning the assailants were not named. The prosecution case was that the appellants had commit ted the crime on account of enmity. PW 14, who claimed to be an eye witness, deposed that she had identified the appel lants. She also stated that she became unconscious and regained consciousness only the next day when the police arrived. PW 1 supported her version. The trial court accepted the testimony of PW 14. The High Court agreed with it. In this appeal by special leave, it was contended for the appellants that if PW 14 had identified the assailants, it would have been possible for PW 1 to disclose the identi ty of the accused at the time the first information report was lodged, and that the prosecution had introduced the theory of unconsciousness of PW 14 only in an attempt to explain away the lacuna Allowing the appeal, the Court, HELD: 1. It is not safe to sustain the conviction when there is 573 reasonable doubt regarding the participation of the appel lants in the crime. The benefit of doubt must necessarily go to them. The statement of PW 1 at the earliest point of time belies the truth of what he had deposed before the court. He had been categoric in the FIR that he had made enquiries with the wife and sons of the deceased before proceeding to the police station and asserted that five or six unknown persons had committed the crime. He had also stated that details could be furnished by the widow and sons of the deceased. This affirmed that he could not gather any useful information regarding identity of the assailants. All the same, in cross examination he supported the version of PW 14 that she was lying unconscious when he reached the house at night and she narrated the incident after regaining con sciousness when the police reached there. It clearly indi cates that an attempt had been made by the prosecution to introduce the case of unconsciousness of PW 14 to explain the infirmity. [576F; G] 3. The circumstance that the identity of the assailants was unknown until the police arrived at the scene showed that PW 14 or her children had not identified the assailants at the time of the occurrence. The courts below have failed to appreciate her evidence in the correct perspective in the light of the clinching evidence. [576B]

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ivil Appeal Nos. 3392 3394 of 1990. From the Judgment and Order dated 30.11. 1989 of the Andhra Pradesh High Court in W.A. No. 269/89, dated 30.8.1988 in W.P. No. 12041/84 and dated 26.11.1987 in W.P. No. 194 of 1983. P.K. Goswamy, Additional Solicitor General, M.K. Ramamurthy, C. Sitaramaiya, M.L. Paul, Kailash Vasdev, Ms. M.M. Rasaily, M.A. Krishnamurthy, Mrs. C. Ramamurthy, T.V.S.N. Chari, Mrs. B. Sunita Rao and Ms. Majula Gupta for the Appearing Parties. The Judgment of the Court was delivered by KASLIWAL, J. Special leave granted. All the above cases are disposed of by one single order as identical questions of law are involved in all these cases. In order to appreciate the controversy, facts in brief are stated of all these cases. SLP No. 4176 of 1988: The respondent Vijaya Kumar was appointed as a Proba tionary Officer (Gr. I Officer) by an Order of the Executive Committee of the Central Board of the State Bank of India on 7.12.71. The respondent was charge sheeted in respect of gross irregularities and corrupt ?401 practices and was ultimately dismissed from service by an order dated 22.12.88 passed by the Chief General Manager of the Bank. Shri Vijay Kumar filed a writ petition No. 194/83 before the Andhra Pradesh High Court challenging his order of dismissal. A Division Bench of the High Court heard the writ petition alongwith writ appeal No. 141/86 and allowed the writ petition but dismissed the writ appeal by order dated 26.11.87. The State Bank aggrieved against the afore said order of the High Court passed in writ petition No. 194/83 has filed this special leave petition. The High Court has allowed the writ petition only on one ground that the appointing authority of Vijaya Kumar was Executive Committee of the Bank and as such Chief General Manager being an authority lower than the appointing authority was not compe tent to pass an order of dismissal. SLP No. 15235 of 1988: In this case the respondent T. Dayakar Rao was appointed as a Clerk in the State Bank of India in the month of Octo ber, 1962. In the month of July, 1971 he was selected as a Trainee Officer and was given job training at various branches of the Bank for two years. While he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period 1.9.79 to 15.6.80. Disci plinary proceedings were initiated on 29.7.82. On 6.3.84 the Chief General Manager in the capacity of disciplinary au thority passed an order of dismissal. T. Dayakar Rao filed a writ petition No. 1204/84 in the High Court. The Division Bench of the High Court by an order dated 13th August, 1988 allowed the writ petition following the decision of Division Bench given in writ appeal No. 141/86 dated 26.11.87. The Bank aggrieved against the aforesaid order has filed the Special Leave Petition under Article 136 of the Constitu tion. SLP No. 2069 of 1990: In this case Shri A.K. Soundararajan appellant was appointed as Technical Officer by an order dated 14.6.68 of the Executive Committee of the Central Board of the Bank. It was mentioned in the Order that Shri Soundararajan would be governed by the State Bank of India (Officers & Assistants) Service Rules. Post of Technical Officer was considered equivalent to Staff Officer Grade III under the Rules. He was suspended and given a chargesheet on 23.4.82 and was dismissed by an order dated 31.3.83 passed by the Chief General Manager. Shri Soundararajan filed a writ petition No. 7108/85 in the High Court challenging his order of dismissal. Learned Single Judge of the High 402 Court by order dated 31.10.88 allowed the writ petition by following the decision given by the Division Bench in writ petition No. 1204/84 in the case of T. Dayakar Rao. The State Bank aggrieved against the order of the learned Single Judge filed an appeal before the Division Bench. The Divi sion Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 25.8.88 made applicable with retrospective effect. The Division Bench by Order dated 30th November, 1989 allowed the appeal filed by the Bank. Shri A.K. Soundararajan aggrieved against the Order of the High Court has filed this Special Leave Peti tion. It would be necessary to narrate the facts of SLP (C) No. 5139/88 (State Bank of India vs Hanumantha Rao) disposed of by an order of this Court dated 30th January, 1990. Hanumantha Rao was promoted as Grade I Officer on 1.4.1973 by the Executive Committee of the Central Board of State Bank of India. In 1979 he was posted as the Manager of a branch of the Bank in Warangal District. In respect of certain alleged acts of misfeasance/malfeasance he was suspended on 17.8.81. On 4.5.82 a memo of charges was served on Hanumantha Rao by the Chief General Manager of the Bank. The Chief General Manager of the State Bank of India, local head office Hyderabad dismissed Hanumantha Rao by an order dated 7.1.84. Hanumantha Rao filed a writ petition No. 5509/84 in the High Court. Learned Single Judge allowed the writ petition declaring the order of dismissal as incompe tent and invalid. The Bank aggrieved against the order of the Learned Single Judge filed a Letters Patent Appeal No. 141/86 before the Division Bench. The Division Bench heard and disposed of the writ appeal No. 141/86 and writ petition No. 194/83 by a common order. The Division Bench agreed with the conclusion of the learned Single Judge that the order of dismissal passed by the Chief General Manager is incompetent and invalid being violative of the guarantee contained in the proviso to Regulation 55(2)(a) of the State Bank of India General Regulations, 1955. While dealing with the cross objections filed by Shri Hanumantha Rao the Bench took notice of the fact that the writ petitioner had died on 24.11.87 and as such gave the following direction: "On account of the death of the writ petitioner it is unnec essary for us to go into the merits of the contentions urged by way of cross objections. There is no question of 403 any enquiry or further enquiry hereafter. We may mention in this connection that the learned counsel for the petitioner (respondent in this Writ Appeal) offered to file a petition to bring on record the legal representatives of the deceased writ petitioner as respondents in this Writ Appeal since, according to him, they would be entitled in any event to claim the monetary benefits flowing from the orders of this Court. Now that we have agreed with the learned single Judge that the order of dismissal was incompetent and invalid, we direct that the writ petitioner shall be treated to be under suspension pending enquiry till 24.11. 1987 and all the monetary benefits that he is entitled to on that basis, including the arrears of suspension allowance, shall be paid over to his legal representatives. Mr. Prasad will file the legal representatives petition within two weeks from today. Post this Writ Appeal for orders after two weeks. The Writ Appeal, accordingly, fails and is dis missed, but, in the circumstances, without costs. " The Bank aggrieved against the aforesaid order filed the SLP No. 5139/88 before this Court. Taking note of the facts and circumstances of the case of Hanumantha Rao having died on 24.11.87 leaving behind 14 children, this Court on 30th January, 1990 did not consider if fit to interfere with impugned order of the Division Bench. It was further made clear that even though this Court was not interfering with the impugned order, the questions raised on behalf of the Bank were left open. The Bank was directed to treat Hanuman tha Rao in service and pay the dues, arrears of salary and other terminal benefits in accordance with law to his legal representatives. With these observations, the SLP was dis missed. The question which calls for consideration in all these cases is whether the order of dismissal could be passed by the Chief General Manager who was lower in rank to the Executive Committee who was the appointing authority in these cases. In order to appreciate this controversy, it would be proper to give reference of the relevant provisions of the (hereinafter referred to as the Act), State Bank of India General Regulations, 1955 (hereinafter referred to as the Regulations) and the State Bank of India (Supervising Staff) Service Rules, 1975 404 (hereinafter referred to as the Rules). Section 43 of the Act empowers the State Bank to appoint such number of officers, Advisors and Employees as it con siders necessary or desirable for the efficient performance of its functions and to determine the terms and conditions of their appointments and service. Section 49 of the Act confers power on the Central Government,in consultation with the Reserve Bank to make rules to provide for all matters in which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. Section 50(1) of the Act confers powers on the Central Board of Directors of the Bank to make regulations. Sub section (3) of the Section 50 of the Act empowered the Reserve Bank to make the first regulations with the previous sanction of the Central Government. In exercise of the powers conferred by sub section (3) of Section 50 of the Act, the Reserve Bank of India with the previous sanction of the Central Government made the State Bank of India General Regulations, 1955. These regulations have been amended from time to time by the Central Board of Directors by making regulations under subsection (1) of Section 50 of the Act. Regulation 55(2)(a) deals with the initial appointments and promotions to various categories of employees in the bank. Initially the appointments of Officers used to be made only by the Executive Committee as provided in Regulation 55(2)(a). As the bank grew larger in branches, the bank thought fit to vest the power of appointment and promotion to various functionaries of the bank and also gave power to delegate their power of appointment also. Regulation 55(2)(a) was thus substituted by a resolution dated 18th August, 1971 of the Central Board. After this resolution for Officers Grade I & II,the appointing authorities were speci fied as the Secretary and Treasurer or the Managing Director respectively depending upon whether the appointment/promo tion is for service in the Circle or the Central office. The State Bank of India Officers & Assistants Rules which govern the service conditions of Grade I Officer whether they were Probationary Officers or Trainee Officers and Staff Officers followed the scheme of "appointing authority" laid down in the Regulations. Regulation 55(2)(a) was again amended by a resolution of the Central 405 Board on 11th July, 1972. By this amendment there was only a terminological regrouping of the earlier regulation rather than any qualitative change. The State Bank Laws (Amendment) Act, 1973 introduced various amendments and one of the amendments was relating to change of designation of Secre tary and Treasurer as Chief General Manager. Hence the Central Board vide its resolution dated 29.3.74 for the words "Secretary & Treasurer" substituted "Chief General Manager. " The service conditions of all Officers came to be brought under a single set of service rules viz. the State Bank of India (Supervising Staff) Service Rules which came into force on 1.7.75. It would be important to mention that Regulation 55(2)(a) at all relevant period for our purpose recognized the right of the officers or employees of the Bank under the following clause "such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority. " Clause (f) of Rule 3 of the State Bank of India (Supervising Staff) Service Rules which is relevant for our purposes reads as under: (f) "Appointing Authority" means (i) in the case of Officers Grade II and Grade I and of other employees to whom the salary scales applicable to Officers Grade II and Grade I generally apply with or with out modification, the Chief General Manager concerned or the Managing Director according as the employee is serving in the Circle or in or under Central Office; (ii) in the case of Staff Officers of various grades and of other employees to whom the salary scales applicable to Staff Officers generally apply with or without modification, the Managing Director; (iii) in the case of Senior Staff Appointments and of em ployees to whom the salary, scales applicable to Senior Staff Appointments generally apply with or without modifica tion, the Executive Committee; Sub Rule (1) of Rule 50 relevant for our purposes is also reproduced below: 50(1)(i) The Disciplinary Authority may itself, or shall when so directed by its superior authority, institute disci plinary proceedings against an employee. 406 (ii) The Disciplinary Authority or any Authority higher than it may impose any of the penalties in rule 49 on an employ ee. It may be further noted that an amendment in Regulation 55 was approved by Central Board at its meeting dated August 25, 1988 which reads as under: 55(1) Save as provided in sub regulation (2) and as may be directed the Central Board, a Local Board may exercise all the powers of the State Bank in respect of the Staff serving in the areas in its jurisdiction. 2(a) The appointing and/or promoting authority for various categories/grades of officers and employees shall be such as the Executive Committee may by general or special order designate from time to time. (b) No officer or employee of the Bank shall be dismissed, discharged, removed or retired from the service of the Bank or reduced to a lower grade or post or to a lower stage in a time scale by an authority lower than the appointing author ity. Explanation (For the purpose of clause (b) the term 'appointing authority ' shall mean and include the authority who has been designated as such in respect of such class or grade of officers or employees to which the officer or employee concerned, as the case may be belongs at the time when such Order is passed or any proceeding leading to such Order or termination is initiated. ) (c) Nothing in this sub regulation shall affect the powers of a disciplinary authority appointed or notified under any award, settlement under the , governing, affecting or regulating the service conditions of workmen of the Bank, and for the purpose of clause (b) above, the appointing authority shall be deemed to have been substituted by such disciplinary authority. (d) The salary and other emoluments to be granted to offi cers and other employees shall be as laid down in the Rules of Service approved by the Central Board and, where no such rules have been laid down, as fixed by the Executive Commit tee. 407 (e) The power to grant pensions to officers and other em ployees leaving the service of the State Bank, other than pensions provided for under the Rules of pension funds respectively applicable to them, shall be reserved to the Central Board. (f) The grant of gratuities or other financial assistance, either temporary or permanent, to widows, children or other dependents of deceased officers or other employees shall be made by the Executive Committee of the Central Board except where grant of any such gratuity or financial assistance is authorised by any general direction given by the Central Board. Explanation (The term 'Officers ' in this regulation shall include any employee to whom the rules of service generally applicable to officers, apply with or without modification.) (Sub regulation (2) substituted with effect from 1.10.79). " The Executive Committee of the Bank passed the following resolution on August 30, 1988: In exercise of the powers conferred by sub section (1) of Section 43 of the (23 of 1955) and amended sub regulation (2)(a) of Regulation 55 of the State Bank of India General Regulations, 1955, the Executive Committee of the Central Board of the State Bank of India hereby makes the following order: The initial appointments and/or promotions to various categories of officers and other employees in the Bank set out in Column I here under shall be made by the authority specified in Column II. Column I Column II Employees working at branches i) Employees other a) Subordinate the concerned than officers Staff Branch Manager and deputy General Manager ii) Clerical the concerned Staff Regional Manager and Dy. General Manager. b) Employees working at LHOs/ 408 Regional Offices and their establishments The concerned Office Manager/ Admn. Officer at Staff Colleges or Insti tutes Manager Dy. Chief Manager or, where there is no post of above descrip tions the head of con cerned dept/office. ii) Officers in The Chief General Manager junior management for appointments/promotions in the Grade Scale I Circle and the Chief General and Middle Manager (Personnel & HRD) in Management Central Office for Central Grade Scale II Office establishment. iii) Officers in The Deputy Managing Director Middle Management Grade Scale III iv) Officers in The Managing Director Senior Management Grade Scale IV, V v) Officers in Top Recommending Authority: Executive Grade Scale VI, VII The Directors Promotion Committee and special consisting of the Chairman, the scales Managing Director and the Director nominated by the Central Government in terms of clause (e), sub section (1) of Section 19 and the Director nominated by the Reserve Bank of India in terms of clause (f) of sub section (1) of Section 19 of the Act. Promoting/Appointing Authority: The Executive Committee of the Cen tral Board. 409 All authorisations in respect of appointing authority and/or promoting authority made by the Executive Committee from time to time after 1.10.79 shall be deemed to have been done under the amended regulation 55. Appointments autho rised by the Chief General Manager (Personnel & HRD) in respect of JMGS I after 1.10.79 are also confirmed hereby. All the employees of the bank in the cases before us where appointed by the Executive Committee. Order of dis missal in their cases has been passed by the Chief General Manager. It is an admitted position that on the date of passing the order of dismissal the Chief General Manager was the appointing authority. According to the Bank though the employees were appointed by the Executive Committee, but at the time when inquiry was held and the order of dismissal passed, the Chief General Manager had become the appointing authority. On the other hand the contention on behalf of the employees is that the Executive Committee being the appoint ing authority, no authority lower than the Executive Commit tee can pass the order of dismissal in their cases. Accord ing to their contention the Chief General Manager, being a lower authority than the Executive Committee, he had no competence to pass the order of dismissal. Learned counsel for the employees in this regard referred to Article 311 of the Constitution of India and placed reliance on a plethora of cases decided on the basis of guarantee enshrined under Article 311 of the Constitution. The guarantee clause under Article 311(1) of the Consti tution of India which is relevant for our purpose reads as under: "No person who is a member of a Civil Service of the Union or an All India Service or a Civil Service of a State or holds a Civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed. " Now so far as the right which has been conferred on the employees of the State Bank contained in Regulation 55(2)(a) is that such officers or employees shall not be dismissed from service of the State Bank by an authority lower than the appointing authority. Thus a comparison of the provi sions contained in Article 311(1) of the Constitution and the right guaranteed to the employees of the State Bank under Regulation 55(2)(a) shows that there is a material difference between the language used in the two provisions. Under Arti 410 cle 311(1) the words used are "by which he was appointed." In Regulation 55(2)(a) there are no such words "by which he was appointed" and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the appointing authority. Thus the right guaran teed in case of the officers or employees of the State Bank is that the order of dismissal cannot be passed by an au thority lower than the appointing authority. A perusal of the relevant Regulations and Rules mentioned above clearly go to show that the Chief General Manager had become the appointing authority of the employees in question under Regulation 55(2)(a) with effect from 1.7.74. Admittedly the orders of dismissal have been passed long after these amend ments when the Chief General Manager had already become their appointing authority under the Regulations and the Rules. The right that an officer or employee of the State Bank of India cannot be dismissed from service by an author ity lower than the appointing authority is a creation of statutory rules and regulations. So far as the right or protection guaranteed under Article 311 of the Constitution is concerned, it applies to members of the Civil Service of the Union or an All India service or a Civil Service of a State or who holds a Civil Post under the Union or a State. Admittedly the employees of the State Bank do not fall under any one of these categories and they cannot seek any protec tion under Article 311(1) of the Constitution. The employees of the State Bank can only claim such rights which have been conferred under Regulation 55(2)(a) of the General Regula tions. The only right conferred under the said provision is that the officers or employees of the State Bank cannot be dismissed by an authority lower than the appointing authori ty. With the risk of repetition it may be stated that on the date when the order of dismissal has been passed, Chief General Manager had already become the appointing authority and as such the order of dismissal has not been passed by an authority lower than the appointing authority. Apart from the view taken by us as mentioned above the Regulation 55 has been amended by a resolution of the Cen tral Board dated August 25, 1988 with retrospective effect. It has now been made clear in the explanation that for the purpose of clause (b) the term appointing authority shall mean and include the authority who has been designated as such in respect of such class or grade of officers or em ployees to which the officer or employee concerned, as the case may be belongs at the time when such order is passed or any proceedings leading to such order or termination is initiated. This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has 411 been designated as such at the time when such order is passed. It was contended on behalf of the Learned counsel for the employees that the Bank had no power to amend the Regulations with retrospective effect. We see no force in this contention. Section 50(2)(a) of the Act clearly pro vides that all regulations made under this section shall have effect from such earlier or later date as may be speci fied in the regulation. Thus the regulations can be made to give effect from earlier dates also as may be specified in the regulations. We find no force in the contention of learned counsel for the employees that they had vested right in this regard and the same could not have been taken away by making regulations with retrospective effect. There cannot be any vested right in such a matter. As already mentioned above it was a right conferred under Regulation 55(2)(a) and the same can be amended with retrospective effect also in case the authority competent to make regula tions has been given a right to make regulations with retro spective effect. It has been held in State of Jammu & Kash mir vs Triloki Nath Khosa & Ors., S.C.R. 1974 Vol. 1771 that it is well settled that a Government servant acquires a 'status ' on appointment to his office and as a result his rights and obligations are liable to be determined under statutory or constitutional authority which for its exercise requires no reciprocal consent. In Bishun Narain Misra vs The State of Uttar Pradesh and Others, AIR 1965 Vol. 52 SC 1567 it was held that new rule reducing the age of retire ment from 55 years to 53 years could not be said to be retrospective. The proviso to the new rule and the second notification were only methods to tide over the difficult situation which would arise in the public service if the new rule was applied at once and also to meet any financial objection arising out of the enforcement of the new rule. The new rule therefore, could not be struck down on the ground that it was retrospective in operation. In Roshan Lal Tandon vs Union of India & Anr., and Kunj Behari vs Union of India & Ors., AIR 1967 SC Vol. 541889 it was held that the legal position of Government servant is more one of status than of contract. The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties. Emolu ment of the Government servant and his terms of service are governed by statute or statutory rules which may be unilat erally altered by he Government without the consent of the employee. It was further held in the above case that the petitioner had no vested contractual right in regard to the terms of his service and that the same can be altered uni laterally. We may further add that the prohibition if any to alter the terms and conditions can be found only under the Constitution of India and in case power of the rule or law making authority is not circumscribed or limited by any constitutional 412 mandate then it has power to amend such terms and conditions of service unilaterally without the consent of the employee. In the cases in hand before us the right whatsoever con ferred on the employees of the State Bank was on the basis of Regulation 55(2)(a) and the Central Board of the Bank was authorised to amend such regulations from any date under Section 50(2)(a) of the Act. In the result the appeals filed by the State Bank of India in the case of Vijaya Kumar and T. Dayakar Rao are allowed, the impugned orders passed by the High Court are set aside and the cases are remanded to the High Court for deciding the writ petitions on other points in accordance with law. Now so far as the appeal filed by Sh. A.K. Sunda rarajan is concerned, the point decided by us shall remain concluded but the appellant would be free to raise other points before this Court which are left undetermined. This case may now be listed for further hearing and final dispos al at an early date. In the facts and circumstances of the case, the parties shall bear their own costs. Y. Lal C.A. No. 3392 & 3393 of 1990 allowed. C.A. No. 3394 of 1990 ordered to be listed for final heating.

A common question of law viz., whether an order of dismissal against an employee, could validly be passed by an authority lower than the appointing authority of the Bank, arises for determination in these three appeals, two by the State Bank of India and the third by an employee. Respondent, Vijaya Kumar in Civil Appeal 3392 of 1990, was appointed as Probationary Officer by an order of the Executive Committee of the Central Board of the State Bank of India. He was charge sheeted for gross irregularities and corrupt practices and was dismissed from service by an order passed by the Chief General Manager of the Bank, whereupon, he flied a writ petition before the Andhra Pradesh High Court, challenging the order of dismissal passed against him. A Division Bench of the High Court heard the writ petition, alongwith writ appeal No. 141 of 1986 (involving a similar point). The High Court allowed the writ petition. The State Bank being aggrieved by the said order has filed this appeal after obtaining special leave. T. Dayakar Rao, respondent in Civil Appeal No. 3393 of 1990 was appointed as a Clerk in the State Bank in October, 1962 and while he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period from 1.9.1979 to 14.6.80. He was dismissed under orders of the Chief General Manager being the disciplinary authority. Mr. Rao flied a writ petition in the High Court and the High Court allowed the writ petition following its decision in writ appeal No. 141 of 1986. Being aggrieved the State Bank has filed the instant appeal with special leave of the Court. Civil Appeal No. 3394 of 1990 has been filed ,by an employee A.K. 399 Soundararajan, who was appointed as Technical Officer by the Executive Committee of the Central Board of the Bank. It was specifically mentioned in the Order of appointment that Shri Soundararajan would be governed by the State Bank of India (Officers & Assistants) Service Rules. Shri Soundararajan was chargesheeted and dismissed under orders passed by the Chief General Manager Thereupon he filed a writ petition in the High Court challenging his order of dismissal. Learned Single Judge of the High Court allowed the writ petition. The Bank filed an appeal before the Division Bench. The Division Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 25.8.1988 made applicable with retrospective effect. Accord ingly the Division Bench allowed the appeal filed by the Bank, Aggrieved against this order. Shri Soundararajan has flied Civil Appeal 3394 of 1990 with special leave. The contention urged by the employees is that the Chief General Manager, being a lower authority than the Executive Committee, he had no competence to pass the order of dis missal whereas the Bank contends that the Chief General Manager had, by virtue of the amendment of Regulation 55(2)(a) made retrospectively, become the appointing author ity of employees in question and as such the orders of dismissal passed by him against the employees long after the amendment are valid. Allowing the appeals by the State Bank and remanding the two cases to the High Court and directing that the appeal by Soundararajan be listed for final hearing, this Court, HELD: The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties. Emolu ment of the Government servant and his terms of service are governed by statute or statutory rule which may be unilater ally altered by the Government without the consent of the employee. [411F G] Under Article 311(1) of the Constitution, the words used are "by which he was appointed" In regulation 55(2)(a) there are no such words "by which he was appointed" and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the ap pointing authority. [410A] Thus the right guaranteed in case of the officers or employees of the State Bank is that the order of dismissal cannot he passed by an 400 authority lower than the appointing authority. [410B] The right whatsoever conferred on the employees of the State Bank was on the basis of Regulation 55(2)(a) and the Central Board of the Bank was authorised to amend such regulations from any date under Section 50(2)(a) of the Act. This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has been designated as such at the time when such order is passed. [412B; 410H] State of Jammu & Kashmir vs Triloki Nath Khosa & Ors., ; ; Bishun Narain Misra vs The State of Uttar Pradesh & Ors., A.I.R. 1965 Vol. 52 S.C. 1567; Roshan Lal Tandon vs Union of India & Anr. and Kunj Behari vs Union of India & Ors., A.I.R. 1967 S.C. (Vol. 54) 1889, referred to.

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ivil Appeal No. 186 of 1976. Appeal by Certificate from the Judgment and Order dated 27.10.1975 of the Kerala High Court in O .P. No. 3743 of 1973. Ajit Pudussery and B .P. Singh for the Appellant. A.S. Nambiar, K.R. Nambiar, V.J. Francis and N.M. Popli for the Respondents. The Judgment of the Court was delivered by RAY, J. The appellant who is owner of land comprised in R.S. Nos. 44/11 and 44/20 in village Thottapuzhasseri in Alleppey District, assailed the validity of the declaration made under Section 6 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) made by the 2nd Respondent, Board of Revenue, Kerala State on 25.9.1973 and published in Kerala Gazette dated October 16, 1973 stating that the lands de scribed therein are needed for a public purpose namely for a playground for M.M.A. High School and directing the Revenue Divisional Officer, Changannur to order for acquisition of the same. The grounds on which the challenge was made in the writ petition inter alia were that the property in question was mortgaged with the Maramon Marthomite Church, as the Church refused to return the property on accepting the money, the appellant filed a suit for redemption of the mortgage which was ultimately decreed and appellant got 537 possession of the property on October 8, 1973. During the pendency of the suit the church authority moved the educa tional authorities as well as the Sub Collector for acquisi tion of the property for the school in order to wreak ven geance on the petitioner appellant. It has also been alleged that the purported proposal to acquire the said property was made mala fide. The land was situated about 3 furlongs away from the school and it was not convenient to be used as playground of the school, that there were more suitable land available for purpose of playground, that the land was required by the owner for purpose of constructing buildings for his sons. The appellant raised all those objections within the prescribed time on receiving notice under section 5 of the said Act. No notice was issued to the Education Department as required under Rule 5(b) & (c) of the Kerala Land Acquisition Rules and the objection made by the appel lant was decided by the respondents without hearing the Government Department or its representative. As such the impugned declaration is illegal and bad and the proceeding for acquisition is also illegal and unwarranted. The writ petition being O.P. No. 3743 of 1973 was dismissed by the High Court holding that there was no violation of the provi sions of Rule 5(b) & (c) of said Rules nor there was in fringement of Rule 6. The instant appeal is on a certificate granted by the High Court under Section 133(1) of the Constitution of India. The sole question that has been agitated before this Court by the learned counsel for the appellant is that provisions of Rule 5(b) & (c) of Kerala Land Acquisition Rules, 1963 are mandatory and the notice of the date of hearing of objection filed by a person interested in the land has to be given to the Departmental Officer requiring the land and failure to serve such notice will invalidate the declaration made under Section 6 of the Kerala Land Acquisition Act, 1961 in short the said Act. Several deci sions have been cited at the Bar in support of this conten tion. The provisions of Section 5 read with Rule 5(b) & (c) of the said Rule have not been complied with in hearing objections. The learned counsel for the respondent has, on other hand, submitted that the proposal for acquisition of the land in question for play ground of the said school was made at the instance of the Manager of the School, the 3rd re spondent. The said proposal was considered by the Education Department which certified that the acquisition was for a public purpose viz for playground of the said school and also that the school agreed to place the necessary funds for payment of compensation for acquisition of the said land. 538 The appellant on receiving the notice under Section 3 of the said Act filed an objection to the proposed acquisition of the said lands in accordance with the provision of Sec tion 5 of the said Act as well as under Rule 3 of the Land Acquisition Rules, 1963. The 1st respondent did not issue any notice of the objection filed by the appellant (peti tioner) to the Education Department as required under Sec tion 5 of the Act and Rule 5(b) & (c) and 6 of the Rules framed under the said Act though notice was issued to Re spondent No. 3, the Manager, M.M.A. High School, Maramon. The 1st respondent, Sub Collector (Land Acquisition Officer) after hearing the petitioner appellant and his lawyer as well as the representation of the 3rd respondent submitted a report to the respondent No. 2, Board of Revenue, Kerala State recommending for the acquisition of the said land for the purpose of playground for the said High School. The Board of Revenue, the respondent No. 2, after considering the report made a declaration under Section 6 of the said Act stating that the land specified in the notification under Section 3 of the Act is needed for a public purpose and the said declaration was published in the Kerala Gazette dated 16th October, 1973 and directed the Revenue Divisional Officer, Changannur to take order for acquisition of the lands. It is convenient to mention that the procedure for requisition for acquiring land has been laid down by the Government in the Land Acquisition Manual. Sub Clauses (a) & (b) of Clause (i) of Section 1 of Chapter 6 of the Manual is in these terms: "(i)(a) Application in all cases in which land is required by a department of Government other than the Revenue Depart ment should be sent by the Departmental Officer authorised in this behalf in the prescribed form (Form 2Appendix II) to the District Collector or to the Special Land Acquisition Officer, if any, appointed for the purpose. In the applica tion it should be specifically stated whether the sanction of the competent authority exists for the work for which the land is required and for the acquisition of the land and whether necessary funds have been provided in the budget for meeting the cost of acquisition. (b) Application from associations or private institutions other than educational institutions, should be sent in the prescribed form to the District Collector. When land is required by a private educational institution, the Manager of the institution should send an application in the pre scribed form to the District Educational Officer concerned 539 who will forward it to the District Collector with a certif icate from the departmental officer authorised in this be half, to the effect that the acquisition is necessary as the land is required for a public purpose and that the private educational agency has agreed to meet the expenditure It is evident from this procedure that in case of land being required by the private educational institution. the Manager of the institution shall send the application for acquisition of the land, The Education Department has to consider the application and to give a certificate to the effect that there was a public purpose for which the pro posed acquisition is asked for and the private educational institution is agreeable to meet the entire expenditure for acquisition of the said property. In the instant case Educa tion Department after considering the requisition made by the Manager of the said school certified about the public purpose for which the land in question is required to be acquired and also that the school authority is ready and willing to meet the entire costs of the acquisition. As has been stated hereinbefore that the appellant, the owner of the said plots of land submitted his objection to the appli cation for acquisition mainly on four grounds inter alia that the proposal for acquisition of the land has been made by the Manager of the said school malafide in as much as the said land was mortgaged previously with the Church authori ties and subsequently the mortgage was redeemed on the basis of a decree passed by the court in a suit and the said land was taken possession of by the applicant in execution of the said decree. Secondly, this land is situated about 3 furlongs away from the said school and so it is not conven ient to use the land for a play ground of the school, third ly, there are other lands available in the locality which can be conveniently used for this purpose, fourthly, it has been stated in the objection petition that the land in question remains submerged during certain part of the year and so the same is not convenient for the purpose of play ground of the school. The 3rd respondent on receiving notice of the objections appeared before the Sub Collector. Re spondent No. 1 and reiterated that the objections are all without any basis and the land was needed for the playground of ' the school and the said land is being used for this purpose for a period of about10 years. The respondent No. 1 after inspecting the site and after considering the objec tions and hearing the appellant and his lawyer submitted a report recommending for acquisition of the said land. It will be evident from the inquiry report made under Section 3 of the said Act that the lands is in possession of the School and it is being used as its playground for the last 10 years. The Management of the said School has no other alternative but to request 540 for acquisition of the said land for the above purpose. it is also staled in the report that the proposed land is at a distance of 3 furlongs and there is no other convenient and suitable land more nearer to the school. On considering this report the respondent No. 2, Board of Revenue made a declaration which has been notified in the Kerala Gazette on October 16, 1973 and directed proceeding for acquisition of the said land. It is, therefore, clear that the Manager of the school submitted a requisition to the Education Department for a certificate as to the public purpose for acquisition of the said land for play ground o[ the school and also to the effect that the school has agreed to meet the entire expend iture in due compliance with the procedure laid down in the Kerala Land Acquisition Manual. The Education Department made the necessary recommendations. The proposal tot the acquisition of the plot was made at the instance of the Manager of the said private educational institution the respondent No. 3 and not by the Education Department. Sec tion 5 enjoins that any person interested in any land which has been notified under sub clause 1 of Section 3 as being needed or likely to be needed for a public purpose may, within 30 days after publication of the notification, object to the acquisition of the land. It has been further provided therein that objections shall be made to the Collector in writing and the Collector on receiving the objections shall give the objector an opportunity of being heard either in person or by counsel and shall after hearing all such objec tions and after making such further enquiry, if any, as he thinks necessary either made a report in respect of the land which has been notified under Sub Section 1 of Section 3 or make different reports in respect of different parcels of such land to the Board of Revenue where the notification under Sub clause 1 of Section 3 has been made and published by the Collector. Rule 3 of the Kerala Land Acquisition Rules clearly states that after publication of the notifica tion under Section 3, the Collector shall issue a notice stating that the land is needed or is likely to be needed, as the case may be, for a public purpose and requiring all persons interested in the land to lodge before the Collector within 30 days after the issue of the notification, a state ment in writing of their objections, if any, to the proposed acquisition Rule 5(b) enjoins that after receiving the objections from a person interested in the land within prescribed time the Collector shall fix a date for hearing the objections and "give notice, thereof to the objector as well as to the departmental officer or company or the local 541 authority requiring the land, where such department is not the Revenue Department. On a perusal of this provision it is clear that notice of the date of hearing of the objections has to be served not only on the objector but also to the Departmental Offi cer or Company or the local authority requiring the land, that is, where the requisition for acquisition of the land is made by the Departmental Officer, the Departmental Offi cer who requires the land for acquisition has to be served with a notice of the date of hearing of objections. In the instant case the requisition was made not by the Education Department but by the Manager of M.M.A. High School, Mara mon. The Education Department merely certified about the requirement of the land in question for a public purpose i.e. for playground of the school and that the entire cost of the requisition is agreed to be borne by the school. The sole question agitated in regard to the validity of the declaration is that no notice of the date of hearing of objection has been served on the Education Department and as such the Education Department has no opportunity to consider the objections raised by the appellant and also to say whether the land in question was suitable for acquisition or whether other lands are available for this purpose for which the proposed acquisition is required to be made and non service of such a notice invalidates the declaration made under Section 6 of the Act by respondent No. 2. It is only the private school as well as the owner of the land who are required to be informed as to the date when the objections will be heard under Section 5 of the said Act and only they are to be heard. The High Court has rightly held that in the instant case there has been no violation of Rule 5(b) & (c) of the Rules. The High Court has further held that there has not been any infringement of Rule 6. It has also been held that it is inappropriate to issue notice to the Education Officer or Departmental Officer who certified about the public purpose as well as readiness of the School authority to pay the entire money for acquisition and failure to issue such a notice to the Departmental Officer would not amount to violation of the principles of natural justice and in fringement of the said Rule 5(b) & (c) of the said Rules. We have mentioned hereinbefore that the proposal for acquisi tion of the land was made by the Manager of the school for the purpose of playground of the school and the requisition was thus made at the instance of the school. The Education Department merely certified about the public purpose and also about the willingness on the part of the school author ity to bear the entire cost of acquisition. The land is not sought to be acquired at the instance of the Depart 542 mental Officer and as such it has been rightly found by the High Court that non service of notice of hearing of the date of objection on the Education Department does not per se infringe the provisions of Rule 5(b) & (c) of the Kerala Land Acquisition Rule, 1963. We do not find any flew in the judgment rendered by the High Court. Several decisions have been cited at the Bar to impress upon us the point that Rule 5 (b) & (c) read with Section 5 of the said Act are mandatory and non compliance therewith will render the declaration invalid and the entire acquisi tion proceedings on the basis of the said declaration will be illegal and unwarranted. In the case of Lonappan vs Sub Collector, Palghat, AIR 1959 Kerala, 343 one Appu moved the authorities of the Education Department to acquire 1.12 acres of land in R.S. No. 125/7 for the construction of a building and for a play ground and a garden for his school. On the recommendation of the Education Department the Gov ernment issued a notification under Section 4(1) of the Land Acquisition Act proposing to acquire an area 1.12 acres in the said survey for this school. Notice was issued to the appellant calling for appellant Lonappan, the owner of the land, for filing objections, if any, under Section 5 A of the Land Acquisition Act to the proposed acquisition and in that notice it was stated that the enquiry under Section 5 A would be held on 23.9. The Sub Collector after hearing the appellant and his objections overruled his objections and recommended acquisition. The appellant thereafter made application under Article 226 of the Constitution for a writ of certiorari and for other directions for quashing the proceedings and for granting other reliefs, on the ground that under Section 5 A the Sub Collector was bound by Rule 3 to give notice of those objections to the Education Depart ment at whose instance step for acquisition has been taken. It was held that the object of Rule 3(b) of the Rules made by the Madras Government under Section 55(1) of the Act for giving notice to the concerned department before hearing of objections filed under Section 5 A is not merely to give the department an opportunity to maintain or support its origi nal requisition but also to provide an opportunity for the original requisition being reviewed or reconsidered by the department in the light of the objections raised by the owner of the land and other persons interested in it. In State of Madras and Ors. vs Periakkal and Ors., AIR 1974 Madras 383 the land acquisition proceedings were start ed at the instance of the Harijan Welfare Department for the purpose of constructing houses for the Harijans. Notice of the date of hearing of the objections filed by the respond ent, owner of the land was not given to 543 the Harijans Welfare Department at whose instance the pro ceedings for acquisition were initiated under Rule 3(b) of the Rules made under Section 55(i) of the Land Acquisition Act. It was held that under Rule 3(b) it is incumbent on the Collector to give notice of objection to the department requiring the land and copies of the objections had to be given to such other departments. This is for enabling the department to file on or before the date fixed by the Col lector a statement by way of answer to the objections and also depute a representative to attend the enquiry. This has to be done in order to give an opportunity to the department requiring the land to traverse the objections, if any, filed by the person interested in the land, so that in the light of the reply of the department, a decision may be arrived at for the purpose of making the declaration under Section 6. It has been held that the Rule being not mandatory its effect is that in the absence of service of such notice acquisition proceedings are not invalidated. In State of Mysore & Ors. vs V.K. Kangan & Ors., ; at 371. The land was sought to be acquired for an Engineering College at the instance of the Education Depart ment of the State of Mysore, Section 4 notification was issued in the year 1960. After an enquiry into the objec tions filed under Section 5 A the Land Acquisition Officer sent his report to the Government. Government overruled the objections and issued a notification under Section 6. The Education Department at whose instance the land was sought to be acquired was not given notice as required by Rule 3(b) of Madras Land Acquisition Rules. The respondents filed a Writ Petition in the High Court challenging the validity of both the notifications on the ground that the Education Department was not consulted. The High Court upheld the contention of the respondents and quashed the notifications issued under Sections 4 and 6 of the Act on the ground that if the Department concerned filed any reply pursuant to the notice issued, the objector would know what the Department has stated by way of reply and at the stage of hearing of objections, the objector might adduce evidence or address arguments to meet what is stated in such reply. The objector could further urge before the Government that the reasons given by the department in reply to the objections should not be accepted. It was held that Section 5 A requires the Collector to make a report after hearing the objections. It does not mean that a rule cannot be framed which would enable the department concerned to place its view point before the Collector when considering the objection under Section 5A. The proceedings of the Collector are quasi judicial and it is only proper that he should be apprised of the attitude of the department requiring the land in the light of the objections filed. It would be 544 helpful to the Government in making the decision to have before it the answer to the objection by the department in order to appreciate the rival view points. Rule 3(b) is not ultra vires Section 5A. It has been held that Rule 3(b) was enacted for the purpose of enabling the Collector to have all the relevant materials before him for coming to a conclusion to be incor porated in the report to be sent to the Government in order to enable the Government to make proper decision. Rule 3(b) is mandatory and non service of the notice on the Government Department at whose instance the requisition for acquisition was initiated, the notification under Sec tion 6 becomes bad and as such the same was quashed. This decision is not applicable to the instant case for the simple reason that the requisition was not made at the instance of the Government Department but at the instance of the Manager, private school and the Education Department merely has given a note certifying that the purpose of the requisition is a public purpose and that the school agreed to bear the entire costs. In these circumstances it cannot be contended that the requisition has been made by the Education Department or by its officer for acquisition of the land in question. There fore, in our considered opinion the ruling cited above is not applicable to the instant case. In the premises aforesaid the only conclusion that follows is to dismiss the appeal. In the facts and circum stances of the case the parties will bear their own costs. Y. Lal Appeal dismissed.

The appellant owned land hearing R.S. Nos. 44/11 and 44/20 in village Thottapuzhasseri in Kerala State. Respond ent 3, M.M.A. High School moved an application under Sub clauses (a) and (b) of Clause (i) of Section 1 of Chapter 6 of the Land Acquisition Manual before the State 's Education Department praying that the aforesaid land be requisitioned for a public purpose for construction of a playground for the school. The State authorities after complying with the requirements of the Kerala Land Acquisition Act, 1961, issued a declaration under Section 6 of the Act stating the lands described therein were needed for a public purpose viz. construction of a playground for the school. The appel lant challenged the validity of the declaration by filing a writ petition before the High Court, contending, that (i) the proposal to acquire the property was mala fide; (ii) that the declaration was bad as no notice was issued to the Education Department as required by Rule 5(b) and (c) of the Kerala Land Acquisition Rules and (iii) that the appellant needed the property for construction of houses for his sons. The High Court dismissed the writ petition holding that there was no violation of the provisions of Rule 5(b) and (c) of the Rules nor was there any infringement of Rule 6. Hence this appeal by the appellant by certificate. Dismissing the appeal, this Court, HELD: The requisition in the instant case, was not made at the instance of the Government Department but at the instance of the Manager, private school and the Education Department merely has given a note certifying that the purpose of the requisition is a public purpose and that the school agreed to bear the entire costs. [544C D] It cannot therefore be contended that the requisition has been made by the Education Department or by its officer for acquisition of the land in question. [541C] 536 The High Court has rightly held that there has been no violation of Rule 5(b) and (c) or 6 of the Rules. [541F] That it is inappropriate to issue notice to the Education Officer or Departmental Officer who certified about the public purpose as well as readiness of the school authority to pay the entire money for acquisition and failure to issue such a notice to the Departmental Officer would not amount to violation of the principles of natural justice and in fringement of the said Rule 5(b) and (c) of the said Rules. [541 F G] Lonappan vs Sub Collector, Palghat, AIR 1959 Kerala 343; State of Madras and Ors. vs Periakkal and Ors., AIR 1974 Madras 383 and State of Mysore and Ors. vs V.K. Kangan and Ors., ; at 371, referred to.

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Appeal No.426 of 1957. Appeal from the judgment and order dated April 21, 1955, of the Orissa High Court at Cuttack in Special Jurisdiction Case No. 179 of 1951. A. N. Kripal, R. H. Dhebar and D. Gupta, for the appellant. A. V. Viswanatha Sastri, M. section K. Sastri and R. Jagannatha Rao, for the respondent. October 14. The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. This is an appeal against the judgment of the High Court of Orrissa in a reference under section 66(1) of the Indian Income tax Act, 1922, hereinafter referred to as the Act, and the point for decision is whether income received by the respondent by the sale of trees growing in his forests is agricultural income exempt from taxation under section 4(3)(viii) of the Act. The respondent is the proprietor of the impartable zamin of Jaipur in Koraput District. The estate is of the area of 12,000 sq. miles of which 1540 sq. miles are reserve forest and 100 sq. miles, protected forest. The respondent derives income from the forests by the sale of timber such as teak, salwood, lac, myrabolam, tamarind, cashewnuts and firewood. There is no 23 178 dispute either as to the receipt of such income or as to its quantum. All tat appears in the account books of the respondent. The point in controversy is as to whether this income is chargeable to tax. It is the contention of the respondent that this is agricultural income as defined ins. 2(1) of the Act, and that it is, in consequence, exempt under section 4(3)(viii). By his 31, 1943, the Income tax order dated January Officer held that the forests in question had not been proved to have been planted by the respondent, that the trees were of spontaneous growth, and that the income therefrom was not within the exemption under section 4(3)(viii); and this order was confirmed on appeal by the Appellate Assistant Commissioner. The respondent took the matter in further appeal to the Appellate Tribunal, and there put forward the contention that the Incometax Officer had failed to take into account a letter of the Dewan dated June 3, 1942, which gave a detailed account of the operations carried on by the estate in the rearing and maintenance of forests and that on the facts mentioned in that letter, his finding that there had been no plantation of trees was errolieous. By its order dated April 9, 1946, the Tribunal accepted this contention, and directed a fresh enquiry into the facts mentioned in the said letter. Pursuant to this order, the Income tax Officer again enquired into the matter. He observed that though he gave ample opportunities to the respondent to prove that there was plantation of trees by the estate, no materials were placed in proof of that fact and that neither plantation books nor any working plans for timber plantation had been produced. He accordingly held that the forests had grown naturally, and that the income therefrom was assessable to tax. On this report, the appeal again came up for hearing before the Tribunal. The main contention urged by the respondent at the hearing was that the facts showed that the forests which had yielded income during the year, ' of account could not have been the virgin forests which had originally grown spontaneously on the hills, because they had been periodically denuded by the hill tribes in the process of Podu cultivation carried on by 179 them. What this Podu cultivation means is thus stated in the ]District Gazetteer, Vishakapatnam, 1907: " This consists in felling a piece of jungle, burning the felled trees and undergrowth, sowing dry grain broadcast in the ashes (without any kind of tilling) for two years in succession, and then abandoning the plot for another elsewhere. " The argument of the respondent was that as a result of the Podu cultivation, the original forests should have disappeared and that the trees that had subsequently grown into forest and sold as timber must have been planted by human agency and their sale proceeds must accordingly be agricultural income. Dealing with this contention, the Tribunal observed that though there had been extensive destruction of forests in the process of Podu cultivation, nevertheless, considerable areas of virgin forests still survived, that the evidence of actual cultivation and plantation by the zamin authorities was meagre and unsubstantial, that no expenses were shown to have been incurred on this account prior to 1904, that the amount shown as spent during that year was negligible, that the trees planted then could not have been the trees sold as timber during the assessment years, and that the respondent bad failed to establish facts on which he could claim exemption. It should be mentioned that this order covered the assessments for five years from 1942 43 to 1946 47, the facts relating to the character of the income being the same for all the years. On the application of the respondent, the Tribunal referred the following question for the decision of the High Court : " Whether on the facts and in the circumstances the income derived from forest in this case is taxable under the Indian Income tax Act. " The reference was heard by Panigrahi, C. J., and Misra, J., who answered it in the negative. They observed : " It appears to us that the cases as set out by both parties have been put too high. The department takes the view that unless there is actual cultivation of the 180 soil the income from the forest trees cannot be regard. ,led as agricultural income. The fact that the assessee has spent some money and planted valuable trees in some areas is not sufficient to free the income out of the extensive forests which owe their existence to spontaneous growth, from its liability to taxation. The assessee on the other hand seeks to create an impression that there is not a single tree of spontaneous growth, in these forests, and such trees as now constitute forests have sprung up out of the stumps left by the hillmen as a result of the system of I Podu ' cultivation adopted by them. It appears to us that neither of these claims can be regarded as precise or correct." The learned Judges then observed that the forests in the Koraput area had been under Podu cultivation for a long period, and that as the result of that cultivation they had practically disappeared even by the year 1870, that the trees had subsequently grown into forests and they had also been destroyed by about the year 1901, and that therefore there could not have been any virgin forest left surviving. Then they referred to the fact that the respondent had been maintaining a large establishment for the preservation of the forests, and that there had been organised activities (1) " in fostering the growth of the trees and preserving them from destruction by man and cattle; (2) in cultivation of the soil by felling and burning trees from time to time; (3) in planned exploitation of trees by marking out the areas into blocks; (4) in systematic cutting down of trees of particular girth and at particular heights; (5) in planting new trees where patches occur; and (6) in watering, pruning, dibbling and digging operations carried on from time to time ". And they stated their conclusion thus: " All these and similar operations which have been undertaken by the assessee through his huge forest establishment, show that there has been both cultivation of the soil as well as application of human skill and labour, both upon the land and on the trees themselves. It cannot be assumed therefore that all the trees are of spontaneous growth. The indications, on 181 the other hand, appear to be that most of them are sprouts springing from burnt stumps. There is no basis for the assumption made by the Income tax Department that all the trees are forty years old and that they owe their existence to spontaneous growth. Apart from that it will be noticed that what distinguishes the present case from all the reported decisions is that practically the whole of the forest area has been subjected to process of 'Podu ' cultivation spreading over several decades so that it is impossible to say that there is any virgin forest left. The onus was certainly upon the department to prove that the income derived from the forest was chargeable, to tax and fell outside the scope of the exemption mentioned in Section 4(3)(viii). " In this view, they held that the Department had failed to establish that the income derived from the sale of trees was not agricultural income, and answered the reference in favour of the respondent. The learned Judges, however, granted a certificate to the appellant under section 66(A)(2) of the Act, and that is how the appeal comes before us. At the very outset, we should dissent from the view expressed by the learned Judges that the burden is on the Department to prove that the income sought to be taxed is not agricultural income. The law is well settled that it is for a person who claims exemption to establish it, and there is no reason why it should be otherwise when the exemption claimed is under the Income tax Act. The learned Judges were of the opinion that their conclusion followed on the principle of the law of Income tax that " where an exemption is conferred by a statute, the State must not get the tax either directly or indirectly ", and support for this view was sought in the following observations of Lord Somervell, L. J., in Australian Mutual Provident Society vs Inland Revenue Commissioners (1): " The rule must be construed together with the exempting provisions which, in our opinion, must be regarded as paramount. So far as the rule, if taken (I) 182 in isolation, would have the effect of indirectly depriving the company of any part of the benefit of the exemption, its operation must be cut down, so as to prevent any such result, and to allow the exemption to operate to its full extent. " These observations have, in our opinion, no bearing on the question of burden of proof. They merely lay down a rule of construction that in determining the scope of a rule, regard must be had to the exemptions engrafted thereon, and that the rule must be so construed as not to nullify those exemptions. No such question arises here. There is ample authority for the view that the principle that a person who claims the benefit of an exemption has to establish it, applies when the exemption claimed is under the provisions of the Income tax Act. Vide the observations of the Lord President and of Lord Adam in Maughan vs Free Church of Scotland (1) and the observations of Lord Hanworth, M. R., in Keren Kayemeth Le Jisroel Ltd. vs The Commissioners of Inland Revenue (2) at p. 36 that " the right to exemption under Section 37 must be established by those who seek it. The onus therefore lies upon the Appellants ", and of Lord Macmillian at p. 58 that, " In my opinion, the Appellants, have failed to bring it within any one of these categories and consequently have failed in what was essential for them to make out, namely, that this Company is a body of persons established for charitable purposes only. " The decisions of Indian Courts have likewise ruled and quite rightly that it is for those who seek exemption under section 4 of the Act to establish it. Vide Amritsar Produce Exchange Ltd. In re (3) and Sm. Charusila Dassi and others, In re (4). So far as exemption under section 4(3) (viii) is concerned, the matter is concluded by a decision of this Court given subsequent to the decision now under appeal. In Commissioner of Income tax vs Venkataswamy Naidu (5), this Court held, reversing the judgment of the High Court of Madras, that it (1) , 21 O. (2) (3) , 327. (4) , 370. (5) , 534. 183 was for the assessee to prove that the income sought to be taxed was agricultural income exempt from taxation under section 4(3)(viii). Bhacgwati, J., delivering the ' judgment of the Court observed: " . the High Court erroneously framed the question in the negative form and placed the burden on the Income tax Authorities of proving that the income from the sale of milk received by the assessee during the accounting year was not agricultural income. In order to claim an exemption from payment of incometax in respect of what the assessee considered agricultural income, the assessee had to put before the Income tax Authorities proper materials which would enable them to come to a conclusion that the income which was sought to be assessed was agricultural income. It was not for the Income tax Authorities to prove that it was not agricultural income. It was this wrong approach to the question which vitiated the judgment of the High Court and led it to an erroneous conclusion. " On the inerits, the question what is agricultural income within section 2(1) of the Act is the subject of a recent decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1). There, it was held that before an income could be held to be agricultural income, it must be shown to have been derived from land by agriculture or by one or the other of the operations described in cls. (i) and (ii) of section 2(1)(b) of the Act, that the term St agriculture " meant, in its ordinary sense, cultivation of the field, that in that sense it would connote such basic operations as tilling of the land, sowing of trees, plantation and the like, and that though subsequent operations such as weeding, pruning, watering, digging the soil around the growth and removing undergrowths could be regarded as agricultural operations when they are taken in conjunction with and as continuation of the basic operations mentioned before, they could not, apart from those operations, be regarded as bearing the character of agricultural operations. (1) ; , 155, 158, 160. 184 It is only " observed Bhagwati, J., delivering the judgment of the Court, " if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations. " " But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations. " Dealing with trees which grow wild, Bhagwati, J., observed : " It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income. There is no process of agriculture involved in the raising of these products from the land. " The law being thus settled, in order to decide whether the income received by the respondent by the sale of trees in his forests was agricultural income or not, the crucial question to be answered is, were those trees planted by the proprietors of the estate, or did they grow spontaneously ? If it is the latter, it would be wholly immaterial that the respondent has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees, because ex hypothes, he performed no basic operations for bringing the forests into being. Now, the Tribunal has clearly found that there were no plantations of trees by the estate authorities worth the name, and that the trees, the income from which is the subject matter of the assessments, must have been of sponta neous growth. That is a finding of fact which is binding on the Court in a reference under section 66(1) of the Act. The learned Judges declined to accept this finding, because they considered that the Tribunal had not appreciated the true significance of Podu cultivation. That, in our opinion, is a misdirection. If the point for decision had been whether the forest was a virgin forest or whether it had subsequently sprung up, the evidence relating to Podu cultivation would have 185 been very material. But the point for decision is not whether the forests were ancient and primeval, but whether they had been planted by the estate authorities, and on that, the Podu cultivation would have no bearing. As a result of the Podu cultivation, the original forests would have disappeared. But the question would still remain whether the forest which again sprang up was of spontaneous growth, or was the result of plantation. Now, there is no evidence that as and when the jungle had disappeared under Podu cultivation, the estate intervened and planted trees on the areas thus denuded. On the other hand, the learned Judges themselves found that after the destruction of the original forests in the process of Podu cultivation, there was a fresh growth of forests from the stumps of the trees which had been burnt. If that is the fact, then the new growth is also spontaneous and is not the result of any plantation. In fairness to the learned Judges, it must be observed that at the time when they heard the reference there was a conflict of judicial opinion on the question whether subsequent operations alone directed to the preservation and improvement of forests would be agricultural operations within section 2(1) of the Act; and the view they took was that such operations when conducted on a large scale as in the present case would be within section 2(1) of the Act. It was in that view that they observed that "it is therefore idle to regard tilling as the sole and indispensable test of agriculture ". The decision of the learned Judges was really based on the view that though trees in the forest had not been planted by the estate authorities, the latter had performed subequent operations of a substantial character for the maintenance and improvement of the forest, and that, in consequence, the income was agricultural income. This view is no longer tenable in view of the decision of this Court in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1). It is contended by Mr. Viswanatha Sastri for the (1) ; , 155, 158, 160. 24 186 respondent that on the facts established in the evidence, the proper conclusion to come to is that the trees sold by the respondent had been planted by the estate authorities, and that the decision of the High Court that the income thus realised is within the exemption under section 4(3)(viii) could be supported even on the view of law taken in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1). The argument was that there was unimpeachable evidence that the old forests had disappeared under Podu cultivation, that the estate had been regularly engaged in planting trees at least from the year 1904 as is shown by the accounts of the zamin, that it was a reasonable inference to make that there had been similar plantations even during the years prior to 1904 notwithstanding that no accounts were produced for those years, because it would not be reasonable to expect that such accounts would now be available, that though the amount shown as spent for plantation might not be considerable, that was understandable when regard is bad to the fact that the agricultural operations were conducted on the hills and not on the plains, that, on these facts, it would be proper to conclude that the forests were in their entirety the result of plantation. It would be ail erroneous approach, it was argued, to call upon the assessee to prove tree by tree that it was planted. Now, these are matters of appreciation of evidence on what is essentially a question of fact, viz., whether the trees were of spontaneous growth or were products of plantation. On this, the Tribunal has given a clear finding on a consideration of all the material evidence, and its finding is final and not open to challenge in a reference under section 66 (1) of the Act. Even the learned Judges of the High Court who considered themselves free to review that finding and, as already pointed out, without justification, could only observe that the trees must have mostly grown from the slumps left when the forests were burnt for purposes of Podu cultivations finding which is fatal to the contention now urged for the respondent that they (I) ; , 155, 158, 160. 187 were the result of plantation. We are of opinion that there are no grounds on which the finding of the Tribunal could be attacked in these proceedings. It remains to deal with one other contention urged on behalf of the respondent, and that is based on the fact that the amounts spent in the upkeep of the forrests were large in comparison with the receipts therefrom. The following are the figures relating to the forest receipts and expenses for the years with which the present assessments are concerned: Years Receipts Expenses 1942 43 Rs. 438,894 Rs. 174,437 1943 44 Rs. 407,447 Rs. 209,895 1944 45 Rs. 552,122 Rs. 228,830 1945 46 Rs. 372,971 Rs. 247,216 1946 47 Rs. 689,366 Rs. 460,369 The argument is that from the high proportion of the expenses in relation to the receipts it could be inferred that the income from trees planted by the estate formed a substantial portion of the income derived from the forests. And support for this conclusion is sought in the following observations in The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy (1): " The expenditure shown by the assessee for the maintenance of the forest is about Rs. 17,000 as against a total income of about Rs. 51,000. Having regard to the magnitude of this figure, we think that a substantial portion of the income must have been derived from trees planted by the proprietors themselves. " To appreciate the true import of these observations, we must have regard to the context in which they occur. The facts found in that case were that portions of the forest which was originally of spontaneous growth had gradually been denuded, that the propritor had planted trees in the areas so denuded, that this had gone on for a period of over 150 years, and that therefore " the whole of the income derived from (1) ; , 155, 158, 160. 188 the forest cannot be treated as non agricultural income ". It was then observed that " If the enquiry had been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of a spontaneous growth and how much to trees Planted by the proprietors ", but that, in view of the long lapse of time, it was not desirable to remand the case for enquiry into the matter. Then follow the observations on which the respondent relies, and when read in the light of the findings that the plantations made by the proprietors were not negligible, they mean nothing more than that out of the total income a substantial portion was likely to be agricultural income, and that it was therefore not a fit case for ordering fresh enquiry These observations do not lay down that if considerable amounts are expended in the maintenance of forests, then it must be held that the trees were planted by the proprietors. They only mean that if a considerable portion of the forests is found to have been planted, a substantial portion of the forest income may be taken to have been derived therefrom. And this too, it must be remarked, is only a presumption of fact, the strength of which must depend on all the facts found. In the face of the clear finding in the present case that the forests with which the assessment years are concerned were of spontaneous growth, the observations quoted above can be of no assistance to the respondent. It is scarcely necessary to add that the observations " If the enquiry bad been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of spontaneous growth and how much to trees planted by the proprietors " quoted above cannot be read, as was sought to be done for the respondent, as throwing on the Department the burden of showing that the income sought to be taxed was not agricultural income. That, in their context, is not the true meaning of the observations, and the law is as laid down in Commissioner of Income tax vs Venkataswamy Naidu (1) , 534. 189 In the result, this appeal is allowed, the order of the Court below is set aside and the reference is answered in the affirmative. The respondent will pay the costs of the appellant here and in the Court below. Appeal allowed.

The respondent, the proprietor of an estate, derived income from the sale of trees growing in his forests and claimed that it was agricultural income as defined in section 2(1) of the Indian Income tax Act, 1922, and that it was exempt from payment of income tax under section 4(3)(viii). The Appellate Tribunal found that the evidence to show that there was plantation by the estate authorities was meagre and unsubstantial, that the trees in question must have been of spontaneous growth and that the respondent had failed to establish facts on which he could claim exemption. On reference, the High Court took the view that though trees in the forest had not been planted by the estate authorities, the latter had performed subsequent operations of a substantial character for the maintenance and improvement of the forest, and that the income was, therefore, agricultural income. It also held that the onus was on the income tax authorities to prove that the income derived from the sale of trees was not agricultural income and that they had failed to show that the income fell outside the scope of the exemption mentioned in section 4(3)(viii) Of the Act. Held, that the High Court erred in placing the burden on the income tax authorities to prove that the income sought to be taxed was not agricultural income. The principle has been well established that where a person claims the benefit of an exemption under the provisions of the Act, he has to establish it. 177 Commissioner of Income tax vs Venkataswamy Naidu, [1956] 291.T.R. 529, followed. The question whether the trees were of spontaneous growth or were products of plantation was essentially a question of fact and the finding of the Tribunal on this point was binding on the High Court in a reference under section 66(1) of the Act. Held, further, that the income received by the respondent by the sale of trees in his forests was not agricultural income as the trees had not been planted by him, and that it was immaterial that he had maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees. The Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy; , , explained and followed.

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ffidavit and the addi tional affidavit before the High Court as well as this Court are filed by the Deputy Superintendent of Police who has no connection whatsoever with the passing of the order or dealing with or processing the file at any point of time. In fact, he could not have got any personal knowledge with the passing of the order of its subsequent proceeding since the order has been passed by the State Government and the subse quent proceedings have been dealt with by the officials of the Secretariat. It is, therefore, terribly shocking and surprising that a police officer who has no connection whatsoever with this detention order and who had not at any relevant time personally dealt with the case has come for ward to swear about the entire proceedings from the begin ning right up to the rejection of the representation includ ing the holding of the meeting of the Advisory Board on behalf of the appropriate authority. The affidavit filed by the Deputy Superintendent of Police is, therefore, not worth consideration. [841D F; 836F G] & CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 30 1 of 1990. From the Judgment and Order dated 15.1.1990 of the Rajasthan High Court in H.C.P. No. 2866 of 1989. Pallave Shishodia, Sandeep Mehta and D. Bhandari for the Appellant. Chandmal Lodha, S.C. Gupta (N.P.), M.N. Shroff, I. Makwana and Manoj Prasad for the Respondents. The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J. This appeal by grant of special leave is directed against the Order of the High Court of Rajasthan at Jodhpur in Habeas Corpus Petition No. 2866/1989 dismissing the Writ Petition filed by the detenu Gazi Khan @ Chotia. The order of detention dated 30.5. 1989 under challenge has been passed by the Administrative Secretary and Commis sioner, Home Department, State of Rajasthan in exercise of powers under Section 834 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substance Act, 1989 (for short 'the Act ') on reaching his subjective satisfaction that the detenu has been involved in illegal business of smuggled charas and heroin and other psychotropic substances. The relevant facts as set out in the grounds of deten tion giving rise to this appeal may be recapitulated as follows: The detenu Gazi Khan @ Chotia was actively involved in illegal and objectionable activities by organising a group of smugglers and financing them in the activities of smug gling without directly involving himself in such activities. However, the police of Jaisalmer has opened a history sheet showing the indirect involvement of the detenu in such smuggling activities. The modus operandi of the detenu is revealed in the statements recorded under Section 108 of the Customs Act from a number of smugglers who were apprehended in the course of smuggling. On 3.11. 1986 the detenu has himself given a statement before the Customs Officer admit ting his involvement in smuggling of readymade garments and bides. He was suspected in Offence No. 32 dated 30.3.1988 as well in Offence No. 17 dated 17.4.88 under the provisions of the Act as well under Section 25 of the Arms Act. But since no evidence was available incriminating the detenu with those offences no action could be taken. Further the detenu is said to have been involved along with his associates in certain criminal cases registered under the provisions of the Indian Penal Code. The detaining authority on the above materials placed before him has passed this impugned order. The High Court before which he challenged the impugned order of detention on various grounds has dismissed the Writ Petition holding that all the contentions did not merit consideration. Hence this appeal. The learned counsel appearing on behalf of the appel lant, raised several contentions, the main thrust of which being that the representation made by the detenu was not decided within. a reasonable time and hence the delay is fatal to the detention. This point has been taken even before the High Court. But the High Court accepting the explanation given by the Deputy Superintendent of Police, Jaisalmer in his additional affidavit filed on behalf of the respondents spumed that plea observing: "In the present case as from the facts mentioned in the additional affidavit and referred to above, it cannot be said that there was undue lethargy or indifference." 835 Under Ground No. (d) of paragraph 16 of the Special Leave Petition, a contention is raised with regard to the delay of disposal of the representation stating that "the extraordinary delay of 27 days in consideration of representation of the petitioner is sought to be explained by mere ipso dixit of the detaining authorities who merely rest content with the skeletal chronology of days taken allegedly by several authorities with copies of unexplained silence about why actually several days as alleged by au thorities were taken to process and consider the representa tion of petitioner. " Before this Court a reply is filed by the Deputy Super intendent of Police, Jaisalmer stating that he is "appointed as Officer Incharge in this case" and that he is replying to the allegations made in the Special Leave Petition with reference to the record connected with this case. In para graph 15(d) of his reply, it is averred that "there is no delay in the consideration of representation of the peti tioner. " The same Deputy Superintendent of Police in an additional affidavit filed before the High Court has sought to explain the delay stating that the representation of the detenu was placed before the Assistant Secretary on 19.6. 1989 with a proposal that a report might be called from the District Magistrate, Jaisalmer, who was the sponsoring authority, that the District Magistrate who received the communication on 22.6.1989 forwarded his comments to the State Government on 29.6.1989, that the comments were re ceived by the State Government on 1.7. 1989 and were placed for perusal of the Assistant Secretary on 3.7.1989 and that the Assistant Secretary after putting up a note incorporat ing the comments of the District Magistrate on the represen tation placed the same for perusal to the Deputy Secretary on 9.7.1989 and thereafter on the recommendation of the Special Secretary (Home) the representation was rejected on 11.7.1989. A perusal of the above additional affidavit shows that the Deputy Superintendent of Police speaks on behalf of the detaining authority, namely, the State Government as well the authorities who dealt with the representation, namely, the Assistant Secretary and the Special Secretary (Home Department). Finally, in regard to the delay in the disposal of the representation he states in para 7 of the said affi davit thus: " . . The delay has occasioned not by lack of deligence 836 or promptness on the part of the party concerned but due to unavoidable circumstances and for the reasons entirely beyond the control of the Detaining Authority. " In this connection, we would like to point out that the main reply and the additional affidavit before the High Court as well as the reply affidavit before this Court are filed only by the same Deputy Superintendent of Police on behalf of the Respondents 1 and 2. After the judgment was reserved, we after going through the papers directed the matter to be reported for further hearing. Accordingly the matter was listed on 17.4.1990 on which date we asked the learned counsel for the respondents to explain as to under what authority the Deputy Superin tendent of Police has arrogated himself to the knowledge of the entire file relating to the impugned order and speaks for the detaining authority and other authorities who subse quently dealt with the file. The learned counsel took an adjournment and has now filed an additional affidavit sworn by the Commissioner and Secretary (Home Department) dated 21.4.1990. In the present additional affidavit no explana tion is given to our query. The explanation given by the Secretary in his affidavit for the complaint of delayed disposal of the representation is as follows: "That there was no inordinate delay in considering the representation of the petitioner and the same was rejected after careful consideration. " We are terribly shocked and surprised to note that a police officer who seems to have no connection whatsoever with this detention order and who had not at any relevant time personally dealt with the case has come forward to swear about the entire proceedings from the beginning right up to the rejection of the representation including the holding of the meeting of the Advisory Board on behalf of the appropriate authority. This practice of allowing a police officer who has not dealt with the case at any point of time at any level and who in the very nature of the case could not have any personal knowledge of the proceedings, to swear the counter and reply affidavits on behalf of the appropriate authorities should be highly deprecated and condemned and the counter and reply affidavits sworn by such officer merit nothing but rejection. This Court on several occasions has expressed its views that in response to the Rule Nisi a counter affidavit should normally be filed 837 by the detaining authority himself though it cannot be suggested as a rigid or inflexible rule applicable in all cases of detention under all circumstances. However, when allegation of mala fide or abuse of powers or personal bias is attributed to the detaining authority, the said authority should himself swear to the counter affidavit. In the ab sence of any such allegation in the petition a counter affidavit may be sworn by a responsible officer who person ally dealt with or processed the case or by an officer duly authorised under the Rules of Business of the Government concerned. A Constitution Bench of this Court in the State of Bombay vs Purushottam Jog Naik, ; in which a similar question arose, the learned Judges answered as follows: " . . if the Home Secretary has the requisite means of knowledge, for example, if the Minister had told him that he was satisfied or he had indicated satisfaction by his con duct and act and the Home Secretary 's affidavit was regarded as sufficient in the particular case, then that would con stitute legally sufficient proof. But whether that would be enough in any given case, or whether the "best evidence rule" should be applied in strictness in that particular case, must necessarily depend upon its facts. In the present case, there was the element that 57 cases were dealt with in the course of 6 days and orders passed in all on one day. But we do not intend to enter into the merits. All we desire to say is that if the learned Judges of the High Court intended to lay down as a proposition of law that an affida vit from the Minister in charge of the department is indis pensable in all such cases, then they went too far." In Ranjit Dam vs State of West Bengal, 16 the counter affidavit was filed by the Assistant Secretary, Home (Special) Department, who was authorised to file it as the detaining authority had since then been appointed as Secretary of the State Electricity Board. This Court in that circumstance stated thus: "The reason given in this counter affidavit for the District Magistrate not making the affidavit himself does not appear to be satisfactory. But as nothing terms on that fact we need say no more about it for the present. " Sarkaria, J. in Shaik Hanif vs State of West Bengal, ; observed thus: 838 "Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective stand ards, it is all the more desirable that in response to the rule nisi the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the author ity on whose subjective satisfaction the detention order under Section 3_ .was passed. If for sufficient reason shown to the satisfaction of the Court, the affidavit of the person who passed the order of detention under Section 3 cannot be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with or processed the case in the Government Secretariat or submit ted it to the Minister or other officer duly authorised under the rules of business framed by the Governor under Article 166 of the Constitution to pass orders on behalf of the Government in such matters. " The learned Judge after referring to Ranjit Dam 's case (albeit) and to I.N. Roy vs State of West Bengal, stated as under: "Nevertheless, the failure to furnish the counter affidavit of the Magistrate who passed the order of detention, is an impropriety. In most cases, it may not be of much conse quence but in a few cases, for instance, where mala fides or extraneous considerations are attributed to the Magistrate or the detaining authority, it may, taken in conjunction with other circumstances, assume the shape of a serious infirmity, leading the Court to declare the detention ille gal. " 71 having regard to the facts of that case wherein the Deputy Secretary Home) filed the counter instead of District Magistrate it was held that he mere omission to file the affidavit by District Magistrate did not vitiate the deten tion order. Speaking for the Bench, Krishna Iyer, J. in Bhut Nath Mete vs State of West Bengal, 11974] 1 SCC 645 at page 658 (para 21) has expressed his considered view on this point as hereunder: "True, we should have expected an affidavit from the detain ing authority but even that is felt too inconvenient and a Deputy Secretary who merely peruses the records and swears an affidavit in every case is the poor proxy. Why 839 is an affidavit then needed at all? The fact of subjective satisfaction, solemnly reached, considering relevant and excluding irrelevant facts, sufficient in degree of danger and certainty to warrant pre emptive casting into prison, is best made out by the detaining District Magistrate, not one who professionally reads records and makes out a precis in the form of an affidavit. The purpose is missed, going by the seriousness of the matter, the proof is deficient, going by ordinary rules of evidence, and the Court is denied the benefit of the word of one who takes responsibility for the action, if action has to be taken against the detainer later for misuse. We are aware that in the exigencies of adminis tration, an officer may be held up far away, engrossed in other important work, thus being unavailable to swear an affidavit. The next best would then be the oath of one in the Secretariat who officially is cognisant of or has par ticipated in the process of approval by Government not one who, long later, reads old files and gives its gist to the Court. Mechanical means are easy but not legitimate. We emphasize this infirmity because routine summaries of files, marked as affidavits, appear in the returns to rules nisi, showing scant courtesy to the constitutional gravity of deprivation of civil liberty. In some cases, where a valid reason for the District Magistrate 's inability to swear affidavits directly has been furnished, this Court has accepted the concerned Deputy Secretary 's affidavit. This should, however, be the exception, not the rule. " Khanna, J. in Asgar Ali vs District Magistrate, Burdwan & Ors., while answering a contention that an affidavit by the detaining authority was essential for sustaining the validity of the detention order observed as follows: "Although normally the affidavit of the person actually making the detention order should be filed in a petition for a writ of habeas corpus, the absence of such an affidavit would not necessarily be fatal for the case of the respond ents. It would indeed depend upon the nature of allegations made by the detenu in the petition for determining whether the absence of affidavit of the person making the detention order introduces a fatal infirmity. In case an allegation is made that the officer making the detention order was actuat ed by some personal bias against the detenu in 840 making the detention order, the affidavit of the person making the detention order would be essential for repelling that allegation. Likewise, such an affidavit would have to be filed in case serious allegations are made in the peti tion showing that the order was mala fide or based upon some extraneous considerations. In the absence of any such alle gation in the petition, the fact that the affidavit filed on behalf of the respondents is not that of the District Magis trate but that of the Deputy Secretary, Home (Special) Department of the Government of West Bengal would not by itself justify the quashing of the detention order. " In Suru Mallick vs State of West Bengal, , this Court accepted the affidavit of the Deputy Secretary (Home) who dealt with the matter as the District Magistrate was not available and preoccupied with some urgent business. In Gulab Mehra vs State of U.P. & Ors., [ 1988] 1 SCR 126, a Station House Officer of Kydganj Police Station filed the counter stating that District Magistrate had passed the detention order when the appellant was already in jail on the apprehension that the appellant therein was likely to be released on bail in the near future. Ray, J. speaking for the Bench while setting aside the order of detention held thus: "This clearly goes to show that the Sub inspector has arro gated to himself the knowledge about the subjective satis faction of the District Magistrate on whom the power is conferred by the Act. The District Magistrate, the detaining authority in this case has not chosen to file his affidavit. The affidavit in opposition filed by the Station Officer of Police implies that he has access to the file of the Dis trict Magistrate or he influenced the decision of the Dis trict Magistrate for making the detention order. " Again in State of Gujarat vs Sunil Fulchand Shah & Anr., ; , accepting a further affidavit of the Deputy Secretary (Home Department), this Court did not attach much importance to the fact that the affidavit was not filed by the detaining authority personally. However, the Court said: "It is true that in a case where a point as mentioned above arises the detaining authority should personally affirm on oath the stand taken on his behalf, but it cannot be sug gested as an inflexible rule applicable to all detention cases irrespective of the circumstances." 841 Recently in Madan Lal Anand vs Union of India, Dutt, J. speaking for the Bench pointed out: "There can be no doubt that a deponent who has no personal knowledge about any fact may, on the basis of some other facts, make his submissions to the court. We do not think that any importance should be attached to the said statement made by the deponent in the counter affidavit. " Thereafter the learned Judge has expressed his views that when there is an allegation of mala fide or bias made against the detaining authority, then the detaining authori ty should himself swear to the counter affidavit. Ultimately having regard to the allegation made therein and to the fact that the Under Secretary to the Government has filed the counter, the learned Judge pointed out: "Merely because the detaining authority has not sworn an affidavit, it will not in all circumstances be fatal to the sustenance of the order of detention." As we have pointed out supra the reply affidavit and the additional affidavit before the High Court as well as this Court are filed by the Deputy Superintendent of Police who does not seem to have any connection whatsoever with the passing of the order or dealing with or processing the file at any point of time. In fact, the Deputy Superintendent of Police could not have got any personal knowledge with the passing of the order or its subsequent proceeding since the impugned order has been passed by the State Government and the subsequent proceedings have been dealt with by the officials of the Secretariat. Reverting to the facts of the case there is no explanation for the delay from 3rd to 9th July 1989, i.e. for 7 days for the Assistant Secretary merely to put up a note on the basis of the comments of the District Magistrate. The present additional affidavit sworn to by the Commissioner and Secretary on 21.4.1990 also does not whisper any explanation as to why such a delay of 7 days had occurred at the hands of the Assistant Secretary. The learned counsel appearing for the appellant in support of his contention that the unexplained delay has vitiated the order has placed reliance on a decision of this Court in Rama Dhondu Borade vs V.K. Saraf, Commissioner of Police & Ors., to which decision one of us (Ratnavel Pandian, J.) was a party. In that decision 842 after referring to various decisions of this Court including Smt. Shalini Soni vs Union of India. [ ; the following proposition was laid down: "The detenu has an independent constitutional right to make his representation under Article 22(5) of the Constitution of India. Correspondingly, there is a constitutional mandate commanding the concerned authority to whom the detenu for wards this representation questioning the correctness of the detention order clamped upon him and requesting for his release, to consider the said representation within reasona ble dispatch and to dispose the same as expeditiously as possible. This constitutional requirement must be satisfied with respect but if this constitutional imperative is ob served in breach, it would amount to negation of the consti tutional obligation rendering breach would defeat the very concept of liberty the highly cherished right which is enshrined in Article 21 of the Constitution." However, in the same decision it has been pointed out that "what is reasonable dispatch depends on the facts and cir cumstances of each case and no hard and fast rule can be laid in that regard. " We have already expressed that the affidavit filed by the Deputy Superintendent of Police is not worth consideration and there is absolutely no explana tion for the delay caused at the hands of the Assistant Secretary. Therefore, for the reasons stated above, we set aside the impugned order of detention on the ground that there is a breach of constitutional obligation as enshrined under Article 22(5) of the Constitution of India. In the result, the appeal is allowed and the detenu is directed to be set at liberty forthwith. P.V. Appeal al lowed.

The appellant challenged before the High Court the order of detention passed against him under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psycho tropic Substances Act, 1989, on various grounds including delay in disposal of his representation. An affidavit was filed by a Deputy Superintendent of Police, on behalf of the respondents stating that the representation was placed before the Assistant Secretary on 19.6.1989, a report was called for from the District Magistrate, the comments, which were received by the State Government on 1.7.1989, were placed before the Assistant Secretary on 3.7.1989 who, in turn, submitted to the higher authorities with his note on 9.7.1989 and the representation was rejected on 11.7.1989. The High Court dismissed the Writ Petition holding that there was no undue lethargy or indifference. In the appeal, by special leave, on behalf of the dete nu, it was contended that the detenu 's representation was not decided within a reasonable time and hence the extraor dinary delay of 27 days was fatal to the detention. A reply was filed by the same Deputy Superintendent of Police, as Officer Incharge of the case, who filed the affidavit before the High Court, stating that there was no delay in the consideration of the representation. 832 Subsequently, on the direction of the Court, an addi tional affidavit sworn by the Commissioner and Secretary (Home Department) stating that there was no inordinate delay in considering the representation and it was rejected after careful consideration, was filed. Allowing the appeal, this Court, HELD: 1. There is no explanation for the delay from 3rd to 9th July, 1989 i.e. for 7 days, for the Assistant Secre tary to merely put up a note on the basis of comments of the District Magistrate. The additional affidavit sworn to by the Commissioner and Secretary does not whisper any explana tion as to why such a delay of 7 days had occurred at the hands of the Assistant Secretary. The order of detention is, therefore, a breach of constitutional obligation as en shrined under Article 22(5) of the Constitution of India. [841F G; 842F] Rama Dhondu Borade vs V.K. Saraf, Commissioner of Police Smt. Shalini Soni vs Union of India, ; , referred to. 2.1 A counter affidavit should normally be filed by the detaining authority himself, but this is not a rigid or inflexible rule and, in the absence of any allegations of mala fide or abuse of powers of personal bias attributed to the detaining authority, it may be sworn by a responsible officer who personally dealt with or processed the case or by an officer duly authorised under the Rules of Business of the Government concerned. However, the practice of allowing a police officer who has not dealt with the case any point of time at any level and who in the very nature of the case could not have any personal knowledge of the proceedings, to swear the counter and reply affidavits on behalf of the appropriate authorities should be highly deprecated and condemned and the counter and reply affidavits sworn by such officer merit nothing but rejection. [836H; 837A B; 836F G] The State of Bombay vs Purushottam Jog Naik, ; ; Ran]it Dam vs State of West Bengal, ; Shaik Hanifv. State of West Bengal; , ; J.N. Roy vs State of West Bengal, ; Bhut Nath Mete vs State of West Bengal, ; at page 658; Asgar Ali vs District Magistrate Burdwan & Ors., Suru Mallick vs State of West Bengal, [1975] 833 4 SCC 470; Gulab Mehra vs State of U.P. & Ors., [19881 ] SCR 126; State of Gujarat vs Sunil Fulchand Shah & Anr., ; and Madan Lal Anand vs Union of India, , referred to.

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vil Appeal No 10 (N) of 1981. From the Judgment and Order dated 22nd March, 1978 of the Karnataka High Court in Writ Appeal No. 520 of 1975. R.B. Datar, K.R. Nagaraja and R.S. Hegde for the Appellant. M. Veerappa for the Respondent. The Judgment of the Court was delivered by RAY, J. This appeal by special leave is against the judgment and order dated 22nd March, 1978 made in Writ Appeal No. 520 of 1975 dismissing the appeal and confirming the judgment and order made in Writ Petition No. 3073 of 1974 on 18.7.1985. The appellant who was a chartered accountant was ap pointed as a non official member of the Sales Tax Appellate Tribunal, in the State of Karnataka by an order (No. RD 80 SXE 1958) dated 16th July, 1958 for a period of two years from 17th July 1958 under subsection (2) of Section 4 of the Mysore Sales Tax Act, 1957 (Mysore Act No. 25 of 1957). By an order No. RD 17 SXT 58 dated 12th December, 1958 issued by the Government it has been mentioned that the appellant as member of Sales Tax Tribunal shall be eligible for Tra vells Allowance under the Mysore Civil Service (Classifica tion, Control and Appeals) Rules 1958 as a government serv ant in respect of tours undertaken by him in connection with his official duty on the basis of his salary Rs. 1,000 per month. Thereafter the appointment was continued from time to time, the last of the period during which the appointment was continued, was by a notification No. FD dated 8th November 1971 by which his period of service was extend ed for a period of two months with effect from 9.12.1971. This notification was issued in exercise of powers conferred by clause (b) of sub rule 1 of Rule 64 of the Mysore Sales Tax Rule, 1957. The respondent by a letter dated 8.2.1972 intimated him that he had been granted 52 days earned leave as terminal leave from 9th February, 1972. The appellant made representations to the respondent that he was entitled to superannuation pension, and same be granted to him. The Government turned down his request on the ground that he was not eligible for such pension. The appellant, then, moved a writ petition No. 3073 210 of 1974 before the High Court, Karnataka stating that he was granted leave on several occasions in accordance with the Mysore Civil Service Rules and the Accountant General had treated him as a gazetted officer in the service of the State Government and as such as a Government servant he may be granted superannuation pension under the Mysore Civil Service Rules. The learned Single Judge held that Rule 64 of the Karnataka Sales Tax Rules, 1957 was applicable to this case and under the said Rules he was not eligible to claim superannuation pension. It was further held that even under the Mysore Civil Service Rules he would not be entitled to claim such a pension. The writ petition was dismissed. The learned Judge, of course, held that the appellant would be entitled to gratuity in terms of Rule 64 and so directed the Government to examine the case of the appellant for grant of gratuity under the rule and pass appropriate orders in that regard expeditiously. The appellant feeling aggrieved preferred Writ Appeal No. 520 of 1975 which was dismissed by the High Court and the judgment pronounced in the writ petition was upheld. It is against this judgment and order, this appeal on special leave has been filed. The main plank of the argument of the counsel for the appellant is that the appellant as a member of the Sales Tax Tribunal was a government servant and as such like other government servants he is entitled to the grant of superan nuation pension in accordance with Mysore Civil Service Rules. Several Rules have been referred to in support of his submission that he was retired from service after reaching the age of superannuation. He further submitted that the appointment of appellant was not a contract appointment and so the Mysore Civil Service Rules are applicable to the appellant for payment of superannuation pension. It is not disputed that the appellant was appointed as a nonofficial member of the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of the Mysore Sales ' Tax Act, 1957. This is evident from the notification dated 16.7.1958 issued by the Government appointing the appellant as a member of Sales Tax Tribunal as well as from Order No. RD 17 SXT 58 dated 12th December 1958. The ap pointment was continued from time to time and the last extension was given by Order No. FD dated 8th November, 1971 made under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax 211 Rules, 1957. It is relevant to notice in this connection that Rules 63 and 64 were introduced by a notification No. FD dated 10/13th January, 1964. Sub rule (6) of Rule 64 is quoted below: "The non official member shall not be eligible for any pension, gratuity or other remuneration. " By further notification No. FD 614 dated 7th April, 1971, a new Sub rule (6) was substituted which was to the following effect: "(6) The non official member shall be eligible for gratuity equivalent to one month 's pay for each completed year of service including interruption or interruptions, if any, the total duration of which does not exceed 180 days but shall not be eligible for any pension or other remuneration . " Thus the appellant was appointed as a non official member in the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of Karnataka Sales Tax Act, 1957 and the last extension of the period of his service was given by Government under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957. The terms and condi tions of his service will be governed by the Mysore Sales Tax Rules and not by the provisions of Mysore Civil Services Rules and it cannot be contended by the appellant that Rule 64(6) of.the said Mysore Sales Tax Rule, 1957 was not ap plicable to him. So the appellant is not eligible for super annuation pension after his relinquishment of the post of non official member of Sales Tax Tribunal on expiry of the period of his service. It has been further urged that Rule 64(6) of Mysore Sales Tax Rules was inserted in 1964 and sub rule (6) of Rule 64 was substituted on 7th April, 1971. This rule not being in existence at the time the appellant was appointed as a member of the said Tribunal, the same cannot be made applicable to the appellant and thereby he could not be deprived of the benefit of superannuation pension as provid ed in Mysore Civil Service Rules. This contention is per se without any substance in as much as before the retirement of the appellant from service due to expiry of his period of service the said provisions of sub rule (6) of rule 64 of Mysore Sales Tax Rules was substituted in place of original sub rule 6 of Rule 64 and as such this rule applies to the appellant and he is not entitled to get any superannuation pension. The High Court has tightly held that according to Rule 64(6) the appellant could not claim pensionary benefit. 212 The appellant next submitted that he became a Government servant on being appointed as a non official member of the Sales Tax Appellate Tribunal and he was paid traveling allowance according to Mysore Civil Service Rules, 1957 and so he is entitled to pension as provided in the said Rules. As stated hereinbefore that the appellant was appointed as a Member of the said Tribunal by the respondent State under Section 4(2) of the Sales Tax Act and though initially appointed for a period of two years in 1958, his service was extended periodically till February, 1972 under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957 by the Government of Mysore. Therefore, the foremost question is whether in such circumstances the Mysore Civil Service Rules apply to him. It is apropos to refer in this connection sub rule (2) of Rule 2 of Mysore Civil Service Rules, which specially provided that the said Rules shall not apply to persons for whose appointment and other mat ters, special provisions are made by or under any law for the time being in force or in any contract in regard to the matters covered by such law or such contract. This Rule clearly says that in cases where special provisions have been made by or under any law for the time being in force, the Mysore Service Rules will not apply. In the instant case, Rule 64(6) of the Mysore Sales Tax Rules, 1957 clearly says that the non official member of the Sales Tax Tribunal will become ineligible for any pension, and as such provi sions relating to pension as provided in Mysore Civil Serv ice Rules, 1957 will not apply. Furthermore, Rule 283 of the said Rues states that a superannuation pension is granted to a Government Servant who is compelled by Rule to retire at a particular age. Rule 95 provides that the date of compulsory retirement of a Government servant is the date on which he attains the age of 55 years. It further provides that the Government servant may be retained upto 60 years of age with the sanction of Government. He must not be retained after the age of 60 years. There is no rule under which a non official member is to retire on attaining a particular age. The appellant was appointed as a member of the Tribunal for a period of two years initially and thereafter his tenure was extended periodically and he left the service as non official member of the Tribunal after he crossed the age of 61 years. There was no specific order that the appellant was due to retire at the age of 55 years. There is no rule for a non official member to retire at a particular age. Moreover by order No FD dated January 28, 1970 the Govern ment sanctioned certain terms and conditions of his appoint ment. the condition Nos. 2 and 5 are as hereunder: "(2) The terms of appointment shall be one year with effect from 9th December, 1969. 213 . . . . . (5) He is permitted to take up the audit of accounts of any person, institution, firm or body of persons without preju dice to his official duties as a Member of the Tribunal and the person, institution, firm or body of persons concerned is not and is not likely to be liable to Sales Tax, Agricul tural Income Tax or Entertainment Tax. " The appointment of the appellant is periodical and not upto a maximum age nor it is a whole time service but a part time one and the appellant was permitted to take up audit of any person, firm, institution etc. on certain restrictions. A Government servant has to render whole time service. Therefore, considering all these aspects it has been found by the High Court that the Mysore Civil Service Rules, 1957 do not apply to the appellant and as such he is not eligible for superannuation pension. We do not find any infirmity in the judgment of the High Court which is unex ceptionable We, therefore, uphold the judgment of the High Court, dismiss the appeal without any order as to costs. N.P.V. Appeal dismissed.

The appellant was appointed as a non official member of the State Sales Tax Appellate Tribunal for a period of two years from 17.7.1958, under sub section(2) of Section 4 of the Mysore Sales Tax Act, 1957. The appointment was extended from time to time and continued upto 8.2.1972. By a letter dated 8.2.1972, the respondent intimated the appellant that he had been granted 52 days Earned Leave as terminal leave from 9th February, 1972. The appellant represented for grant of superannuation pension. This was rejected by the Govern ment on the ground that he was not eligible for pension. The appellant 's writ petition was dismissed by a single Judge of the High Court who held that rule 64 of the Karna taka Sales Tax Rules, 1957 was applicable to him, and that he was not eligible to claim superannuation pension. This was upheld by the Division Bench. In the appeal before this Court, on behalf of the appellant it was contended that as a non official member of the Tribunal, he was a government servant, and as such, like other Government servants, he was entitled to grant of pension in accordance with Mysore Civil Service Rules, that he was retired from service after reaching the age of super annuation, that his appointment was not a contract appoint ment, that he was paid traveling allowance under the Mysore Civil Service Rules, and that Rule 64(6) of Mysore Sales Tax Rules inserted in 1964, and substituted in 1971, not being in existence at the time of his appointment, could not be made applicable to him as to deprive him of the benefit of superannuation pension as provided in the Mysore Civil Service Rules. 208 Dismissing the appeal, this Court, HELD: 1. The terms and conditions of service of the appellant who was appointed as a non official member in the Karnataka Sales Tax Appellate Tribunal under sub section (2) of Section 4 of Karnataka Sales Tax Act, 1957 and was given last extension of the period of service under clause (b) of sub rule (1) of Rule 64 of the Mysore Sales Tax Rules, 1957, will be governed by the Mysore Sales Tax Rules and not by the provisions of Mysore Civil Services Rules. Since sub rule (6) of rule 64 of Mysore Sales Tax Rules was substitut ed in place of original subrule (6) before the appellant retired from service on expiry of his period of service, this rule applies to him, and he is not entitled to get any superannuation pension. [211D E; G] 2.1 Sub rule (2) of Rule 2 of Mysore Civil Service Rules 1957, clearly says that in cases where special provisions have been made by or under any law for the time being in force, the Mysore Service Rules do not apply. Furthermore, Rule 283 of the said Rules states that a superannuation pension is granted to a Government Servant who is compelled by Rule to retire at a particular age. Rule 95 provides that the date of compulsory retirement of a Government servant is the date on which he attains the age of 55 years, and the Government servant may be retained upto 60 years of age with the sanction of Government, but not after the age of 60 years. [212C; E F] 2.2 Rule 64(6).of the Mysore Sales Tax Rules, 1957 clearly says that the non official member of the Sales Tax Tribunal will become ineligible for any pension. Hence,provisions relating to pension as provided in Mysore Civil Service Rules, 1957 will not apply to a non official member. [212D E] 2.3 In the instant case, the appellant was appointed as a member of the Tribunal for a period of two years initial ly, and thereafter his tenure was extended periodically and he left the service as non official member of the Tribunal after he crossed the age of 61 years. There was no specific order that the appellant was due to retire at the age of 55 years. There is no rule for a non official member to retire at a particular age. Moreover, the Government sanctioned certain terms and conditions of his appointment. It is periodical and not upto a maximum age, nor it is a whole time service but a part time one and the appellant was permitted to take up audit of any person, firm, institution etc. on certain restrictions. A Government servant has to render whole time service. Therefore, the Mysore Civil Service Rules, 1957 do not apply to the 209 appellant, and he is not eligible for superannuation pen sion. [212F G; 213C D]

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ivil Appeal No. 2072 of 1990. From the Judgment and Order dated 13.5. 1986 of the Calcutta High Court in Suit No. 2479 of 1967. M.K. Banerjee, Subrat Rai Choudhary, Gopal Subramanium, N.P. Aggarwala, Anil Aggarwala, P.C. Sharma, L.P. Aggarwala, Ms. Indira Banerjee, R.N. Jhunjhunwala, Praveen Kumar, C.S. Vaidyanathan, P.R. Seetharaman, D.N. Mukherjee, Raj Kumr Gupta and P.C. Kapur for the appearing parties. The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. Leave granted. This appeal is directed against the order of the Divi sion Bench of the High Court of Calcutta. The appellant was transposed as the plaintiff in the Original Side suit No. 2479/67 in the High Court of Calcutta. The suit was filed for a declaration that the various properties set out in the Schedule belonged and still belong to the joint family consisting of the members mentioned in the plaint. Pending the suit an application was filed for appointment of a receiver for the various properties mentioned in Schedule 'A ' annexed to the petition, for injunction and for other reliefs. One Mr. S.C. Sen was appointed as Receiver. A declaration was also sought in the suit that the trust dated October 20th, 1948 created by late Gopi Krishna Khemka, father of the plaintiff, is void and for cancellation of the same. Premises No. 38, New Road, Alipore, building with open space was one of the properties belonging to the trust. Grindlays Bank Limited ( 'Grindlays ' for short), respondent No. 1 herein was the original tenant and they were occupying four flats and they surrendered a portion of the tenancy namely two flats i.e. Flats Nos. 1 and 2 which came into effect from 1st 965 April, 1978. The receiver let out these two flats to M/s Tata Finlay Ltd. ( 'Tatas ' for short) with Effect from Febru ary 7, 1979 pursuant to a letter written by Tatas. Question ing the action of the receiver an application was filed in the High Court contending that the receiver had no authority to create any tenancy and that the receiver has virtually created two new tenancies terminating the original tenancy of Grindlays and it was contended before the learned Single Judge of the Calcutta High Court that neither Grindlays nor Tatas were entitled to occupy the premises and they are liable to be evicted summarily. The learned Single Judge was not inclined to order summary eviction as prayed for but, however, observed that the respective contentions of the parties as to the validity of the tenancy created in favour of Tatas have not been finally decided by the High Court and that the parties are at liberty to agitate the same grounds in any action that they may be advised to proceed for evic tion of Tatas and Grindlays. As against the order of the learned Single Judge, an appeal was filed before a Division Bench. It was contended before the Division Bench that upon surrender of Flats Nos. 1 and 2 by the Grindlays a fresh tenancy was created by the receiver from 1st April, 1978 and the other tenancy in favour of Tatas is beyond the powers of the receiver and that the receiver had no authority to create any tenancy either in favour of Grindlays or Tatas. Various contentions were raised before the Division Bench and ultimately the Division Bench having considered the several submissions passed an order, the operative portion of which reads as follows: "Therefore, the petitioner is entitled to get a decree for possession on any ground mentioned in Section 13(1) of the said Act and such relief can be obtained in a suit which cannot be filed in this court inasmuch as the premises in question is situated outside the original side jurisdiction of this Court. " More or less the same contentions are advanced before us. Firstly it is submitted that the receiver had no right or authority to create any lease or tenancy in respect of the said flats for a term exceeding three years at a time and such creation of a tenancy should be deemed to be only for a period of three years ' terminable on the expiry of the said period. In this context a further submission is that upon surrender of Flat Nos. 1 and 2 by Grindlays a fresh tenancy was created by the receiver from 1st April, 1978 for which he had no authority. Therefore, the High Court ought to have ordered summary eviction of Tatas, and Grindlays. 966 It is not in dispute that the tenancy in respect of Flat Nos. 1 and 2 was surrendered by the Grindlays and from 1st April, 1978 Tatas was inducted as tenant in respect of the said two flats at a monthly rent of Rs. 1200 and service charge at the rate of Rs.600 per month and since then Tatas is a monthly tenant in respect of the said two flats. It is the case of the Tatas that the terms of the tenancy were reduced into writing as recorded in the letter dated 7th February, 1979 and the receiver adopted the same and did not raise any objection thereto, and it claimed to be still a monthly tenant and therefore, they are entitled to protec tion under West Bengal Premises Tenancy Act ( 'Act ' for short) and the appellant has no right to demand vacant possession of the said flats from the Tatas. The stand taken by the Grindlays is that the premises in question comprised of four flats and they took all the four flats for 10 years on lease from 1st June, 1958. After the expiry of the period of the said lease relationship between Grindlays and the Trust continued to be that of landlord and tenant governed by the Act, and that in 1977 they agreed to surrender Flat Nos. 1 and 2 by the letters dated 10th March, 1978 and 29th March, 1978 addressed to the receiver in favour of Tatas. However, at all material times they retained the tenancy in respect of Flat Nos. 3 and 4 and continued to be tenant in respect of those flats and they are also governed by the act. In the letters written it is also stated by the Grind lays that their continuation as tenant of flat Nos. 3 and 4 was acknowledged by the receiver by his letter dated 15th May, 1978. It is contended on behalf of the appellant that after the expiry of the lease the receiver had no power to grant a lease for a period exceeding three years without the leave of this Court as envisaged in Chapter 21 Rule 5(a) of the Original side Rules and that in the instant case without obtaining any such leave receiver 's granting monthly tenan cies is illegal. Reliance was also placed on the injunction order passed by Justice A.N. Sen sitting on original Side while appointing the receiver. The learned Judge passed an order restraining the tenants from selling or "transferring" any of the properties mentioned in Schedule 'A '. According to the appellants the transfer includes lease and therefore, the Receiver by creating a new lease i.e. tenancy has vio lated the injunction order and on that ground also the action of the receiver should be held to be illegal. First we shall dispose of this contention and then advert to the rest. Order 40 C.P.C. which provides for the appointment of Receivers empowers the court to confer upon the Receivers all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property. In Satyanarayan Banerji and Ors. vs Kalyani Prosad Singh Deo Bahadur and Ors., AIR 1945 calcutta 387, a Division Bench held that the object of appointment of 967 Receiver is not to divest the rightful owner of the title but only to protect the property and an appointment might operate to change possession but cannot affect the title to the property, which remains in those in whom it was vested when the appointment was made. In Ratnasami Pillai vs Sabap athy Pillai and Ors., AIR 1925 Madras 318, it is held that the Receiver has only such powers as expressly granted by the Court. Relying on these two decisions the learned counsel for the appellants submitted that in the instant case the Re ceiver has acted in such a manner affecting the title to the property and to the detriment of the interest of the right ful owner. Section 5 of the Transfer of Property Act defines the meaning of 'transfer of property ' and it is in the following terms: "In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to him self, or to himself and one or more other living persons and "to transfer property" is to perform such act. In this Section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. " In Mulla Transfer of Property Act, 7th Edition, page 48, there is a passage in this respect which reads thus: "The word "transfer" is defined with reference to the word "convey". This word in English Law in its narrower and more usual sense refers to the transfer of an estate in hand; but it is sometimes used in a much wider sense to include any form of an assurance inter vivos. The definition in Sec. 205(1)(ii) of the Law of Property is "conveyance includes a mortgage, charge, lease, assent, vesting declaration, vest . ing instrument, disclaimer, release of every other assurance of property or of any interest therein by any instrument except a will. " This is a special definition adopted for the purposes of the Law of Property Act, 1925. The word "con veys" in Sec. 5 of the Indian act is obviously used in the wider sense referred to above. Transferor must have an 968 interest in the property. He cannot serve himself from it and yet convey it. " The word 'transfer ' is defined with reference to word 'convey '. In Hari Mohan alias Hari Charan Pal vs Atal Krishna Bose and Ors., XXIII Vol. Indian Cases 925, a Division Bench of the Calcutta High Court held that "the term 'transfer ' as used in Section 11 or Section 88 of the Bengal Tenancy Act, includes a lease, as a lease is a transfer of an interest in immovable property". It is, therefore, clear that a lease comes within the meaning of the word 'transfer ' but in this case the matter does not stop there. According to the learned counsel for the respondents the receiver has not created any new tenancy and the continuation of Grindlays as tenants in respect of Flats Nos. 3 and 4 does not amount to a new lease and, therefore, there is no transfer. Conse quently there is no violation of the injunction order passed by Justice A.N. Sen. Learned counsel for the respondents. referred to various documents mostly in the form of letters between the receiver and the Grindlays. We have perused these letters. They go to show that the Grindlays surren dered those two flats with the consent of the receiver but the stand taken by them is. that their continuation as tenants of Flat Nos. 3 and 4 was acknowledged by the receiv er and the same cannot be treated as a new lease. One of the questions is whether mere surrender of Flats Nos. 1 and 2 affects the Grindlays ' tenancy of Flats Nos. 3 and 4. It is also contended by the learned counsel for the appellant that after the expiry of the stipulated period the tenancy in question turned to be a monthly tenancy and, therefore, the entire character of tenancy got changed. In Utility Articles Manufacturing Co. vs Raja Bahadur Motilal Bombay Mills Ltd., , a Division Bench consisting of Beaumont, C.J. and Kania, J. explaining the nature of the monthly tenancy observed in the following terms: "A characteristic of a periodical tenancy is that as each period commences, it is not a new tenancy, it is really an accretion to the old tenancy. A monthly tenancy, that is, a tenancy subject to a month 's notice, creates in the first instance a tenancy for two months certain. But as soon as the third month commences, that is not a new tenancy; it turns the original tenancy into a three months ' tenancy, and when the fourth month begins, the tenancy becomes a four months ' tenancy, and so on so long as the tenancy 969 continues, until that is to say, notice to quit is given. " Relying on the above passage the learned counsel contended that the monthly tenancy, therefore, is new tenancy. Even otherwise, according to the learned counsel the integrity of the tenancy is broken up and on that score also it is a new tenancy. Reliance is placed on Badri Narain Jha and Ors. vs Rarneshwar Dayal Singh and Ors. , ; it is ob served: "An interse partition of the mokarrari interest amongst the mokarraridars as alleged by the plaintiffs could not affect their liability qua the lessor for the payment of the whole rent, as several tenants of a tenancy in law constitute but a single tenant, and qua the landlord they constitute one person, each constituent part of which .possesses certain common rights in the whole and is liable to discharge common obligations in its entirety." In White vs Tyndall, 13 Appeal Cases 263 it is stated that the parties to whom a demise is made hold as tenants in common but what they covenant to pay is one rent, not two rents and not each to pay is one rent, not two rents and not each to pay half a rent but one rent. There is a privity of the estate between the tenant and the landlord in the whole of the leasehold and he is liable for all the covenants running with the land. According to the appellant, in the instant case, if this principle is followed, the break up of the tenancy affected the integrity of the tenancy inasmuch as by virtue of this break up two new tenancies have come into existence paying separate rents and, therefore, in that view also it is a new tenancy. Yet another submission of the appellant is that the act of the receiver in leasing out in favour of Grindlays and Tatas for a period of more than three years was bad in view of Chapter 21 Rule 5(a) of the Original Side Rules. Though this point appears to have been abandoned before the Division Bench yet it is also canvassed before us. Chapter 21 of the Calcutta High Court Original Side Rules deals with Receivers. Relevant part of the Rule 5 reads thus: "5. In every order directing the appointment of a Receiver of immovable property, there shall, unless otherwise or dered, be inserted the following directions: (a) that the Receiver shall have all the powers provided for 970 in Order XL, rule 1(d) of the Code, except that he shall not, without the leave of the Court (1) grant leases for a term exceeding three years. The submission is that the act of the Receiver in leasing out the flats in the above manner beyond three years is in violation of this Rule and in that view of the matter lease should be cancelled and the tenants should summarily be evicted. Learned counsel for the respondents, on the other hand, submitted that there was no new tenancy and surrender of flats Nos. 1 and 2 by the Grindlays and retaining two more flats does not amount to a new tenancy atleast so far as Grindlays is concerned and a reduction of rent also does not create new tenancy inasmuch as the rent that they had to pay was only for two flats in respect of each their tenancy continue. In Woodfall 's Law of Landlord and Tenant, 25th Edn. Page 969, paragraph 2079 reads as under: "2079. Implied surrender of part only. If a lessee for years accept a new lease by indenture of part of the lands, it is a surrender for that part only, and not for the whole (k); and though a contract for years cannot be so divided, as to be avoided for part of the years and to subsist for the residue, either by act of the party or act in law; yet the land itself may be divided, and the tenant may surrender one or two acres, either expressly or by act of law, and the lease for the residue will stand good and untouched. " In Halsbury 's Laws of England, 4th Edn. Volume 27, paragraph 449 read as under: "449. Surrender by change in nature of tenant 's occupation. A surrender is implied when the tenant remains in occupation of the premises in a capacity inconsistent with his being tenant, where, for instance, he becomes the landlord 's employee, or where the parties agree that the tenant is in future to occupy the premsises rent free for life as a licensee. An agreement by the tenant to purchase the rever sion does not of itself effect a surrender, as the purchase is conditional on a good title being made by the Landlord. " 971 In Foa 's General Law of Landlord and Tenant, 7th Edition by Judge Forbes, paragraph 991 reads thus: "991. Lease of part, & c It has been held that acceptance of a new lease of part only of the demised premises operates as a surrender of that part and no more (b); but any ar rangement between landlord and tenant which operates as a fresh demise will work a surrender of the old tenancy, and this may result from an agreement under which the tenant gives up part of the premises and pays a diminished rent for the remainder and it may result from the mere alteration in the amount of rent payable (c). Where one only of two or more lessees accepts a new lease, it is a surrender only of his share (d). " In Hill and Redman 's Law of Landlord and Tenant, 16th Edn. on page 45 1, it is observed: "Any arrangement between the landlord and tenant which operates as a fresh demise will work a surrender of the old tenancy; and this may result from an agreement under which the tenant gives up part of the premises and pays a dimin ished rent for the remainder, provided a substantial differ ence is thereby made in the conditions of the tenancy. But a surrender does not follow from a mere agreement made during the tenancy for the reduction or increase of rent, or other variation of its terms, unless there is some special reason to infer a new tenancy, where, for instance, the parties make the change in the rent in the belief that the old tenancy is at an end. " From the above passage it can be inferred that surrender of a part does not amount to implied surrender of the entire tenancy and the rest of the tenancy remains untouched. We shall now examine the cases cited. In Konijeti Venkayya and Another vs Thammana Peda Venkata Subbarao and Another, 19, Viswanatha Sastri, J. referred to the above mentioned passage from Woodfall 's Law of Landlord and Tenant and observed that the principle of law is stated correctly. It can therefore be seen that surrender of the part of the lease does not amount to surrender of the whole. In N.M. Ponniah Nadar vs 972 Smt. Kamalakshmi Ammal, AIR 1989 SC 467 it is held: "A mere increase or reduction of rent will not necessarily import a surrender of an existing lease and the grant of a new tenancy. So also if on account of the variation in the quantum of rent any consequential change is made regarding the time and manner of the payment of the rent it cannot have the effect of graver consequences being imported into the change of rent than what the parties had intended and warrant a finding by the Court, that the parties had intend ed to create a new tenancy in supersession of the earlier one or that by operation of law a new tenancy had come into existence. " From what has been considered above it emerges that surren der of part of the tenancy does not amount to implied sur render of the entire tenancy. Likewise the mere increase or reduction of rent also will not necessarily import a surren der of an existing lease and the creation of a new tenancy. We have noticed above that the transfer includes 'lease '. Therefore it becomes necessary at this stage to consider whether there has been violation of injunction granted by Justice A.N. Sen which formed part of the appointment order of the Receiver. So far as the Grindlays are concerned we are unable to accede to the contention that a new tenancy is created. It is true that Justice A.N. Sen issued an injunction restraining the defendants from selling or transferring any of the properties. There is some force in the submission of the learned counsel for the appellant that the lease in favour of Tatas amounts to transfer but the same cannot be said of Grindlays. Therefore the question of evicting them summarily on this ground does not arise. However, the sub mission of the learned counsel is that even the lease in favour of the Grindlays expired and by creating a monthly tenancy it may even go beyond three years, and therefore it is not only creating a new lease but also is in violation of Rule 5 of the Original Side Rules. We think we need not deal with this question elaborately in view of the main and important question regarding the applicability of the provi sions of the Act. However, we have already considered and held that no new tenancy is created so far Grindlays are concerned. Regarding the contention of infraction of Rule 5 it must be noted that the tenancy continued as monthly tenancy and it cannot be said that the Receiver has created tenancy for a period exceeding three years and as observed in Utility 's case it is an accretion to the old tenancy and not a new 973 tenancy. Merely because there is change in a tenancy namely that it has become a monthly tenancy, it does not amount to a new tenancy as contended by the appellant so far as Grind lays are concerned. It is also submitted on behalf of the Grindlays that no new lease has been created by the Receiver and they come within the meaning of 'tenants ' and therefore they cannot be evicted except as provided under the provisions of the Act. Section 2(h) of the Act reads thus: "tenant" means any person by whom or on whose account or behalf, the rent of any premises is, or but for a special contract would be, payable and includes any person continu ing in possesion after the termination of his tenancy or in the event of such person 's death, such of his heirs as were ordinarily residing with him at the time of his death but shall not include any person against whom any decree or order for eviction has been made by a Court of competent jurisdiction. " In Darnadilal and Others vs Parashram and Others, Section 2(i) of the Madhya Pradesh Accommoda tion Control Act, 1961 which is analogous to Section 2(h) of the Act has been considered and it is held: "Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject matter of the tenancy, and heritability is an inci dent of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must neces sarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation. " It is also further observed that: "The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him, thus putting him on par with a person whose contractual tenancy still subsists." In Biswabani (P) Ltd. vs Santosh Kumar Dutta and Ors. , ; it is observed that: 974 "If thus the appellant was already in possession as a tenant of the premises an unsuccessful attempt to create a fresh lease would not change the nature of his possession as from a tenant to one in part performance under a void lease. The appellant continues to be in possession as tenant merely because the appellant and respondents 1 and 2 attempted to enter into a fresh lease which did not become effective. " Their Lordships referred to a passage in Woodfall on 'Land lord and Tenant ' Vol. 1, 27th Edn. page 187 para 446 which reads thus: "Moreover, if the tenant enters into possession under a void lease, he thereupon becomes tenant from year to year upon the terms,of the writing, so far as they are applicable to and not inconsistent with a yearly tenancy. Such tenancy may be determined by the usual notice to quit at the end of the first or any subsequent year, and it will determine, without any notice to quit, at the end of the term mentioned in the writing. But if the lessee does not enter he will not be liable to an action for not taking possession; nor will an action lie against the lessor for not giving possession at the time appointed for the commencement of the term but before the lease is executed. " In an unreported judgment of the Calcutta High Court in Smt. Ashrafi Devi and Anr. vs Satyapal Gupta & Ors., Suit No. 966/58 dated 9th Sept., 1977 Justice Sabyasachi Mukharji, as he then was, dealt with the question of cancelling the tenancy of lease created in respect of a room and kitchen by the Official Receiver. In that case it was found that the Official Receiver violating the order of the injunction granted lease which the Court found it to be illegal. Then the learned Judge proceeded further to consider whether such an illegality can be rectified in the proceedings before the Court and it was held that "Therefore, by acting in viola tion of the order of the court, no right, in my opinion, can be created in favour of a third party. Indeed the court has not acted. The action was in breach of the order of the court. " The learned counsel for the appellant relied on this judgment in support of his submission that the lease in the instant case created by the Official Receiver is also ille gal. From the facts of that case we find a clear injunction order was passed specially restraining the Receiver from creating any new tenancy and in gross violation of that order. But, in the instant case, the facts are different. The injunction granted 975 by A .N. Sen, J. does not apply to the tenancy in favour of Grindlays in respect of flats Nos. 3 and 4 inasmuch as it is an old tenancy though in a modified form. In Ashrafi Devi 's, case as a matter of fact, the learned Judge observed: "There was no question of the lease being given without the power by the Receiver or in derogation or in violation of the order of the court. The lease within the competency of a Receiver cannot be impeached or affected in the summary manner as was contended. " We have already noted that the Grindlays were the tenants in respect of the four flats. They surrendered two flats. This partial surrender does not put an end to the tenancy and we are satisfied that in respect of the Grindlays no new tenan cy is created by the Receiver and they continued to be the tenant and they are entitled to the protection under the Act. Shri Vaidyanathan, learned counsel appearing for one of the respondents, relying on the Full Bench decision of the Madras High Court in Arumugha Gounder vs Ardhanari Mudaliar and Others, AIR 1975 Madras 23 1 contended that the protec tion under the Act cannot be extended to the tenant of a Receiver. In that case the tenant was let into possession of a land by Receiver appointed by the Court pending the suit. The question was whether the provisions of Tamil Nadu Culti vating Tenants Protection Act, 1955 can be extended to such a tenant. It was observed in para 6 that: "So then the act of the Receiver in letting out the land in the suit is an act of the Court itself and it is done on behalf of the Court, the whole purpose of the Court taking possession through the Receiver appointed by it is to pro tect the property for the benefit of the ultimate successful party. If that is the essence and purpose of appointment of a Receiver, as we hold it is, it will be difficult to agree that by a literal application of the Tamil Nadu Cultivating Tenants Protection Act, it could be put beyond the reach of the Court to give relief to the successful party entitled to possession." Before arriving at this conclusion, the Full Bench, as a matter of fact, also observed in para 3: 976 "If literal application of the Tamil Nadu Cultivating Ten ants Protection Act is made, it may prima facie appear that a tenant let into possession by a Receiver would be entitled to statutory protection under the Act. A cultivating tenant in relation to any land has been defined to mean a person who carries on personal cultivation on such land under a tenancy agreement, express, or implied. A "landlord" in relation to a holding or part thereof is defined to mean a person entitled to evict a cultivating tenant from such holding or part. A tenant let into possession by a Receiver appointed by Court literally appears to satisfy the defini tion of "cultivating tenant" and the Receiver, the defini tion of "Landlord" because the former carried on personal cultivating under a tenancy agreement. " The Full Bench however took the view that the Receiver appointed by the Court acts as an Officer of the Court and he cannot create a lease which takes the pending matter beyond the purview of the Court and anyone who gets posses sion through such an act could only do so subject to the directions and orders of the Court. In our view the princi ple laid down by the Full Bench does not apply to the facts in the instant case atleast to the case of Grindlays as in our view on new tenancy is created in their favour. Even by the time the Receiver was appointed the Grindlays were the tenants in respect of the four flats and they continued to be so. It is only later after due correspondence that they made a partial surrender and those two flats were let out to Tatas after due negotiations in respect of the rent. Grind lays ' affidavit shows that they have also sent rent by way of Bank pay orders and they have been received by the Land lord. It is only for the first time on 26.7.88 that the tenant was informed to stop the payment of rent. Further the receiver has not acted in any manner affecting the title. Now coming to the case of Tatas we agree with the High Court that it is a new tenancy. Such a lease comes within the meaning of 'transfer ' and in view of the injunction order passed by A.N. Sen, J. creation of such a new tenancy is legally barred. In Kerr on Receivers, 12th Edn. at p. 154 it is observed: "The receiver does not collect the rents and profits by virtue of any estate vested in him, but by virtue of his position as an officer of the Court appointed to collect property upon the title of the parties to the action. 977 In appointing a receiver the Court deals with the possession only until the right is determined, if the right be in dispute. " It is also useful to note a passage from Sir John Woodroffe book "on Receivers": "The Receiver being the officer of the Court from which he derives his appointment, his possession is exclusively the possession of the Court, the property being regarded as in the custody of the law, in gremio legis for the benefit of whoever may be ultimately determined to be entitled thereto." In Kanhaiyalal vs Dr. D.R. Banali, ; at p. 729 it was observed: "A receiver appointed under 0.40 of the Code of Civil Proce dure, unlike a receiver appointed under the insolvency Act, does not own the property or hold any interest therein by virtue of a title. He is only the agent of the Court for the safe custody and management of the property during the time that the Court exercises jurisdiction over the litigation in respect of the property." In such a situation the question is whether the Tatas can invoke the benefit of the provisions of the Act. In Smt. Ashrafi Devi 's case this is precisely the question that is decided, and we have already referred to some of the obser vations made therein. Justice Sabyasachi Mukharji held further: "On behalf of the transferee of the said property, it was contended that the West Bengal Tenancy Premises Act, 1956 protects such transferee. If however, a valid lease or a tenancy had been created then of course, such a lease or a tenant would be protected but that, in my opinion, begs the question. Secondly, it was contended that no party should be made to suffer because of an Act of the Court, I have not been able to appreciate this contention. The court specifi cally prevented the transfer or creation of the tenancy. The tenancy which is created was in derogation and in violation of the order of the court. Therefore, by acting in violation of the order of the court, no right, in my 978 opinion, can be created in favour of a third party. Indeed, the court has not acted. The action was in breach of the order of the court. " Similarly as observed in Arumugha Gounder 's case any such act of the Receiver done on behalf of the Court pen dente lite and anyone who gets possession through such an act could only do so subject to the directions and orders of the Court. If we apply the above principles to the case of Tatas the tenancy created in their favour by the Receiver is in violation and contrary to the injunction order and such an act is subject to the directions and orders of the Court appointing the Receiver. Therefore the tenancy created in favour of the Tatas was in breach of the order of the court and consequently the Tatas cannot claim any protection under the provisions of the Act and they are liable to be evicted. In the counter affidavit filed on their behalf, it is no doubt stated that they were inducted into possession and even sending the cheques. The case of the appellant is that cheques were never encashed. In any event as observed above, the new tenancy created in their favour contrary to the orders of the Court does not create a fight and is liable to be cancelled. Consequently the provisions of the Act cannot be invoked by them. The appeal is therefore dismissed as against respondent No. 1 Grindlays and allowed as against respondent No. 2 Tatas. In the circumstances of the case, parties are directed to bear their own costs. R.S.S. Appeal dis missed.

The appellant had filed a suit in the High Court of Calcutta for a declaration that the properties set out in the schedule belonged to a joint family and that the trust created by the father of the plaintiff/appellant in respect of the said properties was void. Pending the suit, a Receiv er was appointed by Justice A.N. Sen. While making the appointment the learned Judge had passed an order restrain ing the Receiver from selling or ' 'transferring ' ' any of the properties. The property in dispute is a building at Alipore, Calcutta, which comprised of four fiats. Grindlays Bank Ltd., respondent No. 1, had taken all the four flats on lease for 10 years from 1st June, 1958. After the expiry of the period of lease, Grindlays continued to be the tenant. On 1st April, 1978 Grindlays surrendered a portion of the tenancy, namely, two fiats i.e. fiats Nos. 1 and 2, in favour of Tatas. The Receiver let out these two fiats to M/s Tata Finlay Ltd. with effect from February 1979. Questioning the action of the Receiver, an application was filed in the High Court contending that the Receiver had no authority to create 962 any tenancy, that he had virtually created two new tenancies after terminating the original tenancy of Grindlays, and that neither Grindlays nor Tatas was entitled to occupy the premises and they were liable to be evicted summarily. The learned Single Judge was not inclined to order summary eviction as prayed for. An appeal was filed before the Division Bench. The Division Bench inter alia observed that any such relief could be obtained in a suit but the same could not be filed in the High Court inasmuch as the per mises in question was situated outside the Original Side Jurisdiction of the High Court. Before this Court it was contended on behalf of the appellant that (i) the Receiver had only such powers as were expressly granted by the Court; (ii) "transfer" included lease and therefore the Receiver by creating a new lease i.e. tenancy, had violated the injunction order passed by Justice A.N. Sen; (iii) after the expiry of the stipulated period of lease in favour of Grindlays, the tenancy turned to be a monthly tenancy and therefore the entire character of tenancy changed, and the monthly tenancy therefore was a new tenancy; (iv) protection under the West Bengal Premises Tenancy Act could not be extended to the tenant of a Receiv er; (v) the break up of the tenancy affected the integrity of the tenancy inasmuch as by virtue of this break up two new tenancies had come into existence; and (vi) the lease in favour of Grindlays had expired and by creating a monthly tenancy which may even go beyond three years, the Receiver had created a new lease in violation of Chapter 21 Rule 5(a) of the Original Side Rules. In reply, it was contended on behalf of Tatas that a monthly tenancy in respect of the said two flats had been created in their favour and therefore they were entitled to protection under the Tenancy Act. On behalf of Grindlays it was contended that after the expiry of the period of the original lease in 1968, rela tionship between Grindlays and the Trust continued to be of landlord and tenant; that at all material times they re tained the tenancy in respect of flats Nos. 3 and 4, and were governed by the Tenancy Act; that the surrender of flats Nos. 1 and 2 by the Grindlays and their continuation as tenants at reduced rent did not amount to a new lease in respect of flats Nos. 3 and 4, and hence there was no trans fer and no violation of the injunction. Dismissing the appeal as against respondent No. 1 and allowing it against respondent No. 2, this Court, HELD: (1) In the Transfer of Property Act, the word 'trans fer ' is 963 defined with reference to the word 'convey '. Similarly, the term 'transfer ' as used in Section 11 or Section 88 of the Bengal Tenancy Act, included a lease, as a lease is a trans fer of an interest in immovable property. A lease, there fore, comes within the meaning of the word 'transfer ' [968A B] Hari Mohan alias Hari Charan Pal vs Atal Krishana Bose & Ors., XXIII Vol. Indian Cases 925, referred to. (2) Surrender of part of the tenancy did not amount to implied surrender of the entire tenancy. Likewise the mere increase or reduction of rent also would not necessarily import a surrender of an existing lease and the creation of a new tenancy. [972C D] Konijeti Venkayya & Anr. vs Thammana Peda Venkata Subba rao & Anr. AIR 1957 A.P. 619 and N.M. Ponniah Nadar vs Smt. Kamalakshmi Ammal, AIR 1989 S.C. 467, referred to. (3) The Tenancy in favour of Grindlays continued as monthly tenancy for a period exceeding three years. It was an accretion to the old tenancy and not a new tenancy It could not therefore be said that the Receiver had created tenancy for a period exceeding three years in violation of Chapter 21 Rule 5(a) of the Original Side Rules. Merely because there was change in the character of a tenancy, namely that it had become a monthly tenancy, it did not amount to a new tenancy. [972G H] Utility Articles Manufacturing Co. vs Raja Bahadur Motilal Bombay Mills Ltd., , referred to. (4) A clear injuction order was passed by Justice A.N. Sen specifically restraining the Receiver from creating any new tenancy. But the injunction did not apply to the tenancy in favour of Grindlays in respect of fiats Nos. 3 and 4 inasmuch as it was an old tenancy though in a modification form. The Grindlays were therefore entitled to the protec tion under the provisions of the Tenancy Act. [974G H; 975A, C] Damadilal & Ors. vs Parshram & Ors., [1976] Supp. SCR 645 and Biswabani (P) Ltd. vs Santosh Kumar Dutta, ; , referred to. Ashrafi Devi & Anr. vs Satyapal Gupta & Ors., Suit No. 966 58 dated 9th Sept. 1977. Calcutta High Court and Armugha Gounder vs Ardhanari Mudaliar & Ors., , distinguished. 964 (5) In the case of Tatas, it was a new tenancy. Such a lease came within the meaning of 'transfer ' and in view of the injunction order passed by Justice A.N. Sen, creation of such a new tenancy was legally barred. Consequently the Tatas could not claim any protection under the provisions of the Act and were liable to be evicted. [978C] Kanhaiyalal vs Dr. D.R. Banaji, ; at p. 729; Smt. Ashrafi Devi & Anr. vs Satyapal Gupta & Ors., (supra) and Armugha Gounder vs Ardhanari Mudalier, (supra), referred to.

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ivil Appeal No. 4381 of 1990. From the Judgment and Order dated 23.8.1989 of the Bombay High Court in W.P. No. 494 of 1982. Ashok H. Desai, Solicitor General, Shishir Sharma and P.H. Parekh for the Appellant. Vinod Bobde, S.V. Deshpande and P.S. Sadavartey for the Respondents. The Judgment of the Court was delivered by SAWANT, J. Special leave granted. The appeal is set down for hearing by consent of both the parties. This appeal involves a question of interpretation of paragraphs 521(5)(e) and 521(10)(c) of the Award of the All India Industrial Tribunal (Bank Disputes) which is popularly known as the Shastri Award, (hereinafter referred to as the Award) and is important for the entire banking industry in the country covered by the Award. In order to appreciate the significance of the ques tion, it is necessary to narrate the facts leading to this appeal. The employee concerned was working as a clerk in the Gadchiroli branch of the appellant State Bank of India at the relevant time. A departmental inquiry was held against him for four acts of misconduct and the 16 inquiry officer came to the conclusion that two of the charges were fully proved while one charge was proved to a limited extent and the fourth charge was not established. On the basis of the report of the inquiry officer, the compe tent authority tentatively decided to dismiss the employee from service, and issued a notice to him under paragraph 52 1(10)(a) of the Award, to show cause as to why the said punishment should not be imposed on him. The competent authority also gave him a hearing as required by the said provision, and thereafter passed an order, the operative and relevant part of which is as follows: "Looking at the entire case I find that the established charges, viz., uttering indecent word, threatening the Agent and failure to do the work allotted are quite serious charges and would warrant dismissal. However, the employee has had the benefit of a very tenacious defence from the date of the issue of the show cause notice for dismissal and various arguments have been raised with a view to evade the punishment which would normally follow out of the serious ness of the offences. Taking note of them, even though I do not quite find them tenable, as indicated in my detailed observations thereon, and of the extenuating circumstances (most important of which is the comparatively young age of the employee) I have decided not to impose the punishment of dismissal. At the same time I am of the opinion that it would not be desirable to retain Shri Sadavarte in the Bank 's service and accordingly I order that he be discharged on payment of one month 's pay and allowances in lieu of notice. In terms of para 521(10)(c) of the Sastry Award, this would not amount to disciplinary action. An industrial dispute was raised by the first respondent Union, and in due course it was referred to the Central Govt. Labour Court, Bombay for adjudication. By its award of March 2, 1981, the Labour Court held that the order of dismissal of the petitioner was proper. Against the said decision, the respondent Union preferred a writ petition before the High Court raising several contentions. The High Court confined its decision only to one point, viz., whether the termination of the service was retrenchment, and if so, whether it was made in accordance with the provisions of Section 25F of the (hereinaf ter referred to as the Act). The Court held that the termi nation of the services was retrenchment and was made in breach of the said provisions in as much as no retrenchment 17 compensation was paid to the employee. The termination of the services was, therefore, set aside. It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpreta tion of the provisions of paragraphs 521(5)(e) and 52 1(10)(c) of the Award and ignoring their context. We may first refer to the provisions with regard to retrenchment under the Act. Section 2(00) of the Act defines retrenchment as follows: "Retrenchment" means the termination by the em ployer of the service of a workman for any reason whatsoev er, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or "Compensation in cases of retrenchment". As pointed out above, paragraph 521 is in Section 111 which contains the only other paragraph, namely, paragraph 520. That paragraph is a prologue to Section III and to paragraph 521, which both deal with procedure for taking disciplinary action. Para 520 reads as follows: "Under the subject of disciplinary action we deal with dismissal, suspension, warning or censure, fine, the making of adverse remarks and the stoppage of an increment. " It is, therefore, clear both from the heading of Section 111 as well as from the contents of para 520 that the provisions of para 521 deal with nothing but disciplinary action and tile procedure for taking such action. Paragraph 521 which is a self contained code of disciplinary action and of the procedure for taking it, begins with the following statement: "A person against whom disciplinary action is proposed or likely to be taken should, in the first in stance, be informed of the particulars of the charge against him; he should have a proper opportunity to give his expla nation as to such particulars. Final orders should be passed after due 18 consideration of all the relevant facts and circumstances. With this object in view we give the following directions: . . It classifies delinquencies into three categories, namely, (i) offences (ii) gross misconduct and (iii) minor miscon duct and prescribes procedure to deal with each of them. Sub paragraph (1) to (3) deal with the cases of of fences. Sub para (1) defines offence to mean any act involv ing moral turpitude and for which an employee is liable to conviction and sentence under the provisions of law. Sub para 2(a) states that when in the opinion of the management, the employee has committed an offence and he is not prose cuted by the prosecuting agency, the bank may take steps to prosecute him or get him prosecuted. The bank is also empow ered to suspend the employee in such circumstances. Sub paragraph 2(b) states that if the employee is convicted in such prosecution, he may either be dismissed or "be given any lesser form of punishment as mentioned in sub para 5 below". However, if he is acquitted with or without the benefit of doubt, sub para 2(c) lays down two different procedures to meet the two situations. It states that even if an employee is given a clean acquittal, it is open to the management to proceed against him under the provisions set out in sub paras (9) and (10) "relating to discharges". It may be mentioned here that the provisions with regard to the discharges in sub paras (9) and (10) referred to here, are contained only in sub para 10(c) and they come into play only when the management decides under sub para (9) to take a disciplinary action and the action is taken after the procedure for the same as laid down in sub para (10) is followed. But with that, we may deal with a little later. In cases of clean acquittal and a departmental inquiry held thereafter, the management is given yet another option. Instead of the discharge as provided under sub para 10(c), the management may only terminate the services of the em ployee with three months ' pay and allowances in lieu of notice, if it comes to the decision not to continue the employee in service. In such cases, he shall be deemed to have been on duty during the entire period of suspension, if any, and therefore shall be entitled to the full pay and allowances minus the subsistence allowances he had drawn and also to all other privileges for the period of suspension. Such simple termination of service is not provided for either in sub para (5) or in sub para (10). Thus it is obvious from sub paragraph 2(c) that when a departmental inquiry is held or 19 when disciplinary action is taken in case of a clean acquit tal. two options are given to the management, namely. (i) to discharge the employee under sub paragraph 10(c) with or without notice or on payment of only a month 's pay and allowances, in lieu of notice but without the benefit of the suspension being converted into a period of duty or (ii) to terminate the services with three months ' pay and allow ances, in lieu of notice and also with the further benefit of converting the period of suspension into a period of duty. However, when the acquittal is with the benefit of doubt and the management does not proceed to discharge the employee under sub para 10(c) but wants to resort to the second option of the termination of service with three months ' pay and allowances in lieu of notice, it is left to the discretion of the management to pay the employee such portion of the pay and allowances for the period of suspen sion as the management may deem proper, and unless the management so directs, the period of suspension is not to be treated as the period spent on duty. It should, however. be remembered that the course of action open to the management under sub paragraph 2(c) is in the alternative to and not in negation of the other modes of punishment, namely, to dis miss etc. the employee. What is, however, necessary to note is the distinction between an action of discharge following the disciplinary proceedings under sub paras (9) and (10) and that of simple termination of service under sub para 2(c). The same distinction is also maintained in sub para 2(d). Sub para (3) throws yet more light on the subject. It states that where an employee is guilty of an offence but he is not put on trial within a year of the commission of the offence, the management may deal with him as if he had committed an act of "gross misconduct", or "minor miscon duct" as the case may be. The employee may not be put on trial within an year, either because the prosecuting author ity refuses to do so, or because it comes to the conclusion that there is no case for prosecution. Hence although the management is empowered to proceed against the employee under the provisions set out in sub paras (9) and (lO) relating to discharge, he has to be given the benefit of being treated on duty for the period he was under suspension, if any, and he is entitled to all the further benefits accruing on that account. In the departmental inquiry following such non prosecution, the management may also come to the decision not to continue the employee in service. In that case instead of proceeding against him. under the provisions relating to discharge in sub paras (9) and (10), the management is empowered to terminate his services with three months ' pay and allowances in lieu of notice as provided in sub para 20 (2). Thus sub paragraph (3) like sub para (2) also makes a distinction between discharge under sub paragraph (10)(c) and a mere termination of service with three months ' pay and allowances, in lieu of notice. It is the latter action which amounts to the simple discharge and for it, a separate provision is made in paragraph 522 in Section IV. We will refer to that provision at a later stage. What is necessary, to bear in mind at this stage is the distinction made be tween the discharge under sub paragraph (10) and simple termination of service in sub paras 2(c), 2(d) and (3). Sub para (4) of paragraph 52 1 defines "gross miscon duct" and sub para (5) prescribes punishment for "gross misconduct". Sub para (6) defines "Minor misconduct" and sub para (7) prescribes punishment for such misconduct. Sub para (8) then states the manner in which the record is to be kept when action is taken under sub paras (3), (5) or (7) which deal with the punishment for "gross misconduct" or "minor misconduct" as the case may be. Sub para (5) as stated above, follows on the heels of the enumeration of gross misconducts in sub para (4), and reads as follows: "(5) An employee found guilty of gross misconduct may: (a) be dismissed without notice, or (b) be warned or censured, or have an adverse remark entered against him, or (c) be fined, or (d) have his increment stopped, or (e) have his misconduct condoned and be merely discharged". It should be clear from the context in which sub clause (e) of subparagraph (5) occurs that the entire expression, namely, "have his misconduct condoned and be merely dis charged" has nothing but penal implications, and the measure mentioned therein is a sequel to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4). It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole. The discharge spoken of there is nothing but a punishment for a gross miscon 21 duct. This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in para graph 522 of the Award, as pointed earlier, and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3). If it was intended to provide for a discharge simpliciter there, which was not meant to be penal, there was no need to enumerate it in sub para (5) which specifically enumerates punishments for acts of gross misconduct. Secondly, nothing prevented the authors of the Award in stating in the said sub clause (e) that the discharge simpliciter was in terms of paragraph 522. We have pointed out earlier the distinction made by the Award in sub paragraphs (2)(c), (2)(d) and (3) between the discharge following proceedings under paras (9) and (10) and the simple termination of service or discharge simpliciter as contemplated by paragraph 522. Sub paragraphs (9) and (10) of paragraphs 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action. Sub para (9) says that when it is decided to take a disciplinary action against an employee, such decision shall be communicated to him within three days thereof. Sub Para (10)(a) then lays down the procedure to be followed while conducting the disciplinary proceedings. It also enjoins upon the manage ment to give the employee a hearing with regard to the nature of the proposed punishment. The latter provision has also bearing on the construction of sub clause (c) thereof. We will advert to it instantly. Sub clause (b) of sub para (10) gives power to the management to suspend the employee pending inquiry. Its other provisions also throw light on the construction of sub clause (c) thereof. These provisions state that although the employee is suspended during the inquiry, if on the conclusion of the inquiry it is decided to take no action whatsoever against him, he shall be deemed to have been on duty throughout the period of suspension and would accord ingly, be entitled to the full wages and allowances and all other privileges for the said period. On the other hand "if some punishment other than dismissal" is inflicted, it is left to the discretion of the management to treat either the whole or a part of the period of suspension as on duty with the right to corresponding portion of the wages, allowances, etc. These provisions would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provi sions after inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the in quiry, as on duty. 22 Then follows the provision of sub clause (c) which is crucial for our purpose. The said sub clause reads as fol lows: "In awarding punishment by way of disciplinary action the authority concerned shall take into account the gravity of the misconduct, the previous record, if any, of the employee and any other aggravating or extenuating cir cumstances that may exist. Where sufficiently extenuating circumstances exist the misconduct may be condoned and in case such misconduct is of the "gross" type he may be merely discharged, with or without notice or on payment of a month 's pay and allowances, in lieu of notice. Such dis charge may also be given where the evidence is found to be insufficient to sustain the charge and where the bank does not, for some reason or other, think it expedient to retain the employee in question any longer in service. Discharge in such cases shall not be deemed to amount to disciplinary action. " In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the proposed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action". The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice. The punishment of discharge is to be awarded in two circumstances. The first circumstance is when there are sufficiently extenuating circumstances but the misconduct is of a "gross" type. In other words, where the misconduct is not of a "gross" type and there are exten uating circumstances, the misconduct may merely be condoned without the authority proceeding to inflict the punishment of discharge. That is made clear by stating thus "and in case such misconduct is of the gross type he may be merely discharged" etc. The second circumstance in which the au thority is given power to inflict such discharge is when the charge is such that the Bank does not for some reason or other think it expedient to retain the employee any longer in service but the evidence is insufficient to prove the charge. Read in the context, therefore, the discharge given under sub clause (c) can hardly be doubted as being a pun ishment. However, as was sought to be contended on behalf of the respondent Union and certainly with some force, the last sentence of the said clause is couched in 23 a language which is calculated to create considerable doubt and confusion with regard to the true nature of the action of discharge spoken of there. The said sentence states in so many words that the discharge effected under both the cir cumstances shall not be "deemed" to amount to "disciplinary action". Read in isolation, the said sentence does purport to convey that the discharge is not by way of a punishment and on that score we may not find any fault with the reason ing of the High Court. But as stated at the very outset, we have to read this sentence also in its proper context and in the light of the other provisions of the Award. As pointed out earlier, one of the two circumstances in which such discharge is to be effected is when the miscon duct is of a "gross" type and even if there are extenuating circumstances. It is to provide a punishment precisely for misconducts of gross type that a provision for such dis charge is made in sub clause (e) of sub para (5) to which we have already made a reference. Read with the said sub para (5)(e), the provision of the present sub clause (c) of sub para (10) becomes more clear. If a misconduct is not of a "gross" type, it may be merely condoned without any further action. But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the em ployee. The expressions used both in sub para 5(e) and sub para 10(c) in that respect are identical. Similar is the action contemplated for the second circumstances referred to in sub para 10(c), namely, when the charge though unsustain able for want of evidence is such that it is considered inexpedient to retain the employee in service. If our reading of the provisions is correct, then it needs no elaborate explanation as to why the punishment of discharge both in sub para 5(e) and 10(c) has been worded as it is and why further it became necessary to add the last sentence to sub para 10(c). Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge. This is for the benefit of the employee. It protects him from the baneful consequences of dismissal. At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so. Thus the provision of such discharge works to the advantage of both. At the same time, it cannot be gainsaid that the said dis charge is as a result of the disciplinary proceeding. Al though in form it may not, and for the reasons stated above in the peculiar circumstances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceed 24 ings. To make clear. however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence in question has been added by way of an abundant precaution. That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of paragraph 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself. Paragraph 522 as stated earlier is in section IV and is entitled "procedure for termination of employment" as dis tinct from the title of section III, namely, "procedure for taking disciplinary action" in which paragraph 521 occurs. Paragraph 522 begins by saying "We now proceed to the sub ject of termination of employment. We give the following directions: . . "Thereafter in sub paragraph (1) thereof, it speaks of a simple termination of service of a permanent employee and in sub paragraph (4), talks of simi lar discharge simpliciter of employees other than permanent employees. But what is important to note is that the dis charge simpliciter or simple termination of service which is provided for here, has two distinguishing features. Firstly, it is effected in cases not involving disciplinary action for mis conduct and secondly, it is to be effected by giving three months ' notice or of payment of three months ' pay and allowances in lieu of notice, in the case of permanent employees and by giving one month 's notice or on payment of one month 's pay and allowances, in lieu of notice in case of probationers. There is some apparent conflict in the provi sions of sub clause (1) and sub clause (4) with regard to the period of notice in case of an employee other than a permanent employee. It is, however, immaterial for our purpose. There are yet other conditions imposed by sub para (6) of paragraph 522 when the termination of the service of the employees is on account of the closing down of the establishment or when retrenchment of more than 5 employees is to be effected. But those conditions again do not oblit erate the distinction between discharge simpliciter or simple termination of service other than as a result of a disciplinary proceeding, and discharge effected under sub paras 5(e) and 10(c) as a result of such proceedings. As stated earlier, the termination of employment other than discharge provided for in sub paras 2(c), 2(d) and 3 of paragraph 521 also requires three months ' pay and allow ances, in lieu of notice as do the provisions of paragraph 522(1). But unlike the provisions of paragraph 522(1) which require three months ' notice or payment of three months ' pay and allowances only in case of permanent employees and one month 's notice or one month 's pay and allowances, in lieu of notice in case of employees other than per 25 manent employees, the relevant provisions of paragraphs 521(2)(c) and 521(3) require, a notice of three months ' or pay and allowances for three months ' in lieu of notice, in respect of all employees. Further, what is equally important to note is that whereas para 522(1) and 521(2)(c) and (3) relating to simple termination of service, require the requisite notice to be given or the payment of salary allow ances in lieu thereof. the provisions of discharge contained in the sub paras (2)(c) and (3) and (10)(c) of para 521 do not in all cases require notice or pay and allowances, in lieu of notice. The discharge may also be affected under the said provisions without any notice or pay and allowances in lieu of it. Thus the distinction between the discharge contemplated under paragraph 521(10)(c) and discharge sim pliciter or simple termination of employment under the other provisions is clear enough. This will also show that the two belong to different categories and are not the same. While the former is intended to be punitive. the latter is not. As is further clear from the provisions of paragraphs 521(2)(c). (2)(d) and (3). the discharge contemplated there. as against simple termination. is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge". In other words. it is as a result of a disciplinary proceed ing. 12. Apart from it, we find that to construe the dis charge under 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disciplinary proceedings will deprive an employee of a valuable advantage. viz. that of challenging the legality and propriety of the disciplinary action taken against him. whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc. It is not. therefore. in the inter ests of the employees to construe the provisions as the High Court has done. The predominant object of the Award is to protect the interests of the employees. It is for all these reasons that we are unable to accept the very able arguments advanced by Mr. Bobde on behalf of the respondent Union to support the reasoning of the High Court. The result to our aforesaid discussion is that the termination of service of the employee in the present case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings and is punitive. It is, there fore. not "retrenchment" within the meaning of Section 2(00) of the Act. Hence, there was no question of complying with the provisions of Section 25F of the Act. The decision 26 of the High Court has. therefore to be set aside. In view of the interpretation placed by us on the provisions of paragraph 521(5)(e) and 521(10)(c), there is a queer situation in which both the appellant Bank and the respondent Union would find themselves. The Bank has been supporting the interpretation which we have placed and the respondent Union has been opposing it. but both not looking beyond their immediate interest involved in the present case, which is qua an individual employee. We are happy that the Bank has canvassed the view that it has done in this case. For that view is calculated to benefit the employees at large and in the long run though, it may be to its advan tage and to the disadvantage of the individual employee in this case. The respondent Union, however, by pressing the proposition to the contrary, was supporting a view which was not in the interests of the employee at all. Though, there fore, it may be a loser in the present case, it should thank itself that the interpretation is not in accordance with the submissions made on its behalf. This leaves us with the question of the relief to be granted in the present case. Shri Bobde. submitted that if we are not to accept the interpretation placed by the High Court on the provisions in question, we should remand the matter to the High Court for deciding the other contentions raised in the writ petition, since the court had not gone into the same and had allowed the petition only on the basis of its interpretation of the said provisions. We find that this course is not advisable in the present case for various reasons. The mis conducts complained of against the employee are of 1966. He was chargesheeted in January 1968 and re moved from service on April 9, 1970. The Court proceedings have been pending since then till today, i.e., for more than about 23 years now. In the meanwhile, we are informed that the appellant who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such. We, further, find that the mis conducts which are held proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award. The Labour Court is the final fact finding forum. Further. while setting aside the order of the Labour Court, the High Court has granted re instatement in service and back wages as follows: (i) 50 per cent of the back wages from 9.4.70 to 24.11.75, (which is the date of the reference for adjudication to the Labour Court) on the ground that the damages for the delay in making should be shared by both the parties equally, and (ii) full back wages 27 from 25.11.75 till 31.5.79 on the ground that though the employee started his practice as a lawyer in June 1978, he was not well settled in practice for the first year, and (iii) no back wages for the period from 1.6.79 till the date of his re instatement which is the date of the High Court 's judgment. i.e., August 23, 1989. Shri Desai. the learned Solicitor General appearing for the Bank wanted to produce before us a letter from the Maharashtra State Electricity Board to show that in fact the employee was in gainful employment with the said Board for about six years. Although we have not taken the said letter on record, there is no denial of such employment from the side of the employee. We are further informed that pursuant to the order of the High Court, the employee has already received an amount of Rs.93,000. The effect of our decision would be to set aside not only the order of re instatement but also of the back wages which would require the employee to refund the said amount of Rs.93,000. Of course, Shri Bobde stated that the employee was prepared to refund the said amount and to contest the petition on other grounds. At present. the employee is in his fifties. Taking into consid eration all the facts, we are of the view that it would serve the interests of justice if we set aside the order of the High Court and restore that of the Labour Court without requiring the employee to refund the amount which he has already received. The appeal is allowed. accordingly. There will be no order as to costs. N. V. K. Appeal allowed.

The appellant Bank instituted a departmental inquiry against one of its employees, a clerk in one of its branch es. The departmental inquiry was held for four acts of misconduct and the inquiry officer came to the conclusion that two of the charges were fully proved, while one charge was proved to a limited extent, and the fourth charge was not established. On the basis of the report of the inquiry officer, the competent authority decided to dismiss the employee from service, and issued a notice to him under paragraph 521(10)(a) of the Award of the All India Industri al Tribunal popularly known as the Shastri Award, requiring him to show cause as to why the said punishment should not be imposed on him. He was also given a hearing as required by the said provision, and thereafter an order was passed to the effect: that the established charges viz. uttering indecent words, threatening the agent, and failure to do the work allotted are quite serious and would warrant dismissal, though he may not be dismissed, in view of the extenuating circumstances, but that at the same time it would not be desirable to retain him in the Bank 's service, and that as such, "he be discharged on payment of one month 's pay and allowances in lieu of notice. In terms of para 521(10)(c) of the Shastri Award this would not amount to disciplinary action." An industrial dispute was raised by the first respond ent Uuion, and it was referred to the Central Government Labour Court, for adjudication and by its award the Labour Court upheld the order of dismissal. 12 The first respondent Union preferred a writ petition to the High Court and raised several contentions, but the High Court confined its decision only to one point, viz. whether the termination of the service was retrenchment, and whether it was made in accordance with the provisions of Section 25F of the ; held that the termina tion of the service of the second respondent was retrench ment within the meaning of section 2(00), and was made in breach of the statutory provision contained in Section 25F in as much as no retrenchment compensation was paid to the employee, and set aside, the order of termination of serv ice. In the appeal by the Bank to this Court, the question for consideration was: whether the order of termination of service served on the employee, amounts to punishment or not. Allowing the appeal, this Court, HELD: 1. It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpre tation of the provisions of paragraphs 521(5)(e) and 521(10)(c) of the Award and ignoring their context. [17B] 2. The termination of service of the employee in the instant case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings, and is punitive. It is, therefore, not "retrenchment" within the meaning of Section 2(00) of the . Hence, there was no question of complying with the provisions of Section 25F of the Act. The decision of the High Court has, therefore, to be set aside. [25G H; 26A] 3. It is clear from the context in which sub clause (e) of sub para (5) occurs that the entire expression, namely, "have his misconduct condoned and he merely discharged" has nothing but penal implications, and the measure mentioned therein is a sequal to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4). It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole. The discharge spoken of there is nothing but a punishment for a gross misconduct. This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in paragraph 522 of the Award. and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3). [20G H; 21A B] 13 4. Sub paras (9) and (10) of paragraph 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action. Sub paras (9), 10(a), 10(b) would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provisions after the inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the inquiry, as on duty. [21D & G H] 5. In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the pro posed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action". The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice. The punishment of discharge is to be awarded in two circumstances. The first circumstance is when there are sufficiently extenuating circumstances but the mis conduct is of a "gross" type. The second circum stance is when the charge is such that the Bank does not for some reason or other think it expedient to retain the em ployee any longer in service but the evidence is insuffi cient to prove the charge. [22D E] 6. Read with sub para (5)(e), the provisions of sub clause (c) of sub para (10) become more clear that if a mis conduct is not of a "gross" type, it may be merely condoned without any further action. But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the employee. The expressions used both in sub para (5)(e) and sub para 10(c) in that respect are identical. Similar is the action contemplated for the second circumstance referred to in sub para 10(c), namely when the charge though unsustainable for want of evidence is such that it is considered inexpedient to retain the employ ee in service. [23D E] 7. Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge. This is for the benefit of the employee. It protects him from the banefull consequences of dismissal. At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so. Thus the provision of such discharge works to the advantage of both. At the same time, it cannot be gainsaid that the said 14 discharge is as a result of the disciplinary proceeding. Although in form it may not, and in the peculiar circum stances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceedings. To make clear, however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence viz: "Discharge in such cases shall not be deemed to amount to disciplinary action", has been added by way of abundant precaution. [23F H; 24A] 8. That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of para 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself. The distinction between discharge contemplated under para graph 521(10)(c) and discharge simpliciter or simple termi nation of employment under the other provisions is clear enough. This will also show that the two belong to different categories and are not the same. While the former is intend ed to be punitive, the latter is not. As is further clear from the provisions of paragraphs 521(2)(c), (2)(d) and (3), the discharge contemplated there, as against simple termina tion, is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge". In other words, it is as a result of a disciplinary proceeding. [24B; 25C D] 9. To construe the discharge under paragraphs 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disci plinary proceedings will deprive an employee of a valuable advantage, viz. that of challenging the legality and propri ety of the disciplinary action taken against him, whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc. It is not, therefore, in the interests of the employees to construe the provisions as the High Court has done. The predominant object of the Award is to protect the interests of the employees. [25E F] 10. Remanding the matter to the High Court for deciding the other contentions raised in the writ petition, is not advisable for various reasons. The misconducts complained of against the employee are of 1966. He was charge sheeted in January 1968 and removed from service on April 9, 1970. The Court proceedings have been pending for more than about 23 years. In the meanwhile, the respondent No. 2 who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such. Further, the mis conducts, which are held 15 proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award. The Labour Court is the final fact finding forum. The High Court while setting aside the order of the Labour Court has granted reinstatement in service and back wages and pursuant to the said order, the employee has already received an amount of Rs.93,000. The effect of decision would be to set aside not only the order of reinstatement but also of the back wages which would require the employee to refund the said amount. Even though the employee was prepared to refund the amount and to contest the petition on other grounds, at present, the employee is in his fifties. Taking into consideration all these facts the interests of justice would be served if the order of the High Court is set aside and the order of the Labour Court is restored without requiring the employee to refund the amount he has already received. [26E G; 27C E]

6553.txt

65 of 1958. Petition under Article 32 of the Constitution of India for enforcement of fundamental rights. AND CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 112 of 1958. 277 Appeal by special leave from the judgment and order dated February 28, 1958, of the Punjab High Court in Criminal Revision No. 145 of 1958. N. C. Chatterjee and Nanak Chand, for the petitioner and the appellant. H. N. Sanyal, Additional Solicitor General of India, H J. Umrigar, R. H. Dhebar and T. M. Sen, for the respondent in both the matters. November 4. The Judgment of Das, C. J., Bhagwati, Sinha and Wanchoo, JJ. was delivered by Sinha J., Subba Rao, J., delivered a separate judgment. SINHA, J. Petition Nos. 65 of 1958, under article 32 of the Constitution, on behalf of one Thomas Dana, and Criminal Appeal No. 112 of 1958, by special leave to appeal granted to one Leo Roy Frey (appellant), raise substantially the same question of some constitutional importance, and have, therefore, been heard together, and will be covered by this judgment. The main question for determination in these two cases, is whether there has been an infringement of the constitutional protection granted under article 20(2) of the Constitution. For the sake of brevity and convenience, we shall refer to Thomas Dana as the first petitioner, and Leo Roy Frey, as the second petitioner, in the course of this Judgment. The relevant facts are these : The first petitioner is a Cuban national. He came to India on a special Cuban passport No. 11822, dated November 16, 1954, issued by the Government of the Republic of Cuba. The second petitioner is a citizen of the United States of America, and holds a U.S.A. passport No. 45252, dated July 1, 1955. In May, 1957, both the petitioners were in Paris. There, the second petitioner purchased a motor car from an officer of the American Embassy. He is said to have sold that car to the first petitioner on May 14, 1957, and the same month, it was registered in the first petitioner 's name. The two petitioners sailed by the same steamer at the end of May. The car was also shipped by the same steamer. They reached Karachi on June 11, 1957, and from there, flew to Bombay. From June 11 to 19, 1957, they 278 stayed together in Hotel Ambassador in Bombay. The car was delivered to the first petitioner in Bombay on June 13, and on June 19, both of them flew from Bombay to Delhi. In Delhi also, they stayed together at Hotel Janpath. The first petitioner received the car at Delhi by rail on June 22, and the same night, the two petitioners left by the said car for Amritsar, where they reached after mid night, and stayed in Mrs. Bhandari 's Lodge. On the morning of June 23, they reached Attari Road Land Customs Station by the same car (No. CD On arrival at Attari, the petitioners presented themselves for completing customs formalities for crossing over to Pakistan. The Customs officers at Attari Road Land Customs Station, handed over to them the Baggage Declaration forms, to declare the articles that they had in their possession, including any goods which were subject to the Export Trade Control and/or Foreign Exchange Restrictions, and/or were dutiable. Both the petitioners completed the forms aforesaid, and handed those completed statements over to the Customs officers. The first petitioner declared the under noted articles: Indian currency Rs. 40 Pakistan currency Rs. 50 U. section Dollars $. 30.00 Gold ring I (valued at Rs. 100) Personal effects Valued at $ 100.00 Car Valued at Rs. 15,000 On suspicion, the Customs officers searched his baggage which was being carried in the car aforesaid. His person was also searched, and as a result of the search, the under noted articles which had not been declared by him, were recovered : Indian currency Rs. 900 Pakistan currency Rs. 250 U. section Dollars $ 1.00 Hong Kong Dollars $ 1100 Thailand currency 78 Pocket radio 1 Time piece 1 279 The second petitioner, in his statement, had declared the following articles: Indian currency Rs. 40 U. section Dollars $ 500.00 U. section Coins $ 1.23 Belgian coins BF 26.00 French coins BF 205.00 Italian coins L. 400.00 Wrist watch I Personal effects Rs. 1,00,000 On suspicion, the Customs staff searched the person of the second petitioner also. They recovered from him one pistol of 22 bore with 48 live cartridges of the same bore. As he could not produce a valid licence under the Indian law, the pistol and the cartridges were handed over to the police, for taking appropriate action under the Indian Arms Act. The car was thoroughly searched, and as a result of the intensive search and minute examination on June 30, 1957, a secret chamber above the petrol tank, behind the hind seat of the car, was discovered. The chamber was opened, and the following things which had not been declared by the petitioners, were recovered from inside the secret chamber: Indian currency Rs. 8,50,000 U. section Dollars $ 10,000.00 Empty tin containers 10(The containers bore (rectangular) marks to indicate that they were used for carrying gold bars) Mirror 1. besides other insignificant things. Under the Indian law, Indian currency over Rs. 50, Pakistan currency over Rs. 100 and any foreign currency, could not be exported out of India, without the permission of the Reserve Bank of India. The export of a pocket radio also required a valid licence under the Imports and Exports (Control) Act, 1947. The petitioners could not produce, on demand the requisite permission from the Reserve Bank of India. ' or the licence for the export of the pocket radio, or a permit for exporting 280 a time piece, as required by the . The car also was handed over to the police for necessary action. The offending articles, namely Indian currency Rs.8,50,900 Pakistan currency Rs.250 U. section Dollars $ 10,001.00 Hong Kong Dollar $.1.00 Thailand currency T.78.00 pocket radio, and the time piece, etc., were seized under section 178 of the . Both the petitioners were taken into custody for infringement of the law. On July 7, both the petitioners were called upon to show cause before the Collector of Central Excise and Land Customs, New Delhi, why a penalty should not be imposed upon them under section 167(8) of the , and why the seized articles aforesaid, should not be confiscated under section 167(8) and section 168 of the Act. Both the petitioners objected to making any statements in answer to the show cause notice, on the ground that the matter was. subjudice and any statement made by them, might prejudice them in their defence. But at the same time, the second petitioner disclaimed any connection with the car in which the two petitioners were travelling, and which had been seized. After some adjournments granted to the petitioners to avail themselves of the opportunity of showing cause, the Collector of Central Excise and Land Customs, New Delhi, passed orders on July 24, 1957. He came to the conclusion that the petitioners had planned to smuggle Indian and foreign currency out of India, in contravention of the law. They had been acting in concert with each other, and had, throughout the different stages of their journey from France to India, been acting together, and while leaving India for Pakistan, were travelling together by the same car, until they reached the Attari Road Land Customs Station, on their way to Pakistan. He directed that the different kinds of currency which had been seized, as aforesaid, from the possession of the petitioners, be " absolutely confiscated " for contravention of section 8(2) of the Foreign Exchange Regulation Act, 1947, read with sections 23 A 281 and 23 B of the Act. He also directed the confiscation of the car aforesaid, which could be redeemed on payment of a " redemption fine " of Rs. 50,000. He also ordered the confiscation of the pocket radio and the time piece and other articles seized, as aforesaid, under section 167(8) of the , read with section 5 of the Imports and Exports (Control) Act, 1947, and section 7 of the . He further imposed a personal penalty of Rs. 25,00,000 on each of the petitioners, under section 167(8) of the . After making further inquiry, on August 12, 1957, the Assistant Collector of Customs and Central Excise, Amritsar, under authority from the Chief Customs Officer, Delhi, filed a complaint against the petitioners and a third person, named Moshe Baruk of Bombay, (since acquitted), under section 23, read with section 8, of the Foreign Exchange Regulation Act, 1947, and section 167 (81) of the . The petition of complaint, after stating the facts stated above, charged the accused persons with offences of attempt ing to take out of India Indian and foreign currency, in contravention of the provisions of the Acts referred to above. After recording considerable oral and documentary evidence, the learned Additional District Magistrate, Amritsar, by his judgment dated November 13, 1957, convicted the petitioners, and sentenced them each to two years ' rigorous imprisonment under section 23, read with section 23 B, of the Foreign Exchange Regulation Act, six month 's rigorous imprisonment under section 120 B(2) of the Indian Penal Code, the sentences to run con currently. It is not necessary to set out the convictions and sentences in respect of the third accused Moshe, who was subsequently acquitted by the High Court of Punjab, in exercise of its revisional jurisdiction. The learned Magistrate also, perhaps, out of abundant caution, directed that " The entire amount of currency and foreign exchange and the car in which the currency had been smuggled as well as the sleeveless shirt exhibit P. 39 and belt exhibit P. 40 shall be 36 282 confiscated to Government ". This order of confiscation was passed by the criminal court, notwithstanding the fact, as already stated, that the Collector of Central Excise and Land Customs, New Delhi, had ordered the confiscation of the offending articles under section 167(8) of the and the other related Acts referred to above. On appeal by the convicted persons, the learned Additional Sessions Judge, Amritsar, by his judgment and order dated. December 13, 1957, dismissed the appeal after a very elaborate examination of the facts and circumstances brought out in the large volume of evidence adduced on behalf of the prosecution. It is riot necessary, for the purposes of these cases, to set out in detail the findings arrived at by the appellate court, or the evidence on which those conclusions were based. It is enough to state that both the courts of fact agreed in coming to the conclusion that the accused persons had entered into a conspiracy to smuggle contraband property out of this country. The petitioners moved the High Court of Judicature for the State of Punjab, separately, against their convictions and sentences passed by the courts below, as aforesaid. Both the revisional applications were dismissed summarily by the learned Chief Justice. By his order dated February 28, 1958, the learned Chief Justice refused to certify that the case was a fit one for appeal to this Court. The petitioners then moved this Court for, and obtained, special leave to appeal from the judgment and orders of the courts below, convicting and sentencing them, as stated above. They also moved this Court for writs of habeas corpus. The petition of the first petitioner for a writ of habeas carp= was admitted, and was numbered as petition No. 65 of 1958, and a rule issued. The writ petition on behalf of the second petitioner was dismissed in limited. All these orders were passed on April 28, 1958. Subsequently, the first petitioner moved this Court for revocation of the special leave granted to him, and for an early hearing of his writ petition No. 65 of 1958, as the points for consideration were common to both the cases. This 283 Court granted the prayers by its order dated May 13,1958. Before dealing with the arguments advanced on behalf of the petitioners, in order to complete the narrative of events leading up to the filing of the cases in this Court, it is necessary to state that the petitioners had moved this Court separately under article 32 of the Constitution, against their prosecution in the Magistrate 's court, after the aforesaid orders of confiscation and penalty, passed by the Collector of Customs. They prayed for a writ of certiorari and/or prohibition, and for quashing the proceedings. There was also a prayer for a writ in the nature of habeas corpus. On that occasion also, the protection afforded by article 20(2) of the Constitution, was pressed in aid of the petitioners ' writ applications. This Court, after hearing the parties, dismissed those writ petitions, holding that the charge against the petitioners included an offence under s.120B of the Indian Penal Code, which certainly was not one of the heads of charge against them before the Collector of Customs. This Court, therefore, without deciding the applicability of the provisions of article 20(2) of the Constitution, to the facts and circumstances of the present case, refused to quash the prosecution. The question whether article 20(2) of the Constitution, barred the pro secution of the petitioners under the provisions of the and the Foreign Exchange Regulation Act, was apparently left open for future determination, if and when the occasion arose. In view of the events that have happened since after the passing of the order of this Court, dated October 31, 1957, (reported in ; , it has now become necessary to determine that controversy. It was vehemently argued on behalf of the petitioners that the prosecution of the petitioners under the provisions of the Acts aforesaid, and their convictions and imposition of sentences by the courts below, infringe the protection against double jeopardy enshrined in article 20(2) of the Constitution, which is in these terms 284 " No person shall be prosecuted and punished, for the same offence more than once. " It is manifest that in order to bring the petitioners ' case within the prohibition of article 20(2), it must be shown that they had been " prosecuted " before the Collector of Customs, and " punished " by him for the " same offence " for which they have been convicted and punished as a result of the judgment and orders of the courts below, now impugned. If any one of these three essential conditions, is not fulfilled, that is to say, if it is not shown that the petitioners had been it prosecuted " before the Collector of Customs, or that they had been " punished " by him in the proceedings before him, resulting in the confiscation of the properties aforesaid, and the imposition of a heavy penalty of Rs. 25,00,000, each, or that they had been convicted and " sentenced" for the " same offence ", the petitioners will have failed to bring their case within the prohibition of article 20(2). It has been argued, in the first instance, on behalf of the petitioners that they had been " prosecuted " within the meaning of the article. On the other hand, the learned Additional Solicitor General has countered that argument by the contention that the previous adjudication by the Collector of Customs, was by an administrative body which has to act judicially, as held by this Court in F. N. Roy vs Collector of Customs(1), and reiterated in Leo Roy Frey vs Superintendent, District Jail, Amritsar (2); but the Collector was not a criminal court which could in law, be said to have tried the petitioner for an offence under the Indian Penal Code, or under the penal provisions of the other Acts mentioned above. It is, therefore, necessary first to consider whether the petitioners had really been prosecuted before the Collector of Customs, within the meaning of article 20(2). To " prosecute ", in the special sense of law, means, according to Webster 's Dictionary, " (a) to seek to obtain, enforce, or the like, by legal process; as, to prosecute a right or a claim in a court of law. (b) to pursue (a person) by legal proceedings for redress or (1) ; (2) ; 285 punishment; to proceed against judicially; espy., to accuse of some crime or breach of law, or to pursue for redress or punishment of a crime or violation of law, in due legal form before a legal tribunal; as, to prosecute a man for trespass, or for a riot." According to Wharton 's Law Lexicon, 14th edn., p. 810, " prosecution " means " a proceeding either by way of indictment or information,, in the criminal courts, in order to put an offender upon his trial. In all criminal prosecutions the King is nominally the prosecutor. " This very question was discussed by this Court in the case of Maqbool Hussain vs The State of Bombay (1), with of reference to the context in which the word " prosecution " occurred in article 20. In the course of the judgment, the following observations, which apply with full force to the present case, were made: ". . and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure. " In that case, this Court discussed in detail the provisions of the , with particular reference to Chapter XVI, headed " Offences and Penalties ". After examining those provisions, this Court came to the following conclusion: "We are of the opinion that the Sea Customs Authorities are not a judicial tribunal and the adjudgeing of confiscation, increased rate of duty or penalty under the provisions of the do not constitute a judgment or order of a court or judicial tribunal necessary for the purpose of supporting a plea of double jeopardy." The learned counsel for the petitioners, did not categorically attack the correctness of that decision, but suggested that that case could be distinguished on the ground that in the present case, unlike the case then before this Court, a heavy penalty of Rs. 25,00,000 on each of the petitioners, was imposed by the Collector of Central Excise and Land Customs, (1) ; , 738, 739, 743. 286 besides ordering confiscation of properties and currency worth over 81 lacs. But that circumstance alone cannot be sufficient in law to distinguish the previous decision of this Court, which is otherwise directly in point. Simply because the Revenue Authorities took a very serious view of the smuggling activities of the petitioners, and imposed very heavy penalties under item 8 of the Schedule to section 167 of the , would not convert the Revenue Authorities into a court of law, if the Act did not contemplate their functioning as such. That the did not envisage the Chief Customs Officer or the other officers under him in the hierarchy of the Revenue Authorities under the Act, to function as a Court, is made absolutely clear by certain provisions of that Act. The most important of those is the new section 187A, which was inserted by the Sea Customs (Amendment) Act, (21 of 1955). That section is in these terms:" 187A. No Court shall take cognizance of any offence relating to Smuggling of goods punishable under item 81 of the Schedule to section 167, except upon complaint in writing, made by the Chief Customs officer or any other officer of Customs not lower in rank than an Assistant Collector of Customs authorized in this behalf by the Chief Customs officer. " This section makes it clear that the Chief Customs Officer or any other officer lower in rank than him, in the Customs department, is not a " court ", and that the offence punishable under item 81 of the Schedule to section 167, cannot be taken cognizance of by any court, except upon a complaint in writing, made, as prescribed in that section. This section, in our opinion, sets at rest the controversy, which has been raised in the past upon certain expressions, like " offences " and " penalties used in Chapter XVI. These words have been used in that Chapter in their generic sense and not in their specific sense under the penal law. When a proceeding by the Revenue Officers is meant, as is the case in most of the items in the Schedule to section 167, those officers have been empowered to deal with the offending articles by way of confiscation, or with the person 287 infringing those rules, by way of imposition of penalties in contradistinction to a sentence of imprisonment or fine or both. When a criminal prosecution and punishment of the criminal, in the sense of the Penal law, is intended, the section makes a specific reference to a trial by a Magistrate, a conviction by such Magistrate, and on such conviction, to imprisonment or to fine or both. In this connection, reference may be made to the penalties mentioned in the third column against items 72, 74, 75, 76, 76A, 76B, 77, 78 and 81, which illustrate the latter class of the penalty in column 3. The penalties mentioned in the third column of most of the items of the Schedule to section 167 of the Act, do not make any reference to a conviction by a Magistrate and punishment by him in terms of imprisonment or of fine or of both. For example, item 76C, which was inserted by the Sea Customs Amendment Act X of 1957, in the third column meant for penalties, has only this " such vessel shall be liable to confiscation and the master of such vessel shall be liable to a penalty not exceeding one thousand rupees". Item 76A, on the other hand, specifically mentioning conviction, imprisonment and fine, was inserted by XXI of 1955. Both the amending Acts, by which the aforesaid additional offences were created, and penalties prescribed, were enacted after the coming into force of the Constitution. The Legislature was, therefore, aware of the distinction made throughout the Schedule to section 167, between a proceeding before Revenue authorities by way of enforcing the preventive and penal provisions of the Schedule and a criminal trial before a Magistrate, with a view to punishing offenders under the provisions of the same section. It is, therefore, in the teeth of these provisions to contend that the imposition of a penalty by the Revenue officers in the hierarchy created by the Act, is the same thing as a punishment imposed by a criminal court by way of punishment for a criminal offence. This distinction has been very clearly brought out in the recent judgment of this Court in the case of Sewpujanrai Indrasanrai Ltd. vs The Collector of 288 Customs(2). In that case, though the question of double jeopardy under article 20(2) of the Constitution, had not been raised, this Court has pointed out the difference in the nature of proceedings against offending articles and offending persons. A proceeding under the and the corresponding provisions of the Foreign Exchange Regulation Act, in respect of goods which have been the subject matter of the proceeding, has been held to be of the nature of a proceeding in rem whereas, a proceeding against a person concerned in smuggling goods within the purview of those Acts, is a proceeding in personam, resulting in the imposition of a punishment by way of imprisonment or fine on him, where the offender is known. In the former case, the offender may not have been known, but still the offending goods seized may be confiscated as a result of the proceedings in rem. That case was not concerned with the further question whether, besides the liability to the penalty as contemplated by section 23(1)(a), namely, a penalty not exceeding three times the value of the foreign exchange in respect of which the contravention had taken place, the person contravening the provisions of the Foreign Exchange Regulation Act, 1947, upon conviction by a court, is also punishable with imprisonment which section 23(1)(b) prescribes, namely, imprisonment for a term which may extend to 2 years, or with fine, or with both. The decision of this Court (supra) is also an authority for the proposition that in imposing confiscation and penalty under the , the Collector acts judicially. But that is not the same thing as holding that the Authority under section 167 of the Act, functions as a Judicial Tribunal or as a Court. An Administra. five Tribunal, like the Collector and other officers in the hierarchy, may have to act judicially in the sense of having to consider evidence and hear arguments in an informal way, but the Act does not contemplate that in so doing, it is functioning as a court. As already pointed out, section 187A, which was inserted by the Amending Act of 1955 (21 of 1955), brings out, in bold relief, the legal position that the Chief Customs (I) ; 289 Officer or any other officer of Customs, does not function as a court or as a Judicial Tribunal. All criminal offences are offences, but all offences in the sense of infringement of a law, are not criminal offences. Likewise, the other expressions have been used in their generic sense and not as they are understood in the Indian Penal Code or other laws relating to criminal offences. Section 167 speaks of offences mentioned in the first column in the Schedule, and the third column in that Schedule lays down the penalties in respect of each of the contravention of the rules or of the sections in the Act. There are as many as 81 entries in the Schedule to section 167, besides those added later, but each one of those 81 and more entries, though an offence, being an act infringing certain provisions of the section is and rules under the Act, is not a criminal offence. Out of the more than 81 entries in the Schedule to section 167, it is only about a dozen entries, which contemplate prosecution in the criminal sense, the remaining entries contemplate penalties other than punishments for a criminal offence. The provisions of Chapter XVII of the Act, headed " Procedure relating to offences, Appeals, etc.", also make it clear that the hierarchy of the Customs Officers under the Act have not been empowered to try criminal offences. They have been only given limited powers of search. Similarly, they have been given limited powers to summon persons to give evidence or to produce documents. It is true that the Customs Authorities have been empowered to start proceedings in respect of suspected infringements of the provisions of the Act, and to impose penalties upon persons concerned with those infringements, or to order confiscation of goods or property which are found to have been the subjectmatter of the infringements, but when a trial on a charge of a criminal offence is intended under any one of the entries of the Schedule aforesaid, it is only the Magistrate having jurisdiction, who is empowered to impose a sentence of imprisonment or fine or both. it was also suggested in the course of the argument that the use of a particular phraseology in the Act, 37 290 should not stand in the way of looking at the substance of the matter. It may be that the Act has drawn a distinction between confiscation of property and goods, and imposition of penalties on persons concerned with the infringement, on the one hand, and the imposition of a sentence of imprisonment or fine or both by a Magistrate, on the other hand; but, it is further contended, the Customs Authorities, who impose a penalty or who order confiscation of goods of very large value, are in substance imposing punishments within the meaning of the criminal law. In this connection, our particular attention was drawn to para. 24 of the order dated July 24, 1957, passed by the Collector of Central Excise and Land Customs, New Delhi, which is in these terms: " 24. Having regard to all the circumstances of the case, I find that both Sarvshri Thomas Dana and Leo Roy Frey are equally guilty of the offence. They attempted to smuggle Indian and foreign currency out of India. I hold both of them as the persons concerned in the offence committed under section 167(8) of the . The foregoing facts prove beyond doubt that the offence was the result of the most deliberate and calculated conspiracy to smuggle this huge amount of currency out of the country. The offenders, therefore, deserve deterrent punishment. 1, therefore, impose a personal penalty of Rs. 25,00,000 (Rupees twenty five lakhs only) each on Shri Thomas Dana and Shri Leo Roy Frey which should be paid within two months from the date of this order or such extended period as the adjudicating officer may allow. " The expressions " equally guilty of the offence the offence was the result of the most deliberate and calculated conspiracy to smuggle ", and " deserve deterrent punishment ", have been greatly emphasized in aid of the argument that the Collector had really intended to punish the petitioners in respect of the " offence", and found them ',guilty". It is true that these expressions are commonly used in judgments given in criminal trials, but the same argument can be used 291 against the petitioners by saying that mere nomenclature does not matter. What really matters is whether there has been a " prosecution ". It is true that the petitioners were dealt with by the Collector of Central Excise and Land Customs, for the" offence " of smuggling; were found " guilty ", and a deterrent " punishment " was imposed upon them, but as he had not been vested with the powers of a Magistrate or a criminal court, his proceedings against the petitioners were in the nature of Revenue proceedings, with a view to detecting the infringement of the provisions of the , and imposing penalties when it was found that they had been guilty of those infringements. Those penalties, the Collector had been empowered to impose in order not only to prevent a recurrence of such infringements, but also to recoup the loss of revenue resulting from such infringe ments. A person may be guilty of certain acts which expose him to a criminal prosecution for a criminal offence, to a penalty under the law intended to collect the maximum revenue under the Taxing law, and/or, at the same time, make him liable to damages in torts. For example, an assessee under the Income tax law, may have submitted a false return with a view to defrauding the Revenue. His fraud being detected, the Taxing Officer may realise from him an amount which may be some multiple of the amount of tax sought to be evaded. But the fact that he has been subjected to such a penalty by the Taxing Authorities, may not avail him against a criminal prosecution for the offence of having submitted a return containing false statements to his knowledge. Similarly, a person may use defamatory language against another person who may recover damages in tort against the maker of such a defamatory statement. But the fact that a decree for damages has been passed against him by the civil court, would not stand in the way of his being prosecuted for defamation. In such cases, the law does not allow him the plea of double jeopardy. That this is the law in America also, is borne out by the following quotation from the " Constitution 292 of the United States of America " revised and annotated in 1952 by Edward section Corwin at p. 840: "A plea of former jeopardy must be upon a prosecution for the same identical offense. The test of identity of offenses is whether the same evidence is required to sustain them; if not, the fact that both charges relate to one transaction does not make a single offense where two are defined by the statutes. Where a person is convicted of a crime which includes several incidents, a second trial for one of those incidents puts him twice in jeopardy. Congress may impose both criminal and civil sanctions with respect to the same act or omission, and may separate a conspiracy to commit a substantive offense from the commission of the offense and affix to each a different penalty. A conviction for the conspiracy may be had though the subsequent offense was not completed. Separate convictions under different counts charging a monopolization and a conspiracy to monopolize trade, in an indictment under the Sherman Antitrust Act, do not amount to double jeopardy. ". A forfeiture proceeding for defrauding the Government of a tax on alcohol diverted to beverage uses is a proceeding in rem, rather than a punishment for a criminal offense, and may be prosecuted after a conviction of conspiracy to violate the statute imposing the tax. " To the same effect is the following placitum tinder article 240 in Vol. 22 of 'Corpus Juris Secundum ', headed " Offenses and Proceedings in Which Former Jeopardy Is a Defense ": " The doctrine applies to criminal prosecution only and generally to misdemeanours as well as felonies. A former conviction or acquittal does not ordinarily preclude subsequent in rem proceedings, civil actions to recover statutory penalties or exemplary damages, or proceedings to abate a nuisance. " On behalf of the petitioners, their learned counsel placed reliance upon the two American decisions in Morgan vs Zevine (1) and United States of America vs (1) ; ; 293 Anthony La Franca (,). The former decision is really against the contention of double jeopardy, raised in this case. That case lays down that persons who steal postage stamps and postal funds from a post office of the United States, after having committed burglary, and thus, having effected their entry into the premises, committed two distinct offences which may be separately charged and punished under the United States ' Penal Code. Two separate convictions and Sentences as for two distinct offences in those circumstances were not held to be within double jeopardy within the meaning of the United States ' Constitutional 5th Amendment. The reason given for the decision against the contention of double jeopardy was that though the offences had been committed in the same transaction, they had been constituted separate and distinct offences by the United States ' Penal Code articles 190 and 192. In the latter case, the plea of double jeopardy was given effect to because the special statutes, infringements of which formed the subjectmatter of the controversy, namely, for unlawfully selling intoxicating liquor, had made a specific provision that if any act is a violation of earlier laws in regard to the manufacture and taxation of and traffic in intoxicating liquor, and also of the National Prohibition Act, a conviction for such act or offence under one statute, shall be a bar to prosecution therefor under the other. It is clear, therefore, that where there is a specific statutory provision creating a bar to a second prosecution, the court is bound to give effect to the plea of double jeopardy. It is not necessary to refer to certain decisions of the English courts, relied upon by the learned counsel for the petitioners, because those cases had reference to the question whether certain orders passed by certain courts were or were not made in a criminal case or matter within the meaning of the statutes then under consideration before the court. Those are observations made with reference to the terms of those statutes, and are of no assistance in the present controversy. The learned counsel for the petitioners was not able to produce before us any (1) ; ; 294 authority in support of the proposition that once a person has been dealt with by the Revenue Authorities for an infringement of the law against smuggling, he cannot also be prosecuted in a criminal court for a criminal offence. In view of these considerations, and particularly in view of the decision of this Court in the case of Maqbool Hussain vs The State of Bombay (1), there is no escape from the conclusion that the proceedings before the Sea Customs Authorities under section 167(8) were not " prosecution " within the meaning of article 20 (2) of the Constitution. In that view of the matter, it is not necessary to pronounce upon the other points which were argued at the Bar, namely, whether there was a " punishment " and whether " the same offence " was involved in the proceedings before the Revenue Authorities and the criminal court. Unless all the three essential conditions laid down in el. (2) of article 20, are fulfilled, the protection does not become effective. The prohibition against double jeopardy would not become operative if any one of those elements is wanting. It remains to consider a short point raised particularly on behalf of the second petitioner (Leo Roy Frey). It was argued that the letter exhibit P. DD/2, admittedly written by him to his father in German, had not been specifically put to him with a view to eliciting his explanation as to the circumstances and the sense in which it had been written. The learned Magistrate in the trial court put the following question (No. 20) to him : " It is in evidence that exhibit P. FF/I is the translation of the letter exhibit P. DD/2. What have you to say about it The answer given by the accused to this question was " The translation of exhibit P. FF/I is mostly correct except for few variations which could have been due to misinterpretation of handwriting ". It is clear from the question and answer quoted above, that the learned Magistrate did afford an opportunity to this petitioner to explain the circumstances appearing in the (1) ; , 738, 739, 743 295 evidence against him with particular reference to the letter. If the court had persisted in putting more questions with reference to that letter, perhaps, it may have been argued that the examination under section 342 of the Code of Criminal Procedure, was in the nature of a cross examination of the accused person, which is not permitted. In our opinion, there is no substance in the contention that the petitioner had not been properly examined under section 342, Criminal Procedure Code, to explain the circumstances appearing in the evidence against him. It follows from what has been said above, that there is no merit either in the appeal or in the petition. They are, accordingly dismissed. SUBBA RAO, J. I have had the advantage of reading the judgment prepared by Sinha J., but I cannot persuade myself to agree with my learned brother. The facts are fully stated in the judgment of my learned brother and therefore it would suffice if I restate briefly the facts strictly relevant to the question raised. On June 11, 1957, the petitioner arrived at Bombay, later came to Delhi and from there he travelled to Amritsar by car in company with Mr. Leo Roy Frey. On June 23, 1957, he reached Attari Road Land Customs Station and was arrested under section 173 of the (Act VIII of 1878) on suspicion of having committed an offence thereunder. He was served with a notice by the Collector of Central Excise and Land Customs, New Delhi, on July 7, 1957, to show cause why penalty should not be imposed on him under section 167(8) of the (hereinafter called the Act) and section 7(2) of the , and why the goods should not be confiscated. By order dated July 24, 1957, the petitioner was adjudged guilty under section 167(8) of the Act and currency of the value of over 9 lakhs, car worth Rs. 50,000, and other things were confiscated, and he was punished with personal penalty of Rs. 25,00,000. The petitioner was again prosecuted on the same facts before the Additional District Magistrate, Amritsar, on charges under section 167(81) of the Act and sections 23 and 23B of the 296 Foreign Exchange Regulation Act. 'He was convicted on charges under section 23 read with section 23B of the Foreign Exchange Regulation Act, section 167(81) of the Act and section 120B of the Indian Penal Code and sentenced to imprisonments of 2 years, 6 months and 6 months respectively by 'the Additional District Magistrate, Amritsar. The conviction and sentences were confirmed on appeal by the Additional Sessions Judge, and the revision filed in the High Court was dismissed. The learned counsel for the petitioner contends that the Courts in punishing him violated the fundamental right conferred on him under article 20(2) of the Constitution as he hag been prosecuted and punished for the same offence by the Collector of Customs. The learned Additional Solicitor General counters this argument by stating that the petitioner was not prosecuted earlier before a judicial tribunal and punished by such tribunal, and, in any view, the prosecution was not for the same offence with which he was charged before the Magistrate, and therefore this case does not fall within the Constitutional protection given under article 20(2). Before addressing myself to the arguments advanced it would be convenient at this stage to steer clear of two decisions of this Court. The first is Maqbool Hussain vs The State of Bombay (1). There proceedings had been taken by the Sea Customs Authorities under section 167(8) of the Act and an order for confiscation of goods had been passed. The person concerned was subsequently prosecuted before the Presidency Magistrate for an offence under section 23 of the Foreign Exchange Regulation Act in respect of the same act. This Court held that the proceeding before the Sea Customs Authorities was not a prosecution and the order for confiscation was not a punishment inflicted by a Court or a judicial tribunal within the meaning of article 20(2) of the Constitution and the prosecution was not barred. The important factor to be noticed in that case is that the Sea Customs Authorities did not proceed against the person concerned but only confiscated the goods found in his possession. At page (1) ; 297 742 Bhagwati J. says " Confiscation is no doubt one of the penalties which the Customs Authorities can impose. But that is more in the nature of proceedings in rem than proceedings in personal, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law. . Though the observations in the judgment cover a wider field. I shall deal with them at a later stage the decision could be sustained on the simple ground that the previous proceedings were not against the person concerned and therefore he was not prosecuted and punished for the same offence for which he was subsequently proceeded against in the Criminal Court. The second decision is Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs (1). There also the Customs Authorities confiscated the goods found in the possession of the appellant. Under section 8(3) of the Foreign Exchange Act, a restriction imposed by notification made under that section is deemed to have been imposed under section 19 of the , and all the provisions of the shall have effect accordingly. But the said deeming provision is subject to an important qualification contained in the words ' without prejudice to the provisions of section 23 of the former Act '. It was argued that by reason of the provisions of section 8(3) of the Foreign Exchange Regulations Act, the appellant should have been proceeded against under section 23 of that Act and it was not open to the Customs Authorities to take action against the offender under section 167(8) of the . This Court negatived that contention accepting the principle that confiscation of the goods under section 167(8) of the was an action in rem and not a proceeding in personal. Das, J., who delivered the judgment of the Court made the following observations in repelling the said argument: The penalty provided is that the goods shall be liable to confiscation. There is a further provision in the penalty column that any person concerned in any such offence shall be liable to a penalty not exceeding (1) 298 three times the value of the goods etc. The point to note is that so far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods whether the offender is known or not known; the order of confiscation under section 182, , operates directly upon the status of the property, and under section 184 transfers an absolute title to Government. Therefore, in a case where the Customs authorities can proceed only against the goods, there can be no question of applying section 23 of the Foreign Exchange Act and even on the construction put forward on behalf of the appellant company as respects section 8(3), the remedy under the against the smuggled goods cannot be barred. " This decision also indicates that the confiscation of the goods is an action in rem and is not a proceeding in personam. A combined effect of the aforesaid two decisions may be stated thus: Section 167(8) of the Act provides for the following two kinds of penalties when contraband goods are imported into or exported from India: (1) such goods shall be liable to confiscation; (2) any person concerned in any such offence shall be liable to a penalty. If the authority concerned makes an. order of confiscation it is only a proceeding in rem and the penalty is enforced against the goods. On the other hand, if it imposes a penalty against the person concerned, it is a proceeding against the person and he is punished for committing the offence. It follows that in the case of confiscation there is no prosecution against the person or imposition of a penalty on him. If the premises be correct, the subsequent prosecution of the person con cerned cannot be affected by the principle of double jeopardy, as he was not prosecuted or punished in the earlier proceedings. But the question that arises in this case is whether, when there was a proceeding in personam and a penalty was imposed upon the person concerned under section 167(8) of the Act, he could be prosecuted and punished in regard to the same act before another tribunal. On the facts of this case it is manifest that the 299 petitioner was prosecuted before the Magistrate for the same act in respect of which a penalty of Rs. 25,00,000 had been imposed on him by the Collector of Customs under section 167(8) of the Act. The question is whether the prosecution and punishment of the petitioner infringed his fundamental right under article 20(2) of the Constitution. It reads: " No person shall be prosecuted and punished for the same offence more than once. " The words of this Article are clear and unambiguous and their plain meaning is that there cannot be a second prosecution where the accused has been prosecuted and punished for the same offence previously. The clause uses the three words of well known connotation: (1) Prosecution; (2) punishment; and (3) offence. The word offence ' is defined in section 3(38) of the , to mean any act or omission made punishable by any law for the time being in force. Under section 4 of the Code of Criminal Procedure, it means any act or omission made punishable by any law for the time being in force. An offence is therefore an act committed against law or omitted where the law requires it. Punishment is the penalty for the transgression of law. The terms 'punishment ' and 'penalty ' are frequently used as synonyms of each other; and, indeed under cl. (I)of article 20 of the Constitution the word penalty issued in the sense of punishment. The punishments to which offenders are liable under the provisions of the Indian Penal Code are: (1) death; (2) imprisonment for life; (3) imprisonment, which is of two descriptions, viz., (1) rigorous, i.e., with hard labour; and (ii) simple; (4) for feature of property ; and (6) fine. The word 'prosecuted ' is comprehensive enough to take in a prosecution before an authority other than a magisterial or a criminal Court. Having regard to the historical background, a restricted meaning has been placed upon it by this Court in Maqbool Hussain vs The State of Bombay (1). Bhagwati, J., in delivering the Judgment of the Court observed at page 742 thus: (I) ; 300 Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty, the highest penalty which can be inflicted is Rs. 1,000. Confiscation is no doubt one of the penalties which the Customs Authorities can impose, but that is more in the nature of proceedings in rem than proceedings in personam, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law and in respect of the confiscation also an option is given to the owner of the goods to pay in lieu of confiscation such fine as the officer thinks fit. All this is for the enforcement of the levy of and safeguarding the recovery of the sea customs duties. There is no procedure prescribed to be followed by the Customs Officer in the matter of such adjudication and the proceedings before the Customs Officers are not assimilated in any manner to the provisions of the Civil or the Criminal Procedure Code. The Customs Officers are not required to act judicially on legal evidence tendered on oath and they are not authorised to administer oath to any witness. The appeals, if any, lie before the Chief Customs Authority which is the Central Board of Revenue and the power of revision is given to the Central Government which certainly is not a judicial authority. In the matter of the enforcement of the payment of penalty or increased rate of duty also the Customs Officer can only proceed against other goods of the party in the possession of the Customs Authorities. But if such penalty or increased rate of duty cannot be realised therefrom the only thing which he can do is to notify the matter to the appropriate Magistrate who is the only person empowered to enforce payment as if such penalty or increased rate of duty had been a fine inflicted by himself. The process of recovery can be issued only by the Magistrate and not by the Customs Authority. All these provisions go to show that far from being authorities bound by any rules of evidence or procedure established by law and invested with power to enforce their own judgments or orders the Sea Customs Authorities are merely constituted administrative machinery for the purpose of 301 adjudging confiscation, increased rates of duty and Penalty prescribed in the Act. " This Court therefore accepted the view that the earlier prosecution should have been before a Court of law or a judicial Tribunal, and that the Sea Customs Authorities when they entertained proceedings for the confiscation of gold did not act as a judicial Tribunal. In my view the said decision unduly restricted the scope of the comprehensive terms in which the fundamental right is couched. If res integral I would be inclined to hold that the prosecution before the Customs Authority for an offence created by the Act is prosecution within the meaning of Article 20, even though the Customs Authority is not a judicial Tribunal. But I am bound by the decision of this Court in so far as it held that the earlier prosecution should have been held before a Court of law or a judicial Tribunal, and that the Customs Authority adjudging confiscation was not such a tribunal. But the said observations must be confined to the adjudication of confiscation by the Customs Authority. The outstanding question therefore is whether a Collector of Customs in adjudging on the question whether any person concerned in the importation or exportation of the prohibited goods committed an offence, and in imposing a penalty on him, acts as a judicial Tribunal. There is a current of judicial opinion in support of the contention that under a particular Act an authority may act as a judicial Tribunal in discharge of certain duties and as an executive or administrative authority in discharge of other duties. The question whether a particular authority in dis charging specified duties is a judicial tribunal or not falls to be decided on the facts of each case, having regard to the well settled characteristics of a judicial tribunal. In 'Words and Phrases ', permanent edition, Vol. 23, Judicial Tribunal " has been defined thus: " It is a body who has the power and whose duty it is to ascertain and determine the rights and enforce the relative duties of contending parties. " In I The Encyclopedia of Words and Phrases Legal Maxims ', 302 by Sanagan and Drynan, much to the same effect it is stated thus: " A 'judicial tribunal ' is one that dispenses justice, is concerned with legal rights and liabilities, which means rights and liabilities conferred or imposed by I law '. These legal rights and liabilities are treated by a judicial tribunal as preexisting; such a tribunal professes merely to ascertain and give effect to them; it investigates the facts by hearing the 'evidence ' (as tested by long settled rules), and it investigates the law by consulting precedents. A judicial tribunal looks for some law to guide it. An administrative tribunal, within its province, is a law unto itself. " In Cooper vs Wilson (1) the characteristics of a judicial decision are given as follows, at page 340: " A true judicial decision presupposes an existing dispute between two or more parties, and then involves four requisites: (1) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) If the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence ; (3) If the dispute be. tween them is a question of law, the submission of legal argument by the parties; and (4) A decision which disposes of the whole matter by a finding upon the facts in dispute and application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law. " This passage has been approved by this Court in Maqbool Hussain 's Case (2). In Venkataraman vs The Union of India (3) this Court considered the question whether article 20 protects an Officer against whom an enquiry was held under Public Servants Enquiries Act, 1850 (Act XXXVII of 1850) from being prosecuted again on the same facts before a Criminal (Court. This Court held on a consideration of the provisions of that Act that the appellant was neither prosecuted nor punished (1) , 340, 341 (2) [1953] S C.R. 730. (3) ; 303 for the same offence before a judicial tribunal. But in coming to that conclusion the following criteria were applied to ascertain the character of the proceedings: (1) duty to investigate an offence and impose a punishment; (ii) prosecution must be in reference to the law which creates the offence and punishment must also be in accordance with what the law proscribes; (iii) there must be the trappings of a judicial tribunal and (iv) the decision must have both finality and authoritativeness, which are the essential tests of a judicial pronouncement. Having regard to the aforesaid tests, I shall now proceed to consider the applicability of Article 20 to the present prosecution. A fundamental right is transcendental in nature and it controls both the legislative and the executive acts. Article 13 explicitly prohibits the State from making any law which takes away or abridges any fundamental right and declares the law to the extent of the contravention as void. The law therefore must be carefully scrutinized to ascertain whether a fundamental right is infringed. It is not the form but the substance that matters. If the legislature in effect constitutes a judicial tribunal, but calls it ail authority, the tribunal does not become any the less a judicial tribunal. Therefore the correct approach is first to ascertain with exactitude the content and scope of the fundamental right and then to scrutinize the provisions of the Act to decide whether in effect and substance, though not in form, the said right is violated or curtailed. Otherwise the fundamental right will be lost or unduly restricted in our adherence to the form to the exclusion of the content. The question therefore is whether the petitioner was in effect and in substance prosecuted and punished by a judicial tribunal for the same offence for which he is now prosecuted. Section 167 of the Act opens with the following words: " The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively." Chapter XVI of the Act deals with 'Offences and 304 Penalties '. Section 167 provides for offences and penalties in a tabular form. The first column gives the particulars of the offences; the second column gives the sections of the Act to which the offence has reference ; and the third column gives the penalties in respect of the relevant offences. Apart from the fact that the statute itself, in clear terms, describes the acts detailed in the first column of section 167 as offences against particular laws, the acts described therein clearly fall within the definition of 'offences ' in the and the Indian Penal Code. There cannot therefore be the slightest doubt in this case that the contravention of any of the provisions of the Act mentioned in section 167 is an offence. The next question is whether the penalties prescribed for the various offences in the third column of section 167 are punishments within the meaning of article 20 of the Constitution. A glance at the third column shows that the penalties mentioned therein include direction of payment of money, confiscation of goods and the receptacles wherein they are found, and imprisonment. The penalties may be imposed by the Customs Officers or Magistrates as the case may be. Where a person is convicted by a Magistrate and sentenced to imprisonment or payment of fine or where a penalty is imposed by a Customs Officer, in either case, the punishment is described as penalty in the third column of section 167. Section 167 clearly indicates that penalty is punishment inflicted by law for its violation for doing or failing to do something that is the duty of the party to do. Section 167 therefore defines a criminal act and fixes a penaltv or punishment for that act. The two words penalty ' and 'punishment ' are interchangeable and they convey the same idea. The more difficult question is whether a Customs Authority, when it functions under section 167 of the Act, is a judicial tribunal. It is not, and cannot be, disputed that a magistrate, who convicts and punishes a person for the infringement of some of the provisions of section 167 of the Act, is a judicial tribunal. Is it reasonable to assume that when another authority adjudges on similar offences under the same section, it is 305 functioning in a different capacity ? Section 182 defines the jurisdiction of the Customs Authority in respect of the offences mentioned in section 167 of the Act. It says: " In every case, except the cases mentioned in Section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which under this Act, anything is liable to confiscation or to increased rates of duty or any person is liable to a penalty, such confiscation, increased rate of duty or penalty may be adjudged (a) without limit, by a Deputy Commissioner or Deputy Collector of Customs, or a Customs collector; (b) up to confiscation of goods not exceeding two hundred and fifty rupees in value, and imposition of penalty or increased duty, not exceeding one hundred rupees, by an Assistant Commissioner or Assistant Collector of Customs ; (c) up to confiscation of goods not exceeding fifty rupees in value, and imposition of penalty or increased duty not exceeding ten rupees, by such other subordinate officers of Customs as the Chief Customs authority may, from time to time, empower in that behalf in virtue of their office : ". Section 187 : " All offences against this Act, other than those cognizable under section 182 by officers of Customs, may be tried summarily by a Magistrate. " It is therefore clear that some offences under section 167 are cognizable by the Customs Authorities and some offences by Magistrates. Section 171A, inserted by the Sea Customs (Amendment) Act, 1955 (Act 21 of 1955), confers power on officers of Customs to summon any person to give evidence and produce documents; it reads: " 171A. (1) Any officer of Customs duly employed in the prevention of smuggling shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making in connection with the smuggling of any goods. 39 306 (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct;. and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required: Provided that the exemption under section 132 of the Code of Civil Procedure, 1908, shall be applicable to any requisition for attendance under this section. (4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code. " Under this section, the Customs Authority, who makes an inquiry, is empowered in connection with that inquiry, to summon persons to give evidence and produce documents and the witnesses summoned are under a statutory duty to speak the truth. The cir cumstance that under el. (4) of the said section, an inquiry is deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, viz., for the purpose of punishment for giving false evidence and for contempt of Court, does not detract from the judicial characteristics conferred upon the authority by the other clauses of the section. Clause (4) must have been enacted only by way of abundant caution to guard against the contention that the authority is not a Court ; and to bring in the inquiry made by the Customs Officer in regard to administrative matters other than those conferred upon him under section 167, within the fold of section 193 and section 228 of the Indian Penal Code. Sections 188, 189, 190A and 191 provide a hierarchy of tribunals for deciding appeals and revisions. The Chief Customs authority May, suo motu or otherwise exercise revisional powers in regard to the orders of the subordinate officers. Power is also conferred on Government to 307 inter in matters in regard whereof no appeal is provided for. It is true that no rules have been framed providing the manner in which the Customs collector should proceed with the inquiry in regard to offences committed under the Act of which he is authorized to take cognizance. But the record discloses that a procedure analogous to that obtaining in criminal Courts is followed in regard to the said offences. Charges are framed, evidence is taken, advocates are heard, decision is given on the question whether an offence is committed or not; and, if the offence is held to have been committed, the person concerned is con victed and a penalty is imposed. When the statute empowers the officer to take cognizance of an offence, to adjudge upon the question whether the offence is committed or not and to impose a penalty for the offence, it is implied in the statute that the judicial procedure is to be followed. The entire scheme of the Act as disclosed in the leaves no doubt in my mind that so far as offences mentioned in section 167 are concerned, the Customs Authority has to function as a Judicial Tribunal. I have therefore no hesitation to hold that the Customs Officers in so far as they are adjudicating upon the offences mentioned under section 167 of the Act are functioning as judicial tribunals. If the other view, viz., that an authority is not a judicial tribunal, be accepted, it will lead to an anomalous position, which could not have been contemplated by the legislature. To illustrate, a Customs Collector may impose a penalty of Rs. 25,00,000 as in this case on his finding that a person has committed an offence under section 167 (8) of the Act, and the accused can be prosecuted again for the same offence before a Magistrate. On the other hand, if the prosecution is first laid before a Magistrate for an offence under section 167(81) and he is convicted and sentenced to a fine of a few rupees, he cannot be prosecuted and punished again before a Magistrate. Unless the provisions of the Constitution are clear, a construction which will lead to such an anomalous position should not be accepted, for, by accepting such a construction, the right itself is defeated. 308 It is then contended that the offence for which the petitioner was prosecuted by the Magistrate is different from that in regard whereof he was sentenced by the Customs Officer. The petitioner was convicted under section 167(8) of the Act, whereas he was subsequently prosecuted and punished under section 167(81) of the Act. Section 167(81) of the Act reads as follows : "If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing, harboring, keeping or concealing or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid or with respect to the importation or exportation of which any prohibition or restriction is for the time being in force as aforesaid ; or if any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods, such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years, or to fine, or to both. " It is contended that under section 167(81) knowledge or intention to defraud is an ingredient of the offence, whereas under section 167(8) they are not part of the offence, that offences under sections 167(8) and 167(81) are different, and that therefore the prosecution and punishment for an offence under the former sub section would not be a bar for prosecution and punishment under the latter sub section. It is not necessary to consider the decisions cited in support of the contention that for the application of the principle of double ' jeopardy the offence for which a person is prosecuted and punished in a second proceeding should be the same in respect of which he has been prosecuted and 309 punished at an earlier stage. That fact is self evident from article 20(2) of the Constitution itself. If so, the only question is whether the petitioner was prosecuted before the Magistrate for the same offence in regard to which he was prosecuted before the Collector of customs. It is true that the phraseology in section 167(8) is more comprehensive than that in sub section (81) in that the offences under the former sub section take in acts committed without knowledge or intent to defraud. But it does not exclude from its scope acts committed with knowledge or with intent to defraud. For, a person who imports or exports prohibited goods with intent to defraud is also concerned in the offence of such importation or exportation. The question of identity of offence is one to be determined on the facts and circumstances of a particular case. One of the tests is whether an offence for which a person was earlier prosecuted takes in all the ingredients of the offence, the subject matter of the second prosecution. The fact that he might have been prosecuted for a lesser offence is not a material circumstance. The question therefore is not whether under section 167(8) a person can be found guilty of an offence even if there is no fraudulent intent or knowledge, but the question is whether the petitioner was prosecuted and punished on the same facts in regard to which he was subsequently prosecuted and punished before the Magistrate. The record discloses that the petitioner was prosecuted before the Customs Authority as well as the Magistrate on the same facts, viz., that he, along with others, attempted to take out of India, Indian currency (as detailed in paragraphs 14 and 17 of the complaint of the Assistant Collector of Customs and Central Excise, Amritsar), in contravention of the law prohibiting such export. It is not the case that the knowledge on the part of the petitioner of his illegal act is excluded from the first prosecution and included in the subsequent one. In the circumstances, I cannot hold that the offence for which he was prosecuted by the Magistrate is different from that in regard to which he was prosecuted and punished by the Customs Authority. In this view, the prosecution and punishment by the Magistrate 310 directly infringes the fundamental right under article 20 (2) of the Constitution. No attempt has been made by the learned Solicitor General to contend that the offence under sections 23 and 23B of the Foreign Exchange Regulations Act for which the petitioner is convicted is an offence different from that for which he was prosecuted earlier under section 167(8) of the Act. It is conceded that the decision in the writ petition covers the decision in the connected appeal also. In the result, the writ petition and the appeal are allowed. ORDER In view of the opinion of the majority, the Petition and the Appeal are dismissed.

The two petitioners were apprehended while attempting to smuggle a huge amount of Indian and foreign currency and other contraband goods out of India and the Collector of Central Excise and Land Customs passed orders confiscating the seized goods and imposing heavy personal penalties on both of them under 275 section 167(8) of the Sea Customs Act. On a subsequent complaint made by the Customs Authorities on the same facts, the petitioners were convicted and sentenced by the Additional District Magistrate to various terms of imprisonment under section 23, read with section 23B, of the Foreign Exchange Regulation Act, section i67(8I) of the Sea Customs Act and section 120B of the Indian Penal Code. The Additional Sessions judge in appeal affirmed the said orders of conviction and sentences and the High Court refused to interfere in revision. It was contended on behalf of the petitioners, who had, at an earlier stage, made an unsuccessful attempt to move this Court under article 32 and have the prosecutions quashed, that the orders of conviction and sentences passed on them by the Courts below infringed the constitutional protection against double jeopardy afforded by article 20(2) Of the Constitution. Held, (Per Das, C. J., Bhagwati, B. P. Sinha and Wanchoo, Jj., Subba Rao, J., dissenting) that the contention was without substance and must be negatived. In order to sustain a plea of double jeopardy and to avail of the protection of article 20(2) of the Constitution it was incumbent to show that (1) there was a previous prosecution, (2) a punishment and (3) that for the same offence, and unless all the three conditions were fulfilled the Article did not come into operation. The word 'prosecution ' as used in that Article contemplated a proceeding of a criminal nature either before a court or a judicial tribunal. Maqbool Hussain vs The State of Bombay, ; , relied on. The insertion of section 187A into the Sea Customs Act by the amending Act of 1955, left no scope for doubt that the hierarchy of Authorities under that Act functioned not as Courts or judicial tribunals but as administrative bodies, even though in recording evidence or hearing arguments they acted judicially. The words " offences " and " penalties " used by the Act could not have the same meaning as in Criminal Law and a penalty or confiscation ordered under section 167(8) of the Act could not be a punishment such as is inflicted by a Criminal Court for a criminal offence. Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs and others; , , referred to. Nor were the Customs Authorities invested with the powers of a Criminal Court under the Schedule to section 167 and the procedure laid down by Ch. XVII of the Act, and any orders passed by them either in rem or in personal, by way of confiscation of the goods or imposition of penalties on the person, could only be in the nature of administrative ones made in the interest of revenue and could not bar a criminal prosecution. Morgan vs Devine, ; and United States of America vs Anthony La Franca, ; , considered. 276 The proceedings against the petitioners before the Collector of Customs under section 167(8) of the Sea Customs Act could. not therefore, be a prosecution within the meaning of article 20(2) Of the Constitution and the petitioners were not put to double jeopardy. Per Subba Rao, J. The prosecution of 'the petitioners before the Magistrate and the punishment inflicted on them directly infringed article 20(2) of the Constitution. There can be no inconsistency in an authority under an Act functioning in an administrative capacity in respect of certain specified duties while it acts as a judicial tribunal in respect of others, and the question as to which of them it discharges in a judicial capacity has to be decided on the facts of each case and in the light of well settled characteristics of a judicial tribunal. Cooper vs Wilson, and Venkataraman vs Union of India; , , relied on. Although this Court has held that the Sea Customs Autho rities in adjudging confiscation do not function as judicial tribunals but as mere administrative authorities, the question as to whether imposing personal penalties they act as judicial tribunals still remains open. Maqbool Hussain vs The State. of Bombay, ; and Sewpujanrai Indrasanrai Ltd. vs The Collector of Customs, ; , explained. An examination of the entire scheme of the Sea Customs Act leaves no manner of doubt that the Customs Authorities act as judicial tribunals so far as offences under section 167 Of the Act are concerned. The word 'prosecuted ' used in article 20(2) of the Constitution is comprehensive enough to include a prosecution before an authority other than a Magistrate or a Criminal Court, and the offences described in section 167 Of the Sea Customs Act are offences within the meaning of the General Clauses Act and the Indian Penal Code and the penalties prescribed therefor are nothing but punishments inflicted for those offences either by the Customs Authorities or the Magistrate. The question of the identity of an offence has to be deter mined on the facts of each particular case and the real test is whether the previous prosecution and punishment were based on the same facts on which rested the subsequent prosecution and punishments

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vil Appeal No. 3 169 of 1981. From the Judgment and Order dated 7.5.1981 of the Alla habad High Court in Second Appeal No. 1018 of 1974. Jagan Mohan Rao and R. Ramachandran (N.P.) for the Appellant. Subodh Markandeya, Mrs. Chitra Markandeya, W.A. Nomani and G.S. Giri for the Respondent. 779 The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. This is a case where an order of dismissal passed in a departmental enquiry was challenged in civil court and ultimately has found its way to this Court after a long litigation for over 16 years. The re spondent was a bus conductor in U.P. State Road Transport Corporation (Corporation ' for short). A trap was laid against him and a disciplinary enquiry was initiated and dismissal order was passed on 23rd March, 1965. He filed a civil suit questioning the same. One of the main plea taken by the respondent was that certain important documents were not made available to him during the enquiry and this caused serious prejudice to him. The trial court dismissed the suit and an appeal preferred by him was also dismissed by the appellate court. Relentless as he was, he carried the matter to the High Court by way of second appeal and his plea was accepted by the High Court and the second appeal was al lowed. Aggrieved by the said judgment, the Corporation has approached this Court. On behalf of the Corporation it is contended that the High Court has grossly erred in interfering in a second appeal with the concurrent findings and that the plea of the respondent that relevant documents were not supplied to him during the enquiry has no substance. One of the main issues framed before the trial court was whether all the way bills, carbon copies of the tickets issued on the said dates and carbon copy of checking report were not shown to the delinquent employee by the investigat ing officer and if so what would be its effect? The charge against the respondent was that he erased the waybills and resold some already sold tickets. During the enquiry the delinquent employee was permitted to inspect the documents but he intended to inspect the carbon copies and made a request by way of a letter. However, the carbon copies of the way bills dated 7th, 8th and 10th January, 1963 which are the relevant dates and carbon copies of the checking report were not shown to him. The plea of the delinquent employee has been that from the carbon copies he would have shown that he could not have carried on such erasure or made false entries and non supply of them had caused great preju dice. As already mentioned, the trial court as well as the first appellate court did not accept this plea and held that no prejudice was caused inasmuch as he was shown the origi nals and also on the ground that he did not later insisted on those carbon copies being shown to him. The High Court, however, in an elaborate judgment referred to the various documents 780 and it ultimately reached the conclusion that the important documents have been purposely withheld which resulted in prejudice to the employee. In this appeal, the learned counsel for the Corporation contended that where failure to produce the carbon copies of some of the documents did not cause any prejudice and that at any rate it is a question of fact, the High Court erred in interfering in the second appeal. To satisfy ourselves we wanted to peruse the judg ments of the trial court as well as of the first appellate court but the Corporation has not placed a copy of the appellate court judgment before us. We have perused the trial court judgment and we find at more than one place that the learned District Munsif has observed that the employee could have insisted on production of these documents. The High Court no doubt has considered this aspect in detail and in doing so has referred to the contents of the various documents. From this alone it cannot be said that the High Court has not kept in view the scope of second appeal. Since the employee has been throughout pleading that he did not make the erasures or any other false entry, it naturally became necessary to see whether they were also found in carbon copies. From this point of view the High Court con sidered the various figures and entries in the originals in which such erasures and entries are alleged to have been made by the employee and eventually observed that the entire enquiry was based on some of these documents and if a carbon copy of the way bills had been shown, the authority may well have been convinced that the charge levelled against him was not correct, and that, therefore the non supply of these documents has caused prejudice. Having examined the findings arrived at by the High Court, we are unable to say that the High Court has committed any error which warrants interfer ence under Article 136 of the Constitution. The High Court decreed the suit for pendente lite and future pay and allowances and this was passed on 7th May, 1981. It can therefore be seen that for the last 25 years this litigation went on i.e. from the date of dismissal till today. Admittedly the respondent has already reached the age of superannuation some years ago. During these years the respondent must have sought some employment or the other and the learned counsel also could not seriously dispute the same. Under these circumstances the question is whether again the parties should be driven to go through the indefi nite execution proceedings. On the question of granting lump sum amount towards the backwages and allowances till the date of his retirement we have also heard both sides. Under somewhat similar circumstances this Court in Sohan Singh vs Union of India and Another, granted lump 781 sum amount instead of driving the parties to go to the executing court for further relief. That was a case where the service of an airman in the Air Force was not extended for a period of six years as per the regulation and the matter ultimately came up before this Court. Taking into consideration the facts and circumstances this Court held that the employee should be compensated by payment of a lump sum amount in lieu of the benefits to which he would have been otherwise entitled if he had continued in service for the extended period of six years. Without going into the merits of the actual claim this Court awarded a sum of Rs.35,000 by way of compensation. In the instant case also we are of the view that ends of justice require that such a relief should be granted. Taking into consideration all these aspects including that the respondent would have been entitled for some retirement benefit, we award Rs.35,000 and direct the U.P. State Road Transport Corporation, the appellant herein, to pay this amount to the respondent within two months from today. Since the amount would be received in lump sum by the respondent, it may attract the levy of income tax. But since the amount represents the salary and allowances over the last so many years the respondent may make an application under Section 89 of the Income Tax Act for spreading over this lump sum amount. We may also point out that in similar circumstances, this Court, in Sundaram Motors Pvt. Ltd. vs Ameerjan and Another, where the compensation by way of lump sum amount was awarded, observed that the same should be spread over and gave a direction to the concerned Income Tax Officer to give immediate relief under Section 89 with out further enquiry. Accordingly We direct the Corporation to pay the lump sum amount of Rs.35,000 without deducting income tax. Since the respondent is entitled for relief under Section 89 of the Income Tax Act, he shall make an application to the concerned Income Tax Officer who shall give the necessary relief without any further enquiry. The appeal is disposed of accordingly. In the circumstances of the case there will be no order as to costs. N.P.V. Appeal disposed of.

The respondent, a bus conductor in the appellant State Road Transport Corporation, was dismissed on the charge that he had erased the way bills and resold some already sold tickets. He filed a suit challenging the dismissal order on the ground that carbon copies of certain important documents were not made available to him during the enquiry and this had caused serious prejudice to him. The trial court dis missed the suit and the first appellate court also dismissed his appeal. However, the High Court allowed his second appeal, and held that the important documents had been purposely withheld, which had resulted prejudice to the employee. The appellant Corporation filed a Special Leave Petition before this Court, contending that the High Court had gross ly erred in interfering in second appeal with the concurrent findings, and that the failure to produce the carbon copies of some of the documents did not cause any prejudice and. at any rate, it was a question of fact. Disposing of the appeal, by special leave, this Court, HELD: 1. The High Court has not committed any error which warrants interference. 1780E] The respondent 's plea has been that from the carbon copies he would have shown that he could not have carried on the erasures or made false entries and, therefore; non supply of these carbon copies had caused great prejudice to him. However, the trial court and the first appellate court held that no prejudice was caused since he was 778 shown the originals. The High Court no doubt has considered this aspect in detail and in doing so referred to the con tents of various documents. From this alone it cannot be said that the High Court has not kept in view the scope of second appeal. [779G H; 780A B] Since the employee has been throughout pleading that he did not make the erasures or any other false entry, it naturally became necessary to see whether they were also found in carbon copies. Therefore, the High Court considered the various figures and entries in the originals in which such erasures were alleged to have been made by the employee and eventually observed that the entire enquiry was based on some of these documents, and if a carbon copy of the docu ments had been shown, the authority may well have been convinced that the charge levelled against him was not correct, and that, therefore, the non supply of these docu ments had caused prejudice. [780 D E] 2. The litigation is going on for the last 25 years and the respondent has already reached the age of superannua tion. Hence the parties need not be driven to go through the indefinite execution proceedings again for backwages and allowances and ends of justice require that a lump sum compensation should be granted. Accordingly, a lump sum amount of Rs.35,000 is awarded and the amount should be paid to the respondent without deducting the income tax. The respondent may make an application under Section 89 of the Income Tax Act, 1961 for spreading over this amount, and the concerned Income Tax Officers should also give the necessary relief without any further enquiry. [780F; 781C E] Sohan Singh vs Union of India & Anr., and Sundaram Motors Pvt. Ltd. vs Ameerjan & Ant., , relied on.

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ivil Appeal No. 4521 of 1986. From the Judgment and Order dated 20.12.1985 of the Patna High Court in C.W.J.C. No 1133 of 1984(R). Ashok Desai, Solicitor General, Kuldip Singh, Kapil Sibal, Additional Solicitor Generals, K.K. Venugopal, R.K. Jain, Gobind Das, R.N Sachthey, Shanti Bhushan, Dr. L.M. Singhvi, L.N. Sinha, M.L. Verma, Ranjit Kumar, K.K. Lahiri, R.F. Nariman, section Sukumaran, P.K. Jain, P. Saswidia, P. Parmeshwaran, C.V. Subba Rao, P.P. Singh, D Goburdan, S.B. Upadhyay, P.C. Kapoor, M.M Kashyap, A. Sharan, R.D. Upadh yay, S.K. Sinha, Apurb Lal, Anip Sachthey, C. Badri Nath Babu, B.B. Singh, A.K. Mitra, O.C. Mathur, A.N. Dittia, Arun Madan, Ms. A Subhashini, C.V. Subba Rao, Mrs. Sushma Suri and A.M. Ditta for the Appearing Parties. The Judgment of the Court was delivered by SINGH, J. In these appeals a common question of law is involved whether the State of Bihar had legal authority to execute leases in favour of the respondents for collection of slurry on payment of royalty to it. Since the question involved in these appeals are common the same are being disposed of by a common judgment. Civil Appeal No. 4521 of 1986 and Civil Appeal Nos. 61 62 of 1987 are directed against the judgment of the Patna High Court while Civil Appeal Nos. 230 231 of 1987 are directed against the judg ment of the Division Bench of the Calcutta High Court. In order to appreciate the controversy in question it is necessary to recapitulate the facts. M/s. Bharat Coking Coal Ltd. appellant in of 1986 is a Government Company which carries coal mining operations in village Sudamdih in the State of Bihar. There is a coal washery adjacent to the appellant 's coal mine in village Sudamdih. After the coal is extracted from the mines, it is crushed into pieces of different sizes for purposes of grading. Since the coal is mixed up with mud and other impurities, same is brought to the washery for washing and cleaning the same for reducing the ash percentage and for use by metallurgical consumers. In the process of wash ing small coal particles escape from the washery in the form of slurry along with water and the same are deposited in the slurry ponds constructed for their storage by the appellant company. But when the ponds are full, the slurry overflows the pond and flows down into the river Damodar. After the water is soaked by the soil the small particles of coal get deposited in the river bed. These coal particles are col lected and formed into briquettes which are sold in market for energy and fuel purposes. The slurry coal has acquired high commercial value as it is of exceptional quality and high grade, it is used by steel plants and thermal power stations. The State of Bihar granted lease in favour of Ram Nath Singh respondent No. 4 for collecting the coal parti cles settled in the Damodar fiber bed and other land includ ing plot No. 370 of Mauza Sudamdih. The appellant claimed that plot No. 370 which formed part of river bed of Damodar belonged to it having been acquired under the Coal Bearing Areas (Acquisition & Development) Act, 1957 for the purpose of mining of coal. Pursuant to the lease, respondent No. 4 has been collecting the coal particles from plot No. 370. The appellant company raised objection before the Revenue Authorities of the State of Bihar claiming property rights to collect and obtain slurry deposited in the river bed in plot No. 370, but its objections were over ruled and re spondent No. 4 was permitted to collect the coal particles from the aforesaid plot. The appellant thereupon filed a writ petition in the High Court of Patna challenging the State Government 's action in granting lease to respondent No. 4 for lifting slurry from the fiber bed, on the ground that the property belonged to the appellant company and the State Government had no authority in law to grant a mining lease without the prior approval of the Central Government under Section 5 of the Mines and Mineral (Regulation and Development) Act 1957. Tata Iron & Steel Company Ltd. the appellant in Civil Appeal Nos. 61 62 of 1987, is a company incorporated under the Companies Act. It owns steel plant at Jamshedpur and it also owns captive coal mines in the District of Hazari Bagh and Dhanbad. These coal mines are commonly known as West Bokaro Collieties. There is no dispute 753 that large area of land in the District of Hazari Bagh and Dhanbad have been settled with the appellant company for purposes of mining operations and the company enjoys mineral rights in respect of the surface and sub soil. It is not necessary to refer to the historical facts relating to the acquisition of mining rights by the appellant, as there is no dispute that under Section 10 of the Bihar Land Reforms Act the appellant 's existing mining leases became statutory leases in the State of Bihar. The appellant has established washery plant in the District of Hazari Bagh as well as in Jama Dhoba and Zora Pokhar in District Dhanbad for purposes of washing the coal after extraction from the coal mines and crushed into different sizes. In the process of washing the coal small particles of coal escape from the washery. and over flow from the plant and the same are deposited in the storage pond constructed by the appellant. But sometime they overflow from the storage pond and settle down in the Raiyati land and in the Bokaro river bed. The appellant has been claiming right that the slurry which escaped from the washery belonged to it and no other person had right to collect the same. The State Government did not accept the appellant 's claim instead it settled the fights of collec tion of slurry with the respondents under the indentures granted in their favour. Under the settlement the respond ents have been authorised by the State Government to collect sludge and slurry which settles down in the Bokaro river bed or in the Raiyati land on payment of royalty to the State. The appellant filed two writ petitions before the Patna High Court challenging the authority of the State Government 's action on the ground that slurry was a mineral being coal and as such its collection or mining was regulated by the provisions of the Mines and Mineral (Regulation and Develop ment) Act, 1957 (hereinafter referred to as 'the Act ') and the State Government had no authority to grant any lease for collection of sludge/slurry without the previous sanction of the Central Government. The aforesaid petitions were heard and disposed of by a Full Bench of the Patna High Court (AIR 1986 Patna 242). The Full Bench dismissed the writ petitions on the findings that the slurry was neither coal nor mineral instead it was an industrial waste of coal mine which was not regulated by the provisions of the Act. The collection of slurry did not involve any mining operations and the settlement made by the State Government in favour of the respondents for collecting the same was not a mining lease, therefore, the State Gov ernment was not under any legal obligation to obtain previ ous sanction of the Central Government under the Act. The High Court further held that after the slurry escaped into the river bed or to some other land, the same 754 ceased to belong to the appellants and the State Government was entitlement to execute lease for collection of the same. Civil Appeal Nos. 230 231 of 1987 are directed against the judgment of a Division Bench of the Calcutta High Court (AIR 1985 Calcutta 143). The Central Coal fields Ltd. and the Coal India Ltd. the appellants are Government Companies which own coal mines in the District of Giridih in the State of Bihar. The appellants have set up coal washeries at Kathara, Kargali and Sawang in the District of Giridih for washing the coal extracted from its mines. In the process of washing, particles of coal escape from the washery along with water which ultimately flows into the river Damodar. The Mining Department of the State of Bihar granted lease to Industrial Fuel Marketing Company and Ors. respondents for removing the slurry from the river bed on payment of royalty but the appellants resisted the collection of slurry from their land and they instituted criminal proceedings against the contractors. Thereupon, the respondents contractors filed writ petitions before the Calcutta High Court for quashing the criminal case registered against them, and also for the issue of a direction permitting them to collect slurry under the lease granted to them by the State of Bihar. Before the High Court the appellants herein contended that the slurry belonged to them and the State of Bihar had no authority in law to grant any lease in respect of the same. A learned single Judge of the High Court dismissed the writ petitions on the findings that the appellants herein are the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractors for removal of the same. On appeal by the contractors a Division Bench of the Calcutta High Court vide its judgment (AIR 1985 Calcutta 143) held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Act were not applicable to the grant of lease. On the question of appellants ' claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellant 's land, belonged to them and the respondents had no right to collect the same but if the slurry settled down on other 's land the respond ents have right to remove the same from the river bed. Aggrieved, the Central Coal fields Ltd. and Coal India Ltd. have challenged the correctness of the High Court 's view by these appeals. The main question which falls for consideration is whether the State of Bihar has authority to grant lease/settlement to the respondents for collection/lifting of coal slurry deposited in the river bed or on any other land after its escape from the appellants ' washeries. 755 Before the High Court the appellants contended that in view of the provisions of the Act the State of Bihar had no authority to grant any lease regarding collection of slurry without the prior approval of the Central Government. The State of Bihar and other respondents contended before the High Court that the slurry was not a mineral, and its col lection or lifting from the river bed involved no mining operations, therefore, the Act did not apply and the State Government was free to grant leases for collection of the same. The appellants further pleaded before the High Court that since slurry after its escape from their washeries settled down in their own land, it continued to be their property and the State of Bihar had no authority to grant lease for collection of the same from their land. The Full Bench of the Patna High Court held that the slurry was neither coal nor a mineral instead it was a reject residue or waste of an industrial process consisting of mud, ash and oily substances having carbonaceous ingredients. Since collection of slurry did not involve any mining operations the provisions of the Act did not apply and the State Gov ernment had authority to settle the removal of slurry with private parties. With regard to the appellants ' claim of ownership of the slurry deposited on the appellants ' land, the Full Bench did not decide the question, on the ground that these issues involved disputed questions of fact which could properly be adjudicated in a civil suit. The Division Bench of the Calcutta High Court held that the lease granted by the State of Bihar was not a mining lease as the river bed or the land from where the slurry was collected was not a mine as no winning or mining operations were involved in collecting the same. The Bench further held that the lease granted by the State Government in favour of the respondents for collecting the slurry did not confer any right in them for carrying out coal mining operation nor such right relates to winning or mining of coal. However the Bench held that the slurry deposited on the appellants ' land belonged to them and the respondents lessee had no right to collect slurry from the appellants ' land. But if the slurry was deposited on the land not owned by the appellants, the lessee was entitled to remove the same under the settlement made by the State of Bihar. Thus, both the High Courts held that the slurry which escaped from the washeries and depos ited in the river bed or on other land did not constitute a mineral and it was not regulated by the Central Act, conse quently, the State of Bihar had authority to settle the collection of slurry. Learned counsel for the parties made elaborate submis sions, before us in support of their case. On behalf of the appellants it was ' 756 urged that slurry/sludge the subject matter of dispute in the instant cases, in substance is coal, a mineral specified in the First Schedule to the Act. The State Government had no authority in law to grant any lease to the respondents for the collection or removal or lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Government under Section 5 of the Act. The counsel for the appellants further emphasised that slurry which escaped from washery of the coal mines, contains small particles of coal having carbona ceous character, and it is used for energy and fuel pur poses. Assailing the findings of the Full Bench of the Patna High Court and the Division Bench of the Calcutta High Court, the appellants ' counsel submitted that slurry coal was not deposited in the river bed or other land by any artificial mode instead the same were deposited in the river bed and the land by natural process of flow of water dis charged from the washeries. The process of collection or removal of the same from the river bed or Raiyati land by the respondent/lessees involved winning operations. Winning or mining operation according to the learned counsel did not always require excavation or extraction of a mineral from the bowels of the earth instead a mineral like sand or gravel may be deposited on the earth and removal of the same would also involve winning or mining operation. The appel lants further urged that if the slurry which is the subject matter of the lease or settlement, is not a mineral, the State Government had no authority in law to authorise any other person to remove the same from the appellants ' land. There is no law made by the State Legislature authorising the State Government to interfere with the appellants ' property rights. In the absence of any law the State of Bihar had no authority to interfere with the appellants ' property rights by executive orders. In the alternative learned counsel for the appellants urged that on the admit ted pleadings of the parties slurry discharged from the washeries of the appellants ' coal mines constituted waste and effluent of coal mines, its disposal was exclusively within the legislative competence of the Parliament. In view of the Parliament 's declaration under Section 2 read with Sections 13 and 18 of the Act, the State Government was denuded of all its powers in the matter relating to the disposal of slurry which would include its removal or col lection. Since the State Legislature is denuded of its legislative competence to make any law with regard to dis posal of waste or effluent discharge of coal mines, the State Government has no executive power to deal with the same. Learned counsel for the State of Bihar and other respondents reiterated their stand as taken by them before the High Court that the slurry was not a mineral and its removal did not involve any mining operations, consequently the settlement deed was not a mining 757 lease under the Act. On behalf of the State Government it was further contended that once the slurry escaped from the washcry plants of the appellants it ceased to belong to them and as it polluted the river water and affected the fertili ty of Raiyati land the State Government was justified in providing for its collection and removal to prevent pollu tion. The appellants could not have any right in the goods which they abandoned. It was further urged that the washer ies do not form integral part of the mining operations, therefore the slurry could not be treated as a waste of coal mine. In the alternative learned counsel contended that even if slurry was a waste of a coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating disposal of the slurry. Before, we consider the contentions of the parties, we think it necessary to briefly discuss the nature and charac teristic of the slurry. There is no dispute that coal is found in seams mixed with mud and other impurities. After its extraction from the mines, it is crushed into different sizes, thereafter it is washed in the washeries of the coal mines for removing its impurities for purposes of making it fit for use for metallurgical purposes. In the washery plants, coal is washed with the medium of water mixed with pine oil and sand through mechanical process. In the process of washing, large quantity of water is discharged through pipes which carry the discharged water to storage ponds constructed for the purpose of retaining the slurry. Along with the discharged water, small particles of coal are carried away to the pond where the coal particles settle down on the surface of the pond, and the same is collected after the pond is de watered. The coal particles so collect ed are of fine quality, ash free and the same is used as fuel. The slurry is a descriptive expression, it may be cement sluny or coal slurry, depending upon the character or quality of the mixture of mineral in the liquid form. In Websters New 20th Century Dictionary, 'slurry ' is defined as follows: "A thin mixture of water and any of several fine, insoluble materials as clay, cement, soil etc. " In common parlance slurry is a liquid form mixed with some other material. In Encyclopedia Britannica 'slurry ' is defined as under: "Slurry watery mixture or suspension of insoluble matter. In the manufacture of portland cement, a mixture of the raw materials with water is called a slurry. Cement may be 758 piped as a slurry in building construction. Coal may be transported over long distances as a slurry via pipeline; this method of transmission is economical between large producing areas and markets where large tonnages are used at a fairly uniform rate. The shipment of iron ore as slurry, either by pipeline or by tanker, also has increased. When slurry reaches its destination, the material is separated from the water before use or further processing." Viewed in the light of the above meaning of slurry, there is no doubt that in the instant cases slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water. After it overflows the storage pond the slurry flows into the river and is deposit ed on the river bed, which is later on collected and used as fuel after it is formed into briquettes. The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal. Thus, the slurry is coal in liquid form. A Division Bench of the Patna High Court in Kesari Mal Jain vs State of Bihar, AIR 1985 Patna 114 placing reliance on Nelson 's Dictionary of Mining which defined 'slurry ' as 'slurry inter alia means fine carbonaceous discharge from a colliery washery" held that the carbonaceous particles so discharged from the coal washery is used for producing energy or heat therefore it was coal. The Bench further held that coal particles which flow out with the water from the coal washeries are formed into balls or briquettes for sale in the market for purposes of producing energy or heat, therefore, slurry was coal. The Division Bench 's view was not accepted by the Full Bench of the Patna High Court as it held that the slurry deposit did not constitute a mineral. We agree with the view taken by the Division Bench in Kesari Mal 's case (supra) as in our opinion the slurry coal deposited in the river bed or land, in substance as well as in its character continues to be coal. If slurry is coal, the question is whether the leases in dispute granted by the State of Bihar constitute mine leases as contemplated by Section 5(2)(a) of the Act. "Mining lease" as defined by Section 3(c) means "a lease granted for the purpose of undertaking mining operations and include a sub lease granted for such purpose. "Mining operations" as defined by Section 3(d) means "any operations for the pur pose of winning any mineral. " Section 5(1) places restric tion on the grant of mining leases by a State Government. Section 5 (2)(a) lays down that except with the previous approval of the Central Government no prospecting licence or mining lease shall be granted in respect of any material specified in the First Schedule. The First Schedule to 759 the Act specifies minerals as contemplated by Section 5(2)(a) and "coal" is specified therein at Item No. 4. The Patna and Calcutta High Courts have held that the collection of slurry did not involve any mining operations, therefore, the lease in question was not a mining lease. Consequently, the State Government was not under any legal obligation to obtain approval of the Central Government before granting leasses for collection of slurry. These findings are assailed and the appellants contend that mining operations need not always involve extraction of mineral from the bowels of the earth, a mineral like sand, gravel may be deposited on the surface of the earth, and still its collection involves mining operations. It was strenuously urged that it is wrong to assume that mines and minerals must always be embedded under the sub soil and There can be no mineral on the surface of the earth. See: Bhagwan Das State of U.P. & Ors. , ; The definition of "mining operation" and "mine" are very wide. The expression "mining of mineral" in the definition of "mining operation" under section 3(d) of the Act is spacious enough to comprehend every activity by which a minerals extracted or obtained from the earth irrespective of whether such activity is carried out on the surface or in the bowels of the earth. It is not a requirement of the definition of "mining operation", that the activity for winning the miner al must necessarily be an underground activity. The essence of 'mining operation ' is that it must be an activity for winning a mineral whether under the surface or winning the surface of earth, vide: Tarkeshwar Sio Thakur Jiu vs B.D. Dey & Co. & Ors. , ; The slurry which is deposited on the river bed is not dumped there artificially by any human agency instead coal particles are carried to the river bed by the flow of water through natural process. Therefore the view taken by the High Court that the slurry which is deposited in the river bed is dumped by the appel lants by artificial process is incorrect. Once the coal particles are carried away by the water which is discharged from the washery and the same are settled in the river bed, any operation for the extraction or lifting of the coal particles from the river bed would involve winning opera tions within the meaning of Section 3(d) of the Act. We do not think it necessary to express any final opinion on this question as the appeals bound to succeed on the ground of absence of legislative competence of the State Legislature. Shri K.K. Venugopal learned counsel for the appellant urged that the recovery of coal from slurry irrespective of whether slurry is a mineral, or its collection involved mining operations or not, the State 760 of Bihar has no authority in law to regulate disposal of slurry. Under the Constitution 'conservation and development of mines and minerals ' is exclusively assigned to the Cen tral Government, and the State Legislature has no power to make any lease with regard to the disposal of coal slurry which is waste of coal mining. He referred to the provisions of the Act and particularly to Sections 2 and 18 in support of his contention that in view of Parliamentary Legislation, the State Legislature has no legislative competence to enact any law on the subject, consequently the State Government has no executive authority to deal with the disposal of slurry. In order to appreciate this submission it is neces sary to consider the Constitutional provisions and the Act. Articles 245 and 246 of the Constitution read with Seventh Schedule and the legislative lists therein prescribe the extent of legislative competence of Parliament and,State Legislature. Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule. Similarly, State Legislature has exclusive power to make laws with respect to any of the matters enumerated in List II. Parliament and the State Legislature both have legislative power to make laws with respect to any matter enumerated in List III, the Concurrent List. This is the legislative scheme under the Constitution, but certain matters of legislation are overlapping which present difficulty. The subject matter of legislation with respect of regulation of Mines and Mineral development is enumerated under Entry 23 of List II and Entry 54 of List I. These Entries are as under: "23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union." "54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of Union is declared by Parliament by law to be expedient in the public interest. " The State Legislature is competent to enact law for the regulation of mines and mineral development under Entry 23 of State List but this power is subject to the declaration which may be made by Parliament by law as envisaged by Entry 54 of Union List. Thus the legislative competence of the State Legislature to make law on the topic of mines and mineral is subject to Parliamentary Legislation. The Parlia ment has enacted the Mines and Minerals (Regulation and 761 Development) Act, 1957. By section 2 of the Act the Parliament has declared that it is expedient in public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. In view of Parliamentary declaration as made in section 2 of the Act, the State Legislature is denuded of its legislative power to make any law with respect to the regu lation of mines and mineral development to the extent as provided by the Act. In order to ascertain the extent of Parliamentary declaration, it is necessary to have a glance at the provision of the Act. Section 3 of the Act defines various expressions occurring in the Act. Sections 4 to 9 prescribe restrictions on undertaking, prospecting and mining operations under licence or lease. Section 10 to 12 prescribe procedure for obtaining prospecting licences or mining lease in respect of the land in which minerals vest in Government. Sections 13 to 16 provide for framing of rules for regulating the grant of prospecting licences or mining leases. In particular section 13 empowers the Central Government to make rules for regulating the grant of pros pecting licences and mining leases in respect of minerals and for the purposes connected therewith. Section 13(2) lays down that rules may provide for all or any of the matters as enumerated under various clauses therein. Clause (0) of section 13(2) before its amendment by the Amending Act 37 of 1986 conferred power on the Central Government to frame rules for the disposal or discharge of any tailings, slime or other waste products arising from any mining or metallurgical operations carried out in a mine. This provision empowered the Central Government to frame rules for the disposal of waste products or effluent discharge from mines including a coal mine. Section 14 makes the provisions of sections 4 to 13 inapplicable to minor minerals. Section 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and purposes connected there with. Since in the instant cases, we are not concerned with the minor minerals, it is not necessary to deal with the question in detail. Section 17 confers special powers on Central Government to undertake prospecting or mining opera tions in certain lands. Section 18 and 18A relate to the development of minerals. Sections 19 to 33 deal with miscel laneous matters. Section 18(1) provides for mineral development, this Section prior to its amendment by the Amending Act 37 of 1986 read as under: "Sec. 18(1): It shall be the duty of the Central Government to take such steps as may be necessary for the conservation and development of minerals in India and for that 762 purpose the Central Government, by notification in the Official Gazette, make such rules as it thinks fit. " Section 18(1) as amended by the Amending Act 37 of 1986 reads as under: "Sec. 18(1): It shall be the duty of the Central Government to take such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mine opera tions and for such purpose the Central Government may, by notification in the Official Gazette, make such rules as it thinks fit. " The amended and unamended sections both lay down that it shall be the duty of the Central Government to take all such steps as may be necessary "for the conservation and develop ment of minerals" in India and for that purpose it may make such rules as it thinks fit. The expression "for the conser vation of minerals" occurring under section 18(1) confers wide power on the Central Government to frame any rule which may be necessary for protecting the mineral from loss, and for its preservation. The expression 'conservation ' means "the act of keeping or protecting from loss or injury." With reference to the natural resources, the expression in the context means preservation of mineral; the wide scope of the expression "conservation of minerals" comprehends any rule reasonably connected with the purpose of protecting the loss of coal through the waste of coal mine, such a rule may also regulate the discharge of slurry or collection of coal particles after the water content of slurry is soaked by soil. In addition to the general power to frame rules for the conservation of mineral, Sec. 18(2) confers specific power for framing rules regulating disposal of waste of a mine. The Amending Act 37 of 1986 deleted clause (0) of section 13(2) and added the same as clause (k) to section 18(2) of the Act. After the amendment Sec. 18(2)(k) reads as under: "18(2): In particular, and without prejudice to the general ity of the foregoing power, such rules may provide for all or any of the following matters, namely: (k): "the disposal or discharge of waste slime or tailing 763 arising from any mining or metallurgical operations carried out in a mine." Section 18(2)(k) confers express power on the Central Gov ernment for framing rules for the conservation and the development of mineral including the disposal or discharge of waste arising from any mining operations of a mine. Such a rule may regulate disposal of slurry discharged from a washery which is an integral part of mining operations. The aforesaid analysis of the provisions of the Act makes the extent of Parliamentary declaration clear that the disposal and discharge of sludge or slurry emanating or coming from the washery of a coal mine is exclusively within the legislative power of Parliament. The Act further pro vides that the Central Government has exclusive power to frame any rule either u/s 13(2)(0) or under the amended section 18(2)(k) of the Act regulating disposal of slurry. The effect of the Parliamentary declaration as contained in the Act is that the matters referred to in the declaration, stand abstracted from List II and those become matters of legislation in List I of the Seventh Schedule. As a result of the declaration made by Parliament, under section 2 of the Act, the State Legislature is denuded of its legislative power with respect to the regulation of mines and mineral development and the entire legislative field has been taken over by Parliament. In Baijnath Kedia vs State of Bihar & Ors., ; this Court dealing with the extent of Parliament 's declaration made under section 2 of the Act, ob served as follows: "To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is ab stracted from the legislative competence of the State Legis lature. " This Court has consistently taken this view in The Hingir Rampur Coal Co. Ltd. & Ors. vs The State of Orissa & Ors., [1961] 2 SCR537; State of Orissa vs M.A. Tulloch & Co., ; and State of Tamil Nadu vs Hind Stone, ; 764 The Central Government has not framed any rule either under Section 13 or under Section 18 of the Act. Does it affect the legal position as discussed earlier? The answer must be in the negative. Prior to the Amending Act 37 of 1986 Section 13(2)(o) conferred power on the Central Govern ment to frame rules for the purpose of granting prospecting licences and mining leases including the disposal or dis charge of any tailings, slime or other waste products. Sub clause (0) of section 13(2) was transposed into section 18(2) as sub clause (k) by the Amending Act 37 of 1986. As noted earlier, section 18(1) confers general power on the Central Government to frame rules and to take all such steps as may be necessary for the conservation and development of minerals in India. Section 18(2) does not affect or restrict the generality or width of legislative power under Section 18(1) as the mat ters specified in various sub clauses of section 18(2) are illus trative in nature. Even in the absence of sub section (2) or its various sub clauses, the Central Government was invested with the power of subordinate legislation in respect of any matter which could reasonably be connected with the purpose of "conservation and development of minerals" by section 18(1) of the Act. Thus, power to frame rules, regulating the dis charge or disposal of slime or slurry emanating from a coal mine including its collection from the river bed or from Raiyati land after its escape from the washery of the coal mines, would clearly fail within the expression "conserva tion of mineral". Slurry admittedly contain coal particles. its collection from land or river is reasonably connected with the 'conservation of mineral '. Section 18(2)(k) which expressly confers power on the Central Government to regu late disposal or discharge of waste of a mine makes the Parliamentary declaration apparent that the State Legisla ture is not competent to regulate waste discharge of a coal mine. Mere absence of any rule framed by the Central Govern ment under sections 13 or 18 of the Act with regard to the dis posal of slime or waste of a coal mine does not confer legislative competence on the State Legislature to make any law or rule. Once a particular topic of legislation is covered by the Parliamentary declaration, the State Legisla ture is denuded of its power to make any law or rule in respect of that topic or subject matter and the absence of Rules would not confer legislative competence on the State. In Hingir Rampur Coal Co. Ltd. & Ors. vs The State of Orissa & Ors., this Court held: "In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that required is a declaration by Parliament that it was expedi ent in the public interest to take the regulation of devel opment of mines under the control of the Union. In 765 such a case the test must be whether the legislative decla ration covers the field or not." Since Section 18 of the Act covers the field with respect to disposal of waste of a mine, there is no scope for the contention that until rules are framed the State Legislature has power to make law or rules on the subject. Once the competent legislature with a superior efficacy expressly or impliedly evinces its legislative intent to cover the entire field on a topic, the enactments of the other legislature whether passed before or after would be overborne. Mere absence of rules framed by the Central Government, does not confer power on the State Legislature to make law on the subject. Since the legislative field with regard to the framing of rules relating to the disposal of slime and waste of ' coal mine is fully covered by section 18, the State Legisla ture is denuded of its power of making any law with regard to those matters. It was then urged that in the absence of a law being made by the State Legislature, the State Government 's action in executing lease/ settlement in respondent 's favour for collection of slurry is relatable to exercise of its execu tive powers. Learned counsel for the appellants contended that since Entry 23 of List II of the Seventh Schedule confers legislative power on the State Legislature for making laws regulating mines and minerals, the State Govern ment in the absence of any rule made by the Central Govern ment has power to regulate disposal and collection of slur ry. The State Government was justified in exercising its executive power making arrangements for the collection or removal of slurry which has been polluting the river water and affecting the Raiyati land 's fertility. Article 162 prescribes the extent of executive power of the State, it lays down that the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws. Thus, the executive power of the State Government is co extensive with the legislative power of the State Legislature. If the State Legislature has power to enact laws on a matter enumerated in the State List or in the Concurrent List the State has executive power to deal with those matters subject to other provisions of the Constitution. If a subject matter falls within the legisla tive competence of State Legislature, the exercise of execu tive power by the State Government is not confined, as even in the absence of a law being made, the State Government is competent to deal with the subject matter in exercise of its executive power. See: Rai Sahib Ram Jawaya Kapur & Ors. vs The State of Punjab, In the absence of any law, the State Government or its officers in exercise of executive authority cannot infringe citizens fights merely because the 766 State Legislature has power to make laws with regard to subject, in respect of which the executive power is exer cised. See: State of Madhya Pradesh & Anr. vs Thakur Bharat Singh, ; , No doubt under Entry 23 of List II, the State Legislature has power to make law but that power is subject to Entry 54 of List I with respect to the regula tion and development of mines and minerals. As discussed earlier the State Legislature is denuded of its power to make laws on the subject in view of Entry 54 of List I and the Parliamentary declaration made under Section 2 of the Act. Since State Legislature 's power to make law with re spect to the matter enumerated in Entry 23 of List has been taken away by the Parliamentary declaration, the State Government ceased to have any executive power in the matter relating to regulation of mines and mineral development. Moreover, the proviso to Article 162 itself contains limita tion on the exercise of the executive power of the State. It lays down that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of State shall be subject to limitation of the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authority thereof. The limitation as contained in the proviso to Article 162 was necessary to avoid conflict in the exercise of executive power of State and the Union Government in respect of matters enumerated in List III of the Seventh Schedule. If Parliament and the State Legisla ture both have power to make law in a matter, the executive power of the State shall be subject to the law made by the Parliament or restricted by the executive power of the Union expressly conferred on it by the Constitution or any law made by Parliament. Parliament has made the law as contem plated by Entry 54 of List I and the law so made confers exclusive power on the Central Government to frame rules regulating the disposal of waste or industrial effluent of a mine, the State Legislature has, therefore no power either to make law under Entry 23 of List II or to exercise execu tive power to regulate the disposal of slurry, a waste effluent discharge of a coal mine. Learned counsel for the State of Bihar as well as for the respondent contractors contended that the lease executed by the State Government in their favour was not a mining lease within the provisions of the Act, therefore, the provisions of the Act are not applicable to it. This submis sion is rounded on the assumption that the slurry is not coal. We have already discussed the characteristic of slurry which shows that the coal can be transported in liquid form of slurry. The slurry which gets deposited on the river bed and on Raiyati land contains fine particles of coal, on its resumption it is used for energy and 767 fuel purposes. It is, therefore, difficult to accept the contention that the coal particles which escape from the washery and get deposited in the river bed or in Raiyati land do not have the character of mineral. It is not, howev er, open to the State to raise this contention as while making settlement and granting lease in favour of the re spondents for lifting or collecting slurry deposits the State itself proceeded on the assumption that the coal particles as deposited in the river bed and in the Raiyati land on its escape from the coal washeries constituted 'mineral '. Since under the Bihar Land Reforms Act the miner als vest in the State, it claimed right to grant lease in favour of the respondents for collecting the same. In the indenture of settlement dated 9.4.1975 granted in favour of the M/s. Industrial Fuel Marketing Company and Ors. in Civil Appeal No. 230 231 of 1987 the State Government itself stated: "and whereas these rejects/sludge being a mineral (emphasis supplied) the State Government is the owner of the same by virtue of the entire State including the minerals having vested in the State Government under the provisions of Bihar Land Reforms Act." The indenture purported to confer right on the lessee for lifting rejects also known as sludge comprising fine particles of coal which are ejected in the process of coal being washed in the coal washeries and which flow into the nearby river or to the lands held by the Raiyats. The lease was granted by the Mining Department of the State Government dealing with minerals. Similarly, the indenture of settlement dated 9.4.1981 granted in favour of respondent No. 4 in Civil Appeal Nos. 61 62 of 1987 permitting him to collect slurry after it is deposited in the river bed or in the land as specified in the lease, was also executed by the State of Bihar on the premise that the slurry as deposited in the river bed was a mineral, namely, coal. Thus, it is apparent that the State of Bihar itself has been treating the 'slurry deposits ' as mineral and on that assumption it has been executing leases conferring rights on the respondents to collect the same on payment of royalty. In this view, it is not open to the State of Bihar and the lessees to contend that slurry is not coal or miner al within the meaning of the Act. Learned counsel for the respondents attempted to justify State 's action on the ground that the slurry as settled down in river bed or in Raiyati land was not waste or industrial effluent of coal mines as the washeries are not part of coal mines. We find no merit in the submission. Section 3 of the Act defines 'mining operations ' which means any operation undertaken for the purpose of winning any mineral. The expression 'mine ' is not defined by the Act instead Section 3(1) says that the expression 'mine ' has the same meaning as assigned to it in the . "Mine" as defined by Section 2(1)(j) of 768 1952 means any excavation where any operation for the pur pose of searching for or obtaining minerals has been or is being carried on and it includes: (xii) "any premises in or adjacent to and belonging to a mine on which any process ancillary to the getting, dressing or preparation for sale of minerals or of coke is being carried on. " The inclusive definition of mine is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale. There is no dispute between the parties that the coal as extracted from the coal mine is crushed into pieces and thereafter it is washed to remove its impurities and ash contents to make the coal fit for sale. After the coal is washed, it assumes the form of coke which is sold to consum ers. The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for sale is an integral part of a mine as it involves ancillary process. Washery is included within the definition of mine under the . Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine. Moreover, it is not open to the respondents to contend that slurry is not a waste discharged from the washeries of coal mines. The respondents have all along pleaded before the High Court as well as before this Court that slurry is a waste discharged from the washery of the appellants ' coal mines. In Civil Appeal No. 4521 of 1986 Ram Nath Singh respondent No. 4 has stated in paragraph 2 of his affidavit before this Court that slurry/sludge is a waste substance of Sudamdih coal washery and in order to keep the river water clean and pollution free and to earn revenue the State Government settled the collection of slurry from the river bed in his favour. The State of Bihar also in its affidavit filed before the High Court expressly stated that the sludge/ slurry was rejected property from the coal washery and the State of Bihar made settlement in favour of the respondents for collection of the waste deposits from the river bed and other land. The full Bench of the Patna High Court also observed: "the sludge/slurry could not be raised to the status of being coal, as it was the consequen tial wastes of coal mining process, therefore the true nature of slurry was that it was a mere residue reject or waste of an industrial process consisting of mud, ash, oily substances water and carbonaceous ingredients. " The respond ents have all along proceeded on the assumption that sludge/ 769 slurry was an industrial waste arising out of the mining operations of coal. The State of Bihar as well as the re spondents in whose favour the right of collection of sludge/slurry has been settled have all along taken the stand that the discharge of slurry/sludge by the appellant 's washcry into the river has been polluting the river and affecting the fertility of land, therefore the State Govern ment, permitted the removal of the slurry/sludge with a view to prevent pollution of the fiber and the land. On the admitted facts the entire activity relating to disposal of the industrial waste, slime or tailing in the shape of sludge/slurry escaping from the washeries of the appellant 's coal mines including the prevention of pollution of river water or land is covered by Sec. 18 of the Act. The High Courts confined themselves to the question whether sludge/ slurry was a mineral under the Act and failed to consider the scope and effect of Section 18 of the Act. We are there fore of the opinion that in view of the admitted case of the parties disposal of sludge/slurry coming out from the wash eries of appellants ' coal mines is covered by the Act and the State Government had, no authority in law to grant any lease or settlement authorising collection of the same from the five bed or from any other land. Consequently, the respondents in whose favour settlements have been made by the State Government have no right to authority to collect sludge/slurry either from the five bed or from any other land. In Civil Appeal No. 4521 of 1986 the appellants ' claim that plot No. 370 situated in village Sudamdih belonged to them and the sludge/ slurry discharged from their washery as settled down on that land also belonged to them therefore the State Government had no authority in law to permit respondents to collect slurry coal from their land. The High Court held that since the appellant 's ownership fights in respect of Plot No. 370 of village Sudamdih was seriously disputed the question should be decided by the civil court. Mr. Kapil Sibal learned counsel for the appellant urged that the High Court committed serious error as there was no scope for any dispute regarding the question of ownership of Plot No. 370. We find force in his submission. There is suffi cient material on record to show that Bharat Coking Coal Ltd. is the owner of the plot No. 370 situated at village Sudamdih and the respondents have failed to place any mate rial before the court that the appellant is not owner of Plot No. 370. A Notification was issued by the Central Government on 6.8.1960 under sub section (1) of Section 4 of the Coal Beating Areas (Acquisition and Development) Act, 1957, for purpose of prospecting coal in the land specified in the Schedule to the Notification included the entire land of village Sudamdih District Dhanbad. By another Notifica tion dated August 30, 1961 issued under 770 Section 7 of the Coal Bearing Areas (Acquisition and Devel opment) Act, 1957 the Central Government declared its inten tion to acquire the lands measuring 778.45 acres specified in Schedule A to the Notification Sudamdih village was mentioned in the Schedule. Plot No. 370 of Sudamdih was expressly specified therein. By another Notification dated December 16, 1961 the Central Government declared under Section 9 of the Coal Beating Areas (Acquisition and Devel opment) Act 1957 that the land measuring 778.45 acres de scribed in Schedule A and the rights to mine, quarry, bore, dig and search for win work and carry away minerals in the lands measuring 625.73 acres described in Schedule B are acquired. The Schedule to the Notification clearly stated that all rights in village Sudamdih were acquired and plot No. 370 was expressly specified in the Schedule to the Notification. On the issue of the aforesaid Notifications the lands specified therein vested in the Central Govern ment. The Central Government by its order dated 27th January 1962 transferred the aforesaid lands including plot No. 370 situated in village Sudamdih to the National Coal Develop ment Corporation, a Government Undertaking. In 1975 the Central Government reorganised the management structure of the coal industry in the public sector and a central compa ny, i.e. Coal India Limited, was constituted having Bharat Coking Coal Limited as one of its subsidiary. The Bharat Coking Coal Ltd. was incorporated for running and managing the Sudamdih and Monidih coal mines of National Development Corporation. Since then the Sudamdih coal mines and the land in dispute have been under the control and management of the Bharat Coking Coal Ltd. During the pendency of the appeal before this Court proceedings were initiated against re spondent No. 4 for the violation of interim orders of this Court. In the contempt proceedings Respondent No. 4 contend ed that plot No. 370 of village Sudamdih belonged to the State of Bihar and the appellants had no ownership rights therein. This Court held that since plot No. 370 of Sudamdih has been acquired under Section 9(1) of the Coal Bearing Areas (Acquisition and Development) Act 1957 the appellant company was its owner, and it was idle to contend the con trary. We therefore hold that the appellant is the owner of plot No. 370 of village Sudamdih and the State Government had no authority in law to make any arrangement or to settle any right with respondents for collecting slurry deposits from that Plot No. 370 of Sudamdih. In view of the above discussion, we hold that the slurry which escapes from the appellants ' washeries is mineral and its regulation is within the exclusive jurisdiction of the Central Government. We further hold that in view of the Parliamentary declaration made by 771 Section 2 of the Act and having regard to Section 18 of the Act the State Government has no authority in law to make any settlement or grant any lease to any person for the collec tion of slurry deposits either from the river bed or other land. The impugned settlements made in favour of the re spondents by the State Government are illegal and the re spondent lessees have no right or title to collect the slurry deposits, therefore, they are restrained from lifting or collecting the same from the land in dispute. We, accord ingly, allow Civil Appeal No. 4521 of 1986 and Civil Appeal Nos. 61 62 of 1987 and set aside the order of the High Court of Patna and allow the writ petitions filed by the appel lants before the Patna High Court. We further allow Civil Appeal Nos. 230 231 of 1987 and set aside the order of the High Court of Calcutta and dismiss the writ petitions filed by Industrial Fuel Marketing Company & Ors. We further direct that the money deposited pursuant to the interim orders passed by the High Court and this Court will be paid to the successful party. There will be no order as to costs. G.N. Appeal al lowed.

The three appellant companies claimed their respective right to the slurry that escaped from their washery plant/pond and got deposited in the Bokaro and Damodar River beds, as also in certain Raiyati land. The State Government did not accept their plea and leased out the right to remove the said slurry to the respondent on payment of royalty. The first two appellants filed Writ Petitions before the Patna High Court challenging the State Government 's action in leasing out the right to the Respondent 's for removing the slurry. The third company instituted criminal proceedings against the contractors, who in turn filed Writ Petitions before the Calcutta High Court for quashing the criminal proceedings and for a direction permitting them to collect slurry under the lease granted by the State Government. 745 The Full Bench of the Patna High Court dismissed the Writ Petitions and held that slurry was neither coal nor mineral; it was an industrial waste of coal mine which was not regulated by the provisions of the Act. It also held that collection of slurry did not involve any mining opera tions and the settlement made by the State Government in favour of the respondents was not a mining lease and so the State Government was not under any legal obligation to obtain previous sanction of the Central Government under the . It further held that after the slurry escaped into the river bed or to some other land, it ceased to belong to the appel lants and the State Government was entitled to execute the lease for collection of the slurry. The Writ Petitions filed by the Contractors before the Calcutta High Court were dismissed by a Single Judge who held that the third appellnat company was the owner of the slurry and the State Government had no authority to grant any lease to the respondent contractorS for removal of the same. On appeal by the contractors the Division ' Bench held that the lease granted by the State of Bihar in favour of the contractors was not a mining lease and the provisions of the Mines and ' Minerals (Regulation and Development) Act, were not applicable to the grant of lease. On the question of appellants ' claim to the property rights for collecting slurry, the Bench held that the slurry deposited on the appellants ' land, belonged to them and the respondents had nO right. to collect the same but if the slurry settled down on other 's land the respondents have right to remove the same. Against the above decisions of the two High Courts, the appellant companies have preferred the present appeals. On behalf of the appellants, it was inter alia contended that the slurry/sludge was in substance coal, a mineral specified in the First schedule to the Act; that the State Government had no authority in law to grant any lease to the respondents for the collection, removal Or ' lifting of the slurry coal deposited in the river bed or on any Raiyati land without obtaining the sanction of the Central Govern ment under Section 5 of the Act; that the deposit of the slurry in the river bed and the land was by natural process of flow of water discharged from the washeries; that there was no law made by the State Legislature authorising the State Government to interfere with the appellants ' property right by way of executive orders; that slurry discharged from the washeries of the appellants ' coal mines constituted waste and effluent of coal mines, its disposal was exclu sively within the legislative compe 746 tence of the Parliament; and that in view of the Parlia ment 's declaration under Section 2 read with Sections 13 and 18 of the Act, the State Government was denuded of all its legislative competence to make any law with regard to dis posal of waste or effluent discharge of coal mines. and hence the State Government had no executive power to deal with the same. The main contentions on behalf of the respondents were that once the slurry escaped from the washery plants of the appellant it ceased to belong to them and as it polluted the river water and affected the fertility of Raiyati land the State Government was justified in providing for its collec tion and removal to prevent pollution; that the appellants could not have any right in the goods which they abandoned; that the washeries do not form integral part of the mining operations, and therefore the slurry could not be treated as a waste of coal mine. Alternatively it was contended that even if slurry was a waste of coal mine the State Government was competent to provide for its collection and removal as the Central Government had failed to make any rule under Section 18 of the Act regulating the disposal of the slurry. Allowing the appeal, this Court, HELD: 1. Slurry is a descriptive expression, it may be cement slurry or coal slurry, depending upon the character or quality of the mixture of mineral in the liquid form. There is no doubt that in the instant cases, slurry is coal slurry, as admittedly small particles of coal escape from the washery plant alongwith water. After it overflows the storage pond the slurry flows into the river and is deposit ed on the river bed, which is later on collected and used as fuel after it is formed into briquettes. The deposit which is collected from the river bed continues to be carbonaceous in character having all the elements of coal. Thus, the slurry is coal in liquid form, and slurry coal deposited in the river bed or lands in substance as well as in its char acter continues to be coal. [757F; 758C D] Kesari MaI Jain vs State of Bihar, AIR 1985 Patna 114, ap proved. Websters New 20th Century Dictionary; Encyclopaedia Britannica, referred to. The definition of "mining operation" and "mine" are very wide. The expression "mining of mineral" in the defini tion of "mining operation" under Section 3(d) of the Mines and Minerals (Regulation & 747 Development) Act, 1957 is spacious enough to comprehend every activity by which a mineral is extracted or obtained from the earth irrespective of whether such activity is carried out on the surface or in the bowels of the earth. It is not a requirement of the definition of "mining operation", that the activity for winning the mineral must necessarily be an underground activity. The essence of 'mining operation ' is that it must be an activity for win ning a mineral whether under the surface or winning the surface of earth. The slurry which is deposited on the river bed is not dumped there artificially by any human agency instead coal particles are carried to the river bed by the flow of water through natural process. Therefore the view taken by the High Court that the slurry which is deposited in the river bed is dumped by the appellants by artificial process is incorrect. Once the coal particles are carried away by the water which is discharged from the washery and the same are settled in the river bed, any operation for the extraction of lifting of the coal particles from the river bed would involve winning operations within the meaning of Section 3(d) of the Act. However. in the instant cases, it is not necessary to express any final opinion on this ques tion. [759D G] Tarkeshwar Sio Thakur Jiu vs B.D. Dey & Co. & Ors., ; relied on. Bhagwan Das vs State of U. P. & Ors. , ; , referred 3. The State Legislature is competent to enact law for the regulation of mines and mineral development under Entry 23 of State List but this power is subject to the declara tion which may be made by Parliament by law as envisaged by Entry 54 of Union List. Thus the legislative competence of the State Legislature to make law on the topic of mines and minerals is subject to Parliamentary Legislation. The Par liament has enacted the . By Section 2 of the Act the Parlia ment has declared that it is expedient in public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. In view of Parliamentary declaration as made in section 2 of the Act, the State Legislature is denuded of its legislative power to make any law with re spect to the regulation of mines and mineral development to the extent as provided by the Act. [760G H; 761A] 4.1 An analysis of the provisions of the Act makes the extent of 748 Parliamentary declaration clear that the disposal and dis charge of sludge or slurry emanating or coming from the washery of a coal mine is exclusively within the legislative power of Parliament. The Act further provides that the Central Government has exclusive power to frame any rule either under Section 13(2)(0) or under the amended Section 18(2)(k) of the Act regulating disposal of slurry. The effect of the Parliamentary declaration as contained in the Act is that the matters referred to in the declaration, stand abstracted from List II and these become matters of legislation in List I of the Seventh Schedule. As a result of the declaration made by the Parliament, under Section 2 of the Act. the State Legislature is denuded of its legisla tive power with respect to the regulation of mines and minerals development and the entire legislative field has been taken over by Parliament. [763C E] 4.2 The Central Government has not framed any rule either under Section 13 or under Section 18 of the Act. Prior to the Amending Act 37 of 1986 Section 13(2)(0) con ferred power on the Central Government to frame rules for the purpose of granting prospecting licences and mining leases including the disposal of discharge of any tailings, slime or other waste products. Sub clause (0) of Section 13(2) was transposed into Section 18(2) as sub clause (k) by the Amending Act 37 of 1986. Section 18 (1) confers general power on the Central Government to frame rules and to take all such steps as may be necessary for the conservation and development of minerals in India. Section 18(2) does not affect or restrict the generality or width of legislative power under Section 18(I) as the matters specified in var ious sub clauses of Section 18(2) are illustrative in na ture. Even in the absence of sub section (2) or its various sub clauses, the Central Government was invested with the power of subordinate legislation in respect of any matter which could reasonably be connected with the purpose of "conservation and development of minerals" by Section 18(1) of the Act. Power to frame rules, regulating the discharge or disposal of slime or slurry emanating from a coal mine including its collection from the river bed or from Raiyati land after its escape from the washery of the coal mines. would clearly fall within the expression "conservation of mineral". Slurry admittedly contain coal particles, its collection from land or river is reasonably connected with the 'conservation of mineral '. Section 18(2)(k) which ex pressly confers power on the Central Government to regulate disposal or discharge of waste of a mine makes the Parlia mentary declaration apparent that the State Legislature is not competent to regulate waste discharge of a coal mine. Mere absence of any rule framed by the Central Government under Sections 13 or 18 of the Act with regard to the dis posal of slime or waste of a coal mine does not 749 confer legislative competence on the State Legislature to make any law or rule. Once a particular topic of legislation is covered by the Parliamentary declaration, the State Legislature is denuded of its power to make any law or rule in respect of that topic or subject matter and the absence of Rules would not confer legislative competence on the State. [764A G] 4.3 Since Section 18 of the Act covers the field with respect to disposal of waste of a mine. there is no scope for the contention that until rules are framed the State Legislature has power to make law or rules on the subject. Once the competent legislature with a superior efficacy expressly or impliedly evinces its legislative intent to cover the entire field on a topic. the enactments of the other legislature whether passed before or after would be overborne. Mere absence of rules framed by the Central Government. does not confer power on the State Legislature to make law on the subject. Since the legislative field with regard to the framing of rules relating to the disposal of slime and waste of coal mine is fully covered by Section 18. the State Legislature is denuded of its power of making any law with regard to those mailers. [765B C] Baijnath Kedia vs State of Bihar & Ors. ; Hingir Rampur Coal Co. Ltd. & Ors. vs State of Orissa & Ors. , ; ; State of Orissa vs M.A. Tulloch & Co., ; and State of Tamil Nadu vs Hind Stone, ; relied on. The executive power of the State Government is co extensive with the legislative power of the State Legisla ture. If the State Legislature has power to enact laws on a matter enumerated in the State List or in the concurrent list the State has executive power to deal with those mat ters subject to other provisions of the Constitution. If a subject matter fails within the legislative competence of State Legislature. the exercise of executive power by the State Government is not confined, as even in the absence of a law being made, the State Government is competent to deal with the subject matter in exercise of its executive power. In the absence of any law, the State Government or its officers in exercise of executive authority cannot infringe citizens rights merely because the State Legislature has power to make laws with regard to subject, in respect of which the executive power is exercised. No doubt under Entry 23 of List 1I, the State Legislature has power to make law but that power is subject to Entry 54 of List 1 with respect to the regulation and development of mines and minerals. Since State Legislature 's power to make law with respect to the matter enumerated in Entry 23 of List II has been taken away by the Parliamentary declaration, the State Government ceased to have any executive power in the matter relating 750 to regulation of mines and mineral development. Moreover, the proviso to Article 162 itself contains limitation on the exercise of the executive power of the State. If Parliament and the State Legislature both have power to make law in a matter, the executive power of the State shall be subject to the law made by the Parliament or restricted by the execu tive power of the Union expressly conferred on it by the Constitution or any law made by Parliament. Since Parliament has made the law as contemplated by Entry 54 of List I and the law so made confers exclusive power on the Central Government to frame rules regulating the disposal of waste or industrial effluent of a mine, the State Legislature has, therefore no power either to make law under Entry 23 of List II or to exercise executive power to regulate the disposal of slurry, a waste effluent discharge of a coal mine. [765F H; 766A F] Rai Sahib Ram Jawaya Kapur & Ors. vs State of Punjab, and State of M.P. & Anr. vs Thakur Bharat Singh, ; , referred to. It is apparent that the State of Bihar itself has been treating the 'slurry deposits ' as mineral and on that assumption it has been executing leases conferring rights on the respondents to collect the same on payment of royalty. Hence it is not open to the State of Bihar and the lessees to contend that slurry is not coal or mineral within the meaning of the Act. [767F] 7. The inclusive definition of 'mine ' as contained in Section 2 of the Act is wide enough to include any premises belonging to a mine where any ancillary process is carried on for preparing the minerals or coke for sale. The washery, wherein the process of washing coal is carried on, for the purpose of preparing the coal for. sale is an integral part of a mine as it involves ancillary process. Washery is included within the definition of mine under the . Any waste discharge from the washery carrying small particles of coal in the form of slurry is the waste slime arising from operations carried out in a mine. Moreover, it is not open to the respondents to contend that slurry is not a waste discharged from the washeries of coal mines, since they have all along pleaded that slurry is a waste dis charged from the washery of the appellants ' coal mines. [768C; D E] 8. The slurry which escapes from the appellants ' wash eries is mineral and its regulation is within the exclusive jurisdiction of the Central Government. In view of the Parliamentary declaration made by Section 2 of the Act and having regard to Section 18 of the Act, the State 751 Government has no authority in law to make any settlement or grant any lease to any person for the collection of slurry deposits either from the river bed or other land. The im pugned settlements made in favour of the respondents by the State Government are illegal and the respondent lessees have no right nor title to collect the slurry deposits and they are restrained from lifting or collecting the same from the land in dispute. [771H; 772A] [This Court directed that the money deposited pursuant to the interim orders passed by the High Court and this Court will be paid to the successful party. [771C]

6533.txt

ivil Appeal No. 2231 of 1988. From the Judgment and Order dated 19.8.1987 of the Madras High Court in Appeal No. 86 of 1982. R. Venkataramani for the Appellants. section Balakrishnan and M.K.D. Namboodiri for the Respondents. The Judgment of the Court was delivered by SHARMA, J. This appeal by special leave is directed against the decree passed by the High Court in favour of the plaintiff respondents in a suit for partition. The property in suit belonged to Smt. Rathinammal, who after executing a registered will died in 1942. Accord ing to the terms of the will, her two sons Natesan. defend ant No. 1, and Subramanian. plaintiffs ' witness No. 2 (PW 2), were to remain in possession of the properties without any power of alienation and had to pay the taxes and conduct regularly certain religious festivals; and thereafter their sons were to manage the properties on similar terms. The will further provides that after their attaining majority the great grand sons, i.e., 510 the son 's sons ' sons of the testatrix will get the proper ties as absolute owners. Subramanian, the younger son of the testatrix, who has been in 'the present suit examined as the second witness on behalf of the plaintiffs, has one son Arunachalam, de fendant No. 15. The three plaintiffs, Ramesh, Ganesh and Sivalingam are the sons of the defendant No. 15. The defend ant No. 1 got four sons and ten sons ' sons. The main dispute in the suit is about the share which the plaintiffs are entitled to, under the terms of the will. They claim that they being the only grand sons of Subramanian have half share in the properties, the remaining half going to the grand sons of the defendant No. 1, namely, defendants No. 5 to 14. On behalf of the defendants it is pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares. The defendants also contended that the suit was fit to be dismissed as the defendant No. 1 and the defendant No. 15 had finally parti tioned the properties in 1975, and no question of a further partition arises. The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity. The trial court rejected the plea based on the rule against perpetuity. Having regard to the interest of the defendant No. 1, his brother Subramanian and Arunachalam, defendant No. 15, the court held that the alleged partition of 1975 was illegal and not binding on the plaintiffs. So far the shares of the plaintiffs and the defendants No. 5 to 14 are concerned, agreeing with the defence case, the court held that the parties would take the properties as per capita. However, the suit was dismissed on the ground that the plaintiffs were still minor. On appeal by the plaintiffs, the High Court confirmed the finding of the trial court that the 1975 partition was illegal. On the question of the shares of the parties, the High Court agreed with the plaintiffs and held that the division would take place as per stirpes. Taking into ac count the fact that during the pendency of the appeal two of the plaintiffs had attained majority, the High Court passed a decree in their favour for one sixth share each. So far the third plaintiff is concerned, the High Court declared his right without passing a decree for partition. The de fendants are challenging the decision of the High Court by the present civil appeal. The learned counsel for the appellants has contended that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and the conclusion of the 511 High Court on this aspect is illegal. The English version of the operative portion of the will has been quoted in para graph 7 of the judgment of the trial court and is not chal lenged by either party before us. After mentioning the rights and the duties of her sons the testatrix has stated the position of her grand sons and great grand sons thus: "They (that is, sons ' sons) have also to pay the taxes and out of their income conduct the aforesaid festivals regular ly. Then their male issues after attaining majority, have to take possession of the said properties in equal shares and enjoy them with all powers of alienation. " It has been stated by the learned counsel for the parties before us that the words "the said properties in equal shares" are the English version of the words SAMABHAGAMAGA ADAINTHU. The learned counsel for the appellants translated this portion of the will as stating that, "they (that is, the sons ' sons) shall pay the taxes due to the Government and will carry on the charitable/religious activities without fail and their male issues would on attaining majority get the properties in equal portion (SAMABHAGAMAGA ADAINTHU) and will possess, own and enjoy it absolutely. " The crucial expression is SAMABHAGAMAGA ADAINTHU which according to the learned counsel for the parties means in equal portions. The question is as to whether in view of this provision in the will, the entire properties left by the testatrix are to be divided equally amongst all her great grand sons; or, the three plaintiffs shall amongst themselves take half, the remaining half going to their cousins. The High Court has interpreted the crucial part of the will, mentioned in the preceding paragraph, as directing the plaintiffs on the one hand and the defendants 5 to 14 on the other respectively to "share equally out of each branch". It has been assumed that the properties finally descended on the two branches in equal shares, and conse quently parties belonging to the two branches inherited the properties as stirpes. The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venkatakrishna Rao & Ors. vs Shrimati Boddu Satyavathi & Ors., ; ; were more or less similar, which this Court construed in the manner as suggested by the plaintiffs in the case before us. We are not in agreement with the. approach of the High Court. 512 8. It is well settled that a court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances, the posi tion of the testator. his family relationship 'and the probability that he used the words in a particular sense also must be taken into account. They lend a valuable aid in arriving at the correct construction of the will. Since these considerations are changing from person to person. it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases, the disputed will approximates closely. Recourse to prece dents, therefore, should be confined for the purpose of general principle of construction only. which, by now, are well settled. There is still another reason as to why the construction put on certain expressions in a will should not be applied to a similar expression in the will under ques tion for, a will has to be considered and construed as a whole, and not piecemeal. It follows that a fair and reason able construction of the same expression may vary from will to will. For these reasons it has been again and again held that in the matter of construction of a will. authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur (see Ramachandra Shenoy and Another vs Mrs. Hilda Brite and Others, ; at p. 736. The risk in not appreciating this wholesome rule is demonstrated by the case before us. Assuming that the will in the case of Boddu Venka takrishna Rao & Ors. vs Shrimati Boddu Satyavathi & Ors., ; ; was somewhat similar to that in the present case. the High Court. following the construction given on the will in the reported case, has held in the judgment under appeal that the great grand sons of the testatrix shall be taking the properties as per stripes. While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case. There. the testatrix who was a childless widow. had bequeathed under the will life es tates to two children who were defendants 4 and 5 in the case and whom she had brought up from their infancy. and subject to the same, the property was to go to their chil dren after their death. The conclusion of the High Court on the construction of the will. with which this Court agreed. was expressed thus. "the bequest in favour of defendants 4 and 5 was that of a life estate with a vested remainder in favour of their children and that the children should take the vested re mainder per stripes and not per capita". 513 In the case before us no life estate was created in favour of anybody. otherwise there would not arise any question of the plaintiffs ' getting any share in the proper ty even on their attaining majority during the lifetime of their father and uncle. The High Court has also. under the impugned judgment, observed that a Hindu is not ordinarily expected to create a joint tenancy but, failed to appreciate that there is only presumption. to this effect, which can not override the provisions 'of the will, if the language is unambiguous and clear. In the present case there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate in the properties. It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property abso lutely without waiting for the death of their respective fathers or grand fathers. We should, therefore. interpret the will without being influenced by the meaning given to the will in the reported case. The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time "under equal shares". Since this is the first occasion for the shares in the property to be defined the expression "equal shares" must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix. In other words. they take the properties as per capita. Admittedly the third plaintiff has also attained majority during the pendency of the present appeal and has, therefore. become entitled to a share in the properties now. The suit. is accordingly decreed in favour of all the plain tiffs, their share being one thirteenth each. The plea that the disposition under the will was hit by the rule against perpetuity was rejected by the trial court in paragraph 7 of judgment on the ground that the sons of the testatrix, namely, the first defendant and the plain tiff 's witness No. 2 as also their respective sons the defendants No. 2 to 4 are alive. The point was not pressed in the High Court. The view of the trial court appears to be correct, and does. not require reconsideration at this stage. In the result, the appeal is allowed in part as indicated above. The suit is accordingly decreed in favour of all the three plaintiff. The share of the three plain tiffs and the ten defendants, that is, defendants No. 5 to 14, shall be onethirteenth each in the suit properties. There shall be no order as to costs. N.V.K. Appeal party allowed.

The property in the suit belonged to the great grand mother of the plaintiffs and defendant Nos. 5 to 14 who executed a registered will. According to the terms of the will, her two sons, defendant No. 1 and plaintiffs ' witness No. 2 were to remain in possession of the properties without any power of alienation, to pay the taxes and conduct regu larly certain religions festivals, and their male issues on attaining majority were to get the property in equal por tions and enjoy it absolutely. The main dispute in the suit was about the share which the plaintiffs are entitled to under the terms of the afore said will. The plaintiffs claimed that they being the only grand sons of the younger son of the testatrix were entitled to half share in the properties, the remaining half going to the grand sons of defendant No. 1 namely, defendant Nos. 5 to 14. The suit was contested on behalf of the defendants, who pleaded that the suit properties have to be divided amongst all the 13 great grand sons of the testatrix in equal shares, and that the suit was fit to be dismissed as defendant No. 1 defendent No. 15 had finally partitioned the properties in 1975, and no question of further partition arises. The maintainability of the suit was also challenged on the ground of minority of the plaintiffs as also on the basis of the rule against perpetuity. The trial Court rejected the plea based on the rule against perpetuity but having regard to the interest of defendant No. 1, his brother, and defendant No. 15, it held that the alleged partition of 1975 was illegal and not binding on the plaintiffs and that so far as the shares of the plaintiffs and defendant Nos. 5 to 14 are concerned held that the parties would take the properties as per capita. The suit was however dismissed on the ground that the plain tiffs were still minor. In the appeal to the High Court by the plaintiffs, the High Court confirmed the findings of the trial court that the 1975 partition was illegal, but held that the division would take place as per stirpes, and taking into account the fact that during the pendency of the appeal, two of the plaintiffs had attained majority, the High Court passed a decree in theft favour for one sixth share each. So far as the third plaintiff was concerned, it declared his right without passing a decree for partition. The appellants defendants challenged the decision of the High Court in 508 this Court by special leave, contending that as per the terms of the will the great grand sons of the testatrix have inherited the suit properties as per capita and that the conclusion of the High Court on this aspects was illegal, and that reliance by the High Court, on Boddu Venkatakrishna Rao & Ors. vs Shrimati Boddu Satyavathi & Ors., ; was inapplicable to the facts of this case. Allowing the appeal in part, and decreeing the suit in favour of all the plaintiffs, that the share of the three plaintiffs and defendant Nos. 5 to 14 shah be one thirteen each in the suit properties this Court, HELD: 1. A Court while construing a will should try to ascertain the intention of the testator to be gathered primarily from the language of the document; but while so doing the surrounding circumstances the position of the testator, his family relationship and the probability that he used the words in a particular sense also must be taken into account. They lend a valuable aid in arriving at the correct construction of the will. Since these considerations are changing from person to person it is seldom profitable to compare the words of one will with those of another or to try to discover which of the wills upon which the decisions have been given in reported cases. the disputed will approx imates closely. Recourse to precedents, therefore, should be confined for the purpose of general principles of construc tion only. 2.There is still another reason as to why the construc tion put on certain expressions in a will should not be applied to a similar expression in the will under question for, a will has to be considered and construed as a whole, and not piecemeal. It follows that a fair and reasonable construction of the same expression may vary from will to will. Therefore, in the matter of construction of a will, authorities or precedents are of no help as each will has to be construed in its own terms and in the setting in which the clauses occur. In the instant case, the High Court has interpreted the crucial part of the will containing the expression 'SAMABHA GAMAGA ADAINTHU ' as directing the plaintiffs on the one hand and the defendants5 to 14 on the other to "share equally out of each branch". The main reason for the High Court for taking such a view is that the terms of a will which was the subject matter of interpretation in the case of Boddu Venka takrishna Rao & Ors. vs Shrbnati Boddu Satvavathi & Ors., ; ; were more or less similar. It has also been assumed that the properties finally descended on the two branches in equal shares and consequently parties be longing to the two branches inherited the properties as per stripes. While so doing the Court failed to notice that the relevant facts and circumstances of that case were widely different from those in the present case. The conclusion of the High Court on the construction of the will was therefore not correct. In the instant case, there is no manner of doubt, and it is not denied by any party that neither the sons nor the grand sons of the testatrix got any life estate 509 in the properties. It is the agreed case of the parties that as soon as plaintiffs and defendants No. 5 to 14 become major they are entitled to get the property absolutely without waiting for the death of their respective fathers or grandfather. The will has therefore to be interpreted with out being influenced by the meaning given to the will in the reported case. The devolution of the property under the will takes place on the plaintiffs and defendants No. 5 to 14 for the first time 'under equal shares '. Since this is the first occasion for the shares in the property to be defined, the expression 'equal shares ' must refer to the entire proper ties left by the testatrix which will have to be divided equally amongst all the thirteen great grand sons by the testatrix. In other words they take the properties as per capita. The third plaintiff has also attained majority during the pendency of the present appeal and has therefore become entitled to a share in the properties. The suit is decreed in favour of all the plaintiffs their share being one thirteenth each. Ramachandra Shenoy and Another vs Mrs.Hilda brite and Others; , , relied on. Boddu Venkatakrishna Rao & Ors. vs Shrimati Boddu Sat vavathi & Ors. ; , , distinguished. The plea that disposition under the will was hit by the rule against perpetuity was rightly rejected by the trial court on the ground that the sons of the testatrix as also their respective sons were alive.

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ivil Appeal No. 2228 of 1982. From the Judgment and Order dated the 25.7.1980 of the Madras High Court in C.R.P. No. 1150 of 1979. Anant Palli and E.C. Agarwala for the Appellant. 396 V. Balachandran and K. Vijay Kumar for the Respondent. The Judgment of the Court was delivered by K. RAMASWAMY, J. The appellant/tenant is in occupation of a double storeyed building bearing No. 100, Aiya Mudali Street, Chintadripet, Mount Road, Madras on a monthly rent of Rs. 170. The respondent landlady filed an application under Sec. 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 18 of 1960 as amended by Act, 23 of 1973, for short 'the Act '. The Rent Controller fixed the fair rent at Rs. 1,000 per month. On appeal, the Court of Small Causes, Madras and on further Revision under Sec. 25, the Madras High Court confirmed the order. This appeal by special leave has been at the behest 01 ' the tenant. The admitted facts are that 1/3rd portion of the building is being used for residential and the rest for non residential purpose namely, for running a school. It is of 50 years ' old. Section 4 of the Act provides the procedure for fixation of the fair rent, which reads thus: "Fixation of Fair Rent (1) The Controller shall on applica tion made by the tenant or the landlord of a building and after holding such enquiry as he thinks fit, fix the fair rent for such building in accordance with the principles set out in the following sub sections. (2) The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building. (3) The fair rent for any non residential building shall be twelve per cent gross return per annum on the total cost of such building. (4) The total cost referred to in sub section (2) and sub section (3) shall consist of the market value of the site in which the building is constructed, the cost of construction of the building and the cost of provision of any one or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent; Provided further that the cost of provision of amenities specified in Schedule I shall not exceed 397 (i) in the case of any residential building, fifteen per cent; and (ii) in the case of non residential building, twentyfive per cent, of the cost of site in which the building is con structed and the cost of construction of the building as determined under this Section." "5.(a) The cost of construction of the building including cost of internal water supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned. The Controller may, in appropriate cases, allow or disallow an amount not exceeding thirty per cent of construction having regard to the nature of the building. (b) The Controller shall deduct from the cost of construc tion determined in the manner specified in clause (a) depre ciation, calculated at the rates specified in Schedule II. " A bird 's eye view of Sec. 4 indicates that the Control ler shall hold an enquiry before fixing the fair rent pre ceded by an application made in that behalf either by the tenant or the landlord, in accordance with the principles set out in sub sections 2 to 5 of Sec. 4. In case of a residential building the fair rent shall be 9 per cent and for nonresidential building 12 per cent gross return per annum on the total cost of the building in question. The total cost shall consist of (a) market value of the site on which the building is constructed; (b) the cost of the construction of the building; and (c) the cost of provision of any one or more of the amenities specified in Schedule I which shall not exceed: (1) in the case of residential building 15 per cent; and (2) in case of any non residential building 25 per cent of the cost of the site in which the building was constructed as determined under Sec. 4 of the Act. The cost of the construction of the building would also include internal water supply, sanitary and electrical installations. The estimation of its ratio thereof shall be as is done by the Public Works Department of the Government for the area concerned. In addition to the above, having regard to the nature of the building, the Controller may, in appropriate cases, allow or disallow an amount not exceeding 30% of construction. The Controller shall also deduct from the cost of construction determined in the manner specified in clause (a) of sub 398 section 5 of Sec. (4) the depreciation calculated at the rates specified in Schedule II. The determination of the fair rent of the building shall be fixed as on the date of the application filed for fixation of the fair rent. Section 5 of the Act provides the right for refixation of the fair rent under the Act for the reasons adumbrated therein with which we are presently not concerned. An Engi neer was appointed as a Commissioner to evaluate the total cost of the building, who adopted the rates of the Public Works Department and submitted his report which is Exhibit P 2. He was also examined as a witness. The rates of the construction for terraced building were (a) for the ground floor at Rs.345 per sq. metre and (b) for first floor at Rs.320 per sq. metre. As regards the tiled portion, the cost of construction is Rs.300 per sq. metre. The parties also adduced oral evidence. The Rent Controller after considera tion thereof fixed the rates as afore stated and he worked out the fair rent on that basis. The entire ground floor consists of 2927.25 sq. the area of two shops wherein consists of 238.00 sq. The built up area of the first floor is 3330.75 sq. ft., the tiled portion consists of 237 sq. The cost of construc tion was estimated at Rs. 1,99,300. The depreciation @ 1 per cent, as is first class building, was given. He added the market value of the open site at Rs.20,000 and also annuity on the vacant portion @ 1 per cent was added. Accordingly the Rent Controller worked out the cost at Rs. 1,51,820. The fair rent as non residential premises, at 12 per cent gross return, was fixed at Rs. 15 18 per month. Since the respond ent, landlady confined to the enhancement of the fair rent at Rs. 1,000, it was accordingly fixed. On appeal it was affirmed. In the revision, the High Court while agreeing with the valuation adopted, determined fair rent on the basis that 1/3rd as being used for residential purpose and 2/3rd for non residential purpose. On that basis the learned Judge worked out at the rate of 9 per cent and 12% as adum brated in Sec. 4(2) and (3) and fixed the fair rent. While upholding the depreciation at 1 per cent it fixed the fair rent Rs.1391.67 per month, but affirmed the fair rent at Rs.1,O00 per month as was confined to, by the landlady. From this material matrix the question at issue is whether the fixation of the fair rent by the Rent Controller, ultimately affirmed by the High Court, is illegal. The contention of the learned counsel for the appellant/tenant that the cost of the building and its market value are illegal, is falla cious and untenable. Section 4 not only provides the proce dure but also the principles and method on the basis of which the fair rent is to be determined. The fixation of fair rent, therefore, is in consonance with Section 4. We 399 accordingly affirm its legality. Realising this stark reali ty the counsel laid emphasis that the valuation of the cost of construction should be as on the date of the construction of the building and placed strong reliance on K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors. , Therein this Court held that the expres sion 'cost of construction ' means the cost of construction of the building as originally erected with such additions as may be required to be made for subsequent improvements. Rule 12 which prescribes the rate at which the cost of construc tion is to be computed plainly goes beyond the terms of the section. Accordingly this Court allowed the appeal and determined the fair rent as on the basis of the cost of construction. On that premise the learned counsel for the appellant contended that calculation of the cost of con struction to the residential as well as non residential building should be with reference to the date of applica tion. We find no substance in the contention. It is already seen that sub section 4 of Sec. 4 of the Act, clearly indi cates that the total cost of construction referred to in sub section 2 and sub section 3 shall consist of the market value as on the date of application for fixation of the fair rent. It is obvious that at the time when this court ren dered the decision in Nambiar 's case there was no provision in Sec. 4 as to the date on which the cost of construction was to be determined, and Rule 12 provided in the manner in which the fixation of the fair rent has to be made. But subsequently it was amended by Amending Act 23 of 1973 incorporating in sub section (4) of Sec. 4 of the Act as the date of making an application. This is also apparent when we see Sec. 5 of the Act. Sub section (3) of Sec. 5 clearly mentions that: "Where the fair rent of any building has been fixed before the date of the commencement of the Tamil Nadu Building (Lease and Rent Control) Amendment Act, 1973 the Landlord or the tenant may apply to the Controller to refix the fair rent in accordance with the provisions of Section 4 and on such application, the Controller may refix the fair rent. ' ' Thus we are clearly of the view that the ratio in Nambi ar 's case no longer would apply. The subsequent amendment brought on the statute in 1973, amplified the date of appli cation as the staring point to fix market value. On the basis of the valuation of the building estimated by the commissioner as per P.W.D. rates prevailing in the area and evidence produced by the parties, the Rent controller as modified by the High Court rightly determined the fair rent. 400 It is next contended that the method adopted by the Controller and ultimately upheld by the High Court in fixing the fair rent is not correct. It is contended that the value of the building has been changing from time to time as is reflected from the evidence on record and the courts below committed the gravest error in not considering the evidence in proper perspective. It is already seen that Sec. 4 pre scribed the principles on the basis of which the fair rent is to be fixed. In the light of those principles the evi dence adduced by the parties was considered by the Control ler, the appellate court and the High Court, found that the fixation of the fair rent is much in excess to the claim made by the landlady. Since the landlady confined the claim for Rs. 1,000 per month, the courts below have fixed the fair rent at Rs. 1,000. Therefore, on the findings of facts based on consideration of the evidence, this Court cannot interfere and come to its conclusion. Thereby the finding is not vitiated nor illegal warranting interference. The appeal is accordingly dismissed with costs, fixed at Rs .5,000. G.N. Appeal dismissed.

The appellant tenant was in occupation of a double storeyed building on a monthly rent of Rs. 170. The respond ent landlady filed an application under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent. The Rent Controller took note of the fact that 1/3rd portion of the building was being used for residential purpose and the rest of the building for non residential purpose, namely, for running a school. He also appointed an Engineer as Commissioner to evaluate the total cost of the building. The Commissioner adopted the rates prevalent in the Public Works Department and submitted his report. On the basis of the Commissioner 's report, the Rent Controller worked out the cost at Rs.1,51,820. Accordingly, the fair rent for the said premises was arrived at Rs.1518 per month at 12 per cent gross return. Since the respondent landlady had confined her claim for the enhance ment of fair rent to Rs.1,O00 only, the Rent Controller fixed the fair rent at Rs.1,O00. On appeal, the order of Rent Controller was affirmed by the Court of Small Causes. On a revision being preferred, the High Court agreed with the valuation adopted and determined the fair rent on the basis that 1/3rd of the premises was used for residen tial purpose and 2/3rd for nonresidential purpose, and, as per sub sections (2) and (3) of Section 4 of the Act, worked out the rent at 9 per cent and 12 per cent respectively on the cost of construction arrived at. The High Court fixed the fair rent at Rs. 1391.67 per month. It confirmed the fair rent of Rs. 1,000 as was fixed by the Rent Controller and as confined to by the Respondent landlady. This appeal, by special leave, is against the High Court 's order. It 395 was contended that the cost of the building and its market value as worked out was illegal, fallacious and untenable. Dismissing the appeal, HELD: 1. Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prescribes the principles on the basis of which the fair rent is to be fixed. In the light of those principles, the evidence adduced by the parties was considered by the Rent Controller, the appellate court and the High Court and they found that the fixation of the fair rent was much in excess of the claim made by the Respondent landlady. Since she confined her claim to Rs.1,O00 per month, the courts below have fixed the fair rent at Rs.1,O00. Therefore, on the findings of facts based on consideration of the evidence, this court cannot interfere and come to its own conclusion. The finding is neither vitiated nor illegal warranting interference. [210B C] 2.1 Sub section 4 of Section 4 of the Act, clearly indicates that the total cost of construction referred to in sub sections (2) and (3) shall consist of the market value as on the date of application for fixation of the fair rent. [209C] 2.2 It is obvious that at the time when this Court rendered its decision in Nambiar 's case there was no provi sion in Section 4 as to the date on which the cost of con struction was to be determined, and Rule 12 provided the manner in which the fixation of the fair rent has to be made. The subsequent amendment brought on the statute in 1973, by the Amending Act 23 of 1973, has incorporated sub section (4) in Section 4 which amplified the date of appli cation as the starting point to fix market value. As such the fair rent has been rightly determined by the courts below. [209D E; HI K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors., , referred to.

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vil Appeal Nos. 2403 05 of 1989 From Orders Nos. 568 to 570/88 A dated 31.10.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. C/A. No. 808 to 810 of 1987 A and C/Misc. No. 390 of 1987 A. S.K. Dholakia and S.K. Kulkarni for the Appellant. Kapil Sibal, Additional Solicitor General, P. Parmeswa ran and Mrs. R. Rangaswamy for the Respondent. The Judgment of the Court was delivered by KASLIWAL, J. All these appeals under Sec. 130(e) of the (hereinafter referred to as the Act) are directed against the common order made by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi dated 31.10.88 in C.A. Nos. 808 to 8 10/87 A. Brief facts of the case are that M/s. Sharp Business Machines (Pvt.) Ltd., Bangalore (hereinafter referred to as the company) is a small scale manufacturing unit duly regis tered as such since 1984. The company had started the phased manufacture of plain paper copiers and obtained a licence in this regard dated 25.11.86 for Rs.4,94,500 from the licens ing authority. The company imported components and consuma bles in SKD/CKD for plain paper copiers. Three consignments were imported from M/s. Paralax Industrial Corp., Hongkong under airways bill numbers 098, 4960, 3120; 098, 4960, 3116; and 098, 4960, 3105 all dated 21.1.87. The goods were re ceived at the air cargo complex, Bangalore. The company sought the clearance of the imported goods under bills of entry Nos. 2044, 2045 and 2046 all dated 3.2.87. Similarly, the goods were also imported from M/s. Alpha Papyrus Trading Co. Pvt. Ltd., Singapore under airway bill No. 098 4925 4914 dated 19.2.87. the clearance for this consignment was sought under bill of entry No. 4993 dated 11.3.87. The company had declared the value of each of the consignments at Rs.32,182 Rs.43.359), Rs.5,412 and Rs.18,659 respectively in respect of the above mentioned bills of entry Nos. 2044, 2045. 2046 and 4993. The total value declared was Rs.99,612 under all the four bills. 32 Proceedings were held before the Appraiser of Customs air cargo complex Bangalore for verification of the goods and their valuation etc. and the statements of the company 's Managing Director Sh. Sadanand were also recorded on 11.2.87.10.3.87 and 18.3.87 under Sec. 108 of the Act. The Collector of Customs issued a notice to the company under Sec. 124 of the Act on 4.3.87 relating to the first consign ment. In the said notice it was stated that 4 items were not covered by the licence and the same were liable for confis cation. However. on 30.3.87 the Collector issued another notice in supersession of the earlier notice dated 4.3.87. Notice was also issued on the same date in respect of bill of entry dated 11.3.87. By the said notices the Collector proposed to enhance the value of the goods imported and further proposed to confiscate the entire goods imported and also to levy a fine and other penalties. The company was accused of misdescription of the goods, misdeclaration of value, suppression of the relationship with the suppliers, suppression of the place of origin of goods etc. The Collector by his order dated 13.4.87 decided all the points against the company. The Collector held that the quotations given by M/s. Shun Hing Technology Ltd. along with the application for approval of their PMP during July 1986 should be taken as the correct value of the goods imported. and the plea of the company that it had received a special discount in view of the bulk purchases and promise of future purchases was not accepted. The Collector in these circumstances determined the price of the goods at Rs.7,15,485 for the purposes of Sec. 14(1) of the Act. The Collector thus held that there was a misdeclaration of the value to the tune of Rs.6,15,873 and the duty payable there on would be Rs.10.96,228.20p. The Collector further held that the entire goods imported were liable to confiscation under Sec. 111(m) of the Act. The Collector also held that the goods imported were fully finished copiers in SKD/CKD form and as such there was a misdeclaration that the import ed goods were only parts of the copiers. The Collector also held that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence. The goods covered by three bills 2044, 2045 and 2046 were held to be one consignment and one AWB and thus viewed as one consignment, it amounted to the import of ten copiers. The goods imported under the 4th bill No. 4993 were four fully finished copiers in SKD/CKD form. The Collector further held that in terms of note (i) to Imports Control Order. 1955 and Customs Tarrif Act, 1975, these goods will be deemed to be filly assembled copiers for the purpose of valuation and licence. Thus the goods imported as 33 fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence. It was also held in the alternative that even if all the parts imported were viewed individually, none of the items tally with the licence. The Collector in this regard gave detailed reasons for arriving at this conclu sion. The Collector also held that the value of the parts imported for the purposes of Sec. 14(1) of the Act would be Rs.5,63,332 whereas the importers were permitted to import goods worth Rs.4,94,500. There was thus an excess of Rs.68,832 and as such the goods were liable to confiscation under Sec. III(d) of the Act. The Collector in these circum stances passed an order for confiscation of the entire goods with an option to the company to redeem them on payment of a fine of Rs.3 lacs. The Collector also imposed a fine of Rs.1 lac on the company and Rs. 1 lac on Sh. Sadanand the Manag ing Director of the Company. The company filed two appeals aggrieved against the common order of the Collector relating to both the notices and a separate third appeal was preferred by the Managing Director before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal dismissed all the three appeals by a common order dated 31.10.88. The company and the Managing Director aggrieved against the order of the Tribunal have filed the above mentioned three appeals before this Court. One of the arguments raised before the Tribunal was that the Collector erred in treating SKD/CKD parts of the copiers imported, as assembled copiers, for the purpose of Schedule I to the Imports (Control) Order. 1955 and the case Union of India vs Tarachand Gupta & Bros., ; applied on all force to the instant case. The Tribunal in this regard set aside the finding recorded by the Collector and placing reliance on a decision of the Calcutta High Court in Collector of Customs, Calcutta vs Misuny Electronic Works, held that one has to look into the re spective licence and not to the fact that if all the con signments covered by all the bills of entry are assembled together, there will be complete machines. The Tribunal, however, upheld the other findings recorded by the Collector to the effect that even if all the imported parts contained in SKD/CKD packs of copiers were viewed individually the licence produced was not valid for any of the items import ed. Tribunal thus held that the Collector was right in holding that the imported goods were not covered by the valid licence. The Tribunal also held that the Collector was right in rejecting the price shown by the company in the invoices. The Tribunal also rejected the contention made by the counsel for the 34 company that the valuation made by the Collector was exorbitant. As regards the question of imposing fine and penalty also the Tribunal found the order of the Collector as correct. and did not find any cogent reason to interfere in the order of the Collector. We have heard Mr. Dholakia for the appellants and Mr. Kapil Sibley learned Addl. Solicitor General for the re spondents. It was argued by Mr. Dholakia that the Tribunal commit ted a serious error in holding that the invoices submitted by the company were undervalued and could not be relied upon for determining the correct value of the goods imported. It was contended that the Collector Customs was not correct in determining the value of the imported goods on the basis of the quotations of M/s. Shun Hing Technology Ltd., Hongkong. The quotation of Shun Hing indicated prices at Hongkong and not the place of importation. There was no other material on record to determine the value of the imported goods. It was thus contended that in the absence of any other relevant material, the invoice price has to be taken as the basis for valuation. It was also submitted that there was no justifi cation in discarding the price shown in the invoices which contained the correct value of the goods imported and in case of Customs authorities were not placing reliance on such prices mentioned in the invoices. then the burden lay on the Customs department to find out the correct value of the goods by collecting material and other adequate evidence before enhancing the value of the imported goods. The onus to prove the charge of undervaluation against the company was on the Customs department and the evidence relied upon by them, as contained in the adjudication order. is not at all sufficient to discharge that onus. It was further argued that any reliance placed on the quotations furnished at the time of submitting the application for grant of licence was wholly erroneous. At the time of submitting the application for grant of licence the prices are quoted for fixing the upper limit of the value of the licence. When the actual purchase transactions were entered into, the company negoti ated for the price and having regard to the quantum of purchase and the prospects of future sales, the company was given 25% , ' count by the suppliers. It was also submitted that the prices quoted by M/s. Shun Hing Technology Ltd., Hongkong were not the value of the components imported by the company in SKD/CKD form of plain paper copiers. Thus any price quoted by M/s. Shun Hing can never form any basis for arriving at a proper and correct valuation of the goods imported by the company in the present case. 35 On the other hand it was submitted by the learned Addl. Solicitor General that it has been admitted by Sh. P.N. Sadanand, Managing Director of the company in his statement dated 10.3.87 that the goods imported in the present case by the company were of Japanese origin and manufactured by M/s. Matushita Electric Company Ltd., Japan. M/s. Shun Hing Technology Ltd., Hongkong were the authorised agents of M/s. Matushita Electric Co. Ltd., Japan, who are the manufactur ers of Panasonic copies. He further admitted that normally the Panasonic copies were supplied to Hongkong in fully assembled form and then they were dismantled in Hongkong by the agents and thus supplied in India in SKD/CKD form. Sadanand admitted to have visited Hongkong during January, 1987 alongwith his Engineer Sh. K.S. Radhakrishan for pur chase of 10 copiers 6 Nos. Model EP 1300 and 4 Nos. Model EP 2625 and that he alongwith the Engineer dismantled the fully assembled copiers. It was submitted that the goods contained in the cartons comprised of all the parts required for full and complete assembly of copiers. At the time of examination of the goods covered by Bill of Entry No. 4993 dated 11.3.87, it was found that out of the six cartons, four cartons were the original cartons used for packing fully finished/assembled copiers Model EP 2625. The descrip tion, model number, brand, manufacturer and country of origin/manufacture of the copier (viz. Plain Paper Copier EP 2625 Panasoni, Matushita Electric Co. Ltd. and Japan respec tively) were clearly marked on these four cartons, one set of cassettes, trays, covers, one drum, one developer unit and a bottle of developer. It was thus argued that the original packing cartons used for packing fully finished copiers are normally supplied only if fully finished copiers are purchased. It was submitted that the adjudicating au thority has given detailed reasons for showing that the goods imported were not components of plain paper copiers as declared. In fact, the company had purchased 14 fully fin ished copiers 10 in Hongkong and 4 in Singapore and had then dismantled for importing the same in the guise of components of copiers. The company had submitted application for ap proval of their phased manufacturing programme to the Devel opment Commissioner, Small Scale Industries Govt. of India, New Delhi in July, 1986 and alongwith this application they had also submitted the quotations received by them from M/s. Shun Hing Technology Ltd., Hongkong which covered all the items imported except a few items like toner, drum and table for model FP 2625. The company in the present case not only violated the terms and conditions of licence but also com mitted a complete fraud in importing fully finished copiers which was a totally prohibited item, in the guise of sepa rate components and accessories by dismantling the fully finished copiers. In the above 36 circumstances the adjudicating authority was fully justified in not believing the value mentioned in the invoices and in placing reliance on the prices mentioned in the quotations given by M/s. Shun Hing Technology Ltd., Hongkong. It was further argued by Mr. Sibbal that the prices quoted by M/s. Shun Hing were based on the prices given by the manufactur ers i.e. M/s. Matushita Electric Co. Ltd., Japan and there was no question of supplying the components of the copiers on a lesser price than given by the manufacturers them selves. The company had a special relationship with M/s. Shun Hing Technology Ltd., Hongkong as a sort of collabora tor with no formal agreement and that M/s. Paralax Industri al Corp., Hongkong were in turn agents of M/s. Shun Hing Technology Ltd., Hongkong. We have considered the submissions made by learned counsel for the parties. Section 14 of the Act provides for valuation of goods for the purpose of assessment. Section 14(1) which is relevant for our purposes reads as under: 14. "Valuation of goods for purposes of assessment: (1) For the purposes of the (51 of 1975), or any other law for the time being in force whereun der a duty of customs is chargeable on any goods by refer ence to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale: Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50." According to the above provision the value of the goods shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation, in the course of interna tional trade where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale. In the present case the 37 company itself had produced a copy of the quotations re ceived by them from M/s. Shun Hing Technology Ltd., Hongkong in respect of the copiers and other items imported alongwith their application for approval of their phased manufacturing programme. The company itself having produced these quota tions, they cannot dispute the correctness of the prices mentioned therein. The company has not only not disputed the correctness of these quotations but has not produced any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time. The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determin ing the correct value of the imported goods. Mr. Dholakia next contended that the Tribunal itself had set aside the finding of the adjudicating authority on the question of treating SKD/CKD packs of the copiers imported comprised of all the 100% components of copiers. The company had tried to practice a fraud in defeating the import policy itself. The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62% of the components of the copiers and the balance of 38% was to be manufactured by them indigenously. According to the import policy this percentage of 62% was to be reduced in the subsequent years. The import policy was not meant for such entrepreneurs who instead of importing 62% of the components, imported 100% of the components of a fully finished and complete goods manufactured by a foreign country. It is an admitted position that fully finished plain paper copiers were a prohibited item for import and thus the device adopted by the company in the present case was a complete fraud on the import policy itself. Apart from the above circumstances in our view the Tribunal was not right in setting aside the finding of the adjudicating authority and in taking the view that one has to look into the respective licence and not to the fact that if all the consignments covered by all the bills of entry assembled together, there will be a full and complete machinery. It is an admitted position that goods covered by the three bills of entry Nos. 2044, 2045 and 2046 were all dated 3.2.87 and had been shipped from Hongkong on the same day i.e. on 21.1.87. The entire goods had arrived on the same day and by the same flight on 30th January, 1987. The goods covered under the three bills of entry have been supplied by the same supplier viz. M/s. Paralax Industrial Corp., Hong kong. The goods covered by these bills of entry are ten numbers 38 copiers in SKD/CKD condition, accessories, spares, consuma bles and excess items. The goods covered by the 4th bill of entry are four numbers copiers in SKD/CKD condition and consumables. the licence produced is valid for certain components and is not valid for fully assembled copiers. The fully assembled copiers are the end products of the import ers and hence cannot be imported by them. Plain Paper Copi ers are electronic equipments. The case Union of India vs Tara Chand Gupta & Bros. (supra) lends no assistance to the appellants in the facts and circumstances of the present case. In the above case Tara Chand & Bros. held an import licence dated July 10, 1956 permitting them to import parts and accessories of motorcycles and scooters as per Appendix XXVI of the Import Policy Book for July December, 1956. Under the said licence, the respondents in that case imported certain goods which arrived in two consignments, each containing 17 cases by two different ships. According to the respondents, the goods so imported by them were motorcycle parts which their licence authorised them to import. The Customs authorities, on the contrary held, on the examination of the goods, that they constituted 51 sets of "Rixe Mopeds complete in a knocked down condition". After holding an inquiry the Deputy Collec tor directed confiscation of the said goods with an option to the respondents to pay certain sums in lieu of confisca tion and also personal penalties. That order was passed on the basis that the goods imported were not parts and acces sories of motorcycles and scooters presumably under entry 295 of the Schedule to the Import (Control) Order but were motorcycles/scooters in completely knocked down conditions, prohibited under remark II against entry 294, a licence in respect of goods covered by it would authorise import of motorcycles and scooters. The Deputy Collector held that though the goods were not in completely knocked down condi tion it made no difference as the tyres, tubes and saddles were easily obtainable in India and their absence did not prevent the machines being otherwise complete. He also found that there was a trade practice under which traders were supplying motorcycles without tyres, tubes and saddles unless the purchaser specially asked for these parts. Ac cording to him the goods could not be regarded as spare parts but were "Moped in disassembled condition. " The re spondents in the above case filed a civil suit and the matter went in appeal to the High Court. The Letters Patent Bench of the High Court held that the Collector 's jurisdic tion was limited to ascertain whether or not the goods imported by the respondents were spare parts and accessories covered by entry 295 in respect of which they undoubtedly held the licence, and therefore, he could not have 39 lumped together the two consignments which. though imported under one licence, arrived separately and were received on different dates and could not have come to the conclusion that the plaintiffs had imported 51 "Rixe" Mopeds in com pletely knocked down condition. The respondents were enti tled to import the said goods and therefore. Section 167(8) of the Sea did not apply and the respondents consequently could not have been held guilty of breach either of that Section or Section 3 of the Imports & Exports (Control) Act. It was further held that the decision of this Court in Girdhari Lal Bansi Dhar vs Union of India, ; did not over rule but only distinguished judgment in D.P. Anand vs Mls. T.M, Thakore & Co., C.A. No. 4/1959 decided on August 17, 1960 (H.C.) and therefore, the binding force of that decision remained unshaken. The Union of India came in appeal to this Court by grant of certificate. This Court held as under: "Under entry 295, except for rubber tyres and tubes for whose import a separate licence could be obtained under entry 41 of Part V, there are no limitations as to the number or kind of parts or accessories which can be imported under a licence obtained in respect of the goods covered thereunder. Prime facie, an importer could import all the parts and accessories of motor cycles and scooters and it would not be a ground to say that he has committed breach of entry 295 or the licence in respect of the goods described therein, that the parts and accessories imported. if assem bled, would make motor cycles and scooters in CKD condition. 3There are no remarks against entry 295. as there are against entry 294, that a licence in respect of goods cov ered by entry 295 would not be valid for import of spares and accessories which, if assembled, would make motor cycles and scooters in CKD condition. Apart from that, the goods in question did not admittedly contain tyres. tubes and sad dles, so that it was impossible to say that they constituted motor cycles and scooters in CKD condition. The first two could not be imported and were in fact not imported because that could not be done under the licence in respect of goods covered by entry 295 which expressly prohibited their import and a separate licence under entry 41 of Part V would be necessary. The third, namely. saddles were not amongst the goods imported. No doubt, there was, firstly, a finding by the Collector that a trade practice prevailed under which motor cycles and scooters 40 without tyres, tubes and saddles could be sold. Secondly. the tyres and tubes could be had in the market here and so also saddles, so that if an importer desired, he could have sold these goods as motor cycles and scooters in CKD condi tion. The argument was that since there was a restriction in entry 294 against imports of motor cycles and scooters in CKD condition, the importer could not be allowed to do indirectly what he could not do directly. The argument apparently looks attractive. But the question is what have the respondents done indirectly what they could not have done directly. In the absence of any restrictions in entry 295, namely, that a licence in respect of goods covered by entry 295 would not be valid for import of parts and accessories which. when taken together. would make them motor cycles and scooters in C.K.D. condition. the respond ents could import under their licence all kinds and types of parts and accessories. Therefore, the mere fact. that the goods imported by them were so complete that when put to gether would make them motor cycles and scooters in C.K.D. condition. would not amount to a breach of the licence or of entry 295. Were that to be so, the position would be anoma lous as aptly described by the High Court. Suppose that an importer were to import equal number of various parts from different countries under different indents and at different times, and the goods were to reach here in different con signments and on different dates instead of two consignments from the same country as in the present case. If the conten tion urged before us were to be correct, the Collector can treat them together and say that they would constitute motor cycles and scooters in C.K.D. condition. Such an approach would mean that there is in entry 295 a limitation against importation of all parts and accessories of motor cycles and scooters. Under that contention, even if the importer had sold away the first consignment or part of it, it would still be possible for the Collector to say that had the importer desired it was possible for him to assemble all the parts and make motor cycles and scooters in C.K.D. condi tion. Surely, such a meaning has not to be given to entry 295 unless there is in it or in the licenee a condition that a licensee is not to import parts in such a fashion that his consignments, different though they may be, when put togeth er would make motor cycles and 41 Scooters in C.K.D. condition. Such a condition was advisedly not placed in entry 295 but was put in entry 294 only. The reason was that import of both motor cycles and scooters as also parts and accessories thereof was permitted, of the first under entry 294 and of the other under entry 295. A trader having a licence in respect of goods covered by entry 294 could import assembled motor cycles and scooters, but not those vehicles in C.K.D. condition, unless he was a manufacturer and had obtained a separate licence therefore from the Controller of Imports who, as aforesaid. was autho rised to issue such a licence on an ad hoc basis. Thus the restriction not to import motor cycles and scooters in C.K.D. condition was against an importer holding a licence in respect of goods covered by entry 294 under which he could import complete motor cycles and scooters and not against an importer had a licence to import parts and acces sories under entry 295. If Dr. Syed Mohammad 's contention were to be right we would have to import remark (ii) against entry 294 into entry 295, a thing which obviously is not permissible while construing these entries. further, such a condition, if one were to be implied in entry 295, would not fit in, as it is a restric tion against import of motor cycles and scooters in C.K.D. condition and not their parts and accessories. There is, therefore, no question of a licensee under entry 295 doing indirectly what he was not allowed to do directly. What he was not allowed to do directly was importing motor cycles and scooters in C.K.D. condition under a licence under which he could import complete motor cycles and scooters only. That restriction, as already observed, ' applied to a licen see in respect of goods described in entry 294 and not a licensee in respect of goods covered by entry 295. The result is that when the Collector examines goods import ed under a licence in respect of goods covered by entry 295 what he has to ascertain is whether the goods are parts and accessories, and not whether the goods, though parts and accessories, are so comprehensive that if put together would constitute motor cycles and scooters in C.K.D. condition. Were he to adopt such an approach, he would be acting con trary to and beyond entry 295 under 42 which he had to find out whether the goods imported were of the description in that entry. Such an approach would, in other words, be in non compliance of entry 295." This Court distinguished the case of Girdhari Lal Bansi Dhar (supra) by making the following observation: "It will be noticed that the Bombay decision in D.P. Anand 's case was not dissented from but only distinguished, and therefore, the High Court in the present case was justified in following it. It is true, however, that counsel for the appellant there relied on that decision in support of his proposition that a ban on completed article cannot be read as a ban on the importation of its constituents, which, when assembled, would result in the prohibited article, and this Court pointed out in answer that in D.P. Anand 's case, the imported components could not have when assembled, made up the completed article because of the lack of certain essen tial parts which admittedly were not available in India and could not be imported. The real distinction, however, be tween the two cases was that the decision of the Collector in D.P. Anand 's case was not, as was the decision in Gird bari Lal 's case under which of the two competing entries the imported goods fell but that the imported goods in question, if assembled together, would not be the goods covered by the entry, and therefore, not the goods in respect of which the licence was granted. Further, the articles in question, even when assembled together, were not prohibited articles as in Girdhari Lal 's case. Girdhari Lal case is clearly distin guishable because it is not as if motor cycles and scooters are prohibited articles as was the case there. The restric tion is not against licensees importing motor cycles and scooters under entry 294 and parts and accessories under entry 295 but against the licensees under entry 294 import ing motor cycles and scooters in CKD condition. The question in the instant case was not under which of the two entries, 294 or 295, the goods fell, but whether the goods were parts and accessories covered by entry 295. " In our view the Tribunal was not correct in placing reliance on the case Union of India vs Tara Chand Gupta & Bros. (supra) in the facts and circumstances of the present case. In the case before us the 43 import of fully assembled copiers was prohibited. The appel lant was only entitled to import 62% of the components. As already mentioned above, the device adopted by the appellant in the present case was a complete fraud on the Import Policy and the appellant was doing indirectly what he was not permitted to do directly. We are further of the view that the facts in the present case are more akin and similar to the facts of the case Girdhari Lal Bansi Dhar vs Union of India, (supra) which was distinguished in the case of Union of India vs Tara Chand Gupta & Bros. (supra). Mr. Dholakia also tried to assail the finding recorded by the Collector and upheld by the Tribunal and argued that the components imported by the appellant tallied with the parts which were permitted under the licence. We do not find any force in this submission. The Collector has given de tailed reasons for holding that the imported goods were not covered by the valid licence and the Tribunal having upheld such finding, the same cannot be challenged by the appellant before this Court. Mr. Dholakia also submitted that in the facts and cir cumstances of the case the order confiscating the goods and imposing fine and penalty both on the company and Sh. Sada nand, the Managing Director was too high and ought to be reduced. We find no force in this submission as well. This is a case where the appellant had not only violated the terms and conditions of the licence but also committed a fraud on the Import Policy itself. Thus we find no ground or justifica tion to reduce the penalty or fine. In the result we find no force in these appeals and the same are dismissed with one set of costs. P.S.S. Appeals dismissed.

Section 14(1) of the provides that where a duty of customs is chargeable on any goods by refer ence to their value, the value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale. for delivery at the time and place of importation. in the course of international trade. The appellant company, a small scale manufacturer of plain paper copiers. had submitted. alongwith their applica tion for approval of the phased manufacturing programme, the quotations received by them from their foreign collaborators based in Hongkong in respect of the various components and obtained a licenee in this regard for Rs.4,94,500. Subse quently, they imported three consignments of components and consumables in SKD/CKD form from suppliers at Hongkong and another consignment from Singapore. The total value declared under the four bills of entry was Rs.99,612. The Collector of Customs found that the invoices submit ted by the company were undervalued and determined the price of goods at Rs.7,15,485 with reference to the quotations, for the purposes of section 14(1) of the Act. He thus held that there was a misdeclaration of value to the tune of Rs.6,15,873, that the duty payable thereon would be Rs.10,96,228.20 and that the entire goods were liable to confiscation under section 111(m) of the Act. He also held that the goods imported were fully finished copiers in SKD/CKI) form and as such there was a misdeclaration that the import ed goods were only parts of the copiers, that description of most of the items in the invoices had been deliberately manipulated to suit the description in the licence, that fully assembled copiers were not permissible to be imported and this was a clear violation of the Act and the terms of the licence. In the alternative he held that even if all the parts contained in SKD/CKD packs were 29 viewed individually, none of the items was covered by the licence. He further held that the value of the parts import ed for the purposes of section 14(1) of the Act would be Rs.5,63,332, whereas the importers were permitted to import goods worth Rs.4,94,500, that there was thus an excess of Rs.68,832 and as such the goods were liable to confiscation under section 111(d) of the Act. Consequently, he directed con fiscation of the entire goods with an option to the company to pay Rs.3 lakhs in lieu thereof and also Rs.2 lakhs in personal penalties. The Customs, Excise and Gold (Control) Appellate Tribunal dismissed their appeals. In these appeals under section 130(e) of the Act, it was contended for the appellants that the quotations had indi cated prices at Hongkong and not the place of importation, that at the time of submitting the application for grant of licence the prices were quoted for fixing the upper limit of the value of the licence, that when the actual purchase transactions were entered into the company negotiated for the price and having regard to the quantum of purchase and the prospects of future sales the company was given 25 per cent discount by the suppliers, and that in the absence of any other material on record the invoice price alone could form the basis of valuation of the imported goods. For the respondents, it was contended that the prices quoted by the collaborators were based on the prices given by the manufac turers. and there was no question of supplying the compo nents on a lesser price than given by the manufacturers themselves, that the goods imported were not components of plain paper copiers as declared, that the cartons in fact comprised of all the parts required for full and complete assembly of 14 copiers, that the company in importing them in the guise of separate components and accessories had not only violated the terms and conditions of the licence but also committed a complete fraud, that in the circumstances the adjudicating authority was fully justified in placing reliance on the prices mentioned in the quotations. Dismissing the appeals under section 130(e) of the Act, the Court, HELD: 1.1 According to section 14(1) of the for purposes of assessment the value of the imported goods is to be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation, in the course of interna tional trade, where the seller and the buyer have no inter est in the business of each other and the price is the sole consideration for the sale or offer for sale. [36G H] 1.2 In the instant case the appellant company itself had produced 30 a copy of the quotations received by them from their collab orators at Hongkong in respect of the copiers and other items imported, alongwith their application for approval of their phased manufacturing programme. They, therefore. could not dispute the correctness of the prices mentioned in the said quotations. Not only that, they have also failed to produce any other material on record to show that the value mentioned in the invoices was the correct market value of the goods imported at the relevant time. The adjudicating authority in these circumstances was perfectly justified in taking the prices mentioned in the quotations as a basis for determining the correct value of the imported goods. [37A C] 2.1 The goods covered by the three bills of entry dated 3rd February, 1987 had been shipped from Hongkong on the same day i.e. on 21st January, 1987. The entire goods had arrived on the same day and by the same flight on 30th January, 1987. These goods had been supplied by the same supplier. They comprised of ten numbers copiers in SKD/CKD condition, accessories, spares, consumables and excess items. The goods covered by the 4th bill of entry were four numbers copiers in SKD/CKD condition and consumables. If assembled together these would constitute full and complete copiers. The licenee produced was valid for certain compo nents and was not valid for fully assembled copiers. The appellant company was thus doing indirectly what they were not permitted to do directly under the licence. [37H; 38A B] Girdbari Lal Bansi Dhar vs Union of India, ; referred to. Union of India vs Tarachand Gupta & Bros., ; distinguished. 2.2 The intention and purpose of the import policy was to give incentive and encouragement to the new entrepreneurs establishing small scale industries and in the first phase to import 62% of the components of the copiers and the balance of 38% was to be manufactured by them indigenously. This percentage of 62% was to be reduced in the subsequent years. The import policy was not meant for such entrepre neurs who instead of importing 62% of the components, im ported 100% of the components of a fully finished and com plete goods manufactured by a foreign country. Fully fin ished plain paper copiers were the end product of the im porters and hence could not be imported by them. The device a, looted by the company in the instant case was thus a complete fraud on the import policy itself. [37D F] 31 2.3 The order confiscating the goods and imposing fine was, therefore, rightly made.

6547.txt

Criminal Appeal No. 386 of 1978. From the Judgment and Order dated 19/20th July, 1977 of the Himachal Pradesh High Court in Crl. A. No. 46 of 1976. Rakesh Luthra, N.N. Bhatt, L.R. Singh (N.P.) and lrshad Ahmad for the Appellant. K.G. Bhagat, N.K. Sharma and Ms. A. Subhashini (N.P.) for the Respondent. The Judgment of the Court was delivered by K. RAMASWAMY, J. The appellant, K.C. Sharma, alongwith two others was charged for the offence punishable under sections 302 and 201 read with section 34 of the Indian Penal Code for causing the death and concealing the dead body of Joginder Singh. The Additional Sessions Judge, Kangra Division at Dharamsala convicted all the accused under section 302/34 and directed them to undergo imprisonment for life and to pay a fine of Rs.500 and also to the sentence of two years rigor ous imprisonment and fine of Rs.500 for the offence of section 201/34, in default of payment of fine for a further period of three months rigorous imprisonment. All the sentences were directed to run concurrently. On appeal the Division Bench of the High Court of Himachal Pradesh by judgment dated July 20, 1977 acquitted accused 2 and 3 of the offence under section 302 IPC and confirmed the conviction and sentence of the appellant and set aside the sentence of fine. The leave having been granted by this Court, this appeal has been filed. The narrative of prosecution case runs thus: The de ceased Joginder Singh, resident of Jogipura. Kangra on November, 10, 1974. while going to Pathankot with some currency notes in his possession went on his way to Jassur Village to meet his friend one Bala Pahalwan. On enquiry the latter was said to be absent in the village. The deceased came in contact with the appellant and both went to the Dhaba of PW. 7, Joginder Singh Paul to have some drink, but PW. 7 did not allow them to take liquor inside the Dhaba. Both of them sat in the back side of the Dhaba to have drink. PW. 8 Tamil Singh and one Jai Onkar were also invited to have drink with them. All of them together consumed the liquor and ate meat. The deceased paid the price of the liquor and meat and when he had become tipsy, PW. 8 suggest ed to take the deceased to Pathankot or to keep him at Dhaba 110 Beli where at he could make necessary arrangements for their stay but the appellant insisted upon taking the deceased to Kangra. Thereafter the appellant and the deceased boarded the Truck No. HPK 4179 driven by A. 2, Madho Ram, Driver and A. 3, Bihari Lal, Cleaner. PW. 8 and the other left the place. The truck was loaded with the bricks and the appel lant and the deceased sat on the bricks in the body of the truck and went towards Kangra side. PW. 12, the Octroi Clerk at Nagpur states that the truck driven by A. 2 went towards Baijnath. PW. 13. Burfiram, Chowkidar at Ichhi Marketing Co op. Society spoke that he saw the truck driven by A. 2 and A. 3 and got unloaded the bricks at the godown of the said Society at about mid night but the deceased was not seen there. It is further the case of the prosecution that while the deceased or accused were going in the truck, there ensued a quarrel between them over some money matter and the appellant took iron screw driver and gave blows on the head and face of the deceased. Consequently the deceased was half dead. He was thrown out of the truck but finding him not dead put him in the truck and all the accused severed the head with an iron saw and burried the trunk under stones in the outskirts of the village Dhadhu and carried the head with them in the truck. The head was hidden at a place between Guggal and Chaitru on the Kachcha road branching off the main road to the village Ichhi. On November 13, 1974, PW. 6 Karrudi Ram, the Chowkidar of Mauza Bandi, during twilight, had gone to answer nature 's call at the outskirts of the village Dhadhu and noticed the blood stains and a torn pant near the stones. On further probe the hand of the deceased was seen projecting from the stones and he noticed the dead body. He went and reported to Bidhu Ram, PW. 10. the Pradhan of the village and two others. All of them went to the spot, noticed the dead body. 10 kept a watch during the night. On November 14, 1974 at about 7.00 or 8.00 a.m. PW. 6 went to the Police Station and lodged the com plaint. PW. 26, the A,S.I. recorded and issued the First Information Report and proceeded to the spot. He recovered the articles on and near the dead body under PW. 11, Panch nama and conducted inquest and sent the dead body for post mortem. The Doctor conducted autopsy. On November 15. 1974 the parents of the deceased came to the Police Station and identified the clothes of the deceased. On November 16, 1974, PW. 27, the Sub Inspector of the Police took over the investigation. He contacted one Kuldip Singh, a Conductor in Kapila Transport Company from whom he came to know that on November 10, 1974, the deceased and the appellant were seen consuming liquor at Jassur. Thereafter PW. 27 and PW. 10, Bidhu Ram, Pradhan of Guggal Panchayat went to the appel lant 's village Sahaura and was sent for the appellant. The appel 111 lant on coming to him was found to have shaved off his moustaches. PW. 27 had enquired as to why he had removed his moustoches upon which the appellant was claimed to have replied that he had removed his moustaches due to demise of his maternal uncle. PW. 10 and PW. 27 took the appellant to Jassur for identification purposes. The appellant pointed out PW. 7, the owner of the Dhaba and the latter identified the appellant as one seen in the company of the deceased and having consumed liquor. Equally of PW. 8. Thereafter the appellant was taken back to PW. 10 's village and PW. 27 left the village for further investigation. On enquiry made by PW. 10, in the shop of one Mangath Ram and in the company of one Raghunath, to reveal the truth to him, the appellant was stated to have requested PW. 10 whether he could save him if he would tell the truth. Thereupon PW. 10 stated that he could not save him but if he would speak the truth he would help himself. Thereupon the appellant was stated to have made extra judicial confession giving out the details of consuming liquor with the deceased; their going together on the truck, the quarrel that ensued between them; his hitting the deceased with the screw driver, throwing the. dead body, thinking that he died, on the road realising that he was not dead, lifting him and putting him in the body of the truck and all the accused cutting the head of the deceased with the saw blade and burrying the trunk under the stones and hiding the head at different place and thereby they had committed the crime. 10 gave this information to PW. 27 on the next day, namely, November 25, 1974. Thereon all the accused were arrested. On November 27, 1974, the Driver A. 2 was stated to have made a statement under section 27 of the Evidence Act. exhibit PW. 9/A leading to discovery of the hidden head at a place between Guggal and Chaitru. This statement had been made in the presence of PW. 9 and another and the severed head was recovered under Memo exhibit PW. 9/B. This was in the presence of PW. 10 and another. The head was sent to the Doctor for post mortem examination. The Doctor verified and found it to be correct and the doctor corelated the trunk of the dead body and the head belonging to the de ceased. On November 30., 1974, pursuant to statement made by the appellant and A. 3 under exhibit PW. 16/B leading to recover one iron saw without handle and a piece of cloth wrapped to one of its sides was recovered from a bush near Kathman Mor and PW. 10 and another are Panch witnesses and found the saw blade contained with blood stains and a piece of cloth of torn pant. They were recovered under exhibit PW. 16/C. The clothes of the appellant were also claimed to have been recovered from his house under exhibit PW. 16/H which was stained with blood and the same were recovered in the presence of PW. 16 The Serologist found the blood stains disintegrated on all the 112 items. On the basis of this evidence the prosecution laid the chargesheet against all the accused. As stated earlier the appellant now stands convicted and sentenced for the offences under sections 302 and 201, I.P.C. The two others did not file appeal against their convict under section 201 I.P.C. The entire prosecution case rested on circumstantial evidence. As regards the appellant, the circumstances relied on the prosecution are three, namely,(i) the appellant and the deceased were last seen together by PW. 7, the owner of the liquor shop Dhaba and PW. 8, the companion who had liquor with the deceased and the appellant; (ii) the extra judicial confession made to PW. 10, the Pradhan of Guggal Gram Panchayat; and (iii) the discovery of saw blade pursu ant to the statement made by the appellant and A. 3 under section 27 of the Evidence Act. The question, therefore, is whether the prosecution proved guilt of the appellant beyond all reasonable doubt. In a case of circumstantial evidence. all the circumstances from which the conclusion of the guilt is to be drawn should be fully and cogently established. All the facts so estab lished should be consistent only with the hypothesis of the guilt of the accused. The proved circumstances should be of a conclusive nature and definite tendency, unerringly point ing towards the guilt of the accused. They should be such as to exclude every hypothesis but the one proposed to be proved. The circumstances must be satisfactorily established and the proved circumstances must bring home the offences to the accused beyond all reasonable doubt. It is not necessary that each circumstances by itself be conclusive but cumula tively must form unbroken chain of events leading to the proof of the guilt of the accused. If those circumstances or some of them can be explained by any of the reasonable hypothesis then the accused must have the benefit of that hypothesis. In assessing the evidence imaginary possibilities have no role to play. What is to be considered are ordinary human probabilities. In other words when there is no direct wit ness to the commission of murder and the case rests entirely on circumstantial evidence, the circumstances relied on must be fully established. The chain of events furnished by the circumstances should be so far complete as not to leave any reasonable ground for conclusion consistent with the inno cence of the accused. If any of the circumstances proved in a case are consistent with the innocence of the accused or the chain of the continuity of the circumstances is broken, the accused is entitled to the benefit of the doubt. 113 In assessing the evidence to find these principles. it is necessary to distinguish between facts which may be called primary or basic facts on one hand and inference of facts to be drawn from them. on the other. In regard to the proof of basic or primary facts. the court has to judge the evidence in the ordinary way and in appreciation of the evidence in proof of those basic facts or primary facts, there is no scope for the application of the doctrine of benefit of doubt. The court has to consider the evidence and decide whether the evidence proves a particular fact or not. Whether that fact leads to the inference of the guilt of the accused or not is another aspect and in dealing with this aspect of the problem the doctrine of benefit would apply and an inference of guilt can be drawn only if the proved facts are inconsistent with the innocence of the accused and are consistent only with his guilt. There is a long distance between may be true and must be true. The prosecution has to travel all the way to establish fully the chain of events which should be consistent only with hypothesis of the guilt of the accused and those circumstances should be of conclu sive nature and tendency and they should be such as to exclude all hypothesis but the one proposed to be proved by the prosecution. In other words. there must be a chain of evidence so far consistent and complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all probability the act must have been done by the accused and the accused alone. The question emerges, therefore is whether the prosecu tion has established the three circumstantial evidence heavily banked upon by the prosecution in proof of the guilt of the appellant. The first circumstance is that the de ceased and the appellant were last seen together by PW. 7 and PW. 8. From the evidence it is clear that there is no prior intimacy of the appellant and the deceased. They happened to meet per chance. Equally from the evidence it is clear that PW. 7, the liquor shop owner and PW. 8 who had liquor with the appellant and the deceased are also absolute strangers to the deceased and the appellant. Admittedly there is no identification parade conducted by the prosecu tion tO identify the appellant by PW. 7 or PW. 8. The appel lant was stated to have pointed out to PW. 7 as the one that sold the liquor and PW 8 consumed it with him and the de ceased. Therefore it is not reasonably possible to accept the testimony of PW. 7 and PW. 8 when they professed that they have seen the appellant and the deceased together consuming the liquor. It is highly artificial and appears on its face a make believe story. 114 The next piece of evidence is the alleged extra judicial confession made by the appellant to PW. 10. An unambiguous extra judicial confession possesses high probative value force as it emanates from the person who committed the crime and is admissible in evidence provided it is free from suspicion and suggestion of its falsity. But in the process of the proof of the alleged confession the court has to be satisfied that it is a voluntary one and does not appear to be the result of inducement, threat or promise envisaged under section 24 of the Evidence Act or was brought about in suspicious circumstances to circumvent Section 25 and 26 of the Evidence Act. Therefore, the court has to look into the surrounding circumstances and to find whether the extra judicial confession is not inspired by any improper or colateral consideration or circumvention of the law suggest ing that it may not be true one. For this purpose the court must scrutinise all the relevant facts such as the person to whom the confession is made, the time and place of making it, the circumstances in which it was made and finally the actual words used by the accused. Extra judicial confession if found to be voluntary, can be relied upon by the court alongwith other evidence on record. Therefore, even the extra judicial confession will also have to be proved like any other fact. The value of the evidence as to the confes sion depends upon the verocity of the witness to whom it is made and the circumstances in which it came to be made and the actual words used by the accused. Some times it may not be possible to the witness to reproduce the actual words in which the confession was made. For that reason the law insists on recording the statement by a Judicial Magistrate after administering all necessary warnings to the accused that it would be used as evidence against him. Admittedly PW. 10 and the appellant do not belong to the same village. From the narrative of the prosecution story it is clear that PW. 27, and PW. 10 came together and appre hended the appellant from his village and was taken to Jassur for identification. After he was identified by PW. 7 and PW. 8 it was stated that he was brought back to Gaggal village of PW. 10 and was kept in his company and PW. 27 left for further investigation. Section 25 of the Evidence Act provides that no confession made to a police officer shall be proved as against a person accused of any offence. Section 26 provides that no confession made by any person while he is under custody of the police officer, unless it be made in the immediate presence of a magistrate, shall be proved as against such person. Therefore, the confession made by an accused person to a police officer is irrelevant by operation of Section 25 and it shall be proved against the appellant. Likewise the confession made by the appellant while he is in the custody of the police shall not 115 be proved against the appellant unless it is made in the immediate presence of the magistrate, by operation of Sec tion 26 thereof. Admittedly the appellant did not make any confession in the presence of the magistrate. The question, therefore, is whether the appellant made the extra judicial confession while he was in the police custody. It is incred ible to believe that the police officer, PW. 27, after having got identified the appellant by PW. 7 and PW. 8 as the one last seen the deceased in his company would have left the appellant without taking him into custody. It is obvious, that with a view to avoid the rigour of Section 25 and 26, PW. 27 created an artificial scenerio of his leaving for further investigation and kept the appellant in the custody of PW. 10, the Pradhan to make an extra judicial confession. Nothing prevented PW. 27 to take the appellant to a Judicial Magistrate and had his confession recorded as provided under section 164 of the Crl. P.C. which possesses great probative value and affords an unerring assurance to the court. It is too incredulous to believe that for mere asking to tell the truth the appellant made voluntarily confession to PW. 10 and that too sitting in a hotel. The other person in whose presence it was stated to have been made was not examined to provide any corroboration to the testimony of PW. 10. Therefore, it would be legitimate to conclude that the appellant was taken into the police custo dy and while the accused was in the custody, the extra judicial confession was obtained through PW. 10 who accommo dated the prosecution. Thereby we can safely reach an irre sistible conclusion that the alleged extra judicial confes sion statement was made while the appellant was in the police custody. It is well settled law that Sections 25 and 26 shall be construed strictly. Therefore, by operation of Section 26 of the Evidence Act, the confession made by the appellant to PW. 10 while he was in the custody of the police officer (PW. 27) shall not be proved against the appellant. In this view it is unnecessary to go into the voluntary nature of the confession etc. The third circumstance relied on is the statement said to have been made by the appellant under section 27 of the Evidence Act leading to discovery of the consequential information, namely, saw blade, is not of a conclusive nature connecting the appellant with the crime. The recover ies were long after the arrest of the appellant. The blood stains on all the articles were disintegrated. So it was not possible to find whether it is human blood or not. Moreover, from the prosecution evidence it is clear that the deceased himself was an accused in an earlier murder case and it is obvious that he had enemies at his back. Absolutely no motive to commit crime was attributed to the appellant. 116 No doubt the appellant and two others have been charged for an offence under section 302 and 201 read with Section 34, namely, common intention to commit the offences and A. 2 and A. 3 were acquitted of the charge under section 302/34, I.P.C. and that there is no independent charge under section 302, I.P.C. If, from the evidence, it is established that any one of the accused have committed the crime individual ly, though the other accused were acquitted, even without any independent charge under section 302, the individual accused would be convicted under section 302, I.P.C. sim plicitor. The omission to frame an independent charge under section 302, I.P.C. does not vitiate the conviction and sentence under section 302, I.P.C. Thus considered we find that the prosecution has utterly failed to prove any one of the three circumstances against the appellant and the chain of circumstances was broken at every stage without connecting the accused to the commission of the alleged crime as the prosecution failed to prove as a primary fact all the three circumstances, much less beyond all reasonable doubt bringing home the guilt to the accused, and to prove that the accused alone had committed the crime. Therefore, the appellant is entitled to the benefit of doubt. The conviction and sentence of the appellant for the offences under section 302 or Section 201 of I.P.C. are set aside. The appellant is on bail granted by this Court after nine years ' incarceration. The bail bond shall stand can celled. He shall remain at liberty unless he is required in any other case. Before parting with the case, it is necessary to state that from the facts and circumstances of this case it would appear that the investigating officer has taken the appel lant, a peon, the driver and the cleaner for ride and tram pled upon their fundamental personal liberty and lugged them in the capital offence punishable under section 302. I.P.C. by freely fabricating evidence against the innocent. Un doubtedly. heinous crimes are committed under great secrecy and that investigation of a crime is a difficult and tedious task. At the same time the liberty of a citizen is a pre cious one guaranteed by article 3 of Universal Declaration of Human Rights and also article 21 of the Constitution of India and its deprivation shall be only in accordance with law. The accused has the fundamental right to defend himself under article 10 of Universal Declaration of Human Rights. The right to defence includes right to effective and meaningful defence at the trial. The poor accused cannot defend effec tively and adequately. Assigning an experienced defence counsel to an indigent accused is a facet of fair procedure and an inbuilt right to liberty and life envisaged under articles 117 19 and 21 of the Constitution. Weaker the person accused of an offence, greater the caution and higher the responsi bility of the law enforcement agencies. Before accusing an innocent person of the commission of a grave crime like the one punishable under section 302, I.P.C., an honest, sincere and dispassionate investigation has to be made and to feel sure that the person suspected of the crime alone was re sponsible to commit the offence. Indulging in free fabrica tion of the record is a deplorable conduct on the part of an investigating officer which under mines the public confi dence reposed in the investigating agency. Therefore, great er care and circumspection are needed by the investigating agency in this regard. It is time that the investigating agencies, evolve new and scientific investigating methods, taking aid of rapid scientific development in the field of investigation. It is also the duty of the State, i.e. Cen tral or State Government to organise periodical refresher courses for the investigating officers to keep them abreast of the latest scientific development in the art of investi gation and the march of law so that the real offender would be brought to book and the innocent would not be exposed to prosecution. Though article 39A of the Constitution provides fundamental rights to equal justice and free legal aid and though the State provides amicus curiae to defend the indigent accused, he would be meted out with unequal defence if, as is common knowledge the youngster from the Bar who has either a little experience or no experience is assigned to defend him. It is high time that senior counsel practicing in the court con cerned, volunteer to defend such indigent accused as a part of their professional duty. If these remedial steps are taken and an honest and objective investigation is done, it will enhance a sense of confidence of the public in the investigating agency. We fervently hope and trust that concerned authorities and Senior Advocates would take appropriate steps in this regard. The appeal is accordingly allowed. P.S.S. Appeal allowed.

The appellant was convicted under sections 302 and 201 read with section 34 IPC. The prosecution case was that he and the deceased were last seen together in village J on November 10, 1974 by PW. 7, owner of a dhaba cum liquor shop, and PW. 8, and all of them had consumed liquor. The deceased had by then become tipsy. Thereafter the appellant and the deceased had boarded a truck driven by A 2 and A 3, the cleaner. While they were going in the truck there ensued a quarrel between them over some money matters and the appellant attacked the deceased with an iron screw driver, and when the latter was half dead all the accused severed his head with an iron saw and burried the trunk under stones. The head was hidden at a different place. Three days later, PW 6, chowkidar of a neighboring village noticed the dead body and reported the matter to PW 10, the village pradhan, who accompanied him to the spot. PW 6 lodged the FIR the next morning. On receiving information that the deceased and the appellant were seen consuming liquor on November 10 the Sub Inspector, PW 27, and PW 10 went to appellant 's village and took him for identification to village J, where PWs 7 and 8 identified him as one seen in the company of the deceased and having consumed liquor. The appellant was thereafter taken to PW 10 's village and PW 27 proceeded for further investigation. The appellant then made an extra judicial confession to PW 10 of having committed the crime with the help of A 2 and A 3. PW 10 passed on that informa tion to PW 27 the next day following which the accused were arrested. Thereafter A 2 made a statement under section 27 of 106 the Evidence Act leading to the ' discovery of the severed head. The weapon of offence was also recovered. The High Court confirmed the conviction and sentence of the appellant but acquitted the other two of the charge under section 302 IPC. Allowing the appeal by special leave, the Court, HELD: 1. The prosecution has failed to bring home the guilt to the appellant beyond all reasonable doubt and to prove that he alone had committed the crime. He is, there fore, entitled to the benefit of doubt. [116D] 2.1 When there is no direct witness to the commission of murder and the case rests entirely on circumstantial evi dence, all the circumstances from which the conclusion of the guilt is to be drawn should be fully and cogently estab lished. The proved circumstances should be of a conclusive nature and definite tendency unerringly pointing towards the guilt of the accused. Imaginary possibilities have no role to play. What is to be considered are ordinary human proba bilities. It is not necessary that each circumstance by itself be conclusive but cumulatively must form unbroken chain of events leading to the proof of the guilt of the accused. If any of the said circumstances are consistent with the innocence of the accused or the chain of the conti nuity of the circumstances is broken, the accused is enti tled to the benefit of the doubt. [112D H] 2.2 In assessing the evidence to find these principles it is necessary to distinguish between facts which may be called primary or basic facts on one hand and inference of facts to be drawn from them, on the other. In regard to the proof of basic or primary facts, the court has to judge the evidence in the ordinary way and in appreciation of the evidence in proof of those basic facts or primary facts, there is no scope for the application of the doctrine of benefit of doubt. The court has to consider the evidence and decide whether the evidence proves a particular fact or not. Whether that fact leads to the inference of the guilt of the accused or not is another aspect and in dealing with this aspect of the problem, the doctrine of benefit would apply and an inference of guilt can be drawn only if the proved facts are inconsistent with the innocence of the accused and are consistent only with his guilt. [113A C] 3.1 In the instant case, from the evidence it is clear that there was no prior intimacy of the appellant and the deceased. They happened to meet per chance. PW 7, the liquor shop owner, and PW 8, who had 107 liquor with the appellant and the deceased were also abso lute strangers to the deceased and the appellant. Admittedly there was no identification parade conducted by the prosecu tion to identify the appellant by PW 7 or PW 8. The appel lant was stated to have pointed out to PW 7 as the one that sold the liquor and PW 8 consumed it with him and the de ceased. Therefore, it is not reasonably possible to accept the testimony of the PW 7 and PW 8 when they professed that they had seen the appellant and the deceased together con suming the liquor. It is highly artificial and appear on its face a make believe story. [113F H] 3.2.1 An unambiguous extra judicial confession possesses high probative value force as it emanates from the person who committed the crime and is admissible in evidence pro vided it is free from suspicion and suggestion of its falsi ty. But in the process of the proof of the alleged confes sion the court has to be satisfied that it is a voluntary one and does not appear to be the result of inducement, threat or promise envisaged under section 24 of the Evidence Act or was brought about in suspicious circumstances to circum vent ss, 25 and 26 of the Evidence Act. For this purpose the court must scrutinise all the relevant facts such as the person to whom the confession is made, the time and place of making it, the circumstances in which it was made and final ly the actual words used by the accused. [114A D] 3.2.2 Section 25 of the Evidence Act provides that no confession made to a police officer shall be proved as against a person accused of any offence. Section 26 provides that no confession made by any person while he is under custody of the police officer, unless it be made in the immediate presence of a magistrate, shall be proved as against such person. [114G] 3.2.3 In the instant case, the appellant did not make any confession in the presence of the magistrate. From the narrative of the prosecution story it is clear that PW 10 and the appellant did not belong to the same village and that PW 27 and PW 10 came together and apprehended the appellant from his village and took him to village J for identification. After he was identified by PW 7 and PW 8 it was stated that he was brought back to the village of PW 10 and was kept in his company and PW 27 left for further investigation. It is incredible to believe that the police officer, PW 27 after having got an accused identified would have left without taking him into custody. He seems to have created an artificial scenario of his leaving for further investigation and keeping the appellant in the custody of PW 10 to make an extra judicial confession, with a view to avoid the rigour of sections 25 and 108 26. Nothing prevented him from taking the appellant to a Judicial Magistrate and having his confession recorded as provided under section 164 of the Crl. P.C. which possesses great probative value and affords an unerring assurance to the court. It is too incredulous to believe that for mere asking to tell the truth the appellant made voluntary confession to PW 10 and that too sitting in a hotel. The other person in whose presence it was stated to have been made was not examined to provide any corroboration to the testimony of PW 10. It would be legitimate, therefore, to conclude that the appellant was taken into police custody and the extra judicial confession was obtained there through PW 10 who accommodated the prosecution. [115A E] 3.2.4 It is well settled law that sections 25 and 26 of the Evidence Act shall be construed strictly. Therefore, by operation of section 26 the confession made by the appellant to PW 10 while he was in the custody of the police officer shall not be proved against him. [115E] 3.3 The statement said to have been made by the appel lant under s 27 of the Evidence Act leading to discovery of the consequential information, namely. saw blade, is not of a conclusive nature connecting the appellant with the crime. The recoveries were made long after the arrest of the appel lant. The blood stains on all the articles had disintegrat ed. So it was not possible to find whether it was human blood or not. Moreover, from the prosecution evidence it is clear that the deceased himself was an accused in an earlier murder case and it is obvious that he had enemies at his back. Absolutely no motive to commit the crime was attribut ed to the appellant. [115G H] 4. The conviction and sentence of the appellant for the offences under sections 302 and 201 IPC are set aside. The bail bond shall stand cancelled. He shall remain at liberty unless he is required in any other case. [116D] 5. Indulging in free fabrication of evidence against an innocent and implicating him in the capital offence punisha ble under section 302 IPC, as in the instant case, is a deplora ble conduct on the part of an investigating officer. The liberty of a citizen is a precious one guaranteed by consti tutional provisions and its deprivation shall be only in accordance with law. Before accusing the appellant of the commission of such a grave crime an honest, sincere and dispassionate investigation should have been made to feel sure that he alone was responsible to commit the offence. [117B; A] 109

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tion (Civil) No. 112 of 1990 etc. (Under Article 32 of the Constitution of India.) P.S. Poti. E.M.S. Anam, V.J. Francis and M.N. PopIi for the Petitioners. T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambi ar. K.R. Kurup. section Balakrishanan, Vijay Kumar, T.T. Kunhi Kannan. section Vasudevan and P.K. Manohar for the Respond ents. 564 The Judgment of the Court was delivered by AHMADI, J. In special leave petitions, leave granted. An autonomous body called the Kerala Water and Waste Water Authority was constituted with effect from 1st April, 1984 under Section 3(1) of the Kerala Water and Waste Water Ordinance, 1984 (No, 14 of 1984) which Ordinance was brought into force w.e.f. 1st March, 1984. This ordinance was re placed by similar Ordinances issued from time to time, the last being Ordinance No. 27 of 1986 which was in turn re placed by the Kerala Water Supply and Sewerage Act, 1986 (Act No. 14 of 1986), (hereinafter called 'the Act '); Sec tion 1(3) whereof provides that it shall be deemed to have come into force on 1st March, 1984. This Act, besides pro viding for the establishment of an autonomous authority to be called the Kerala Water Authority, makes provision for the development and regulation of water supply and waste water collection and disposal and for matters connected therewith. There is no dispute that the functions which were carried on by the Public Health Engineering Department (PHED) were transferred to the autonomous body on the enact ment of the Ordinance No. 14 of 1984. After the enactment of the Act, every person working in the PHED became the employ ee of the Kerala Water Authority (for short 'the Authority ') by virtue of Section 19(1) of the Act, which reads as under: "Transfer of employees to the Authority Save as otherwise provided in this section, every person who was employed in the Public Health Engineering Department of the Government shall, on and from the appointed day become an employee of the Authority and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions, and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if this Act had not come into force and shall continue to do so until his employment in the Authority is terminated or until his remuneration or other terms and conditions of service are revised or altered by the Authority under or in pursuance of any law or in accordance with any provision which for the time being governs his service: Provided that nothing contained in this sub section shall apply to an employee in the cadres of the Administrative ? 565 Officers, Financial Assistants Divisional Accounts, Typists and Stenographers, who, by notice in writing given to the Government and the Authority within such time as the Govern ment may, by general or special order, specify, intimates his intention of not becoming an employee of the Authority: Provided further than an employee referred to in the preced ing proviso shall continue to be an employee under the Government and shall be provided elsewhere in any post or other service under the Government. " Sub sections (3) and (6) of Section 19 make it clear that such transfer of service shall not entitle the employee to claim any compensation under the nor shall it amount to retrenchment or abolition of post under any extant rule, regulation or order applicable to Government servants. Thus, the erstwhile staff of the PHED was by the thrust of Section 19(1) transferred on the establishment of the Authority. This would naturally concern those persons only who were in the employment of the PHED before the establishment of the Authority w.e.f. 1st April, 1984. The staff members employed by the Authority after its constitution were naturally appointed under the provisions of the concerned statute. Since the Act has retrospective effect, reference may be made to Section 8(1) of the Act which reads thus: "Appointment of officers and staff Subject to the provi sions of sub section (2), the Authority may appoint for the purpose of enabling it to carry out its powers, duties and functions under this Act, a Secretary and such other offi cers and staff as may be required against posts duly sanc tioned by it: Provided that the Authority shall obtain the previous ap proval of the Government for the creation of post above the rank of the Executive Engineer. " By virtue of Section 8(3), except as provided by sub sec tions (1) & (2), the appointment and conditions of service of the officers and employees of the Authority are to be governed by rules made by the Government from time to time. Although the Act is deemed to have come into force w.e.f. 1st March. 1984, Section 69 became effective 566 from the date of publication of the Act in the Gazette i.e. 4th August, 1986. That section reads as follows: "Amendment of Act 19 of 1970 With effect from the date of publication of this Act in the Gazette, the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 (19 of 1970) shall have effect subject to the following amendment, namely: in clause (a) of Section 2, the words and figures "or the Kerala Water Authority" established under section 3 of the Kerala Water Supply and Sewerage Act 1986;", shall be added at the end. " Even though Act 19 of 1970 stood so amended by the force of Section 69, actual effect could be given after issuance of Notification No. G.O. (MS) No. 38/88/P & ARD dated 30th July, 1988 on which date item (LIII) was added to the rele vant rules as "Amendment of the Rules In the Kerala Public Service Com mission (consultation by Corporation and Companies) Rules, 1971, in Clause (d) of rule 2, after item (LII), the follow ing item shall be added, namely: (LIII) The Kerala Water Authority. " This amendment was considered necessary with a view to bringing the Authority within the purview of PSC so that it may seek the advice of that body on matters relating to the methods of recruitment of its employees, etc. From the above discussion it becomes clear that the employees of the Authority can be divided into four distinct groups, viz., (i) those who were in the employment of PHED before the constitution of the Authority and were trans ferred to the Authority (ii) those whom the Authority em ployed between 1st April. 1984 and 4th August, 1986 (iii) those who were appointed between 4th August, 1986 and 30th July, 1988 and (iv) those who were appointed after 30th July, 1988. The petitioners in this batch of matters are serving in different capacities, such as, cleaners, pump operators, draftsmen, drivers, etc. They claim that they were appointed through the Employment Ex 567 change between 1981 and 1988. They contend that they have been compelled to approach this Court as their services are likely to be terminated as has been done in the case of a few of their colleagues. They contend that till the issuance of the notification dated 30th July. 1988 amending the concerned PSC rule (amendment extracted earlier) there was no question of the Authority consulting the PSC and there fore, appointments made prior to that date cannot be termed as irregular or unauthorised and cannot be determined on that ground. They contend that as in a few cases the High Court of Kerala failed to appreciate this true legal posi tion and refused to grant relief to employees whose services were threatened, the Managing Director of the Authority issued instructions to his subordinates to terminate the services of similarly placed employees, thereby compelling the present petitioners to approach this Court so that all such employees are uniformly governed by this Court 's order. They point out that in Civil Appeals Nos. 472 to 478 of 1988 arising from the High Court decision. and Writ Petitions (Civil) Nos. 857 and 1135 of 1987, this Court passed the following order on 1st February, 1988: "Special leave granted. Heard counsel for the parties. We are of the view that in the facts and circumstances of these cases the services of such of the appellants as pos sess the requisite qualifications should be regulated in accordance with the Kerala Public Service Commission (Addi tional functions as respects certain Corporations and Compa nies) Act, 1970 and until such regularisation is made, no appointment on similar posts from outside be made. If there be any excess employees now in service employment, it will be open to the Authority to terminate their services on condition that as and when vacancies arise, they shall first be considered for appointment keeping the direction indicat ed above in view. Recruitments in future will, however, be in accordance with the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 and the Kerala Water Supply and Sewerage Act, 1986. " Thereafter in another batch of special leave petitions Nos. 4385 to 4387 of 1988 this Court passed the following order on 24th March, 1988: 568 "Heard learned counsel for parties. The only direction which we can give in the facts and circumstances of the case will be in case after all those who have been regularly selected by the Public Service Commission are appointed and thereaf ter any vacancies are left, the same should be given to those who, like the petitioners, have already been in serv ice taking into consideration their seniority. Every step should be taken by the Water Authorities to regularise the services of such people who can be appointed under our direction as indicated above. There will be no further direction in this case. The other person who may be thrown out of employment on account of the direction of the Water Authority which is impugned before us, may appear before the Public Service Commission in the next examination, The State of Kerala has informed us that age bar would be waived. The petitions are disposed of accordingly. " The Authority treated these orders as confined to the work men who had filed the proceedings and did not extend the ratio to others similarly placed. Not only that, the Author ity, contend the petitioners, placed different interpreta tions on the aforesaid orders and continued to terminate the services of the employees. Another group of writ petitions Nos. 525,527,528, and 503 of 1988 came up before this Court on 28th November, 1988 when this Court passed the following Order: "Mr. Krishna Murthy Iyer appearing for the Kerala Water Authority states that the claims of the petitioners can be divided into three categories, namely (1) those who had been employed by Public Health Engineering Department before the Kerala Water Authority was constituted, (2) those who get employed between 1.4.1984 and 1986 and (3) the persons appointed after 1986. The Kerala Water Authority is given three months ' time to examine the individual cases of these groups and take its decision accordingly. We direct the Authority to place its conclusions before the Court before giving effect to them. Status quo as on today will continue until further orders. " The grievance of the petitioners is that no action was taken by the Authority within the time allowed nor has it taken any action till today to implement the said order. The petitioners also contend that the employees are compelled to knock at the doors of different courts as the Authority continues to terminate the services of the employees 569 not with standing the aforequoted orders passed by this Court. Mr. P.S. Poti, the learned counsel for the petition ers, therefore, made a fervent appeal that this Court should pass an order laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that these low income group employees are not required to knock at the doors of differ ent courts to protect themselves from the threatened arbi trary action of the Authority terminating their services. In other words he wants this Court to formulate a scheme for the regularisation of the services of all similarly placed employees which would put an end to all pending cases and future cases which are bound to arise if the Authority continues its present policy. The claims made by the employees in this group of cases is contested mainly on the plea that their tenure and serv ice conditions were regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service Rules, 1958 (hereinafter called `the Rules ') which were statutory in character and were, therefore, binding on the Authority as well as the employees. It is contended that the employees belonging to different categories were appointed on different dates by the PHED prior to 1st April, 1984 under this rule and, therefore, their services could only be regulated thereun der. After the autonomous Authority was constituted w.e.f. 1st April, 1984 on the enactment of Ordinance 14 of 1984, the Authority passed a Resolution No. 8 on 25th April, 1984 adopting the aforesaid Rules and hence all appointments made after 1st April, 1984 also came to governed by Rule 9(a)(i) of the Rules till Section 69 of the Act came into force w.e.f. 4th August, 1986 and not 30th July, 1988 when the relevant rule was amended by the introduction of item (LIII) referred to earlier. Appointments made after 4th August, 1986 are clearly subject to the requirement of Section 69 of the Act and the Authority cannot act in contravention there of. Had it not been for Court orders restraining the Author ity from terminating their services, the services of all those who were governed by Rule 9(a)(i) would have been terminated on the expiry of 180 days. The text of that rule may be noticed at this stage: "Where it is necessary in the public interest, owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the appointing authority may appoint a person, otherwise than in accordance with the said rules, temporarily. " 570 The first proviso is not relevant for our purpose but reli ance was placed on the second proviso which reads as under: "Provided further that a person appointed under this clause by direct recruitment to a post other than teaching post and a post covered by the proviso to clause (iii) of rule 10(b)] shall not be allowed to continue in such post for a period exceeding three months." (i.e. one hundred eighty days) The rule further requires that a person appointed under clause (i) should be replaced as soon as possible by a member of the service or an approved candidate qualified to hold the post under the said rules. Such replacement must take place in the order of seniority based on length of temporary service in the unit. It is, therefore, the case of the Authority that appointments made under this rule were purely temporary, not to exceed three months, and had to be terminated on the expiry of the said period and it was not open to the Authority to continue their services even by reappointment unless fresh candidates were not available for reappointment through employment exchange. Therefore, had it not been for the restraint orders issued by different Courts, the Authority contends it was under an obligation to act in conformity with the above rules. However, as regards those who had joined service prior to 1st April. 1984 in different categories, the Authority passed a resolution on 30th January, 1987 to the following effect: "Resolved to recommend the Government the regularisation of the service of the employees recruited in the erstwhile PHED and still working in the Kerala Water Authority. " The Government, it seems, has not taken any decision in this behalf as yet. Since the counter filed on behalf of the State Government is silent on this point we inquired of the learned counsel for the State to clarify the position. We were told that since the Authority was an autonomous body it was free to regularise the services of such employees, if it so desired, without the concurrence of the State Government. While admitting the fact that appointments were made from the lists submitted by various District Employment Officers, the Authority contends that as the appointments were gov erned by Rule 9(a)(i) they could not ensure beyond three months and the termination of their employment did not fall within the ambit of `retrenchment ' as understood under the 571 . In any case even otherwise the application of that law is specifically excluded by Section 19(3) of the Act and hence the benefit of that law cannot be extended to the employees of the Authority. The contention that the action of the Authority to terminate the services is violative of Article 14 is repelled on the plea that acting in conformity with a statutory Rule 9(a)(i) can never be branded as arbitrary. Lastly it is contended that the Authority was not directed to apply this Court 's orders passed in some of the proceedings referred to earlier to all similarly situated employees as the Court 's orders were based on `the fact and circumstances of these cases ' and were not intended to be of general application. With refer ence to the order of 24th March, 1988 it is said that the Authority has moved a review application which is pending. The Authority contends that as there is no infringement of any fundamental right, the writ petitions brought under Article 32 of the Constitution cannot be sustained. The above is the stand taken by the Authority. The State Govern ment has by and large supported this stand and, therefore, we need not restate the contentions raised in their counter. The respondents, therefore, contend that the employees are not entitled to any relief whatsoever and the appeals/peti tions deserve to be dismissed with costs. The question of regularisation in service must be exam ined keeping in mind the historical as well as the constitu tional perspectives. During the colonial rule industrial growth in the country was tardy and most of the large sized industries were controlled by British interests. These establishments employed Indian labour on wages far below the sustenance levels. Men, women and even children were required to work for long hours in thoroughly unhygien ic conditions. Because of large scale unemployment there was a surplus labour market which the employers could and did exploit. This virtually forced the labour to accept employ ment on terms unilaterally dictated by the employers. The relationship between the employer and the employee being purely contractual, the hire and fire rule governed. Those were the days of laissez faire when contractual rights were placed above human rights. The concepts of dignity of labour and fair remuneration for work done were wholly alien. The workers had to work in appalling conditions and at low wages with no job security. After we attained independence the pace of industrial growth accelerated. Our Constitution makers were aware of the hardships and insecurity faced by the working classes. The Preamble of our Constitution obligates the State to secure to all its citizens social and economic justice, besides political justice. By the 42nd Amendment, the Pream 572 ble of the Constitution was amended to say that ours will be a socialistic democracy. In furtherance of these promises certain fundamental rights were engrafted in Part 111 of the Constitution. The Constitution guarantees `equality ', abhors discrimination, prohibits and penalises forced labour in any form whatsoever and extends protection against exploitation of labour including child labour. After extending these guarantees, amongst others, the Constitution makers proceed ed to chart out the course for the governance of the country in Part IV of the Constitution entitled `Directive Princi ples of State Policy '. These principles reflect the hopes and aspirations of the people. Although the provisions of this part are not enforceable by any court, the principles laid down therein are nevertheless fundamental in the gover nance Of the country and the State is under an obligation to apply them in making laws. The principles laid down therein. therefore, define the Objectives and goals which the State must endeavour to achieve over a period of time. Therefore, whenever the State is required to make laws It must do so consistently with these principles with a view to secur ing social and economic freedom so essential for the estab lishment of an egalitarian society. This part, therefore, mandates that the State shall strive to promote the welfare of the people by minimising the inequalities in income and eliminating inequalities in status, facilities and opportu nities; by directing its policy towards securing, amongst others, the distribution of the material resources of the community to subserve the common good; by so operating the economic system as not to result in concentration of wealth; and by making effective provision for securing the right to work as also to public assistance in cases of unemployment, albeit within the limits of its economic capacities. There are certain other provisions which enjoin on the State certain duties, e.g. securing to all workers work, a living wage, just and humane conditions of work, a decent standard of life. participation in management, etc., which are aimed at improving the lot of the working classes. Thus the Pream ble promises socio economic justice, the fundamental rights confer certain justiciable socio economic rights and the Directive Principles fix the socio economic goals which the State must strive to attain. These three together constitute the core and conscience of the Constitution. India is a developing country. It has a vast surplus labour market. Large scale unemployment offers a matching opportunity to the employer to exploit the needy. Under such market conditions the employer can dictate. I his terms of employment taking advantage of the absence of the bargaining power in the other. The unorganised job seeker is left with no option but to accept employment on take it or 573 leave it terms offered by the employer. Such terms of em ployment offer no job security and the employee is left to the mercy of the employer. Employers have betrayed an in creasing tendency to employ temporary hands even on regular and permanent jobs with a view to circumventing the protec tion offered to the working classes under the benevolent legislations enacted from time to time, One such device adopted is to get the work done through contract labour, It is in this backdrop that we must Consider the request for regularisation in service. Before we deal with the case on hand it would be advan tageous to refer to some of the decision bearing on the question of regularisation. In Smt. P.K. Narayani & Ors. vs State of Kerala & Ors,, the petition ers who had been serving as employees of the State of Kerala or its public sector undertakings for the past few years challenged the action of the employer in terminating their services to make room for the candidates selected by the Kerala Public Service Commission. This Court directed that the petitioners and all others similarly placed should be allowed to appear at the next examination that the Public Service Commission may hold without raising the age bar; till then the petitioners and others may be continued in service provided there are vacancies. This, clarified the Court, will not confer any right on the employees to contin ue in service or of being selected by the Commission other wise than in accordance with the extant rules and regula tions. These directions were given to resolve what this Court described as `a human problem which has more than one facet ', Again in Dr. A.K. Jain & Ors. v, Union of India & Ors., ; the services of ad hoc Assistant Medical Officers who were initially appointed for six months but were continued for periods ranging upto four years, were sought to be terminated to accommodate the candidates se lected by the Union Public Service Commission. The petition ers claimed that their services should be regularised and their seniority should be fixed from the date of their initial entry in service as ad hoc appointees. In the coun ter, the Union of India contended that `ad hoc ' appointments were made by the General Managers of the Zonal Railways to tide over temporary shortages of doctors and their tenures were extended till regular selection was made by the UPSC and appointments were made by the President of India. Since the appointing authority was the President of India such ad hoc appointments by the General Managers of the Zonal Rail ways could not be regularised. It was further contended that the ad hoc appointees were granted age relaxation and were asked to appear at two special selections based on interview alone held by the 574 UPSC in 1982 and 1985. The petitioners were those ad hoc appointees who had either failed to avail of the special benefit of selection or had appeared and failed to qualify. In the circumstances it was contended that they could not be regularised in service. Notwithstanding the same this Court directed regularisation of services of all doctors appointed upto October 1, 1984 in consultation with UPSC on the evalu ation of their work and conduct based on the confidential reports in respect of the period subsequent to October 1, 1982. Such regularisation was to be from the dates from which they were continuously working. The services of those not regularised were allowed to be terminated. The petitions of those appointed after October 1, 1984 were however dis missed. In the case of Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., this Court, while dealing with the question of their absorption, referred to the State 's obligations (referred to as an individual 's rights) under Part IV of the Constitution and observed as under: "Of those rights the question of security of work is of utmost importance. If a person does not have the feeling that he belongs to an organization engaged in production he will not put forward his best effort to produce more. That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management. It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contribute to the maximisation of produc tion. It is again for this reason that managements and the governmental agencies in particular should not allow workers to remain as casual labourers or temporary employees for an unreasonable long period of time." This Court emphasised that unless a sense of belonging arises, the worker will not give his best and consequently production will suffer which in turn will result in economic loss to the nation. This Court, therefore, directed the department to prepare a scheme on a rational basis for absorbing those who have worked for a continuous period of one year. 575 Tested on the above and keeping in mind the constitu tional philosophy adverted to earlier, we may now proceed to consider the main plank of the contention raised by the Authority. But before we do so we may dispose of the non controversial part of the case. From the pleadings in this case one thing that clearly emerges is that the Authority had taken a decision on 30th January, 1987 to regularise the services of those who were employed by the erstwhile PHED and whose services stood transferred to the Authority by the thrust of the statute. According to the resolution extracted earlier, the Authority recommended to the State Government that the services of the employees recruited in the erstwhile PHED and who continued to work on the establishment of the Authority should be regularised. The learned counsel for the State Government contended that since these employees were now borne on the establishment of the Authority on the statutory transfer of their services, it was for the Authority to regularise their services, and it was quite unnecessary to make a recommenda tion to the State Government in that behalf. To put it differently, the stand of the State Government through its counsel is that the question of regularisation of the serv ices of ex PHED employees now borne on the establishment of the Authority is exclusively within the purview of the Authority and the State Government has no role to play. That means it was wholly unnecessary on the part of the Authority to make the recommendation it made by the resolution of 30th January, 1987 to the State Government for the regularisation of the ex PHED employees serving on its establishment on that date. To us the position, therefore, appears crystal clear that it is for the Authority and the Authority alone to regularise the services of such employees without waiting for a nod from the State Government. The sphinx like silence on the part of the State Government for now over three years from the date of the resolution is indeed disturbing and betrays total lack of concern for this pressing human prob lem. The second batch of workers comprise those who were appointed between 1st April. 1984 and 4th August, 1986 by the Authority itself. Under section 8(1) of the Act the power to appoint the Secretary and other officers and staff members vests in the Authority. Only when a post above the rank of an Executive Engineer is to be created that the sanction of the State Government becomes necessary under the proviso. Sub section (2) to which sub section (1) is subject expects the Authority to seek the previous sanction of the Government if it desires to employ a servant of the Central or State Government on deputation and not otherwise. It is, therefore, clear beyond any manner of doubt 576 that the power to appoint the staff members with whom we are concerned, solely vests in the Authority. Since the Act is brought into force w.e.f. 1st March, 1984 the question of regularisation of the services of staff members appointed after that date must be examined with reference to the power found in section 8(1) of the Act. However, the contention of the Authority is based on Rule 9(a)(i) of the Rules, which it claims to have adopted under Resolution No. 8 dated 25th April. The Authority contends that by the thrust of this rule the appointments were limited to 180 days only and since the said rules had statutory flavour the Authority was bound to act in accordance therewith. We have extracted the relevant part of this rule earlier. since these rules were framed in exercise of power conferred by the proviso to Article 309 of the Constitution they are undoubtedly statu tory in character but Mr. Poti was right in his contention that they do not retain that character in their application to the staff members of the Authority since they have been adopted by the Authority under a resolution. These rules would undoubtedly be statutory in character in their appli cation to the members of the Kerala Subordinate services for whom they were enacted but when any other authority adopts them by a resolution for regulating the services of its staff, the rules do not continue to remain statutory in their application to the staff of that Authority. They are like any other administrative rules which do not have statu tory force. It was not contended, as indeed it could not That these rules derive statutory force from section 64 or 65 of the Act. Section 64 confers the rule making power on the State while section 65 empowers the Authority to make regulations with the previous approval of the Government. It is nobody 's case that these rules were adopted after obtain ing the previous approval of the Government. If that be so. we must accept Mr. Poti 's submission that these rule their application to the staff members of the Authority appointed after 1 st. April, 1984 have no statutory flavour or force. Now to the text of Rule 9(a)(i) of the Rules. It empowers the appointing authority to appoint a person temporarily otherwise than in accordance with the rule if (i) it is necessary in public interest and (ii) where an emergency has arisen to fill any particular post which has fallen vacant, immediately. In the present case it is diffi cult to say that all appointments made after 1st April, 1984 were required to be filled immediately because of an emergency of the type contemplated by the said rule. On the contrary it seems appointments were routinely made in purported exercise of power conferred by this rule. The proviso on which reliance is placed , which we have extract ed earlier. merely states that ordinarily such appointments will be of those persons who 577 possess the requisite qualifications for the post. If any person who does not possess the requisite qualifications is appointed under the said clause, he will be liable to be replaced by a qualified person. Clause (iii) of Rule 9 states that a person appointed under clause (i) shall, as soon as possible, be replaced by a member of the service or an approved candidate qualified to hold the post. Clause (e) of Rule 9, however, provided for regularisation of service of any person appointed under clause (i) of sub rule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules. This is a clear indication that in the past the Government also considered it just and fair to regularise the services of those who had been in continuous service for two years prior to the cut off date. The spirit underlying this treat ment clearly shows that the Government did not consider it just, fair or reasonable to terminate the services of those who were in employment for a period of two or more years prior to the cut off date. This approach is quite consistent with the spirit of the rule which was intended to be invoked to serve emergent situations which could not brook delay. Such appointments were intended to be stop gap temporary appointments to serve the stated purpose and not long term ones. The rule was not intended to fill a large number of posts in the service but only those which could not be kept vacant till regular appointments were made in accordance with the rules. But once the appointments continued for long, the services had to be regularised if the incumbent possessed the requisite qualifications as was done by sub rule (e). Such an approach alone would be consistent with the constitutional philosophy adverted to earlier. Even otherwise, the rule must be so interpreted, if the language of the rule permits, as will advance this philosophy of the Constitution. If the rule is so interpreted it seems clear to us that employees who have been working on the establish ment since long, and who possess the requisite qualifica tions for the job as obtaining on the date of their employ ment, must be allowed to continue on their jobs and their services should be regularised. It is unfair and unreasona ble to remove people who have been rendering service since sometime as such removal has serious consequences. The family of the employee which has settled down and accommo dated its needs to the emoluments received by the bread winner, will face economic ruination if the job is suddenly taken away. Besides, the precious period of early life devoted in the service of the establishment will be wholly wasted and the incumbent may be rendered `age barred ' for securing a job elsewhere. It is indeed unfair to use him, generate hope and a feeling of security in him attune his family to live within his earnings and then suddenly to throw him out of job. Such behaviour would be an 578 affront to the concept of job security and would run counter to the constitutional philosophy, particularly the concept of right to work in Article 41 of the Constitution. There fore, if we interpret Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible. Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service. The third and fourth batches concern workers who were appointed between 4th August, 1986 and 30th July, 1988 and after 30th July, 1988, respectively. Their appointments would be governed by Section 69 which became effective from 4th August, 1986. By virtue of this section the Kerala Public Service (Additional Functions as respect certain Corporations and Companies) Act, 1970 (19 of 1970) came to be amended with effect from 4th August, 1968 on which date it came to be published in the Gazette. Thereby in clause (a) of section 2 the "Kerala Water Authority" came to be added. In law, therefore, the need to consult the PSC had arisen. True it is that the consequential notification amending the 1971 Rules was issued on 30th July, 1988. But on that account we do not think it would be proper to treat them differently. We think it advisable to treat them as forming a single batch since the need to consult the PSC had arisen on Section 69 coming into effect from 4th August, 1986. In the result we allow these appeals and writ petitions and make the rule absolute as under: "(1) The Authority will with immediate effect regularise the services of all ex PHED employees as per its Resolution of 30th January, 1987 without waiting for State Government approval. (2) The services of workers employed by the Authority be tween 1st April, 1984 and 4th August, 1986 will be regula rised with immediate effect if they possess the requisite qualifications for the post prescribed on the date of ap pointment of the concerned worker. (3) The services of workers appointed after 4th August, 1984 and possessing the requisite qualifications should be regu lated in accordance with Act 19 of 1970 provided they have put in continuous service of not less than one year, artifi cial breaks, if any, 579 to be ignored. The Kerala Service Public Service Commission will take immediate steps to regularise their services as a separate block. In so doing the Kerala Public Service Com mission will take the age bar as waived. (4) The Kerala Public Service Commission will consid er the question of regularisation of the services of workers who possess the requisite qualifications but have put in less than one year 's service, separately. In doing so the Kerala Public Service Commission will take the age bar as waived. If they are found fit they will be placed on the list along with the newly recruited candidates in the order of their respective merits. The Kerala Public Service Com mission will be free to rearrange the list accordingly. Thereafter fresh appointments will issue depending on the total number of posts available. If the posts are inade quate, those presently in employment will make room for the selected candidates but their names will remain on the list and they will be entitled to appointment as and when their turn arrives in regular course. The list will enure for such period as is permissible under the extant rules. (5) The Authority will be at liberty to deal with the serv ices of the workers who do not possess the requisite quali fications as may be it considered appropriate in accordance with law. (6) Those workers whose services have been terminated in violation of this Court 's order in respect of which Contempt Petition No. 156 of 1990 is taken out shall be entitled to the benefit of this order as if they continue in service and the case of each worker will be governed by the clause applicable to him depending on the category to which he belongs and if he is found eligible for regularisation he will be restored to service and assigned his proper place. This order will regulate the services not only of the par ties to the present petitions but also all others similarly situated including those who may be parties to other pro ceedings pending in different Courts. If further directions are required in the matter of working out of the above order the High Court of Kerala may be approached for the same. All the aforestated proceedings are disposed of accordingly with no order as to costs. Y. Lal Appeals and petitions allowed.

Consequent upon the establishment of Kerala Water Au thority under the Kerala Water Supply and Sewerage Act, 1986, all the functions which were till then carried on by the Public Health Engineering Department (PHED) were trans ferred to the said Authority. Contemporaneously with that every person working in the PHED became the employee of the Kerala Water Authority by virtue of Section 19(1) of the Act. Though the said Act was given retrospective operation w.e.f. 1st March 1984, Section 69 thereof came into force from the date of publication of the Act in the Gazettee viz., 4.8.1986; actual effect could be given w.e.f. 30.7. 1988 on which date the necessary notification was issued where by the rule was amended and the Authority came within the purview of the Public Service Commission. Thus the employees of the Authority fell into four different groups viz., (i) those who were in the employment of PHED before the constitution of the Authority and were transferred to the Authority, (ii) those whom the Authority employed be tween 1st April, 1984 and 4th August 1986, (iii) those who were appointed between 4th August 1986 and 30th July 1988, and (iv) those who were appointed after 30th July 1988. The Authority it seems terminated the services of various em ployees. The petitioners apprehending termination of their serv ices by the Authority filed petitions contending inter alia that they were recruited through the Employment Exchange and till the issuance of the notification dated 30.7.1988, amending the concerned PSC rule, there was no question of the Authority consulting the PSC and therefore, appointments made prior to that date could not be termed as irregular or unauthorised and could not be determined on that ground. It is asserted by them that the High Court refused to grant relief to those employees whose services were threatened and despite favourable orders passed by this Court in cases that came before it, the Authority continued to terminate the services of employees similarly placed treating those 563 orders as having been passed in respect of only those em ployees who were before the Court. It is, therefore, urged by them that this Court should pass orders laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that the low income employees are not required to knock at the doors of different courts for protection against the threatened arbitrary action of the Authority terminating their services. The Authority has contested the cases on the plea that all the appointments made before or after April 1, 1984 were governed by Rule 9(a)(i) of the Rules till Section 69 came into force w.e.f. 4.8.1986 and 30.7.1988 when it was amended. Appointments made after 4.8.1986 are clearly sub ject to the requirement of Section 69 of the Act and the Authority cannot act in contravention thereof. Services of all those who were governed by Rule 9(a)(i) will have to be determinated on the expiry of 180 days. Allowing the appeals as also writ petitions, this Court, HELD: Interpreting Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible. Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service. [388A B] P.K. Narayani & Ors. vs State of Kerala and Ors. , ; Dr. A.K. Jain & Ors. vs Union of India and Ors. , ; ; Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India and Ors., , referred to.

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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.

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]

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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.

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]

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vil Appeal No. 2211 (NT) of 1988 etc. From the Judgment and Order dated 7.10.1986 of the Madhya Pradesh High Court in M.P. No. 1861 of 1983. 594 Prithvi Raj, R.B. Mishra, Uma Nath Singh, S.K. Gambhir, Vivek Gambhir, Satish K. Agnihotri, Ashok Singh and Mrs. V.D. Khanna for the Appellants. Harish N. Salve, Ms. Lira Goswami and D.N. Misra for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. The Civil Appeal and S.L.P. 12054/87 are by the State of Madhya Pradesh (M.P.). The respondents in these two matters and the petitioners in the other five Special Leave Petitions are certain concerns in M.P. assess able to sales tax (hereinafter compendiously referred to as the assesses '). All these matters can be conveniently dis posed of by a common judgment as they raise a common issue. The assesses ' claim for exemption from sales tax for certain periods in question was accepted by the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail (a case where the exemption sought for was originally granted but subsequently revoked). However, subsequently, a Full Bench of the High Court, in the case of Jagadamba Industries, disapproved the view taken by the Division Bench in the G.S. Dhall & Flour Mills case and, following the Full Bench, the writ petitions filed by certain other assesses were dismissed by the High Court. The State is aggrieved by the judgment in the first two cases and the assesses by the High Court 's decision in the other cases. Hence these appeals and special leave petitions. Before dealing with the appeals on merits, an important circumstance needs to be referred to, which is this: The judgment of the Full Bench in the case of Jagadamba Indus tries was itself the subject matter of Special Leave Peti tions in this Court but those petitions (S.L.P. Nos. 15688 90/87) were dismissed, at the stage of admission, on 9.2. 1988, with the observations: "We are in agreement with the views expressed by the High Court. The Special Leave Peti tions are dismissed". In view of this, the State submits that C.A. 22 11/87 should be allowed and that the assesses ' S.L.Ps. should be dismissed in limine. On the other hand, counsel for the assesses seek to distinguish the Jagadamba case by contending that this Court had refused leave against the Full Bench judgment on account of certain special facts which were considered sufficient to disentwine the assesses in those 595 cases from claiming the exemption. They contend that, in view of this and the fact that the G.S. Dhall & Flour Mills case is in appeal before we may grant leave in the S.L.Ps. and dispose of all the appeals on merits. We accept this plea and grant leave in the S.L.Ps. condoning a delay in the filing of S.L.P. 12054/87. We shall, however, touch upon the above aspect of the matter in the course of our judgment. The issue raised is, at first blush, a simple one. section 12 of the M.P. Sales Tax Act (hereinafter referred to as `the Act ') enables the State Government to grant exemption from the levy of sales tax in certain circumstances. It says: 12. Saving: (1) The State Government may, by notification, and subject to such restrictions and condi tions as may be specified therein, exempt, whether prospec tively or retrospectively, in whole or in part (i) any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification; (ii) any dealer or class of dealers from any provision of the Act for such period as may be specified in the notifica tion. (2) Any notification issued under this section may be re scinded before the expiry of the period for which it was to have remained in force and on such rescission such notifica tion shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect. " In exercise of this power, the State Government issued the following notification on 23/26.10.1981 which it is neces sary to extract in full here along with its Annexure. It reads: "In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) the State Government hereby exempts the class of dealers specified in column (1) of the Schedule below who have set up industry in any of the districts of Madhya Pradesh specified in the annexure to this notification and have commenced production after 1st April, 1981, from pay ment of tax under the said Act for the period specified in column (2), subject to the restrictions and conditions specified in column (3) of the said schedule: 596 Class of dealers Period Restrictions and conditions subject to which exemption has been granted 1 2 3 1. dealers who Two years The dealer specified in (a) hold a certifi from the column (1) shall continue cate of regis date of to furnish the pres tration under The commence cribed returns under the M.P. General Sales ment of M.P. General Sales Tax Tax Act, 1958: production Act, 1958 and shall pro duce before the assessing (b) are registered authority at the time of small scale indus his assessment a certifi trial units with cate issued by the Direc the Industries Dep tor of Industries, Madhya artment of Govt. of Pradesh or any officer au M.P., and thorised by him for the purpose, certifying that (c) have set up ind such dealer is eligible to ustry in any of the claim the exemption and districts specified that he has not opted for in part I of the the scheme of deferring Annexure the payment of tax under the rules framed for this purposes. Dealer who do (a) hold certifi (a) 3 years cate of registra in case of an tion under the industry loca M.P. General Sales ted in a district Tax Act, 1958 specified in `A ' (No.2 of 1959); of part II of the Annexure. (b) are registered (b) 4 years, in the as Small scale Ind case of an industry ustrial units with located in category the Industries De `B ' of Part II of partment of Govt. of of the Annexure; M.P. or are regis and tered with the Di rector General of Technical Develop ment as an indus trial unit or are registered 597 as industrial units by any authority duly empowered to do so by the State Govt. or Cen tral Govt. or hold a licence under the In dustries (Development & Regulation) Act 1951 (No.65 of 1951); and (c) have set up indus (c) 5 years, in do try in any of the dis the case of an tricts specified in industry located part II of the Anne in a district spe xure. cified in category `C ' of part II of the Annexure; from the date of commen cement of production. Dealers who (a) hold certificate (a) 3 years in The dealer speci of registration under the case of an fied in column (1) the M.P.General Sales Industry loca shall produce be Tax 1958 (No.2 of ted in any of fore the assessing 1959); the tehsils of authority at the a district spe time of his assess fied in part I ment a certificate of the Annexure; issued by the Direc tor of Industries, Madhya Pradesh or any (b) are registered (b) 5 years in officer authorised by as industrial units the case of an him for the purpose with the Director industry located of certifying that General of Technical in any of the the dealer is eligi Development or by any tehsils of a ble to claim such authority duly em a district spe exemption under the powered to do so by cified in cate scheme of the Indus State or Central gory `A ' of Part tries. Department Government or hold II of the Anne being a first dealer licence under the xure; to have commenced Industries (Develop production in the ment and Regula industry set up by him in the tehsils referred to in col umn (2) and that such dealer has not opted for the scheme of deferring the pay ment of tax under the rules framed for this purpose. 598 tion) Act, 1951 (No.65 of 1951) have fixed a capital in vestment between Rs.1 crore and Rs.10 crores and; (c) are the first to (c) 7 years in set up the industry the case of an in any tehsil of the industry loca district of Madhya ted in any of Pradesh specified in the tehsils of the Annexure. a district spe cified in cate gory `B ' of Part II of the Anne xure; (d) 3 years in the case of an industry located in any of the tehsils to a district specified in category `C ' of Part II of the Annexure; from the date of commencement of production. ANNEXURE Part I 1. Indore 2. Ujjain 3. Bhopal 4. Jabalpur 5. Gwalior 6. Durg Part II Category `A ' 1. Bilaspur 2. Raipur 3. Dewas 4. Handsaur 5. Morena 6. Vidisha 7. Hoshangabad 8. Ratlam 9. Khandwa 10. Satna 11. Shahdol 599 Category `B ' 1. Geoni 2. Balaghat 3. Betul 4. Raigharh 5. Guna 6. Chindwara 7. Damoh 8. Sagar 9. Narsimhpur 10. Senor 11. Rajmandgoo Category `C ' 1. Panna 2. Sidhi 3. Rewa 4. Chhatarpur 5. Tikamgarh 6. Khargone 7. Surguja 8.Mandla 9. Bhind 10. Shivpuri 11. Datia 12. Raisen 13. Shajapur 14. Dhar 15. Rajgarh 16. Jhooua 17. Bastar It is not in dispute that the assessees before us fulfil the qualifications mentioned in the notification. However, when they approached the Director of Industries for the certificate of exemption envisaged under column (3) of the notification, it was denied to them on the ground that the industries run by them are "traditional industries" which were not eligible for exemption. The assessees went to Court contending that this was totally unjustified. They said, the concept of "traditional industries" was one unspecified in the notification. The authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assessees an exemption they were entitled to under the notification. It is this contention that was accepted in the G.S. Dhall and Flour Mills case. The State had relied on the provisions of the M.P. (Deferment of Payment of Tax) Rules, 1983, notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from/deferment of payment of sales tax". The High Court took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notifica tion of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statu tory notification. This judgment was delivered on 7.10.1986 by Sohani, C.J. and Faizanuddin, J. The Full Bench, in its judgment of 2.11.1987 took a different view. It has, in effect, attached importance to the rules and instructions referred to above and relied considerably on the history of the 600 sales tax levy in the State as furnishing a proper and necessary background in which the terms of the notification of 23.10.1981 have to be read and interpreted. This history has, therefore, to be set out now in order to appreciate the validity of the conclusions of the Full Bench. Before doing this, it may be mentioned that the Full Bench comprised of Ojha C.J., Faizanuddin, J. and Adhikari, J. In fact, the judgment was written by Faizanuddin, J. who has explained in detail the reasons for his change in view. It may also be mentioned, as a matter of record, that, subsequent to the decision of the Division Bench in G.S. Dhall and Flour Mills, the State Government appears to have issued a notifi cation on 3.7. 1987, intended obviously to overcome the effect of the said decision. We shall refer to this later in this judgment. Now, to turn to the history relied on by the Full Bench, we start with a "scheme for the grant of subsidy/interest free loan to new industries set up in Madhya Pradesh". The scheme was to be effective from 15.9.69 and till the end of the Fourth Five Year Plan period (1970) "or such further period as may be extended by the State Government from time to time". It would appear that the scheme was being adminis tered informally under executive instructions even beyond 1970. Though certain "rules" appear to have been framed for the first time on 30.8.73, these rules, it would seem, were not statutory but were only in the nature of executive instructions. We shall, however, refer to them as "rules". Rule 3 was clear as to the persons eligible to avail of it. It read: "Rule 3 "It shall be applicable to all new industrial units except traditional industries like oil mill, flour mill, dall mill, rice mill, ginning and printing factories, who set up in Madhya Pradesh, provided further that such appli cants register themselves with the department after 15.9.69 but before 31.3.74 and in case of SSI units go into produc tion within a period of one year and in case of Large and Medium Industries go into production within 3 years of their date of registration provided further that in case of delay in going into production the period of availability of subsidy or concession will be reduced by the period of delay in going into production. This will come into force from 1.4.74. Note: Small Scale Industries who are already registered with the department need not register separately for this concession. " 601 It would also appear that the districts of the State were divided into two categories advanced and backward and the latter into three categories `A ', `B ', `C '. The amount and period of the subsidy/loan depended upon this classification and was elaborately set out in para 8 which need not be extracted here. A note added to para 8 had this to say: Note: (1) Unit who is otherwise entitled to subsidy may on his request be considered for grant of interest free loan to the extent of entitlement of the subsidy. (2) No unit available concession under the scheme will be allowed to change the location of the whole or any part of the industrial unit or effect any substantial part of its total fixed capital investment within a period of five year after its going in to production. (3) In case the ownership of a new unit changed during the period of availability of this concession, the new owner would be entitled to this concession for the balance period. (4) A closed unit, which is re started by an entrepre neur will not be considered to be a new unit for the purpose of this concession. " Another set of "rules" came into force with effect from 1.4.1977 and superseded the earlier rules. These were on more or less the same lines as the earlier ones and were to apply to "new industrial units", and "existing industrial units", as defined in rules 2(a) and (b), on fulfillment of certain terms and conditions but industries enumerated in rule 3 were specifically excluded from the purview of the definition. Rule 3 made it clear that the rules shall not be applicable to "the following traditional industries". The list of such industries, in addition to those mentioned in the earlier set of rules (excluding roller flour mills and solvent extraction plants in oil mills), took in also saw mills, ice factories and "such other industries as may be notified by the Government from time to time". The period and extent of the subsidy/ loan here again depended upon the district advanced or backward, and in the latter category `A ' or `B ' or `C ' in which the industry was set up Rule 7 is of some relevance and may be set out: "7. An industrial unit eligible for this concession will apply 602 to the Asst. Director of Industries of the district con cerned for verification of the date of going into commercial production and other particulars of new industrial unit or substantial expansion in respect of which the concession is sought. The Asst. Director of Industries will make verifica tion in accordance with rules 5(1) and send within 15 days of the receipt of the application his report to the sanc tioning authorities, Dy. Director of Industries or Director of Industries indicating the date of going into commercial production of the unit. A copy will be furnished to the applicant. " The form of the certificate to be issued by the office of the Director of Industries read thus: "No. Date The particulars furnished by M/s . . . . . . have been checked and verified from records including those of consumption of power and raw materials and output of finished products. The date of commencement of commercial production by the industrial unit is The date from which the unit has exceeded, on a sustained basis production over the licensed or installed capacity of the unit is . . . Asst. Director of Industries" It appears that the Government had announced "conces sions" regarding the payment of sales tax by new industrial units including pioneer units going into production after 1 4 1981 not only under the notification dated 23/10/81 but also under other notifications dated 1 5 82 and 29 6 82. Two of these notifications are on record before us. It is, however, unnecessary to extract them here. It is sufficient to set out their purport, quoting from the "instructions" of 12 1 83, referred to a little later: "According to the first notification, the new industrial units are exempted from the payment of sales tax. This notification covered sales tax payable by them on the products manufactured by them. It entitled them to exemption 603 from payment of purchase tax on purchase made by them from unregistered dealers. According to the second notification an industrial unit making purchases of its raw material from a registered dealer is exempted from payment of sales tax on the raw materials so purchased by him from the registered dealer. In other words, registered dealers selling raw materials to a new industrial unit are not required to charge any sales tax from the new industrial unit on sales made by them to such unit. The third notification exempts the goods manufactured by the new industrial units from the levy of sales tax even when these goods are sold by the dealers who have purchased these goods from the new indus trial units. In other words, by issue of this notification, the goods manufactured by the new industrial units are fully exempted from the payment of sales tax right upto the stage they reach the consumer. These three notifications only deal with the grant of exemption from payment of sales tax under the M.P. General Sales Tax Act. that is to say from the payment of the State Sales Tax. The fourth notification exempts the new industrial units from payment of the Central Sales Tax on the sale of goods manufactured by them in the course of interstate trade or commerce. This notification has exempted the new units from payment of sales tax w.e.f. 1 7 82. " In view of these notifications, the Government considered it necessary to issue certain instructions "for the grant of certificate of eligibility to new industrial units claiming exemption from/deferment of payment of sales tax" on 12 1 1983. These instructions also proceed on the same lines as the earlier ones. "Traditional" industries, as listed in para 5. are said to be outside the purview of the scheme. Para 5 enumerated the following as "traditional industries": flour mills (excluding roller flour mills), oil mills (excluding solvent extraction plants, dall mills. saw mills, rice mills, printing presses of all types, cotton ginning and pressing factories, in factories and such other indus tries as may be notified from time to time. It also stated (a) that "industrial units undertaking expansion/modifica tion or diversification will not be eligible for these concessions, (b) that a closed unit revived by the entrepre neur will not be considered as a new unit for the purpose of availing of these concession and (c) that units claiming interest free loans as an existing unit will not be eligible for these concessions. A certificate of eligibility had to be obtained in the prescribed manner 604 and this procedure was made more elaborate. District Level Committees and a State Level Committee were constituted for this purpose and they took a decision on the application of the unit read with the comments thereon by the Director of Industries, though the certificate was actually issued by the Director of Industries or the General Manager of the District Industries Centre in a prescribed form. The Full Bench, after considering the scheme and in structions of the Government discussed above, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the conces sions granted earlier. The 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes. The Court observed: "It appears that the mode of concessions granted by the aforesaid instructions involved some inconvenience to the industrial units and duplication of procedure inasmuch as the industrial unit had to first collect the sales tax and the tax so collected and paid along with the returns were later on refunded to the industrial unit in the shape of subsidy. To avoid the duplication of procedure the State Government thought it fit to altogether exempt the industri al units from payment of sales tax or defer the payment of sales tax. " The Court observed. vis a vis the various instructions referred to above: "12 . . These instructions also contain a complete procedure for application and grant of eligibility certifi cate by the Industries Department. Thus it is clear from these instructions that the question of grant of eligibility certificate by the Industries Department is not an empty formality but before granting the certificate the Industries Department has to see whether all the requirements as con tained in the instructions are fulfilled and complied with or not. All the Government Instructions discussed above, issued from time to time right from 1973 onwards till 1983 (Annex ure R I, II and III) clearly indicate not only the consist ent Government policy in the matter of grant of 605 Sales Tax concessions to the New Industrial Units but also the consistent practice that has been followed throughout whereby these concessions were not at any time made avail able to the Traditional Industries like Flour Mills and Dall Mills etc. Not a single instance is available to show that any of these concessions were ever made available to any Traditional Industries. It may be pointed out that all these facts and the Government policy as also all the aforesaid Government Instructions on the subject were not placed before the Division Bench which heard and decided Misc. Petition No. 1861 of 1983 (G. section Dall Mills vs State of M.P.). However, after the decision of M.P. No. 1861/83 the State Government while issuing a Notification No. 351 dated 21st October, 1986 under section 12 of the Act, a photostat copy of which has been filed on record of M.P. No. 2710/87 (See at page 94 of the paper book) exempting the Industrial Units specified therein from payment of tax under section 6 and 7 AA of the Act again specifically provided in clause (xiii) of the said Notification that the said exemption shall not be available to the Industrial Units enumerated therein including Flour Mills and Dall Mills etc. " It was true, the Court agreed, that a notification has generally to be construed on its plain language. But, here: "as pointed out earlier, column 3 of the 1981 Notification (Annexure B) does not contain any guidelines or a procedure in the matter of grant of eligibility certificate or refusal thereof by the Industries Department and as the grant or refusal of such certificate cannot be an empty formality and, therefore, in order to avoid the possibility of arbi trariness and injustice to any one the State Government was justified in issuing executive instructions laying down the guidelines and procedure for the same. " The Full Bench, therefore, observed: "16. From what has been stated and discussed above it is clear that at no point of time any concession or exemption from. payment of sales tax was ever given to the Traditional Industries and not a single example to that effect is avail able. The State Government while issuing instruction from 606 time to time have been specifically excluding the Tradition al Industries. Thus the executive authorities and the high est agency and its officers charged with the duty for the administration and enforcement of the said Notification are not only conversant with the underlying policy of the Gov ernment but they are also intimately acquainted with the economic significance of the tax in question and exemption thereof. The interpretation of the Government regarding the construction of 1981 Notification read with the instructions (Annexure R. I, II and III) excluding the Traditional Indus tries, which has been consistently followed and acted upon accordingly for a period over a decade cannot be given a go by but has to be accepted. In view of the above discussion the impugned Notifica tion dated 4 7 1987 (Annexure G) is hardly of any conse quence. More or less it is a clarification of 1981 Notifica tion and not rescission of any grant. " The contention that "instructions" could not override the effect of the statutory notification was repelled by the Court on the ground that the validity and effectiveness of the instructions can be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification. An argument based on the doctrine of promissory estoppel was also rejected as "the petitioners were well aware of the fact that the exemption was not available to their new units and they had not established their units because of the exemption". The Court explained the position thus: "20. In this behalf firstly it may be pointed out that all the petitioners had established their Industrial Units after the Government issued the executive instructions (Annexure R. III) dated 12 1 1983, of which clause 5(b) specifically speaks that the concessions will not be available to Tradi tional Industries like Flour Mills and Dall Mills etc. To say that the petitioners were not aware of these executive instructions would be incorrect because clause 6 of these instructions contemplates that New Industrial Units desirous of availing the said concessions shall have to apply in Form I accompanied with a declaration in Form II appended to the said Instructions and the petitioners applied in Form I with declaration in Form II (See Annexure D, D/I and D/2 in M.P. No. 2710/87). Further these 607 applications for exemption were made by the petitioners only after the order dated 7 10 1986 was passed in G.S. Flour Mills vs State (M.P.) No. 1861 of 1983) which shows that the petitioners were aware of the fact that they were not entitled to exemption and it was only after the aforesaid decisions that they considered to apply for exemption. This fact is further fortified from the conduct of the petition ers themselves as they continued to submit returns right from 1983 onwards and continued to pay the tax as assessed against them without taking any steps to claim exemption. In this behalf paragraphs 8 and 9 of the petitions are self explanatory. Thus having regard to all these facts, the. question of application of principle of promissory estoppel in the present case does not arise and the petitions deserve to be dismissed. " Sri Harish Salve, appearing for the G.S. Dhall & Flour Mills, apart from pleading that the view taken in this case is the correct one and not that enunciated by the Full Bench, also raised an alternative contention on the footing that, at best, the notification of 1981 was ambiguous and lent itself to two plausible interpretations. Assuming that there was initially some ambiguity regarding the applicabil ity of the Notification of 23.10.81 to traditional indus tries, it had been dispelled by the instructions of 12, 1.83. Once these instructions were published, any assessee setting up a traditional industry took a calculated risk on the issue as to whether the Notification should be confined, on proper interpretation, only to non traditional industries and could not rely on the doctrine of equitable estoppel. Pointing out that the assesses in the Full Bench case were persons who had set up their industry after 12.1.83, Sri Salve argued that the dismissal of the Special Leave Peti tion against the Full Bench judgment will not affect his case as this assessee had set up its industry, admittedly, before 12.1. The position is similar in the case of Mohan. Ismail. Learned counsel, therefore, submitted that, even if the 1983 instructions were rightly held by the High Court to have validly supplemented the terms of the 1981 Notification, they can have no application to the two earli er cases which had to be decided solely on the terms of the 1981 Notification. To answer these contentions, one has to look first at the statutory instruments in this case viz. section 12 of the Act and the notification thereunder. section 12(1)(i), with which we are concerned, lays down four requirements for the grant of exemption from the provisions of the Act: 608 (i) that any exemption to be granted under the section has to be by a notification; (ii) that the notification may exempt any class of dealers or any goods or class of goods from the payment of tax under the Act in whole or in part but only for a definite period to be specified in the notification; (iii) that the exemption will be subject to such restric tions and conditions as may be specified in the notifica tion; (iv) that such exemption could be prospective or retrospec tive. We are concerned here with the scope of the second and third requirements mentioned above. So far as the class of dealers entitled to the exemption are concerned, the notifi cation spells out the following requisites: (i) they must belong to one of the classes Of dealers speci fied in column No. (1) of the schedule; (ii) they must have set up industry in any of the districts of Madhya Pradesh specified in the annexure; (iii) they must have commenced production after 1.4. The period of exemption is also specified in the notifica tion. So far as the "restrictions and conditions" subject to which the exemption has been granted, they are, as per column No. (3) of the Schedule: (a) that the dealer should continue to furnish the pre scribed returns under the Sales Tax Act; and (b) that they should produce, at the time of their assessment, a certifi cate from the Director of Industries certifying that such dealer is eligible to claim exemption and has not opted for the "scheme of deferring the payment of tax under the rules framed for the purpose". It is not anybody 's case that the assesses before us did not fall within the class of dealers specified in column (1) or that they did not comply with (a) above or that they had opted for the scheme of deferment of tax. This being so, the assesses claim that they are eligible for the exemption under the notification and that the Director of Industries should have granted them a certificate to this effect. It is the denial of 609 this certificate which has brought the assesses to Court. The question for consideration is whether the Director of Industries can refuse the exemption certificate on a consid eration not specified in the notification. Prima facie, No. All the conditions for exemption have to be. and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those condi tions are fulfilled; he cannot travel beyond the terms of the notification. He can see whether the dealer falls under the description in column (1), whether he has set up a new industry in M.P. State, whether he has commenced production after 1.4.1981 and whether has opted for the deferment scheme. The condition about the dealer filing returns regu larly would seem to be one under the purview of the sales Tax Officer rather than one under that of the Director of industries. If these conditions are fulfilled, the exemption certificate will have to be granted. That seems the straight and simple interpretation of the notification. But, it is said for the State, this is not the intend ment or effect of the notification. It is said that the argument overlooks the reference in column (3) to the grant of an eligibility certificate by the Director of Industries. This is one of the important conditions for the grant of this exemption. It is pointed out, in this context, that there had been in force in the State, for several years past, a scheme of subsidy/loan. That scheme was also depend ant on a certificate of the Director of Industries but that certificate could be denied to "traditional industries". It is argued that, since the notification does not set out the conditions on which, and the procedure in accordance with which the Director of Industries is to issue the eligibility certificate, that earlier scheme and procedure should be read into the notification. Sri Salve objected to this reading of the notification, infer alia, on the ground that the earlier scheme and the exemption now proposed are total ly different in their object and scope and that, while the former scheme was intended as an incentive to any one who set up a new industry in the State so that "traditional" industries did not get any benefit, the notification presently under consideration was issued with the object of industrialising the backward areas of the State and so it was immaterial what type of industry went in there and whether the industry proposed to be set up was a "tradition al" one or not. This contention does not appear to be quite correct. It has been pointed earlier that even the earlier schemes provided for graded incentives for industrialisation effective for varying periods depending upon the backward ness or otherwise of the district in which the industry was proposed to be set up. But, even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemp tion, it does not necessarily follows that the 610 units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated. Indeed, there were four new concessions introduced in 1981 82 and there is no mate rial which would justify these being tied down to the param eters of the earlier schemes. No factual foundation has been laid to establish the hypothesis that the exemption con ferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier. There are other difficulties in reading the provisions of the earlier schemes into the notification. In the first place, the earlier schemes spe cifically provided that "traditional industries" were out side their purview. The language of the notification, which is a piece of subsequent legislation, is silent about this. This is itself indicative of a legislative intent to widen the scope of relief and grant exemption to traditional industries as well: vide, G.P. Singh: Interpretation of Statutes, 4th Edition, pp. 767 8. The omission to specifi cally exclude "traditional industries" as was done in the earlier schemes the notification gains added significance in view of section 12 which specifically requires that all condi tions and restrictions governing an exemption should be specified in the notification. Secondly, the attempt of the State to read a further condition into the notification excluding "traditional industries" from the exemption is based on the words which require that the Director of Indus tries should grant a certificate (a) that the dealer is entitled to claim the exemption and (b) that he has not opted for the scheme of deferring the payment of tax under the rules framed for the purpose. But these words do not carry the State 's case further, for what the Director of Industries has to do is to certify that the applicant is entitled to the exemption on the terms and conditions set out in the notification and not on the basis of any further requirements not so set out. The notification does not authorise him to say that, though the applicant fulfills the terms of the notification, he will not grant the eligibility certificate because, under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries". He could not grant an eligibility certifi cate under the earlier schemes because the instructions which outlined the scheme specifically excluded traditional industries. Actually, even under the earlier schemes, nei ther the application form nor the form of certificate, which have been extracted earlier, make any reference to the assessee concerned not being a `traditional industry '. Be that as it may, for granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else. To say that, when the notifica tion requires an eligibility certificate from the Director it means a certificate on the terms prescribed under the earlier scheme is to read into 611 the notification something which is not there. Thirdly, the interpretation advocate by the State really narrows down the class of dealers entitled to the exemption as set down in column (1) of the notification. It amounts to substituting, for the word "dealers" in column 1 of the notification the words "dealers other than those carrying on traditional industries". Such an interpretation also virtually amounts to allowing certain executive instructions issued in a different context to cut down the scope of a statutory notification. This cannot clearly be done. Lastly, a perusal of the earlier schemes would show that the concept of "traditional industries" is a vague one. The nomenclature of these industries has varied from time to time. The note in the 1977, and the definition in the 1983, instructions show the eligibility under the earlier schemes was denied not only to "traditional industries" but also certain other industries such as revived or reconstructed industries. We may also mention in this context a notification of 21.10.1986 referred to by the High Court outlining exemp tions under Ss. 6 and 7AA. It excludes, from exemption, in addition to saw mills, flour mills etc. (which the State calls traditional industries) various other industries (total numbering 26) specified in cl. (xiii) thereof. This changing definition of eligibility for exemption also shows that there was no common or identical group of beneficiaries intended under the various instructions or notifications and that each set of instructions or notification issued from time to time defined only the categories exempted from its purview and nothing else. The exemption list under one was not meant to be carried over into another. We are, there fore, of opinion that it is not permissible to restrict the scope of the notification in the manner suggested. We may point out that, in construing the notification thus, we are only giving effect to a well settled rule that may be illustrated by a reference to the decision in Hansraj Gordhandas vs H.H. Dave, In that case notifications had been issued under section 8 of the granting exemption to (a) "cotton fabrics produced by any cooperative society formed of owners of cotton powerlooms . ." and (b) "cotton fabrics pro duced on powerlooms owned by any cooperative society or owned by or allotted to the members of the society . . ". The appellant had sought exemption from excise duty under these notifications in respect of cotton fabrics which had been got manufactured by him on the powerlooms belonging to a cooperative society in pursuance of an agreement entered into with it. The excise authorities rejected the claim on the ground that the exemption under the notifications could be claimed only when the cotton fabrics were manufactured by a cooperative so 612 ciety for itself. Upholding the assessee 's claim, this Court observed: "It was contended on behalf of the respondent that the object of granting exemption was to encourage the forma tion of co operative societies which not only produced cotton fabrics but which also consisted of members. not only owning but having actually operated not more than four power looms during the three years immediately preceding their having joined the society. The policy was that instead of each such member operating his looms on his own. he should combine with others by forming a society which. through the cooperative effort should produce cloth. The intention was that the goods produced for which exemption could be claimed must be goods produced on its own behalf by the society. We are unable to accept the contention put forward on behalf of the respondents as correct. On a true construction of the language of the notifications. dated July 31, 1959 and April 30. 1960 it is clear that all that is required for claiming exemption is that the cotton fab rics must be produced on power looms owned by the coopera tive society. There is no further requirement under the two notifications that the cotton fabrics must be produced by the Cooperative Society on the power looms "for itself". It is well established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom. the matter is different, but that is not the case here. In this connection we may refer to the observations of Lord Watson in Salomon vs Salomon & Co., ; , 38: "Intention of the legislature is a common but very slippery phrase, which, popularly understood may signi fy anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant although there has been an omission to enact it. In a Court of Law or Equity, what the Legislature intended to be 613 done or "not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication. " It is an application of this principle that a statutory notification may not be extended so as to meet a casus omissus. As appears in the judgment of the Privy Council in Crawford vs Spooner, " . We cannot aid the legislature 's defective phrasing of the Act, we cannot add, and mend, and, by construction, make up deficiencies which are left there. " Learned Counsel for the respondents is possibly right in his submission that the object behind the two notifications is to encourage the actual manufacturers of handloom cloth to switch over to power looms by constituting themselves into Cooperative Societies. But the operation of the notifica tions has to be judged not by the object which the rulemak ing authority had in mind but by the words which it has employed to effectuate the legislative intent. " In our view, this principle applies here squarely. Indeed, even granting that the notification may be inter preted having regard to the past history and the possible intention of the Government while issuing the notification, the position of the assesses here is much stronger for, while in the reported case the State was trying only to effectuate the clear object of the notification, here it is not at all clear, for the reasons discussed above, that the State intended the exemption to be confined only to the cases covered by the subsidy/loan schemes prevalent earlier. The 1981 notification does not expressly, or (for the rea sons discussed above) even by necessary implication, exclude "traditional" industries from its scope. Sri Salve contends that, even if a lenient view is taken and a more liberal construction is sought to be placed on the notification, the best that could be said for the State would be that the notification was ambiguous. One could either say that the previous procedure and requirements prevalent for obtaining an exemption certificate were in tended to be incorporated by the words requiring such a certificate (as suggested for the appellant or one could say, with equal plausibi 614 lity, that the exemption certificate is to be based only on the conditions and requirements mentioned in the notifica tion (as contended for by the assesses). In such a state of law, he contends, one can have regard to the conduct of the parties and how they understood the notification. His argu ment is that the State, by its conduct, had held out to the assessee that it would also be eligible for the exemption. In this context, he drew our attention to the following circumstance: (1) The M.P. Audhyogik Vikas Nigam, a State instrumen tality, which was administering the notification issued, in November 1981, a pamphlet setting out the various incentives the State was offering for new industries proposed to be set up in the State. As to "exemption from sales tax", the pamphlet stated that "new industrial units coming into production after 1.4.81" will be entitled to an exemption for a period depending upon the district where it is set up or could alternatively exercise an option to defer payment of sales tax by a period of 10 years. It did not mention anywhere that the industry should not be a traditional industry. (2) The Nigam allotted a plot of land of the extent of 1 acre to enable the assessee to establish its unit in the Industrial Area. Mandideep, Dt. Raisen. (3) Other incentives as to power, interest and capital subsidy were extended to the assessee. Thus, says counsel, the State "lured" the assessee to set up a unit in the record time of ten months and with a substantial capital outlay of over Rs. 10 lakhs in a backward area. These incen tives were meant to be coextensive with the concession regarding sales tax. He contends that these representations and acts are sufficient to found a claim of "equitable estoppe" against the State. We are unable to accept this argument. The respondents have stated in their counter affidavit that the Nigam had acted in error and misconstrued the notification and was not acting under the authority of the Government in issuing the pamphlet. The other conces sions extended to the assessee pertained to the setting up of a small scale industry in the State and were unrelated to the exemption from sales tax. In our opinion, there is force in these submissions. The circumstances and material relied on by the assessee do not spell out any clear promise of exemption from sales tax even for traditional industries. The notifications or guidelines under which the other facil ities were granted have not been 615 placed before us and no material is available on record to correlate them to the sales tax exemption or to show that all these were inextricably connected so as to form part of a single "relief packet". We, therefore, reject this conten tion of Sri Salve. However, on the interpretation of the notification. we accept the contention of the assesses that the notification does not warrant denial of exemption solely on the ground that the applicant is having a "traditional industry". We have indicated earlier that the assesses whose writ petitions were disposed of by the Full Bench had set up their industries after 12.1. 1983 by which time elaborate instructions had been issued to explain the State 's point of view, The question is whether this makes a difference. We think not. Even the 1983 document is not a statutory instru ment neither a notification nor a rule framed under the statute. The Full Bench has considered those instructions to be conclusive on two grounds on the doctrine of contempora nea exposition and on the principle that executive instruc tions can always be issued to supplement statutory instru ments so as to fill up areas on which the latter are silent. In our opinion, neither of these grounds is tenable. It is true that the principle of contemporanea exposition is in voked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner. This doctrine has been explained and applied in a numbers of cases of this Court (e.g. See Varghese vs L.T.O., ; , in addition to the cases referred to by the Full Bench). As pointed out by Sri Salve, its applicability in the construction of recent statutes. and that too in the first few years of their enforcement, has been doubted. vide: Doypack Systems P. Ltd. vs Union of India. ; , para 61. But, this apart, the principle will not be applicable here for two reasons. In the first place, the instructions of 1983 do not anywhere "expound" the terms of the notification. They do not give any indication that the state had applied its mind to the precise terms of the notification or their interpretation. They do not explain or clarify that, though the notification is silent, it has been intended that the limitations of the previous schemes should be read into it. Secondly, the cases referred to will show that the doctrine applies in cases where the plea is that, though the language of the statute may appear to be wide enough to seem applicable against the subject in particular situations, the State itself which was the progenitor of the statute had not understood it in that way. But, to apply the doctrine to widen the are bit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its 616 ipsi dixit. That, certainly, is not, and cannot be, the scope of the doctrine. The doctrine can be applied to limit the State to its own narrower interpretation in favour of the subject but not to claim its interpretation in its own favour as conclusive. The second ground on which the Full Bench has sought to invoke the instructions is also not correct. Executive instructions can supplement a statute or cover areas to which the statute does not extend. But they cannot run contrary to statutory provisions or whittle down their effect. The Full Bench seems to think that, unless the instructions are brought in, the notifications would have been in danger of abuse for want of proper guidelines as to the grant of exemption certificates. It is suggested that the notification contemplates rules to be issued for the purpose and that, since no rules had been issued, Directors of Industries were left with no parameters for the issue of exemption certificates and might act capriciously or arbi trarily in granting or refusing certificates. The instruc tions, it is said, have been issued to fill in this lacuna and are hence valid. There are two misconceptions in this line of reasoning. The first is that. though the last few words in column (3) of the notification are capable of a wider meaning, it would appear that these words govern only the immediately preceding words; rules envisaged are not in relation to the grant of exemption certificates and condi tions therefore but in respect of the circumstances in which the assesses can exercise the option between exemption and deferment of sales tax. This view derives support from the instructions of 1983. As pointed out earlier, the instruc tions first set out the scope of the various notifications as granting exemption from sales tax; the instructions thereafter proceed to say: "The grant of exemption from the payment of sales tax is contingent upon the issue of a certificate of eligi bility to the new industrial units. This certificate of eligibility is required to be issued by the Director of Industries or an officer authorised by him for this purpose. In so Jar as the grant of concessions relating to the exemption from payment of sales tax is concerned, no further notifications are required to be issued. For ena bling the new industrial units to avail of the second con cession viz., that of deferment of payment of sales tax, a scheme is being issued separately. For availing of the benefit of the deferment of concession too, a certificate of eligibility is required to be obtained by the industrial unit. However. 617 pending the issue of the scheme, the grant of certificate of eligibility should not be held up." (underlining ours) Incidentally, we may point out, the first part of the para does not clarify that the eligibility certificate is not to be granted to "traditional industries". But, so far as the present point is concerned, it is categorically stated that no further notifications are required to be issued and that they are needed only to define the scheme for deferment of tax. Indeed, rules were framed in order to implement the deferment scheme which came into force with effect from 1 4 1983. We shall refer a little later to these rules. Secondly, there is no warrant for assuming that the notifi cation envisages conditions for the issue of the eligibility certificate other than those specified by itself. There is nothing in the language of the notification to suggest that anything further is needed to enable the Director of Indus tries to grant the exemption. Without the guidelines, the requirement for an exemption certificate would not become an "empty formality" as suggested by the Full Bench. The Direc tor of Industries has to issue the same after satisfying himself that the applicant industry falls within the terms of the notification in the following respects (a) that the assessee is one of the class of dealers set out in column ( 1); (b) that he has set up an industry in the State; (c) that it has been set up in one of the districts set out in the annexure and the category to which it belongs; (d) that the industry has commenced production after 1 4 81; (e) that the assessee has not opted for the deferment scheme. These conditions are many and detailed and do not leave anything to the discretion of the Director of Industries. We fail to understand what need there was to lay down any elaborate procedure therefore. Even if there was, and the earlier procedure by way of application form, declaration form and form of certificate were to be adapted, that proce dure, by itself, did not, as pointed out earlier, contain any reference to the assessee being a traditional industry or otherwise. To assume first that the conditions specified in the notification are not exhaustive or suffi 618 cient and may lead to abuse of power by executive authori ties unless canalised by procedural guidelines and then to say that such a conclusion is borne out by the mere refer ence to a certificate being granted by the Director of Industries because, under some earlier schemes, such certif icate was being granted on a restricted basis, does not appear to be sound logic. We are, therefore, of opinion that the notification is quite clear and leaves no area of vacuum which needs to be supplemented by guidelines. Thirdly, if we read the last part of the entry in column (3) of the notifi cation as envisaging rules to be framed for the grant of the eligibility certificate, no such rules were flamed. Only instructions were issued. These instructions say that even an assessee, who fulfills all the requirements of the noti fication, will not be eligible for exemption unless he fulfills one more condition outside the notification. They travel beyond and counter to the notification. They restrict the scope of exemption under the notification. They deny exemption to a person who qualifies for it under the statu tory notification. Indeed, there is force in the contention that if the statutory notification is construed as permit ting the State by rules or executive instructions to pre scribe other conditions for exemption, whether new or based on past practice, it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive. This, certainly, they cannot do. A further development which has been relied on by the State but does not really seem to help its case may now be referred to. State Act 25 of 1982 inserted section 22 D in the Act in the following terms: "22 D. Special provisions relating to deferred payment of tax by Industrial Units Notwithstanding anything contained in any other provisions of this Act, a registered dealer, who is (a) registered as a small scale industrial unit with Indus trial Department of the Government of Madhya Pradesh;or (b) registered with the Director General of Technical Devel opment as an industrial unit; or (c) registered as an industrial unit by any authority duly empowered to do so by the Government of Madhya Pradesh or the Central Government; or (d) holding a licence under the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951). 619 and who in each case has or may set up a new industrial unit in any district of Madhya PradeSh if eligible for grant of the facility of deferred payment of tax under the scheme providing for grant of incentive to enterpreneurs for set ting up new industrial units in the state as the State Government may make in this behalf may make deferred payment subject to such restrictions and conditions as may be speci fied in such scheme. " Thereafter, the State Government framed the M.P. Deferment of Payment of Tax Rules, 1983 which were gazetted of 1.9.83 but with retrospective effect from 1.4. 1981 (that is, even anterior to the date of the notification). Rules 3, 4 and 14 are relevant and may be set out here. "3. Eligibility for grant of Facility of Deferred payment of tax (1) A new industrial unit other than a unit specified in rule 14 which is covered by any of the categories speci fied in section 22D and of the Act and which is engaged in the manufacture and sale of any goods shall qualify for deferred payment of the tax payable by it provided it is eligible for grant of the concession of exemption from payment of tax in terms of notification No. A 3 41 81 (35) ST V, dated the 23rd October, 1981 and No. A 3 41 81(31) ST V, dated the 29th June, 1982 as amended from time to time subject to the provisions of the act. The period pertaining to which the tax which the new industrial unit can defer will be the same for which it could have obtained the con cession of the exemption from payment of tax, i.e., the period pertaining to which the tax can be deferred will be the period shown in column (2) of the said notification. (2) The new industrial unit shall be eligible to defer only the payment of tax which is due from it under the Act. Application for Scheme of deferred payment and grant of certificate of eligibility (1) A new industrial unit opting for the scheme of deferred payment of tax shall apply for and obtain a certificate of eligibility in accordance with the instructions issued by State Government in the Commerce and Industries Department for the said purpose. An applica tion in writing shall be submitted within forty five days of the publication of these rules or of commencement of the production whichever is later. In the application form the 620 new industrial unit shall indicate that it has opted for scheme of deferred payment of tax. The option once exercised shall be irrevocable. The form of the application as well as the certificate of eligibility shall be as specified in the said instructions. The application shall be made to the General Manager, District Industries Centre of the district where the new industrial unit is or is proposed to be locat ed and shall be processed further in accordance with the said instructions. The certificate of eligibility in respect of large and medium scale units shall issued by the Director of Industries (Government of Madhya Pradesh) and in respect of small scale units by the said General Manager, and shall carry a specific and district number given by the said officer. (2) A copy of the certificate of eligibility shall be for warded by the officer issuing the certificate to the appro priate Sales Tax Officer, i.e. the Sales Tax Officer in whose circle the industrial unit is registered as a dealer. The Sales Tax Officer receiving the copy of the certificate of eligibility shall maintain a record of the same in such form as may be directed by the Commissioner and shall not enforce recovery of the tax payment whereof has been shown to have been deferred in the certificate of eligibility. (3) The new industrial unit shall be entitled to defer the payment of the tax for a period of ten years. This entitle ment shall be available only on receipt of the certificate of eligibility to it under sub rule (1). The certificate of eligibility shall show the duration for which the payment of the tax has been deferred. The year in which the tax per taining to any accounting year of the industrial unit is required to be paid consequent upon deferment of tax shall also be shown in the certificate of eligibility. The entire tax assessed pertaining to any accounting year shall be payable by the industrial unit in lump sum on the expiration of duration of deferment and payment of such tax shall be made within thirty days of the date on which the period of ten years from the end of the relevant accounting year expires. Non availability of facility of deferred payments The result of the scheme of deferred payment of tax shall not be available to the following new industrial units, namely: 621 (A) (1) flour mills (Excluding Roller Flour Mills); (2) Oil mills (excluding Solvent Extraction Plants); (3) dall mills; (4) saw mills; rice mills; (6) printing presses of all types; (7) cotton ginning and pressing factories; (8) ice factories; (9) such other industries as may be notified by Government from time to time. (B) industrial units undertaking expansion, modernisation or diversification; (C) a closed unit revived by an entrepreneur; (D) units claiming interest free loans as an existing unit establishing a new unit; (E) an industrial unit set up by transferring or shifting or dismenting an existing industry. A note was also published in the Gazette explaining the background of the rules. It reads thus: "NOTE EXPLAINING THE BACKGROUND OF THE SCHEME OF DEFERRED PAYMENTS TAX The Government of Madhya Pradesh, with a view to accelerat ing the pace of industrialisation have announced concessions regarding the payment of tax under the Madhya Pradesh Gener al Sales Tax Act, 1958 and the by new industrial units going into production after 1st April, 1981 which contemplate (a) total exemption from payment of tax whether State or Central by new industrial units going into production after 1st April, 1981 for varying periods depending upon the district in which the new industrial unit is set up; 622 (b) deferment of the payment of tax in lieu of the above said exemption for a period of ten years. To give effect to the concession of exemption from payment of tax, the Government in the Separate Revenue Department have already issued the following notifications: (i) F. No. A3 41 81(35) ST V, dated 23rd October, 1981. (ii)F. No. A3 41 81 (25) ST V, dated 1st May, 1982. (iii) F. No A3 41 81(24) ST. V, 1st May, 1982. (iv) F. No. A3 41 81 (31) ST V, dated 29th June, 1982. With a view to enabling those new industrial units who opt for the alternative concession of deferment of payment of tax, a special provision in the shape of section 22 D has been inserted in the Madhya Pradesh General Sales Tax Act, 1958 with effect from 1st April, 1981, according to which the facility of deferring the payment of tax which become available subject to the provisions of the scheme providing for the grant of incentives for setting up the new industri al Units; The aforesaid rules have therefore been framed to formulate the scheme of deferred payment of tax. " It might appear, at first sight, that since the relief by way of deferment of tax is only in the nature of an alterna tive to the provision for exemption and the former is not available to traditional industries because of rule 14 above, the same should be the position in regard to the exemption provision also. There are, however, several diffi culties in accepting this suggestion. In the first place, the rules relate to tax deferment and not tax exemption. It is open to the State Government, particularly in view of section 22D, to frame such scheme for the purpose as it may deem fit. The provision for exemption, however, needs to be spelt out, under section 12, in a statutory notification. Secondly if, as is being urged on behalf of the State, it is explicit even on the terms of the notification that traditional industries are excluded, it is not necessary for the rules of deferment to specifically provide that they will not be available to the industries listed in rule 14 particularly when rule 4 has incorporated the requirement of an eligibil ity certificate in accordance with 623 the previous instructions for the said purpose. Thirdly rule 14 excludes from the scheme not merely "traditional indus tries" covered by para (A) but also industrial units (which may not be `traditional industries ') falling under paras (B) to (E). Fourthly, the rules are not inconsistent with the interpretation that, while all industries fulfilling the terms of the notification can claim exemption under it, only some of those units, which do not fall under rule 14, can opt for the alternative of determent. We are, therefore, of opinion that even the retrospective promulgation of these rules provide no assistance in the interpretation of the notification. A reference has now to be made to the notification of 3/7/87 amending the 1981 notification with retrospective effect so as to exclude what may be described in brief as `traditional industries ' though, like rule 14 of the defer ment rules, the exclusion extends even to certain other non traditional units operating in certain situations. Though this notification purports to be retrospective, it cannot be given such effect for a simple reason. We have held that the 1981 notification clearly envisages no exclu sion of any industry which fulfills the terms of the notifi cation from availing of the exemption granted under it. In view of this interpretation, the 1987 amendment has the effect of rescinding the exemption granted by the 1981 notification in respect of the industries mentioned by it. section 12 is clear that, while a notification under it can be prospective or retrospective, only prospective operation can be given to a notification rescinding an exemption granted earlier. In the interpretation we have placed on the notifi cation, the 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospective: it enacts the rescission of the earlier exemption and, hence, can operate only prospec tively. It cannot take away the exemption conferred by the earlier notification. We would like to add that we agree with the view of the Full Bench that, if the notification is interpreted as done by it or even hold it to be ambiguous, there is no scope for the assessee to invoke the doctrine of promissory estoppel. We have already dealt with this aspect in regard to the cases in which the State has appealed. In the other cases covered by the Full Bench decision, the mere fact that an exemption was initially granted and then revoked would be insufficient to found the claim of estoppel particularly when it has been found that the assesses started production after 12.1. 1983 and claimed exemption very much later. But since, in our view, the terms of the notification are clear and envisage no denial of exemption to traditional indus tries, this question does not survive. 624 Before we conclude, we have to refer to one aspect which we have touched upon at the very beginning of the judgment and that is the dismissal, in limine, of the Special Leave Petition filed in this Court by the petitioners before the Full Bench. It has been pointed out that the above petition was dismissed notwithstanding that the Special Leave Peti tion in the case of G.S. Dhall & Flour Mills was also then pending for admission. It would perhaps have been better if both the S.L.Ps. had been taken up and dealt with together. However, the S.L.P. against the Full Bench was dismissed and, two of us having been members of the Bench that dis missed it, we may observe that Sri Salve is perhaps right in saying that it was the content of paras 20 and 21 of the Full Bench judgment that persuaded this Court to dismiss the S.L.P. there against. The Full Bench has there pointed out that even if it could be said that two interpretations of the notification were equally plausible. the assesses in those cases had set up the industries after the explicit instructions of 12.1. 1983 were made public and thus took a deliberate risk and had only themselves to thank. Neverthe less, the fact is that the view taken by us on the scope of the notification runs counter to the Full Bench decision which must be treated as overruled. For the above reasons, we have come to the conclusion that the G.S. Dhall and Flour Mills case laid down the correct law and not the Full Bench. We would like to add that we are not quite happy to arrive at this decision. It does seem likely that the State Government had not intended the exemption to be availed of by certain categories of industries. But it has failed to achieve this purpose on account of the wide language in which it couched the exemp tion notification. We find ourselves unable, for the reasons discussed above, to discover any valid legal basis on which the exemption clearly granted can be withheld from the assesses here. We, therefore, dismiss the appeals of the State and allow the appeals preferred by the assesses and hold them entitled to the exemption under the 1981 notifica tion. We, however, make no order regarding costs. R.S.S. Appeals filed by State dismissed and other appeals allowed.

In exercise of the powers conferred by section 12 of the Madhya Pradesh General Sales Tax Act, 1958 the State Govern ment issued a notification dated 23.10.1981 exempting the specified class of dealers who had set up industry in any of the specified districts of Madhya Pradesh and had commenced production after 1st April, 1981 from payment of tax under the said Act for a specified period subject to certain restrictions and conditions. However, when the assesses approached the Director of Industries for the certificate of exemption, it was denied to them on the ground that the industries run by them were "traditional industries" which were not eligible for exemption. The assesses went to the court and urged that the con cept of "traditional industries" was one unspecified in the notification, and that the authorities had no jurisdiction to travel outside the terms of the notification and import extraneous considerations to deny the assesses an exemption they were entitled to under the notification. The State on the other hand, relied on the provisions of the M.P. (Deferment of payment of Tax) Rules, 1983. notified on 1.9.83 (in particular, rule 13 thereof) and on certain instructions that had been issued by the Government on 12.1.1983 pertaining to the "grant of certificate of eligi bility to new industrial units claiming exemption from or deferment of payment of sales tax". The assessee 's claim for exemption from sales tax was accepted by the Division Bench of the High Court in the case of G.S. Dhall & Flour Mills and, following it, in the case of Mohd. Ismail. The Division Bench took the view that these rules and instructions had no relevance to the claim for exemption put forward under the notification of 23.10.1981 and that, in any event, the executive instructions could not override the provisions of the statutory notification. 591 Subsequent to the decision of the Division Bench, the State Government issued a notification on 3.7.1987, intended obviously to overcome the effect of the said decision. Subsequently, however, a Full Bench of the High Court, in the case of Jagadamba Industries disapproved the view taken by the Division Bench in G.S. Dhall case. The Full Bench attached importance to the rules and instructions referred to above and relied considerably on his history of the sales tax levy in the State as furnishing proper and necessary background in which the terms of the notification of 23.10.1981 had to be read and interpreted. The Full Bench, after considering the scheme and in structions of the Government, came to the conclusion that the scope of the exemption notification of 1981 was not intended to be wider than that of the concessions granted earlier, and that the 1981 notification was intended to bring about only a change in the mode of relief to the same categories of industries as were covered by the earlier schemes. The contention that "instructions" could not override the effect of the statutory notification was repelled by the Full Bench on the ground that the validity and effectiveness of the instructions could be supported by reference to Article 162 of the Constitution as filling up a lack of guidelines in the notification. The Full Bench considered the 1983 instructions to be conclusive on two grounds on the doctrine of contemporanea exposition and on the principle that executive instructions could always be issued to supplement statutory instruments so as to fill up areas on which the latter were silent. The State, aggrieved by the judgment of the Division Bench in the two cases, and the assessee by the judgment of the Full Bench in the other case, have filed the appeals and Special Leave Petitions. Before this Court the parties reiterated their submis sions in support of either of the two judgments. The main submission on behalf of the State was that, since the 1981 notification did not set out the conditions on which, and the procedure in accordance with which the Director of Industries was to issue the eligibility certificate, the earlier scheme of subsidy/loan and its procedure should be read into the notification for this purpose. This contention was contested by the assesses inter alia on the ground that the earlier scheme and the exemption now 592 proposed were totally different in their object and scope. Dismissing the appeals of the State, and allowing the appeals preferred by the assesses, this Court while observ ing that the Division Bench laid down the correct law and not the Full Bench, HELD: (1) The 1981 notification does not expressly, or even by necessary implication, exclude "traditional" indus tries from its scope. (2) Prima facie, the Director of Industries cannot refuse the exemption on a consideration not specified in the notification. All the conditions for exemption have to be, and are, set out in the notification itself and all that the Director of Industries has to do is to satisfy himself that those conditions are fulfilled; he cannot travel beyond the terms of the notification. (3) Even granting that the 1981 policy was to replace the earlier subsidy/loan by an exemption, it does not neces sarily follow that the units intended to be covered by the new scheme were only those that were covered by the earlier scheme and that no wider exemption was contemplated. (4) No factual foundation has been laid to establish the hypothesis that the exemption conferred in 1981 was to be a mere extension or substitution of the benefits conferred earlier. (5) The notification does not authorise the Director of Industries to say that, though the applicant fulfill the terms of the notification. he will not grant the eligibility certificate because,Under the previously prevalent schemes, he could not issue an eligibility certificate to "tradition al industries". For granting a certificate that the appli cant is eligible for exemption under the notification, the director has to look to the conditions set out in the noti fication and nowhere else. Changing definition of eligibility for exemption also shows that there was no common or identical group of benefi ciaries intended under the various instructions or notifica tions and that each set of instructions or notification issued from time to time defined only the categories exempt ed from its purview and nothing else. The exemption list under one was not meant to be carried over into another. Hans Gordon Dan v .H.H. Dave, referred to. 593 (7) The 1983 document is not a statutory instrument neither a notification nor a rule framed under the statute. (8) It is true that the principle of contemporanea exposition is invoked where a statute is ambiguous but is shown to have been clearly and consistently understood and explained by the administrators of the law in a particular manner. But. to apply the doctrine to widen the ambit of the statutory language would, however, virtually mean that the State can determine the interpretation of a statute by its ipsi dixit. That, certainly, is not, and cannot be the scope of the doctrine. The doctrine can be applied to limit the State to its own narrower interpretation to favour of the subject but not to claim its interpretation in its own favour as conclusive. Varghese vs 1. T.O.; , and Doypack Sys tems P. Ltd. vs Union of India, ; , referred to. (9) Executive instructions can supplement a statute or cover areas to which the statute does not extend. But they cannot run contrary to statutory provisions or whittle down their effect. (10) There is nothing in the language of the notifica tion to suggest that anything further is needed to enable the Director of Industries to grant the exemption. Without the guidelines, the requirement for an exemption certificate would not become an "empty formality". (11) If the statutory notification is construed as permitting the State by rules or executive instructions to prescribe other conditions for exemption, whether new or based on past practice. it is liable to be struck down on the ground of impermissible delegation of legislative power to the executive. This, certainly, they cannot do. (12) The 3/7/87 notification cannot be treated as one merely clarifying an ambiguity in the earlier one and hence capable of being retrospectively; it enacts the rescission of the earlier exemption and, hence, can operate only pro spectively. It cannot take away the exemption conferred by the earlier notification.

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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.

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]

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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.

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.

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ition No. 706 of 1990. (Under Article 32 of the Constitution of India). Dr. L.M. Singhvi, Dr. Y.S. Chitale, R.K. Garg, R.N. Trivedi, Addl. Advocate General for the State of U.P,, Mrs. Swaran Mahajan. Mrs. Geetanjali Mohan, Ms. Anuradha Mahajan. Sunil Gupta, R. Venkataramani, S.M. Garg, Suresh Harkauli. Sushil Harkauli, Sunil Gupta, A.S. Pundir, Suresh Kumar Misra, Mahesh Shrivastava, H.D. Pathak, Vishnu Mathur and Mrs. Shobha Dikshit for the appearing parties. The Judgment of the Court was delivered by VERMA, J. This judgment disposes of a bunch of matters comprising of some writ petitions under Article 32 of the Constitution of India and special leave petitions under Article 136 of the Constitution of India, all of which involve for decision certain common questions. The special leave petitions are directed against a common judgment of the Allahabad High Court dismissing some writ petitions in which the same questions were raised. In view of the deci sion of the High Court rejecting those contentions, the writ petitions were filed in this Court directly for the same purpose. By one stroke, seemingly resorting to the Spoils System alien to our constitutional scheme, the Government of State of Uttar Pradesh has terminated by a general order the appointments of all Government Counsel (Civil, Criminal, Revenue) in all the districts of the State of U.P.w.e.f. 1990 and directed preparation of fresh panels to make appointments in place of the existing incumbents. This has been done by Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990, terminating all the existing appointments w.e.f. 1990, irrespective of the fact whether the term of the incumbent had expired or was subsisting. The validity of this State action is challenged in these matters after the challenge has been rejected by the Allahabad High Court. They have all been heard together since the common question 631 in all of them is the validity of the Circular G.O. No. D 284 Seven Law Ministry dated 6.2.1990 issued by the Govern ment of State of Uttar Pradesh. Leave is granted in the Special Leave Petitions and the appeals are also heard on merits along with the Writ Peti tions. Broadly, two questions arise for decision by us in this bunch of matters. These are: Is the impugned circular amena ble to judicial review?; and if so, is it liable to be quashed as violative of Article 14 of the Constitution of India, being arbitrary? The challenge in all these matters is to validity of G.O. No. D 284 Seven Law Ministry dated 6th February, 1990, from Shri A.K. Singh, Joint Legal Remembrancer, Justice (Law Ministry) Section, Government of Uttar Pradesh, to all the District Magistrates of Uttar Pradesh with copy to all the District Judges of the State for information and necessary action. The main question for decision in these matters being the validity of this circular, it would be appropriate to quote the same in extenso. It reads as under: "Subject:RENEWAL OF TENURE OF ALL THE EXISTING GOVERNMENT COUNSEL, CALLING OF NEW PANELS FOR NEW APPOINTMENT. XXXX I have been directed to inform you on the subject mentioned above that the Administration has taken a decision to extend the tenure of all the Government Counsel, who are presently working, till 28th February, 1990 only and to immediately receive new panels from the District Magistrates for new appointments in their places. I, therefore, have been directed to state that all the Government Counsel, presently engaged for the work of Civil/Revenue/Criminal (including Anti Dacoity) and Urban Ceiling may be permitted to work till 28.2.1990 only and for appointments in their place, Administration may send the new panels, after preparing the same in following manner: 1. Separate single panal in each of the Civil side, Revenue 632 side, Criminal side (including Anti Dacoity) and Urban ceiling side fixed for 12 districts, and separate single panel in each of the courts, functioning at District and Tehsil Headquarters, may be prepared. It may be enlisted therein the names of the work zone, number of courts related to it, the number of sanctioned posts for Government Counsel and recommended names of the Counsel in terms of their seniority. It may be clearly mentioned in the panel which counsel belong to Scheduled Caste, Scheduled Tribes, Back ward Caste and Minority group. The panels prepared for civil, revenue and urban ceiling side may contain the recommendations of names only three times of the presently sanctioned posts. In the criminal side, five times of the names of the present sanctioned posts may be recommended. The attested copies of Bio Data of the Counsel recommended, attested details of their work during last two years, certificate of registration as an Advocate, certifi cate of birth and the attested copies of certificates of educational qualifications may also be sent. The names of any such counsel, who has practice experience for less than 7 years, or who has more than 60 years of age as on 1.1. 1990, or the person who is already working at a salaried Government or nonGovernmental posts, a full time lecturer in a college, Notary, Marriage Officer, Executive Qazi or State, may not be included in the panels. However, on resignation from the present post, they can be included in the panel. For preparation of new panel, a general notice which enlists the application, age, conditions of appointment and the last date for submission of Bio Data, may be prepared. This notice may be put on the Notice Boards of the Local Bar Associations, and in the offices of District Magistrate, District Judge, Zonal Commissioner, S.D.M. and Munsif Magis trate. 633 8. It will be a condition for appointment as a Government Counsel that he will not be permitted to do private prac tice. He will be entitled to plead, with permission from the Administration, only the cases of State Government and Central Government, State Company Council, Local Bodies, Autonomous Institution and Authorities. He will be paid only the monthly remuneration fixed by the Administration and no fee will be paid according to the valuation of the case/appeal. No extra fee will also be paid for any other work/consultation. It may also be clarified that appointment of a Government Counsel will be different from the Govern ment employees and no facilities to Government employees will be applicable to them. The appointment of Government Counsel will be done in the form of business engagement and the State Government will be entitled to terminate engage ment at any time, without giving reasons for it. The Bio Data and other desired papers, if received from the counsel within the prescribed date, may be examined minutely, as a special drive and after getting approval from the District Judge/Munsif Magistrate/SDM, as the case may be, the names may be recommended in the panel as per senior ity position. The details of last two years work, along with the attested copies of the certificates and information desired in the enclosed format,`Ka ' and `Kha ' may be sent to the Administration along with the panel. I have also been directed to state that the appointments made on or after January, 1990, shall not be affected by the above mentioned policy decision and the same shall continue for the prescribed period. I have also been directed to clarify that the panels received prior to release of this Government Order, on the basis of which, no appointments or. renewal has been made or which are still pending, may be understood as cancelled. I have also been directed to request you that the new panels may be prepared in accordance with the above direc tion on top priority basis, `and the same may be ensured to be sent to the undersigned in a confidential 634 envelope through a special messenger by 25th February, 1990. sd/ (A.K. Singh) Joint Legal Remembrancer" By the above quoted circular letter dated 6.2. 1990, the decision of the State Government to terminate the engagement of all the Government Counsel engaged throughout the State of U.P. for civil/ revenue/criminal (including anti dacoity) and urban ceiling work on and from 28.2. 1990 and to make appointments in their place on the basis of new panel pre pared for the purpose was communicated to all the District Magistrates in the State. Admittedly, this circular was made applicable to all the Government Counsel throughout the State at the district level, howsoever designated such as district Government Counsel, Additional District Government Counsel, etc. There is no dispute that the circular related to and applied equally to all the Government Counsel throughout the State irrespective of their tenure whose appointments were terminated w.e.f. 28.2.1990 for being replaced by new appointees. The circular applied equally to not only those Government Counsel whose tenure had already expired or whose tenure was to expire before 28.2. 1990, but also to those whose tenure, as a result of their earlier appointment, was to extend beyond 28.2. 1990, as well as those who were entitled to be considered for renewal of the tenure on expiry of their earlier tenure. The Challenge in these matters is not only by some individuals who were adversely affected by the said circular but also by Associa tion of District Government Counsel. Since the impact of the circular is on all Government Counsel engaged at the dis trict level throughout the State, the challenge is really in representative capacity on behalf of all of them and this is how the challenge has been met on behalf of the State of U.P. in reply. It is common ground that the decision of these matters will govern the appointment of all Government Counsel throughout the State of U.P.at the district level, in all branches, irrespective of the name or designation given to the appointment such as District Government Coun sel, Additional District Government Counsel, etc. Several arguments were advanced by the learned counsel on both sides relating to the nature of these appointments about which there is a serious contest between the parties. In the present case, it is not necessary for us to consider at length the exact nature of these appoint 635 ments which is material only for indicating the extent of security of tenure of the appointee to these offices since in our opinion the main attack to the impugned circular on the ground of arbitrariness can be upheld even assuming the security of tenure of the appointees to be minimal as claimed for and on behalf of the State of U.P. We shall, therefore, only refer to the rival contentions regarding the nature of appointments and then proceed on the basis of the minimum status attaching to these appointments to examine whether the ground of arbitrariness is available and viti ates the circular. According to the learned Additional Advocate General of the State of U.P., the relationship of the appointees to these offices of Government Counsel in the districts is purely contractual depending on the terms of the contract and is in the nature of an engagement of a Counsel by a private party who can be changed at any time at the will of the litigant, with there being no right in the Counsel to insist on continuance of the engagement. The learned Addi tional Advocate General contended that for this reason, the relationship being purely contractual, which cannot be continued against the will of either party, there is no scope for the argument that the State does not have the right to change the Government Counsel at its will. It is common ground that the appointment, termination and renewal of tenure of all Government Counsel in the districts is governed by certain provisions contained in the Legal Remem brancer 's Manual, in addition to Section 24 of the Code of Criminal Procedure, 1973, applicable in the case of public prosecutors. The learned Additional Advocate General did not dispute that if Article 14 of the Constitution of India is attracted to this case like all State actions, the impugned circular would be liable to be quashed if it suffers from the vice of arbitrariness. However, his argument is that there is no such vice. In the ultimate analysis, it is the challenge of arbitrariness which the circular must withstand in order to survive. This really is the main point involved for decision by us in the present case. The nature of appointment of the Government Counsel in the districts on the civil, criminal and revenue sides was hotly debated during the hearing. It was urged on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government is not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel cannot be equated with the termination by a private litigant of his Counsel 's engage ment, which is purely contractual, with 636 out any public element attaching to it. It was urged that appointment of public prosecutors has a statutory status also in view of such appointments being required to be made in accordance with Section 24 of the Code of Criminal Proce dure, 1973. Reliance was also placed on certain provisions of the Legal Remembrancer 's Manual, which admittedly govern and regulate the appointment of all Government Counsel in the districts as well as the termination of their appoint ment and renewal of their tenures. It was contended that the relationship between the Government and the Government Counsel is therefore, not purely contractual in nature as in the case of a private litigant and his counsel. An attempt was also made to urge that the appointment of Government Counsel is in the nature of a public employment with the attendant security of tenure of office and the necessary concomitants attaching to it. On the other hand, the learned Additional Advocate General appearing for the State of U.P. contended that the relationship between the Government and the Government Counsel is purely contractual like that of a private litigant and his counsel which enables the Govern ment to change its counsel at any time as may be done by a private litigant in the event of loss of confidence between them. He contended that there is no element of public em ployment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure are merely to provide for making a suit able choice. We shall briefly refer to some provisions which admittedly regulate and govern such appointments, termi nation and renewal of tenure of the appointees. Chapter I of the Legal Remembrancer 's Manual, 1975 Ed., contains the interpretations and Para 1.01 says that the L.R. Manual is the authoritative compilation of the Govern ment orders and instructions for the conduct of legal af fairs of the State Government. Para 1.06 enumerates the Law Officers of the Government which includes the District Government Counsel (Civil, Revenue, Criminal) along with many others such as Judicial Secretary and Legislative Secretary. it is obvious that all of them including D.G.Cs. are described as holders of some `office ' of the State Govt. Chapter VII contains the necessary provisions relating to District Government Counsel. Part A therein deals with appointment and conditions of engagement of the District Government Counsel. Para 7.02 deals with the power of Gov ernment to appoint Government Counsel in the districts which requires the Government to appoint District Government Counsel (Civil, Revenue, Criminal) and also, wherever necessary, in the interest of efficient and expeditious disposal of business, to appoint Additional or/and Assistant District Government Counsel to assist the District 637 Government Counsel (Criminal) or (Civil) in discharge of his duties: Subordinate District Government Counsel for the conduct of civil cases in outlying towns of a district; and Assistant District Government Counsel in outlying towns of the district for the conduct of criminal or civil cases or both. Para 7.03 provides for applications and qualifications for appointment to these offices or posts. The District Officer is required to consider all the applications re ceived in consultation with the District Judge, giving due weight to the claim of the existing incumbents, if any, and to submit in order of preference the names of legal practi tioners, together with the opinion of the District Judge on the suitability and merits of each candidate. The process of selection expressly involves the District Judge and gives due weight to his opinion for the obvious reason that the District Judge is expected to know best the comparative merits of the candidates for such appointments. Para 7.04 requires the Legal Remembrancer to submit the recommenda tions of the District Officer along with his own opinion for the orders of the Government Para 7.06 provides for ap pointment and renewal, para 7.08 for renewal of term ,red para for maintenance of character roll of the appointees. Para 7.07 forbids the D.G.C. so long as he holds the `post ' from participating in political activity like all other Government officers and unlike a lawyer engaged by a private part vs These provisions read as under: "7.06. Appointment and renewal (1) The legal practitioner finally selected by the Government may be appointed District Government Counsel for one year from the date of his taking over charge. (2) At the end of the aforesaid period, the Dis trict Officer after consulting the District judge shall submit a report On his work and conduct to the Legal Remem brancer together with the statement of work done in Form No. 9. Should his work or conduct be found to be unsatisfac tory the matter shall be reported to the Government for orders. If the report in respect of his work and conduct is satisfactory, he may be furnished with a deed engagement in Form No. 1 for a term not exceeding three years. On his first engagement a copy of Form No. 2 shall be supplied to him and he shall complete and return it the Legal Remem brancer for record. (3) The appointment of any legal practitioner as a District Government Counsel is only professional engage 638 ment terminable at will on either side and is not appoint ment to a post under the Government. Accordingly the Govern ment reserves the power to terminate the appointment of any District Government Counsel at any time without assigning any cause. 7.07 Political Activity The District Government Counsel shall not participate in political activities so long they work as such; otherwise they shall incur a dis qualification to hold the post. 7.08 Renewal of term (1) at least three months before the expiry of the term of a District Government Counsel, the District Officer shall after consulting the District Judge and considering his past record of work, conduct and age, report to the Legal Remembrancer, together with the statement of work done by him in Form No. 9 whether in his opinion the term of appointment of such counsel should be renewed or not. A copy of the opinion of the District Judge should also be sent along with the recommen dations of the District Officer. (2) Where recommendation for the extension of the term of a District Government Counsel is made for a speci fied period only, the reasons therefore shall also be stated by the District Officer. (3) While forwarding his recommendation for renewal of the term of a District Government Counsel (i) the District Judge shall give an estimate of the quality of the Counsels 's work from the Judicial standpoint, keeping in view the different aspects of a lawyer 's capacity as it is manifested before him in conducting State cases, and specially his professional conduct; (ii) the District Officer shall give his report about the suitability of the District Government Counsel from the administrative point of view, his public reputation in general, his character, integrity and professional conduct. 639 (4) If the Government agrees with the recommendations of the District Officer for the renewal of the term of the Government Counsel, it may pass orders for reappointing him for a period not exceeding three years. (5) If the Government decides not to re appoint a Gov ernment Counsel, the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03. (6) The procedure prescribed in this para shall be followed on the expiry of every successive period of renewed appointment of a District Government Counsel. Note The renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the Counsel. Character roll (1) The District Officer and the District Judge shall, before the end of every year and also while leaving the district on transfer, place on record his opinion on the capacity and work of the District Government Counsel. The District Judge shall before recording such opinion obtain a report about the work and: conduct of the District Government Counsel from the presiding officers of the courts, where they are generally required to practise. Similarly, the District Officer shall before recording such opinion obtain a report from the Superintendent of Police regarding the counsel 's capacity for prosecution of cases and assistance rendered to the investigating agency. The record, which shall be confidential, shall be maintained by the District Officer. Every adverse entry shall be communi cated to the District Government Counsel concerned by the District Officer, with the prior approval of the Government. (2) The character roll of every District Government Counsel shall also be maintained by the Government in Judi cial (Legal Advice) Section. For this purpose, the District Officer shall forward to the Legal Remembrancer a copy of all the confidential reports, recorded by him and the Dis trict Judge on the work and conduct of the District Govern ment Counsel by the first week of May every year 640 for being incorporated in the character roll, maintained by the Government. (3) The District Officer shall forward a copy of all the confidential reports, referred to in para 7.09(2) in respect of District Government Counsel (Criminal) to Home (Police) Section of Secretariat also for information. (4) Any shortcomings on the part of the District Government Counsel shall at once be brought to the notice of the Legal Remembrancer. " These provisions show that the initial appointment is for a period of one year during which the work and conduct of the appointee is watched to adjudge his suitability and a report is required to be submitted at the end thereof by the District Officer after consulting the District Judge and on the same being found satisfactory, his engagement is made for a term not exceeding three years. Before expiry of the term of three years, the case of the incumbent is to be considered on the basis of his work, conduct and age for renewal and the Government is required to decide the ques tion of his reappointment for a period not exceeding three years on the basis of the report of the District Officer and the opinion of the District Judge. If the Government agrees with their recommendations, the term of the existing incum bent is renewed for a period not exceeding three years. It is only if the Government decides not to reappoint a Govern ment Counsel ' that the Legal Remembrancer may call upon the District Officer to forward fresh recommendations in the manner laid down in para 7.03. this procedure is to be followed on the expiry of every successive period of renewed appointment of District Government Counsel. The age factor mentioned in para 7.08 has to be read with the footnote to it, which says that `the renewal beyond 60 years of age shall depend upon continuous good work, sound integrity and physical fitness of the counsel '. Para 7.09 provides for maintenance of the character roll in which the District Officer and the District Judge are required to record their opinion on the capacity and work of the District Government Counsel. Clause 3 of para 7.06, regarding termination of the appointment, would be considered later while dealing with an other argument of the learned Additional Advocate General. Part B of Chapter VII lays down `Duties ' of D.G.Cs. The above provisions in the L.R. Manual clearly show that the Government Counsel in the districts are treated as Law Officers of the 641 State who are holders of an `office ' or `post '. The afore said provisions in Chapter VII relating to appointment and conditions of engagement of District Government Counsel show that the appointments are to be made and ordinarily renewed on objective assessment of suitability of the person based on the opinion of the District Officer and the District Judge; and character roll is maintained for keeping a record of the suitability of the appointee to enable an objective assessment for the purpose of his continuance as a Law Officer in the district. There arc provisions to bar private practice and participation in political activity by D.G.Cs. Apart from clause 3 of para 7.06 to which we shall advert a little later, these provisions clearly indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of ap pointment. Suitability of the appointee being the prime criterion for any such appointment, it is obvious that appointment of the best amongst those available, is the object sought to be achieved by these provisions, which, even otherwise, should be the paramount consideration in discharge of this governmental function aimed at promoting public interest. All Govt. Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '. The learned Additional Advocate General contended that clause 3 of para 7.06 says that the appointment of a Dis trict Government Counsel is only professional engagement terminable at will on either side and not appointment to a post under the Government; and the Government has the power to terminate the appointment at any time `without assigning any cause '. He contended that this power to terminate the appointment at any time without assigning any cause and the clear statement that the appointment is only professional engagement terminable at will on either side is sufficient to indicate that the relationship is the same as that of a private client and his counsel. In our opinion, this provi sion has to be read not in isolation, but in the context in which it appears and along with the connected provisions, already referred. The expression `professional engagement ' is used therein to distinguish it from `appointment to a post under the Government ' in the strict sense. This, howev er, does not necessarily mean that a person who is not a Government servant holding a post under the Government does not hold any public office and the engagement is purely private with no public element attaching to it. This part of 642 clause 3 of para 7.06 means only this and no more. The other part of clause 3 which enables the Government to terminate the appointment `at any time without assigning any cause ' can also not be considered in the manner, suggested by the learned Additional Advocate General. The expression `at any time ' merely means that the termination may be made even during the subsistence of the term of appointment and `wit hout assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated. However, `without assigning any cause ' is not to be equated with `without existence of any cause '. It merely means that the reason for which the termination is made need not to be assigned or communicated to the appointee. It was held in Liberty Oil Mills and Others vs Union of India and Others, ; that the expression `without assigning any reason ' implies that the decision has to be communicated, but reasons for the decision have not to be stated; but the reasons must exist, otherwise, the decision would be arbi trary. The non assigning of reasons or the non communication thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy. Clause 3 of para 7.06 must, therefore, be understood to mean that the appointment of a District Government Counsel is not to be equated with appointment to a post under the Government in the strict sense, which does not necessarily mean that it results in denuding the office of its public character; and that the appointment may be terminated even during currency of the term by only communicating the decision of termina tion without communicating the reasons which led to the termination. It does not mean that the appointment is at the sweet will of the Government which can be terminated at any time, even without the existence of any cogent reason during the subsistence of the term. The construction, suggested on behalf of the State of U.P. of this provision, if accepted, would amount to conceding arbitrary power of termination to the Government, which by itself is sufficient to reject the contention and thereby save it from any attack to its valid ity. We may now refer to some provisions of the Code of Criminal Procedure, 1973, relating to Public Prosecutors. Section 24 provides for appointment of Public Prosecutors in the High Courts and the districts by the Central Government or the State Government. We are here concerned only with the appointment of Public Prosecutors by the State Government in the districts. Sub section 3 of Section 24 says that for every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecu 643 tors for the district. Sub section 4 requires the District Magistrate to prepare a panel of names of persons considered fit for such appointments, in consultation with the Session Judge. Sub section 5 contains an embargo against appointment of any person as the Public Prosecutor or Additional Public Prosecutor for the district by the State Government unless his name appears in the panel prepared under sub section 4. Sub section 6 provides for such appointments, where in a State there exists a regular Cadre of Prosecuting Officers but if no suitable person is available in such cadre, then the appointment has to be made from the panel prepared under sub section 4. Sub section 7 says that a person shall be eligible for such appointment only after he has been in practice as an advocate for not less than seven years. Section 25 deals with the appointment of Assistant Public Prosecutors in the district for conducting prosecution in the Courts of Magistrate. In the case of Public Prosecutors also known as District Government Counsel (Criminal), there can be no doubt about the statutory element attaching to such appointments by virtue of these provisions in the Code of Criminal Procedure, 1973. In this context, Section 321 of the Code of Criminal Procedure, 1973. is also significant. Section 321 permits withdrawal from prosecution by the Public Prosecutor or Assistant Public Prosecutor in charge of a case, with the consent of the Court, at any time before the judgment is pronounced. This power of the Public Prose cutor in charge of the case is derived from statute and the guiding consideration for it, must be the interest of admin istration of justice. There can be no doubt that this func tion of the Public Prosecutor relates to a public purpose entrusting him with the responsibility of so acting only in the interest of administration of justice. In the case of Public Prosecutors, this additional public element flowing from statutory provisions in the Code of Criminal Procedure, undoubtedly. invest the Public Prosecutors with the at tribute of holder of a public office which cannot be whit tled down by the assertion that their engagement is purely professional between a client and his lawyer with no public element attaching to it. A brief reference to some decisions of this Court, in which the character of engagement of a Government Counsel was considered. may be made. In Mahadeo vs Shantibhai and Ors., it was held that a lawyer engaged by the Railway Administration during the continuance of the engagement was holding an `office of profit '. The engagement of the Railway Counsel was similar to that of the Government Counsel in the present case. It was pointed out that by `office ' is meant the right and duty to exercise an employ ment or a position of authority and trust to which certain duties are attached; 644 and such an engagement satisfied that test. Even though the decision was rendered in the context of disqualification under the Election Law by holding an `office of profit ', yet it is useful for appreciating the nature of such an engage ment or appointment of a counsel by the Government. In Mundrika Prasad Sinha vs State of Bihar, [1980] 1 SCR 759. the nature of appointment of Government Pleaders came up for consideration and it was said that the office of a Govern ment Pleader. as defined in Section 2(7) of the Code of Civil Procedure.1908 is a public office. Krishna Iyer. J. in that decision, also pointed out that the `Government under our Constitution shall not play with law offices on political or other impertinent consideration as it may affect the legality of the action and subvert the rule of law itself '. In that decision. an earlier Madras decision was quoted with approval. wherein. it was clearly held that the duties of the Government Pleader are of a public nature and that the office of a Government Pleader is a public office. The relevant extract is as under: . A Government pleader is more than an advocate for a litigant. He holds a public office. We recall with approval the observations a Division Bench of the Madras High Court made in Ramachandran vs Alagiriswami, AIR 1961 Madras 460 and regard the view there. expressed about a Government Pleader 's office. as broadly correct even in the Bihar set up. ". the duties of the Government Pleader. Madras are duties of a public nature. Besides. as already explained the public are genuinely concerned with the manner in which Government Pleader discharges his duties because. if he handles his cases badly. they have ultimately to foot the bill . XXXXX XXXXX XXXXX consider that the most useful test to be applied to determine the question is that laid down by Erie, J. in ; The three criteria are. source of the office, the tenure and the duties. I have applied that test and I am of opinion that the conclusion that the office is a public office is irresistible." Similarly. in Mukul Dalai and Others vs Union of India and Others. ; it was held that the `office of the Public Prosecutor is 645 a public one ' and `the primacy given to the Public Prosecu tor under the Scheme of the Code (Cr.P.C.) has a social purpose '. It is useful in this context to refer to the decision in Malloch vs Aberdeen Corporation. That was d case of dismissal of an employee of a public authority whose appointment during the authority 's pleasure. Examining the scope of judicial review. Lord Wilberforce said: "The appellant 's challenge to the action taken by the re spondents raises a question in my opinion. of administrative law. The respondents are a public authority. the appellant holds a public position fortified by statute. The considera tions which determine whether he has been validly removed from that position go beyond the mere contract of employ ment, though no doubt including it. They are. in my opinion. to be tested broadly on arguments of public policy and not to be resolved on narrow verbal distinctions The appellant is entitled to complain if. whether in procedure or in substance, essential requirements, appropriate to his situa tion in the public service under the respondents, have not been observed and. in case of non observance. to come to the courts for redress. XXXXX XXXXX XXXXX . . So. while the courts will necessarily respect the right. for good reasons of public policy. to dismiss without assigned reasons. this should not. in my opinion, prevent them from examining the framework and context of the employment to see whether elementary rights are conferred on him expressly or by necessary implication. and how tar these extend . are. therefore. unable to accept the argument of the learned Additional Advocate General that the appointment of District Government Counsel by the State Government is only a professional engagement like that between a private client and his lawyer, or that it is purely contractual with no public element attaching to it. which may be terminated at an), time at the sweet will of the Government excluding judicial review. We have already indicated the presence of public element attached to the `office ' or `post ' of Dis trict Government Counsel of every category covered by the impugned circular. This is 646 sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review. The scope of judicial review permissible in the present case, does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irrationali ty, once Article 14 is attracted, is sufficient to invali date the impugned circular as indicated later. We need not, therefore, deal at length with the scope of judicial review permissible in such cases since several nuances of that ticklish question do not arise for consideration in the present case. Even otherwise and sans the public element so obvious in these appointments, the appointment and its concomitants viewed as purely contractual matters after the appointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action. This aspect is dealt with hereafter. Even apart from the premise that the `office ' or `post ' of D.G.Cs. has a public element which alone is sufficient to attract the power of judicial review for testing validity of the impugned circular on the anvil of Article 14, we are also clearly of the view that this power is available even without that element on the premise that after the initial appointment. the matter is purely contractual. Applicability of Article 14 to all executive actions of the State being settled and for the same reason its applicability at the threshold to the making of a contract in exercise of the executive power being beyond dispute, can it be said that the State can thereafter cast off its personality and exer cise unbridled power unfettered by the requirements of Article 14 in the sphere of contractual matters and claim to be governed therein only by private law principles applica ble to private individuals whose rights flow only from the terms of the contract without anything more? We have no hesitation in saying that the personality of the State, requiring regulation of its conduct in all spheres by re quirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts. which cannot co exist. The Preamble of the Constitution of India resolves to secure to all its citizens Justice, social. economic and political; and Equality of status and opportunity. Every State action must be aimed at achieving 647 this goal. Part IV of the Constitution contains `Directives Principles of State Policy which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action to realise the vision in the Preamble. This being the philoso phy of the Constitution, can it be said that it contemplates exclusion of Article 14 non arbitrariness which is basic to rule of law from State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. In our opinion. it would be alien to the Constitutional Scheme to accept the argument of exclusion of Article 14 in contractual matters. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals. There is an obvious difference in the contracts between private parties and contracts to which the State is a party, Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal require ments of public law obligations and impress with this char acter the contracts made by the State or its instrumentali ty. It is a different matter that the scope of judicial review in respect of disputes failing within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, chal lenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also fails within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic require ments of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition there to. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 648 of non arbitrariness at the hands of the State in any of its actions. Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved per sons. The State cannot be attributed the sprit personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the con tract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in what ever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The re quirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in public inter est and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regu lating the conduct of the State activity. In Wade 's Administrative Law, 6th Ed., after indicating that `the powers of public authorities are essentially different from those of private persons ', it has been suc cinctly stated at p. 400 401 as under: . The whole conception of unfettered discretion is inappropriate to a public authority, which possesses powers solely in order that it may use them for the public good. There is nothing paradoxical in the imposition of such legal limits. It would indeed be paradoxical if they were not imposed. Not is this principle an oddity of British or 649 American law: it is equally prominent in French law. Nor is it a special restriction which fetters only local authori ties: it applies no less to ministers of the Crown. Nor is it confined to the sphere of administration: it operates wherever discretion is given for some public purpose, for example where a judge has a discretion to order jury trial. It is only where powers are given for the personal benefit of the person empowered that the discretion is absolute. Plainly this can have no application in public law. For the same reasons there should in principle be no such thing as unreviewable administrative discretion, which should be just as much a contradiction in terms as unfettered discretion. The question which has to be asked is what is the scope of judicial review, and in a few special cases the scope for the review of discretionary decisions may be minimal. It remains axiomatic that all discretion is capable of abuse, and that legal limits to every power are to be found somewhere. (emphasis supplied) The view, we are taking is, therefore, in consonance with the current thought in this field. We have no doubt that the scope of judicial review may vary with reference to the type of matter involved, but the fact that the action is reviewa ble, irrespective of the sphere in which it is exercised, cannot be doubted. A useful treatment of the subject is to be found in (1990) 106 L.Q.R. at pages 277 to 292 in an article `Judi cial Review and Contractual Powers of Public Authorities '. The conclusion drawn in the article on the basis of recent English decisions is that `public law principles designed to protect the citizens should apply because of the public nature of the body, and they may have some role in protect ing the public interest '. The trend now is towards judicial re,dew of contractual powers and the other activities of the Government. Reference is made also to the recent decision of the Court of Appeal in Jones vs Swansea City Council, [1990] 1 W.L.R. 54, where the Court 's clear inclination to the view that contractual powers should generally be reviewable is indicated, even though the Court of Appeal faltered at the last step and refrained from saying so. It is significant to note that emphasis now is on reviewability of every State action because it stems not from the nature of function, but from the public nature of the body 650 exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '. The only exception limiting the same is to be found in specific cases where such exclusion may be desirable for strong reasons of public policy. This, however, does not justify exclusion of reviewability in the contractual field involving the State since it is no longer a mele private activity to be excluded from public view or scrutiny. Unlike a private party whose acts uninformed by reason and influenced by personal predilections in contractual matters may result in adverse consequences to it alone without affecting the public interest, any such act of the State or a public body even in this field would adversely affect the public interest. Every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. This is equally true of all actions even in the field of contract. Thus, every holder of a public office is a trustee whose highest duty is to the people of the country and, therefore, every act of the holder of a public office, irrespective of the label classifying that act, is in discharge of public duty meant ultimately for public good. With the diversification of State activity in a Wel fare State requiring the State to discharge its wide ranging functions even through its several instrumentalities, which requires entering into contracts also, it would be unreal and not pragmatic, apart from being unjustified to exclude contractual matters from the sphere of State actions re quired to be non arbitrary and justified on the touchstone of Article 14. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14. It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in 651 contractual matters, fails to satisfy the test of reasona bleness, it would be unconstitutional. See Ramana Dayaram Shetty vs The International Airport Authority of India and Ors., ; and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir & Anr., ; In Col. A.S. Sangwan vs Union of India and Ors., [1980] Supp. SCC 559, while the discretion to change the policy in exer cise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validi ty on this touch stone, irrespective of the field of activi ty of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose. In M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay,[1989] 3 SCC 293, the matter was re examined in relation to an instrumentality of the State for applicability of Article 14 to all its actions. Referring to the earlier decisions of this Court and examining the argu ment for applicability of Article 14, even in contractual matters, Sabyasachi Mukharji, J. (as the learned Chief Justice then was), speaking for himself and Kania, J., reiterated that `every action of the State or an instrumen tality of the State must be informed by reason . actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Con stitution. ' Ranganathan, J. did not express `any opinion on this point but agreed with the conclusion of the other learned Judges on the facts of the case. It is obvious that the conclusion on the facts of the case could not be reached by Ranganathan, J. without examining them and this could be done only on the basis that it was permissible to make the judicial review. Thus, Ranganathan, J. also applied that, principle without saying so. In view of the wide ranging and, in essence, all pervading sphere of State activity in discharge of its, welfare functions, the question assumes considerable importance and cannot be shelved. The basic requirement of Article 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule. of law. Non arbitrariness, in substance, is only fair play in action. We have no doubt that this obvious requirement must be satis fied by every action of the State or its instrumentality in order to 652 satisfy the test Of validity. it is this aspect which has been considered at length by Sabyasachi Mukharji, j. (as the learned Chief justice then was) in M/s Dwarkadas Marfatia 's case (supra) even though, that was a case of statutory exemption granted under the Rent Act to an instrumentality of the State and it was in that context that the exercise of power to terminate the contractual tenancy was examined. All the same, without going into the question whether the obligation of the in strumentality to act in pursuance of public purpose, was a public law purpose or private law purpose, it was held that the obligation to act in pursuance of public purpose was alone sufficient to attract Article 14. It was held that there was an implied obligation in respect of the dealings with the tenants/occupants of the authority to act in public interest/purpose. It was emphasised that every state action has to be for a public purpose and must promote public benefit. Referring to some earlier decisions, it was reiter ated that all State actions `whatever their mien ' are amena ble to constitutional limitations, the alternative being to permit them `to flourish as an imperium in imperio '. It was pointed out that `governmental policy would be invalid as lacking in public interest, unreasonable or contrary to the professed standards ', if it suffers from this vice. It was stated that every State action must be reasonable and in public interest and an infraction of that duty is amenable to judicial review. The extent of permissible judicial review was indicated by saying that `actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose '. It is sufficient to quote from the judg ment of Mukharji, 3. (as the learned Chief Justice then was) the following extract: " . . Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14 . (emphasis supplied) This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenan cy which alone applied by virtue of the exemption granted under the Rent Act excluding the applicability of the provi sions thereof. 653 In another recent decision in Mahabir Auto Stores & Ors. vs Indian Oil Corporation & Ors., J.T. , it was held that Article 14 was attracted even where the ag grieved person did not have the benefit of either a contrac tual or a statutory right. The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct. it was held by the learned Chief justice that the impugned act of the Indian Oil Corpo ration was an administrative decision and could be impeached on the ground that it was arbitrary or violative of Article 14 of the Constitution. It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that `fairness in such actions should be perceptible, if not transparent '. If Article 14 was applied even without the benefit of a contract of deal ership, the position cannot be worse with the added benefit of a contract. With respect, we concur with the view about the impact of Article 14 of the Constitution on every State action as indicated by the learned Chief Justice in these two recent decisions. No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable. If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. The scope of judicial review is limited as indicated in Dwarkadas Marfatia 's case (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. it is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. As indicated by Di plock, L.J., in Council of Civil Service Unions vs Minister for the Civil Service, ; , the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety. In the case of arbitrariness, the defect of irrationality is obvious. 654 In our opinion, the wide sweep of Article 14 undoubtedly takes within its fold the impugned circular issued by the State of U.P. in exercise of its executive power, irrespec tive of the precise nature of appointment of the Government Counsel in the districts and the other rights, contractual or statutory, which the appointees may have. It is for this reason that we base our decision on the ground that inde pendent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Article 14 of the Constitution and if it is shown to be arbitrary, it must be struck down. However, we have referred to certain provisions relating to initial appointment, termination or renewal of tenure to indicate that the action is controlled at least by settled guide lines, followed by the State of U.P., for a long time. This too is relevant for deciding the question of arbitrariness alleged in the present case. It is now too well settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Consti tution and basic to the rule of law, the system which gov erns us. Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua lion tO its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind. The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not, is ultimately to be answered on the facts and in the circum stances of a given case. An obvious test to apply is to see whether there is any discernible principle emerging from the impugned act and if so, does it satisfy the test of reasona bleness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, perform ance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act unin formed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that be you ever so high, the laws are above you '. This is what men in power must remember, always. 655 Almost a quarter century back, this Court in S.G. Jais inghani vs Union of India and Ors., ; , at p. 7 18 19, indicated the test of arbitrariness and the pit falls to be avoided in all State actions to prevent that vice, in a passage as under: "In this context it is important to emphasize that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey "Law of the Constitution" Tenth Edn. , Introduction cx). "Law has reached its finest moments", stated Douglas, J. in United States vs Wunderlick, (*), "when it has freed man from the unlimited discretion of some ruler . Where discretion is absolute, man has always suffered". It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discre tion, as Lord Mansfield stated it in classic terms in the case of John Wilker (*), "means sound discretion guided by law. It must be governed by rule, not humour: it must not be arbitrary, vague and fanciful." After Jaisinghani 's case (supra), long strides have been taken in several well known decisions of this Court expand ing the scope of judicial review in such matters. It has been emphasized time and again that arbitrariness is anathe ma to State action in every sphere and wherever the vice percolates, this Court would not be impeded by technicali ties to trace it and strike it down. This is the surest way to ensure the majesty of rule of law guaranteed by the Constitution of India. It is, therefore, obvious that irre spective of the nature of appointment of the Government Counsel in the districts in the State of U.P. and the secu rity of tenure being even minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable. 656 No doubt, it is for the person alleging arbitrariness who has to prove it. This can be done by showing in the first instance that the impugned State action is uninformed by reason inasmuch as there is no discernible principle on which it is based or it is Contrary to the prescribed mode of exercise of the power or is unreasonable. If this is shown, then the burden is shifted to the State to repel the attack by disclosing the material and reasons which led to the action being taken in order to show that it was an informed decision Which was reasonable. If after a prima facie case of arbitrarineSs is made out, the State is unable to show that the decision is an informed action which is reasonable, the State action must perish as arbitrary. In the present case. the initial burden on the petition ers/appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State, even those whose tenure in office had not expired. Such a drastic action could be justified only on the basis of some extraordinary ground equally applicable to all Government Counsel in the dis tricts throughout the State which is reasonable. No such reason appears in the circular. The impugned circular itself does not indicate the compelling reason, if any, for the drastic step of replacing all the Government Counsel in every branch at the district level throughout the State of U.P., irrespective of the fact whether the tenure of the incumbent had expired or not. The learned Additional Advocate General stated that the circular was issued because the existing panels were made in 1985, 1986 and 1987 and were considered to be not too proximate in point of time in the year 1990 for being continued. The reason, if any, for considering such en bloc change neces sary has not been disclosed either in the circular or at the hearing in addition to what is said in para 29 of the coun ter affidavit of A.K. Singh, which is referred later. On behalf of the petitiOners/appellants, it was alleged that the en masse change at the district level throughout the State of U.P. was made only for political reasons on account of the recent change in the State Government. We deem it unnecessary to go into this question for want of any specif ic material either way. Moreover, the arbitrariness, if any, of such an act, would be equally applicable irrespective of the change in the Government, which, if at all, would only strengthen the argument in case arbitrariness is proved otherwise. The only reason given 657 in the counter affidavit of A.K. Singh, Joint Secretary & Joint Legal Rememberancer, Government of U.P., is in para 29 thereof which reads as under: "That the contents of para 38 of the writ petition are not admitted. It is denied that the government took the present decision with a political motive and in an arbitrary manner. It is also submitted that the decision to terminate the prOfessional engagement has been taken in order to stream line the conduct of the government cases and effective prosecution thereof. " It is difficult to appreciate this as a reasonable basis for the drastic and sweeping action throughout the State, particularly when the provisions in the Legal Remembrancer 's Manual referred earlier provide ordinarily for renewal of the tenure Of the appointees. To say the least. the contents of para 29 of this counter affidavit Which alone are relied on to disclose the reasons for the circular are beautifully vague and convey nothing of substance and cannot furnish any tangible support to the impugned circular. It was stated by the learned Additional Advocate General that many of the old incumbents were to be re appointed even after this exercise and, therefore, a wholesale change was not to be made. If at all. this submission discloses a further infirmity in the impugned circular. If it be true that many of the existing appointees were to be continued by giving them fresh ap pointments. the action of first terminating their appoint ment and then giving them fresh appointment is. to say the least, Uninformed by reason and does not even fail within the scope of the disclosed reason `to streamline the conduct of government cases and effective prosecution thereof '. It is obvious that at least in respect of all such appointees who are to be continued by giving them fresh appointments, the act of terminating their appointment in one stroke, was without application of mind by anyone to the question wheth er a change was at all needed in their case. It would be too much to assume that every Government Counsel in all the districts of the State of U.P. was required to be replaced in order to streamline the conduct of government cases and indeed. that is not even the case of the State which itself says that many of them were to be re appointed. Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State of U.P. is itself eloquent of the arbitrariness writ large on the face of the circular. It is obvious that issuance of the impugned circular 658 was not governed by any rule but by the whim or fancy of someone totally unaware of the requirements of rule of law, neatly spelled out in the case of John Wilkes, more than two centuries back and quoted with approval by this Court almost a quarter century earlier in Jaisinghani 's case (supra). We have considered it necessary to re emphasize this aspect and reiterate what has been said so often by this Court only because we find that some per sons entrusted with the task of governance appear to be unaware of the fact that the exercise of discretion they have must be governed by rule, not by humour, whim, caprice or fancy or personal predilections. It also disturbs us to find that the Legal Remembrancer 's Department of the State of U .P. which has the duty to correctly advise the State Government in such matters. overlooked the obvious and failed to discharge its bounden duty of correctly advising the State Government in matters of law. We would like to believe that the impugned circular was issued for want of proper legal advice in this behalf instead of any ulterior motive suggested by the petitioners/appellants. Conferment of the power together with the discretion which goes with it to enable proper exercise of the power is coupled with the duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred, which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual. All persons entrusted with any such power have to bear in mind its necessary concomitant which alone justified con ferment of power under the rule of law. This was apparently lost sight of in the present case while issuing the impugned circular. Arbitrariness is writ large in the impugned circular dated 6.2. 1990 issued by the State of Uttar Pradesh. It gives the impression that this action was taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs. as bounty to be distributed by the appoint ing authority at its sweet will. Such a change even by a private party is made keeping in view his own interest when he finds that the existing lawyer is not suitable for the assignment and. therefore. without making the change he incurs the risk of some loss. In the case of the State it is the public interest which should be the prime guiding con sideration to judge the suitability of the appointee but it appears that the impugned State action was taken in the present case with only one object in view, that is, to terminate all existing appointments irrespective of the subsistance or expiry of the tenure or suitability of the existing incumbents. 659 Viewed in any manner, the impugned circular dated 6.2.90 is arbitrary. It terminates all the appointments of Govern ment Counsel in the districts of the State of Uttar Pradesh by an omnibus order, even though these appointments were all individual. No common reason applicable to all of them justifying their termination in one stroke on a reasonable ground has been shown. The submission on behalf of the State of Uttar Pradesh at the hearing that many of them were likely to be re appointed is by itself ample proof of the fact that there was total non application of mind to the individual cases before issuing the general order terminat ing all the appointments. This was done in spite of the clear provisions in the L.R. Manual laying down detailed procedure for appointment, termination and renewal of tenure and the requirement to first consider the existing incumbent for renewal of his tenure and to take steps for a fresh appointment in his place only if the existing incumbent is not found suitable in comparison to more suitable persons available for appointment at the time of renewal. In the case of existing appointees. a decision has to be first reached about their non suitability for renewal before deciding to take steps for making fresh appointments to replace them. None of these steps were taken and no material has been produced to show that any existing incumbent was found unsuitable for the office on objective assessment before the decision to replace all by fresh appointees was taken. The prescribed procedure laid down in the L.R. Manual which has to regulate exercise of this power was totally ignored. In short, nothing worthwhile has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary. The impugned circular must, therefore, perish on the ground of arbitrariness which is an available ground for judicial review in such a situation. In view of the above conclusion, all the existing ap pointees to the posts of Government Counsel in the districts throughout the State of U.P., by whatever name called, governed by the impugned circular dated 6.2. 1990, who were in position at the time of issuance of the circular, must continue in office and be dealt with in accordance with the procedure laid down in the L.R. Manual. Those Government Counsel, whose term had then expired or was to expire there after, would be considered for renewal of their tenure in the manner prescribed and steps for preparation of a fresh panel to replace them would be taken only if they are found unsuitable for renewal of their term as a result of an informed decision in the manner prescribed. The power of termination of any appointment during the subsistence of the term available to the State Government shall also be avail able for exercise only in the manner indicated, wherever considered necessary. 660 In short, the status quo ante as on 28.2. 1990, on which date the impugned circular dated 6.2. 1990 was made effec tive, will be restored and be maintained till change in any appointment is found necessary and is made in the manner prescribed. The fresh appointments, if any, made by the State Government in implementation of the impugned circular dated 6.2. 1990, being subject to the validity of the circu lar and the result of these matters, would stand superseded in this manner. The State Government will implement this direction within two weeks of the date of this order. In our view, bringing the State activity in contractual matters also within the purview of judicial review is inevi table and is a logical corollary to the stage already reached in the decisions of this Court so far. Having fortu nately reached this point, we should not now turn back or take a turn in a different direction or merely stop there. In our opinion, two recent decisions in M/s Dwarkadas Marfa tia and Sons, (supra) and Mahabir Auto Stores & Ors., (supra) also lead in the same direction without saying so in clear terms. This appears to be also the trend of the recent English decisions. It is in consonance with our commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power. We would much rather be wrong in saying so rather than be wrong in not saying so. Non arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reason and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power. In view of the conclusion reached by us and the above direction restoring status quo ante as on 28.2.1990, we have not gone into individual matters brought before us. Some argument was advanced from both sides in W.P. No. 706 of 1990 (Km. Shrilekha Vidyarthi vs State of U.P. & Ors.), wherein the fact of renewal of petitioner 's tenure is dis puted. It is unnecessary for us to go into that question also since the order, we are making, governs the case of all Government Counsel in the districts throughout the State of U.P. including that of the petitioner in this writ petition. The subsequent rights of this petitioner also would be governed in the manner indicated above. If and when such a situation arises, it would be open to the parties to have the dispute, if any, adjudicated wherein the question of renewal of tenure, claimed by the petitioner, can also be gone into. 661 Consequently, these appeals and writ petitions are allowed. The impugned circular G.O. No. D 284 Seven Law ministry dated 6.2. 1990, issued by the Government of State of U.P., is quashed resulting in resto ration of status quo ante as on 28.2. 1990, the date from which this circular was made effective. No costs. R.S.S. Petitions and appeals allowed.

The writ petitioners/appellants had been appointed as Government Counsel (Civil, Criminal, Revenue) by the State of U.P. By its circular dated 6.2.1990 the State terminated the appointment of all Government Counsel with effect from 28.2. 1990 irrespective of the fact whether the term of the incumbent had expired or was subsisting. At the same time the Government directed preparation of fresh panels to make appointments in place of existing incumbents. The appellants challenged the validity of this State action, which was rejected by the High Court. Before this Court it was contended inter alia on behalf of the petitioners/appellants that the relationship of the Government Counsel with the Government was not merely one of client and counsel as in the case of a private client, but one of status in the nature of public employment or appoint ment to a `public office ' so that termination of the ap pointment of a Government Counsel could not be equated with the termination by a private litigant of his Counsel 's engagement, which was purely contractual. without any public element attaching to it. On behalf of the State it was urged that: (i) the rela tionship of the appointees to these offices of Government Counsel in the districts was purely contractual depending on the terms of the contract and was in the nature of an en gagement of a Counsel by a private party who could be changed at any time at the will of the litigant, with there being no right in the counsel to insist on continuance of the engagement; (ii) there was no element of public employ ment in such appointments and the provisions in the Legal Remembrancer 's Manual and Section 24 of the Code of Criminal Procedure were merely to provide for making a suitable choice; (iii) the appointment of a District Government Counsel was only professional engagement terminable at will on either side and not appointment to a post under the Government, and the Government had 626 the power to terminate the appointment at any time `without assigning any cause ' and hence this circular did not suffer from the vice of arbitrariness. Allowing the writ petitions and the appeals, this Court, HELD: (1) The provisions in the Legal Remembrancer 's Manual clearly show that the Government Counsel in the districts are treated as law Officers of the State who are holders of an `office ' or `post '. These provisions further indicate that the appointment and engagement of District Government Counsel is not the same as that by a private litigant of his counsel and there is obviously an element of continuity of the appointment unless the appointee is found to be unsuitable either by his own work, conduct or age or in comparison to any more suitable candidate available at the place of appointment. (2) All Government Counsel are paid remuneration out of the public exchequer and there is a clear public element attaching to the `office ' or `post '. (3) Clause 3 of para 7.06 of the L.R. Manual which enables the Government to terminate the appointment `at any time without assigning any cause ' merely means that the termination may be made even during the subsistence of the term of appointment, and the expression `without assigning any cause ' means without communicating any cause to the appointee whose appointment is terminated. (4) The non assigning of reasons or the non communica tion thereof may be based on public policy, but termination of an appointment without the existence of any cogent reason in furtherance of the object for which the power is given would be arbitrary and, therefore, against public policy. Liberty Oil Mills vs Union of India, ; , referred to. (5) In the case of Public Prosecutors, the public ele ment flowing from statutory provisions in the Code of Crimi nal Procedure, undoubtedly, invest the Public Prosecutors with the attribute of holder of a public office `which cannot be whittled down by the assertion that their ' engage ment is purely professional between a client and his lawyer with no public element attaching to it. 627 Mahadeo vs Shantibhai, ; Mundrika Prasad Sinha vs State of Bihar, [1980] 1 S.C.R. 759; Mukul Dalaiand Others vs Union of India and Others, ; and Malloch vs Aberdeen Corporation, , referred to. (6) The presence of public element attached to the `office ' or `post ' of District Government Counsel of every category covered by the impugned circular is sufficient to attract Article 14 of the Constitution and bring the ques tion of validity of the impugned circular within the scope of judicial review. (7) The scope of judicial review permissible in the present case does not require any elaborate consideration since even the minimum permitted scope of judicial review on the ground of arbitrariness or unreasonableness or irration ality once Article 14 is attracted, is sufficient to invali date the impugned circular. (8) Even otherwise and sans the public element so obvi ous in these appointments, the appointment and its concomi tants viewed as purely contractual matters after the ap pointment is made, also attract Article 14 and exclude arbitrariness permitting judicial review of the impugned State action. (9) The personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14, does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the require ments of Article 14 and contractual obligations are alien concepts, which cannot co exist. (10) The scope and permissible grounds of judicial review in such matters, and the relief which may be avail able are different matters but that does not justify the view of its total exclusion. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form con tracts between unequals. (11) To the extent challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. 628 (12) It is significant to note that emphasis now is on review ability of every State action because it stems not from the nature of function, but from the public nature of the body exercising that function; and all powers possessed by a public authority, howsoever conferred, are possessed `solely in order that it may use them for the public good '. Jones vs Swansea City Counsel, [1990] 1 W.L.R. 54, referred to. (13) It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconsti tutional. Ramana Dayaram Shetty vs The International Airport Authority of India, ; ; Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir, ; and Col. A.S. Sangwan vs Union of India, [1980] Supp. SCC 559, referred to. (14) The basic requirement of Article 14 is fairness in action by the State and it is difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule of law. Non arbitrariness, in substance, is only fair play in ac tion. This obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity. M/s Dwarkadas Marlaria and Sons vs Board of Trustees of the Port of Bombay, ; and Mahabir Auto Stores (15) There is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it dis cernible and the State action, therefore, appears to be exfacie arbitrary, the initial burden to prove the arbi trariness is discharged shifting onus on the State to justi fy its action as fair and reasonable. (16) The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. It is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is success fully repelled by 629 showing that the act which was done was fair and reasonable in the facts and circumstances of the case. Council of Civil Service Union vs Minister for the Civil Service, ; (17) Arbitrariness is the very negation of the rule of law. Satisfaction of this basic test in every State action is sine qua non to its validity and in this respect. the State cannot claim comparison with a private individual even in the field of contract. (18) Every State action must be informed by reason and it follows, that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. (19) Irrespective of the nature of appointment of the Government Counsel in the districts in the State of U.P and the security of tenure being minimal as claimed by the State, the impugned circular, in order to survive, must withstand the attack of arbitrariness and be supported as an informed decision which is reasonable. S.G. Jaisinghani vs Union of India, ; (20) In the present case. the initial burden on the petitioners appellants has been discharged by showing that there is no discernible principle for the impugned action at the district level throughout the State of U.P. since there is nothing in the circular to indicate that such a sweeping action for all districts throughout the State was necessary which made it reasonable to change all Government Counsel in the districts throughout the State. even those whose tenure in office had not expired. (21) Non application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State is itself eloquent of the arbitrariness writ large on the face of the circular. John Wilkes 's case (22) Arbitrariness is writ large in the impugned circu lar issued by the State of Uttar Pradesh. It gives the impression that this action was 630 taken under the mistaken belief of applicability of "spoils system" under our Constitution and the cavalier fashion in which the action has been taken gives it the colour of treating the posts of D.G.Cs. as bounty to be distributed by the appointing authority at its sweet will. Nothing worth while has been shown on behalf of the State of U.P. to support the impugned action as reasonable and non arbitrary.

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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 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]

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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 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.

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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.

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.

6605.txt

ivil Appeal No. 2279 of 1991. From the Judgment and Order dated 27.9.1989 of the Bombay High Court in C.R.A. No. 500 of 1985. S.C. Birla for the Appellant. V.N. Ganpule, S.V. Deshpande and Ms. Priya Gupta for the Respondent. The Judgment of the Court was delivered by RAY, J. We have heard learned counsel for the parties and we grant special leave. This appeal on special leave is directed against the judgment and order passed in Civil Revision Application No. 500 of 1985 by the High Court of Judicature at Bombay, Aurangabad Bench allowing the Revision, setting aside the judgment and decree passed by the District Judge in Rent Appeal No. 5 of 1984 confirming and allowing the judgment and order of the Additional Rent Controller, Aurangabad in R.C. No. ARC/71/3. The matrix of the case is as follows: The appellant landlord, Chandmal, S/o Sumermal Surana as plaintiff filed a suit for eviction of the respondent defendent Firm Ram Chandra & Vishwanath, a commission agent firm from his shop bearing Municipal No. 4 16 101 situated a Mondha, Taluka, District Aurangabad (maharashtra) under section 15(3)(a)(iii) of the Hyderabad House (Rent, Eviction and Lease) Control Act, 1954 to be hereinafter to be referred to as the said Act on the ground inter alia that the respondent was the tenant of the said shop attached to the said house of the appellant landlord on the monthly rent of Rs.50 per month and the tenancy commences from the Ist day of every month according to the English calendar, that the landlord appellant required the suit shop for his own personal use as he intended to start commission agency and other business in the said shop, that he terminated the tenancy of the respondency of the respondent by serving the two notices dated 28.3.1969 and 8.12.1970 and that the respondent did not vacate the suit premises, hence the suit has been filed for eviction of the tenant respondent from the said premises. Shankarrao Marutirao Sonawane, 735 one of the partners of respondent firm filed his written statement before the Additional Rent Controller accepting the ownership of the appellant and tenancy of the respondent at the rate of Rs. 50 per month. He, however, denied the appellant 's allegation that he required the suit premises for his personal use. According to the respondent, the appellant is a member of Hindu joint family comprising of his father, Sumermal, his real brothers and appellant and as one of the partners of registered firm runs a kirana of commission agency shop under the name and style of M/s Rajmal Sumermal Surana. It has been further submitted that the appellant owns many houses and shops at Aurangabad and also runs a very big shop at Bhaji Bazar, Aurangabad and is not entitled to evict. In the additional written statement it has been further stated that the appellant purchased the house from Balkrishna and brothers, the firm Ramchandra and Vishwanath is a partnership firm registered under the Partnership Act, one of the partners of the firm Ramchandra and Vishwanath is occupying the house as a permanent tenant since Samwat 2002. It has also been contended that the partners of the firm are not made parties to the eviction proceedings and hence the suit was not tenable. An additional issue was framed at the request of the appellant which was to the following effect: "Do defendant prove that he is permanent tenant and his claim is bona fide. " The trial court considering the evidences adduced on behalf of the defendant respondent held that the defendant failed to prove the claim of permanent tenancy of Ramchandra Madhavrao since Samvat 2002 over the suit premises and that the claim of permanent tenancy is not bona fide. This issue was thus answered in the negative. The Additional Rent Controller, therefore, held that the appellant is entitled to evict the respondent from the suit premises in view of the provisions of Section 15(2) (vi) of the said Act and, therefore, Made an order directing the tenant respondent to hand over vacant and peaceful possession of the said shop to the landlord appellant within a period of 30 days of the order though he negatived the plea of bona fide requirement of suit premises for his own occupation. The order was made on February 14, 1984. Against this judgment and order, the tenant respondent filed an appeal being Rent Appeal No. 5 of 1984 under section 25 of the said Act in the court of 736 District Judge at Aurangabad. The learned District Judge confirmed the judgment and order of the Additional Rent Controller holding that the landlord failed to prove that he bona fide required the premises for personal use, for starting new business. It was further held that so far as the claim of permanent tenancy, there was no iota of evidence to support the tenant respondent 's claim of permanent tenancy. It also held that the tenant respondent has put forth the claim of permanent tenancy to defeat the landlord appellant 's right to claim possession of the premises and had there been any substance in the claim, the tenant respondent would have produced evidence in support of it. Complete absence of evidence indicated that the claim is fake and not put forth bona fide. The learned District Judge, therefore, held that the tenant 's claim of permanent tenancy was not bona fide and so upheld the finding of the Additional Rent Controller and granted three months ' time to the tenant respondent to deliver possession of the suit premises to the landlord appellant. The tenant respondent feeling aggrieved filed an application for Revision under Section 26 of the said Act in the High Court at Bombay (Aurangabad Bench) being Civil Revision Application No. 500 of 1985. The said Revision Application was allowed by the learned Single Judge setting aside the concurrent finding of the courts below holding inter alia that in the reply of the tenant to the notices sent by the landlord, there was no semblance of a claim for permanent tenancy. It was further held that in the written submission there was no whisper about the claim of permanent tenancy. It is for the first time that in the additional written statement filed on behalf of the tenant the claim of permanent tenancy by one of the partners, Ramchandra Madhavrao since Samwat 2002 was made. It has also been held that during the trial, Shankarrao Marutirao Sonawane, one of the partners of the respondent firm who has signed the written statement has not uttered a word in his examination in chief with regard to the question of permanent tenancy. It was, therefore, held that in these circumstances "it is the duty of the Court in the interest of justice to interfere even with a concurrent finding of fact because on the record, I find that there is not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as is required by the statute. " The learned Single Judge, therefore, set aside the judgments of the courts below and allowed the Revision Application with costs throughout. It is against this judgment and order, the instant appeal on 737 special leave has been filed by the landlord. It is convenient to set out hereinbelow the relevant provisions of Section 15(2)(vi) of the said Act before proceeding to consider whether the High Court was justified in setting aside the judgment and order of the courts below: Section 15(2)(vi): A tenant shall not be evicted, whether in execution of a decree or otherwise except in accordance with the provisions of this section (vi) that the tenant has denied the title of the landlord or claimed a right of permanent tenancy and that such denial or claim was not bona fide the Controller shall make an order directing the tenant to put the landlord in possession of the house, and if the Controller is not so satisfied he shall make an order, rejecting, rejecting the application. " It is also pertinent to set out in this connection the provisions of Section 26 of the said Act: Section 26: "Notwithstanding anything contained in this Act or any other law for the time being in force, an application for revision shall lie to the High Court from any final order passed on appeal by an appellate authority on the following grounds: (a) that the original or appellate authority exercised a jurisdiction not vested in it by law, or (b) that the original or appellate authority failed to exercise a jurisdiction so vested, or (c) in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity. " There is no dispute regarding the submission made in para 9 of the additional written statement which is a part of the same written statement, filed on behalf of the respondent by one of its partners, Shankarrao Marutirao Sonawane to the effect that one of the partners 738 of the said firm, Ramachandra Madhavrao is occupying the house as a permanent tenant since Samvat 2002. Admittedly, on the basis of this additional written statement, an additional issue No. 1 was framed at the request of the landlord appellant whether the claim of permanent tenancy of Ramchandra Madhavrao was bona fide. It is evident from the provisions of Section 15(2)(vi) as set out hereinbefore that if the tenant has claimed a right of permanent tenancy and that such claim was not bona fide the Controller shall make an order directing the tenant to put the landlord in possession of the house. The Additional Rent Controller as well as the District Judge considered carefully and minutely the evidences adduced on behalf of the tenant respondent and found that claim of permanent tenancy was not bona fide. Accordingly, the courts below held that the tenant respondent was liable to be evicted from the suit premises on this ground alone and passed order for eviction from the suit premises. The jurisdiction of the High Court in revision against the order passed on appeal by the District Judge is a limited one and it is almost pari materia with the provisions of Section 115 of the Code Procedure. The High Court while exercising the revisional jurisdiction can interfere with the order passed on appeal by the appellate authority only on three grounds i.e. (i) where the original or appellate authority exercised a jurisdiction not vested in it by law, or (ii) where the original or appellate authority failed to exercise a jurisdiction so vested, or (iii) where in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity. It is evident from the averments made in para 9 of the additional written statement that one of the partners of the respondent firm, Ramchandra Madhavrao occupied the said premises as a permanent tenant since Samvat 2002. This claim of permanent tenancy was held to be not bona fide by the original court as well as by the appellate authority on a consideration and appraisement of the evidences adduced on behalf of the tenant respondent and as such both the courts below passed order of eviction of the tenant respondent from the suit premises. These are admittedly concurrent findings of fact arrived at by the original and the appellate authority. Moreover, these findings in any view of the matter whatsoever, cannot be held to be either without jurisdiction nor it can amount to a failure to exercise jurisdiction vested with them, nor it can be held to be made by the original or appellate authority illegally or with material irregularity. The revisional jurisdiction of the High Court under Section 26 of the said Act is confined strictly to the jurisdictional error or illegal exercise of jurisdiction. The finding of the High Court to the effect 739 that it was the duty of the Court in the interest of justice to interfere even with the concurrent finding of facts because on the records, High Court found that there was not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as required by the statute, is entirely baseless and not in accordance with the provisions of Section 26 of the said Act which confers revisional jurisdiction on the High Court. It is pertinent to mention in this connection the decision in J. Pandu vs R. Narsubai, It is a case under the A.P. Buildings (lease, Rent and Eviction) Act, 1960. Sub section 2(vi) of Section 10 of A.P. Buildings (Lease, Rent and Eviction) which is similar to Section 15(2)(vi) of the Hyderabad Houses (Rent, Eviction and Lease) Control Act, 1954 sets out two grounds of eviction viz. (1) denial of title of the landlord without bona fides and (2) claim of permanent tenancy rights without bona fides. It was held that "consequently, either denial of title or claim of permanent tenancy without bona fides will itself be enough to attract Section 10(2)(vi). The order of eviction on this ground, has therefore, to be sustained. By reason of this conclusion alone the appeal can be dismissed. " In the case of Majati Subbarao vs P.V.K.Krishna Rao (deceased) by Lrs., it has been observed that the denial of title of the landlord by the tenant must be made in clear and in unequivocal terms. It was further observed that it is well settled that the court hearing a suit or appeal can take into account events which are subsequent to the filing of the suit in order to give appropriate relief or mould the relief appropriately. As we have stated hereinbefore that the claim of permanent tenancy by one of the partners, Ramchandra Madhavrao has been clearly and unequivocally made in the additional written statement filed on behalf of the respondent. In such circumstances, the provisions of Section 15(2)(vi) of the said Act are applicable and an order of eviction can very well be passed on this ground alone. In the premises aforesaid, the judgment and order passed in revision by the High Court is contrary to law as the High Court in exercise of its revisional jurisdiction interfered with the concurrent finding of fact arrived at by the original court as well as the appellate authority. The High Court should not have reversed the same in excise of its revisional jurisdiction under Section 26 of the said Act. We, therefore, set aside the judgment and order of the High Court and uphold the orders of the court below. The respondent is given three 740 months ' time to vacate the suit premises on filing the usual undertaking that they will not induct anybody or transfer the same to any other person and they will go on paying the rent of the premises at the usual rate and will deliver vacant and peaceful possession of the suit premises on or before the expiry of the said period to the landlord appellant. In the facts and circumstances of the case, the parties will bear their own costs. V.P.R. Appeal allowed.

The appellant landlord filed a suit for eviction of the respondent firm defendant commission agent firm, from his shop under section 15(3)(a)(iii) of the Hyderabad House (Rent, Eviction and Lease) Control Act, 1954 on the ground that the appellant required the suit shop for his own personal use as he intended to start commission agency and other business; and that the respondent did not vacate the premise inspite of his two notices, terminating the tenancy. The respondent filed written statement before the Additional Rent Controller accepting the ownership of the appellant and tenancy of the respondent and denied the appellant 's allegation that he required the premises for his personal use, as the appellant was a member of Hindu Joint family comprising of his father, and his brothers, and his brothers and appellant; the appellant as one of the partners of registered firm runs a kirana of commission agency shop under the name and style of M/s Rajmal Sumermal Surana and the appellant owned many houses and shops and as such was not entitled to an order of eviction. In the additional written statement it was further stated that the appellant purchased the house from one registered partnership firm and one of the partners of the firm was occupying the house as a permanent tenant since Samwat 2002. It was also contended that the partners of the firm were not made parties to the eviction proceedings and hence the suit was not tenable. The Trial Court considering the evidence allowed the suit holding that the appellant was entitled to evict the respondent in view of the provisions of Section 15(2)(vi) of the Act, though the plea of bona fide requirement was negatived. The tenant respondent filed an appeal under section 25 before the 733 District Judge, which was dismissed though it was held that the landlord failed to prove that he required the premises for personal use. The tenant respondent 's revision petition under section 26 to the High Court, was allowed by a Single Judge. Allowing the landlord 's appeal, this Court HELD: 1. The jurisdiction of the High Court in revision against the order passed on appeal by the District Judge is a limited one and it is almost pari materia with the provisions of Section 115 of the Code of Civil Procedure. The High Court while exercising the revisional jurisdiction can interfere with the order passed on appeal by the appellate authority only on three grounds, i.e. (i) where the original or appellate authority exercised a jurisdiction not vested in it by law, or (ii) where the original or appellate authority failed to exercise a jurisdiction so vested, or (iii) where in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity. [738C E] 2. The findings in any view of the matter whatsoever cannot be held to be either without jurisdiction vested with them, nor it can be held to be made by the original or appellate authority illegally or with material irregularity. [738G] 3. The revisional jurisdiction of the High Court under Section 26 of the said Act is confined strictly to the jurisdictional error or illegal exercise of jurisdiction. The finding of the High Court to the effect that it was the duty of the Court in the interest of justice to interfere even with the concurrent finding of facts because on the record, High Court found that there was not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as required by the statute, is entirely baseless and not in accordance with the provisions of Section 26 of said Act which confers revisional Jurisdiction on the High Court. [738H 739B] 4. The claim of permanent tenancy by one of the partners has been clearly and unequivocally made in the additional written statement filed on behalf of the respondent. In such circumstances, the provisions of Section 15(2) (vi) of the said Act are applicable and an order of eviction can very well be passed on this ground alone. [739F] 734

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ivil Appeal Nos. 2567 70 of 1985. From the Judgment and Order dated 3.4.1985 of the Hyderabad High Court in Writ Petition No. 9403 of 1984. Kapil Sibal, Additional Solicitor General, G.L. Sanghi, Anil B. Diwan, G. Ramaswamy, P.A. Choudhary, Kailash Vasudev, Naunit Lal, M.J. Paul, C.S. Vaidyanathan, U.K. Khaitan, Praveen Kumar, section Murlidhar, Vineet Kumar, Vinod Bhagat and Mukul Mudgal for the Appellants. Shanti Bhushan, V.R. Reddy, Rajendra Choudhary, section Thananjayan, K. Ram Kumar for the Respondents. V.B. Sharya for the Intervenor. The Judgement of the Court was delivered by VERMA, J. These appeals by special leave are by several industrial concerns against the Andhra Pradesh State Electricity Board (hereinafter called 'the Board ') challenging the common judgment of the Andhra Pradesh High Court in writ petitions filed by these concerns challenging the revision of the electricity tariffs by the Board by its proceedings contained in B.P. Ms. No. 1014 (Commercial) dated 649 13.12.1983 which came in to force on 15.1.1984. Prior to this revision, the tariffs were governed by B.P. Ms. No. 418 (Commercial) dated 12.1.1981. On 13.12.1983, two separate orders were issued by the Board revising the various tariffs. By one of them, namely, B.P. Ms. No. 1014, the tariffs for various categories of consumers including H.T. categories I and II were revised. By the other order of the same date, namely, Memo No. DE/COML/IV/2250/83/I, the tariffs for highly power intensive industries were also revised upwards. Out of the appellants it was applicable to five units, namely, (1) Nav Bharat Ferro Alloys Ltd., (2) Andhra Sugars Ltd., (3) Ferro Alloys Corporation Ltd., (4) Grindwell Norton Ltd., and (5) A.P. Carbides Ltd. This upward revision of tariffs made by the Board by its two orders dated 13.12.1983 which were made effective from 15.1.1984, was challenged by the appellants in writ petitions filed in the Andhra Pradesh High Court on various grounds. The High court rejected all the grounds and dismissed the writ petitions by its common judgment now reported in A.I.R. 1985 A.P. 299. These appeals by special leave are against the High Court Judgment. The appellants are all H.T. power consumers of one category or other. The tariffs consist of three parts: Part A, Part B and Part C. Part A provides for H.T. tariffs; Part B for L.T. supply; and Part C provides, inter alia, for miscellaneous and general charges. H.T. consumers in Part A are broadly classified into three categories: H. T. Category I (Industrial); H.T. Category II (Non Industrial); and H.T. Category III comprising of power intensive consumers and some others. The Board retained the power to decide in accordance with the guidelines as to which industries were power intensive and which were not. This was the position in the tariffs of 1975. Subsequently, the Board began to deal with the power intensive industries by notifying tariffs for them separately from time to time. In effect, there were four classes of consumers availing H.T. supply; (1) H.T. consumers falling under H.T. Category I (Industrial); (2) H.T. consumers falling under H.T. Category II (Non Industrial); (3) H.T. consumers falling under the category 'power intensive industries '; and (4) H.T. consumers availing supply of electricity for irrigation and agricultural purposes included in Part B. The tariffs for these different categories of H.T. consumers were enhanced from time to time. For H.T. Category I (Industrial), it was 21 paise in 1975, increased to 30 paise in 1979, 33 paise in 1980, 40 paise in 1981 and 48 paise in 1984. Likewise, there was corresponding increase in the energy rates for H.T. Category II (Non Industrial), being 28 paise, 37 paise, 40 paise, 47 paise and 56 paise. The tariffs for power intensive industries were, however, 650 increased by separate notifications issued by the Board from time to time. It was 11 paise prior to 1975, raised to 12.2 paise in 1977, 16 paise in 1978, 18.5 paise in September 1979, 21 paise in November 1979, 25 paise in 1980, 32 paise in 1981 and 45 paise in 1984. The H.T. consumers grouped in Part B were required to pay 15 paise under the 1975 tariffs and 16 paise thereafter. Besides the energy charges as stated above, the H.T. consumers were also required to pay at different rates effective from 1.9.1982 an additional charge levied as 'fuel cost adjustment charges '. The H.T. consumers were also required to pay some amount as 'voltage surcharge ' in accordance with the terms of the agreement entered into by the individual consumers with the Board. The comparison of the aforesaid tariffs shows that the tariffs for power intensive industries to begin with were much less than the tariffs for H.T. Category I (Industrial) and H.T. Category II (Non Industrial). In course of time, the concession in tariffs for the power intensive industries was progressively withdrawn. The concessions were, however, continued in respect of consumers availing H.T. or L.T. supply for purposes of irrigation and agriculture or L.T. supply for domestic, cottage industries, public lighting and small poultry farming units. It is the admitted position that the power generation in the State of Andhra Pradesh is both hydro and thermal, each source contributing almost equally to the total power generation in the State. The H.T. categories have been consuming more than one half of the total power generated in the State against the much larger number of individual L.T. consumers availing the remaining power. The main attacks to the upward revision of the tariffs for H.T. consumers in the writ petitions before the High Court were: (1) The Board, as a public utility undertaking, is expected to function in the most efficient and economical manner; (2) It cannot plan its activities with a view to drive any sizeable profits on its undertaking except in accordance with Section 59 of the (hereinafter referred to as 'the Supply Act '); (3) The Board Could not generate a surplus in excess of that specified under Section 59 of the Supply Act which it had been doing; (4) The Board was preparing its financial statement incorrectly in a manner contray to section 59 of the Supply Act by improperly taking into account expenses chargeable to capital by showing such expenses as charged to revenues; (5) The steep upward revision to tariffs from 1980 made by the Board is invalid, being arbitrary and in contravention of Section 49 and 59 of the Supply Act; and (6) There was no justification for the Board to have revised the tariffs either in 1981 or in 1984 or to have levied any 651 fuel surcharge in terms of Section 49 and 59 of the Supply Act. It was also contended that the tariffs revision was made without prior consultation with the State Electricity Consultative Council as required by Section 16(5) of the Supply Act which also rendered it invalid. Prior to 30.7.1982, it was usual for the Board to take into account various escalation charges such as pay revisions and increases in the cost of fuel and revise its tariffs from time to time. This was done in 1975 and 1981. Thereafter, the Board took the view that to avoid making frequent tariff revisions necessitated by frequent escalations in the cost of fuels like coal and diesel oil, the formula known as "fuel cost adjustment" be evolved. Accordingly, the Board in its proceedings contained in B.P. Ms. No. 589 dated 30.7.1982, set out the formula known as "fuel cost adjustment". This formula was introduced as condition No. 11 in H.T. tariffs Part A. Ever since September 1982, all categories of H.T. consumers in Part A including the power intensive consumers are subject to this condition. Immediately after 30.7.1982, the fuel cost adjustment was fixed as 2.74 paise per unit, which was increased gradually to 2.95 paise, 3.79 paise and 11.68 paise. Thereafter, 3.79 paise was absorbed as part of the tariffs applicable to these H.T. consumers and the remaining increase of 7.89 paise alone was indicated as the fuel cost adjustment charges. The grievance made by all H.T. consumers before the High Court was that: (1) the fuel cost adjustment could not be recovered as part of the tariffs; (2) there is discrimination in recovering the entire fuel cost adjustment from H.T. consumers alone; (3) fairness demands that a reasonable proportion of the burden should be shared also by Part B consumers; and (4) that fuel cost adjustment charge is excessively computed. The High Court rejected all these contentions. It held that this was a matter of policy which could be changed from time to time and it was permissible to gradually withdraw the pre existing concessional tariffs given to the power intensive industries for which the tariffs earlier were much lower as compared to the other consumers and even after the increase , they were not excessive. It was held that electricity was a raw material for power intensive industries and no grievance could be made against the increase of its cost just as such a grievance was untenable against increase in the cost of any other raw material. The challenge on the ground of discrimination was rejected on the ground that H.T. consumers including power intensive industries formed a separate class and the reason which justified grant of concession to them earlier also justified the gradual withdrawal of that 652 concession. It held that prior consultation with the State Electricity Consultative Council according to Section 16(5) of the Supply Act was not obligatory before revising the tariffs. The High Court held that the Board was justified in adjusting its tariffs to ensure progressive minimizing of losses and the failure of the State Government to specify the surplus it could generate in accordance with Section 59 of the Supply Act, did not detract from the Board 's power to adjust its tariffs and generate a surplus on principles of commercial expediency applicable to a public utility undertaking. Fixation of tariffs was held to be a matter of major policy in respect of which the Government can effectively issue directions under Section 78 A of the Act. It was held that the H.T. consumers including power intensive industries were bound to pay according to the revised higher tariffs fixed from time to time under the agreement as contemplated by Section 49 of the Supply Act. The condition of fuel cost adjustment, introduced as condition No. 11 in H.T. tariffs Part A, was held applicable to power intensive consumers also. An additional argument that this added burden became unbearable for the power intensive consumers was rejected on the ground that such inability of the industry to survive is not a compelling consideration for deciding the Board 's power in adjusting it tariffs. Accordingly, the High Court dismissed the writ petitions and upheld the revision of tariffs made by the Board by the impugned B.P. Ms. No. 1014 (Commercial) dated 13.12.1983 w.e.f. 15.1.1984. The High Court having refused to grant a certificate of fitness to appeal to this Court, the appellants have preferred these appeals by special leave. It may be mentioned at this stage that the controversy raised in these appeals was also the controversy in another bunch of civil appeals arising out of a judgment of the Kerala High Court wherein a similar challenge had been upheld and the Kerala State Electricity Board had come in an appeal to this Court. In those matters, the contention of the Kerala State Electricity Board which would be the same as that of the Andhra Pradesh State Electricity Board before us, was accepted and the judgment of the Kerala High Court taking the view contrary to that of the Andhra Pradesh High Court was reversed (Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu and Bros. and Others. , [1986] 4 S.C.C. 198.) All the hearing before us, it was contended by Shri Shanti Bhushan, learned counsel for the Andhra Pradesh State Electricity Board that the Kerala decision concludes these points against the present appellants. On the other hand, Shri G. Ramaswamy and other learned counsel, appearing for the appellants, made an attempt to 653 distinguish the decision in the Kerala case. The question, therefore, is: Whether any ground has been made out by the present appellants to persuade us to take a view different from the one taken by this Court in the Kerala case? Before considering the arguments in these appeals, we would refer to the controversies in the Kerala case and the view taken therein. The decision in Kerala State Electricity Board vs M/s. Govinda Prabhu and Bros. and Others, ; arose out of the decision of the Kerala High Court in a similar situation. The Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board unlike the Andhra Pradesh High Court which has upheld the upward revision of tariffs in the present appeals. The main question in the Kerala case also related to the extent of authority of the Kerala Board to increase the electricity tariffs under the . The principal ground of challenge which was accepted by the Kerala High Court was that the Kerala State Electricity Board acted outside its statutory authority by formulating a price structure intended to yield substantial revenue to offset not merely the expenditure properly chargeable to the revenue account for the year as contemplated by Section 59 of the Supply Act but also expenditure not so properly chargeable. The Kerala High Court had held that in the absence of a specification by the Government, the Board was not entitled to generate a surplus at all and it acted entirely outside its authority in generating a surplus to be adjusted against items of expenditure not authorised to be met from revenue receipts. this view of the Kerala High Court was based primarily on the construction made of section 59 of the . Accordingly, the Kerala High Court struck down the upward revision of tariffs made by the Kerala State . Accordingly, the Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board in the years 1980, 1982 and 1984. It may here be mentioned that Section 59 of the Supply Act, as it stood prior to 1978, was amended by Act No. 23 of 1978 and thereafter, by Act No. 16 of 1983, which came into effect from April 1, 1985 only. The Kerala case also was decided on the basis of Section 59 as it stood amended by the 1978 (Amendment) Act, prior to its amendment w.e.f. April 1, 1985 by Act No. 16 of 1983. For our purposes also, Section 59 as it stood amended by the 1978 Act, prior to the 1983 amendment, is relevant. This Court expressly rejected the submission which had found favour with the Kerala High Court that in the absence of a specification by the State Government, the position would be as it was before the 1978 amendment, that is, the Board was to carry on its affairs and 654 adjust the tariffs in such a manner as not to incur a loss and no more. While rejecting the submission, this Court held as under: "We are of the view that the failure of the government to specify the surplus which may be generated by the Board cannot prevent the Board from generating a surplus after meeting the expenses required to be met. Perhaps, the quantum of surplus may not exceed that a prudent public service undertaking may be expected to generate without sacrificing the interests it is expected to serve and without being obsessed by the pure profit motive of the private entrepreneur. The Board may not allow its character as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house. Neither the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion that the Board has shed its public utility character. When that happens the court may strike down the revision of tariffs as plainly arbitrary. But not until then. Not, merely because a surplus has been generated, a surplus which can by no means be said to be extravagant. The court will then refrain from touching the tariffs. After all, as has been said by this Court often enough 'price fixation ' is neither the forte nor the function of the court. " Further, it said: "Turning back to Section 59 and reading it along with Section 49, 67, 67 A etc. We notice that the Electricity Supply Act requires the Electricity Board to follow a particular method of accounting and it is on the basis of that method of accounting that the Board is required to generate a surplus. Broadly, Section 59 requires that a surplus should be left from the total revenues, in any year of account, after meeting all expenses properly chargeable to revenues. It has to be remembered that apart from subventions which may be received from the State Government, which depend entirely on the bounty of the government, the only revenues available to the Board are the charges leviable by it from consumers. Bearing this in mind, we may now consider what expenses are properly chargeable to revenues under the Electricity Supply Act. For this purpose, we may not be justified in having recourse to the principles of corporate 655 accounting or the rules which determine what is revenue expenditure under the Income Tax Act. It appears to us that the Electricity Supply Act prescribes its own special principles of accounting to be followed by the Board. " This Court also held that the prescribing of different tariffs for high and low tension consumers and for different classes of consumers, such as industrial, commercial, agricultural and domestic, appears to be reasonable and far from arbitrary and is based on an intelligent and intelligible differentia. Accordingly, the judgment of the Kerala High Court upholding challenge to the validity of the upward revision of tariffs was set aside. Broadly speaking, the substance of the main arguments advanced before us in these matters was repelled by this Court in the Kerala case. However, learned counsel for the appellants attempted to distinguish the Kerala decision and also tried to advance some additional arguments. We shall refer to those arguments presently. It would be appropriate at this stage to quote the relevant provisions of the , with reference to which the arguments advanced have to be considered. Section 2 of the act relates to interpretation and give the meaning of the expressions defined therein. Section 3 deals with the constitution of the Central Electricity Authority. Section 4 B contains the rule making power of the Central Government. Section 5 provides for the constitution and composition of State Electricity Boards. Section 12 provides for the incorporation of the Board. Section 12 A relates to the capital structure of the Board. Section 78 contains the rule making power of the State Government. Section 79 contains the power of the Board to make regulations. Some of the provisions of the Act which may be quoted in extenso are as under: "4A. Directions by Central Government to the Authority. (1) In the discharge of its functions, the Authority shall be guided by such directions in matter of policy involving public interest as the Central Government may give to it in writing. (2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final." xxx xxx xxx 656 "16. State Electricity Consultative Council. (1) The State Government shall constitute a State Electricity Consultative Council for the State, and in cases to which Section 6 and 7 apply, the State Government concerned shall constitute such one or more State Electricity Cousultative Council or Councils and for such areas as they may by agreement determine. (2) The State Electricity Consultative Council shall consist of the members of the Board and, if there are any Generating Company or Generating Companies operating in the State, one representative of the Generating Company or each of the Generating Companies, to be nominated by the Generating Company concerned, and such other persons being not less than eight and not more than fifteen as the State Government or the State Governments concerned may appoint after consultation with such representatives or bodies of representative of the following interests as the State Government or the State Governments concerned thinks or think fit, that is to say, local self government, electricity supply industry, commerce, industry, transport, agriculture, labour employed in the electricity supply industry and consumers of electricity, but so that there shall be at least one member representing each such interest in the Council. (3) The Chairman of the Board shall be ex officio Chairman of the State Electricity Consultative Council. (4) The State Electricity Consultative Council shall meet at least once in every three months. (5) The functions of the State Electricity Consultative Council shall be as follows: (i) To advise the Board and the Generating Company or Generating Companies, if any, operating in the State on major questions of policy and major schemes; (ii) to review the progress and the work of the Board and the Generating Company or Generating Companies, if any, operating in the State from time to time; 657 (iii) To consider such other matters as the Board or the Generating Company or Generating Companies, if any, operating in the State may place before it; and (iv) To consider such matters as the State Government may by rules prescribe. (6) The Board shall place before the State Electricity Consultative Council the annual financial statement and supplementary statement, if any, and shall take into consideration any comments made on such statement in the said Council before submitting the same to the State Government under Section 61." xxx xxx xxx "49. Provision for the sale of electricity by the Board to persons other than licensees. (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2)In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely: (a) The nature of the supply and the purposes for which it is required; (b) The co ordinated development of the Supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) The extension and cheapening of supplies of electricity to sparsely developed areas. 658 (3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors. (4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person." xxx xxx xxx Section 59 prior to 1978 "General principles for Board 's finance. The Board shall not, as far as practicable and after taking credit for any subventions from the State Government under Section 63, carry on its operations under this Act at a loss, and shall adjust its charges accordingly from time to time: Provided that where necessary any amounts due for meeting the operating, maintenance and management expenses of the Board or for the purposes of clauses (i) and (ii) of Section 67 may, to such extent as may be sanctioned by the State Government, be paid out of capital. " Section 59 as amended by Act No. 23 of 1978 "General principles for Board 's finance. (1) The Board shall, after taking credit for any subvention from the State Government under Section 63, carry on its operations under this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus, as the State Government may, from time to time, specify. (2) In specifying the surplus under sub section (1), 659 the State Government shall have due regard to the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave. (a) a reasonable sum to contribute towards the cost of capital works; and (b) where in respect of the Board, a notification has been issued under sub section (1) of Section 12 A, a reasonable sum by way of return on the capital provided by the State Government under sub section (3) of that section and the amount of the loans (if any) converted by the State Government into capital under sub section (1) of Section 66A." Section 59 as further amended by Act No. 16 of 1983 "General principles for Board 's finance. (1) The Board shall, after taking credit for any subvention from the State Government under Section 63, carry on its operations under this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus as is not less than three per cent, or such higher percentage, as the State Government may, by notification in the Official Gazette, specify in this behalf, of the value of the fixed assets of the Board in service at the beginning of such year. Explanation. For the purposes of this sub section, "value of the fixed assets of the Board in service at the beginning of the year" means the original cost of such fixed assets as reduced by the aggregate of the cumulative depreciation in respect of such assets calculated in accordance with the provisions of this Act and consumers ' contribution for service lines. (2) In specifying any higher percentage under sub section (1), the State Government shall have due regard to 660 the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave (a) a reasonable sum to contribute towards the cost of capital works; and (b) where in respect of the Board, a notification has been issued under sub section (1) of Section 12 A, a reasonable sum by way of return on the capital provided by the State Government under sub section (3) of that section and the amount of the loans (if any) converted by the State Government into capital under sub section (1) of Section 66 A." xxx xxx xxx "61. Annual financial statement. (1) In February of each year the Board shall submit to the State Government a statement in the prescribed form of the estimated capital and revenue receipts and expenditure for the ensuing year. (2) The said statement shall include a statement of the salaries of members and officers and other employees of the Board and of such other particulars as may be prescribed. (3) The State Government shall as soon as may be after the receipt of the said statement cause it to be laid on the table of the House, or as the case may be, Houses of the State Legislature; and the said statement shall be open to discussion therein, but shall not be subject to vote. (4) The Board shall take into consideration any comments made on the said statement in the State Legislature. (5) The Board may at any time during the year in respect of which a statement under sub section (1) has been submitted, submit, to the State Government a supplementary statement, and all the provisions of this section shall apply to such statement as they apply to the statement under the said sub section. " xxx xxx xxx 661 "63. Subventions to the Board. The State Government may, with the approval of the State Legislature, from time to time make subventions to the Board for the purposes of this Act on such terms and conditions as the State Government may determine." XXX XXX XXX "65. Power of Board to borrow. (1) The Board may, from time to time, with the previous sanction of the State Government and subject to the provisions of this Act and to such conditions, as may be prescribed in this behalf, borrow any sum required for the purposes of this Act. (2) Rules made by the State Government for the purposes of this section may empower the Board to borrow by the issue of debentures or bonds or otherwise and to make arrangements with bankers, and may apply to the Board with such modifications as may be necessary to be consistent with this Act, the provisions of the (9 of 1914), and the rules made thereunder as if the Board were a local authority. (3) The maximum amount which the Board may at any time have on loan under sub section (1) shall be ten crores of rupees, unless the State Government, with the approval of the State Legislative Assembly, fixes a higher, maximum amount. (4) Debentures or bonds issued by the Board under this section shall be issued, transferred, dealt with and redeemed in such manner as may be prescribed." XXX XX XXX "67. Priority of liabilities of the Board. The Board shall distribute the surplus referred to in sub section (1) of section 59 to the extent available in a particular year in the following order, namely: (i) repayment of principal of any loan raised (including redemption of debentures or bonds issued) under Section 65 which becomes due for payment in the 662 year or which became due for payment in any previous year and has remained unpaid; (ii) repayment of principal of any loan advanced to the Board by the State Government under Section 64 which becomes due for payment in the year or which became due for payment in any previous year and has remained unpaid; (iii) payment for purposes specified in sub section (2) of Section 59 in such manner as the Board may decide. 67 A. Interest on loans advanced by State Government to be paid only after other expenses. Any interest which is payable on loans advanced under Section 64 or deemed to have been advanced under Section 60 to the Board by the State Government and which is charged to revenues in any year may be paid only out of the balance of the revenues, if any, of that year which is left after meeting all the other expenses referred to in sub section (1) of Section 59 and so much of such interest as is not paid in any year by reason of the provisions of this section shall be deemed to be deferred liability and shall be discharged it, accordance with the provisions of this section in the subsequent year or year, as the case may be. Charging of depreciation by Board (1) The Board shall provide each year for depreciation such sum calculated in accordance with such principles as the Central Government may, after consultation with the Authority, by notification in the Official Gazette, lay down from time to time. (2) Omitted (3) The provisions of this section shall apply to the charging of depreciation for the year in which the Electricity (Supply) Amendment Act, 1978, comes into force." XXX XXX XXX "68 A. Directions by the State Government. (1) In 663 the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government. (2) If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, it shall be referred to the Authority whose decision thereon shall be final. ' ' We shall first consider the common arguments advanced by the learned counsel for the appellants in all these matters before taking up some additional arguments advanced in some of these matters. The first argument is that the requirement of consultation with the State Electricity Consultative Council before the revision of tariffs in accordance with Section 16 of the , not having been made, the upward revision of tariffs is invalid on account of non compliance of Section 16 of the Supply Act. It was urged that revision of tariffs being a major question of policy as envisaged by clause (i) of Sub section (5) of Section 16, it is one of the functions of the Consultative Council to advise the Board on this question and without such advice of the Consultative Council, the revision in tariffs could not be made. It was argued that the consumers ' interest is also represented on the Consultative Council as indicated by Sub section (2) of Section 16 providing for its constitution, and therefore, it was necessary to know the viewpoint of the consumers through their representative in the Consultative Council before deciding upon an upward revision of the tariffs for H.T. consumers. Though the Board may not be bound by the advice of the Consultative Council, yet it was urged, such consultation with the Council was a condition precedent. It was suggested that Section 16 must be read with Section 61 of the Supply Act which requires the Board to submit to the State Government the annual financial statement in February each year. It is unnecessary in the present case to decide whether the revision of tariffs falls within the ambit of `major questions of policy ' occurring in Section 16(5)(i) of the Supply Act since the arguments from both sides proceeded on the basis that revision of tariffs for the purpose of this case may be treated as a `question of policy ' which expression finds place also in Section 78 A of the Supply Act. The question, therefore, reduces itself to this: Whether the failure of the Board to place the matter before and seek the advice of the Consultative Council on this question renders the revision of tariffs made by it 664 invalid? The common premise for the purpose of this case that revision of tariffs by the Board is a question of policy may indicate that it would be open to the Consultative Council to advise the Board also on the question of revision of tariffs, and if such advice is given, then the Board must consider the same before taking the final decision. That, however, does not necessarily mean that where no such advice was taken from the Consultative Council or was rendered on account of the absence of any meeting of the Consultative Council during the relevant period, it would necessarily render invalid the revision of tariffs made by the Board. The consequence of non compliance of Section 16 is not provided and the nature of function of the Consultative Council and the force of its advice being at the best only persuasive. it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revision of tariffs invalid. It is also significant that the annual financial statement containing all particulars relating to revision of tariffs is required to be submitted to the State Government in February each year and the State Government is required after receipt of such statement to cause it to be laid on the table of the House or Houses of the State Legislature and the said statement is open to discussion therein. The Board is bound to take into consideration any comments made on the said statement in the State Legislature. Thus, there is ample provision for discussion on the revised tariffs in the State Legislature with the Board being bound to take into consideration any comments made thereon. Shri Shanti Bhushan sought to make a distinction between the provisions of sub section (5) of section 16 pertaining to the functions of the `Consultative Council ' empowering or enabling the Council to advice the Board on `major questions of policy ' and the provision in sub section (6) as to the obligation of the Board to place certain matters before the `Council ' to emphasise his point that sub section (6) does not envisage any obligation on the part of the `Board ' to place before the Council the proposal for revision of tariffs. He sought to distinguish between the functions of the `Council ' to tender advice and the obligation of the Board to specifically seek and invite such advice. Shri Shanti Bhushan said that the very concept of consultation does imply mandatory obligation or duty attaching the pain of nullity to the transaction. Provisions of the Electricity Act 1947 in England contain certain express statutory stipulations as to the scope of the Consultative Council 's functions which do not, in terms, obtain in the Indian statute. For instance, Section 7 of the English Act which contemplates 665 the establishment of `Consultative Council ' specifically provides in Section 7(4) : ``(4) Each of the said Councils shall be charged with the duties (a) of considering any matter affecting the distribution of electricity in the area, including the variation of tariffs and the provision of new or improved services and facilities within the area, . . . (b) xxx xxx xxx (c) of considering any matter affecting the variation of any tariff regulating the charges for the provision of bulk supplies of electricity by the Generating Board for distribution in the area, being a matter which is either the subject of a representation made to them by consumers or other persons requiring supplies of electricity in the area, or which appears to them to be a matter to which consideration ought to be given apart from any such representation, and, where after consultation with the Area Board action appears to them to be requisite as to any such matter, of notifying their conclusions to the Generating Board; (d) xxx xxx xxx (rest of the Section omitted as unnecessary) Section 37(1) of the English statute again provides: ``37 Fixing and variation tariffs (1) The prices to be charged by the Generating Board for the supply of electricity by them to Area Boards shall be in accordance with such tariffs as may be fixed from time to time by the Generating Board after consultation with the Electricity Council; the different tariffs may be fixed for different Area Boards. ' ' (rest of the Section omitted as unnecessary) The pattern of the provisions in the Indian statute is quite different. 666 The `laying procedure ' before the legislature effectively controls the exercise of the delegated power of the Board. We are of the opinion that though advisable yet failure to seek advice of the Consultative Council before revision of the tariffs does not result in invalidation of the revised tariffs. This consequence appears to us to be the logical and reasonable view to take of the requirement of Section 16 along with other provisions of the Supply Act. One of the arguments addressed at length before us relates to Section 78 A of the Supply Act. It was urged on behalf of the appellant that any direction of the State Government relating to tariffs was on a question of policy within the meaning of Sub section (1), and, therefore, the Board is bound by such direction subject only to the adjudication, if any, in accordance with Sub section (2), if any dispute is raised by the Board in that behalf. It was urged that in the present case the Board was, therefore, bound by the directions of the State Government granting the concession to the power intensive consumers since no dispute was raised by the Board in accordance with Sub section (2), of Section 78 A. Learned counsel for the Board did not for the purpose of this case, dispute this position, but contended that all directions of the State Government were obeyed by the Board and, therefore, the question does not really arise. The Board 's contention is that it has acted according to the directions of the State Government and, therefore, the question of non compliance with any such directions giving rise to the argument based on Section 78 A does not arise. For consideration of the main controversy, it is advisable at this stage to deal with Sections 49 and 59 of the Supply Act. Section 49 makes provision for the sale of electricity by the Board to persons other than licensees. Sub section (1) starts with the words `Subject to the provisions of this Act and of regulations, if any, made in this behalf '. This means that the provision made therein is subject to other provisions of the Supply Act and the regulations. It then proceeds to say that the Board may supply electricity to any person not being a licensee upon `such terms and conditions as the Board thinks fit ' and may for the purposes of such supply supply frame `uniform tariffs '. Sub section (2) then enumerates several factors which the Board is required to `have regard to ' in fixing the uniform tariffs. The meaning of the expression `have regard to ' is well settled. It means that the factors specifically enumerated shall be taken into account while performing the exercise which in this case is the fixation of uniform tariffs. Ordinarily, therefore, uniform tariffs are required to be framed by the Board for making such supply. Sub section (3) then proceeds to 667 say that nothing in the earlier enacted provisions shall derogate from the power of the Board, `if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person ', having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and `any other relevant factors '. Sub section (4) then says that in fixing the tariffs and terms and conditions for the supply of electricity, `the Board shall not show undue preference to any person '. In other words, Sub section (4) provides against any unreasonable discrimination in fixing the tariffs and terms and conditions for supply of electricity. The power of fixation of tariffs in the Board is provided in this manner by Section 49 of the Supply Act which requires the fixation of uniform tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors, providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixing the tariffs. The next important provision is Section 59 of the Supply Act. For appreciating the argument based on Section 59, it is necessary to bear in mind the distinction in Section 59 as it stood prior to 1978, as amended by Act No. 23 of 1978 and finally as amended by Act No. 16 of 1983, quoted earlier. Prior to 1978, Section 59 required the Board, as far as practicable and after taking credit for any subventions from the State Government under Section 63, not to carry on its operations under this ACt at a loss and for this purpose, it was empowered to adjust its charges accordingly from time to time. Under the provision as it then existed, the main thrust was to avoid the Board incurring any loss and for that purpose, it could adjust its charges accordingly from time to time. Section 59 as amended by Act No. 23 of 1978 required the Board, after taking credit for any subventions from the State Government under Section 63, to carry on its operations under this Act and to adjust its tariffs so as to ensure that the total revenues in any year meeting all expenses properly chargeable to revenue including those specified, left such surplus as the State Government specified from time to time. The shift was, therefore, towards having a surplus as the State Government specified from time to time. Sub section (2) then provided guidelines for the State Government in specifying the surplus under Sub section (1) and mentioned the factors to which regard was to be had for this purpose. The effect of the amendment made in Section 59 by Act No. 16 of 1983, which came into effect from 1.4.1985, was to provide for a 668 minimum surplus of three per cent or such higher percentage as the State Government is to specify in this behalf. In other words, prior to 1978 amendment, the requirement from the Board was to avoid incurring any loss, after the 1978 amendment the shift was towards ensuring a surplus as specified by the State Government, and after the 1983 amendment the Board is required to ensure a surplus of at least three per cent unless the State Government specifies a higher surplus. This is the scheme of Section 59 and it is Section 59 as amended by 1978 Act but prior to its amendment by the 1983 Act, with which we are concerned in the present case. It cannot be doubted that Section 59 requiring the Board to adjust its tariffs for the purpose of Board 's finance is to be read along with Section 49 which provides specifically for fixation of tariffs and the manner in which that exercise has to be performed while dealing with any question relating to the revision of tariffs. It was argued on behalf of the appellants that Section 59 as amended by the 1978 Act did not empower the Board to adjust its tariffs to generate any surplus unless the surplus had been specified by the State Government and when specified, the surplus generated could not exceed the specified surplus. In other words, it was argued that when the State Government did not specify any surplus, the Board had no power to adjust its tariffs in a manner which resulted in generating any surplus. We are unable to construe Section 59 in this manner. The general principle for the Board 's finance indicated by Section 59 is that prior to the 1978 amendment, tariffs could be adjusted to avoid any loss, but as a result of the shift made by the 1978 amendment, the power could be exercised to generate a surplus and when the State Government specified the amount of surplus then the Board was bound to adjust the tariffs to ensure generation of the specified surplus. However, generation of a reasonable surplus in any year of account without specification of the surplus amount by the State Government was not contra indicated in the provision inasmuch as the duty to generate a surplus was implicit with the added obligation to ensure generating surplus to the extent specified by the State Government when it was so specified by the State Government. It cannot be accepted as a reasonable view that in the absence of specification of the surplus by the State Government, the Board could not adjust its tariffs to generate even a reasonable surplus in any year of account. The effect of 1983 amendment, which came into force from 1.4.1985, is that the Board is entitled to adjust its tariffs to ensure generating a surplus of not less than three per cent even without such specification 669 by the State Government and when the State Government specifies a higher surplus, then the Board must ensure generating the higher specified surplus. This is, of course, subject to the accepted norm of the Board acting in consonance with its public utility character and not entirely with a profit motive like that of a private trader. The pre 1978 concept of the Board 's functioning to merely avoid any loss is replaced by the shift after 1978 amendment towards the positive approach of requiring a surplus to be generated, the quantum of surplus being specified by the State Government, with a minimum of three per cent surplus in the absence of the specification by the Government of a higher surplus, after the 1983 amendment. This construction made of Section 59, as it stood at different times in Govinda Prabhu 's case (supra) indicated earlier, cannot be faulted in any manner. In Govinda Prabhu 's case (supra) the same argument which is advanced before us was expressly rejected. We are of the same view. It is , therefore, obvious that mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of Section 59 of the Supply Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character. In other words, if the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond it authority. The Board in the present case has shown that the surplus resulting from upward revision of tariffs applicable to the H.T. consumers made in the present case, was for the purpose of better discharge of its other obligations under the Supply Act and in effect, it has merely resulted in a gradual withdrawal of the concessional tariffs provided earlier to the power intensive consumers which do not in its opinion require continuance of the concessional tariffs any longer. In fact, no material has been placed before us to indicate that this assertion of the Board is incorrect or there is any reasonable basis to hold that the upward revision of tariffs applicable to H.T. consumers is merely with a desire to earn more profits like a private trader and not to generate surplus for utilisation of the funds to discharge other obligations of the Board towards more needy consumers, such as agriculturists or to meet the need of expansion of the supply to deserving areas. The argument with reference to statistics that the upward revision of tariffs for the H.T. consumers results in earning amounts in excess of the cost of generation does not, therefore, merit a more detailed consideration. 670 It was also contended on behalf of the appellants that the generation of electricity by the Andhra Pradesh Electricity Board is both thermal as well as hydro, the quantity from each source being nearly equal and the entire electricity generated is fed into a common grid, from which is supplied to all categories of consumers. On this basis, it was argued that the rise in the fuel cost which led to the fuel cost adjustment applicable only to the H.T. consumers was unreasonable and discriminatory since the burden of rise in fuel cost was placed only on the H.T. consumers. In our opinion, this argument has no merit. The H.T. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material. This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers who are much smaller consumers. There is also a rational nexus of this classification with the object sought to be achieved. Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification. Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariff for quite some time and have also a better capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity. Shri Sibal submitted that the prescription and imposition of disparate tariffs, unrelated to the production cost, on a particular section of consumers would be a case of misplaced philanthrophy on the part of the statutory authority. The Board, Shri Sibal says, cannot use its powers in order to confer "social or economic benefits on particular sections of the community" at the cost of the other sections. Shri Sibal contended that while it may be permissible for the Board to supply electricity to the weaker and under privileged sections of the society at prices which may even be lower than the costs of generation and distribution, however subsidies for such social objectives must come from subventions from Government and should not be made good by unjustifiable higher charges on other sections of electricity consumers. Shri Sibal read to us the following passage in Wade 's Administrative Law (6th Edn.): "Statutory authorities have sometimes made use of their wide general powers in order to confer social or economic benefits on particular sections of the community. In several such cases they have gone beyond the true limits of their powers. The policy of the courts is in general hostile to the 671 use of public funds, such as rates, for new social experiments. Local authorities are subject to a fiduciary duty to use their revenues with due restraint. " (at p. 424) After referring to decided cases on the point, the learned author says: ". The idea that runs through these cases is that public money must be administered with responsibility and without extravagance. This appears to mean it is not available for charity. The generosity of local authorities, in particular, is restrained by the doctrine that they owe a fiduciary duty to their ratepayers analogous to that of trustees. This means that, in deciding upon their expenditure, they must hold a balance fairly between the recipients of the benefit and the ratepayers who have to bear the cost." (at p.426) Shri Sibal contends that in the case of class of consumers respecting which the tariff is enhanced, the enhancement is not justified on the ground of making good the loss on supply to others at cheaper rates. The increase is attributable to higher costs of generation of thermal power. It is not unreasonable to take the view that the thermal power has become costlier on account of the increase in fuel cost and could nationally be allocated to the consumption by H.T. and power intensive consumers, and, therefore, the fuel cost adjustment is made applicable to them alone. In our opinion, the argument on behalf of the Board in this behalf is not unreasonable. It was argued on behalf of the appellants with considerable force that the upward hike of tariff for the H.T. consumers including power intensive was arbitrary and discriminatory inasmuch as it was not related to the cost of generation and was based on irrelevant factors. It was argued that the L.T. tariffs and agricultural tariffs were relieved of this burden and the liabilities of the Board even of a capital nature were taken into account for increasing the tariff applicable to power intensive units. The contention is that these factors are irrelevant and do not permit exercise of the power to increase the tariffs. This arguments was considered at length in Govinda Prabhu 's case before it was 672 negatived. We agree with the reasons given in that decision to repel this contention. In Govinda Prabhu, it was pointed out that the Court would not strike down the revision of tariff as arbitrary unless the resulting surplus reaches such a height as to lead to the inevitable decision that the Board has shed its public utility character and is obsessed by the profit motive of private entrepreneur in order to generate a surplus which is extravagant. The limited power of judicial review in the field of price fixation was also indicated. This limited scope of judicial review in striking down revision of tariffs resulting in generation of surplus applied in Govinda Prabhu cannot be faulted in view of the long line of decisions of this Court on the point and reiteration of the same principle by a Constitution Bench in Shri Sitaram Sugar Company Limited and Another. vs Union of India and Others, ; The surplus generated by the Board as a result of revision of tariffs during the relevant period cannot be called extravagant by any standard to render it arbitrary permitting the striking down of the revision of tariffs on the ground of arbitrariness. We have already indicated that it is not also discriminatory as was the view taken in Govinda Prabhu. It has been pointed out on behalf of the Board that the Board 's action is based on the opinion of Rajadhyaksha Committee 's Report submitted in 1980 and the formula of fuel cost adjustment is on a scientific basis linked to the increase in the fuel cost. This is a possible view to take and, therefore, the revision of tariffs by the Board does not fall within the available scope of judicial review. One of the contentions of Shri G. Ramaswamy, on behalf of the appellant was that the G.Os. issued in respect of the power intensive units amounted to a special tariff for them resulting in their exclusion from the category of H.T. consumers and, therefore, the clause relating to fuel cost adjustment inserted by amendment to the H.T. tariffs did not apply to the power intensive consumers without insertion of a similar clause in the special tariff applicable to them. It was urged that for this reason the power intensive consumers could not be governed by the clause of fuel cost adjustment made applicable to H.T. tariffs. Shri Ramaswamy advanced elaborate arguments to distinguish "terms and conditions of supply" from "terms and conditions of tariff". According to the learned counsel, B.P. Ms. No. 778 dated 18.10.1975 excluded the power intensive units from applicability of the Notification date 17.9.1975 to it. It is unnecessary to repeat the history of the H.T. tariffs by which power intensive tariffs were separated. It would be sufficient in this context to quote the relevant portion of Memo. dated 18.11.1975 which, in our opinion, negatives this argument. It was provided in this Memo. , inter alia as under: 673 "With regard to other charges, such as Miscellaneous charges, terms and conditions of supply, not mentioned specifically herein, those applicable to normal H.T. consumers will apply". The expression "other charges" is wide enough to include within its ambit the fuel cost adjustment admittedly made applicable to all H. T.consumers as a result of the escalation in fuel prices. The method adopted was to prescribe a formula linking it to the increase in fuel cost so that it was not necessary to revise the tariffs each time as a result of increase in fuel prices, the same being taken care of by the relevant factors in the formula for fuel cost adjustment. It was in this context that Shri Ramaswamy contended that the `terms and conditions of supply ' are different from the `terms and conditions of tariff ' and fuel cost adjustment being a term or condition of tariff and not a term or condition of supply, the above provision in the Memo dated 18.11.1975 did not have the effect of applying the term relating to fuel cost adjustment to the power intensive tariff. It is sufficient to state that the Memo dated 18.11.1975 did not merely extend the non specified `terms and conditions of supply ' applicable to normal H.T. consumers to the power intensive consumers but also "other charges" which were merely illustrated by the words following, namely, "such as Misc. charges, terms and conditions of supply not mentioned herein". In other words, this express provision in the Memo, dated 18.11.1975 clearly provided that except for the provisions specifically made for power intensive consumers, in respect of all other provisions the power intensive consumers were to be governed by the provisions, by whatever name called, applicable to the normal H.T. consumers. A further discussion of this distinction sought to be made by Shri G. Ramaswamy of the `terms and conditions of supply ' and `terms and conditions of tariff ' is, therefore, unnecessary. Shri Ramaswamy also urged that there was no communication to the appellant of the applicability of the term relating to fuel cost adjustment during the relevant period which also relieves the power intensive consumers of this liability. On the view we have already taken about the applicability of the term relating to fuel cost adjustment to the power intensive tariffs this point is not material. However, it has also been shown that in the bills issued to the power intensive consumers the same was specifically indicated. If any communication was needed, this indication in the bills issued to the power intensive consumers satisfied that requirement. We are, therefore, unable to accept the contention that the term relating to fuel cost adjustment made applicable to H.T. consumers 674 had no application to the power intensive consumers during the relevant period. Shri Kapil Sibal appearing on behalf of some of the appellants confined the challenge to the mode of exercise of power by the Board. He laid great emphasis on the effect of absence of consultation with the Consultative Committee under Section 16 of the . He also claimed that the quantum of increase could at best be justified only to the extent of one half and no more. Shri Sibal claimed that certain extraneous factors had been taken into account for the purpose of revising the tariffs. The irrelevant considerations, according to Shri Sibal, taken into account are the capital sums owed by the Board and the overall losses incurred by the Board which according to him is impermissible under Section 59 of the . He also argued that the upward revision of H.T. tariffs is intended to subsidise another class of consumers which is not permissible. His arguments are already covered by our earlier discussion. Similarly, the arguments of Shri K.N. Bhat, for the appellant in C.A. No. 5379 of 1985 to the same effect, need to further discussion. The details of the several factors taken into account for the revision in tariffs, to the limited extent they can be gone into within the permissible scope of judicial review in such a matter also do not require any further consideration. Shri Anil Divan, on behalf of the appellant in C.A No. 2569 of 1985, submitted that the increase in tariffs for the power intensive unit in his case was 47 per cent as against 15 per cent for ordinary H.T. consumers. According to him, even ignoring the FCA, the increase is 40 per cent from 32 paise to 45 paise. This is disputed on behalf of the Board. In our opinion, it is unnecessary to go into this question any further for the reasons already given by us. Shri Divan also contended that the Electricity Board 's stand has been conflicting at different stages. In our opinion, any detailed decision on this aspect also is unnecessary on the view taken by us about the Board 's power to revise tariffs, no case for striking down the same as arbitrary and discriminatory having been made out. In view of the earlier decision of this Court in Govinda Prabhu, with the conclusion as well as reasoning of which we respectfully concur and reiteration of the Court 's limited power of judicial review in Shri Sitaram Sugar Company Limited recently decided by a Constitution Bench, we do not find any reason to accept any of the arguments advanced on behalf of the appellants by their learned counsel. In fact, the decision in Govinda Prabhu con 675 cludes the controversy against the appellants and some detailed discussion by us has become necessary only on account of an attempt on behalf of the appellants to distinguish the decision and the emphasis placed on the requirements of Sections 16, 49 and 59 of the . We find no merit in these appeals/special leave petition and the same are dismissed. All interim orders in favour of the appellants/petitioner stand vacated. No costs. R.P. Appeals dismissed.

The appellants are H.T. electricity consumers of various categories in the State of Andhra Pradesh. The respondent State Electricity Board (the Board), by its orders B.P. Ms. No. 1014 dated 13.12.1983 revised upwards the tariffs for various categories of consumers including H.T. categories 1 (Industrial) and II (Non Industrial); and by Memo No. DE/COML/IV/2250/83/I of the same date it revised upwards the electricity tariffs for highly power intensive industries falling under 644 H.T. Category III. Tariffs consisted of three parts. The said three categories of H.T. consumers fell in Part A. H.T. consumers availing supply of electricity for irrigation and agricultural purposes were included in part B. provided for miscellaneous and general charges. Tariffs were not revised for consumers availing H.T. supply for purposes of irrigation and agriculture falling in part B or L.T. supply for domestic cottage industries, public lighting and small poultry farms units. Besides the energy charges, the H.T. consumers included in Part A were also required to pay at different rates effective from 1.9.1982 an additional charge levied as `fuel adjustment charges '; and some amount as `voltage surcharged ' in accordance with the terms of the agreement entered into by the individual consumers with the Board. The writ petitions filed by the appellants challenging the said upward revision of the Electricity Tariffs were dismissed by the High Court upholding the revision of tariffs made by the respondent Board. Aggrieved the appellants preferred appeals by special leave to this Court. It was contended on behalf of the appellants that: (1) the upward revision of tariffs by the State Electricity Board was invalid being made without prior consultation with the State Electricity Consultative Council as envisaged by section 16 of the ; (2) without specification of any surplus by the State Government the Board had no power to adjust its tariffs in a manner which resulted in generating any surplus; (3) there is discrimination in recovery of the entire full cost adjustment from the H.T. consumers alone; (4) the upward hike of the tariffs for the H.T. consumers including power intensive consumers was arbitrary and discriminatory inasmuch as it was not related to the cost of generation and was based on irrelevant factors; and (5) and the Board had acted with profit motive losing its public utility character. Learned counsel representing the power intensive consumers also contended that in the absence of a clause relating to fuel cost adjustment in the G.Os. issued in respect of the power intensive units, they could not be governed by the clause of fuel cost adjustment made applicable to the H.T.tariffs. Dismissing the appeals, this Court, HELD: 1.1 The power of fixation of tariffs in the Board is provided by section 49 of this Supply Act which requires the fixation of uniform 645 tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixing the tariffs. section 59, requiring the Board to adjust the tariffs for the purpose of its finance is to be read along with section 49. [667B C; 668B C] 1.2. The common premise for the purpose of the instant case that the revision of tariffs by the State Electricity Board is a question of policy may indicate that it would be open to the Consultative Council to advise the Board also on the question of revision of tariffs, and if such advice is given, then the Board must consider the same before taking the final decision. That, however, does not necessarily mean that where no such advice was taken from the Consultative Council or was rendered on account of the absence of any meeting during the relevant period, it would necessarily render invalid the revision of tariffs made by the Board. [664A B] Though it is advisable to seek advice of the Consultative Council before revision of the tariffs yet failure to do so does not result in invalidation of the revised tariffs. This consequence appears to be the logical and reasonable view to take of the requirement of section 16 alongwith other provisions of the Act. [666A B] 1.3 The consequence of non compliance of section 16 is not provided, and the nature of function of the Consultative Council and the force of its advice being at the best only persuasive, it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revisions of tariffs invalid. [664B C] 1.4 It is also significant that the annual financial statement containing all particulars relating to revision of tariffs is required to be submitted to the State Government in February each year and the State Government is required after receipt of such statement to cause it to be laid on the table of the House or Houses of the State Legislature and the said statement is open to discussion therein. The Board is bound to take into consideration any comments made on the said statement in the State Legislature. The 'laying procedure ' before the legislature effectively controls the exercise of the delegated power of the Board. Thus there is ample provision for discussion on the revised tariffs in the State Legislature with the Board being bound to take into consideration any comments made thereon. [664C D; 666A] 646 Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu & Bros. & Ors. , ; , relied on. 2.1 Mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of section 59 of the Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character. If the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond its authority. [669C E] 2.2 The general principle for the Boards finance indicated by section 59 is that prior to the 1978 amendment, tariffs could be adjusted to avoid any loss, but as a result of the shift made by the 1978 amendment the power could be exercised to generate a surplus and when the State Government specified the amount of surplus then the Board was bound to adjust the tariffs to ensure generation of the specified surplus. However, generation of a reasonable surplus in any year of account without specification of the surplus amount by the State Government was not contra indicated in the provision inasmuch as the duty to generate a surplus was implicit with the added obligation to ensure generating surplus to the extent specified by the State Government when it was so specified by it. It cannot be accepted as a reasonable view that in the absence of specification of the surplus by the State Government, the Board could not adjust its tariffs to generate even a reasonable surplus in any year of account. [668E G] 2.3 In the instant case the Board showed that the surplus resulting from upward revision of tariffs applicable to the H.T. consumers was for the purpose of better discharge of its other obligations under the Supply Act and in effect the same has merely resulted in a gradual withdrawal of the concessional tariffs provided earlier to the power intensive consumers which did not in its opinion require continuance of the concessional tariffs any longer. It was not proved that this assertion of the Board was incorrect or there was any reasonable basis to hold that the upward revision of tariffs applicable to H.T. consumers was merely with a desire to earn more profits like a private trader and not to generate surplus for utiliasation of the funds to discharge other obligations of the Board towards more needy consumers, such as agriculturists, or to meet the needs of expansion of the supply to deserving areas. [669E G] 647 3.1 The H.T. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material. This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers who are much smaller consumers. There is also a rational nexus of this classification with the object sought to be achieved. Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification. Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariffs, for quite some time and have also a better capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity. [670B C] 3.2 It is not unreasonable to take the view that the thermal power has become costlier on account of the increase in fuel cost and could notionally be allocated to the consumption by H.T. and power intensive consumers and, therefore, the fuel cost adjustment is made applicable to them alone. [671E F] 4.1 The Court would not strike down the revision of tariffs as arbitrary unless the resulting surplus reaches such a height as to lead to the inevitable decision that the Board has shed its public utility character and is obsessed by the profit motive of private entrepreneur in order to generate a surplus which is extravagant. [672A B] 4.2 The surplus generated by the Board as a result of revision of tariffs during the relevant period cannot be called extravagant by any standard to render it arbitrary permitting the striking down of the revision of tariffs on the ground of arbitrariness nor is it discriminatory. It was pointed out on behalf of the Board that its action was based on the opinion of Rajadhyaksha Committee 's report submitted in 1980 and the formula of fuel cost adjustment was on a scientific basis linked to the increase in the fuel cost. This is a possible view to take and, therefore, the revision of tariffs by the Board does not fall within the available scope of judicial review. [672C D] Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu and Bros. & Ors., ; , relied on. Shri Sitaram Sugar Company Limited & Anr. vs Union of India & Ors. , ; , followed. 648 5. It cannot be said that the term relating to fuel cost adjustment had no application to the power intensive consumers during the relevant period. The Memo dated 18.11.1975 did not merely extend the non specified 'terms and conditions of supply ' applicable to normal H.T. consumers to the power intensive consumers but also "other charges" which were merely illustrated by the words, "such as Misc. charges, terms and conditions of supply not mention herein". This express provision in the said Memo clearly provided that except for the provision specifically made for power intensive consumers, in respect of all other provisions the power intensive consumers were to be governed by the provisions, by whatever name called, applicable to the normal H.T. consumers. However in the bills issued to the power intensive consumers the terms relating to fuel cost adjustment was specifically indicated. [673D H; 674A] Nav Bharat Ferro Alloys Ltd. vs A.P.S.E. Board Hyderabad, AIR 1985 A.P. 299, approved.

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N: Criminal Appeal No. 294 of 1991. 422 From the Judgment and Order dated 10.4.1990 of the Punjab & Haryana High Court in Crl. No. 3635 of 1989. R.S. Suri for the Appellant. Brijender Chahar and Ashok Mathur for the Respondent. The following Order of the Court was delivered We have heard the learned counsel for the parties. The delay in filing the special leave petition is condoned and leave is granted. The respondent who was undergoing sentence of life imprisonment, had served a period of eleven and an half years when he made an application for pre mature release. The Punjab and Haryana High Court by the impugned order issued a direction to release the respondent on bail, observing further that if his mercy petition, which was pending, is dismissed, he will have to surrender. The High Court has not taken into consideration the provisions of Section 433A of the Criminal Procedure Code while passing the order. A week back we have allowed a criminal appeal against a judgment of the Punjab & Haryana High Court in another case directing pre mature release on account of good conduct of the respondent in jail serving a life sentence although he had actually been in jail for a period of nine years only. We set aside the order as the provisions under Section 433A had not been taken into consideration, and remitted the matter to the High Court for reconsideration in accordance with the provisions of Jail Manual. The learned counsel for the respondent in the present appeal attempted to distinguish the case on the ground that here the respondent has been only enlarged on bail and has not been finally released. We do not think that Section 433A, which is quoted below, is inapplicable in the present case: "Restriction on powers of remission or commutation in certain cases Notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law, or where a sentence of death imposed on a person has been commuted under Section 433 into one of imprisonment for life, such person shall not be released from prison unless he had 423 served at least fourteen years of imprisonment." (emphasis supplied) The respondent in his writ petition before the High Court relied upon three instructions (Annexures P 1 to P 3) in support of his claim that he is entitled to pre mature release. Earlier the High Court had directed the mercy petition, pending before the Governor, to be decided within a period of three months. This was not done and a reply was filed on behalf of the State explaining the circumstances under which the matter remained pending. In this background the impugned order was passed. The judicial proceeding dealing with the conviction and sentence of the accused had been earlier concluded, and the order of his release on bail was passed while finally disposing of the writ petition alleging delay in disposal of the mercy petition. In other words, no case in now pending before the Court, and it cannot be suggested that the order of the respondent 's release on bail has been passed as an interim measure pending the decision of a case before the Court. In such a situation the provisions of Section 433A are attracted. The words in the Section quoted above and underlined by us are wide in their application and cannot be restricted as suggested by the learned counsel for the respondent. We, therefore, allow the appeal, set aside the impugned judgment and remit the case to the High Court for reconsideration of the writ petition confined to its limited scope in accordance with law. The respondent shall surrender without delay and only thereafter he shall be allowed to press his application before the High Court. N.P.V. Appeal allowed.

On the application for pre mature release, made by the respondent, who was undergoing sentence of life imprisonment and had served a period of eleven and a half years the High Court directed that the respondent 's mercy petition pending before the Governor, should be decided within three months. Since this was not done, the High Court directed his release on bail, observing that if his mercy petition was dismissed he would have to surrender. Against this decision the State filed an appeal before this Court. Allowing the appeal, this Court, HELD: The High Court has not taken into consideration the provisions of Section 433A of the Criminal Procedure Code, 1973 while passing the order for the respondent 's release on bail. The judicial proceeding dealing with the conviction and sentence of the accused had been earlier concluded, and the order was passed while finally disposing of the writ petition alleging delay in disposal of the mercy petition. Thus, no case is now pending before the court. The order for the respondent 's release on bail has not therefore, been passed as an interim measure pending the decision of a case before the Court. In such a situation the provisions of Section 433A are attracted. The words "such person shall not be released from prison" are wide in their application and cannot be restricted only to case where the person has been released finally. The judgment in question is set aside and the case remitted to the High Court for reconsideration of writ petition confined to its limited scope.

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eference No. 1 of 1951. The circumstances which led to this Special Reference by the President and the questions referred appear from the full text of the reference dated 7th January, 1951, which is reproduced below : "WHEREAS in the year 1912 the Governor General of India in Council acting in his legislative capacity enacted the , section 7 of which conferred power on the Central Government by notification to extend to the Province of Delhi (that is to say, the present State of Delhi) or any part thereof, with such restrictions and modifications as it thought fit, any enactment which wag in force in any part of British India at the date of such notification; "AND WHEREAS in 1947 the Dominion Legislature enacted the Ajmer Merwara (Extension of Laws) Act, 1947, section 2 of which conferred power on the Central Government by notifica tion to extend to the Province of Ajmer Merwara (that is to say, the present State of Ajmer), with such restrictions and modifications as it thought fit, any enactment which was in force in any other Province at the date of such notifica tion; 753 "AND WHEREAS, by virtue of the powers conferred by the said sections of the said Acts, notifications were issued by the Central Government from time to time extending a number of Acts in force in the Governors ' Provinces to the Province of Delhi and the Province of Ajmer Merwara, sometimes with, and sometimes without, restrictions and modifications, and the Acts so extended and the orders,rules, by laws and other instruments issued under such Acts were and are re garded as valid law in force in the Province (now State) of Delhi and in the Province of Ajmer Merwara (now State of Ajmer), as the case may be, and rights and privileges have been created, obligations and liabilities have been in curred and penalties, forfeitures and punishments have been incurred or imposed under such Acts and instruments; "AND WHEREAS Parliament with the object inter alia of making a uniform provision for extension of laws with regard to all Part C States except Coorg and the Andaman and Nico bar Islands enacted the Part C States (Laws) Act, 1950, section 2, of which confers power on the Central Government by notification to extend to any Part C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification and also confers the power on the Central Government to make provision in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State; "AND WHEREAS section 4 of the Part C States (Laws) Act, 1950 has repealed section 7 of the , and the Ajmer Merwara (Extension of Laws)Act, 1947, but the effect of the provisos to the said section is, notwithstand ing the said repeals, to continue, inter alia in force the Acts extended to the Provinces of Delhi and Ajmer Merwara or the States of Delhi and Ajmer under the provisions repealed by the said section; "AND WHEREAS notifications have been issued by the Central (Government from time to time under section 9, of the States (Laws) Act, 1950, extending Acts in force in Part A States to various Part C States sometimes with, and sometimes without, restrictions and modifications; "AND WHEREAS the Federal Court of India in Jatindra Nath Gupta vs Province of Bihar(1) held by a majority that (1)[1949] F.C.R. 595. 754 the proviso to sub section (3) of section 1 of the Bihar Maintenance of Public Order Act, 1947, was ultra vires of the Bihar Legislature inter alia on the ground that the said proviso conferred power on the Provincial Government to modify an Act of the Provincial Legislature and thus amounted to a delegation of legislative power; "AND WHEREAS, as a result of the said decision of the Federal Court, doubts have arisen regarding the validity of Section 7 of the , Section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, and Section 2 of the Part C States (Laws) Act, 1950, and of the Acts extended to the Provinces of Delhi and Ajmer Merwara and various Part C States under the said sections respectively, and of the orders and other instruments issued under the Acts so extended: "AND WHEREAS the validity of Section 7 of the , and section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, and of the Acts extended by virtue of the powers conferred by the said sections has been challenged in some cases pending at present before the Punjab High Court, the Court of the Judicial Commissioner of Ajmer, and the District Court and the Subordinate Courts in Delhi; "AND WHEREAS, in view of what is hereinbefore stated, it appears to me that the following questions of law have. arisen and are of such nature and of such public importance that it is expedient that the opinion of the Supreme Court of India should be obtained thereon; Now, THEREFORE, in exercise of the powers conferred upon me by clause (1) of article 143 of the Constitution, I, Rajendra Prasad, President of India, hereby refer the said questions to the Supreme Court of India for consideration and report thereon, namely : "(1) Was section 7 of the , or any of the provisions thereof and in what particular or particu lars or to what extent ultra vires the Legislature which passed the said Act ? "(2) Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the Legislature which passed the said Act ? "(3) Is section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the Parliament?" 755 Arguments were heard on the 9th, 10th, 11th, 12th, 16th, 17th, 18th, 19th, 20th, 23rd, 24th, 25th, 26th, 27th and 30th days of April, 1951. M.C. Setalvad, Attorney General for India, (G. N. Joshi, with him) for the President of India. C.K. Daphtary, Advocate General of Bombay (G. N. Joshi, with him) for the State of Bombay. (R. Ganapathy lyer, for the State of Madras. M.L. Saxena,for the State of Uttar Pradesh. A.R. Somanatha lyer, Advocate General of Mysore (R. Ganapathy lyer, with him) for the State of Mysore. P.S. Safeer, for Captain Deep Chand. N.S. Bindra, for Pt. Amarnath Bharadwaj. M.M. Gharakhan, for the Ajmer Electric Supply Co. Ltd. N.C. Chatterjee, (G. C. Mathur, Basant Chandra Ghose, and Tilak Raj Bhasin, with him) for the Maidens Hotel. Jessaram Banasingh, for Runglal Nasirabad. Jyoti Sarup Gupta and K.B. Asthana, for the Municipal Committee, Ajmer. Din Dayal Kapur, for Shri Munshilal and two others. May 23. The following judgments were delivered. KANIA C.J. This is a reference made by the President of India under article 143 of the Constitution asking the Court 's opinion on the three questions submitted for its consideration and report. The three questions are as fol lows: "(1) Was section 7 of the , or any of the provisions thereof and in what particular or particu lars or to what exent ultra vires the Legislature which passed the said Act ?" Section 7 of the , mentioned in question, runs as follows : 756 "The Provincial Government may, by notification in the official gazette, extend with such restrictions and modifi cations as it thinks fit to the Province of Delhi or any part thereof, any enactment which is in force in any part of British India at the date of such notification. " "(2) Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particu lar or particulars or to what extent ultra vires the Legis lature which passed the said Act ?" Section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, runs as follows: ' 'Extension of Enactments to Ajmer Merwara. The Cen tral Government may, by notification in the official ga zette, extend to the Province of Ajmer Merwara with such restrictions and modifications as it thinks fit any enact ment which is in force in any other Province at the date of such notification. " "(3) Is section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof and in what particu lar or particulars or to what extent ultra vires the Parlia ment ?" Section 2 of the Part C States (Laws) Act, 1950, runs as follows : "Power to extend enactments to certain Part C States. The Central Government may, by notification in the Official Gazette, extend to any Part C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amend ment. of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State. " The three sections referred to in the three questions are all in respect of what is described as the delegation of. legislative power and the three particular Acts are selected to raise the question in respect of the three main stages in the constitutional development of India. 757 The first covers the legislative powers of the Indian Legis lature during the period prior to the Government of India Act, 1915. The second is in respect of its legislative power after the Government of India Act, 1935, as amended by the Indian Independence Act of 1947. 'The last is in respect of the power of the Indian Parliament under the present Consti tution of 1950. It is therefore necessary to have an idea of the legislative powers of the Indian Legislature during those three periods. Without going into unnecessary details, it will not be out of place to know the historical back ground. The East India Company first started its operations as a trading company in India and gradually acquired politi cal influence. The Crown in England became the legislative authority in respect of areas which had come under the control of the East India Company. The Indian Councils Act of 1861, section 22, gave power to the Governor General in Council, with additional nominated members, to make laws. The constitutional position therefore was that the British Parliament was the sovereign body which passed the Indian Councils Act. It gave the Governor General in Council in his legislative capacity powers to make laws over the territo ries in India under the governance of the Crown. Under the English Constitution the British Parliament with its legis lative authority in the King and the two Houses of Parlia ment is supreme and its sovereignty cannot be challenged anywhere. It has no written Charter to define or limit its power and authority. Its powers are a result of convention but are now recognised as completely absolute, uncontrolled and unfettered. Sir Cecil Cart in his book on English Admin istrative Law at page 15 observes: "A more basic difference between the Constitutions of the United States and Britain is the notorious fact that Britain has no written Constitu tion, no fundamental statute which serves as a touchstone for all other legislation and which cannot be altered save by. some specially solemn and dilatory process. In Britain the King in Parliament is all powerful. There is no Act which cannot be passed and will not be valid within 758 the ordinary limits of judicial interpretation . . Even Magna Carts is not inviolate . . The efficient secret of the English Constitution was the close union and nearly complete fusion of the executive and legislative powers. In other words by the system of Cabinet Government the executive authority is entrusted to a committee consisting of members of the dominant party in the legisla ture and in the country." In Halsbury 's Laws of England, Vol. VI, Article 429, it is further stated that it is for this reason that there is no law which the King in Parliament cannot make or unmake whether relating to the Constitution itself or otherwise; there is no necessity as in States whose Constitutions are drawn up in a fixed and rigid form and contained in written documents for the existence of a judicial body to determine whether any particular legislative Act is within the consti tutional powers of Parliament or not; and laws affecting the Constitution itself may be enacted with the same ease and subject to the same procedure as ordinary laws. In England, when occasions of conferment of powers on subordinate bodies became frequent and assumed larger scope, questions about the advisability of that procedure were raised and a Commit tee on the Minister 's Powers, what is generally described as the Donoughmore Committee was appointed. The Committee recommended that certain cautions should be observed by the Parliament in the matter of confermen of such powers on subordinate bodies. This is natural because of the well recognised doctrine of the English Constitution that Parlia ment is supreme and absolute and no legislation can control its powers. Such a legislative body which is supreme has thus cer tain principal characteristics. It is improper to use the word "constitutional" in respect of laws passed by such a sovereign body. The question of constitutionality can arise only if there is some touchstone by which the question could be decided. In respect of a sovereign body like the British Parliament there is no 759 touchstone. They are all laws and there is no distinction in the laws passed by the Parliament as constitutional or other laws. Such laws are changed by the same body with the same ease as any other law. What law follows from this is that no court or authority has any right to pronounce that any Act of Parliament is unconstitutional. In Dicey 's Law of the Constitution, 9th Edition, in considering the Constitution of France,it was observed that the supreme legislative power under the Republic was not vested in the ordinary Parliament of two Chambers, but in a National Assembly or Congress composed of the Chamber of Deputies and the Senate sitting together. The Constitutions of France which in this respect were similar to those of Continental polities exhibited as compared with the expansiveness or flexibility of English institutions that characteristic which was described by the author as rigid. A flexible constitution was one under which every law of every description can legally be changed with the same ease and in the same manner by one and the same body. The flexibility of the British Constitution consists in the right of the Crown and the two Houses to modify or repeal any law whatever. They can modify or.repeal in the same manner in which they can pass an Act enabling a company to make a new railway from Oxford to London. Therefore, in England laws are called constitutional because they refer to subjects proposed to affect the fundamental institutions of the State and not because they are legally more sacred or difficult to change than other laws. Under the circumstances the term "constitutional law or enactment" is rarely applied to any English statute to give a definite description to its character. Under a rigid constitution, the term "consti tutional" means that a particular enactment belongs to the articles of the constitution and cannot be legally changed with the same ease and in the same manner as ordinary laws, and it is because of this characteristic that courts are invested with powers to determine whether a particular legislation is permitted or not by the constitution. Such a question can 760 never arise in respect of an enactment of the British Parliament. As against this, the Governor General in Council with legislative powers established under the Indian Councils Act stood in a different position. Its charter was the Indian Councils Act. Its powers were there necessarily defined and limited. That power, again, at any time could be withdrawn, altered and expanded or further curtailed. Moreover, as the powers were conferred by an Act of the British parliament, the question whether the action of the Governor General in Council in his legislative capacity was within or without its legislative power was always capable of being raised and decided by a court of law. In Dicey 's Law of the Constitution, 9th Edition the author has distin guished the position of a sovereign legislature and a subordinate law making body. The distinction is drawn from the fact that the subordinate legislatures have a limited power of making laws. At page 99, he has specifically considered the position of the legislative Council of British India prior to 1915 and stated as follows: "Laws are made for British India by a Legislative Council having very wide powers of Legislation. This Council, or, as it is technically expressed, the Governor General in Council, can pass laws as important as any Acts passed by the Brit ish Parliament. But the authority of the Council in the way of law making is as completely subordinate to, and as much dependent upon, Acts of Parliament as is the power of the London and North Western Railway Company to make bye laws . Now observe, that under these Acts the Indian Council is in the strictest sense a non sovereign legisla tive body, and this independently of the fact that the laws or regulations made by the Governor General in Council can be annulled or disallowed by the Crown; and note that the position of the Council exhibits all the marks or notes of legislative subordination. (1) The Council is bound by a large number of rules which cannot be changed by the Indian legislative body itself and which can be changed by the superior power of the Imperial parliament. 761 (2) The Acts themselves, from which the Council derives its authority, cannot be changed by the Council and. they stand in marked contrast with the laws or regulations which the Council is empowered to make. These fundamental rules contain, it must be added, a number of specific restrictions on the subjects with regard to which the Council may legis late . (3) The courts in India . may, when the occasion arises, pronounce upon the validity or constitu tionality of laws made by the Indian Council. " It is there fore clear that the Indian Legislature in 1861 and upto 1915 was a subordinate legislature and not a sovereign legisla ture. At this stage it may again be noticed that the Govern ment was unitary and not federal. There was no distribution of legislative powers as between the Centre and the differ ent Provinces. Another important factor to be borne in mind is that while the British Parliament was supreme, its execu tive Government came into power and remained in power so long only as the Parliament allowed it to remain and the Parliament itself was not dissolved. The result is that the executive government was a part of the legislature and the legislature controlled the actions of the executive. Indeed, the legislature was thus supreme and was in a position effectively to direct the actions of the executive govern ment. In India the position was quite different if not the reverse. The Governor General was appointed by the Crown and even after the expansion of the legislative body before the Government of India Act of 1915 in numbers, it had no con trol over the executive. In respect of the Indian Legisla ture functioning prior to the Government of India Act of 1915 the control from the Secretary of State was justified on the ground that the Provincial Legislatures were but an enlargement of the executive government for the purpose of making laws and were no more than mere advisory bodies without any semblance of power. The executive Government of India was not responsible to the Indian Legislature and the composition of the Indian Legislature was such that the executive officers 762 together with the nominated members constituted the majority in the Legislature. The result was that the Legislative Council was practically a creature of the executive Govern ment of India and its functions were practically limited to registering the decrees of the executive government. It would not be wrong, according to Mr. Cowell in his lecture on "Courts and Legislative Authorities in India," to de scribe the laws made in the Legislative Councils as in reality the orders of Government. Every Bill passed by the Governor General 's Council required his assent to become an Act. The Indian Councils Act of 1892 empowered the Governor General in Council, with the approval of the Secre tary of State in Council, to make regulations as to the conditions under which nomination of the additional members should be made. The word `election ' was carefully avoided. The existence of a strong official block in the Councils was the important feature of the Act. As noticed by a writer on Indian Constitution, the Government maintained a tight and close control over the conduct of official members in the Legislature and they were not allowed to vote as they pleased. They were not expected to ask questions or move resolutions or (in some Councils) to intervene in debate without Government 's approval. Their main function was to vote to vote with the Government. However eloquent the non official speakers might talk and however reasonable and weighty their arguments might be, when the time for voting came the silent official flanks stepped in and decided the matter against them. All these factors contributed to the unreality of the proceedings in the Council because the number of elected members was small and the issue was often known beforehand. Speaking in the. House of Lords in Decem ber 1908 on the Bill which resulted in the Government of India Act of 1909, Lord Morley, the then Secretary of State for India, declared: "If I were attempting to set up a Parliamentary system in India, or if it could be said that this chapter of rules led directly or necessarily up to the establishment of a Parliamentary system in India. I for one would have 763 nothing at all to do with it . . A Parliamentary system is not at all the goal to which I would for one moment aspire. " The constitution of the Central Legislative Council under the Regulation of November, 1909, as revised in 1912, was this: Ordinary members of the Governor Gene ral 's Council, The Commander in Chief and the Lt. Governor . 8 Nominated members of whom not more than 28 must be officials . 33 Elected members, . 27 and The Governor General . 1 69 The executive government was thus supreme and was not bound to obey or carry out the mandates of the legislature. Instances where Finance Bills were rejected and other Bills were backed by the popular feeling and which decisions the Governor General overruled, are well known. The Indian Legislature was powerless to do anything in the matter. Without the consent of the executive government no Bill could be made into an Act nor an Act could be amended or repealed without its consent. The possibility of the Legis lature recalling the power given tinder an Act to the execu tive against the latter 's consent was therefore nil. Once an Act giving such power (like the ) was passed, practically the power was irrevocable. In my opinion, it is quite improper to compare the power and position of the Indian Legislature so established and functioning with the supreme and sovereign character of the British Parliament. The legislative power of the Indian Legislature came to be changed as a result of the Act of 1915 by the creation of Provincial legislatures. I do not propose to go into the details of the changes, except to the extent they are di rectly material for the discussion of the questions submit ted for the Court 's opinion, Diarchy 764 was thus created but there was no federation under the Act of 1915. Under the Government of India Act, 1935, the legis lative powers were distributed between the Central legisla ture and the Provincial legislature, each being given exclu sive powers in respect of certain items mentioned in Lists I and II of the Seventh Schedule. List III contained subjects on which it was open to the Centre or the Province to legis late and the residuary power of legislation was controlled by section 104. This Act however was still passed by the British Parliament and therefore the powers of the Indian Central legislature as well as the Provincial legislatures were capable of being altered, expanded or limited according to the desire of the British Parliament without the Indian legislature or the people of India having any voice in the matter. Even under this Act, the executive government was not responsible to the Central Legislature or the Provincial Legislature, as the case may be. I emphasize this aspect because it shows that there was no fusion of legislative and executive powers as was the case with the Constitution in England. The result of the Indian Independence Act, 1947, was to remove the authority of the British Parliament to make any laws for India. The Indian Central Legislature was given power to convert itself into a Constituent Assembly to frame a Constitution for India, including the power to amend or repeal the Government of India Act, 1935, which till the new Constitution was adopted, was to be the Constitution of the country. Even with that change it may be noticed that the executive government was not responsible to the Central Legislature. In fact with the removal of the control of the Parliament it ceased to be responsible to anyone. Under the Constitution of India as adopted on the 26th of January, 1950, the executive government of the Union is vested in the President acting on the advice of the Minis ters. A Parliament is established to make laws and a Su preme Court is established with the powers defined in dif ferent articles of the Constitution. The executive, legislative and judicial 765 functions of the Government, which have to be discharged, were thus distributed but the articles giving power to these bodies do not vest the legislative or judicial powers in these bodies expressly. Under the Constitution of India, the Ministers are responsible to the legislatures and to that extent the scheme of the British Parliament is adopted in the Constitution. While however that characteristic of the British Parliament is given to the Indian Legislature, the principal point of distinction between the British Parlia ment and the Indian Parliament remains and that is that the Indian Parliament is the creature of the Constitution of India and its powers, rights, privileges and obligations have to be found in the relevant articles of the Constitu tion of India. It is not a sovereign body, uncontrolled with unlimited powers. The Constitution of India has con ferred on the Indian Parliament powers to make laws in respect of matters specified in the appropriate places and Schedules, and curtailed its rights and powers under certain other articles and in particular by the articles found in Chapter 111 dealing with Fundamental Rights. In case of emergency where the safety of the Union of India is in danger, the President is given express power to suspend the Constitution and assume all legislative powers. Similarly. in the event of the breaking.down of the administrative machinery of a State, the President is given powers under article 257 to assume both legislative and executive powers in the manner and to the extent found in the article. There can be no doubt that subject to all these limitations and controls, within the scope of its powers and on the subjects on which it is empowered to make law% the Legislature is supreme and its powers are plenary. The important question underlying the three questions submitted for the Court 's consideration is what is described as the delegation of legislative powers. A legislative body which is sovereign like an autocratic ruler has power to do anything. It may, like a Ruler, by an individual decision, direct that a certain person may be put to death or a cer tain property may be 766 taken over by the State. A body of such character may have power to nominate someone who can exercise all its powers and make all its decisions. This is possible to be done because there is no authority or tribunal which can question the right or power of the authority to do so. The contentions urged on behalf of the President of India are that legislative power carries with it a power of delegation to any person the legislature may choose to appoint. Whether sovereign or subordinate, the legislative authority can so delegate its function if the delegation can stand three tests. (1) It must be a delegation in respect of a subject or matter which is within the scope of the legis lative power of the body making the delegation. (2) Such power of delegation is not negatived by the instrument by which the legislative body is created or established. And (3) it does not create another legislative body having the same powers and to discharge the same functions which it itself has, if the creation of such a body is prohibited by the instrument which establishes the legislative body it self. It was urged that in the ease of an unwritten consti tution, like the British Parliament there can De no affirm ative limitation or negative prohibition against delegation and therefore the power of delegation is included to the fullest extent within the power of legislation. The British Parliament can efface itself or even abdicate because it has a power to pass the next day a law repealing or annulling the previous day 's legislation. When the British Parliament established legislative bodies in India, Canada and Austra lia by Acts of the British Parliament, the legislatures so established, although in a sense subordinate, because their existence depended on the Acts of the British Parliament and which existence could be terminated or further let tered by an Act of the British Parliament, neverthe less are supreme with plenary powers of the same nature as the British Parliament, on the subjects and matters within their respective legislative authority. As the power of delegation is 767 included in the power of legislation, these legislative bodies have also, subject to the three limitations mentioned above, full power of delegation in their turn. These legis lative bodies were not agents of the British Parliament. Not being agents or delegates of the British Parliament, the doctrine delegata potestas non potest delegare cannot apply to their actions and if these legislatures delegate powers to some other authority to make rules or regulations, or authorise the executive government to enforce laws made by them or other legislatures wholly or in part and with or without restrictions or modifications, the legislatures are perfectly competent to do so. The history of legislation in England and India and the other Dominions supports this contention. It is recognised as a legislative practice and is seen in several Acts passed by the legislatures of the Dominions and in India. Such delegation of the legislative functions has been recognised over a series of years by the Judicial Committee of the Privy Council and it is too late to contest the validity of such delegation. It was lastly contended that the observations of the Federal Court in Jatindra Nath Gupta vs Province of Bihar(1), tending to show that delegation was not permissible, required to be recon sidered. Before considering these arguments in detail, I think it is essential to appreciate clearly what is conveyed by the word "delegation ' '. That word is not used, either in discus sions or even in some decisions of the courts, with the same meaning. When a legislative body passes an Act it has exercised its legislative function. The essentials of such function are the determination of the legislative policy and its formulation as a rule of conduct. These essentials are the characteristics of a legislature by itself. It has nothing to do with the principle of division of powers found in the Constitution of the United States of America. Those essentials are preserved, when the legislature specifies the basic conclusions of fact, upon ascertainment of which, from relevant data, by a designated administrative agency, (1) 768 it ordains that its statutory command is to be effective. The legislature having thus made its laws, it is clear that every detail for working it out and for carrying the enact ments into operation and effect may be done by the legisla ture or may be left to another subordinate agency or to some executive officer. While this also is sometimes described as a delegation of legislative powers, in essence it is different from delegation of legislative power which means a determination of the legislative policy and formulation of the same as a rule of conduct. I find that the word "delega tion" is quite often used without bearing this fundamental distinction in mind. While the so called delegation, which empowers the making of rules and regulations, has been recognised as ancillary to the power to define legislative policy and formulate the rule of conduct, the important question raised by the Attorney General is in respect of the right of the legislature to delegate the legislative func tions strictly so called. In support of his contention that the legislative power of the Indian Legislature carried with it the power of delegation, the Attorney General relied on several decisions of the Judicial Committee of the Privy Council and decisions of the Supreme Court of Canada and Australia. The first is The Queen vs Burah(1). Act XXII of 1869 of the Council of the Governor General of India for making laws and regula tions was an Act to remove the Garo Hills from the jurisdic tion of the tribunals established under the General Regula tions and Acts passed by any legislature in British India and provided that "no Act hereafter passed by the Council of the Governor General for making laws and regulations shall be deemed to extend to any part of the said territory unless the same was specifically named therein. " The administration of civil and criminal justice within the said territory was vested in such officers as the Lieutenant Governor may from time to time appoint. Sections 8 and 9 of the said Act provided as follows : (1) 51. A. 178, 769 "Section 8. The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend to the said territory any law, or any portion of any law, now in force in the other territories subject to his Government, or which may hereafter be enacted by the Council of the Governor General ,or of the said Lieutenant Governor. for making laws and regulations, and may on making such exten sion direct by whom any powers of duties incident to the provisions so extended shall be exercised or performed, and make any order which he shall deem requisite for carrying such provisions into operation." "Section 9. The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend mutatis mutandis all or any of the provisions contained in the other sections of this Act to the Jaintia Hills, the Nags Hills, and to such portion of the Khasi Hills as for the time being forms part of British India. Every such notification shall specify the boundaries of the territories to which it applies. " The Lieutenant Governor of Bengal issued a notification in exercise of the power conferred on him by section 9 and extended the provisions of the said Act to the territory known as the Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the ordinary civil and criminal courts. By a majority judgment the Calcutta High Court decided that the said notification had no legal force or effect. In the Calcutta High Court, Mr. Kennedy, counsel for the Crown, boldly claimed for the Indian Legislative Council the power to transfer legislative functions to the Lieutenant Governor of Bengal and Markby J. framed the question for decision as follows: "Can the Legislature confer on the Lieutenant Governor legislative power?" Answer: "It is a general prin ciple of law in India that any substantial delegation of legislative authority by the Legislature of this country is void." Lord Selbourne after agreeing with the High Court that Act XXII of 1869 was within the legislative 770 power of the Governor General in Council, considered the limited question whether consistently with that view the 9th section of that Act ought nevertheless to be held void and of no effect. The Board noticed that the majority of the Judges of the Calcutta High Court based their decision on the view that the 9th section was not legislation but was a delegation of legislative power. They noticed that in the leading judgment Markby J. the principle of agency was relied upon and the Indian Legislature seemed to be regarded an agent delegate, acting under a man.date from the Imperial Parliament. They rejected this view. They observed: "The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament. which created it, and it can, of course, do nothing beyond the limits which circumscribe these powers. But, when acting within those limits, it is not. in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, as large, and of the same nature as those of Parliament itself. The established courts of justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question; and the only way in which they. can properly do. so, is by looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirm ative words which give the power, and if it violates no express condition or restriction by which that power is limited . it is not for any court of justice to inquire further, or to enlarge constructively those condi tions and restrictions. "Their Lordships agree that the Governor General in Council could not, by any form of enactment, create in India and arm with general legislative authority, a new legislative power not created or authorised by the Councils Act. Nothing of that kind has, in their Lordships opinion, been done or attempted in the present case. What has been done is this. The Governor General in Council has deter mined in the 771 due and ordinary course of legislation, to remove a particu lar district from the jurisdiction of the ordinary courts and offices, and to place it under new courts and offices, to be appointed by and responsible to the Lieut. Governor of Bengal; leaving it to the Lieut. Governor to say at what time that change shall take place; and also enabling him not to make what laws he pleases for that or any other district, but to apply by public notification to that district any law, or part of a law, which either already was, or from time to time might be, in force by proper legislative authority, in the other territories subject to his gov ernment. The legislature determined that, so far, a certain change should take place; but that it was expedi ent to leave the time and the manner of carrying it into effect to the discretion of the Lieut. Governor; and also, that the laws which were or might be in force in the other territories subject to the same Government were such as it might be fit and proper to apply to this district also; but that, as it was not certain that all those laws, and every part of them, could with equal convenience be so applied, it was expedient, on that point also, to entrust a discretion to the Lieut. Governor. This having been done as to the Garo Hills, what was done as to the Khasi and. Jaintia Hills ? The legislature decided that it was fit and proper that the adjoining district of the Khasi and Jaintia Hills should also be removed from the jurisdiction of the existing courts and brought under the same provisions with the Garo Hills . if and when the Lieut. Governor should think it desirable to do so; and that it was also possible that it might be expedient that not all, but some only, of those provisions should be applied to that adjoining district; and accordingly the legislature entrusted for these purposes also a discretionary power to the Lieut. Governor. " The important part of the decision, dealing with the the question before them was in these terms : "Their Lordships think that it is a fallacy to speak of the 772 powers thus conferred upon the Lieut. Governor (large as they undoubtedly are) as if, when they were exercised the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor Gener al in Council. Their whole operation is directly and imme diately under and by virtue of this Act (XXI of 1869) it self. The proper legislature has exercised its judgment as to place, person, laws powers and the result of that judg ment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legisla tion is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a Provincial Legislature, they may (in their Lordships judgment) be well exercised, either absolutely or condition ally. Legislation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrust ed by the legislature to persons in whom it places confi dence, is no uncommon thing;and, in many circumstances, it may be highly convenient. The British Statute Book abounds with examples of it: and it cannot be supposed that the Imperial Parliament did not, when constituting the Indian Legislature, contemplate this kind of conditional legisla tion as within the scope of the legislative powers which is from time to time conferred. It certainly used no words to exclude it." (The italics are mine). They then mentioned by way of illustrations the power given to the Governor General in Council (not in his legislative capacity) to extend the Code of Civil Procedure and Code of Criminal Procedure by section 385, Civil Procedure Code. and section 445, Criminal Procedure Code, to different territories. They held that a different conclusion will be casting doubt upon the validity of a long series of legislation, appropriate, as far as they can judge, to the peculiar circumstances of India; great part of which belongs to the period antecedent to the year 1861, and must therefore be presumed to have been known to and in the view of, the Imperial Parliament, when the Coun cils Act of that year was passed. For such doubt their Lordships were unable 773 to discover any foundation either in the affirmative or in the negative words of the Act before them. I have quoted in extenso extracts from this judgment because it is considered the foundation for the argument advanced by the learned Attorney General. In my opinion this judgment does not support the contention as urged. The Privy Council noted the following:(1) That the Garo Hills were removed by the Act from the jurisdiction of the ordi nary courts. (2) That in respect of the Khasi and Jaintia Hills the same position had been arrived at. (:3) That the power was to be exercised over areas which, notwithstanding the Act, remained under the administrative control of the Lieut. Governor. (4) That the authority given to the Lieut. Governor was not to pass new laws but only to extend Acts which were passed by the Lieut. Governor. or the Gover nor General in respect of the Province both being competent legislatures for the area in question. He was not given any power to modify any law. (5) They rejected the view of the majority of the Judges of the Calcutta High Court that the Indian Legislature was a delegate or an agent of the British Parliament. (6) That within the powers conferred on the Indian Legislature it was supreme and its powers were as plenary and of the same nature as the British Parliament. (7) That by the legislation the Indian Parliament had not created a legislative body with all the powers which it had. (8) The objection on the ground of delegation was rejected because what was done was not delegation at all but it was conditional legislation. Throughout the judgment it is nowhere suggested that the answer of Markby J. to the ques tion framed by him (and quoted earlier in this judgment) was incorrect. (9) It emphasized that the order of the Lieut Governor derived its sanction from the Act of the Governor General and not because it was an order of the Lieut. Gover nor. (10) That in the legislation of the Governor General in Council (legislative) all that was necessary to consti tute legislation was found. This applied equally to future laws as the appropriate legislative body for the area was 774 the same. This decision therefore carefully and deliberate ly did not endorse the contention that the power of delega tion was contained in the power of legislation. The Board after affirming that what was done was no delegation at all held that the legislation was only conditional legislation. In Emperor vs Benoari Lal Sarma and others (1), the question arose about the Special Criminal Courts Ordinance 1I of 1942, issued by the Governor General under the powers vested in him on the declaration of an emergency on the outbreak of war. The validity of that Ordinance was chal lenged in India either (1) because the language of the section showed that the Governor General, notwithstanding the preamble, did not consider that an emergency existed but was making provision in case one should arise in future, or (2) else because the section amounted to what was called delegated legislation by which the Governor General without legal authority sought to pass the decision as to whether an emergency existed, to the Provincial Government instead of deciding it for himself. The relevant provision of the Government of India Act, 1935, was in these terms: "72. The Governor General may, in cases of emergency, make and promulgate ordinances for the peace and good gov ernment of British India or any part thereof, and any Ordi nance so made shall for the space of not more than six months from its promulgation, have the like force of law as an Act passed by the Indian Legislature;but the power of making Ordinances under this section is subject to the like restrictions as the power of the Indian Legislature to make laws; and any Ordinance made under this section is subject to the like disallowance as an Act passed by the Indian Legislature and may be controlled or superseded by any such Act. " In rejecting this second objection, their Lordships observed that under paragraph 72 of Schedule 9, the Gover nor General himself must discharge the duty of (I) 72 I.A. 27. 775 legislation and cannot transfer it to other authorities. But the Governor General had not delegated his legislative powers at all. After stating again that what was done was not delegated legislation at all, but was. merely an example of the not uncommon legislative arrangement by which the local application of the provision of a statute is deter mined by the judgment of a local administrative body as to its necessity, their Lordships disagreed with the majority view of the Federal Court that what was done was delegation of legislative functions. If the power of delegation was contained in the power of legislation as wide as contended by the Attorney General, there appears no reason why the Privy Council should have rejected the argument that the Act was an act of delegation and upheld its validity on the ground that it was conditional legislation. Moreover they reaffirmed the following passage from Russell vs The Queen (1): "The short answer to this objection (against delegation of legislative power) is that the Act does not delegate any legislative powers whatever. It contains within itself the whole legislation on the matters with which it deals. The provision that certain parts of the Act shall come into operation only on the petition of a majority electors does not confer on these persons powers to legislate. Parliament itself enacts the condition and everything which is to follow upon the condition being fulfilled. Conditional legislation of this kind is in many cases convenient, and is certainly not unusual, and the power so to legislate cannot be denied to the Parliament of Canada when the subject of legislation is within its competency." (The italics are mine). Support for this last mentioned statement was found in the decision of the Privy Council in The Queen vs Burah(2). It is clear that this decision does not carry the matter further. Even though this was a war measure the Board emphasized that the Governor General must himself discharge the duty of legislation and cannot transfer it to other authorities. They examined the impugned Act and (1) 7 App. (2) 5 I.A. 178. 776 came to the conclusion that it contained within itself the whole legislation on the matters with which it dealt and there was no delegation of legislative functions. A close scrutiny of these decisions and the observations contained therein, in my opinion, clearly discloses that instead of supporting the proposition urged by the Attorney General impliedly that contention is negatived. While the Judicial Committee has pointed out chat the Indian Legislature had plenary powers to legislate on the subjects falling within its powers and that those powers were of the same nature and as supreme as the British Parliament, they do not endorse the contention that the Indian Legislature, except that it could not create another body with the same powers as it has, or in other words, efface itself, had unlimited powers of delegation. When the argument of the power of the Indian Legislature to delegate legislative powers in that manner to subordinate bodies was directly urged before the Privy Council, in each one of their deci sions the Judicial Committee has repudiated the suggestion and held that what was done was not delegation but was subsidiary legislation or conditional legislation. Thus while the Board has reiterated its views that the powers of the Indian Legislature were "as plenary and of the same nature as the British Parliament" no one, in no case, and in no circumstances, during the last seventy years, has stated that the Indian Legislature has power of delegation (as contended in this case) and which would have been a direct, plain, obvious and conclusive answer to the argument. Instead of that, they have examined the impugned legislation in each case and pronounced on its validity on the ground that it was conditional or subsidiary legislation. The same attitude is adopted by the Privy Council in respect of the Canadian Constitution. The expressions "subsidiary" or "conditional legislation" are used to indicate that the powers conferred on the subordinate bodies were not powers of legislation but powers conferred only to carry the enact ment into operation and effect, or that the Legislature having discharged legislative functions had specified the basic conclusions of fact upon 777 ascertainment of which, from relevant data by a designated administrative agency, that body was permitted to bring the statute into operation. Even in such cases the Board has expressly pointed out that the force of. these rules, regu lations or enactments does not arise out of the decision of the administrative or executive authority to bring into operation the enactment or the rules framed thereunder. The authoritative force and binding nature of the same are found in the enactment passed by the legislature itself. Therefore, a correct reading of these decisions does not support the contention urged by the Attorney General. Some decisions of the Privy Council on appeal from the Supreme Court of Canada and some decisions of the Supreme Court of Canada, on the point under discussion, on which the learned Attorney General relied for his contention, may be noticed next. In Hodge vs The Queen(1), which was an appeal from the Court of Appeal, Ontario, Canada, a question about the validity of the Liquor Licences Act arose. After hold ing that the temperance laws were under section 92 of the British North America Act for "the good government", their Lordships considered the objection that the Imperial Parlia ment had conferred no authority on the local legislature to delegate those powers to the Licence Commissioners. In other words, it was argued that the power conferred by the Imperial Parliament on the local legislature should be exercised in full by that body and by that body alone. The maxim delegata potestas non potest delegare was relied upon to support the objection. Their Lordships observed: "The objection thus raised by the appellants was founded on an entire misconception of the true character and position of the Provincial Legislatures. They are in no sense delegates of, or acting under mandate from, the Imperial Parliament. When the British North America Act enacted that there should be a legislature for Ontario and that its Legislative Assem bly should have exclusive authority to make laws for the Province and for Provincial purposes in relation to the matters (1) 9 App. Cas.117. 778 enumerated in section 92, it conferred powers, not in any sense to be exercised by delegation from, or as agents of, the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by section 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme and has the same authority as the Imperial Parliament, or the Parliament of the Domin ion, would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make byelaws or resolutions as to subjects specified the enactment, and with the object of carrying the enactment into operation and effect. It is obvious that such authority is ancillary to legislation ' and without it an attempt to provide for vary ing details and machinery to carry them out might become oppressive or absolutely fail . It was argued at the Bar that a legislature committing important regulations to agents or delegates effaces itself. That is not so. It retains its power intact and can whenever. it pleases de stroy the agency it has created and set up another or take the matter directly into its own hands. How far it shall seek the aid of subordinate agencies and how long it shall continue them are matters for the legislature and not for the courts of law to decide." (The italics are mine.) As regards the creation of new offences, their Lordships ob served that if byelaws or resolutions are warranted the power to enforce them seemed necessary and equally lawful. This case also does not help the Attorney General. It recognises only the grant of power to make regulations which are "ancillary to legislation". In In re The Initiative and Referendum Act(1), the Act of the Legislative Assembly of Manitoba was held outside the scope of section 92 of the British North America Act inas much as it rendered the Lieut Governor powerless to prevent the Act from becoming actual law, if approved by the voters, even without his consent. Their Lordships observed: "Section 92 of the (1) 779 Act of 1867 entrusts the legislative power in a Province to its legislature and to that legislature only. No doubt a body with power of legislation on the subjects entrusted to it.so ample as that enjoyed by a Provincial Legislature in Canada could, while preserving its own capacity intact, seek the assistance of subordinate agencies as had been done in Hodge vs The Queen(1), but it does not follow that it can create and endow with its own capacity a new legislative power not created by the Act to which it owes its own exist ence. " In In re George Edwin Gray(2), the question of delega tion of powers in respect of the War Measures Act, 19 14, came for consideration. The provisions there were very similar to the Defence of India Act and the Rules made thereunder in India during the World War I. In delivering judgment Sir Charles Fitzpatrick C.J. observed as follows: "The practice of authorising administrative bodies to make regulations to carry out the object of an Act instead of setting out all the details of the Act itself is well known and its legality is unquestioned. ' ' He rejected the argument that such power cannot be granted to the extent as to enable the express provisions of a statute to be amended or re pealed, as under the Constitution, Parliament alone is to make laws under the Canadian Constitution. He observed that Parliament cannot indeed abdicate its function but within reasonable limits at any rate it can delegate its powers to the executive government. Such powers must necessarily be subject to determination at any time by Parliament. He observed: "I cannot however find anything in that Constitu tional Act which would impose any limitation on the authori ty of the Parliament of Canada to which the Imperial Parlia ment is not subject." Against the objection that such wide discretion should not be left to the executive he observed that this objection should have been urged when the regula tions were submitted to Parliament for its approval or better still when the War Measures Act was being discussed. The Parliament was the delegating authority and it was for that body to put any (1) 9 App. (2) 57 S.C.R. Canada 150. 780 limitations on the powers conferred upon the executive. He then stated: "Our legislators were no doubt impressed in the hour of peril with the conviction that the safety of the country was the supreme law against which no other law can prevail. It is clearly our duty to give effect to their patriotic intentions." In the Chemical Reference case(D, Duff C.J. set out the true effect of the decision in the War Measures Act. He held that the decision of the Privy Council in the Fort Frances ' case(2) had decided the validity of the War Measures Act and no further question remained in that respect. He stated: "In In re Gray(3) was involved the principle, which must be taken in this Court to be settled, that an Order in Council in conformity with the conditions prescribed by, and the provisions of, the War Measures Act may have the effect of an Act of Parliament." The Court considered that the regu lations framed by the Governor General in Council to safe guard the supreme interests of the State were made by the Governor General in Council "who was conferred subordinate legislative authority." He stated: "The judgment of the Privy Council in the Fort Frances ' case(2), laid down the principle that in an emergency, such as war, the authority of the Dominion in respect of legislation relating to the peace, order and good government of Canada may, in view of the necessities arising from the emergency, disable or over bear the authority of the Provinces in relation to a vast field in which the Provinces would otherwise have exclusive jurisdiction. It must not however be taken for granted that every matter within the jurisdiction of the Parliament of Canada even in ordinary times could be validly committed by Parliament to the executive for legislative action in the case of an emergency. " Unlike the Indian Constitution, in the British North America Act there is no power to suspend the Constitution or enlarge the legislative powers in an emergency like war. The Courts therefore stretched the langugage of the sections to meet the emergen cy in (1) [1943] S.C.R. Canada 1. (3) [1918] 57 S.C.R, Canada 150. (2) 781 the highest interest of the country but it also emphasized that such action was not permissible in ordinary times. The War Measures Acts were thus considered by the z Supreme Court of Canada on a different footing. The question was of competence but owing to the unusual circumstances and exigencies what was stated in the legislation was considered a sufficient statement of the legislative policy. It ap pears to be thought that the same test cannot be applied in respect of legislation made in normal times, in respect of a permanent statute which is not of limited duration. The discussion in Benaori Lal Sarma 's case(1) in the judgment of the Privy Council mentioned above may be usefully noted in this connection as the legislation in that case was also a war measure but was held valid as conditional legislation. In so far as the observations in the Canadian decisions go beyond what is held in the Privy Council decisions, with respect, I am unable to agree. It appears that the word "delegation" has been given an extended meaning in some observations of the Canadian courts, beyond what is found in the Privy Council decisions. It is important to notice that in all the judgments of the Privy Council, the word "delega tion" as meaning conferment of_legislative functions strict ly, is not used at all in respect of the impugned legisla tion and has been deliberately avoided. Their validity was upheld on the ground that the legislation was either conditional or subsidiary or ancillary legislation. An important decision of the Supreme Court of Australia may be noticed next. In the Victorian Stevedoring and Gener al Contracting Company Proprietary Ltd. vs Dignan(2), the question whether delegation of legislative power was accord ing to the Constitution came to be examined by the High Court of Australia. It was argued that section 3 of the Act in question was ultra vires and void in so far as it pur ported to authorise the Governor General to make regulations which (nothwithstanding anything in any other Act) shall have (1) 72 I.A. 27. (2) 782 the force of law. In the judgment of Gavan Duffy C.J. and Starke J. it was stated: "The attack upon the Act itself was based upon the American Constitutional doctrine that no legislative body can delegate to another department of the Government or to any other authority the power either gener ally or specially to enact laws. This high prerogative has been entrusted to its own wisdom, judgment and patriotism and not to those of other persons and it will act ultra vires ii it undertakes to delegate the trust instead of executing it. (Cooley 's Principles of Constitutional Law, 3rd Edition, p. 111). Roche vs Kronheimer(1) was an authori ty for the proposition that an authority of subordinate law making may be invested in the executive. Whatever ,may be said for or against that decision I think we should not now depart from it." Mr. Justice Dixon considered the argu ment fully in these terms: "The validity of this provision is now attacked upon the ground that it is an attempt to grant to the executive a portion of the legislative power vested by the Constitution in the Parliament which is incon sistent with the distribution made by the Constitution of legislative, executive and judicial powers. In support of the rule that Congress cannot invest another organ of gov ernment with legislative power a second doctrine is relied upon in America but it has no application to the Australian Constitution. Because the powers of Government are consid ered to be derived from the authority of the people of the Union no agency to whom the people have confided a power may delegate its exercise. The well known maxim delegata potesta non potest delegare applicable to the law of agency in the general and Common Law is well understood and has had wider application in the construction of our Federal and State Constitutions than it has in private laws. No similar doc trine has existed in respect of British Colonial legisla tures, whether erected in virtue the prerogative or by Imperial Statute. It is important to observe that in Ameri ca the intrusion of the doctrines of agency into Constitu tional interpretation (1) (1921) 29 Corn. L.R. 329. 783 has in no way obscured the operation of the separation of powers. In the opinion of the Judicial Committee a general power of legislation belonging to a legislature constituted under a rigid Constitution does not enable it by any form of enactment to create and arm with general legislative authority a new legislative power not created or authorized by the instrument by which it is established. " In respect of the legislation passed during the emergency of war and where the power was strongly relied upon, Dixon J. observed: "It might be considered that the exigencies which must be dealt with under the defence power are so many, so great and so urgent and are so much the proper concern of the execu tive that from its very nature the power appears by neces sary intendment to authorise a delegation otherwise general ly forbidden to the legislature . . I think it certain that such a provision would be supported in America and the passage in Burah 's case appears to apply to it in which the Judicial Committee deny that in fact any delega tion there took place . . This does not mean that a law confiding authority to the executive will be followed, however extensive or vague the subject matter may be, if it does not fall outside the boundaries of federal power. Nor does it mean that the distribution of powers can supply no considerations or weight affecting the validity . . It may be acknowledged that the manner in which the Constitution accomplishes the separation of power itself logically and theoretically makes the Par liament the executive repository of the legislative power of the Commonwealth. The existence in Parliament of power to authorise subordinate legislation may be ascribed to a conception of that legislative power which depends less upon juristic analysis and perhaps more upon the history and usages of British legislation and the theories of English law . . Such subordinate legislation remains under Parliamentary control and is lacking in the independent and unqualified authority which is an attribute of true legisla tive power." He concludes: " But whatever it may be, we should now adhere to the interpretation 784 which results from the decision of Roche vs Kronheimer(1). This whole discussion shows that the learned Judge 12,was refuting the argument that because under the Consti tution of U.S.A. such conferment of power would be invalid it should be held invalid under the Canadian Constitution also. He was not dealing with the question raised before us. Ultimately he said that Roche vs Kronheimer(1) was conclu sive. Mr. Justice Evatt stated that in dealing with the doctrine of the separation of legislative and executive powers "it must be remembered that underlying the Common wealth frame of government there is the notion of the British system of an executive which is responsible to Parliament. That system is not in operation under the United States ' Constitution. He formulated the larger proposition that every grant by the Commonwealth Parliament of authority to make rules and regulations, whether the grantee is the executive government or some such authority, is itself a grant of legislative power. The true nature and quality of the legislative power of the Commonwealth Parlia ment involves as a part of its content power to confer law making powers upon authorities other than Parliament itself. If such power to issue binding commands may lawfully be granted by Parliament to the executive or other agencies an increase in the extent of such power cannot of itself inval idate the grant. It is true that the extent of the power granted will often be a very material circumstance in the examination of the validity of the legislation conferring the grant. " In this paragraph the learned Judge appears certainly to have gone much beyond what had been held in any previous decision but he seems to have made the observations in those terms because (as he himself had stated just previ ously) in his view every conferment of power whether it was by conditional legislation or ancillary legislation was a delegation of legislative power. He concluded however as follows:"On final analysis therefore the (1) (1921) 29 Corn. L.R. 329. 785 Parliament of the Commonwealth is not competent to abdicate its powers of legislation. This is not because Parliament is bound to perform any or all of its legislative powers or functions for it may elect not to do so and not because the doctrine of the separation of powers prevents Parliament from granting authority to other bodies to make laws or byelaws and thereby exercise legislative power for it does so in almost every statute but because each and every one of the laws passed by Parliament must answer the description of law upon one or more of the subject matters stated in the Constitution. A law by which Parliament gives all its lawmaking authority to another body would be bad merely because it would fail to pass the test last mentioned. "Read properly, these judgments therefore do not support the contention of the learned Attorney General. The decisions of the Privy Council on appeal from Canada do not carry the matter further. In the judgments of the two decisions of the Supreme Court of Canada and the deci sion of the Supreme Court of Australia there are observa tions which may appear to go beyond the limit mentioned above. These observations have to be read in the light of the facts of the case and the particular regulation or enactment before the court in each case. These decisions also uniformly reiterate that the legislature must perform its functions and cannot leave that to any other authority. Moreover the word "delegation" as stated by Evatt J. in his judgment is understood by some Judges to cover what is described as subsidiary or conditional legislation also. Therefore because at some places in these judgments the word "delegation" is used it need not be assumed that the word necessarily means delegation of legislative functions, as understood in the strict sense of the word. The actual decisions were on the ground that they were subordinate legislation or conditional legislation. Again, in respect of the Constitutions of the Dominions of Canada and Austra lia I may observe that the legislatures of those Dominions were not packed, as in India, and their Constitution was 786 on democratic lines. The principle of fusion of powers between the Legislature and Executive can well be considered in operation in those Dominions, while as I have pointed out above there was no such fusion at all so far as the Indian Constitution in force till 1935 was concerned. Conclusions therefore based on the fusion of legislative and executive powers are not properly applicable to the Indian Constitu tion. In my opinion therefore to the extent the observa tions in the Canadian and Australian decisions go beyond what is clearly decided by the Privy Council in respect of the Indian Legislature, they do not furnish a useful guide to determine the powers of the Indian Legislature to dele gate legislative functions to administrative or executive authorities. The Canadian and Australian Constitutions are both based on Acts of the British Parliament and therefore are crea tures of written instruments. To that extent they are rigid. Moreover in the Australian Constitution in distribut ing the powers among the legislative and executive authori ties, the word "vest" is used as in the Constitution of the U.S.A. To that extent the two Constitutions have common features. There is however no clear. separation of powers between the legislature and executive so as to be mutually and completely exclusive and there is fusion of power so that the Ministers are themselves members of the legisla ture. Our attention was drawn to several decisions of the Supreme Court of the United States of America mostly to draw a distinction between the legislative powers of the Congress in the United States of America and the legislative powers of the legislature under Constitutions prepared on the British Parliament pattern. It was conceded that as the Constitution itself provided that the legislative and execu tive powers were to vest exclusively in the legislature and the executive authority mentioned in the Constitution, it was not permissible for one body to delegate this authority and functions to another body. It may be noticed that several decisions of the Supreme Court of U.S.A, 787 are based on the incompetence of the delegate to receive the power sought to be conferred on it. Its competence to function as the executive body is expressly set out in the Constitution, and it has been thought that impliedly the Constitution has thereby prevented such body from receiving from the legislative body other powers. In view of my final conclusion I shall very briefly notice the position accord ing to the U.S.A. Constitution. In Crawford on Statutory Construction, it is stated as follows: "So far however as the delegation of any power to an executive official or Administrative Board is concerned, the legislature must declare the policy of the law and fix the legal principles which are to control in given cases and must provide a standard to guide the official or the ,Board empowered to execute the law. This standard must not be too indefinite or general. It may be laid down in broad general terms. It is sufficient if the legislature will lay down an intelligible principle to guide the executive or administra tive official . From these difficult criteria it is apparent that the Congress exercises considerable liberali ty towards upholding legislative delegations if a standard is established. Such delegations are not subject to the objection that the legislative power has been unlawfully delegated. The filling in mere matters of details within the policy of, and according to, the legal principles and stand ards, established by the Legislature, is essentially minis terial rather than legislative in character, even ' if considerable discretion is conferred upon the delegated authority. " In Hampton & Co. vs United States(1), Taft C.J. ob served: "It is a breach of the national fundamental law if Congress gives up its legislative power and transfers it to the President or to the judicial branch or if by law it attempts to invest itself or its members with either execu tive or judicial power. This is not to say that the three branches are not co ordinate parts of one Government and that each in the field of duties (1) ; , 406 & 407. 788 may not invoke the action of the two other branches in so far as the action invoked shall not be an assumption of the constitutional field of action of another branch . The field of Congress involves all and many varieties of legislative action and Congress has found it frequently necessary to use officers of the executive branch within defined limits to secure the exact effect intended by its act of legislation by vesting discretion in such officers to make public regulations, interpreting a statute and direct ing the details of its executive even to the extent of providing for penalizing a preach of such regulations . . Congress may feel itself unable conveniently to determine exactly when its exercise of the legislative power should become effective, because dependent on future conditions, and it may leave the determination of such time to the decision of an executive. " He agreed with the often cited passage from the judgment of Ranny J. of the Supreme Court of Ohio in Cincinnati W. & Z.R. Co. vs Clin ton County Commissioners (1), viz., "The true distinction therefore is between the delegation of power to make the law which necessarily involves a discretion as to what it shall be and conferring an authority or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. " In Locke 's Appeal(2), it. is slated: "The proper dis tinction is this. The legislature cannot delegate its power to make a law but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend. To deny this would be to stop the wheels of Government. There are many things upon which useful legislation must depend, which cannot be known to the law making power, and must therefore be a subject of enquiry and determination outside the halls of legislature." In Panama Refining Co. vs Ryan (s), it was observed by Hughes C.J. "The Congress is not permitted to (1) (3) ; (2) , 789 abdicate or transfer to others the essential legislative functions with which it is vested. Undoubtedly legislation must often be adapted to complex conditions involving a host of details with which the National Legislature cannot deal directly. The Constitution has never been regarded as denying to the Congress the necessary resources of flexibil ity and practicality which will enable it to perform its function in laying down policies and establish standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determi nation of facts to which the policy as declared by the legislature is to apply. Without capacity to give authori sations of that sort we should have the anomaly of a legis lative power which in many circumstances calling for its exertion would be but a futility but the constant recogni tion of the necessity and validity of such provisions and the wide range of administrative authority which has been declared by means of them cannot be allowed to obscure the limitations of the authority to delegate if our constitu tional system is to be maintained. Similarly, in Schechter vs United States (1), it is stated: "So long as the policy is laid down and standard established by a statuten no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determi nation of facts to which the policy as declared by the legislature is to apply. " The complexity of this question of delegation of power and the consideration of the various decisions in which its application has led to the support or invalidation of Acts has been somewhat aptly put by Schwartz on American Adminis trative Law. After quoting from Wayman vs Southend (2) the observations of Marshall C.J. that the line has not been exactly drawn which separates those important subjects which must be entirely regulated by the legislature itself from those of less interest in which a general provision may be made and power given to those who are to (1) (2) ; U.S. 1825. 790 act under such general provision to fill up details, the author points out that the resulting judicial dilemma, when the American courts finally were squarely confronted with delegation cases, was resolved by the judicious choice of words to describe the word "delegated power". The authority transferred was, in Justice Holmes ' felicitous phrase, "softened by a quasi", and the courts were thus able to grant the fact of delegated legislation and still to deny the name. This result is well put in Prof. Cushman 's syllo gism: "Major premise: Legislative power cannot be constitu tionally delegated by Congress. Minor premise: It is essential that certain powers be delegated to administrative officers and regulatory commis sions. Conclusions: Therefore the powers thus delegated are not legislative powers. They are instead administrative or quasi legislative powers. ' ' It was argued on behalf of the President that the legis lative practice in India for over eighty years has recog nised this kind of delegation and as that is one of the principles which the court has to bear in mind in deciding the validity of Acts of the legislature, this Court should uphold that practice. In support of this contention a sched ule annexed to the case filed on behalf of the President, containing a list of Acts, is relied upon. In my opinion, out of those, the very few Acts which on a close scrutiny may be cited as instances, do not establish any such prac tice. A few of the instances can be supported as falling under the description of conditional legislation or subsid iary legislation. I do not discuss this in greater detail because unless the legislative practice is overwhelmingly clear, tolerance or acquiescence in the existence of an Act without a dispute about its validity being raised in a court of law for some years cannot be considered binding, when a question about the validity of such practice is raised and comes for decision before the Court. In my opinion, there fore; this broad 791 contention of the Attorney General that the Indian Legisla ture prior to 1935 had power to delegate legislative func tions in the sense contended by him is neither supported by judicial decisions nor by legislative practice. A fair and close reading and analysis of all these decisions of the Privy Council, the judgments of the Supreme Courts of Canada and Australia without stretching and straining the words and expressions used therein lead me. to the conclusion that while a legislature, as a part of its legislative functions, can confer powers to make rules and regulations for carrying the enactment into operation and effect, and while a legislature has power to lay down the policy and principles providing the rule of conduct, and while it may further provide that on certain data or facts being found and ascertained by an executive authority, the operation of the Act can be extended to certain areas or may be brought into force on such determination which is de scribed as conditional legislation, the power to delegate legislative functions generally is not warranted under the Constitution of India at any stage. In cases of emergency, like war where a large latitude has to be necessarily left in the matter of enforcing regulations to the executive, the scope of the power to make regulations is very wide, but. in those cases the suggestion that there was delega tion of "legislative functions" has been repudiated. Simi larly, varying according to the necessities of the case and the nature of the legislation, the doctrine of conditional legislation or subsidiary legislation or ancillary legisla tion is equally upheld under all the Constitutions. In my opinion, therefore, the contention urged by the learned Attorney General that legislative power carries with it a general power to delegate legislative functions, so that the legislature may not define its policy at all and may lay down no rule of conduct but that whole thing may be left either to the executive authority or administrative or other body, is unsound and not supported by the authorities on which he relies. I do not think that apart from the sover eign character of 792 the British Parliament which is established as a matter of convention and whose powers are also therefore absolute and unlimited, in any legislature of any other country such general powers of delegation as claimed by the Attorney General for a legislature, have been recognised or permit ted. It was contended by the learned Attorney General that under the power of delegation the legislative body cannot abdicate or efface itself. That was its limit. It was argued that so long as the legislature had power to control the actions of the body to which power was delegated, that so long as the actions of such body were capable of being revoked there was no abdication or effacement. In support of this argument some reliance was placed on certain obser vations in the judgments of the Privy Council in the cases mentioned above. It should be noticed that the Board was expressing its views to support the conclusion that the particular piece of legislation under consideration was either a conditional legislation or that the legislation derived its force and sanction from what the legislature had done and not from what the delegate had done. I do not think that those observations lead to the conclusion that up to that limit legislative delegation was permitted. The true test in respect of ' 'abdication" or "effacement" appears to be whether in conferring the power to the delegate, the legislature, in the words used to confer the power, retained its control. Does the decision of the delegate derive sanc tion from the act of the delegate or has it got the sanction from what the legislature has enacted and decided ? Every power given to a delegate can be normally called back. There can hardly be a case where this cannot be done because the legislative body which confers power on the delegate has always the power to revoke that authority and it appears difficult to visualize a situation in which such power can be irrevocably lost. It has been recognised that a legisla tive body established under an Act of the British Parliament by its very establishment has not the right to create anoth er legislative body with the same junctions and 793 powers and authority. Such power can be only in the British Parliament and not in the legislature established by an Act of the British Parliament. Therefore, to say that the true test of effacement is that the authority which confers power on the subordinate body should not be able to withdraw the power appears to be meaningless. In my opinion, therefore, the question whether there is "abdication" and "effacement" or not has to be decided on the meaning of the words used in the instrument by which the power is conferred on the au thority. Abdication, according to the Oxford Dictionary, means abandonment, either formal or virtual, of sovereignty. Abdication by a legislative body need not necessarily amount to a complete effacement of it. Abdication may be partial or complete. When in respect of a subject in the Legisla tive List the legislature says that it shall not legislate on that subject but would leave it to somebody else to legislate on it, why does it not amount to abdication or effacement ? If full powers to do anything and everything which the legislature can do are conferred on the subordi nate authority, although the legislature has power to control the action of the subordinate authority, by recall ing such power or repealing the Acts passed by the subordi nate authority, the power conferred by the instrument, in my opinion, amounts to an abdication or effacement of the legislature conferring such power. The power to modify an Act in its extension by the order of the subordinate authority has also come in for considera ble discussion. Originally when power was conferred on the subordinate authority to apply existing legislation to specified areas it was given only to apply the whole or a portion thereof. That power was further expanded by giving a power to restrict its application also. In the next stage power was given to modify "so as to adapt the same" to local conditions. It is obvious that till this stage the clear intention was that the delegate on whom power was con ferred was only left with the discretion to apply what was Considered suitable, as a whole or in part, 794 and to make adaptations which became necessary because of local conditions and nothing more. Only in recent years in some Acts power of modification is given without any words of limitation on that power. The learned Attorney General contended that the word "modify" according to the Oxford Dictionary means to limit, restrain, to assuage, to make less severe, rigorous, or decisive ;to tone down. " It is also given the meaning "to make partial changes in;to alter without radical transformation." He therefore contended that if the done of the power exceeded the limits of the power of modification beyond that sense, that would be exceeding the limits of the power and to that extent the exercise of the power may be declared invalid. He claimed no larger power under the term "modification. " On the other hand, in Rowland Burrows ' "Words and Phrases ", the word "modify" has been defined as meaning" vary, extend or enlarge, limit or restrict. " It has been held that modification implies an alteration. It may narrow or enlarge the provisions of the former Act. It has been pointed out that under the powers conferred by the , the Central Government has extended the application of the Bombay Debtors ' Relief Act to Delhi. The Bombay Act limits its application to poor agriculturists whose agricultural income is less than Rs. SO0. Under the power of modification conferred on it by the , the Central Government has removed this limit on the income, with the result that the principles, policy and machinery to give relief to poor peasants or agriculturists with an income of less than Rs. 500 is made applicable in Delhi to big landowners even with an income of 20 lakhs. This shows how the word ' 'modification" is understood and applied by the Central Government and acqui esced in by the Indian Legislature. I do not think such power of modification as actually exercised by the Central Government is permitted in law. If power of modification so understood is permitted, it will be open to the Central Legislature in effect to change the whole basis of the legislation and the reason for making the 795 law. That will be a complete delegation of legislative power, because in the event of the exercise of the power in that manner the Indian legislature has not applied its mind either to the policy under which relief should be given nor the class of persons, nor the circumstances nor the machin ery by which relief is to be given. The provisions of the Rent Restriction Act in different Provinces are an equally good example to show how dangerous it is to confer the power of modification on the executive government. Having considered all the decisions which were cited before us and giving anxious consideration to the elaborate and detailed arguments advanced by the learned Attorney General in the discussion of this case, I adhere to what I stated in Jatindra Nath Gupta 's case(1) that the power of delegation, in the sense of the legislature conferring power, on either the executive government or another author ity, "to lay down the policy underlying a rule of conduct" is not permitted. The word "delegation ", as I have pointed out, has been somewhat loosely used in the course of discus sion and even by some Judges in expressing their views. As I have pointed out throughout the decisions of the Privy Council the word "delegation" is used so as not to cover what is described as conditional legislation or subsidiary or ancillary legislation, which means the power to make rules and regulations to bring into operation and effect the enactment. Giving "delegation" the meaning which has always been given to it in the decisions of the Privy Council, what I stated in Jatindra Nath Gupta 's case, as the legisla ture not having the power of delegation is, in my opinion, correct. Under the new Constitution of 1950, the British Parlia ment, i.e. an outside authority, has no more control over the Indian Legislature. That Legislature 's powers are de fined and controlled and the limitations thereon prescribed only by the Constitution of India. But the scope of its legislative power has not become (1) 796 enlarged by the provisions found in the Constitution of India. While the Constitution creates the Parliament and although it does not in terms expressly vest the legislative powers in the Parliament exclusively, the whole scheme of the Constitution is based on the concept that the legisla tive functions of the Union will be discharged by the Par liament and by no other body. The essential of the legisla tive functions, viz., the determination of the legislative policy and its formulation as a rule of conduct, are still in the Parliament or the State Legislatures as the case may be and nowhere else. I take that view.because of the provi sions of article 357 and article 22 (4) of the Constitution of India. Article 356 provides against the contingency of the failure of the constitutional machinery in the States. On a proclamation to that effect being issued, it is provid ed in article 357 (1) (a) that the power of the legislature of the State shall be exercisable by or under the authority of the Parliament, and it shall be competent for the Parlia ment to confer on the President the power of the legislature of the State to make laws "and to authorise the President to delegate, subject to such conditions as he may think fit to impose. the powers so conferred to any other authority to be specified by him in that behalf. " Sub clause (b) runs as follows : " For Parliament, or for the President or other authority in whom such power to make laws is vested under sub cl. (a), to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and author ities thereof. " It was contended that on the breakdown of such machinery authority had to be given to the Parliament or the President, firstly, to make laws in respect of sub jects on which the State Legislature alone could otherwise make laws and, secondly, to empower the Parliament or the President to make the executive officers of the State Gov ernment to act in accordance with the laws which the Parlia ment or the President may pass in such emergency. It was argued that for this purpose the word "to delegate" is used. I do not think this argument is sound. Sub clause (2) re lates to the power 797 of the President to use the State executive officers. But under clause (a) Parliament is given power to confer on the President the power of the legislature of the State to make laws. Article 357 (1) (a) thus expressly gives power to the Parliament to authorise the President to delegate his legis lative powers. If powers of legislation include the power of delegation to any authority there was no occasion to make this additional provision in the article at all. The word ing of this clause therefore supports the contention that normally a power of legislation does not include the power of delegation. Article 22 (4) again is very important in this connec tion. It deals with preventive detention and provides that no law shall be valid which will permit preventive detention of a person for a period over three months, unless the conditions laid down in article 22 (4) (a) are complied with. The exception to this is in respect of an Act of the Parliament made on the conditions mentioned in article 22 (4) (b). According to that, the Parliament has to pass an Act consistently with the provisions of article 22 (7). The important point is that in respect of this fundamental right given to a person limiting the period of his detention up to three months, an exception is made in favour of the Parlia ment by the article. It appears to me a violation of the provisions of this article on fundamental rights to suggest that the Parliament having the power to make a legislation within the terms of article 22(7) has the power to delegate that right in favour of the executive government. In my opinion, therefore the argument that under the Constitution of 1950 the power of legislation carries with it the power of delegation, in the larger sense, as contended by the Attorney General cannot be accepted. Having regard to the position of the British Parliament, the question whether it can validly delegate its legislative functions cannot be raised in a court of law. Therefore from the fact that the British Parliament has delegated legisla tive powers it does not follow. that the power of delegation is recognised in law as necessarily included in the power of legislation, Although 798 in the Constitution of India there is no express separation of powers, it is clear that a legislature is created by the Constitution and detailed provisions are made for making that legislature pass laws. Is it then too much to say that under the Constitution the duty to make laws, the duty to exercise its own wisdom, judgment and patriotism in making laws is primarily cast on the legislatures ? Does it not imply that unless it can be gathered from other provisions of the Constitution, other bodies, executive or judicial, are not intended to discharge legislative functions ? I am unable to read the decisions to which our attention has been drawn as laying down that once a legislature observes the procedure prescribed for passing a bill into an Act, it becomes a valid law, unless it is outside the Legislative Lists in the Seventh Schedule prescribing its respective powers. I do not read articles 245 and 246 as covering the question of delegation of legislative powers. In my opinion, on a true construction of articles 245 and 246 and the Lists in the Seventh Schedule, construed in the light of the judicial decisions mentioned above, legislation delegating legislative powers on some other bodies is not a law on any of the subjects or entries mentioned in the Legislative Lists. It amounts to a law which states that instead of the legislature passing laws on any subject covered by the entries, it confers on the body mentioned in the legislation the power to lay down the policy of the law and make a rule of conduct binding on the persons covered by the law. As a result of considering all these decisions together it seems to me that the legislature in India, Canada, Aus tralia and the U.S.A. has to discharge its legislative functions, i.e., to lay down a rule of conduct. In doing so it may, in addition, lay down conditions, or state facts which on being fulfilled or ascertained according to the decision of another body or the executive authority, the legislation may become applicable to a particular area. This is described as conditional legislation. The legislature may also, in laying down the rule of conduct, express itself generally if the conditions and circumstances so require. The extent of the 799 specific and detailed lines of the rule of conduct to be laid down may vary according to the circumstances or exigen cies, of each case. The result will be that if, owing to unusual circumstances or exigencies, the legislature does not choose to lay down detailed rules or regulations, that work may be left to another body which is then deemed to have subordinate legislative powers. Having regard to the distinction noticed above between the power of delegation of legislative functions and the authority to confer powers which enables the donee of the power to make regulations or rules to bring into effect or operation the law and the power of the legislature to make conditional legislation, I shall proceed to consider the three specific questions mentioned in the Reference. It may be noticed that occasions to make legislation of the type covered by the three sections mentioned in the three ques tions began in the early stages of the occupation of India where small bits of territories were acquired and in respect of which there was no regular legislative body. It was thought convenient to apply to these small areas laws which were made by competent ' legislature in contiguous areas. That practice was adopted to avoid setting up a separate, sometimes inconvenient and sometimes costly, machinery of legislation for the small area. Nor might it have been considered possible for the Governor General in Council to enact laws for the day to day administration of such bits of territory or for all their needs having regard to different local conditions. As local conditions may differ to a cer tain extent, it appears to have been considered also conven ient to confer powers on the administrator to apply the law either in whole or in part or to restrict its operation even to a limited portion of such newly acquired area. This aspect of legislation is prominently noticed in Act XXII of 1869 discussed in The Queen vs Burah(1). Under section 22 of the Indian Councils Act of 1861, the Governor General in Council was given power to make laws for all persons and for all places and things whatever within British India. The Province of Delhi was carved out of the Province of Punjab and was put (1) 5 I.A. 178. 800 under a Chief Commissioner and by section 2 of the the laws in force in the Punjab continued to be operative in the newly created Province of Delhi. The Province of Delhi had not its legislative body and so far as this Chief Commissioner 's Province is concerned it is not disputed that the power to legislate was in the Governor General in Council in his legislative capacity. The first question as worded has to be answered according to the powers and position of the legislature in 1912. Section 7 of the enables the Government (executive) to extend by notification with such restrictions and modifica tions as it thinks fit, to the Province of Delhi or any part thereof, any enactment which is in force in any part of British India, at the date of such notification, i.e., a law which was in force not necessarily in the Province of Punjab only, from which the Province of Delhi was carved out, but any Central or provincial law in force in any Province. Again, the Government is given power to extend any such law with such restrictions and modifications as it thinks fit. Moreover it enables the Provincial Government to extend an Act which is in force "at the date of such notification. " Those words therefore permit extension of future laws which may be passed either by the Central or any Provincial legis lature, also with such restrictions and modifications as the Provincial Government may think fit. At this stage, sections 8 and 9 of Act XXII of 1869 under which powers were given to the Lieut. Governor in The Queen vs Burah(1) may be com pared. They permitted the extension of Acts which were or might be made by the Governor General in Council (legisla tive) or the Lieut. Governor, both of whom were the competent legislative authorities for the whole area under the admin istrative jurisdiction of the Lieut. Governor. The power was confined to extend only those Acts, over the area specified in Act XXII of 1869, although that area was declared by Act XXII of 1869 as not subject to the laws of the Province, unless the area was specifically mentioned in the particular Act. On (1) 5 I.A. 178. 801 the authority of that decision therefore, so far as section 7 of the gives power to the executive (Cen tral) Government to extend Acts passed by the Central Legis lature to the Province of Delhi, the same may be upheld. The question then remains in respect of the power of the executive government to extend Acts of other Provincial legislatures (with or without restrictions or modifications) to the Chief Commissioner 's Province. It is obvious that in respect of these Acts the Central Legislature has not ap plied its mind at all. It has not considered whether the Province of Delhi requires the rule of conduct laid down in those Acts, as necessary or beneficial for the welfare of the people of the Province or for its government. They are passed by other Provincial legislatures according to their needs and circumstances. The effect of section 7 of the therefore in permitting the Central Govern ment to apply such Provincial Acts to the Province of Delhi is that, instead of the Central Legislature making up its mind as to the desirability or necessity of making laws on certain subjects in respect of the Province of Delhi, that duty and right are conferred on the executive government. For example, the question whether a rent act, or an excise act, or what may be generally described as a prohibition act, or a debt relief act is desirable or necessary, as a matter of policy for the Province of Delhi is not considered and decided by the Central Legislature which, in my opinion, has to perform that duty, but that duty and function without any reservation is transferred over to the executive govern ment. Section 7 of the thus contains an entirely different quality of power from the quality of power conferred by sections 8 and 9 of Act XXII of 1869. All the decisions of the Privy Council unequivocally affirm that it is not competent for the Indian Legislature to create a body possessing the same powers as the Central Legislature itself. It is stated that the legislature cannot efface itself. One may well ask, if section 7 of the has done 802 anything else. The Privy Council decisions emphasize two aspects in respect of this question. The first is whether the new body is empowered to make laws. The second is, does the sanction flow from the legislation made by the legisla ture or from the decision of the newly created body. As regards the first, it is obvious that in principle there is no difference if the newly created body itself writes out on a sheet of paper different sections of an Act or states that the Act will be what is written or printed on another clear ly identifiable paper. Therefore if such new body says that the law in Delhi will be the same as Bombay or Madras Act so and so of such and such year it has made the law. Moreover it may be remembered that in doing so the new body may re strict or modify the provisions of such Act also. On the second aspect the sanction flows clearly from the notifica tion of the newly created body that Bombay or Madras Act so and so with such modifications as may be mentioned, will be the law. That has not been the will or decision of the legis lature. The legislature has not applied its mind and said "Bombay Act . . . is the law of this Province". In my opinion, it is futile to contend that the sanction flows from the statement of the legislature that the law will be what the newly created body decides or specifies, for that statement only indicates the new body and says that we confer on it power to select a law of another province. The illustrations of the extension of the Civil and Criminal Procedure Codes, mentioned in the judgment in The Queen vs Burah(1) have to be considered along with the fact that at that time the Governor General in Council, in its legislative capacity, had power of legislation over the whole of India on all subjects. The Civil and Criminal Procedure Codes were enacted by the Central Legislature and it could have made the same applicable at once to the whole of India. But having passed the laws, it laid down a condi tion that its application may be referred to certain areas until the particular Provincial Government (executive) considered it convenient for these Codes to be made (1) 5 I.A. 178, 803 applicable to its individual area. A Provincial Govern ment, e.g., of Bombay, was not empowered to lay down any policy in respect of the Civil Procedure Code or the Crimi nal Procedure Code nor was it authorised to select, if it liked, a law passed by the Legislature of Madras for its application to the Province of Bombay. If it wanted to do so, the Legislature of the Province of Bombay had to exer cise its judgment and decision and pass the law which would be enforceable in the Province of Bombay. It may be noticed that the power to extend, mutatis mutandis, the laws as contained in sections 8 and 9 of Act XXII of 1869 brings in t.he idea of adaptation by modification, but so far only as it is necessary for the purpose. In my opinion, therefore, to the extent section 7 of the permits the Central executive government to apply any law passed by a Provincial legislature to the Province of Delhi, the same is ultra vires the Central Legislature. To that extent the Central Legislature has abdicated its functions and there fore the Act to the extent is invalid. Question 2 relates to Ajmer Merwara (Extension of Laws) Act. Till the Government of India Act, 1915, there was unitary government in India. By the Act of 1915, Provincial legislatures were given powers of legislation but there was no distribution of legislative powers between the Centre and the Provinces. That was brought about only by the Govern ment of India Act, 1935. Section 94 of that Act enumerates the Chief Commissioner 's Provinces. They include the Prov inces of Delhi and Ajmer Merwara. Under sections 99 and 100 there was a distribution of legislative powers between Provinces and Centre, but the word "Province" did not in clude a Chief Commissioner 's Province and therefore the Central Legislature was the only law making authority for the Chief Commissioner 's Provinces. The Ajmer Merwara Act was passed under the Government of India Act as adapted by the Indian Independence Act. Although by that Act the control of British Parliament over the Government of India 804 and the Central Legislature was removed, the powers of the Central Legislature were still as those found in the Govern ment of India Act, 1935. The Independence Act therefore made no difference on the question whether the power of delega tion was contained in the legislative power. The result is that to the extent to which section 7 of the is held ultra vires, section 2 of the Ajmer Merwara Act, 1947, should also be held ultra vires. This brings me to Question 3. section 2 of the Part C States (Laws) Act, 1950, is passed by the Indian Parliament. Under article 239 of the Constitution of India, the powers for the administration of Part C States are all vested in the President. Under article 240 the Parliament is empowered to create or continue for any State specified in Part C, and administered through a Chief Commissioner or Lieutenant Governor; (a) a body whether nominated or elected or partly nominated or partly elected, to function as a legislature for the State, or (b) a Council of Advisers or Ministers. It is common ground that no law creating such bodies has been passed by the Parliament so far. Article 246 deals with the distribution of legislative powers between the Centre and the States but Part C States are outside its operation. Therefore on any subject affecting Part C States, Parliament is the sole and exclusive legislature until it passes an Act creating a legislature or a Council in terms of article 240. Proceeding on the footing that a power of legislation does not carry with it the power of delegation (as claimed by the Attorney General), the question is whether section 2 of the Part C States (Laws) Act is valid or not. By that section the Parliament has given power to the Central Government by notification to extend to any part of such State (Part C State), with such restrictions and modifications as it thinks fit, any enactment which is in force in Part A State at the date of the.notification. The section although framed on the lines of the and the Ajmer Merwara Act is restricted in 805 its scope as the executive government is empowered to extend only an Act which is in force in any of the Part A States. For the reasons I have considered certain parts of the two sections covered by Questions 1 and 2 ultra rites, that part of section 2 of the Part C States (Laws) Act, 1950, which empowers the Central Government to extend laws passed by any Legislature of Part A State, will also be ultra vires. To the extent the Central Legislature or Parliament has passed Acts which are applicable to Part A States, there can be no objection to the Central Government extending, if necessary, the operation of those Acts to the Province of Delhi, be cause the Parliament is the competent legislature for that Province. To the extent however the section permits the Central Government to extend laws made by any legislature of Part A State to the Province of Delhi, the section is ultra vires. In view of my conclusion in respect of the first part of section 2 of the Part C States (Laws) Act, 1950, I do not think it necessary to deal with separately the other part of the section relating to the power to repeal or amend a corresponding law for the time being applicable to that Part C State. Before concluding, I must record the appreciation of the Court in the help the learned Attorney General and the counsel appearing in the Reference have rendered to the Court by their industry in collecting all relevant materials and putting the same before the Court in an extremely fair manner. My answers to the questions are that all the three sections mentioned in the three questions are ultra vires the Legislatures, functioning at the relevant dates, to the extent power is given to the Government (executive) to extend Acts other than Acts of the Central Legislature as mentioned in the judgment. FAZL ALI J. The answer to the three questions which have been referred by the President under article 143 of the Constitution of India, depends upon the proper answer to another question which was the 806 subject of very elaborate arguments before us and which may be stated thus: Can a legislature which is sovereign or has plenary powers within the field assigned to it, delegate its legislative functions to an executive authority or to anoth er agency, and, if so. to what extent it can do so ? In dealing with this question, three possible answers may be considered. They are : (1) A legislature which is sovereign in a particular field has unlimited power of delegation and the content of its power must necessarily include the power to delegate legislative functions; (2) Delegated legislation is permissible only within certain limits; and (3) Delegated legislation is not permissible at all by reason of certain principles of law which are wellknown and well recognised. I will first consider the last alternative, but I should state that in doing so I will be using the expressions, "delegated legislation," and "delegation of legislative authority," in the loose and popular sense and not in the strict sense which I shall explain later. One of the principles on which reliance was placed to show that legislative power cannot be delegated is said to be embodied in the well known maxim, delegatus non potest delegare, which in simple language means that a delegated authority cannot be redelegated, or, in other words, one agent cannot lawfully appoint another to perform the duties of agency. This maxim however has a limited application even in the domain of the law of contract or agency wherein it is frequently invoked and is limited to those cases where the contract of agency is of a confidential character and where authority is coupled with discretion or confidence. Thus, auctioneers, brokers, directors, factors, liquidators and other persons holding a fiduciary position have generally no implied authority to employ deputies or sub agents. The rule is so stated in Broom 's Legal Maxims, and many other books, and it is also stated that in a number of cases the authority to employ 807 agents is implied. In applying the maxim to the act of a legislative body, we have necessarily to ask "who is the principal and who is the delegater" In some cases where the question of the power of the Indian or a colonial legisla ture came up for consideration of the courts, it was sug gested that such a legislature was a delegate of the British Parliament by which it had been vested with authority to legislate. But this view has been rightly repelled by the Privy Council on more than one occasion, as will appear from the following extracts from two of the leading cases on the subject: "The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it, and it can of course do nothing beyond the limits which circum scribe these powers. But when acting within those limits it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation as large, and of the same nature, as those of Parliament itself. " Reg. vs Burah (1). "It appears to their Lordships, however, that the objec tion thus raised by the appellants is founded on an entire misconception of the true character and position of the Provincial Legislatures. They are in no sense delegates of or acting under any mandate from the Imperial Parliament. When the British North America Act enacted that there should be a Legislature for Ontario, and that its Legislative Assembly should have exclusive authority to make laws for the Province and for Provincial purposes in relation to the matters enumerated in section 92, it conferred powers, not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample, within the limits prescribed by section 92, as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and areas the Local Legislature is supreme, and has the same authority as the Imperial Parliament.": Hodge vs The Queen (2). (1) 3 App. (2) 9 App. 117. 808 It has also been suggested by some writers that the legislature is a delegate of the people or the electors. This view again has not been accepted by some constitutional writers, and Dicey dealing with the powers of the British Parliament with reference to the Septennial Act, states as follows : "That Act proves to demonstration that in a legal point of view Parliament is neither the agent of the electors nor in any sense a trustee for its constituents. It is legally the sovereign legislative power in the state, and the Sep tennial Act is at once the result and the standing proof of such Parliamentary sovereignty." (1) The same learned author further observes: "The Judges know nothing about any will of the people except in so far as that will is expressed by an Act of Parliament, and would never suffer the validity of a statute to be questioned on the ground of its having been passed or being kept alive in opposition to the wishes of the elec tors." (2) There can be no doubt that members of a legislature represent the majority of their electors, but the legisla ture as a body cannot be said to be an agency of the elec torate as a whole. The individual members may and often do represent different parties and different shades of opinion, but the composite legislature which legislates, does so on its own authority or power which it derives from the Consti tution, and its acts cannot be questioned by the electorate, nor can the latter withdraw its power to legislate on any particular matter. As has been pointed out by Dicey, "the sole legal right of electors under the English Constitution is to elect members of Parliament. Electors have no legal right of initiating, of sanctioning, or of repealing the legislation of Parliament." (3) It seems to me therefore that it will not be quite accurate to say that the legislature being an agent of (1) Dicey 's:"Law of the Constitution", 8th edn., p. 45. (2) Ibid, p. 72. (3) Dicey 's "Law of the Constitution", 8th edn., p. 57. 809 its constituents, its powers are subject to the restrictions implied in the Latin maxim referred to. I shall however advert to this subject again when I deal with another principle which is somewhat akin to the principle underlying the maxim. The second principle on which reliance was placed was said to be founded on the well known doctrine of "separation of powers. " It is an old doctrine which is said to have originated from Aristotle, but, as is well known, it was given great prominence by Locke and Montesquieu. The doc trine may be stated in Montesquieu 's own words: "In every government there are three sorts of power, the legislative; the executive in respect to things dependent on the law of nations; and the executive in regard to matters that depend on the civil law . When the legislative and the executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may rise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner. Again, there is no liberty, if the judi ciary power be not separated from the legislative and the executive. Were it joined with the legislative, the life and liberty of the subject would be exposed to abritrary control; for the judge would be then the legislator. Were it joined to the executive power, the judge might behave with violence and oppression. There should be an end of everything, were the same man or the same body, whether of the nobles or of the people, to exercise those three powers, that of enacting laws, that of executing the public resolu tions, and of trying the causes of individuals. "(1) The doctrine found many enthusiasts in America and was virtually elevated to a legal principle in that country. Washington, in his farewell address, said : "The spirit of enroachment tends to consolidate the powers of all governments in one, and thus to (1) Montesquieu 's Spirit of Laws, Vol. 1 by J. V. Pritchard, 1914 edn, pp. 162 3. 810 create, whatever the form of government, a real despotism." John Adams wrote on similar lines as follows:" It is by balancing one of these three powers against the other two that the efforts in human nature toward tyranny can alone be checked and restrained and any degree of free dom preserved." (1) These sentiments are fully reflected in the Constitu tions of the individual States as well as in the Federal Constitution of America. Massachusetts in her Constitution, adopted in 1780, provided that "in the govern ment of this commonwealth the legislative department shall never exercise the executive and judicial powers or either of them; the executive shall never exercise legislative and judicial powers or either of them; the judicial shall never exercise legislative and executive powers or either of them; to the end that it may be a government of laws and not of men. "(2) The Constitutions of 39 other States were drafted on similar lines, and so far as the Federal Constitution of the United States was concerned, though it does not express ly create a separation of governmental powers, yet from the three articles stating that the legislative power vests in Congress, the judicial power in the Supreme Court and the executive power in the President, the rule has been deduced that the power vested in each branch of the Government cannot be vested in any other branch. nor can one branch interfere with the power possessed by any other branch. This rule has been stated by Sutherland J. in Springer vs Government of the Philiipine Islands(s) in these words : "It may be stated then, as a general rule inherent in the American constitutional system, that unless otherwise expressly provided or incidental to the powers conferred, the Legislature cannot exercise either executive or judicial power; the Executive (1) Vide, Works, Vol. 1, p. 186. (2) Willoughby 's Constitution of the United States, Vol. III, 1616. (3) ; at 201, 811 cannot exercise either legislative or judicial power; the Judiciary cannot exercise either executive or legislative power. " From the rule so stated, the next step was to deduce the rule against delegation of legislative power which has so often been stressed in the earlier American decisions. It was however soon realized that the absolute rule against delegation of legislative power could not be sustained in practice, and as early as 1825, Marshall C.J. openly stated that the rule was subject to limitations and asserted that Congress "may certainly delegate to others powers which the Legislature may rightfully exercise itself ,,(1). In course of time, notwithstanding the maxim against delegation, the extent of delegation had become so great that an American writer wrote in 1916 that "because of the rise of the admin istrative process, the old doctrine prohibiting the delega tion of legislative power has virtually retired from the field and given up the fight".(2) This is in one sense an over statement, because the American Judges have never ceased to be vigilant to check any undue or excessive au thority being delegated to the executive as will appear from the comparatively recent decisions of the American Supreme Court in Panama Refining Co. vs Ryan (3) and Schechter Poultry Corp. vs United States(4). In the latter case, it was held that the National Industrial Recovery Act, in so far as it purported to confer upon the President the author ity to adopt and make effective codes of fair competition and impose the same upon members of each industry for which such a code is approved, was void because it was an uncon stitutional delegation of legislative power. Dealing with the matter, Cardozo J. observed as follows : ' "The delegated power of legislation which has found expression in this code is not canalized within (1) Wayman vs Southard (2) 41 American Bar Asscn. Reports, 356 at 368. (3) ; (4) ; 812 banks that keep it from overflowing. It is unconfined and vagrant . Here, in the case before us, is an attempt ed delegation not confined to any single act nor to any class or group of acts identified or described by reference to a standard. Here in effect is a roving commission to inquire into evils upon discovery to correct them . This is delegation running riot. No such plenitude of power is capable of transfer. "(1) The fact however remains that the American courts have upheld the so called delegated legislation in numerous instances, and there is now a wide gulf between the theoret ical doctrine and its application in practice. How numerous are the exceptions engrafted on the rule will appear on a reference to a very elaborate and informing note appended to the report of the case of Panama Refining Co. vs Ryan in 79, Lawyer 's Edition at page 448. In this note, the learned authors have classified instances of delegation upheld in America under the following 8 heads, with numerous sub heads : 1. Delegation of power to determine facts or conditions on which operation of statute is contingent. Delegation of non legislative or administrative functions. Delegation of power to make administrative rules and regulations. Delegation to municipalities and local bodies. Delegation by Congress to territorial legislature or commission. Delegation to private or non official persons or corporations. Vesting discretion in judiciary. Adopting law or rule of another jurisdiction. The learned American Judges in laying down exceptions to the general rule from time to time, have offered various expla nations, a few of which may be quoted as samples: (1) ; at 551. 813 " . however we may disguise it by veiling words we do not and cannot carry out the distinction between legislative and executive action with mathematical precision and divide the branches into watertight compartments, were it ever so desirable to do so, which I am far from believ ing that it is, or that the Constitution requires. " [Per Holmes J. in Springer vs The Government of Phillipine Is lands(1)] " . too much effort to detail and particularize, so as to dispense with the administrative or fact finding assist ance, would cause great confusion in the laws, and would result in laws deficient in both provision and execution." [Mutual Film Corporation vs Industrial Commission(2)] "If the legislature ' 'were ' strictly required to make provision for all the minutiae of regulation, it would, in effect, be deprived of the power to enact effective legisla tion on subjects over which it has undoubted power." "The true distinction. is this. The legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. "(3) "The true distinction is between the delegation of power to make the law which necessarily involves a discretion as to what it shall be. and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made." [Per Ranney J. in Cincinnati W. & Z.R. Co. vs Clinton County Commissioners(4)]. (1) ; (31 Locke 's Appeal, (2) ; (4) 814 "Half the statutes on our books are in the alternative, depending on the discretion of some person or persons to whom is confided the duty of determining whether the proper occasion exists for executing them. But it cannot be said that the exercise of such discretion is the making of law." [Moore v.Reading(1)] "Congress may declare its will and, after fixing a primary standard, devolve upon administrative officers the power to fill up the details by prescribing administrative rules and regulations." [United States vs Shreveport Grain & E. Co.(2)] . . . . "The Constitution has never been regarded as denying to the Congress the necessary resources of flexibility and practicality which will enable it to perform its functions in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordi nate rules within the prescribed limits, the determination of facts to which the policy as declared by the legislature is to apply. Without capacity to give authorizations of that sort, we should have the anomaly of a legislative power which in many circumstances calling for its exertion would be but a futility." [Per Hughes C.J. in Panama Refining Co. Ryan(3)] "This is not to say that the three branches are not co ordinate parts of one government and that each in the field of its duties may not invoke the action of the two other branches in so far as the action invoked shall not be an assumption of the constitutional field of action of another branch." [Per Taft C.J. in J.W. Hampton Jr. & Co. vs U. S.(4)] I have quoted these extracts at the risk of encumbering my opinion for 2 reasons:firstly, because they (1) (3) ; (2) (4) ; 815 show that notwithstanding the prevalence of the doctrine of separation of powers in America, the rule against delega tion of legislative power is by no means an inelastic one in that country, and many eminent Judges there have tried to give a practical trend to it so as to bring it in line with the needs of the present day administration, and secondly, because they show that the rule against delegation is not a necessary corollary from the doctrine of separation of powers. It is to be noted that though the principle of separa tion of powers is also the basis of the Australian Constitu tion, the objection that the delegation of legislative power was not permissible because of.the distribution of powers contained in the Constitution has been raised in that Com monwealth only in a few cases and in all those cases it has been negatived. The first case in which this objection was raised was Baxter vs Ah Way(1). In that case, the validity of section 52 of the Customs Act, 1901, was challenged. That section after enumerating certain prohibited imports provid ed for the inclusion of "all goods the importation of which may be prohibited by proclamation. " Section 56 of the Act provided that "the power of prohibiting importation of goods shall authorise prohibition subject to any specified condition or restriction and goods imported contrary to any such condition or restriction shall be prohibited imports. " The ground on which these provisions were chal lenged was that they amounted to delegation of legislative power which had been vested by the Constitution in the Federal Parliament. Griffith C.J. however rejected the contention and in doing so relied on Queen vs Burah(2) and other cases, observing : " . . . unless the legislature is prepared to lay down at once and for all time, or for so far into the future as they may think fit, a list of prohibited goods, they must have power to make a prohibition depending upon a condition, and that condition may be the coming into exist ence or the discovery of some fact (1) ; (2) 3 App. 889. 816 . . And if that fact is to be the condition upon which the liberty to import the goods is to depend, there must be some means of ascertaining that fact, some person with power to ascertain it; and the Governor in Council is the authority appointed to ascertain and declare the fact. " The other cases in which a similar objection was taken, are Welebach Light Co. of Australasia Ltd. vs The Common wealth(1), Roche vs Kronheimer(2), and Victorian Stevedor ing and General Contracting Co. Pry. Ltd. and Meakes vs Dignan(3). In the last mentioned case in which the matter has been dealt with at great length, Dixon J. observed thus : " . . the time has passed for assigning to the constitutional distribution of powers among the separate organs of government, an operation which confined the legis lative power to the Parliament so as to restrain it from reposing in the Executive an authority of an essentially legislative character. "(4) In England, the doctrine of separation of powers has exer cised very little influence on the course of judicial deci sions or in shaping the Constitution, notwithstanding the fact that distinguished writers like Locke and Blackstone strongly advocated it in the 17th and 18th centuries. Locke in his treatise on Civil Government wrote as follows : "The legislature cannot transfer the power of making laws to any other hands; for it being a delegated power from the people, they who have it cannot pass it over to others. (g 141). Blackstone endorsed this view in these words : Wherever the right of making and enforcing the law is vested in the same man or one and the same body of men, there can be no public liberty. "(5) Again, Montesquieu, when he enunciated the doctrine of sepa ration of powers, thought that it represented the (1) ; (3) (1931) 46C.L.R. 73. (2) (4) Ibid, p. 100. (5) Commentaries on the Laws of England, 1765. 817 quintessence of the British Constitution for which he had great admiration. The doctrine had undoubtedly attracted considerable attention in England in the 17th and 18th centuries, but in course of time it came to have a very different meaning there from what it had acquired in the United States of America. In the United States, the empha sis was on the mutual independence of the three departments of Government. But, in England, the doctrine means only the independence of the judiciary, whereas the emergence of the Cabinet system forms a ]ink between the executive and the legislature. How the Cabinet system works differently from the so called non parliamentary system which obtains in the United States, may be stated very shortly. In the United States, the executive power is vested in the Presi dent, to whom, and not to the Congress, the members of the Cabinet are personally responsible and neither the President nor the members of the Cabinet can sit or vote in Congress, and they have no responsibility for initiating bills or seeking their passage through Congress. In England, the Cabinet is a body consisting of members of Parliament chosen from the party possessing a majority in the House of Com mons. It has a decisive voice in the legislative activities of Parliament and initiates all the important legislation through one or other of the Ministers, with the result that "while Parliament is supreme in that it can make or unmake Government, the Government once in power tends to control the Parliament. " The conclusion which I wish to express may now be stated briefly. It seems to me that though the rule against delega tion of legislative power has been assumed in America to be a corollary from the doctrine of separation of powers, it is strictly speaking not a necessary or inevitable corollary. The extent to which the rule has been relaxed in America and the elaborate explanations which have been offered to justi fy departure from the rule, confirm this view, and it is also supported by the fact that the trend of decisions in Australia, notwithstanding the fact that its Constitution 818 is at least theoretically based on the principle of separa tion of powers, is that the principle does not stand in the way of delegation in suitable circumstances. The division of the powers of Government is now a normal feature of all civilised constitutions, and, as pointed out by Rich J. in New South. Wales vs Commonwealth.(1), ,, it is "well known in all British communities ; yet, except m the United States, nowhere it has been held that by itself it forbids delegation of legislative power. It seems to me that the American jurists have gone too far in holding that the rule against delegation was a direct corollary from the separa tion of powers. I will now deal with the third principle, which, in my opinion, is the true principle upon which the rule against delegation may be founded. It has been stated in Cooley 's Constitutional Limitations, Volume 1 at page 224 in these words : "One of the settled maxims in constitutional law is, that the power conferred upon the legislature to make laws cannot be delegated by that department to any other body or authority. Where the sovereign power of the State has located the authority, there it must remain; and by the constitutional agency alone the laws must be made until the constitution itself is changed. The power to whose judgment, wisdom, and patriotism this high prerogative has been in trusted cannot relieve itself of the responsibility by choosing other agencies upon which the power shall be de volved, nor can it substitute the judgment, wisdom, and patriotism of any other body for those to which alone the people have seen fit to confide this sovereign trust. " The same learned author observes thus in his wellknown book on Constitutional Law (4th Edition, page 138): "No legislative body can delegate to another depart ment of the government, or to any other authority, the power, either generally or specially, to enact (1) ; at 108. 819 laws. The reason is found in the very existence of its own powers. This high prerogative has been intrusted to its own wisdom, judgment, and patriotism, and not to those of other persons, and it will act ultra vires if it undertakes to delegate the trust, instead of executing it. " This rule in a broad sense involves the principle underly ing the maxim, delegatus non potest delegare, but it is apt to be misunderstood and has been misunderstood. In my judg ment, all that it means is that the legislature cannot abdicate its legislative functions and it cannot efface itself and set up a parallel legislature to discharge the primary duty with which it has been entrusted. This rule has been recognized both in America and in England, and Hughes C.J. has enunciated it in these words : "The Congress manifestly is not permitted to abdicate, or to transfer to others, the essential legislative func tions with which it is thus vested. "(1) The matter is again dealt with by Evatt J. in Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Neakes vs Dignan(2), in these words : "On final analysis therefore, the Parliament of the Commonwealth is not competent to 'abdicate ' its powers of legislation. This is not because Parliament is bound to perform any or all of its legislative powers or functions, for it may elect not to do so; and not because the doctrine of separation of powers prevents Parliament from granting authority to other bodies to make laws or bye laws and thereby exercise legislative power, for it does so in almost every statute; but because each and every one of the laws passed by Parliament must answer the description of a law upon one or more of the subject matters.stated in the Con stitution. A law by which Parliament gave all its lawmaking authority to another body would be bad merely because it would fail to pass the test last mentioned." (1) , (2) at 121, 820 I think that the correct legal position has been compre hensively summed up by Lord Haldane in In re the Initiative and Referendum Act(3): "No doubt a body, with a power of legislation on the subjects entrusted to it so ample as that enjoyed by a Provincial Legislature in Canada, could, while preserving its own capacity intact, seek the assistance of subordinate agencies, as has been done when in Hodge vs The Queen, the Legislature of Ontario was held entitled to entrust to a Board of Commissioners authority to enact regulations relat ing to taverns; but it does not follow that it can create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence. " What constitutes abdication and what class of cases will be covered by that expression will always be a question of fact, and it is by no means easy to lay down any comprehen sive formula to define it, but it should be recognized that the rule against abdication does not prohibit the Legisla ture from employing any subordinate agency of its own choice for doing such subsidiary acts as may be necessary to make its legislation effective, useful and complete. Having considered the three principles which are said to negative delegation of powers, I will now proceed to consid er the argument put forward by the learned Attorney General that the power of delegation is implicit in the power of legislation. This argument is based on the principle of sovereignty of the legislature within its appointed field. Sovereignty has been variously described by constitutional writers, and sometimes distinction is drawn between legal sovereignty and political sovereignty. One of the writers describes it as the power to make laws and enforce them by means of coercion it cares to employ, and he pro ceeds to say that in England the legal sovereign, i.e., the person or persons who according to the law of the land legislate and administer the Government, is the King in Parliament, whereas the political (1) at 945. 821 or the constitutional sovereign, i.e., the body of persons in whom power ultimately resides, is the electorate or the voting public(1). Dicey states that the legal conception of sovereignty simply means the power of law making unrestrict ed by any legal limit, and if the term "sovereignty" is thus used, the sovereign power under the English Constitution is the Parliament. The main attribute of such sovereignty is stated by him in in these words : "There is no law which Parliament cannot change (or to put the same thing somewhat differently, fundamental or so called constitutional laws are under our Constitution changed by the same body and in the same manner as other laws, namely, by Parliament acting in its ordinary legisla tive character) and any enactment passed by it cannot be declared to be void. According to the same writer, the characteristics of a non sovereign law making body are : ( 1 ) the existence of laws which such body must obey and cannot change;(2) the formation of a marked distinction between ordinary laws and fundamental laws;and (3) the existence of some person or persons, judicial or otherwise, having authority to pro nounce upon the validity or constitutionality of laws passed by such law making body. Dealing with the Indian or the colonial legislature, the learned writer characterizes it as a non sovereign legislature and proceeds to observe that its authority to make laws is as completely subordinate to and as much dependent upon Acts of Parliament as is the power of London and NorthWestern Railway Co. to make byelaws. This is undoubtedly an overstatement and is certainly not ap plicable to the Indian Parliament of today. Our present Parliament, though it may not be as sovereign as the Parlia ment of Great Britain, is certainly as sovereign as the Congress of the United States of America and the Legisla tures of other independent countries having a Federal Con stitution. But what is more relevant (1) Modern Political Constitutions, by Strong. 822 to our purpose is that Dicey himself, dealing with colonial and other similar legislatures, says that "they are in short within their own sphere copies of the Imperial Parlia ment, they are within their own sphere sovereign bodies, but their freedom of action is controlled by their subordination to the Parliament of the United Kingdom. " These remarks undoubtedly applied to the Legislative Council of 1912 which passed the , and they apply to the present Parliament also with this very material modification that its freedom of action is no longer controlled by subor dination to the British Parliament but is controlled by the Indian Constitution. At this stage, it will be useful to refer to certain cases decided by the Privy Council in England in which the question of the ambit of power exercised by the Indian and colonial legislatures directly arose. The leading case on the subject is Queen vs Burah(1), which has been cited by this court on more than one ' occasion and has been accepted as good authority. In that case, the question arose whether a section of Act No. XXII of 1869 which conferred upon the Lieutenant Governor of Bengal the power to determine whether a law or any part thereof should be applied to a certain territory was or was not ultra vires. While holding that the impugned provision was intra vires, the Privy Council made certain observations which have been quoted again and again and deserve to be quoted once more. Having held that the Indian Legislature was not a delegate of the Imperial Parliament and hence the maxim, delegatus non potest dele gare, did not apply (see ante for the passage dealing with this point), their Lordships proceeded to state as follows:. "Their Lordships agree that the Governor General in Council could not by any form of enactment, create in India, and arm with general legislative authority, a new legisla tive power, not created or authorized by the Councils Act. Nothing of that kind has, in their Lordships ' opinion, been done or attempted in the (1) 5 I.A. 178. 823 present case. What has been done is this. The Governor General in Council has determined, in the due and ordinary course of legislation, to remove a particular district from the jurisdiction of the ordinary Courts and offices, and to place it under new Courts and offices., to be appointed by and responsible to the Lieutenant Governor of Bengal, leav ing it to the Lieutenant Governor to say at what time that change shall take place; and also enabling him, not to make what laws he pleases for that or any other district, but to apply by public notification to that district any law, or part of a law, which either already was, or from time to time might be, in force, by proper legislative authority, 'in the other territories subject to his government '. " Then, later they added : "The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legislation is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a provin cial legislature, they may (in their Lordships judgment) be well exercised, either absolutely or conditionally. Legis lation, conditional on the use of particular powers, or on the exercise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient. The British Statute Book abounds with examples of it; and it cannot be supposed that the Imperial Parlia ment did not, when constituting the Indian Legislature, contemplate this kind of conditional legislation as within the scope of the legislative powers which it from time to time conferred. " The next case on the subject is Russell vs The Queen (1). In that case, the Canadian Temperance Act, 1878, was challenged on the ground that it was (1) 7 App, Cas. 824 ultra vires the Parliament of Canada. The Act was to be brought into force in any county or city if on vote of the majority of the electors of that county city favouring such a course, the Governor General in Council declared the relative part of the Act to be on force. It was held by the Privy Council that this provision did not amount to a dele gation of legislative power to a majority of the voters in a city or county. The passage in which this is made clear, runs as follows: "The short answer to this objection is that the Act does not delegate any legislative powers whatever. It contains within itself the whole legislation on the matters with which it deals. The provision that certain parts of the Act shall come into operation only on the petition of a majority of electors does not confer on these persons power to legis late. Parliament itself enacts the condition and everything which is to follow upon the condition being fulfilled. Conditional legislation of this kind is in many cases con venient, and is certainly not unusual, and the power so to legislate cannot be denied to the Parliament of Canada when he subject of legislation is within its competency. If authority on. this point were necessary, it will be found in the case of Queen vs Burah, lately before this Board. The same doctrine was laid down in the case of lodge vs The Queen (1), where the question arose as to whether the legislature of Ontario had or had not the power of entrust ing to a local authority the Board of Commissioners the power of making regulations with respect to the Liquor Licence Act, 1877, which among other things created offences for the breach of hose regulations and annexed penalties thereto. their Lordships held that the Ontario Legislature had that power, and after reiterating that the Legislature which passed the Act was not a delegate, they observed as follows : "When the British North America Act enacted that there should be a legislature for Ontario, and that (1) 9 App. 825 its legislative assembly should have exclusive authority to make laws for the Province and for provincial purposes in relation to the matters enumerated in section 92, it con ferred powers not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by section 92 as the Imperial Parliament in the plenitude of its powers possessed and could bestow. Within these limits of subjects and area the local legislature is supreme, and has the same authority as the Imperial Parliament, or the Parliament of the Dominion, would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make byelaws or resolutions as to subjects specified in the enactment, and with the object of carrying the enactment into operation and effect." Another case which may be usefully cited is Powell vs Apollo Candle Co. (1). The question which arose in that case was whether section 133 of the Customs Regulations Act of 1879 of New South Wales was or was not ultra rites the colonial legislature. That section provided that "when any article of merchandise then unknown to the collector is imported, which, in the opinion of the collector or the commissioners, is apparently a substitute for any known dutiable article, or is apparently designed to evade duty, but possesses properties in the whole or in part which can be used or were intended to be applied for a similar purpose as such dutiable article, it shall be lawful for the Gover nor to direct that a duty be levied on such article at a rate to be fixed in proportion to the degree in which such unknown article approximates in its qualities or uses to such dutiable article. " Having repelled the contention that the colonial legislature was a delegate of the Imperial Parliament and having held that it was not acting as an agent or a delegate, the Privy Council proceeded to deal with the question raised in the following manner : (1) 10App. 826 "It is argued that the tax in question has been imposed by the Governor, and not by the Legislature, who alone had power to impose it. But the duties levied under the Order in Council are really levied by the authority of the Act under which the order is issued. The Legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted to him. Under these circumstances their Lordships are of opinion that the judgment of the Supreme Court was wrong in declaring section 133 of the Customs Regulations Act of 1879 to be beyond the power of the Legislature. " Several other eases were cited at the Bar in which the supremacy of a legislature (which would be nonsovereign according to the tests laid down by Dicey) within the field ascribed to its operation, were affirmed, but it is unnec essary to multiply instances illustrative of that princi ple. I might however quote the pronouncement of the Privy Council in the comparatively recent case of Shannon vs Lower Mainland Dairy Products Board (1), which runs as follows : "The third objection is that it is not within the powers of the Provincial Legislature to delegate so called legislative powers to the Lieutenant Governor in Council, or to give him powers of further delegation. This objection appears to their Lordships subversive of the rights which the Provincial Legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the constitution has granted legislative powers. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament; and it is unnecessary to try to enu merate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted var ious persons and bodies with similar powers to those con tained in this Act. " I must pause here to note briefly certain important principles which can be extracted from the cases (1) at 722. 827 decided by the Privy Council which I have so far cited, apart from the principle that the Indian and colonial legis latures are supreme in their own field and that the maxim, delegatus non potest delegare, does not apply to them. In the first place, it seems quite clear that the Privy Council never liked to commit themselves to the statement that delegated legislation was permissible. It was easy for them to have said so and disposed of the cases before them, but they were at pains to show that the provisions impugned before them were not instances of delegation of legislative authority but they were instances of conditional legislation which, they thought, the legislatures concerned were compe tent to enact, or that the giving of such authority as was entrusted in some cases to subordinate agencies was ancil lary to legislation and without it "an attempt to provide for varying details and machinery to carry them out might become oppressive or absolutely fail. " They also laid down: (1) that it will be not correct to describe conditional legislation and other forms of legislation which they were called upon to consider in several cases which have been cited as legislation through another agency. Each Act or enactment which was impugned before them as being delegated legislation, contained within itself the whole legislation on the matter which it dealt with, laying down the condition and everything which was to follow on the condition being fulfilled; (2) that legislative power could not be said to have been parted with if the legislature retained its power intact and could whenever it pleased destroy the agency it had created and set up another or take the matter directly into its own hands; (3) that the question as to the extent to which the aid of subordinate agencies could be sought by the legislatures and as to how long they should continue them were matters for each legislature and not for the court of law to decide; (4) that a legislature in committing important regulations to others does not efface itself; and (5) that the legislature, like the Governor General in Council, could not by any form of enactment create, and arm with legislative 828 authority, a new legislative power not created or authorised by the Councils Act to which it (the Governor General in Council) owes its existence. I have already indicated that the expressions "delegated legislation" and "delegating legislative power" are some times used in a loose sense, and sometimes in a strict sense. These expressions have been used in the loose or popular sense in the various treatises or reports dealing with the so called delegated legislation; and if we apply that sense to the facts before the Privy Council, there can be no doubt that every one of the cases would be an instance of delegated legislation or delegation of legislative au thority. But the Privy Council have throughout repelled the suggestion that the cases before them were instances of delegated legislation or delegation of legislative authori ty. There can be no doubt that if the legislature completely abdicates its functions and sets up a parallel legislature transferring all its power to it, that would undoubtedly be a real instance of delegation of its power. In other words, there will be delegation in the strict sense if legislative power with all its attributes is transferred to another authority. But the Privy Council have repeatedly pointed out that when the legislature retains its dominant power intact and can whenever it pleases destroy the agency it has created and set up another or take the matter directly into its own hands, it has not parted with its own legislative power. They have also pointed out that the act of the subordinate authority does not possess the true legislative attribute, if the efficacy of the act done by it is not derived from the subordinate authority but from the legisla ture by which the subordinate authority was entrusted with the power to do the act. In some of the cases to which reference has been made, the Privy Council have referred to the nature and principles of legislation and pointed out that conditional legislation simply amounts to entrusting a limited discretionary authority to others, and that to seek the aid of subordinate agencies in carrying out the object of the legislation is ancillary to legislation and properly 829 lies within the scope of the powers which every legislature must possess to function effectively. There is a mass of literature in America also about the socalled delegated legislation, but if the judgments of the eminent American Judges are carefully studied, it will be found that, though in some cases they have used the expression in the popular sense, yet in many cases they have been as careful as the Privy Council in laying down the principles and whenever they have upheld any provision impugned before them on the ground that it was delegation of legislative authority they have rested their conclusion upon the fact that there was in law no such delegation. The learned Attorney General has relied on the authority of Evatt J. for the proposition that "the true nature and scope of the legislative power of the Parliament involves as part of its content power to confer law making power upon authorities other than Parliament itself"(1). It is undoubt edly true that a legislature which is sovereign within its own sphere must necessarily have very great freedom of action, but it seems to me that in strict point of law the dictum of Evatt J. is not a precise or an accurate state ment. The first question which it raises is what is meant by law making power and whether such power in the true sense of the term can be delegated at all. Another difficulty which it raises is that once it is held as a general proposition that delegation of lawmaking power is implicit in the power of legislation, it will be difficult to draw the line at the precise point where the legislature should stop and it will be permissible to ask whether the legislature is competent to delegate 1, 10 or 99 per cent of its legislative power, and whether the strictly logical conclusion will not be that the legislature can delegate the full content of its power in certain cases. It seems to me that the correct and the strictly legal way of putting the matter is as the Privy Council have put it in several cases. The legislature in order to function effectively, has to call for sufficient data, has to (1) See the Victorian Stevedoring case: 830 legislate for the future as well as for the present and has to provide for a multiplicity of varying situations which may be sometimes difficult to foresee. In order to achieve its object, it has to resort to various types and forms of legislation, entrusting suitable agencies with the power to fill in details and adapt legislation to varying circum stances. Hence, what is known as conditional legislation, an expression which has been very fully explained and de scribed in a series of judgments, and what is known as subordinate legislation, which involves giving power to subordinate authorities to make rules and regulations to effectuate the object and purpose for which a certain law is enacted, have been recognized to be permissible forms. of legislation on the principle that a legislature can do everything which is ancillary to or necessary for effective legislation. Once this is conceded, it follows that the legislature can resort to any other form of legislation on the same principle, provided that it acts within the limits of its power, whether imposed from without or conditioned by the nature of the duties it is called upon to perform. The conclusions at which I have arrived so far may now be summed up : (1) The legislature must normally discharge its primary legislative function itself and not through others. (2) Once it is established that it has sovereign powers within a certain sphere, it must follow as a corollary that it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law, and that it may utilize any outside agency to any extent it finds neces sary for doing things which it is unable to do itself or finds it inconvenient to do. In other words, it can do everything which is ancillary to and necessary for the full and effective exercise of its power of legislation. (3) It cannot abdicate its legislative functions, and therefore while entrusting power to an outside 831 agency, it must see that such agency, acts as a subordinate authority and does not become a parallel legislature. (4) The doctrine of separation of powers and the judi cial interpretation it has received in America ever since the American Constitution was framed, enables the American courts to check undue and excessive delegation but the courts of this country are not committed to that doctrine and cannot apply it in the same way as it has been applied in America. Therefore, there are only two main checks in this country on the power of the legislature to delegate, these being its good sense and the principle that it should not cross the line beyond which delegation amounts to "abdicacation and self effacement". I will now deal with the three specific questions with which we are concerned in this Reference, these being as follows : (1) Was section 7 of the , or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the legislature which passed the said Act ? (2) Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the legislature which passed the said Act ? (3) Is section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the Parliament ? Before attempting to answer these questions, it will be Useful to state briefly a few salient facts about the compo sition and power of the Indian Legislature at the dates on which the three Acts in question were passed. It appears that formerly it was the executive Government which was empowered to make regulations and ordinances for "the good government of the factories and territories acquired in India", and up to 1833, the laws used to be passed by the Governor General in Council or by the Governors of Madras and 832 Bombay in Council, in the form of regulations. By the Charter Act of 1833, the Governor General 's Council was extended by the inclusion of a fourth member who was not entitled to sit or vote except at meetings for making laws and regulations. The Governor General in Council was by this Act empowered to make laws and regulations for the whole of India and the legislative powers which vested in the Governors of Madras and Bombay were withdrawn, though they were allowed to propose draft schemes. The Acts passed by the Governor General in Council were required to be laid before the British Parliament and they were to have the same force as an Act of Parliament. In 1853, the strength of the Council of the Governor General was further increased to 12 members, by including the fourth member as an ordinary member and 6 special members for the purpose of legislation only. Then came the Councils Act of 1861, by which the power of legislation was restored to the Governors of Madras and Bombay in Council, and a legislative council was ap pointed for Bengal; but the Governor General in Council was still competent to exercise legislative authority over the whole of India and could make laws for "all persons and all places and things", and for legislative purposes the Council was further remodelled so as to include 6 to 12 members nominated for a period of 2 years by the Governor General, of whom not less than one half were to be non officials. In this Council, no measure relating to certain topics could be introduced without the sanction of the Governor General, and no law was to be valid until the Governor General had given his assent to it and the ultimate power of disallowing a law was reserved to the Crown. Further, local legislatures were constituted for Madras and Bombay, wherein half the members were to be non officials nominated by the Governors, and the assent of the Governor as well as that of the Governor General was necessary to give validity to any law passed by the local legislature. A similar legislature was directed to be constituted for the lower Provinces of Bengal, 833 and powers were given to constitute legislative councils for certain other Provinces. In 1892, the Indian Councils Act was passed, by which the legislative councils were further expanded and certain fresh rights were given to the members. In 1909, came the MorleyMinto scheme under which the strength of the legislative council was increased by the inclusion of 60 additional members of whom 27 were elected and 33 nominated. Soon after this, in 1912, the was passed, and the points which may be noticed in connection with the legislature which functioned at that time are: firstly, within its ambit, its powers were as plenary as those of the legislature of 1861, whose powers came up for consideration before the Privy Council in Bu rah 's case, and secondly, considering the composition of the legislative council in which the non official and the executive elements predominated, there was no room for the application of the doctrine of separation of powers in its full import, nor could it be said that by reason of that doctrine the legislature could not invest the GovernorGener al with the powers which we find him invested with under the . It should be stated that in section 7 of that Act as it originally stood, the Governor General was mentioned as the authority who could by notification extend any enactment which was in force in any part of British India at the date of such notification, The "Provincial Government" was substituted for the "Governor General" subsequently. Coming to the second Act, namely, the Ajmer Merwara (Extension of Laws) Act, 1947, we find that when it was enacted on the 31st December, 1947, the Government of India Act, 1935, as adapted by the India (Provisional Constitu tion) Order, 1947, issued under the Indian Independence Act, 1947, was in force. Under that Act, there were three Legis lative Lists, called the Federal, Provincial and Concurrent Legislative Lists. Lists I and II contained a list of sub jects on which the Central Legislature and the Provincial Legislature could respectively legislate, and List III contained subjects on which both the Central and the 834 Provincial Legislatures could legislate. Section 100(4) of the Act provided that "the Dominion Legislature has power to make laws with ' respect to matters enumerated in the Provin cial Legislative List except for a Province or any part thereof. " Section 46 (3) stated that the word "Province", unless the context otherwise required, meant a Governor 's Province. Therefore, section 100 (4) read with the defini tion of "Province", empowered the Dominion Legislature to make laws with respect to subjects mentioned in all the three Lists for Ajmer Merwara, which was not a Governor 's Province. The Central Legislature was thus competent to legislate for Ajmer Merwara in regard to any subject, and it had also plenary powers in the entire legislative field allotted to it. Further, at the time the Act in question was passed, the Dominion Legislature was simultaneously functioning as the Constituent Assembly and had the power to frame the Constitution. The third Act with which we are concerned was passed after the present Constitution had come into force. Article 245 of the Constitution lays down that "subject to the provisions of this Constitution, Parliament may make laws from the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. " On the pattern of the Government of India Act, 1935, Lists I and II in the Seventh Schedule of the Constitution enumerate the subjects on which the Parlia ment and the State Legislatures can respectively legislate, while List 11 enumerates subjects on which both the Parlia ment and the State Legislatures can legislate. Under article 246 (4), "Parliament has power to make laws with respect to any matter for any part of the territory of India not in cluded in Part A or Part B of the First Schedule notwith standing that such matter is a matter enumerated in the State List. " The points to be noted in connection with the Part C States (Laws) Act, 1950, are : (1) The present Parliament derives its authority from the Constitution which has been framed by the 835 people of India through their Constituent Assembly, and not from any external authority, and within its own field it is as supreme as the legislature of any other country possess ing a written federal Constitution. (2) The Parliament has full power to legislate for the Part C States in regard to any subject. (3) Though there is some kind of separation of govern mental functions under the Constitution, yet the Cabinet system, which is the most notable characteristic of the British Constitution, is also one of the features of our Constitution and the doctrine of separation of powers, which never acquired that hold or significance in this country as it has in America, cannot dominate the interpretation of any of the Constitutional provisions. I may here refer to an argument which is founded on articles 353 (b) and 357 (a) and (b) of the Constitution. Under article 353 (b), when a Proclamation of Emergency is made by the President " the power of Parliament to make laws with respect to any matter shall include power to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and authorities of the Union as respects that matter, notwithstanding that it is one which is not enumer ated in the Union List. " Under article 357, when there is a failure of constitu tional machinery in a State, "it shall be competent (a) for Parliament to confer on the President the power of the Legislature of the State to make laws, and to autho rise the President to delegate, subject to such conditions as he may think fit to impose, the power so conferred to any other authority to be specified by him in that behalf; (b) for Parliament, or for the President or other au thority in whom such power to make laws is vested under sub clause (a), to make laws conferring powers and imposing duties, or authorising the Conferring of 108 836 powers and the imposition of duties, upon the Union or officers and authorities thereof. In both these articles, the power of delegation is ex pressly conferred, and it is argued that if delegation was contemplated in normal legislation, there would have been an express power given to the ' Parliament, similar to the power given in articles 353(b) and 357(a) and (b). In other words, the absence of an express provision has been used as an argument for absence of the power to delegate. It should however be noticed that these are emergency provisions and give no assistance in deciding the question under considera tion. So far as article 353(b) is concerned, it is enough to say that a specific provision was necessary to empower the Parliament to make laws in respect of matters included in the State List upon which the Parliament was not otherwise competent to legislate. When the Parliament was specially empowered to legislate in a field in which it could not normally legislate, it was necessary to state all the powers it could exercise. Again, article 357(a) deals with complete transfer of legislative power to the President, while clause (b) is incidental to the powers conferred on the Parliament and the President to legislate for a State in case of fail ure of constitutional machinery in that State. These provi sions do not at all bear out the conclusion that is sought to be drawn from them. Indeed, the Attorney General drew from them the opposite inference, namely, that by these provisions the Constitution makers have recognized that delegation of power is permissible on occasions when it is found to be necessary. In my opinion, neither of these conclusions can be held to be sound. I will now deal with the three provisions in regard to which the answer is required in this Reference. They are as follows: Section 7 of the . "The Provincial Government may, by notification in the official gazette, extend with such restrictions and modifi cations as it thinks fit to the Province of Delhi or any part thereof, any enactment which is in 837 force in any part of British India at the date of such notification. " Section 2 of the Ajmer Merwara (Extension of Laws). Act, 1947. "The Central Government may, by notification in the official gazette, extend to the Province of Ajmer Merwara with such restrictions and modifications as it thinks fit any enactment which is in force in any other Province at the date of such notification. " Section 2 of the Part C States (Laws) Act, 1950. "The Central Government may, by notification in the official Gazette, extend to any Part C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification; and provision may be made in any enactment so extended for the repeal or amend ment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State. " At the first sight, these provisions appear to be very wide, their most striking features being these : 1. There is no specification in the Act by way of a list or schedule of the laws out of which the selection is to be made by the Provincial or the Central Government, as the case may be, but the Government has been given complete discretion to adopt any law whatsoever passed in any part of the country, whether by the Central or the Provincial Legis lature. The provisions are not confined merely to the laws in existence at the dates of the enactment of these Acts but extend to future laws also. The Government concerned has been empowered not only to extend or adopt the laws but also to introduce such restrictions and modifications as it thinks fit; and in the Part C States (Laws) Act, 1950, power has been given to the Central Government to make a provision in the enactment extended under the Act for the repeal or amendment of any corresponding law 838 (other than a Central Act) which is for the time being applicable to the Part C State concerned. There can be no doubt that the powers which have been granted to the Government are very extensive and the three Acts go farther than any Act in England or America, but, in my judgment, nothwithstanding the somewhat unusual features to which reference has been made, the provisions in question cannot be held to be invalid. Let us overlook for the time being the power to intro duce modifications with which I shall deal later, and care fully consider the main provision in the three Acts. The situation with which the respective legislatures were faced when these Acts were passed, was that there were certain State or States with no local legislature and a whole bundle of laws had to be enacted for them. It is clear that the legislatures concerned, before passing the Acts, applied their mind and decided firstly, that the situation would be met by the adoption of laws applicable to the other Prov inces inasmuch as they covered a wide range of subjects approached from a variety of points of view and hence the requirements of the State or States for which the laws had to be framed could not go beyond those for which laws had already been framed by the various legislatures, and second ly, that the matter should be entrusted to an authority which was expected to be familiar and could easily make itself familiar with the needs and conditions of the State or States for which the laws were to be made. Thus, everyone of the Acts so enacted was a complete law, because it em bodied a policy, defined a standard, and directed the au thority chosen to act within certain prescribed limits and not to go beyond them. Each Act was a complete expression of the will of the legislature to act in a particular way and of its command as to how its will should be carried out. The legislature decided that in the circumstances of the case that was the best way to legislate on the subject and it so legislated. It will be a misnomer to describe such legisla tion as amounting to abdication of powers, because from the very nature of the legislation 839 it is manifest that the legislature had the power at any moment of withdrawing or altering any power with which the authority chosen was entrusted, and could change or repeal the laws which the authority was required to make applica ble to the State or States concerned. What is even more important is that in each case the agency selected was not empowered to enact laws, but it could only adapt and extend laws enacted by responsible and competent legislatures. Thus, the power given to the Governments in those Acts was more in the nature of ministerial than in the nature of legislative power. The power given was ministerial, because all that the Government had to do was to study the laws and make selections out of them. That such legislation is neither unwarranted on princi ple nor without precedent, will be clear from what follows: 1. The facts of the case of Queen vs Burah(1) are so familiar that they need not be reproduced, but for the purpose of understanding the point under discussion, it will be necessary to refer to section 8 of Act XXII of 1869 and some of the observations of the Privy Council which obvious ly bear on that section. The section runs as follows : "The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette, extend to the said territory any law, or any portion of any law, now in force in the other territories subject to his Government, or which may hereafter be enacted by the Council of the Governor General, or of the said Lieutenant Governor, for making laws and regulations, and may on making such extension direct by whom any powers or duties incident to the provi sions so extended shall be exercised or performed, and make any order which he shall deem requisite for carrying such provisions into operation. " In their judgment, the Privy Council do not quote this section, but evidently they had it in mind when they made the following observations : (1) 5 I.A. 178. 840 "The legislature determined that, so far, a certain change should take place; but that it was expedient to leave the time and the manner, of carrying it into effect to the discretion of the Lieutenant Governor; and also, that the laws which were or might be in force in the other territo ries subject to the same Government were such as it might be fit and proper to apply to this district also; but that,.as it was not certain that all those laws, and every part of them, could with equal convenience be so applied, it was expedient, on that point also, to entrust a discretion to the Lieutenant Governor. " The language used here can be easily adapted in the following manner so as to cover the laws in question: "The legislature determined that . . the laws which were or might be in force in the other territories . . (omitting the words "subject to the same Government" for reasons to be stated presently) were such as it might be fit and proper to apply to this State also; but that, as it was not certain that all those laws, and every part of them, could with equal convenience be so applied, it was expedient, on that point also, to entrust a discretion to the Central or Provincial Government. " It seems to me that this line of reasoning fully fits in with the facts before us. The words "territories sub ject to the same Government" are not in my opinon material, because in Burah 's case only such laws as were in force in the other territories subject to the same Government were to be extended. We are not to lay undue emphasis on isolated words but look at the principle underlying the decision in that case. In the as originally enacted, the agency which was to adapt the laws was the Governor General. In the other two Acts, the agency was the Central Govern ment. In 1912, the Governor General exercised jurisdiction over the whole of the territories the laws of which were to be adapted for Delhi. The same remark applies to the Central Government, while dealing with the other two Acts. As I have already 841 stated, Burah 's case has been accepted by this Court as having been correctly decided, and we may well say that the impugned Acts are mere larger editions of Act XXII of 1869 which was in question in Burah 's case. It is now well settled in England and in America that a legislature can pass an Act to allow a Government or a local body or some other agency to make regulations consist ently with the provisions of the Act. At no stage of the arguments, it was contended before us that such a power cannot be granted by the legislature to another body. We have known instances in which regulations have been made creating offences and imposing penalties and they have been held to be valid. It seems to me that the making of many of these regulations involves the exercise of much more legis lative power and discretion than the selection of appropri ate laws out of a mass of ready made enactments. The fol lowing observations in a well known American case, which furnish legal justification for empowering a subordinate authority to make regulations, seem to me pertinent : "It is well settled that the delegation by a State legislature to a municipal corporation of the power to legislate, subject to the paramount law, concerning local affairs, does not violate the inhibition against the delega tion of the legislative function. It is a cardinal principle of our system of government that local affairs shall be managed by local authorities, and general affairs by the central authority, and hence, while the rule is also fundamental that the power to make laws cannot be delegated, the creation of municipalities exercising local self government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject, of course, to the interposition of the superior in cases of necessity." (Per Fuller J. in Stoutenburgh vs Hennick(1). (1) ; 842 3. A point which was somewhat similar to the one raised before us arose in the case of Sprigg vs Sigcau(1). In that case, section 2 of the Pondoland Annexation Act, 1894, was brought into question. That section gave authority to the Governor to add to the existing laws in force in the terri tories annexed, such laws as he shall from time to time by Proclamation declare to be in force in such territories. Dealing with this provision, the Privy Council observed as follows : "The legislative authority delegated to the Governor by the Pondoland Annexation Act is very cautiously expressed, and is very limited in its scope. There is not a word in the Act to suggest that it was intended to make the Governor a dictator, or even to clothe him with the full legislative powers of the Cape Parliament. His only authority, after the date of the Act, is to add to the laws, statutes and ordi nances which had already been proclaimed and were in force at its date, such laws, statutes and ordinances as he 'shall from time to time by proclamation declare to be in force in such territories '. In the opinion of their Lordships, these words do not import any power in the Governor to make "new laws" in the widest sense of that term; they do no more than authorise him to transplant to the new territories, and enact there, laws, statutes and ordinances which already exist, and are operative in other parts of the Colony. It was argued for the appellant that the expression "all such laws made" occurring in the proviso, indicates authority to make new laws which are not elsewhere in force; but these words cannot control the plain meaning of the enactment upon which they are a proviso; and, besides that enactment is left to explain the meaning of the proviso by the reference back which is implied in the word "such" (pp. 247 8). Following the line of reasoning in the case cited, it may be legitimately stated that what the Central or the Provincial Government has been asked to do under the Acts in question is not to enact "new laws" but to transplant" to the territory concerned laws operative (1) , 843 in other parts of the country. I notice that in section 2 of the Pondoland Annexation Act, 1894, there was a proviso requiring that "all such laws made under or by virtue of this Act shall be ]aid before both Houses of Parliament within fourteen days after the beginning of the Session of Parliament next after the proclamation thereof as aforesaid, and shall be effectual, unless in so far as the same shall be repealed, altered, or varied by Act of Parliament." This provision however does not affect the principle. It was made only as a matter of caution and to ensure the superin tendence of Parliament, for the laws were good laws until they were repealed, altered or varied by Parliament. If the Privy Council have correctly stated the principle that the legislature in enacting subordinate or conditional legisla tion does not part with its perfect control and has the power at any moment of withdrawing or altering the power entrusted to another authority, its power of superintendence must be taken to be implicit in all such legislation. Refer ence may also be made here to the somewhat unusual case of Dorr vs United States(1), where delegation by Congress to a commission appointed by the President of the power to legis late for the Phillipine Islands was held valid. There are also some American cases in which the adopt ing of a law or rule of another jurisdiction has been per mitted, and one of the cases illustrative of the rule is Re Lasswell(2), where a California Act declaring the existence of an emergency and providing that where the Federal author ities fixed a Code for the government of any industry, that Code automatically became the State Code therefor, and fixing a penalty for violation of such Codes, was held to be constitutional and valid, as against the contention that it was an unlawful delegation of authority by the State legis lature to the Federal government and its administrative agencies. This case has no direct bearing on the points before us, but it shows that application of laws made (1) ; (2) (1934) 1 Cal. (2d), 183. 109 844 by another legislature has in some cases been held to be permissible. There are many enactments in India, which are not without their parallel in England, in which it is stated that the provisions of the Act concerned shall apply to certain areas in the first instance and that they may be extended by the Provincial Government or appropriate author ity to the whole or any part of a Province. The , is an instance of such enactment, as section 1 thereof provides as follows : "It (the Act) extends in the first instance to all the Provinces of India except Bombay, East Punjab and Delhi. But this Act or any part thereof may by notification in the official Gazette be extended to the whole or any part of the said Provinces by the Provincial Government concerned. " It is obvious that if instead of making similar provi sions in 50 or more Acts individually, a single provision is made in any one Act enabling the Provincial Governments to extend all or any of the 50 or more Acts, in which provision might have been but has not been made for extension to the whole or any part of the Provinces concerned there would be no difference in principle between the two alternatives. It was pointed out to us that in the Acts with which we are concerned, power has been given to extend not only Acts of the Central Legislature, which is the author of the Acts in question, but also those of the Provincial Legislatures. But it seems to me that the distinction so made does not affect the principle involved. The real question is: Can authority be given by a legislature to an outside agency, to extend an Act or series of Acts to a particular area ? This really brings us back to the principle of conditional legislation which is too deeply rooted in our legal system to be ques tioned now. Our attention has been drawn to several Acts con taining provisions similar to the Acts 845 which are the subject of the Reference, these being : 1. Sections 1 and 2 of Act I of 1865. Sections 5 and 5A of the Scheduled Districts Act, 1874 (Act XIV of 1874). The Burma Laws Act, 1898 (Act XIII of 1898). section 10 (1). Section 4 of the (Act XLVII of 1947). The Merchant Shipping Laws (Extension to Acceding States and Amendment) Act, 1949 (Act XVIII of 1949), section 4. The relevant provisions of two of these Acts, which were passed before the Acts in question, may be quoted, to bring out the close analogy. The Scheduled Districts Act, 1874. "The Local Government, with the previous sanction of the Governor General in Council, may, from time to time by notification in the Gazette of India and also in the local Gazette (if any), extend to any of the Scheduled Districts, or to any part of any such District, any enactment which is in force in any part of British India at the date of such extension. In declaring an enactment in force in a Scheduled District or part thereof under section 3 of this Act, or in extending an enactment to a Scheduled District or part thereof under section 5 of this Act, the Local Government with the previous sanction of the Governor General in Coun cil, may declare the operation of the enactment to be sub ject to such restrictions and modifications as that Govern ment think fit. " The Burma Laws Act, 1898. 10(1). "The Local Government, with the previous sanction of the Governor General in Council, may, by notification in the Burma Gazette, extend, with such restrictions and modi fications as it thinks fit, to all or any of the Shan States, or to any specified local area in the Shan State any enactment which is in force 846 in any part of Upper Burma at the date of the extension. " It is hard to say that any firm legislative practice had been established before the and other Acts we are concerned with were enacted, but one may presume that the legislature had made several experiments before the passing of these Acts and found that they had worked well and achieved the object for which they were intended. I will now deal with the power of modification which de pends on the meaning of the words "with such modifications as it thinks fit. " These are not unfamiliar words and they are often used by careful draftsmen to enable laws which are applicable to one place or object to be so adapted as to apply to another. The power of introducing necessary re strictions and modifications is incidental to the power to apply or adapt the law, and in the context in which the provision as to modification occurs, it cannot bear the sinister sense attributed to it. The modifications are to be made within the framework of the Act and they cannot be such as to affect its identity or structure or the essential purpose to be served by it. The power to modify certainly involves a discretion to make suitable changes, but it would be useless to give an authority the power to adapt a law without giving it the power to make suitable changes. The provision empowering an extraneous authority to introduce modifications in an Act has been nicknamed in England as "Henry VIII clause", because that monarch is regarded popu larly as the personification of executive autocracy. Sir Thomas Carr, who bad considerable experience of dealing with legislation of the character we are concerned with, refers to "Henry VIII clause" in this way in his book "Concerning English Administrative Law" at page 44: "Of all the types of orders which alter statutes, the so called 'Henry VIII clause ' sometimes inserted in big and complicated Acts, has probably caused the greatest flutter in England. It enables the Minister 847 by order to modify the Act itself so far as necessary for bringing it into operation. Any one who will look to see what sort of orders have been made under this power will find them surprisingly innocuous. The device is partly a draftsman 's insurance policy, in case he has overlooked something, and is partly due to the immense body of local Acts in England creating special difficulties in particular areas. These local Acts are very hard to trace, and the draftsman could never be confident that he has examined them all in advance. The Henry VIII clause ought, of course, to be effective for a short time only. " It is to be borne in mind that the discretion given to modify a statute is by no means absolute or irrevocable in strict legal sense, with which aspect alone we are princi pally concerned in dealing with a purely legal question. As was pointed out by Garth C.J. in Empress vs Burah(1), the legislature is " 'always in a position to see how the powers, which it has conferred, are being exercised, and if they are exercised injudiciously, or otherwise than in accordance with its intentions, or if, having been exercised, the result is in any degree inconvenient, it can always by another Act recall its powers, or rectify the inconvenience." The learned Chief Justice, while referring to the Civil Procedure Code of 1861, pointed out that it went further than the Act impugned before him, because "it gave the Local Governments a power to alter or modify the Code in any way they might think proper, and so as to intro duce a different law into their respective Provinces from that which was in force in the Regulation Provinces." Nevertheless, the Privy Council considered the Civil Proce dure Code of 1861 to be a good example of valid conditional legislation. In the course of the arguments, we were sup plied with a list of statutes passed by the Central and some of the Provincil Legislatures giving express power of modi fication to certain authorities, and judging from the number of instances included in it, it is not an unimpressive list. A few of the Acts which may be mentioned by (1) I.L.R. S Cal. 63 at 140. 848 way of illustration are: The Scheduled Districts Act, 1874, The Burma Laws Act, 1898, The Bombay Prevention of Prostitu tion Act, 1928, The Madras City Improvement Trust Act, 1945, The Madras Public Health Act, 1939, U.P. Kand Revenue Act, 1901. There are also many instances of such legislation in England, of which only a few may be mentioned below to show that such Acts are by no means confined to this coun try. In 1929, a Bill was proposed to carry out the policy of having fewer and bigger local authority in Scotland. During the debate, it was suddenly decided to create a new kind of body called the district council. There was no time to work out details for electing the new district councillors, and the Bill therefore applied to them the statutory provisions relating to the election of county councillors in rural areas "subject to such modifications and adaptations as the Secretary of State may by order prescribe." In 1925, the Parliament passed the Rating and Valua tion Act, and section 67 thereof provided that if any diffi culty arose in connection with its application to any excep tional area, or the preparation of the first valuation list for any area, the Minister "may by order remove the diffi culty. " It was also provided that "any such order may modify the provisions of this Act so far as may appear to the Minister necessary or expedient for carrying the order into effect." In 1929, a new Local Government Bill was introduced in Parliament, and section 120 thereof provided that "the Minister may make such order for removing difficulties as he may judge necessary. . and any such order may modify the provisions of this Act. " Section 1(2) of the Road Transport Lighting Act, 1927, provided that" the Minister of Transport may exempt wholly or partially, vehicles of particular kinds from the require ments of the Act," and sub section (3) empowered him to "add to or vary such requirements" by regulations. 849 By section 1 of the Trade Boards Act, 1918, "the Minis ter of Labour may, by special order, extend the provisions of the Trade Boards Act, 1909, to new trades. . and may alter or amend the Schedule to the Act. " The Unemployment Insurance Act, 1920, by sec tion 45 provided that "if any difficulty arises with respect to the constitution of special or supplementary schemes. . the Minister of Labour. . may by order do anything which appears to him to be necessary or expedient. . and any such order may modify the provi sions of this Act. . " Similar instances may be multiplied, but that will serve no useful purpose. The main justification for a provision empowering modifications to be made, is said to be that, but for it, the Bills would take longer to be made ready, and the operation of important and wholesome measures would be delayed, and that once the Act became operative, any defect in its provisions cannot be removed until amending legisla tion is passed. It is also pointed out that the power to modify within certain circumscribed limits does not go as far as many other powers which are vested by the legislature in high officials and public bodies through whom it decides to act in certain matters. It seems to me that it is now too late to hold that the Acts in question are ultra vires, merely because, while giving the power to the Government to extend an Act, the legislatures have also given power to the Government to subject it to such modifications and restric tions as it thinks fit. It must, however, be recognised that what is popularly known as the "Henry VIII clause" has from time to time provoked unfavourable comment in England, and the Committee on Ministers ' Powers, while admitting that it must be occasionally used, have added:" . . we are clear in our opinion, first, that the adoption of such a clause ought on each occasion when it is, on the initiative of the Minister in charge of the Bill, proposed to Parliament to be justified by him up to the essential. It can only be essential for the limited purpose of 850 bringing an Act into operation and it should accordingly be in most precise language restricted to those purely machin ery arrangements vitally requisite for that purpose;and the clause should always contain a maximum time limit of one year after which the powers should lapse. If in the event the time limit proves too short which is unlikely the Government should then come back to Parliament with a one clause Bill to extend it. " It may also be stated that in England "delegated legislation" often requires the regula tions or provisions made by the delegate authority to be laid before the Parliament either in draft form or with the condition that they are not to operate till approved by Parliament or with no further direction. The Acts before us are certainly open to the comment that this valuable safe guard has not been observed, but it seems to me that however desirable the adoption of this safeguard and other safe guards which have been suggested from time to time may be, the validity of the Acts, which has to be determined on purely legal considerations, cannot be affected by their absence. I will now deal with section 2 of the Part C States (Laws) Act, 1950, in so far as it gives power to the Central Government to make a provision in the enactment extended under the Act for the repeal or amendment of any correspond ing law which is for the time being applicable to the Part C State concerned. No doubt this power is a far reaching and unusual one, but, on a careful analysis, it will be found to be only a concomitant of the power of transplantation and modification. If a new law is to be made applicable, it may have to replace some existing law which may have become out of date or ceased to serve any useful purpose, and the agency which is to apply the new law must be in a position to say that the old law would cease to apply. The nearest parallel that I can find to this provision, is to be found in the Church of England Assembly (Powers) Act, 1919. By that Act, the Church Assembly is empowered to propose legislation touching matters concerning the Church of England, and 851 the legislation proposed may extend to the repeal or amend ment of Acts of Parliament including the Church Assembly Act itself. It should however be noticed that it is not until Parliament itself gives it legislative force on an affirma tive address of each House that the measure is converted into legislation. There is thus no real analogy between that Act and the Act before us. However, the provision has to be upheld, because, though it goes to the farthest limits, it is difficult to hold that it was beyond the powers of a legislature which is supreme in its own field; and all we can say is what Lord Hewart said in King vs Minister of Health(1), namely, that the particular Act may be regarded as "indicating the high water mark of legislative provisions of this character," and that, unless the legislature acts with restraint, a stage may be reached when legislation may amount to abdication of legislative powers. Before I conclude, I wish to make a few general observa tions here on the subject of "delegated legislation" and its limits, using the expression once again in the popular sense. This form of legislation has become a present day necessity, and it has come to stay it is both inevitable and indispensable. The legislature has now to make so many laws that it has no time to devote to all the legislative details, and sometimes the subject on which it has to legis late is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject. Again, when complex schemes of reform are to be the subject of legislation, it is difficult to bring out a selfcontained and complete Act straightaway, since it is not possible to foresee all the contingencies and envisage all the local requirements for which provision is to be made. Thus, some degree of flexibility becomes necessary, so as to permit constant adaptation to unknown future conditions without the necessity of having to amend the law again and again. The advantage of such a course is that it enables the delegate authority (1) at 236. 110 852 to consult interests likely to be affected by a particular law, make actual experiments when necessary, and utilize the results of its investigations and experiments in the best way possible. There may also arise emergencies and urgent situations requiring prompt action and the entrustment of large powers to authorities who have to deal with the var ious situations as they arise. There are examples in the Statute books of England and other countries, of laws, a reference to which will be sufficient to justify the need for delegated legislation. The British Gold Standard (Amendment) Act, 1931, empowered the Treasury to make and from time to time vary orders authorising the taking of such measures in relation to the Exchanges and otherwise as they may consider expedient for meeting difficulties arising in connection with the suspension of the Gold Standard. The National Economy Act, 1931, of England, empowered "His Majesty to make Orders in Council effecting economies in respect of the services specified in the schedule" and proved that the Minister designated in any such Order might make regulations for giving effect to the Order. The Food stuffs (Prevention of Exploitation) Act, 1931, authorised the Board of Trade to take exceptional measures for prevent ing or remedying shortages in certain articles of food and drink. It is obvious that to achieve the objects which were intended to be achieved by these Acts, they could not have been framed in any other way than that in which they were framed. I have referred to these instances to show that the complexity of modern administration and the expansion of the functions of the State to the economic and social sphere have rendered it necessary to resort to new forms of legis lation and to give wide powers to various authorities on suitable occasions. But while emphasizing that delegation is in these days inevitable, one should not omit to refer to the dangers attendant upon the injudicious exercise of the power of delegation by the legislature. The dangers in volved in defining the delegated power so loosely that the area it is intended to cover cannot be clearly ascertained, and in giving 853 wide delegated powers to executive authorities and at the same time depriving a citizen of protection by the courts against harsh and unreasonable exercise of powers, are too obvious to require elaborate discussion. For the reasons I have set out, I hold that none of the provisions which are the subject of the three questions referred to us by the President is ultra vires and I would answer those questions accordingly. PATANJALI SASTRI J. The President of India by an order, dated the 7th January, 1951, has been pleased to refer to this Court, under article 14:3 (1) of the Constitution, for consideration and report the following questions: 1. Was section 7 of the , or any of the provisions thereof and in what particular or particu lars or to what extent ultra vires the legislature which passed the said Act ? 2. Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particular or particulars or to what extent ultra vires the legislature which passed the said Act ? 3. Is section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof and in what particular or particulars or to what extent ultra rites the Parliament ? The reasons for making the reference are thus set out in the letter of reference: "And whereas the Federal Court of India in Jatindra Nath Gupta vs The Province of Bihar(1) held by a majority that the proviso to sub section (3) of section 1 of the Bihar Maintenance of Public Order Act, 1947, was ultra vires the Bihar Legislature inter alia on the ground that the said proviso conferred power on the Provincial Government to modify an act of the Provincial Legislature and thus amounted to a delegation of legislative power; And whereas as a result of the said decision of the Federal Court, doubts have arisen regarding (1) 854 the validity of section 7 of the , section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, and section 2 of the Part C States (Laws) Act, 1950, and of the Acts extended to the Provinces of Delhi and Ajmer Merwara and various Part C States under the said sections respectively, and of the orders and other instru ments issued under the Acts so extended; And whereas the validity of section 7 of the , and section 2 of the Ajmer Merwara (Extension of Laws) 'Act, 1947, and of the Acts extended by virtue of the powers conferred by the said sections has been challenged in some cases pending at present before the Punjab High Court, the Court of the Judicial Commissioner of Ajmer, and the District Court and the Subordinate Courts in Delhi. " The provisions referred to above are as follows: Section 7 of the : The Provincial Government may, by notification in the official Gazette, extend with such restrictions and modifi cations as it thinks fit to the Province of Delhi or any part thereof, any enactment which is in force in any part of British India at the date of such notification. " Section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947: "Extension of enactments to Ajmer Merwara. The Central Government may, by notification in the official Gazette, extend to the Province of Ajmer Merwara with such restric tons and modifications as it thinks fit any enactment which is in force in any other Province at the date of such noti fication. Section 2 of the Part C States (Laws) Act 1950: "Power to extend enactments to certain Part C States. The Central Government may, by notification in the official Gazette, extend to any Fart C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions and modifications as it thinks fit, any 855 enactment which is in force in a Part A State at the date of the notification; and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State. " The Central Legislature, which enacted these provisions, had, at all material times, the power to make laws itself for the designated territories. But, instead of exercising that power, it empowered the Provincial Government in the first mentioned case, and the Central Government in the others, to extend, by notification in the official Gazette, to the designated territories laws made by Provincial Legis latures all over India for territories within their respec tive jurisdiction. The principal features of the authority thus delegated to the executive are as follows: (1) The laws thus to be extended by the executive are laws made not by the delegating authority itself, namely, the Central Legislature, but by different Provincial Legis latures for their respective territories. (2) In extending such laws the executive is to have the power of restricting or modifying those laws as it thinks fit. (3) The law to be extended is to be a law in force at the time of the notification of extension, that is to say, the executive is empowered not only to extend laws in force at the time when the impugned provisions were enacted, which the Central Legislature could be supposed to have examined and found suitable for extension to the territories in question, but also laws to be made in future by Provincial Legislatures for their respective territories which the Central Legislature could possibly have no means of judging as to their suitability for such extension. (4) The power conferred on the executive by the enact ments referred to in Question No. a is not only to extend to the designated territories laws made by other legislatures but also to repeal or amend any corresponding law in force in the designated territories. 856 The question is: Was the delegation of such sweeping discretionary power to pick and choose laws made by other legislatures to operate elsewhere and to apply them to the territories in question within the competence of the Central Legislature ? In Jatindra Nath Gupta vs The Province of Bihar (1), which has led to this reference, the Federal Court of India held by a majority (Kania C.J., Mahajan and Mukher jea JJ.) that the proviso to sub section (3) of section 1 of the Bihar Maintenance of Public Order Act, 1937, pur porting to authorise the Provincial Government, on cer tain conditions which are not material here, to extend by notification, the operation of the Act for a further speci fied period after its expiry with or without modifications amounted to a delegation of legislative power and as such was beyond the competence of the legislature. The deci sion proceeded to some extent on the concession by counsel that delegation of legislative power was incom petent though it must be admitted there are observations in the judgments of their Lordships lending the weight of their authority in support of that view. Fazl Ali J. in a dissenting judgment held that the power to extend and the power to modify were separate powers and as the Provincial Government had in fact extended the operation of the Act without making any modification in it, the proviso operated as valid conditional legislation. While agreeing with the conclusion of the majority that the detention of the petitioners in that case was unlawful, 1 preferred to rest my decision on a narrower ground which has no rele vancy in the present discussion. In the light of the fuller arguments addressed to us in the present case, I am unable to agree with the majority view. The Attorney General, appearing on behalf of the Presi dent, vigorously attacked the majority view in Jatindra Nath Gupta 's case(1) as being opposed alike to sound con stitutional principles and the weight of authority. He cited numerous decisions of the Privy (1) 857 Council and of the American, Australian and Canadian Courts and also called attention to the views expressed by various writers on the subject in support of his contention that legislative power involves as part of its content a power to delegate it to other authorities and that a legislative body empowered to make laws on certain subjects and for a certain territory is competent, while acting within its appointed limits, to delegate the whole of its legislative power to any other person or body short of divesting itself completely of such power. It is now a commonplace of constitutional law that a legislature created by a written constitution must act within the ambit of its powers as defined by the constitu tion and subject to the limitations prescribed thereby, and that every legislative act done contrary the provisions of the constitution is void. In England no such problem can arise as there is no constitutional limitation on the powers of Parliament, which, in the eye of the law, is sovereign and supreme. It can, by its ordinary legislative procedure, alter the constitution, so that no proceedings passed by it can be challenged on constitutional grounds in a court of law. But India, at all material times, in 1912, 1947 and 1950 when the impugned enactments were passed had a written constitution, and it is undoubtedly the function of the courts to keep the Indian legislatures within their consti tutional bounds. Hence, the proper approach to questions of constitutional validity is "to look to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they were restrict ed. If what has been done is legislation within the general scope of the affirmative words which gave the power and if it violates no express condition or restriction by which the power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it) it is not for any court of justice to inquire further or, to enlarge constructively those conditions and restrictions.": Empress vs Burah(1). We (1) s I.A. 178. 858 have,therefore, to examine Whether the delegation of author ity made in each of the impugned enactments is contrary to the tenor of the constitution under which the enactment itself was passed. No provision is to be found in the relevant constitutions authorising or prohibiting in express terms the delegation of legislative power. Can a prohibi tion against delegation be derived inferentially from the terms of the constitution and, if so, is there anything in those terms from which such a prohibition can be implied ? Before examining the relevant constitutions to find an answer to the question, it will be useful to refer to the two main theories of constitutional law regarding what has been called delegated legislation. Though, as already explained, no question of constitutionality of such legisla tion could arise in England itself, such problems have frequently arisen in the British commonwealth countries which have written constitutions, and British Judges, trained in the tradition of parliamentary omnipotence, have evolved the doctrine that every legislature created by an Act of Parliament, though bound to act within the limits of the subject and area marked out for it, is, while acting within such limits, as supreme and sovereign as Parliament itself. Such legislatures are in no sense delegates of the Imperial Parliament and, therefore, the maxim delegatus non potest delegare is not applicable to them. A delegation of legislative functions by them, however extensive, so long as they preserve their own capacity, cannot be challenged as unconstitutional. These propositions were laid down in no uncertain terms in the leading case of Hodge vs Queen(1) decided by the Privy Council in 1883. Upholding the validity of an enactment by a Provincial Legislature in Canada where by authority was entrusted to a Boar6 of Commissioners to make regulations in the nature of bylaws or municipal regu lations for the good government of taverns and thereby to create offences and annex penalties thereto, their Lordships observed as follows: (1) 9 App. 117 859 "It was further contended that the Imperial Parliament had conferred no authority on the local legislature to delegate those powers to the Licence Commissioners, or any other persons. In other words, that the power conferred by the Imperial Parliament on the local legislature should be exercised in full by that body, and by that body alone. The maxim delegatus non potest delegare was relied on. It appears to their Lordships, however, that the objection thus raised by the appellant is founded on an entire misconcep tion of the true character and position of the provincial legislatures. They are in no sense delegates of or acting under any mandate from the Imperial Parliament. When the British North America Act enacted that there should be a legislature for Ontario, and that its legislative assembly should have exclusive authority to make laws for the Prov ince and for provincial purposes in relation to the matters enumerated in section 92, it conferred powers not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by section 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme. . . It was argued at the bar that a legislature committing important regulations to agents or delegates effaces itself. That is not so. It retains its powers intact, and can, whenever it pleases, destroy the agency it has created and set up another, or take the matter directly into its own hands. How far it can seek the aid of subordinate agencies, and how long it shall continue them, are matters for each legislature, and not for courts of law, to decide. Here is a clear enunciation of the English doctrine of what may be called "supremacy within limits"; that is to say, within the circumscribed limits of its legislative power, a subordinate legislature can do what the Imperial Parliament can do, and no constitutional limit on its power to delegate can be imported (1) 9 App. Cas. 117 131, 111 860 on the strength of the maxim delegatus non potest delegare, because it is not a delegate. The last few words of the quotation are significant. They insist, as does the pas sage already quoted from Burah 's case(1), that the scope of the enquiry when such an issue is presented to the court is strictly limited to seeing whether the legislature is acting within the bounds of its legislative power. The remarks about "authority ancillary to legislation" and "abundance of precedents for this. legislation entrusting a limited des cretionary authority to others " have, obviously, reference to the particular authority delegated on the facts of that case which was to regulate taverns by issuing licences, and those remarks cannot be taken to detract from or to qualify in any way the breadth of the general principles so unmis takably laid down in the passages quoted. The same doctrine was affirmed in Powell vs Apollo Candle Co. Ltd.(2), where, after referring to Burah 's case (1) and Hodge 's case(3), their Lordships categorically stated: "These two cases have put an end to a doctrine which appears at one time to have had some currency, that a Colo nial Legislature is a delegate of the Imperial Legislature. It is a legislature restricted in the area of its powers, but within that area unrestricted, and not acting as an agent or a delegate. " An objection that the legislature of New South Wales alone had power to impose the tax in ques tion and it could not delegate that power to the Governor, was answered by saying "But the duties levied under the Order in Council are really levied by the authority of the Act under which the order is issued. The legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted to him"(4). If Hodge 's ease(3) did not involve an extensive dele gation of legislative power, Shannon 's case(5) did. (1) 5 I.A. 178. (4) 10 App. 282, 291. (2) 10 App. (5) (3) 9 App. 861 A provincial legislature in Canada had passed a compulsory Marketing Act providing for the setting up of Marketing Boards but leaving it to the Government to determine what powers and functions should be given to those Boards. One of the objections raised to the legislation was that it was only a "skeleton of an Act" and that the legislature had practically "surrendered its legislative responsibility to another body." Lord Haldane 's dictum in what is known as the Referendum case(1) (to which a more detailed reference will be made presently) suggesting a doubt as to a provin cial legislature 's power to "create and endow with its own capacity a new legislative power not created by the Act to which it owes its existence" was cited in support of the objection. The objection, however, was summarily repelled without calling upon Government counsel for an answer. Their Lordships contented themselves with reiterating the English doctrine of "plenary powers of delegation within constitu tional limits" and said: "This objection appears to their Lordships subversive of the rights which the provincial legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the constitu tion has granted legislative powers. Within its appointed sphere the provincial legislature is as supreme as any other parliament. . Martin C.J. appears to have disposed of this objection very satisfactorily in his judgment on the reference, and their Lordships find no occasion to add to what he there said. " What Martin C.J. said is to be found in Re Natural Products Marketing (B.C.) Act(2). He said "1 shall not, however, pursue at length this subject (delega tion of legislative powers) because, to use the language of the Privy Council in Queen vs Burah(3), 'The British Statute book abounds with examples of it ' and a consideration for several days of our early and late 'statute book ' discloses such a surprising number of delegations to various persons and bodies in all sorts of subject matters that it would (1) (3) 3 App. Cas. 889, 906. (2) , 310. 862 take several pages even to enumerate them, and it would also bring about a constitutional debacle to invalidate them. I must, therefore, content myself by selecting four statutes only." The learned Judge then proceeded to refer, among others, to a statute whereby "carte blanche powers were delegated over affected fruit lands areas to cope with a pest", and to another "whereby power was conferred upon the Lieutenant Governor in Council to make rules of the widest scope" and the first importance in our system of jurisprudence whereby our whole civil practice and proce dure, appellate and trial, are regulated and constituted to such an extent that even the sittings we hold are thereto subjected. " This recent pronouncement of the Privy Council on the Eng lish view of the delegability of legislative power is, in my opinion, of special interest for the following reasons : (1) The case involved such an extensive delegation of legislative power counsel thought the ' 'limit" had been reached that it squarely raised the question of the constitutional validity of surrender or abdication of such power and Lord Haldane 's dictum in the Referendum case(1) was relied upon. (2) Nevertheless, the objection was considered so plainly unsustainable that Government counsel was not called upon to answer, their Lordships having regarded the objection as "subversive" of well established constitutional princi ples. (3) Martin C.J. 's instances of "carte blanche delegation" were approved and were considered as disposing of the objection "very satisfactorily. " (4) All that was considered necessary to repel the objection was a plain and simple statement of the English doctrine, namely, within its appointed sphere the provin cial legislature was as supreme as any other parliament, or, in other words, as there can be no legal limit to Parliament 's power to delegate, so can there (1) 863 be none to the power of the provincial legislature to dele gate legislative authority to others. Thus, the English approach to the problem of delegation of legislative power is characterised by a refusal to regard legislation by a duly constituted legislature as exercise of a delegated power, and it emphatically repudiates the application of the maximum delegatus non potest delegate. It recognises the sovereignty of legislative bodies within the limits of the constitutions by which they are created and concedes plenary powers of delegation to them within such limits. It regards delegation as a revocable entrustment of the power to legis late to an appointed agent whose act derives its validity and legal force from the delegating statute and not as a relinquishment by the delegating body of its own capacity to legislate. On the other hand, the American courts have approached the problem along wholly different lines which are no less the outcome of their own environment and tradition. The American political scene in the eighteenth century was dominated by the ideas of Montesque and Locke that concen tration of legislative, executive and judicial powers in the hands of a single organ of the State spelt tyranny, and many State constitutions had explicitly provided that each of the great departments of State, the legislature, the executive and the judiciary, shall not exercise the powers of the others. Though the Federal Constitution contained no such explicit provision, it was construed, against the background of the separatist ideology, as embodying the principle of separation of powers, and a juristic basis for the conse quent non delegability of its power by one of the depart ments to the others was found in the old familiar maxim of the private law of agency delegatuts non potest delegare which soon established itself as a traditional dogma of American constitutional law. But the swift progress of the nation in the industrial and economic fields and the result ing complexities of administration forced the realisation on the American Judges of the unavoidable necessity for 864 large scale delegation of legislative powers to administra tive bodies, and it was soon recognised that to deny this would be "to stop the wheels of government. " The result has been that American decisions on this branch of the law consist largely of attempts to disguise delegation "by veiling words" or "by softening it by a quasi" (per Holmes J. in Springer vs Government of the Phillipine Islands(1). "This result", says a recent writer on the subject, "is well put in Prof. Cushman 's syllogism ' Major premise: Legislative power cannot be constitu tionally delegated by Congress. Minor premise: It is essential that certain powers be delegated to administrative officers and regulatory commis sions. Conclusion: Therefore the powers thus delegated are not legislative powers. " They are instead "administrative"or "quasi legisla tive" (American Administrative Law by Bernard Schwartz, p. 20). After considerable confusion and fluctuation of opin ion as to what are "essentially" legislative powers which cannot be delegated and what are mere "administrative" or "ancillary" powers, the delegation of which is permissible, the recent decisions of the Supreme Court would seem to place the dividing line between laying down a policy or establishing a standard in respect of the subject legislated upon on the one hand and implementing that policy and en forcing that standard by appropriate rules and regulations on the other: (vide Schechter Poultry Corpn. vs United States(2) and Panama Refining Co. vs Ryan(3)), a test which inevitably gives rise to considerable divergence of judicial opinion as applied to the facts of a given case. I will now turn to the questions in issue. The first question which relates to the validity of section 7 of the . has to be determined with reference to the competency of "the legislature which (1) ; (3) ; (2) ; 865 passed the said Act", that is, with reference to the consti tution then in force. It may be mentioned her, e that the , as well as the AjmerMerwara (Extension of Laws) Act, 1947, to which the second question relates, were repealed by section 4 of the Part C States (Laws) Act, 1950, but the Acts already extended under the repealed provisions have been continued in force and hence the neces sity for a pronouncement on the constitutional validity of the repealed provisions. In 1912 the Indian Legislature was the Governor General in Council, and his law making powers were derived from section 22 of the Indian Councils Act, 1861 (24 and 25 Vic. Ch. 7) which conferred power "to make laws and regulations for repealing, amending or altering any laws or regulations whatever now in force or hereafter to be in force in the Indian territories now under the dominion of Her Majesty and to make laws and regulations for all persons whether British or native, foreigners or others, and for all courts of justice whatever and for all places and things whatever within the said territories," subject to certain conditions and restrictions which do not affect the impugned provi sions. The composition and powers of the Governor General in Council were altered in other respects by the Councils Acts of 1892 and 1909, but his law making powers remained essentially the same in 1912. The question accordingly arises whether section 7 of the , was within the ambit of the legislative powers conferred on himby section 22 of the Indian Councils Act, 1861. As the power is defined in very wide terms " for all persons. . and for all places and things whatever " within the Indian territories the issue of competency reduces itself to the question whether section 7 was a "law" within the meaning of section 22 of the Indian Councils Act of 1861. This question is, in my opinion, concluded by the decision of the Privy Council in Empress vs Burah(1). (1) 5 I.A. 178. 866 That was an appeal by the Government from a judgment of the majority of a Full Bench of the Calcutta High Court holding that sections 8 and 9 of Act XXII of 1869 were ultra vires the Governor General in Council as being an unautho rised delegation of legislative power to the Lieutenant Governor of Bengal. The combined effect of those provisions was to authorise the Lieutenant Governor to extend to cer tain districts by notification in the Calcutta Gazette "any law or any portion of any law now in force in the other territories subject to his government or which may hereafter be enacted by the Council of the Governor General or of the said Lieutenant Governor, for making laws and regulations. . "Markby J., who delivered the leading judgment of the majority, held (1) that section 9 amounted to a delegation of legislative authority to the Lieutenant Governor by the Indian Legislature which, having been en trusted with such authority as a delegate of the Imperial Parliament, had no power in its turn to delegate it to another, and (2) the Indian Legislature could not "change the legislative machinery in India without affecting the provisions of the Acts of Parliament which created that machinery and if it does in any way affect them, then ex consensu omnium its Acts are void." The learned Judge referred to the argument of Government counsel, namely, "where Parliament has conferred upon a legislature the general power to make laws, the only question can be 'Is the disputed Act a law '. If it is, then it is valid unless it falls within some prohibition." The learned Judge remarked that this argument was "sound", but met it by holding that "it was clearly intended to restrict the Legislative Council to the exercise of functions which are properly legislative, that is, to the making of laws, which (to use Blackstone 's expression)are rules of action prescribed by a superior to an inferior or of laws made in furtherance of those rules. The English Parliament is not so restricted. It is not only a legislative but a paramount sovereign body. The Legislative Council, when it merely grants permission 867 to another person to legislate, does not make a law within the meaning of the Act from which it derives its authority"(1) The learned Judge rejected the argument based on previous legislative practice as the instances relied on were not "clear and undisputed instances of a transfer of legislative authority. " Garth C.J. in his dissenting opinion pointed out that "by the Act of 1833 the legislative powers which were then conferred upon the Governor General in Council were in the same language, and (for the purposes of the present case) to the same effect, as those given by the Councils Act in 1861; and from the time when that Act was passed, the Governor General in Council has constantly been in the habit of exercising those powers through the instru mentality of high officials and public bodies, in whom a large discretion has been vested for that purpose. "(2) It could not therefore be supposed that "the Imperial Parlia ment would have renewed in the Councils Act of 1861 the legislative powers which the Governor General in Council had so long exercised, if they had disapproved of the course of action which the Legislature had been pursuing. The fact that with the knowledge of the circumstances which they must be assumed to have possessed, Parliament did in the Councils Act renew the powers which were given by the Act of 1833, appears to me to amount to a statutory acknowledgment that the course of action which had been pursued by the legisla ture in the exercise of those powers was one which the Act had authorised. "(3) The learned Chief Justice accordingly came to the conclusion that Act XXII of 1869 was a law "which the legislature was justified in passing. " I have referred at some length to the reasoning and conclusions of the learned Judges in the High Court as I think they will be helpful in understanding the full import of the judgment of the Privy Council. It will be seen, in the first place, that the line of approach adopted by Government counsel in the High (1)I.L.R. at 90, 91. (3) Ibid 144. (2) Ibid, 140. 112 868 Court was endorsed by their Lordships as the correct ap proach to the problem, that is to say, the court has to see whether "what has been done is legislation within the gener al scope of affirmative words which give the power, and if it violates no express condition by which that power is limited it is not for any court to inquire further or to enlarge constructively those conditions and restrictions" (italics mine). This passage clearly lays down [what we have already seen was reiterated in Hodge 's case(1)]: (1) that the scope of judicial review in such cases is limited only to determining whether the impugned enactment is within the law making power conferred on the legislature and wheth er it violates any express condition limiting that power, and (2) that in determining the latter question the court should have regard only to express conditions and should not enlarge them inferentially by a process of interpretation. In the second place, their Lordships repudiated the doctrine [as they did also in respect of a provincial legislature in Canada in Hodge 's case(1)] that the Indian Legislature is in any sense an agent or delegate of the Imperial Parliament, and that the rule against delegation by an agent applies to the situation. Thirdly, the distinction made by Markby J. between Parliament and the Indian Legislature that the latter is "restricted to the. making of laws" in the sense defined by Blackstone, while Parliament was not so restricted, or, in other words, that while Parliament could make a "law" delegating its legislative power, the Indian Legislature could not make such a "law, ' was rejected, and the English doctrine of supremacy within limits was laid down specifically in regard to the Indian. Legislature, which, when acting within the limits circumscribing its legislative power "has and was intended to have plenary powers of legislation as large and of the same nature as those of Parliament itself" (italics mine). It must follow that it is as competent for the Indian Legislature to make a law delegating legislative power, both quantitatively and qualitatively, as it is for (1) 9 App. 117. 869 Parliament to do so, provided, of course, it acts within the circumscribed limits. Fourthly, their Lordships "agree that the Governor General in Council could not by any form of enactment create in India and arm with general legisla tive authority a new legislative power not created or autho rised by the Councils Act. Nothing of that kind has in their Lordships ' opinion been done or attempted in the present case." Mr. Chatterjee, on behalf of the opposite party, submit ted that the remark regarding the incompetency of the Gover nor General in Council to create in India a new legislative power had reference to the subordinate agency or instrumen tality to which the legislative authority was to be delegat ed and thus negatived the legislature 's right to delegate. The context, however, makes it clear that their Lordships were expressing agreement on this point with Markby J. who, as we have seen, had stated that the Indian Legislature could not "change the legislative machinery in India without affecting the provisions of the Acts of Parliament which created that machinery." This shows that their Lordships were envisaging the setting up of a new legislative machin ery not authorised by the Councils Act, that is, a new legislature in the sense in which the Central and Provincial Legislatures in the country were legislatures. While they agreed that that could not. be done (because it would be a contravention of the Act of Parliament which confers no power to create such legislatures) their Lordships proceeded to point out that that was not what was done by the impugned Act and that Markby J. fell into an error in thinking that it was. Their Lordships gave two reasons: first, because "it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) ' as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act (No. XXll of 1869) itself." Here, indeed, their Lordships touch the core of the problem by indicating 870 the true nature of delegated legislation as distinct from creating a new legislative body. The point is developed to its logical consequence in later cases as will be seen presently, but here they expose to view the not uncommon "fallacy" of treating the one as of the same nature and as having constitutionally the same consequence as the other, a fallacy which perhaps accounts for much of the confusion of thought on the subject. It will be recalled that in Hodge 's case(1) it was made clear that in delegated legislation the delegating body does not efface itself but retains its legislative power intact and merely elects to exercise such power through an agency or instrumentality of its choice. There is no finality about this arrangement, the delegating body being free to "destroy the agency it has created and set up another or take the matter directly into its own hands. " In Burah 's case(2) their Lordships emphatically stated one consequence of that view, namely, that the act done by the authority to which legislative power is delegat ed derives its whole force and efficacy from the delegating legislature, that is to say, when the delegate acts under the delegated authority, it is the legislature that really acts through its appointed instrumentality. On the other hand, in the creation of a new legislative body with general legislative authority and functioning in its own right, there is no delegation of power to subordinate units, but a grant of power to an independent and co ordinate body to make laws operating of their own force. In the first case, according to English constitutional law, no express provi sion authorising delegation is required. In the absence of a constitutional inhibition, delegation of legislative power, however extensive, could be made so long as the delegating body retains its own legislative power intact. In the second case, a positive enabling provision in the constitutional document is required. The second reason why their Lordships regarded the majority view as erroneous was that Act XXII of 1869 was, in truth, nothing more than conditional legislation (1) 9 App. (2) 5 I.A. 178. 871 and there was no question of delegating legislative power. Their Lordships were of opinion that neither in fixing the time for commencement of the Act nor in enlarging the area of its operation was the Lieutenant Governor exercising "an act of legislation." "The proper legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been ful filled, the legislation is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a Provincial Legislature, they may (in their Lordships ' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers or on the exercise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient. The British Statute book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when consti tuting the Indian Legislature, contemplate this kind of conditional legislation as within the scope of the legisla tive powers which it from time to time conferred. It cer tainly used no words to exclude it. " Their Lordships finally proceeded to refer to the legis lative practice in this country of delegating to the execu tive government a discretionary power of extending enact ments to new territories subject in certain cases to such "restriction, limitation or proviso" as the Government may think proper, and they expressed their approval of the reasoning of Garth C.J. based on such practice. "If their Lordships," they said, "were to adopt the view of the major ity of the High Court they would (unless distinction were made on grounds beyond the competency of the judicial of fice) be casting doubt upon the validity of a long course of legislation appropriate, as far as they can judge to the peculiar circumstances of India. . For such doubt their Lordships are unable to discover any foundation either in the affirmative or the negative words of that Act" 872 (Indian Councils Act, 1861). The parenthetic remark (which I have italicised) is significant. It is not com petent for the court, according to their Lordships, to dis criminate between degrees of delegation. It might be extensive in some cases and slight in others. Its validity must, however, be founded "on the affirmative or the nega tive words" of the Constitution Act. Another logical consequence of the British theory of dele gation has been worked out in Co operative Committee on Japanese Canadians vs Attorney General for Canada(1), where the question arose as to whether an order made by the Governor in Council pursuant to authority delegated by the Parliament of Canada was a law made by the Parliament of Canada within the meaning of the Statute of Westminster and, if so, whether it was such a law made after the pass ing of that Statute. The delegation of authority to the Governor was made before that Statute was passed but the Governor 's order was promulgated after the Statute. Holding that the order was a "law" made by the Parliament of Canada after the Statute of Westminster their Lordships observed: "Undoubtedly, the law as embodied in an order or regulation is made at the date when the power conferred by the Parlia ment of the Dominion is exercised. Is it made after that date by the parliament of the Dominion ? That Parliament is the only legislative authority for the Dominion as a whole and it has chosen to make the law through machinery set up and continued by it for that purpose. The Governor in Council has no independent status as a law making body. The legislative activity of Parliament is still resent at the time when the orders are made, and these orders are" law". In their Lordships ' opinion they are law made by the Parlia ment at the date of their promulgation. "(2) Mr. Chatterice has urged that in Burah 's case(3) the Privy Council did no more than hold that the type of legis lation which their Lordships there called conditional legis lation was within the competence of the (1) (3) S I.A. 178. (2) Ibid 106 107. 873 Indian legislature and was valid, and that the con siderations adverted to 'by their Lordships in upholding such legislation have no relevancy in determining the validity of the provisions impugned in the present case. It is true that the kind of legislation here in question does not belong to that category, for the operation of the impugned Acts is not made to depend upon the exercise of a discretion by an external authority, but it is not correct to say that Burah 's case(1) has application only to facts involving conditional legislation. As I have endeavoured to show, it lays down general principles of far reaching importance. It was regarded in Powell 's case(2) referred to above as "laying down the general law" and as "putting an end" to the false doctrine that a subordinate legislature acts as an agent or a delegate. Mr. Chatterjee next relied on the dictum of Lord Haldane in the Referendum case. (3) In that case their Lordships held that the Initiative and Referendum Act of Manitoba (Canada) was, in so far as it compelled the Lieutenant Governor to submit a proposed law to a body of voters total ly distinct from the legislature of which he was the consti tutional head and rendered him powerless to prevent it from becoming an actual law if approved by those voters, ultra vires the Provincial Legislature, as the power to amend the Constitution of the Province conferred upon that Legislature by the British North America Act, 1867, excluded from its scope "the office of the Lieutenant Governor ". Lord Hal dane, however, proceeded to make the following observations: "Section 92 of the Act of 1867 entrusts the legislative power in a Province to its Legislature, and to that Legisla ture only. No doubt, a body, with a power of legislation on the subjects entrusted to it so ample as that enjoyed by a Provincial Legislature in Canada, could, while preserving its own capacity intact, seek the assistance of subordinate agencies, as had been done when in Hodge vs The Queen(4) the Legislature of Ontario was (1) 5 I.A. 178. (3) (2) 10 App. (4) 9 App. Cas. 117, 874 held entitled to entrust to a Board of Commissioners au thority to enact regulations relating to taverns; but it does not follow that it can create and endow with, its own capacity a new legislative power not created by the Act to which it owes its own existence. Their Lordships do no more than draw attention to the gravity of the constitutional questions which thus arise. "(1) Mr. Chatterjee submitted that the grave constitutional question, to which Lord Haldane drew attention, arose in the present case. I do not think so. The dictum, like the obser vation of Lord Selborne in Burah 's case(2) regarding the power of the Governor General in Council "to create in India and arm with general legislative authority a new legislative power," to which reference has been made, seems to envisage the unauthorised creation of a new legislature with an independent status as a law making body, which, for reasons already indicated, is quite different from delegation of legislative power, and my remarks in connection with that observation equally apply here. The only other decision of the Privy Council to which reference need be made is King Emperor vs Benoari Lal Sarma. (3) It was an appeal from a judgment of the majority of the Federal Court of India (reported in holding, inter alia, that sections 5, 10 and 16 of the Special Criminal Courts Ordinance (No. II of 1942) passed by the Governor General in exercise of his emergency powers were ultra vires and invalid. The ground of decision was that although the powers of the High Court were taken away in form by section 26 of the Ordinance, they were, in fact, taken away by the order of the executive officer to whom it was left by sections 5, 10 and 16 to direct what offences or classes of offences and what cases or classes of cases should be tried by the special courts established under the Ordinance. In so far as these sections thus purported to confer on the executive officers absolute and uncontrolled discretion without any legislative provision or direction laying down (1) , 945. (2) 5 I.A. 178. (3) 72 I.A. 57. 875 the policy or conditions with reference to which that power was to be exercised, they were beyond the competence of the Governor General. Varadachariar C.J., with whom Zafrulla Khan J. concurred, went elaborately into the whole question of delegation of legislative powers, and while conceding, in view of the Privy Council decisions already referred to, that the Governor General (whose legislative power in emer gencies was co extensive with that of the Indian Legisla ture) could not be regarded as a delegate of the Imperial Parliament and that, therefore, the maxim delegatus non potest delegare had no application, nevertheless expressed the opinion that "there is nothing in the above decisions of their Lordships that can be said to be inconsistent with the principle laid down in the passage from the American author ity which the Advocate General of India proposed to adopt as his own argument. " That principle was this: "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done, to the latter no valid objection can be made :" (per Judge Ranney of the Supreme Court of Ohio, often cited in American decisions). The learned Chief Justice then proceeded to examine the American decisions bearing upon the delegation of powers and the opinions expressed by writers on administrative law and came to the following conclusion : "As we have already observed, the considerations and safeguards suggested in the foregoing passages may be no more than considerations of policy or expediency under the English Constitution. But under Constitutions like the Indian and the American, where the constitutionality of legislation is examinable in a court of law, these consider ations are, in our opinion, an integral and essential part of the limitation on the extent of delegation of responsi bility by the legislature to the executive. In the present case, it is impossible to deny that the Ordinance making 113 876 authority has wholly evaded the responsibility of laying down any rules or conditions or even enunciating the policy with reference to which cases are to be assigned to the ordinary criminal courts and to the special courts respec tively and left the whole matter to the unguided and uncontrolled action of the executive authorities. This is not a criticism of the policy of the law as counsel for the Crown would make it appear but a complaint that the law has laid down no policy or principle to guide and control the exercise of the undefined powers entrusted to the execu tive authorities by sections 5, 10 and 16 of the Ordinance. "(1) I have set out at some length the reasoning and conclu sion of the learned Chief Justice because it summarises and accepts most of what has been said before us by Mr. Chatter jee in support of his contention that the American rule as to delegation of legislative powers should be followed in this country in preference to the views of English Judges on the point and that the delegation of a too wide and uncon trolled power must be held to be bad. The Privy Council, however, rejected the reasoning and conclusion of the major ity of the 'Court in a clear and emphatic pronouncement. Their Lordships scouted the idea that what might be no more than considerations of policy or expediency under the Brit ish Constitution could, in India, as in America, become. constitutional limitations on the delegation of legislative responsibility merely because the constitutionality of legislation was open to judicial review under the constitu tion of this country. They said: "With the greatest respect to these eminent Judges, their Lordships feel bound to point out that the question whether the Ordinance is intra vires or ultra vires does not depend on considerations of juris prudence or of policy. It depends simply on examining the language of the Government Of India Act and of comparing the legislative authority conferred on the Governor General with the provisions of the ordinance by which he is 'purporting to exercise that authority" the old traditional approach, "It (1) , 139 140, 877 may be that as a matter of wise and well framed legislation it is better, if circumstances permit, to frame a statute in such a way that the offender may,know in advance before what court he will be brought if he is charged with a given crime; but that is a question of policy, not of law. There is nothing of which their Lordships are aware in the Indian constitution to render invalid a statute, whether passed by the Central legislature or under the Governor General 's emergency powers, which does not accord with this principle. There is not, of course, the slightest doubt that the Parliament of Westminster could validly enact that the choice of courts should rest with an executive authori ty, and their Lordships are unable to discover any valid reason why the same discretion should not be conferred 'in India by the law making authority, whether that authority is the legislature or the Governor General, as an exercise of the discretion conferred on the authority to make laws for the peace order, ' and good government of India. "(1) The English doctrine of supremacy within limits is here asserted once again, and its corollary is applied as the determining test: "What the British Parliament could do, the Indian legislature and the Governor General legislating within their appointed sphere could also do. " There was here a 'delegation of an "unguided and uncontrolled" discretion ary power affecting the liberty of the subject. In the lan guage of an American Judge,it was "unconfined and vagrant" and was not "canalised within banks that kept it from over flowing :"(per Cardozo J. in Panama Refining Co. vs Ryan.(2) Yet, the delegation was upheld. Why? Because "their Lordships are unable to find any such constitutional limita tion is imposed. " There is, however, a passage in the judgment of their Lordships, which, torn from its context, may appear, at first blush, to accept the maxim of delegatus non potest delegare as a principle of English constitutional law, notwithstanding its consistent repudiationby the same tribu nal in the previous decisions already (1) 72 I.A. 57, 70 72. (2) ; 878 referred to, and Mr. Chatterjee was not slow to seize on it as making a veering round to the American point of view. I do not think that their Lordships meant anything so revolutionary. The passage is this: "It is undoubtedly true that the Governor General, acting under section 72 of Schedule IX, must himself discharge the duty of legislation there cast on him, and cannot transfer it to other authorities"(1) (italics mine). This was said, however, in answering the "second objection" which was that section 1 (3) of the Ordinance "amounted to what was called delegated legislation by which the Governor Gener al, without legal authority, sought to pass the decision whether an emergency existed to the Provincial Governmen tinstead of deciding it for himself. " Now, the opening words of section 72 of Schedule IX of the Government of India Act declare: "The Governor General may, in case of an emergency, make and promulgate ordinances for the peace and good government of British India or any part thereof." The ordinance was thus passed avowedly in exercise of a special power to legislate to meet an emergency, and the argument was that the very basis of this ordinance making power must be an exercise of per sonal judgment and discretion by the Governor General which he could not delegate to the Provincial Government or its officers. Their Lordships accepted the major premise of this argument but went on to point out that there was no delegation of his legislative power by the Governor General at all and that "what was done is only conditional legislation. " It was with reference to this special ordinance making power to meet emergencies that their Lordships said that the Governor General must himself exercise it and could not transfer it to other authorities. The words "acting under section 72 of Sched ule IX" and "there, cast on him" make their meaning clear, and the passage relied on by Mr. Chatterjee lends no support to his argument regarding the nondelegability of legislative power in general. In the light of the authorities discussed above and adopting the line of approach laid down there, I am 879 of opinion that section 7 of the , fell within the general scope of the affirmative words of section 22 of the Indian Councils Act, 1861, which conferred the law making power on the Governor. General in Council and that the provision did not violate any of the clauses by which, negatively, that power was restricted. The same line of approach leads me to the conclusion that section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, was also constitutional and valid. This Act was passed by the Dominion Legislature of India, and the governing constitutional provision was section 99 (1) of the Govern ment of India Act, 1935. The Indian Independence Act, 1947, authorised the removal of certain restrictions on the law making powers of the Central Legislature and section 108 of the Constitution Act was omitted; but the material words in section 99 (1) which granted the legislative power remained the same, namely, "may make laws for the whole or any part of the Dominion. " No doubt, as between the Dominion and the Provinces there was a distribution of legislative power according to the Lists in Schedule VII, but such distribu tion did not affect the power of the Dominion Legislature to make laws for what are known as Chief Commissioners ' Prov inces, of which Ajmer Merwara is one. This was made clear by section 100 (4) read with section 46. Section 2 of the impugned Act was, therefore a "law" which the Dominion Legislature was competent to make and the restrictive words "subject to the provisions of this Act" had no application to the case, as no provision was brought to our notice which affected the validity of the law. There was some discussion as to the scope and meaning of the words "restrictions" and "modifications". It was sug gested by Mr. Chatterjee that these words occurring in the impugned provisions would enable the executive authority to alter or amend any law which it had decided to apply to the territories in question and that a power of such undefined amplitude could not be validly delegated by the legislature. On 880 the other hand, the Attorney General submitted that in such context "modification" was usually taken to connote "making a change without altering the essential nature of the thing changed," and that the use of the word would make no difference to the delegability or otherwise of the legislative power. He drew attention to an instance men tioned by the Privy Council in Burah 's case, where their Lordships thought that the power given to the local govern ment by Act XXIII of 1861 to extend the Civil Procedure Code of 1859 "subject to any restriction, limitation or proviso". which it may think proper was not bad. In the view I have expressed above, however wide a meaning may be attributed to the expression, it would not affect the constitutionality of the delegating statute, because no constitutional limitation on the delegation of legislative power to a subordinate unit is ' to be found in either of the constitutions discussed above. That, I apprehend, is also the reason why the Privy Council too attached no importance to the words in section 39 of Act XXIII of 1861 referred to above. Turning next to section 2 of the Part C States (Laws) Act, 1950, it is framed on the same lines as the other two impugned provisions save for the addition of a clause empow ering repeal or amendment of any corresponding law (other than a Central Act) which is for the time being in force in the State. This additional clause, however, need not detain us, for, if there is no constitutional inhibition against delegation of legislative power under the present Constitu tion, delegation can as Well extend to the power of repeal as to the power of modification and the Court cannot hold such ' delegation to be ultra vires. The Constitutional validity of the additional clause thus stands or falls with that of the first part of the section and the only question is: What is the position in regard to delegated legislation under the present Constitution ? Here we do not have the advantage of Privy Council decisions bearing on the question as we had in Burah 's case (1) on the Indian Councils Act, 1861, and Benoari Lal (1) 5 I.A. 178. 881 Sarma 's case(1) on the Government of India Act, 1935. But the line of approach laid down in those cases and in numer ous others, to which reference has been made, must be fol lowed, not because of the binding force of those decisions, but because it is indubitably the correct approach to prob lems of this kind. Indeed, there is no difference between the English and the American decisions on this point. In both countries it is recognised that the correct way of resolving such problems is to look to the terms of the constitutional instrument, and to find out whether the impugned enactment falls within the ambit of the lawmaking power conferred on the legislature which passed the enact ment and, if so, whether it transgresses any restrictions and limitations imposed on such power. If the enactment in question satisfies this double test, then it must be held to be constitutional. We therefore begin by looking to the terms of the Con stitution and we find that article 245 confers lawmaking power on Parliament in the same general terms as in the other two cases discussed above. The article says "subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India. "Then we have the scheme of distribution of legislative powers worked out in article 246 as between Parliament and the legislatures of the States specified in Part A and Part B of the First Schedule, which, however, does not affect the question we have to determine, for article 246 (4), like section 100 (4) of the Government of India Act, 1935, provides that Parliament has power to make laws with respect to any matter for any part of the.territo ry of India not included in Part A or Part B notwithstanding that such matter is a matter enumerated in the State List. The position, therefore, is substantially similar to that under the Indian Councils Act, 1861, and the Government of India Act, 1935, so far as the words conferring law making power are concerned. Is then this impugned enact ment, which merely purports to (1) 72 I.A. 57. 882 delegate law making power to the Central Government for Part C ,States, a "law" within the meaning of article 245 (1) ? There can be no question but that the Act was passed by Parliament in accordance with the prescribed legislative procedure, and I can see no reason why it should not be regarded as a law. It will be recalled that the restricted interpretation which Markby J. (1) put on the word in sec tion 22 of the Indian Councils Act in accordance with Black stone 's definition (formulation of a binding rule of conduct for the subject) was not accepted by the Privy Council in Burah 's case. Even if a mere delegation of power to legis late were not regarded as a law ' 'with respect to" one or other of the "matters" mentioned in the three Lists, it would be a law made in exercise of the residuary powers under article 248. The question next arises whether there is anything in the Constitution which prohibits the making of such a law. The main restrictions and limitations on the legislative power of Parliament or of the States are those contained in Part III of the Constitution relating to Fundamental Rights. Our attention has not been called to any specific provision in that Part or elsewhere in the Constitution which prohib its or has the effect of prohibiting the making of a law delegating legislative power to a subordinate agency of Parliament 's choice. What Mr. Chatterjee strenuously urged was that, having regard to the Preamble to the Constitution, whereby the people of India resolved, in exercise of their sovereign right, "to adopt, enact and to give to themselves the Constitution," Parliament, which is charged with the duty of making laws for the territories of the Union, must, as in the American Constitution, be deemed to be a delegate of the people, and that this fundamental conception, which approximates to the conception ' underlying the American Constitution, attracts the application of the maxim delega tus non potest delegare, and operates as an implied prohibi tion against the delegation of legislative power by Parlia ment or, for that matter, by any other legislature (1) I.L.R. , 91, 883 in the country. It is true to say that, in a sense, the people delegated to the legislative, executive and the judicial organs of the State their respective powers while reserving to themselves the fundamental right which they made paramount by providing that the State shall not make any law which takes away or abridges the rights con ferred by that Part. To this extent the Indian Constitution may be said to have been based on the American model, but this is far from making the principle of separation of powers, as interpreted by the American courts, an essential part of the Indian Constitution or making the Indian Legis latures the delegates of the people so as to attract the application of the maxim. As already stated, the historical background and the political environment which influenced the making of the American Constitution were entirely absent here, and beyond the creation of the three organs of the State to exercise their respective functions as a matter of convenient governmental mechanism, which is a common feature of most modern civilised governments, there ' is not the least indication that the framers of the Indian Constitution made the American doctrine of separation of powers, namely, that in their absolute separation and vesting in different hands lay the basis of liberty, an integral and basic fea ture of the Indian Constitution. On the contrary, by provid ing that there shall be a Council of Ministers to aid and advise the President in the exercise of his functions and that the Council shall be collectively responsible to the House of the People, the Constitution following the British model has effected a fusion of legislative and executive powers which spells the negation of any clear cut division of governmental power into three branches which is the basic doctrine of American constitutional law. Without such a doctrine being incorporated in the Constitution and made its structural foundation, the maxim delegatus non potest dele gare could nave no constitutional status but could only have the force of a political precept to be acted upon by legis latures in a 884 democratic polity consisting of elected representatives of the people in the discharge of their function of making laws, but cannot be enforced by the court as a rule of constitutional law when such function is shirked or evaded. The American courts are able to enforce the maxim because it has been made by the process of judicial construction an integral part of the American Constitution as a necessary corollary of the doctrine of separation of powers. But the position in India, as pointed out above, is entirely differ ent, and the courts in this country cannot strike down an Act of Parliament as unconstitutional merely because Parlia ment decides in a particular instance to entrust its legis lative power to another in whom it has confidence, or, in other words to exercise such power through its appointed instrumentality, however repugnant such entrustment may be to the democratic process. What may be regarded as politi cally undesirable is constitutionally competent. Mr. Chatterjee also attempted to spell out an implied prohibition against delegation on the strength of article 357 (1) (a) which provides specifically for delegation by the President of the law making powers conferred on him by Parliament in case of failure of constitutional machinery in States. This express provision, it is claimed, shows that whenever the makers of the Constitution wanted to authorise delegation of legislative powers they have made specific provision in that behalf and, in the absence of any such provision in other cases, no delegation of such powers is permissible. I see no force in this argument. Merely be cause in a particular instance of rare and extraordinary occurrence an express provision authorising the President to delegate to another the law making powers conferred on him by Parliament is made in the Constitution, it is not reason able to infer that it was intended to prohibit the delega tion of powers in all other cases. The maxim expressio unius est exclusio alterius is not one of universal applica tion, and it is inconceivable that the framers of the Con stitution could have intended to deny to the Indian Legisla tures 885 a power which, as we have seen, has been recognised on all hands as a desirable, if not, a necessary con comitant of legislative activity in modern States America, having started with a rule against delegation as a necessary corollary of the constitutional doctrine of separation of powers, has made and is making numerous inroads on the rule, and English constitutional law has allowed, as we have seen, even to subordinate legislatures, the widest latitude to delegate their legislative powers so long as they retain their own law making capacity intact. In such circumstances, a provision for express delegation in a remote contingency is far too flimsy a ground for infer ring a general prohibition against delegation of legislative power in all other eases. In this connection, it will be useful to recall Lord Selborne 's observation in Burah 's case that all that the court has to see in adjudging an enactment constitutional is "that it violates no express condition or restriction by which the law making power conferred on the legislature is limited, and that it is not for the court to enlarge constructively those conditions and restrictions," and as recently as 1944, the Privy Council, as we have seen in Benoari Lal Sharma 's case referred to what has always been regarded as an established doctrine of English consti tutional law, namely, that the Indian legislature could do, in the matter of delegating its legislative powers, what the British Parliament could do. It would indeed be strange if, in framing the constitution of the Independent Republic of India at the present day, its makers were to ignore the experience of legislative bodies all the world over and to deny to Parliament a power which its predecessors unques tionably possessed. I have no hesitation in rejecting this argument. In the result, I hold that section 7 of the , section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, and section 2 of the Part C States (Laws) Act, 1950, are in their entirety constitutional and valid and I answer the reference accordingly. 886 MAHAJAN J. In exercise of the powers conferred by clause (1) of article 143 of the Constitution the Presi dent of India has referred the following questions to this Court for its opinion : (1) Was section 7 of the , or any of the provisions thereof and in what particular or particulars and to what extent ultra vires the legislature which passed the said Act ? (2) Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof and in what particular or particulars and to what extent ultra vires the legislature which passed the said Act ? (a) Was section 2 of Part C States (Laws)Act, 1950, or any of the provisions thereof and in what particular or particulars and to what extent ultra vires the Parliament ? The reference raises questions of great importance concerning the administration of the affairs of the Republic and is the first one of the kind since the inauguration of the new constitution. The only point canvassed in the reference is as to the vires of the laws mentioned therein. It was contended by the learned Attorney General that legis lative power without authority or power to delegate is a futility and that unless legislative power includes. the power to delegate, power to administer will be ineffective. It was suggested that the true nature and scope of the legislative power of Parliament involves as part of its content power to confer law making powers upon authorities other than Parliament itself and that this is a natural consequence of the doctrine of the supremacy of Parliament. It was said that the Indian legislature when acting within the ambit of its legislative power has plenary powers of legislation as large and of the same nature as the British Parliament and unless the prescribed limits are exceeded, no question of ultra vires can possibly arise, that the proper approach to the question is "Look at the terms of the in strument by which affirmatively the legislative powers are created and by which negatively they are restricted. If what 887 has been done is legislation within the general scope of the affirmative words which give the power and if it violates no express condition or restriction by which the power is limited, it is not for any court of justice, to enquire or to enlarge constructively those conditions and restrictions. "(1) Reliance was also placed on the legisla tive practice in India and other countries of the the Com monwealth sanctioning constitutionality of statutes drawn up in the same form as the impugned enactments. The questions referred cover 'three distinct periods of legislation in the constitutional and political history of this country. The first question relates to the period when the government of this country was unitary in form and was constituted under the Indian Councils Act, 1861, as amended from time to time up to the stage of the introduction of the Morley Minto Reforms, when the Indian Legislature achieved the status of a political debating society and when as a result of the undoing of the partition of Bengal the capital of India was transferred from Calcutta to Delhi. The unitary form of government was changed after the different Round Table Conferences in London into a Federation by the Consti tution Act 'of 1935. This Act with certain adaptations remained in force till 26th January, 1950, when the new constitution was inaugurated. Under the Independence Act, 1947, India became a Dominion of the British Empire but the legislative power of the Parliament of the Dominion remained within the ambit of the Constitution Act of 1935, though the Parliament as a Constituent Assembly was conferred unlimited powers like that of a sovereign. The federal form of govern ment that had been adopted 'by the Constitution Act of 1935 was also adopted by the framers of the new constitution. The second question relates to the period when India had at tained the status of a dominion under the Indian Independ ence Act, while the last question concerns the legislative competency of Parliament under the new constitution of the Republic of India. (1) Queen vs Burah, 5 I.A. 178. 888 It is futile to ask in the year of grace 1951 whether delegated legislation is necessary or not. This kind of legislation is only a special aspect of the problem of administrative discretion. The necessity of delegating rule making power on the largest scale to administrative authorities is as much a basic fact of modern industrial society as the assumption by the State of certain obliga tions of social welfare. The problem, however, is how dele gated legislation and administrative discretion are confined and controlled so as to comply with the elementary princi ples of law in a democratic society. The answer to the problem has to be found within the ambit of the constitution of the country concerned and on the construction that a lawyer or a jurist would place on it with a constructive and not a purely legalistic approach. In this back ground it is instructive to see how the question has been solved in other countries. It was customary for the mother of Parliaments told ele gate minor legislative power to subordinate authorities and bodies. Some people took the view that such delegation was wholly unwise and should be dispensed with. Prof. Dicey, however, pointed out that it was futile for Parliament to endeavour to work out details of large legislative changes and that such anendeavour would result in cumbersome and prolix statutes. Blackstone remarked that power of this kind were essential to the effective conduct of the government. Constitutional practice grew up gradually as and when the need arose in Parliament, without a logical system, and power was delegated by Parliament for various reasons: because 'the topic required much detail, or because it was technical, or because of pressure of other demands on par liamentary time. The Parliament being supreme and its power being unlimited, it did what it thought was right. The doctrine of ultra vires has no roots whatever in a country where the doctrine of supremacy of Parliament holds the field. The sovereignty of Parliament is an idea fundamental ly inconsistent with the notions which govern inflexible and rigid constitutions existing in countries 889 which have adopted any scheme of representative government. In England supremacy of law only means the right of judges to control the executive and it has no greater constitution al value than that. The basis of power in England is the legal supremacy of Parliament and its unrestricted power to make law. In the words of Coke, "It is so transcendent and absolute as it cannot be confined either for causes or persons within any bounds," or again, as Blackstone put it, "An act of Parliament is the exercise of the highest author ity that this kingdom acknowledges upon earth. It hath power to bind every subject in the land, and the dominions there unto belonging; nay, even the King himself, if particularly named therein. And it cannot be altered amended, dispensed with, suspended or repealed, but in the same forms and by the same authority of Parliament." (1). The Parliament being a legal omnipotent despot, apart from being a legislature simpliciter, it can in exercise of its sovereign power delegate its legislative functions or even create new bodies conferring on them power to make laws. The power of delegation is not necessarily implicit in its power to make laws but it may well be implicit in its omnipotence as an absolute sovereign. Whether it exercises its power of delegation of legislative power in its capacity as a mere legislature or in its capacity as an omnipotent despot, it is not possible to test it on the touchstone of judicial precedent or judicial scrutiny as courts of justice in England cannot inquire into it. 'The assertion therefore that this power Parliament exercises in its purely legisla tive capacity has no greater value than that of an ipse dixit. For these reasons I am in respectful agreement with the view of that eminent judge and jurist, Varadachariar J., expressed in Benoari Lal arma 's case(2) that the constitu tional position in India approximates more closely to the American model than to the English model and on this subject the decisions of the United States so far as they lay down any principle are a valuable guide on this question. (1) Vide Allen "Law in the Making " 3rd Edn., p. 367. (2) 890 This view finds support also from the circumstance that the constitutions of the two countries are fundamentally different in kind and character. They fail in two distinct classes having different characteristics. England has a unitary form of ' government with a flexible constitution, while in India we have always had a rigid constitution and since 1935 it is federal in form. It is unsafe, therefore, to make any deductions from the legislative power exercised under a system of government which is basically different in kind and not merely in degree from the other on the question of its legislative competency and reach conclusions on the basis of such deductions. In my opinion, search for a solu tion of the problem referred to us in that direction is bound to produce no results. I have, therefore, no hesita tion in rejecting the contention of the learned Attorney General that the answer to the questions referred to us should be returned by reference to, the exercise of power of Parliament in the matter of delegation of legislative power to the executive. It may, however, be observed that in spite of the widest powers possessed by the British Parliament, it has adopted a policy of self abnegation in the matter of delegated legis lation. A committee was appointed to report on the Minis ters ' powers, popularly known as the Donoughmore Committee. It made its recommendations and stated the limits within which power of delegated legislation should be exercised. Means were later on adopted for keeping a watchful eye on such legislation. The Donoughmore Committee discovered a few instances of cases where delegation had gone to the extent of giving a limited power of modifying Parliamentary statutes. One of these instances was in section 20 of the Mental Treatment Act, 1930 (20 & 21 Geo. V, c. 23). It empowered the Minister of Health by order to modify the wording of an enactment so far as was necessary to bring it into conformity with the provisions of the section. The whole section related to terminology, its intention being to replace certain statutory expressions in previous use by others which at the moment were regarded less 891 offensive. The other instance was found in section 76 of the Local Government Scotland Act, 1929, (19 & 20 Geo. V, c. 25). By this section the Secretary of State was empowered between 16th May, 1929, and 31st December, 1930, by order to make any adaptation or modification in the provisions of any Act necessary to bring these provisions in conformity with the provisions of other Acts. Such a clause in a statute bore the nickname "Henry VIII clause". Concerning it the Committee made the following recommendation: "The use of the so called Henry VIII clause conferring power on a Minister to modify the provisions of Acts of Parliament (hitherto limited to such amendments as may appear to him to be neces sary for the purpose of bringing the statute into operation) should be abandoned in all but most exceptional cases and should not be permitted by Parliament except upon special grounds stated in a ministerial memorandum to the bill. Henry VIII clause should never be used except for the sole purpose of bringing the Act into operation but subject to the limit of one year. " The language in which this recommendation is couched clearly indicates that even in a country where Parliament is supreme the power of modifying Parliamentary statutes has never been exercised except in the manner indicated in the above recommendation, and even as regards that limited power the recommendation was that the exercise of it should be abandoned. It is significant that since then Henry VIII clause has not been used by Parliament. The Dominion of Canada has a written constitution, The British North Amercia Act (30 & 31 Vict., c. 31). It is not modelled on the doctrine of exclusive division of power between the departments of State, legislative, executive and judicial. It does not place them in three water tight compartments and it is somewhat similar in shape in this respect to the British constitution where the King is still a part of the legislature, the House of Lords still a part of the judicial as well as legislative and where all parts of government form 892 a mutual check upon each other. This similarity, however, does not mean that the legislature in Canada is of the same kind as the British Parliament. It falls in the class of non sovereign legislatures, like all colonial parliaments. The decisions of Canadian courts are by no means uniform on the power of the Canadian Parliament to delegate legislative power. Those cited to us of recent date seem to have been given under the pressure of the two world wars and under the provisions of the War Measures Act. With great respect and in all humility, I am constrained to observe that in these decisions, to establish the vires of the powers delegated, arguments have been pressed into service which are by no means convincing or which can be said to be based on sound juristic principles. They can only be justified on the ground that during a period of emergency and danger to the State the dominion parliament can make laws which in peace time it has no competency to enact. There are a number of Privy Council decisions which have concerned themselves with the vires of legislative enactments in Canada which purported to transfer legislative power to outside authorities and it seems to me that these decisions furnish a better guide to the solution of the problem before us than the later decisions of the Supreme Court of Canada which seemingly derive support from these Privy Council decisions for the rules stated therein. The first of these decisions is in the case of Russell vs The Queen(1) decided in 1882. Two questions were raised in the appeal. The first was as to the validity of the Canada Temperance Act, 1878. It was urged that having regard to the provisions of the British North America Act, 1867, relating to the distribution of legislative powers it was not competent for the Parliament of Canada to pass the Act in question. The second question was that even if the Dominion Parliament possessed the powers which it assumed to exercise by the Act, it had no power to delegate them (1) 7 App. Cas. 829, 893 and to give local authorities the right to say whether the provisions of the Act should be operative or not. It is the second question which is relevant to the present enquiry the mode of bringing the second part of the Act into force, stating it succinctly, was as follows: "On a petition to the Governor in Council, signed by not less than one fourth in number of the electors of any county or city in the Dominion qualified to vote at the election of a member of the House of Commons, praying that the second part of the Act should be in force and take effect in such county or city, and that the votes of all the electors be taken for or against the adoption of the petition, the GovernorGeneral, after certain prescribed notices and evi dence, may issue a proclamation, embodying such petition, with a view to a poll of the electors being taken for or against its adoption. When any petition has been adopted by the electors of the county or city named in it, the Gover nor General in Council may, after the expiration of sixty days from the day on which the petition was adopted, by Order in Council published in the Gazette, declare that the second part of the Act shall be in force and take effect in such county or city, and the same is then to become of force and take effect accordingly. " It was urged before their Lordships that assuming that the Parliament of Canada had authority to pass a law for prohibiting and regulating the sale of intoxicating liquors, it could not delegate its powers, and that it had done so by delegating the power to bring into force the prohibitory and penal provisions of the Act to a majority of the electors of counties and cities. Their Lordships ' answer to the coun sel 's contention was in these words : "The short answer to this objection is that the Act does not delegate any legislative powers whatever. It contains within itself the whole legislation on the matters with which it deals. The provision that certain parts of the Act shall come into operation only 894 on the petition of a majority of electors does not confer on these persons power to legislate. Parliament itself enacts the condition and everything which is to follow upon the condition being fulfilled. Conditional legislation of this kind is in many cases convenient, and is certainly not unusual, and the power so to legislate cannot be denied to the Parliament of Canada, when the subject of legislation is within its competency. Their Lordships entirely agree with the opinion of Chief Justice Ritchie on this objection. If authority on the point were necessary, it will be found in the case of Queen vs Burah(1), lately before this Board. " It seems to me that their Lordships acquiesced and assented in the proposition urged by the learned counsel that delegation of legislative power was not permissible when they combated his arguments with the remark that the Act does not delegate any legislative power whatever. Otherwise, the short answer to the objection was that dele gation of legislative power was implicit within the power of legislation possessed by the legislature. It was not neces sary to base the decision on the ground of conditional legislation. Though Queen vs Burgh(1) was an appeal from the High Court of Bengal, a reference was made to it and the decision therein was mentioned as laying down an apposite rule for the decision of cases arising under the British North Ameri ca Act, 1867. In order to appreciate and apprehend the rule to which their Lordships gave approval in the above men tioned case, it seems necessary to state precisely what Queen vs Burgh(1) decided. Act XXII of 1869 of the Council of the Governor General of India which is entitled "An Act to remove the Garo Hills from the jurisdiction of the tribu nals established under the General Regulations and Acts, and for other purposes" among other things provided as follows : "Sec. 4. Save as hereinafter provided, the territory known as the Garo Hills. is hereby removed from the jurisdiction of the Courts of Civil and (1) 5 I.A, 178. 895 Criminal Judicature, and from the control of the offices of revenue constituted by the Regulations of the Bengal Code and the Acts passed by any legislature now or heretofore established in British India, as well from the law pre scribed for the said courts and offices by the Regulations and Acts aforesaid. And no Act hereafter passed by the Council of the Governor General for making Laws and Regula tions shall be deemed to extend to any part of the said territory, unless the same be specially named therein. Sec. 5. The administration of civil and criminal jus tice, and the superintendence of the settlement and realiza tion of the public revenue, and of all matters relating to rent, within the said territory, are hereby vested in such officers as the said Lieutenant Governor may, for the pur pose of tribunals of first instance or of reference and appeal, from time to time appoint. The officers so appointed shall, in the matter of the administration and superin tendence aforesaid, be subject to the direction and con trol of the said Lieutenant Governor and be guided by such instructions as he may from time to time issue. Sec. 8. The said Lieutenant Governor may from time to time by notification in the Calcutta Gazette, extend to the said territory any law, or any portion of any law, now in force in the other territories subject to his Government, or which may hereafter be enacted by the Council of the Gover nor General, or of the said Lieutenant Governor, for making laws and regulations, and may on making such extension direct by whom any powers or duties incident to the provi sions so extended shall be exercised or performed, and make any order which he shall deem requisite for carrying such provisions into operation. Sec. 9. The said Lieutenant Governor may from time to time, by notification in the Calcutta Gazette extend mutatis mutandis all or any of the provisions contained in the other sections of this Act to the Jaintia Hills, the Naga Hills, and to such portion of the Khasi Hills as for the time being forms part of British India. " 896 Under the provisions of the Act the Lieutenant Governor of Bengal on the 14th October, 1871, issued a notification and in exercise of the powers conferred upon him by section 9, he extended the provisions of the said Act to the terri tory known as the Khasi and Jaintia Hills and excluded therefrom the jurisdiction of the Courts of Civil and Crimi nal Judicature, and specified in the notification the bound aries of the said territory. The notification extended all the provisions of the Act to the districts of Khasi and Jaintia Hills. The Lieutenant Governor did not exercise the power of selecting parts of these Acts for purposes of local application. Section 9 of the Act did not empower the Lieu tenant Governor to modify any of the provisions of the Act. The High Court of Bengal by a majority judgment held that the notification had no legal force or effect in removing the said territories from the jurisdiction which the High Court had previously possessed over it, inasmuch as the Council of the Governor General of India for making laws and regulations had under its constitution, by the Councils Act, 1861, no power to delegate such authority to the Lieutenant Governor as it had by Act XXII of 1869 in fact purported to delegate. The Indian Councils Act, 1861, 24 & 25 Vict. c. 67, by section 22, gave the Governor General in Council power for the purpose of making laws and regulation$, power for repealing, amending or altering any laws or regulations whatever then in force or thereafter to be in force and to make laws and regulations for all per sons, whether British or native, foreigners or others, and for all courts of justice whatever, and for all places and things whatever within the said territories, and for all servants of the Government of India within the dominions of princes and states, provided always that the said Governor General in Council shall not have the power of making any laws or regulations which shall repeal or in any way affect any of the provisions of the Act. As regards section 9 of the Act their Lordships made the following observations : 897 "The ground of the decision to that effect of the major ity of the Judges of the High Court was, that the 9th section was not legislation, but was a delegation of legis lative power. In the leading judgment of Mr. Justice Mark by, the principles of the doctrine of agency are relied on; and the Indian Legislature seems to be regarded as, in effect, an agent or delegate, acting under a mandate from the Imperial Parliament, which must in all cases be executed directly by itself. "Their Lordships cannot but observe that, if the princi ple thus suggested were correct, and justified the conclu sion drawn from it, they would be unable to follow the distinction made by the majority of the Judges between the power conferred upon the Lieutenant Governor of Bengal by the 2nd and that conferred on him by the 9th section. If, by the 9th section, it is left to the Lieutenant Governor to determine whether the Act, or any part of it, shall be applied to a certain district, by the 2nd section it is also left to him to determine at what time that Act shall take effect as law anywhere. Legislation which does not directly fix the period for its own commencement, but leaves that to be done by an external authority, may with quite as much reason be called incomplete, as that which does not itself immediately determine the whole area to which it is to be applied, but leaves this to be done by the same external authority. If it is an act of legislation on the part of the external authority so trusted to enlarge the area within which a law actually in operation is to be applied, it would seem a fortiori to be an act of legislation to bring the law originally into operation by fixing the time for its com mencement. "But their Lordships are of opinion that the doctrine of the majority of the Court is erroneous, and that it rests upon a mistaken view of the powers of the Indian Legisla ture, and indeed of the nature and principles of legisla tion. The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it, and it can, of course, do 898 nothing beyond the limits which circumscribe these powers. But, when acting within those limits, it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation, as large and of the same nature as those of Parliament itself. The established courts of justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question; and the only way in which they can properly do so, is by looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted. If what has been done is legislation, within the general scope of the affirmative words which give the power, and if it violates no express condition or restriction by which that power is limited (in which category would, of course, be included any Act of the Imperial Parliament at variance with it), it is not for any court of justice to inquire further, or to enlarge constructively those conditions and restrictions. " The learned Attorney General placed considerable reli ance on these observations in support of his proposition that if the legislation is within the ambit of the field prescribed for exercise of legislative power, then from it it follows that within that field power can be exercised to delegate to the widest extent. This quotation, however, cannot be torn off from the context and read by itself. Meaning can only be given to these observations in the light of the observations that follow the quotation cited above and which are in these terms : " "Their Lordships agree that the Governor General in Council could not, by any form of enactment, create ' in India, and arm with general legislative authority a new legislative power not created or authorised by the Councils Act. Nothing of that kind has, in their Lordships ' opinion, been done or attempted in the present case. What has been done is this. The Governor General in Council has deter mined, in the due and ordinary course of legislation, to remove a particular district from the 899 jurisdiction of the ordinary courts and offices, and to place it under new courts and offices, to be appointed by and responsible to the Lieutenant Governor of Bengal; leav ing it to the Lieutenant Governor to say at what time that change shall take place; and also enabling him, not to make what law he pleases for that or any other district, but to apply by public notification to that district any law, or part of law, which either already was, or from time to time might be, in force, by proper legislative authority, in the other territories subject to his government. The legisla ture determined that, so far, a certain change should take place; but that it was expedient to leave the time, and the manner of carrying it into effect to the discretion of the Lieutenant Governor; and also, that the laws which were or might be in force in the other territories subject to the same government were such as it might be fit and proper to apply to this district also; but that, as it was not certain that all those laws, and every part of them, could with equal convenience be so applied, it was expedient, on that point also, to entrust a discretion to the Lieutenant Gover nor. "Their Lordships think that it is a fallacy to speak of the powers thus conferred upon the Lieutenant Governor (large as they undoubtedly are) as if, when they were exercised, the efficacy of the acts done under them would be due to any other legislative authority than that of the Governor General in Council. Their whole operation is, directly and immediately, under and by virtue of this Act (XXII of 1869) itself. The proper legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been ful filled, the legislation is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a provincial legislature, they may (in their Lordships ' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exercise of a limit ed 116 900 discretion, entrusted by the legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be highly convenient. The British Statute book abounds with examples of it; and it cannot be supposed that the Imperial Parliament did not, when consti tuting the Indian Legislature, contemplate this kind of conditional legislation as within the scope of the legisla tive powers which it from time to time conferred. It cer tainly used no words to exclude it. " Towards the close of the judgment certain illustrations were mentioned of legislation in India described as condi tional legislation. Reference was made to the Codes of Civil and Criminal Procedure and particularly, section 39 of Act XXIII of 1861 which authorised the Local Government with the previous sanction of the Governor General in Council (not in his legislative capacity) to extend the provisions of the Act "subject to any restriction, limitation or proviso which the Local Government may think 'proper. " In my opinion, in this case their Lordships did not affirmatively assent to the proposition that the Indian Legislature had full power of delegation within the ambit of its legislative field and they did not dissent from the conclusion of Markby J. in the concluding part of the judg ment that under general principles of law in India any substantial delegation of legislative power by the legisla ture of the country was void. On the other hand, they re marked that legislation of this kind was conditional legis lation and it only becomes complete on the fulfilment of those conditions and that the determination of those condi tions could be left to an external authority. In spite of expressing their disapproval of the view of the majority of the Full Bench in applying the principles of the doctrine of agency and in treating the Indian Legislature as an agent of the Imperial Parliament, their Lordships clearly expressed the opinion that the exercise of the legislative will and judgment could not be transferred to an external authority and that it was for the proper legislature to exercise its own judgment as to the. 901 place, persons, laws and powers. It seems to me that though their Lordships were not prepared to assent to the proposi tion that the matter should be dealt with on principles deducible from the doctrine of the law of agency, they were also not prepared to depart from the rule that apart from the doctrine of the law of agency a person to whom an office or duty is assigned or entrusted by reason of a special qualification cannot lawfully devolve that duty upon another unless expressly authorised so to do. Public func tionaries charged with the performance of public duties have to execute them according to their own judgment and discre tion except to the extent that it is necessary to employ ministerial officers to effectively discharge those duties. For the reasons given above presumably the Privy Council was not prepared to lay down that delegation of legislative power was a content of the power itself. It contented itself by holding the law valid under the name and style of condi tional legislation. It is difficult to conceive that the Privy Council would have hesitated in saying so if it felt that delegation of legislative power was a content of the power itself. Reference in this connection may be made to a passage in the judgment of Markby J. which reads thus : The various Parliamentary statutes nowhere confer any express power upon the Indian Legislature to change the machinery of legislation in India. But they do confer that power subject to important restrictions upon the executive government. Mr. Kennedy boldly claimed for the Indian Legislative Council the power to transfer legislative func tions to the Lieutenant Governor of Bengal. Indeed as I understand him, the only restriction he would attempt was that the Legislative Council could not destroy its own power to legislate though I see no reason why he should stop there. The Advocate General did not go so far. There are no words in the Acts of Parliament upon which the legislative authority could be made transferable in one class of cases and not in others because I do not 902 for a moment suggest that every time a discretion is en trusted to others there is the transfer of legislative authority. Every Act of the legislature abounds with exam ples of discretion entrusted to judicial and executive officers of government, the legality of which no one would think of questioning. 'the broad question, however, is ' Can the legislature confer on the Lieutenant Governor legisla tive power? ' Answer: 'It is a general principle of law in India that any substantial delegation of legislative author ity by the legislature of this country is void '. " It was then contended that the illustration cited in the concluding part of the judgment of their Lordships suggests their approval of the proposition that the legislative power could be delegated conferring power to modify a statute passed by the legislature itself. This contention seems to be based on a misapprehension of what their Lordships decid ed. In the Full Bench decision of the Calcutta High Court in Empress vs Burgh & Book Singh(1) Markby J. made the following observations while dealing with these illustra tions : "Lastly it was argued that the Indian Legislature had done so (delegated power) for a long series of years, and a long list of Acts passed between 1845 and 1868 has been handed in to us, all of which, it is said, must be treated as instances of delegation of legislative authority and Act XXII of 1869 should be so treated. The Acts contained in the list do not appear to me to afford (as was asserted) so many clear and undisputed instances of transfer of legisla tive authority. I may observe that as to the provisions which these and many other Acts contain for the making of rules by executive government in conformity with the Act we have the highest authority in Biddie vs Tariney Churn Baner jee(2) that the power to make such rules may be conferred without delegation of legislative authority. . The list of Acts does not seem to me to show any clear practice of transferring legislative authority. " (1) I.L.R. (2) 1 Tay. & Bell, 390. 903 Ainslie J. specifically considered the provisions of section 39 of Act XXIII of 1861 and the meaning of the words "reservations ", "limitations" and "provisos" and said as follows : "The provisions of section 39, Act XXIII of 1861, do not affect my view of this matter. This section allows a local Government, with the previous sanction of the Governor General in Council, to annex any restriction, limitation, or proviso it may think proper when extending the Code of Civil Procedure to any territory not subject to the general regu lations; but this is merely another form of delaying the full extension of the Code. So far as the Code obtains operation, it is still, because the extension is pro tanto, a carrying out of the intention of the superior legislature that this shall be sooner or later the law in the particular tract of country. As I read the section, no power is given to amend the law itself; it is only a power to keep some portion in abeyance or to make its operation contingent on something external to it, which again is only another form of postponing its full operation." No doubt was cast on this construction of the language of section 39 either in the minority judgment of the High Court or in the judgment of their Lordships of the Privy Council. In view of this clear expression of opinion of Ainslie J. as to the meaning of the language used in section 39 and not disapproved by their Lordships of the Privy Council it cannot with any force be contended that their Lordships in Burahs case(1) gave approval to the proposition that the power of conditional legislation included the power of amendment or modification of the Act of the legis lature itself. In my opinion, the result of the decision in Burah 's case(1) is that it was decided that the Indian Legislature had power to conditionally legislate. This case is no authority for the proposition that it could delegate the exercise of its judgment on the question as to what the law should be to an external agency. This case does not support the (1) 5 I.A. 178. 904 proposition that amendment of a statute of the legislature itself is a matter which could form the subject of delegated legislation. The expression that Indian Legislature could not arm with legislative power a new legislative body not created by the Indian Councils Act only means that it must function itself in making laws and not confer this power on any other body. In other words, it could not create a person having co extensive power of legislation and could not clothe it with its own capacity of law making, that is in laying down principles and policies. The possession of plenary powers within the ambit laid down only means that within that particular field it can make any laws on those subjects, but it does not mean that it can shirk its duty in enacting laws within the field by making a law that it shall not itself operate on that field but somebody else will operate on its behalf. In my opinion, their Lordships ' judgment amounts to saying that though within the field prescribed it has the largest power of legislation, yet at the same time it is subject to the condition that it cannot abandon formally or virtually its high trust. Hodge vs The Queen(1) was the next Canadian case decid ed by the Privy Council in 1883. The appellant Hodge, was the holder of a liquor licence issued on 25th April, 1881, by the Board of Licence Commissioners for the City of Toron to under the Liquor Licence Act of the Province of Ontario in respect of the St. James Hotel. He was also the holder of a licence under the authority of the Municipal Act, authorising him to carry on the business or calling of a keeper of a billiard saloon with one table for hire. The appellant did on the 7th May, 1881, unlawfully permit and suffer a billiard table to be used and a game of billiards to be played thereon, in his tavern during the time prohib ited by the Liquor Licence Act for sale of liquor therein. It was urged that the Ontario Assembly was not competent to legislate in regard to licences for the sale of liquor and that even if the Ontario legislature could, it could not delegate its power to Licence Commissioners. ( 1) 9 App. 905 The local legislature had assigned to three officials the power to define offences and impose penalties. This conten tion was met with the plea that there was no delegation of legislative authority but only of the power to make by laws. The Court of the King 's Bench Division held that the local legislature had no power to delegate in the matter and that such power could be exercised by the legislature alone. The Court of Appeal reversed this decision and it was upheld by their Lordships of the Privy Council. It was found that sections 4 and 5 of the Liquor Licence Act were intra vires the constitution. In the course of their judgment their Lordships made the following observations: "It appears to their Lordships, however, that the objec tion thus raised by the appellants is founded on an entire misconception of the true character and position of the provincial legislatures. They are in no sense delegates of or acting under any mandate from the Imperial Parliament. When the British North America Act enacted that there should be a legislature for Ontario, and that its legislative assembly should have exclusive authority to make laws for the Province and for provincial purposes in relation to the matters enumerated in section 92, it conferred powers not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by section 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subjects and area the local legislature is supreme, and has the same authority as the Imperial Parliament, or the Parliament of the Domin ion, would have had under like circumstances to confide to a municipal institution or body of its own creation authority to make by laws or resolutions as to subjects specified in the enactment, and with the object of carrying the enactment into operation and effect. It is obvious that such an authority is ancillary to legislation, and without it an attempt for varying details and machinery to carry them out might 906 become oppressive, or absolutely fail, The very full and very elaborate judgment of the Court of Appeal con tains abundance of precedents for this legislation, entrusting a limited discretionary authority to others, and has many illustrations of its necessity and convenience. It was argued at 'the bar that a legislature committing important regulations to agents or delegates effaces itself. That is not so. It retains its powers intact, and can, whenever it pleases, destroy the agency it has created and set up another, or take the matter directly into its own hands. How far it shall seek the aid of subordinate agencies, and how long it shall continue them, are matters for each legis to decide. "lature, and not for courts of law This case, in my opinion, decided the following points : (1) Power to make by laws or regulations as to subjects specified in the enactment and with the object of carrying that enactment into operation and effect can be transferred to municipal 'institutions or local bodies. (2) Such an authority is ancillary to legislation. (3) Giving such power of making regulations to agents and delegates does not amount to an effacement of the legislature itself. The case does not sanction the proposition that power to amend or to modify a statute passed by the legislature itself can be delegated. Power of amending a statute or altering it cannot be described as ancillary to legislation, nor is such a power within the armit of the doctrine of subsidiary legis lation. It is significant, that their Lordships of the Privy Council never gave their approval to the wide propo sition that what the legislature itself can do, it can employ an agent with coextensive powers for doing the Same. They have been careful in saying to what extent and in what measure delegation was permissible. All that they sactioned was delegation of authority ancillary to legislation or delegation to municipal institutions to make regulations and by laws and no more. It was not held by their Lordships that power to declare what the law shall be could ever be delegated or that such delegation will be intra vires the Parliament of Canada or of the 907 Indian Legislature. It was contended that by implication their Lordships held in this case that short of effacing itself the legislature could delegate. In my opinion, there is no justification for placing such a construction on the language used by their Lordships while they were combat ing an argument that was placed before them by the learned counsel. In re The Initiative and Referendum Act (1) is the third Canadian case decided by the Privy Council. By the Initia tive and Referendum Act of Manitoba the Legislative Assembly sought to provide that the laws of the province will be made and repealed by the direct vote of the electors instead of only by the Legislative Assembly whose members they elect. It was held that the powers conferred on a provin cial legislature by section 92 include the power of amend ment of the constitution of the province except as regards the office of the Lieutenant Governor and that the Initia tive and Referendum Act of Manitoba excludes the Lieu tenant Governor wholly from the new legislative authority set up and that this was ultra rites the provincial legisla ture. The Act was therefore held void. Lord Haldane who delivered the opinion of the Privy Council, after having found that the Act was ultra vires the legislature, made the following observations: "Having said so much, their Lordships, following their usual practice of not deciding more than is strictly neces sary, will not deal finally with another difficulty which those who contend for the validity of this Act have to meet. But they think it right, as the point has been raised in the court below, to advert to it. Section 92 of the Act of 1867 entrusts the legislative power in a province to its legisla ture and to that legislature only. No doubt a body, with a power of legislation on the subjects entrusted to it so ample as that enjoyed by a provincial legislature in Canada, could, while preserving its own capacity intact, seek (1) 117 908 the assistance of subordinate agencies as had been done when in Hodge vs The Queen (1) the Legislature of Ontario was held entitled to entrust to a Board of Commissioners authority to enact regulations relating to taverns; but it does not follow that it can create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence. Their Lordships do no more than draw attention to the gravity of the constitutional questions which thus arise. " These observations reiterate the ratio of the decision in Hodge vs The Queen(1) and they do not amount to saying that power to amend or modify Acts of the legislature itself could be given by delegation of legislative power. It is, however, important that their Lordships in clear and unam biguous language laid it down that section 92 entrusts legislative power to its legislature and to that legisla ture only and to no other. The principle underlying Lord Haldane 's remarks is thus stated in Street 's book on the Doctrine of Ultra Vires, at page 430: "The decision in this case, that the statute was ultra vires, did not turn precisely on the ground of delegation, but these remarks suggest that a legislature will not ordi narily be permitted to shift the onus of legislation, though it may legislate as to main principles and leave details to subordinate agencies. " Reference may also be made to the case of King vs Nat Bell Liquors Ltd.(2) The Liquor Act (6 Geo. V, c. 4, Alber ta) was held intra vires the power of the province under the British North America Act, 1867, and it was found that it was not ultra vires by reason of being passed pursuant to a popular vote under the Direct Legislation Act (4 Geo. V, c. 3, Alberta). Here the law was made by the provincial legis lature itself and it was passed in accordance with the regular procedure of the Houses of Legislature. This case is no authority for the contention raised by the learned Attorney General. Il) 9 App. 117 (21 909 The next Canadian case decided by the Privy Council is reported in Croft vs Dunphy(1). Antismuggling provisions enacted operating beyond territorial limits which had long formed part of Imperial customs legislation and presumably were regarded as necessary for its efficacy were held valid and within the ambit of the constitutional powers. This case does not suggest any new line of thought, not already con sidered in Queen vs Burah(2), or Hodge vs The Queen(3). Shannon vs Lower Mainland Dairy Products Board (4) is a case in which the question arose whether Natural Products Market ing Legislation Scheme of control or regulation and imposi tion of licence fees were intra vires the provincial legis lature. It was argued that it was not within the powers of the provincial legislature to delegate legislative power to the Lieutenant Governor in Council or to give him further power of delegation. This contention was met with the fol lowing observations : "The objection seems subversive of the rights which the provincial legislature enjoys while dealing with matters within its ambit. It is unnecessary to enumerate the innu merable occasions on which legislature has entrusted similar powers to various persons and bodies. On the basis of past practice the delegation was upheld. " So far as I have been able to ascertain, the past prac tice was in respect of conferring necessary and ancillary powers to carry on the policy of a statute. Reference was also made to Powell vs Apollo Candle Co. (5) decided in the year 1885. There the question arose as to the validity of section 133 of the Customs Regulating Act of 1879 which authorizes the levy of certain duties under an Order in Council. The section was held intra vires the constitution. It was argued that the power given to the colonial legislature to impose duties was to be executed by themselves (1) (4) (2) 5 I.A. 178. (5) 10 App. (3) 9 App. 117. 910 only and could not be entrusted wholly or in part to the Governor or anybody else. This objection was answered in the following way "The duties levied under the Order in Council are really levied by authority of the Act under which the order was issued. The legislature has not parted with its perfect control of the Governor and has the power of withdrawing or altering the power entrusted. " On this construction of the power delegated, that what the delegate was doing was done under the authority of the Act no question of delegation of lawmaking power arises. Fort Frances Pulp & Power Co. vs Manitoba Free Press (1), Co operative Committee on Japanese Canadians vs Attorney General for Canada (2), and Cooperative Committee vs Attorney General of Canada (3) cited at the Bar are not helpful in giving an opinion on the present matter. Four recent Canadian cases were cited for the extreme view that short of effacing itself Parliament or a legisla ture has the widest power of delegation and that it acts intra vires the constitution in doing so. The first of these cases is In re George Edwin Gray(4). The case was under section 6 of the War Measures Act, 1914, which con ferred very wide powers on the Governor General in Council for the efficient prosecution of the war. The decision was given by a majority of four to two and in the majority judgment the following observations occur : "The practice of authorizing administrative bodies to make regulations to carry out the objectives of an act instead of setting out all details in the Act itself is well known and its legality is unquestioned but it is said that the power to make such regulations could not constitu tionally be granted to such an extent as to enable the express provisions of the statute to be amended or repealed; that under the constitution (1) (3) (2) (4) 57 S.C.R. (Canada) 150. 911 Parliament alone is to make laws, the Governor General to execute them and the court to interpret them, then it fol lows that no one of the fundamental branches of government can constitutionally either delegate or accept the function of any other branch. In view of Rex vs Halliday(1), I do not think this broad proposition can be maintained. Parliament cannot indeed abdicate its functions, within reasonable limits at any rate it can delegate its power to execute government orders. Such powers must necessarily be subject to determination at any rate by Parliament and needless to say that the acts of the executive under its delegated authority must fall within the ambit of the legislative pronouncement by which this authority is measured. It is true that Lord Dunedin in Rex vs Halliday(1) said that the British Constitution has entrusted to the two Houses of Parliament subject to assent by the King an absolute power untrammelled by any other circumstance, obedience to which may be compelled by a judicial body. That undoubtedly is not the case in this country. Nothing in the Act imposes any limitations on the authority of the Parliament. " To the proposition stated in the opening part of the quotation there can be no possible objection. But when the learned Judges proceed to lay down the rule that in the absence of any limitations in the constitution Parliament can delegate the power to amend and repeal laws made by itself to an external authority unless it amounts to an abdication of its functions does not in my humble opinion seem to be sound. In the first instance, these observations seem inconsistent with the fundamental proposition that a duty entrusted to a particular body of persons and which is to be performed according to certain procedure by that body can be entrusted to an external agency which is not con trolled by any rules of procedure in the performance of that duty and which would never have been entrusted to perform it. Moreover, abdication by a legislative body need not necessarily amount to a (1) ; 912 complete effacement of it. Abdication may be partial or complete. It would certainly amount to abdication when in respect of a subject of legislative list that body says it shall not legislate on that subject but would leave it to somebody else to legislate on it. That would be delegation of the law making power which is not authorized. There is no justification for the assumption that the expression "abdi cation" is only applicable when there is a total effacement or a legal extinction of such a body. In my opinion, it is the abdication of the power to legislate when a legislature refuses to perform its duty of legislating on a particular subject and entrusts somebody else to perform that function for it. "Abdication" according to the Oxford Dictionary means abandonment, either formal or virtual, of sovereignty or other high trust. It is virtual abandonment of the high trust when the person charged with the trust says to some body else that the functions entrusted to him in part or whole be performed by that other person. Be that as it may, the point of view contained in the above quotation cannot be supported on the decisions of their Lordships of the Privy Council discussed in the earlier part of this judgment. Duff J. stated his view in the following way : "The true view of the effect of this type of legisla tion is that the subordinate body in which a lawmaking authority is vested by it is intended to act as the agent or the organ of the legislature and that the acts of the agent take effect by virtue of the antecedent declaration that they shall have the force of law." These observations, in my opinion, and I speak with great respect cannot again be justified on any juristic principle. In the matter of making law there cannot be an anticipatory sanction of a law not yet born or even con ceived. Moreover, an organ of the legislature for making laws can only be created by the constitution and not by the legislature which is itself confided with that power by the constitution. The learned dissenting Judge in this case observed that a wholesale surrender of the will of the people to any 913 autocratic power would not be justified either in cons titutional law or by the past history of their ancestors. These observations were made in respect to the power of amendment or repeal conferred on the delegate. As I have pointed out earlier in this judgment, such a power has not even been exercised by the British Parliament and the Do noughmore Committee recommended that its exercise as far as possible should be abandoned. The decision in this case, in my opinion, is not an apposite authority for arriving at a correct conclusion on the questions involved in the refer ence. The next case to which our attention was drawn is Ref. re Regulations (Chemicals)(1). This case arose in connection with the regulations respecting chemicals made pursuant to powers conferred by the Department of Munitions and Supply Act and by the War Measures Act. The question was whether these regulations were ultra vires the constitution. It was held that except in one part the regulations were intra rites, and it was observed that the War Measures Act does not attempt to transform the executive government into a legislature in the sense in which the Parliament of Canada and the legislatures of provinces are legislatures and that the regulations derive legal force solely from the War Measures Act. Reliance was placed on Queen vs Burah(2) and Hodge vs The Queen(3). One of the learned Judges observed that the maxim delegatus non potest delegare is a rule of the law of agency and has no applica tion to Acts of a legislature, that the power of delegation being absolutely essential in the circumstances for which the War Measures Act has been enacted so as to prove a workable Act, power must be deemed to form part of the powers conferred by Parliament in that Act. Another learned Judge observed that the maxim was not confined to the law of agency alone but that it had no application to legislation. A third learned Judge, however, said that the maxim quoted above also had application to grants of legislative power but that the Parliament has not (1) [1943] S.C.R. (Canada) 1 (3) 9 App. Cas. 117, (2) 5 I.A. 178. 914 effaced itself, in the ultimate analysis it had full power to amend or repeal the War Measures Act. In my opinion, for the reasons already stated, the observations in this case also go beyond the rule laid down by their Lordships of the Privy Council in Queen vs Burah(1) and Hodge vs The Queen(s), and are not a true guide to the solution of the problem. Our attention was also drawn to Attorney General of Nova Scotia vs Attorney General of Canada(3). This case does not lend full support to the view taken in the cases cited above. Therein it was laid down that neither the Parliament of Canada nor the legislature of any province can delegate one to the other any of the legislative authority respec tively conferred upon them by the British North America Act, especially by sections 91 and 92 thereof. The legislative authority conferred upon Parliament and upon a provincial legislature is exclusive and in consequence, neither can bestow upon or accept power from the other, ' although each may delegate to subordinate agencies. On the question of delegation of legislative power, the learned Chief Justice remarked that "delegations such as were dealt with in In re George Edwin Gray(4) and in Ref. re Regulations (Chemicals)(5) under the War Measures Act were delegations to a body subordinate to Parliament and were of a character different from the delegation meant by the bill now submit ted to the courts." In this case on the general question of delegation the Supreme Court did not proceed beyond the rule enunciated in In re The Initiative and Referendum Act (6), or what was stated in Hodge vs The Queen(7). Lastly reference may also be made to the case of Oimuit vs Bazi (8). The learned Attorney General placed reliance on certain obiter dicta of Davies J. to the effect that the Parliament of Canada could delegate its legislative power and such delegation was within its power. The learned Chief Justice did not express (1) 5 I.A. 178. (5) (2) 9 App. (6) (3) (1950)4 D.L.R 369. ' (7) 9 App. 57 S.C.R. 150 (8) 46 S.C.R.L. (Canada)502. 915 any opinion on the point, while Idington J. was not prepared to subscribe to this view. The other Judges did not consid er the point at all. In my opinion, these remarks, the soundness of which was doubted by other Judges, are not of much assistance to us in this case. Having examined the Canadian cases on this subject it seems pertinent at this stage to refer to a passage from Street on the Doctrine of Ultra Vires, which states the true position of colonial legislatures and appositely brings out the meaning of the language used by the Privy Council in the cases that the legislatures are not the agents of the Imperial Parliament : "However true it may be that colonial legislatures are not mere agents of the Imperial Government, it is also true that they are not unfettered principals. Within the terms of their constitution they are limited at least as to subjects and area, and, to the extent suggested, perhaps also as to power of delegation. If an ultra vires colonial ' statute may be ratified by the Imperial Parliament, there is an implica tion of agency. To do anything outside the scope of their constitution as when the Dominion of Canada established the Province of Manitoba(1), an imperial statute is required. It would appear that a legislature cannot, as an ordinary principal, ratify acts purporting to be done under its authority (2). Taking a broad view, non sovereign legisla tures are, and so long as they do not repudiate their con stitutions must remain, delegates of the Imperial Parlia ment. They have been so regarded by the Privy Council(3). But just as in the case of the prerogative it would be impolitic to apply a formula too strictly, so also the law of agency must be accommodated to meet the solid fact that the colonies, or the most important of them, enjoy real independence. " The decisions of American courts on the constitutionality of delegation of legislative power are, as in (1) 34 Vict. c. 28. (2) Commonwealth vs Colonial Ammunition Co. ; , 221. (3) [1906] A.C. 542; , 254. 118 916 the case of other countries, by no means uniform. Judicial opinion has sometimes taken a strict view against the valid ity of such delegation and on other occasions it has liber ally upheld it as constitutional on grounds which again by no means are based on logical deductions from any juristic principle, but generally on grounds of convenience or under the doctrine of "determining conditions" and sometimes on historical considerations. The Supreme Court of America has, however, never departed from the doctrine that legislative power cannot be delegated to other branches of government or to independent bodies or even back to the people. The rule against delegation of legislative power is not based merely on the doctrine of separation of powers between the three state departments, legislative, executive and judicial, evolved by the constitution. This doctrine puts a restraint on delegation to other branches of government. Prohibition against delegation to independent bodies and commissions rests on Coke 's maxim, delegatus non potest delegare. The maxim, though usually held applicable to the law of agency embodies a sound juristic principle applicable to the case of persons entrusted with the performance of public duties and the discharge of high trusts. The restraint on delega tion back to the people is tied up with some notion of representative democracy. Reference was made to a number of decisions of, the Supreme Court during the arguments and quotations from several books on constitutional law were cited. It is not useful to refer to all of them in my opinion, but a few important ones may be mentioned. The first American case that needs mention is Waman vs Southard (1), a decision of Marshall C.J. given in the year 1825. The question concerned the validity of certain rules framed by the courts. The learned Chief Justice observed that it could not be contended that Congress could delegate to courts or to any other tribunal powers which are strictly or exclusively legislative. (1) 6 Law. Edn. 262. 917 In Killbourn vs Thompson (1), it was held that judicial power could not be exercised by the legislative department. Field vs Clark C) is one of the leading cases in America on this subject. In this case power had been delegated to the executive to impose certain duties. Delegation of power was upheld on the ground that the policy of the law having been determined by the legislature, working out of the details could be left to the President who could not be said to be exercising any legislative will but was merely authorised to execute the law as an agent of the legislature in execut ing its policy. It was asserted that it was a principle universally recognised as vital to the maintenance of the system of government that Congress could not delegate legislative power to the President. In Springer vs Phillipine Islands C), the same view was expressed. On similar lines is the decision in U.S. vs Gravenport etc. Co. (4). It was observed that after fixing a primary standard, power to fill up details could be devolved by appropriate legislation. The provision attacked there was held as not delegation of legislative power but merely giving power to make administrative rules. O 'Donouhue vs U.S. (5) concerned the question of compensation payable to Judges of the Supreme Court and it was held that it could not be lawfully diminished. It was remarked that the object of the creation of the three departments of government was not a mere matter of convenience but was basic to avoid commingling of duties so that acts of each may not be called to have been done under the coercive influence of the other departments. The decision in Hampton & Co. vs U.S.(6) is the oft quoted judgment of Taft C.J. The following extracts from that judgment may be quoted with advantage : "It is a breach of the national fundamental law if Congress gives up its legislative power and transfers it to the President, or to the judicial branch, or, if by ; (4) (2) ; (5) ; (3) (8) ; 918 law it attempts to invest itself or its members with either executive power or judicial power. This is not to say that the three branches are not co ordinate parts of one govern ment and that each in the field of duties may not invoke the action of the other two branches in so far as the action invoked shall not be an assumption of the constitu tional field of action of another branch. In determining what it may do in seeking assistance from another branch, the extent and character of that assistance must be fixed according to commonsense and the inherent necessities of governmental co ordination. The field of Congress involves all and many varieties of legislative action and Congress has found it frequently necessary to use officers of the executive branch, within defined limits, to secure the exact effect intended by its acts of legislation, by vesting direction in such officers to make public regulations inter preting a statute and directing the details of its execu tion, even to the extent of providing for penalizing a breach of such regulations. . Congress may feel itself unable conveniently to determine exactly when its exercise of the legislative power should become effective, because dependent on future conditions, and it may leave the determination of such time to the decision of an executive, or, as often happens in matters of State legislation, it may be left to a popular vote of the residents of a district to be affected by legislation. " Panama Refining Co. vs U.S. (1) is another leading decision of the Supreme Court on this subject. In Benoari Lal Sarma 's ease (2) considerable reliance was placed by Varadachariar J. on this decision for arriving at his con clusion against non delegation of power in India. The following observations from the judgment of Hughes C.J. may appositely be cited : The Congress is not permitted to abdicate, or to trans fer to others, the essential legislative functions with which it is vested. Undoubtedly, legislation must often be adapted to complex conditions involving (1) 293 U.S. a88. (2) 919 a host of details with which the national legislature cannot deal directly. The Constitution has never been regarded as denying to the Congress the necessary resources of flexibil ity and practicality, which will enable it to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determi nation of facts to which the policy as declared by the legislature is to apply. " Cardozo J. observed as follows :"An attempted delegation not confined to any single act nor to any class or group of acts identified or described by reference to standards is in effect a roving commission. " In Opp Cotton Mills vs Administrator (1), it was said that essential legislative power could not be delegated but fact finding agencies could be created. Yakus vs U.S. C) is to the same effect. In Lichter vs U.S. (3) it was held that a constitutional power implies a power of delegation of authority under it sufficient to effect its purpose. This power is especially significant in connection with war powers under which the exercise of discretion as to methods to be employed may be essential to an effective use of its war powers by Congress. The degree to which Congress must specify its policies and standards in order that the admin istrative authority granted may not be an unconstitutional delegation of its own legislative power is not capable of precise specification. These decisions seem to indicate that judicial opinion in America is against delegation of essential powers of legislation by the Congress to administrative bodies or even to independent commissions. It is unnecessary to refer to all the passages that were quoted from the different text books which apart from the opinions of the text book writers merely sum up (1) ; (3) ; (2) ; 920 the result of the decisions given by the various courts on this point. This result has been, in my opinion, very accurately summarized by Crawford in his book on Construc tion of Statutes at pages 215, 26 in the following words and represents the present state of constitutional law in that country on this subject : "Legislative power has been delegated, as a general rule, not so often as an effort to break down the triparte theory of the separation of powers, but from necessity and for the sake of convenience. More and more with a social system steadily becoming increasingly complex, the legisla ture has been obliged in order to legislate effectively, efficiently and expeditiously, to delegate some of its functions: not purely legislative in character, to other agencies, particularly to administrative officials and boards. Most prominent among the powers thus delegated have been the power to ascertain facts, and the power to promul gate rules and regulations. Many of the other delegated powers, upon analysis, fall within one of these two major or basic classifications. "So far, however, as the delegation of any power to an executive official or administrative board is concerned, the legislature must declare the policy of the law and fix the legal principles which are to control in given cases and must provide a standard to guide the official or the board empowered to execute the law. This standard must not be too indefinite or general. It may be laid down in broad general terms. It is sufficient if the legislature will lay down an intelligible principle to guide the executive or administra tive official. From these typical criterions, it is apparent that the courts exercise considerable liberality towards upholding legislative delegations, if a standard is established. Such delegations are not subject to the objec tion that legislative power has been unlawfully delegated. The filling in of mere matters of detail within the policy of, and according to, the legal principles and standards established by the legislature is essentially ministerial rather than legislative in character, even if considerable 921 discretion is conferred upon the delegated authority. In fact, the method and manner of enforcing a law must be left to the reasonable discretion of administrative officers, under legislative standards. " On one point, however, there is uniformity of judicial decisions in the American courts and even amongst the text book writers. Delegation of general power to make and repeal laws has uniformly been held as unconstitutional: [vide observations of Dixon J. in Victoria etc. Co. & Meakes vs Dignam(1)]. It was there pointed out that no instance could be cited of a decision of the Supreme Court of America in which Congress had allowed or empowered the executive to make regulations or ordinances which may overreach existing statutes. In Moses vs Guaranteed Mortgage Co. of New York(2) a section of the Emergency Banking Law of 1933 was held uncon stitutional delegation of power. There a banking board was given power to adapt, rescind, alter or amend rules and regulations inconsistent with and in contravention of any law. In his second edition on Administrative Law, at p. 110, Walter Gellhorn states as follows : "Delegations of power to alter or modify statutes are, in effect, nothing more than delegations of the dispensing, suspending or rule making powers, or a combination thereof. Yet the mere use of the terms 'alter ' or 'modify ' in the statute, has brought unexpected repercussions from courts and commentators. " In a number of decisions mentioned in this book the courts have held that delegation of power to alter or modify a statute is unconstitutional delegation of power. As observed by Prof. Salmond (Jurisprudence 10th Edn. p. 159), a legislative Act passed by the supreme legislature cannot be amended by any other body than the supreme legislature itself. In Rowland Burrow 's Words and Phrases, the word "modify" has been defined as meaning "vary, extend or en large, limit or restrict. " In Oxford Dictionary, one of the (1) ; (2) 239 App. 703, 922 meanings of this word is "the making of partial changes or altering without radical transformation." The same diction ary gives the following meaning to the word "modification": ' 'the result of such alteration, a modified form or varie ty. " In Stevens vs General Steam Navigation Co. Ltd.(1) it was stated that modification implies an alteration. It may narrow or enlarge the provisions of a former Act. In my opinion, the view taken in American decisions that delega tion of authority to modify an Act of the Congress is uncon stitutional is fully borne out by the meaning of the expres sion "modify", though this view is not liked by Walter Gellhorn. Before concluding, it is apposite to quote a passage from Baker 's Fundamental Law which states the prin ciple on which the American decisions are based and which coincides with my own opinion in respect of those decisions. The passage runs thus: "The division of our American government into three co ordinate branches necessarily prevents either of the three departments from delegating its authority to the other two or to either of them, but there are other reasons why the legislative power cannot be delegated. Representative government ' vests in the persons chosen to exercise the power of voting taxes and enacting laws, the most important and sacred trust known to civil government. The representa tives of the people are required to exercise wise discretion and sound judgment, having due regard for the purposes and needs of the executive and judicial departments, the ability of the tax payers to respond and the general public welfare. It follows as a self evident proposition that a representa tive legislative assembly must exercise its own judgment; that in giving its consent to a tax levied it must distinct ly and affirmatively determine the amount of the tax by fixing a definite and certain rate or by fixing an aggregate amount on the tax payers and that in enacting a law it must so far express itself that the Act when it leaves the legis lative department is a complete law. It is therefore a maxim of constitutional law that a legislative body (1) 923 cannot delegate its power. If it was competent for a repre sentative legislative body to delegate its power it would be open to make the delegation to the executive which would be destructive of representative government and a return to despotism. Not only the nature of the legislative power but the very existence of representative government depends upon the doctrine that this power cannot be transferred. " The Australian Constitution follows the American model (63 & 64, Vic., c. 12, passed in July 1900). The legislative power of the Commonwealth is vested in a Federal Parliament. The executive power is vested in the Queen, while the judicial power is vested exclusively in the courts. The extent of the legislative power is stated in sections 51 and 52 of the Constitution Act. The residuary powers vest in the States. The first Australian case cited to us is Baxter vs Ah Way(1). This was decided in the year 1909. It was held that section 52, sub section (g), of the Customs Act of 1901, which provides that all goods the importation of which shall be prohibited by proclamation shall be prohibited imports, is not a delegation of legislative power but conditional legislation and is within the power conferred on Parliament by section 51 of the Constitution. It was further held that prohibition of importation is a legislative act of the Parliament itself, the effect of sub section (g) being to confer upon the Governor General in Council the discretion to declare to what class of goods the prohibition will apply. In the course of his judgment the learned Chief Justice observed as follows : "The foundation of the argument that this power cannot be delegated by the legislature is to be found in the case of. . It is of course obvious that every legislature does in one sense delegate some of its functions. . Nor is it to the purpose to say that the legislature could have done the thing itself. Of course, it could. In one sense this is delegation of authority because it authorizes another body to do (1) ; 119 924 something which it might have done itself. It is too late in the day to contend that such a delegation,if it is a delegation is objectionable m any sense. The objection cannot be supported on the maxim delegatus non potest dele gate or on any other ground. . There being no objec tion to conditional legislation being passed, this is a case of that sort. " O 'Connor J. said as follows : "Power is given in section 51 in respect of trade and commerce with other countries on taxation and there is also power to make laws incidental to the exercise of any power vested in Parliament. It is a fundamental principle of the constitution that everything necessary to the exercise of a power is included in the grant of a power. Everything necessary to the effective exercise of the power of legisla tion must be taken to be conferred by the constitution with that power. . Exercise of such discretion cannot be said to be making of the law." Higgins J. said : "According to my view, there is not here in fact any delegation of the law making power." This case rests on the principle that legislative power cannot be delegated and it was for that reason that the impugned statute was justi fied on the ground of conditional legislation. If delega tion of legislative power was permissible, it was wholly unnecessary to justify the enactment as a form of condition al legislation. Roche vs Kronheimer(1), decided in the year 1921, was argued by Dixon (as he then was). The question in that case concerned the validity of the Treaty of Peace Act, 1919, which by section 2 authorized the making of regulations conferring the delegation of powers on certain persons. The legislation was held constitutional. In the argument by Mr. Dixon, its validity was attacked on the following grounds: "It is not conditional legislation as in the case of. Baxter vs Ah Way(2), but it bestows on the executive full ; (2) 925 legislative power upon a particular subject. Vesting of legislative power to any other hands than Parliament is prohibited. The making of a law that another body may make laws upon a particular subject matter is not making a law on that subject. " The decision was given in these terms : It was said that if Parliament had authority to legis late, it had no power to confer that authority on the Gover nor General. On this topic we were referred to Hodge vs The Queen (1) and Rex vs Halliday(2) and In re The Initiative and Referendum Act(3), and much interesting argument was devoted to the real meaning and effect of the first of those cases. It is enough to say that the validity of legislation in this form has been upheld in Farey vs Burvett(4); Pank hurst vs Kierman(5); Ferrando vs Pearce(6); and Sickerdick vs Ashton(D, and we do not propose to enter into any inquiry as to the correctness of those decisions. " This case therefore was decided on the ground of cursus curiae, and the point raised by Mr. Dixon remained unan swered. In the year 1931 two cases came before the Supreme Court, one of which was decided in February, 1931, and the other in November, 1931. The first of these is the case of Huddart Parker Ltd. vs The Commonwealth(3), in which Dixon J. was one of the presiding Judges. The question in that ease concerned the validity of section 33 of the Transport Workers Act which empowered the Governor General to make regulations in respect of transport workers. The learned Judge observed that Roche vs Kronheimer(9) had decided that a statute conferring on the executive power to legislate upon some matters, is law with respect to that subject. On this construction of the decision in Roche vs Kronheimer(9) the case was decided. (1) 9 App. (6) ; 12} ; (7) ; (3) iI919] A.C. 935. t8) ; (4) ; (9) ; (5) ; 926 So far as I have been able to see, Roche vs Kronhei mer(1) decided nothing and it was based on the rule of stare decisis. Victorian etc. Co. & Meakes vs Dignan(2) was decided in November, 1931. The question in that case was whether section 3 of the Transport Workers Act was intra rites the constitution inasmuch as it delegated power of making regu lations notwithstanding anything else contained in other Acts. The delegation was under the name and style of confer ring "regulative power. " The appellants in that case were informed that they were guilty of an offence against the Waterside Employment rights, picking up for work as a water side worker at Melbournea person not a member of the Water side Workers ' Federation, while transport workers who were members of the Federation were available for being picked up for the work at the said port. The attack on the Act itself was based on the American constitutional doctrine that no legislative body can delegate to another department of government or to any other authority the power, either generally or specially, to enact laws. The reason, it was said, was to be found in the very existence of its own powers '. This high prerogative having been entrusted to its own wisdom, judgment and patriotism and not to those of other persons, it will act ultra rites if it undertakes to delegate the trust instead of executing it. It was, however, said that this principle did not preclude conferring local powers of government upon local authorities. The defence was that the Act did not impinge upon the doctrine because in it the Parliament confined the regulating power on certain specific matters within the ambit of the trade and commerce power and accordingly merely exercised its own legislative power within that ambit, and did not delegate any part of it. Reference was made to the decision of Higgins J. in Baxter vs Ah Way(3), in which it was observed that the Federal Parliament had within its ambit full power to frame its own laws in any fashion using any agent, any agency, any machinery that in its wisdom it thinks (1) ; (2) ; (3) 927 fit for the peace, order and good government of the Common wealth. Rich 3. held that the authority of subordinate law making may be invested in the executive. Reference was made to Roche vs Kronheimer(1) The learned Attorney General placed considerable reliance on the judgment of Dixon J. The learned Judge expressed his opinion on the American decisions in these words : "But in what does the distinction lie between the law of Congress requiring compliance with direction upon some specified subject which the administration thinks proper to give and a law investing the administration with authority to legislate upon the same subject? The answer which the decisions of the Supreme Court supply to this question is formulated in the opinion of that Court delivered by Taft C.J. in Hampton & Co: v.U.S.(2). The courts in America had never had any criterion as to the validity of statutes except that of reasonableness, the common refuge of thought and expression in the face of undeveloped or unascertainable standards. " The learned Judge then reached the conclusion that no judicial power could be given or delegated, but from that it did not follow that Parliament was restrained from transfer ring any power essentially legislative to another organ or body. In an earlier decision the learned Judge had ex pressed the opinion that time had passed for assigning to the constitutional distribution of powers among.the separate organs of government, an operation which confined the legis lative power to the Parliament so as to restrain it from reposing in the executive an authority essentially legisla tive in character and he remarked that he was not prepared to change that opinion or his expression to the effect that Roche vs Kronheirner(1) did decide that a statute conferring upon the executive a power to legislate on some matters contained within one of the subjects of the legislative power of Parliament is a law with respect to that subject and the distribution of powers (1) ; (2) ; , 406. 928 does not restrain Parliament to make the law. The learned Judge then proceeded to say: "This does not mean that a law confiding authority " to the executive will be valid, however extensive or vague the subject matter may be, if it does not fall outside the boundaries of federal power. Nor does it mean that the distribution of powers can supply no considerations of weight affecting the validity. It may be acknowledged that the manner in which the constitution accomplished the separation of power does logically or theoretically make the Parliament the exclusive repository of the legislative power of the Commonwealth. The existence in Parliament of power to authorize subordinate legislation may be ascribed to a conception of that legislative power which depends less upon juristic analysis and perhaps more upon the history and usages of British legislation and the theories of English law. Such subordinate legislation remains under Parliamen tary control and is lacking in the independent and unquali fied authority which is an attribute to true legislative power. " It seems to me that in its ultimate analysis the judgment of the learned Judge proceeded, as pointed out by him, upon the history and the usages of British legislation and theories of English law and not on the strict construction of the Australian Constitution with respect to which the learned Judge frankly conceded that logically or theoretically the power of delegation of the quality held valid in that case could not be justified on the framework of the constitution. I have also not been able precisely to follow the distinction drawn by the learned Judge that delegation held justified by him did not include delegation in the fullest extent of any matter falling within the boundaries of federal power. After a careful consideration of the observations of this very learned and eminent Judge I venture to think that these are not a safe guide for deci sion of the present reference. Not only were the constitu tional limitations of the written constitution over reached, but the decision was based on the theories of British legis lation and English law which could 929 hardly be applied to a written constitution with a complete separation of power. Mr. Justice Evatt in this case stated the rule differ ently. He observed "every grant by the Parliament of author ity to make regulations is itself a grant of legislative power and the true nature and quality of legislative power of the Commonwealth Parliament involves as part of its contents power to confer law making powers upon author ities other than the Parliament itself." The theory that legislative power has a content of delegation in it, to my mind, is not based on any principles of jurisprudence or of legislation and I venture to think that it is inconsistent with the fundamental principle that when a high trust is confided to the wisdom of a particular body which has to be discharged according to the procedure prescribed, such trust must be discharged by that person in whom it is confided and by no other. This decision is moreover inconsistent with the decisions of the Privy Council above mentioned. If the mere existence of power of legislation in a legislature automati cally authorized it to delegate that power, then there was hardly any necessity for their Lordships of the Privy Coun cil to justify delegation in the cases referred to above on the ground of conditional legislation and to state affirma tively that the cases considered by them were not cases of delegation of legislative authority. This view is certainly in conflict with the observations of the Privy Council in Benoari Lal Sarma 's case (1), given under the Government of India Act, 1935, wherein their Lordships said: "It is true that the Governor General acting under section 72 of Sched ule IX himself must discharge the duty of legislation there cast on him and cannot transfer it to any other authority. " Evatt J. after enunciating the rule discussed above remarked : "It is true that the extent of the power granted will often be a material circumstance in the examination of the validity of the legislation conferring the grant. . The nature of the legislative power of the (1) 930 Commonwealth authority is plenary, but it must be possible to predicate of every law passed by the Parliament that it is a law with respect to one or other of the specific subject matters mentioned in sections 51 and 52 of the constitution." After referring to a number of circumstances considered by the learned Judge material in reaching at a result as to the constitutionality of a statute, he observed as follows: "As a final analysis the Parliament of the Commonwealth is not competent to abdicate its powers of legislation. This is not because Parliament is bound to perform all or any of its legislative functions though it may elect not to do so, or because of the doctrine of sepa ration of powers, but because each and every one of the laws passed by Parliament must answer the description of a law upon one or more of the subject matters stated in the con stitution. A law by which Parliament gave all its law making authority to another body will be bad because it will fail to pass the test last mentioned. " Frankly speaking, I have not been able to apprehend on what principles, if any, of construction, the relevancy of the matters considered by the learned Judge as material circumstances in judging the validity of an Act so far as the question of the vires of the Act is concerned could be justified. Another Australian case cited is Wishart vs Fraser(1). There the attack was on section 5 of the National Security Act, 1939 40, which empowered the making of regulations for securing public safety and defence of the Commonwealth etc. It proceeds on the same line as the earlier case discussed above. In my opinion, the decision in Baxter vs Ah Way(2) is based on a correct construction of the provisions of the Australian Constitution and the later decisions cannot be considered as any guide. in this country for a decision of the point involved m the reference. The argument pressed by Mr. Dixon, as he then was, in (1) ; (2) ; 931 Roche vs Kronheirner(1) in my opinion, states the principle correctly. The decisions of their Lordships of the Privy Council from India are not many. The first and the earliest of these is in Queen vs Burah(2), which has already been dis cussed at considerable length in the earlier part of this judgment and as stated already, it is no authority for the proposition that the Indian Legislature constituted under the Indian Councils Act, 1861, had power to delegate author ity to the executive authorising them to modify or amend the provisions of an Act passed by the legislature itself. King Emperor vs Benoari Lal Sarma(3) is the last Indian decision of the Privy Council on this subject. Conviction of fifteen individuals made by a special magistrate purporting to act under Ordinance II of 1942, promulgated by the Gover nor General on the 2nd January, 1942, was set aside by a special Bench of the High Court at Calcutta and this deci sion was affirmed by the majority of the Federal Court of India. The ground on which the conviction was set aside was that the Ordinance was ultra vires. In appeal before their Lordships of the Privy Council it was contended that the Ordinance was valid. The Ordinance did not itself set up any of the special courts but provided by sub section (3) of section 1 that the Ordinance "shall come into force in any Province only if the Provincial Government, being satisfied of the existence of an emergency arising from any disorder within the Province or from a hostile attack on India or on a country neighbour ing on India or from the imminence of such an attack, by notification in the official gazette, declare it to be in force in the Province and shall cease to be in force when such notification is rescinded." In view of this last provision it was contended that the Ordinance was invalid either because the language showed that the Governor General notwithstanding the preamble did not consider that an emergency existed but was making provi sion in case one should arise in ; (2) 5 I.A. 178, (3) 120 932 future, or else because the section amounted to what was called "delegated legislation" by which the Governor General without legal authority sought to pass the deci sion whether an emergency existed to the Provincial Govern ment instead of deciding it for himself. On this last point their Lordships observed as follows : "It is undoubtedly true that the Governor General acting under section 72 of Schedule IX, must himself discharge the duty of legislation there cast on him, and cannot trans fer it to other authorities. But the Governor General has not delegated his legislative powers at all. His powers in this respect, in cases of emergency, are as wide as the powers of the Indian legislature which, as already pointed out, in view of the proclamation under section 102, had power to make laws for a province even in respect of matters which would otherwise be reserved to the Provincial legislature. Their Lordships are unable to see that there was any valid objection, in point of legality, to the Governor General 's ordinance taking the form that the actual setting up of a special court under the terms of the ordinance should take place at the time and within the limits judged to be neces sary by the provincial government specially concerned. This is not delegated legislation at all. It is merely an exam ple of the not uncommon legislative arrangement by which the local application of the provision of a statute is deter mined by the judgment of a local administrative body as to its necessity. Their Lordships are in entire agreement with the view of the Chief Justice of Bengal and of Khundkar J. on this part of the case. The latter Judge appositely quotes a passage from the judgment of the Privy Council in the well known decision in Russell vs The Queen(1). " This case brings out the extent to which conditional legislation can go, but it is no authority justifying dele gation of legislative power authorising an external authori ty to modify the provisions of a legislative enactment. It may be pointed out that the opening part of the passage quoted above seems to approve the view (1) 7 App. 933 of the Federal Court expressed by Varadachariar J. in that case when his Lordship relying on a passage from Street on the Doctrine of Ultra Vires observed that a legislature will not ordinarily be permitted to shift the onus of legisla tion though it may legislate as to main principles and leave the details to subordinate agencies. The decision of the Federal Court in Jatindra Nath Gupta vs The Province of Bihar and Others(1) to which I was a party and wherein I was in respectful agreement with the judgment of the learned Chief Justice and my brother Mukher jea, in my opinion, correctly states the rule on the subject of delegation of legislative power. The Bihar Maintenance of Public Order Act, 1947, in sub section (3) of section 1 provided as follows : "It shall remain in force for a period of one year from the date of its commencement. Provided that the Provincial Government may, by notifi cation, on a resolution passed by the Bihar Legislative Assembly and agreed to by the Bihar Legislative Council, direct that this Act shall remain in force for a further period of one year with such modifications, if any, as may be specified in the notification. " Acting under the proviso the Provincial Government on the 11th March, 1948, extended by notification the life of the Act by one year. The validity of the proviso to sub section (3) of section 1 of the Act was attacked on the ground that it amounted to delegation of legislative power by the Provincial Legislature and this it was not competent to do. On the authority of the decision of the Privy Council in Benoari Lal Sarma 's case (2) I held the proviso void. The question was posed by me in the following way : "It may be asked what does the proviso purport to do in terms and in substance ? The answer is that it empowers the Provincial Government to issue a notification saying that the Provincial Act shall remain (1) (2) 934 in force for a further period of one year with such modifi cations, if any, as may be specified in the notification. As stated in the earlier part of this judgment, unless the power of the Provincial Government is co extensive with the power of the Provincial Legislature, it is difficult to see how it can have the power to modify a statute passed by that legislature, Modification of statute amounts to re enacting it partially. It involves the power to say that certain parts of it are no longer parts of the statute and that a statute with X sections is now enacted with Y sections. In the act of modification is involved a legislative power as a discretion has to be exercised whether certain parts of the statute are to remain law in future or not or have to be deleted from it. The power to modify may even involve a power to repeal parts of it. A modified statute is not the same original statute. It is a new Act and logically speak ing, it amounts to enacting a new law. The dictionary mean ing of the word 'modify ' is to make something existing much less severe or to tone it down or to make partial changes in it. What modifications are to be made in a statute or whether any are necessary is an exercise of law making power and cannot amount merely to an act of execution of a power already conferred by the statute. The extent of changes is left to external authority, i.e., the Provincial Government. Nothing is here being done in pursuance of any law. What is being delegated is the power to determine whether a law shall be in force after its normal life has ended and if so, what that law will be, whether what was originally enacted or something different. The body appointed as a delegate for declaring whether a penal Act of this character shall have longer life than originally contemplated by the legislature and if so, with what modification, is a new kind of legisla ture than that entrusted with the duty under the Government of India Act, 1935. " I still maintain the view that the question of the life of an Act is a matter for the judgment of the competent legislature. It is a matter of policy whether a certain enactment is to be on the statute 935 book permanently or temporarily. Such a question does not fall within conditional legislation as it concerns the extension of the life of a temporary Act. Such an Act dies a natural death when the period fixed for its duration ex pires. It automatically ceases to operate and there is no real analogy between conditional legislation which author izes a known authority to determine the commencement or termination of an Act and an act done in exercise of any power conferred by the Act itself. It was said by the learned Attorney General that this decision had created considerable difficulties and that the various High Courts in India on its authority had held certain enactments void, the validity of which had never been questioned before this decision was given. In my humble judgment, there is nothing whatever in that decision which m any way unsettled the law as settled by their Lordships of the Privy Council in Bu rah 's case(1). This decision did not lay down that the Indian legislature did not possess power of delegation necessary for effectively carrying out its legislative functions. All that it held was and I think rightly that essential legislative function could not be delegated to an external authority and that the legislature could not shirk its own duty and lay the burden of discharging that duty on others. If I was convinced that the decision laid down a wrong rule of law, I would have required no sugar coated phrases to own the error. Our attention is not drawn to a single decision of their Lordships of the Privy Council during the whole administration of this country by the British in which the highest court in the land upheld the contention urged by the learned Attorney General. On the other hand, learned Judges in this country of the eminence of Markby J. and Varadachariar J. in very clear and unambig uous terms affirmed the rule that delegation of essential legislative power was not within the competence of the Indian legislatures. Reference may also be made to the case of The State of Bombay vs Narottamdas(2), decided recently and to (1) 5 IA. (2) ; 936 which I was a party. Therein it was explained that Jatindra Nath Gupta 's case(1) was no authority prohibiting delegation of legislative power in case where the principle and policy of the law had been declared in the enactment itself and ancillary powers had been delegated to the provincial gov ernment for bringing into operation the provisions of an Act. To sum up, judicial opinion on this subject is still in a fluid state and it is impossible to reconcile all the judgments cited to us on the basis of any rigid principles of constitutional law. In England the Parliament is for the time being following the recommendations of the Donough more Committee. In America the doctrine against delegation of legislative power still holds the field. In Canada as well as.in India the rule laid down by their Lordships of the Privy Council in Burah 's case(2) has never been departed from in theory. The same view was maintained in the earlier Australian decisions. Recently Australian decisions however have gone to the length of holding that even essential legislative power can be delegated so long as the principal does not completely efface itself. In my opinion, the true solution of the problem of delegation of legislative power is to be found in the oft quoted passage from the judgment of Ranney J. of the Supreme Court of Ohio in Cincinnati W. & Z.R. Co. vs Clinton County Comrs.(3). This quotation is in these terms: "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. " The decision in Locke 's Appeal(4) is also based on this rule. There it was said : (1) (3) 5 I,A. 178. (4) , 937 "To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the legislature of the power to act wisely for the public wel fare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossi ble to fully know. " The proper distinction the court said was this: "The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. 'To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law making power, and must, therefore, be a subject of inquiry and determination outside of the halls of legislation. " The Federal Court of India in its opinion, expressed by Varadachariar J. in Benoari Lal Sarma 's case(1) considered a contention of the Advocate General of India made to it based on the above quotation of Ranney J. and observed as follows: "We are of the opinion that there is nothing in the above decisions of their Lordships that can be said to be inconsistent with the principle laid down in the passage from the American authority which the Advocate General of India proposed to adopt as his own argument. " The majority of the court approved the rule stated by Chief Justice Hughes in Panama Refining Co. vs U.S.(2), and it was stated that the rule therein held had nothing whatev er to do with maxim delegatus non potest delegate, but was only the amplification of what was referred to by the Judi cial Committee in Burah 's case(3) as "the nature and princi ples of legislation. " The question can be posed thus: Why is delegation pecul iarly a content of legislative power and not of judicial power ? In my judgment, it is a content of none of the three State powers, legislative, judicial or executive. It is, on the other hand, incidental to the (1) (2) ; (3) 5 I.A. 178. 938 exercise of all power inasmuch as it is necessary to dele gate for the proper discharge of all these three public duties. No public functionary can himself perform all the duties he is privileged to perform unaided by agents and delegates, but from this circumstance it does not follow that he can delegate the exercise of his judgment and dis cretion to others. One may well ask, why is a legislature formed with such meticulous care by all constitution makers ? Why do they take pains to lay down the procedure to be followed by an elected legislature in its function of law making ? Why do they define its different functions and lay down the methods by which it shall act ? The only answer that reasonably can be given to these queries is: "Because the constitution trusts to the judgment of the body consti tuted in the manner indicated in the constitution and to the exercise of its discretion by following the procedure pre scribed therein. " On the same principle the judges are not allowed to surrender their judgment to others. It is they and they alone who are trusted with the decision of a case. They can, however, delegate ancillary powers to others, for instance, in a suit for accounts and in a Suit for dissolu tion of partnership, commissioners can be entrusted with powers authorising them to give decisions on points of difference between parties as to items in the account. Again it may be enquired why cannot other public functionaries entrusted in the matter of appointment of public servants delegate this particular duty to others. The answer again is found in the same principle. I put this query to the learned Attorney General but I could not elicit any very satisfactory answer. He contented himself by saying that possibly there was something in the nature of the power itself which requires the personal attention of the authori ties concerned and that therefore delegation was there impliedly forbidden. To my mind, the same principle forbids delegation of essential legislative power. It is inherent in the nature of the power that has to be exercised by the legislature elected for the purpose subject to the qualifi cations already stated, It would be a breach of 939 the constitutional duty to bestow this power on someone else. In the words of Sir John Salmond, "In general, in deed, the power of legislation is far too important to be committed to any person or body of persons save the incor porate community itself. The great bulk of enacted law is promulgated by the state in its own person. But in excep tional cases it has been found possible and expedient to entrust this power to private hands. " In the words of Mr. Dixon (as he then was), the making of a law that another body may make laws upon a particular subject matter is not making a law on that subject. The quotation cited in the earlier part of this judgment from Baker 's book appositely states the rule when it says: "It is an axiom of constitu tional law that representative legislative bodies cannot delegate legislative power because representative government vests in the persons chosen to exercise the power of voting taxes and enacting laws, :the most important and sacred trust known to civil government. " In the words of another jurist, "Legislation is the formal utterance by the legisla tive organ of the society and by no others. Its words constitute the law and not the words of the delegate. " In private law the rule is well settled that an arbitra tor cannot lawfully devolve his duty on another unless so expressly authorized. The nature of the duty itself is such that it demands exercise of his own judgment and discretion. It is again well settled that fiduciary duties cannot be made the subject of delegation, though trustees in order to discharge certain functions can use machinery or subordinate agencies for effectively carrying on the duties which attach to their constitution. Delegation is permissible in cases where there is a legal or physical necessity to do so be cause without trusting some person or persons it would be impossible efficiently to discharge the duties. It cannot be denied that municipal and other corporations cannot delegate the by law making power to the executive officers. It is so because power is entrusted to them in their corporate capac ity and has to be exercised in that capacity. I am not able to apprehend 121 940 why this principle which is well settled in. private law cannot appositely be applied to the discharge of duties by public functionaries and by a legislature. It seems to me that the nature of the duty is such that it is implicit within it that it should be discharged by the person en trusted with it and by no others. In other words, the nature of the public duty itself demands it and the principles of legislation require it. For the reasons given above I cannot accept the proposi tion contended for by the learned Attorney General that in the absence of an express or implied provision in the con stitution legislative authority can be bestowed on other persons. In my opinion, the correct proposition, on the other hand, is that unless expressly or impliedly author ized, such delegation is not permissible. The exceptions to this rule fall in two classes which have been stated in the quotation from Crawford 's book earlier cited in this judg ment. It is now convenient to examine the provisions of our Constitution in order to appreciate the contention of the learned Attorney General that it has been modelled on the British system and that the Parliament of India is as omnip otent as in England and that in the matter of delegation of legislative power it is in an analogous situation. In my opinion, our Constitution is a judicious combination of the American model with the British Parliamentary system. In its main scheme it follows the Government of India Act, 1935, which provides for a federation of States and provides for an executive responsible to the legislature. As a matter of fact, the framers of the constitution, though they have borrowed ideas from other constitutions, have not rigidly adhered to any particular model. Certain provisions in our constitution are such for which there is no precedent in the constitution of any other country. It seems to ,me that they were as much alive to the doctrine of administrative convenience as to the dangers of a system which permits delegation of unfettered legislative power to the execu tive. The country had recently emerged from the bonds of a bureaucratic system which had killed 941 its very soul and they. apparently did not wish it to get engulfed again m the rigours of that system. Bureaucratic rule is a necessary corollary to the existence of unfettered delegation of legislative power. To avoid this, the consti tution makers made detailed provision in the Constitution on all matters. It has to be emphasized that no country in the world has such an elaborate and comprehensive constitution as we have in this country and it would not be proper to construe such a constitution with the help of decisions given elsewhere on the construction of constitutions shaped differently. It is only after a consideration of all the provisions of the Constitution and its whole scheme that it has to be decided whether delegation of power legislative, executive or judicial is implict in the grant of any of these powers or has been expressly provided for, to the extent it was considered necessary on grounds of administra tive convenience in peace or war time and therefore confer ment of this power by implication cannot be upheld on its true construction. It has also to be borne in mind that our Constitution is fundamentally different from the British system inasmuch as the doctrine of supremacy of Parliament has its limitations here. The courts are empowered to declare Acts of Parliament unconstitutional if they are inconsistent with Part III of the Constitu tion or when they trespass on fields demarcated for State legislatures. Obviously, it is implict in the demarcation of legislative fields that one legislature cannot by delega tion of subjects that are exclusively within its field clothe the other with legislative capacity to make laws on that subject as it will amount to an infringement of the Constitution itself. It seems clear, therefore, that dele gation of legislative power to that extent is prohibited by the Constitution. Illustratively, defence is a Union sub ject, while law and order is a State subject. Can it be argued with any reason that by delegation Parliament can arm a State legislature with the law making power on the subject of defence and that a State legislature can arm Parliament with 942 power to make law on the subject of law and order ? In my opinion, any argument on those lines has to be negatived on the ground that the delegation of such power would be contrary to the Constitution itself and that this kind of transfer of power is outside its contemplation. For a simi lar reason if such transfer of power is not possible in the case of one legislature to the other, it is difficult to justify it if the transfer is made in favour of the execu tive except to the extent allowed by the Constitution or to the extent that it had already been recognised under the designation "conditional legislation" or "rule making power", of which presumably the constitution makers were fully aware. I have again no hesitation in holding that our constitution makers accepted the American doctrine against delegation of legislative power, and on grounds of adminis trative convenience and to meet particular circumstances they carefully made express provisions within the Constitu tion for devolution of power in those eventualities. Article 53 of the Constitution concerns the executive power of the Union. It is vested in the President and in express terms it is stated in that article that it shall be exercised by him either directly or through officers subor dinate to him in accordance with this Constitution. The Parliament is authorized by law to confer functions on authorities other than the President. A careful reading of this article shows that an elaborate provision has been made in the Constitution for employing agencies and machinery for the exercise of the executive power of the Union. The President is vested with the supreme command of the Defence Forces and in addition to this power, power of delegation has been conferred on Parliament even in its executive field in article 53 (3) (b). Similar provision has been made in regard to the executive power of each State:(vide article 154). In article 77 provision has been made as to how the business of the Government of India has to be conducted. The President has been conferred the power of making rules for the more convenient transaction of the business 943 of the Government of India and for the allocation among Ministers of the said business. Such a detailed provision regarding the exercise of executive power does not exist in the other constitutions to which our attention was drawn. Article 79 provides that there shall be a Parliament for the Union. Provision has then been made in the various articles how the Parliament has to be constituted and how it has to conduct its business, what officers and secretariat it can employ and with what powers. Articles 107 to 119 relate to legislative procedure. It is implicit in these elaborate provisions that the Constitution bestowed the lawmaking powers on the body thus constituted by it, and it was this body in its corporate capacity that had to exercise its judgment and discretion in enacting laws and voting taxes and that judgment had to be arrived at by following the rules of procedure expressly laid down therein. Article 123 confers legislative power on the President when Parlia ment is not in session and this power is co extensive with the legislative power of the Parliament itself. Article 124 deals with the Union judiciary. It prescribes the number of Judges and the method of their appointment and it lays down the procedure that the President has the power in making the appointments. In article 140 provision has been made under which Parliament can confer on the Supreme Court such sup plemental powers as may appear to be necessary for the purpose of enabling the court more effectively to exercise the jurisdiction conferred upon it by or under this Consti tution. An express provision of this kind, in my opinion, very clearly negatives the proposition which the learned Attorney General has been contending for. If the power of delegation of legislative powers is implict in the power of legislation itself, the constitution makers would not have made an express provision in article 140 bestowing authority on Parliament for conferment of ancillary powers on the Supreme Court. Parliament obviously had authority to legis late on "Supreme Court" as it is one of the subjects in the Union List. Article 145 (1) (a)again very strongly 944 negatives the proposition of the learned Attorney General. The constitution has authorized the Supreme Court to make rules as to the persons practising before the court. This is one of the subjects in the Union List and this conferment of power by the Constitution on the Supreme Court is subject to the provision of any law made by the Parliament. In other words, Parliament has been given express power to take away this power or supplement it by making a law. In my judgment, such a provision is quite foreign to a constitution in which delegation of law making powers is implicit. Detailed provi sion has been made for the appointment of High Court Judges in article 217, and rule making powers have been given to the High Courts under article 227. In article 243 the Presi dent has been given the power to make regulations for the peace and good government of territories enumerated in Part D of the First Schedule and in exercise of that power he can repeal or amend any law made by Parliament or an existing law. The Constitution itself has delegated the powers of the Parliament to the President wherever it thought that such delegation was necessary. Articles 245 and 246 demarcate the field of legislation between the Parliament and the State legislature and in article 248 provision has been made that residuary powers of legislation remain in the Parliament. Article 250 makes provision for cases of emergency. Parlia ment in that event has power to make laws for the whole or any part of the territory of India with respect to any matters enumerated in the State lists. Article 252 is a somewhat peculiar provision. Under it Parliament can legis late for two or more States with their consent. This is a form of exercise of legislative power by Parliament as a delegate of the State as by its consent alone Parliament gets the power of legislation. By article 258 the President has been authorized with the consent of the Government of a State to entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union ex tends. In that article provision has also been made. for 945 delegation of powers by a law made by Parliament. By article 349 the power of the Parliament to enact laws in respect of language has been restricted. Article 353 states the effect of a proclamation of emergency and provides that the execu tive power of the Union in such a case shall extend to the giving of directions to any State as to the manner in which the executive power thereof is to be exercised. Clause (2) of this article requires emphasis. It provides that the power of Parliament to make laws with respect to any matters shall include power to make laws conferring powers and imposing duties, or authorizing the conferring of powers and he imposition of duties, upon the Union, or officers and authorities of the Union, as respects that matter, notwith standing that it is one which is not enumerated in the Union List. Parliament in an emergency under article 250 has full power to make laws on subjects within the State List and is certainly entitled to delegate that power if that power is a content of legislative power but the constitution makers thought otherwise and made an express provision for delega tion of power in such a situation. Article 357 provides that where by proclamation issued under clause (1) of article 356, it has been declared that the powers of the legislature of the State shall be exercisable by or under the authority of Parliament, it shall be competent for Parliament to confer on the President the power of the legislature of the State to make laws, and to authorize the President to dele gate, subject to such conditions as he may think fit to impose, the power so conferred to any other authority to be specified by him in that behalf. This is the only article by which the Constitution has authorized the delegation of essential legislative power. Possibly it was thought that in that contingency it was necessary that Parliament should have power to confer legislative power on the executive and to clothe it with its own legislative capacity in the State field and further to authorize the President to delegate that legislative power to any other authority specified by him. A reference to the entries in the three Lists of the Seventh Schedule further 946 illustrates this point. Entry 93 of List I is Offences against laws with respect to any of the matters in this List. " Entry 94 is "Inquiries, surveys and statistics for the purpose of any of the matters in this List. ' ' Entry 96 is "Fees in respect of any of the matters in this List, but not including fees taken in any court. " Entry 95 is "Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List. " All these entries are instances of subjects incidental and ancillary to the main subjects of legislation contained in the List. Similar entries are to be found in Lists II and III as well. The Constitution seems to have taken care to confer legislative power in express terms even regarding incidental matters and it is therefore unnecessary to read by implication and introduce by this process within such a constitution any matter not expressly provided therein. I am satisfied that the constitution makers considered all aspects of the question of delegation of power, whether executive, legislative or judicial, and expressly provided for it whenever it was thought necessary to do so in great detail. In this situation there is no scope for the applica tion of the doctrine contended for by the learned Attorney General and it must be held that in the absence of express powers of delegation allowed by the Constitution, the Par liament has no power to delegate its essential legislative functions to others, whether State legislatures or executive authorities, except, of course, functions which really in their true nature are ministerial, The scheme of the Consti tution and of the Government of India Act, 1935, is that it expressly entrusted with legislative capacity certain bodies and persons and it also authorised the creation of law making bodies wherever it thought necessary but gave no authority to create a new law making body not created by itself. It even created the executive as a legislature in certain contingencies. In these circumstances it is not possible to add to the list of legislative authorities by a process of delegation. As pointed out by Crawford on Statu tory 947 Construction, at page 333. "If a statute enumerates the things upon which it is to operate, everything else must necessarily and by implication be excluded from its opera tion and effect. So if a statute directs certain acts to be done in a specified manner by certain persons, their per formance in any other manner than{ that specified, or by any other person than is there named, is impliedly prohibited. " The ordinary rule is that if authority is given expressly by affirmative words upon a defined condition, the expression of that condition excludes the doing of the act authorised under other circumstances than those as defined. Under the Government of India Act, 1935, the executive enjoyed a larger power of legislation than is contained in the new constitution. It seems to have been cut down to a certain extent. The new constitution confers authority on Parliament to make laws for the State of Delhi. It also authorizes it to create a legislature for that State. The Constitution therefore has made ample provision indicating bodies who would be competent to make laws for the State of Delhi. In my opinion, therefore, delegation of legislative power to the executive in matters essential is unconstitutional. Any legislative practice adopted during the pre constitution period for undeveloped and excluded areas can have no rele vancy in the determination of this point. Having examined the provisions of the new constitution, the constitutional position of the Indian legislature under the Indian Councils Act of 1861 and of the Government of India Act, 1935, as subsequently adapted by the Indian Independence Act, 1947, may now be examined. As already stated, the Government of India Act, 1935, envisaged a federal constitution for India with a demarca tion of the legislative field between the Federation and the States and it is the scheme of this Act which has been adopted in the new constitution. I have already expressed my respectful agreement with the view expressed by Varadachari ar J. in Benoari Lal Sarrna 's case(1) that the constitution al (1) 122 948 position in India under this Act approximates more closely to the American model than to the English model and it seems to me that delegation of legislative power in its essenti ality is not allowed by its provisions. During a period of emergency the Governor General could himself under his own proclamation become the executive as well as the legislature and the necessities of administrative convenience were not a compelling circumstance for introducing into the scheme of the Act by implication, authority in Parliament for the delegation of legislative power. This Act also contains detailed provisions authorizing delegation of power both in the executive and legislative field wherever it was consid ered necessary to confer such power. The Indian Independence Act by section 6 conferred the power of legislation on the Dominion Parliament within the ambit of the Act of 1935. By other provisions of the Indian Independence Act it made the Dominion Parliament a Constituent Assembly for the purpose of making the new constitution for India and it also gave it authority to repeal Acts of Parliament. For the purpose of ordinary law making it had the same powers as the legisla tures in India enjoyed under the Government of India Act, 1935, and the question referred to us in regard to the Ajmer Merwara Act, 1947, has to be answered on the provi sions of the constitution contained in the Constitution Act of 1935. The constitutional position in India prior to the Act of 1935 may now be briefly stated. Before the Charter Act of 1833 there was a division of legislative power between the Governor General and the Presidencies. By that Act the power of the Presidencies as legislatures was terminated and the whole law making power was vested in the Governor General in Council. Mr. Macaulay was added as a legislative member to the executive council without a right to vote. In sub stance the executive and the legislative functions were performed by the same body, of course, with the help and advice of Mr. Macaulay. With slight modifications the situation remained the same till the Indian Councils Act, 1861. Under this Act the 949 Governor General in Council in legislative meetings could legislate for the whole of India and local legislatures could also legislate for the provinces. By section 10 of the Act the legislative power was vested in the Governor General in Council. In section 15 it was laid down how that power was to be exercised. For conduct of the legislative business power was given to the Governor General to make rules in section 18. Section 22 laid down the ambit of the legislative power. Section 23 bestowed power on the Gover nor General in emergencies to make ordinances. Section 44 empowered the Governor General to create local legislatures and confer on them legislative power. It appears that the scheme of the Councils Act was that whenever Parliament wanted the Governor General in Council to have power to create legislatures or to make rules or regulations, that power was conferred in express terms. By another statute in the year 1870 summary power to make law was conferred on the Governor General in his executive capacity in respect to less advanced areas, i.e., non regulation provinces. Another charter would not have been necessary if the Governor Gener al could arm himself with legislative power by a process of delegation from his own Council. In my opinion, the consti tution as envisaged by the Indian Councils Act, 1861, does not authorize the delegation of essential legislative power by any of the legislative authorities brought into existence by that Act to the executive and it was for this reason that their Lordships of the Privy Council in Burgh 's case(1) did not base their decision on this ground but merely upheld the enactment as intra vires on the ground of conditional legis lation. I am in respectful agreement with the opinion of Markby J. expressed in the year 1877 in these terms:" that any substantial delegation of legislative authority by the legislature of this country is void. " The Privy Council on appeal did not dissent from this view. It was argued that legislative practice in India since a long time has been such as would validate statutes (1) 5 I.A. 178. 950 designed on the model of the three statutes under reference to us. Reference was made to the following observations in U.S.v. Curriss Wright(1) : "Uniform, long continued and undisputed legislative practice resting on an admissible view of the constitution goes a long way to the direction of proving the presence of unas sailable grounds for the constitutionality of the prac tice. " In my opinion, there is no evidence in this case of any uniform, long continued and undisputed legislative practice for validating statutes which have been drafted on lines similar to the statutes in question. The material on which this argument was based is of a most meagre character and does not warrant the conclusion contended for. Annexure (A) annexed to the case stated on behalf of the President mentions two instances only before the year 1912 of this alleged long continued legislative practice, but even these instances are not analogous to the statutes which have been given in the reference, The scheme of those enact ments in vital matters is different from the enactments in question. The first instance of this legislative practice is said to be furnished by section 5(a) which was added to the Scheduled Districts Act, 1874, by Act XII of 1891. It pro vided that with the previous sanction of the Governor Gener al in Council in declaring an enactment in force in the scheduled districts or in extending an enactment to a sched uled district the Local Government may declare the applica tion of the Act subject to such restriction and modification as the Government may think fit. It is noticeable that,section 7 of the has not been drafted in the same terms as section 5(a) of the Scheduled Districts Act. Though constitutionally speaking, the Governor General discharged the executive and legislative functions in meet ings held separately for the two purposes and with the help of some additional members, for all practical purposes the Governor General was truly ; 951 speaking in both executive and legislative matters the real authority in this country, and if previous sanction of this authority was necessary before declaring the law even with modifications, this instance cannot be such as would constitute legislative practice for what has been enacted in section 7 of the . The second instance cited is of the Burma Laws Act, 1898. In section 10 of this Act it was provided that the Local Government may, with the previous sanction of the Governor General in Council by notification, with such restrictions and modifications as he thinks fit, extend certain Acts in force in any part of Upper Burma at the date of the extension to certain areas. In section 4 a schedule was given of all the Acts that were in force in Upper Burma at the time of the enactment. This instance also does not furnish evidence of legislative practice for the validation of section 7 of the in which there is no provision like the one contained in section 4 of the Burma Laws Act, 1898, and which also contains a provision similar to section 5(a) of the Scheduled Districts Act requiring the previous sanction of the Governor General in Council. Both these important things are lacking in the . Between 1861 and 1912, a period of over fifty years, two instances of this kind which occurred within seven years of each other cannot fail within the criterion laid down in the case cited above. After the year 1912 three other illustrations were men tioned. The first of these is in sections 68 and 73 of the Inland Steam Vessels Act, 1917. Section authorised modifica tion of an enactment for the purpose of adaptation. This certainly is no instance of the kind of legislation. con tained in the , section 7, or in the Ajmer Merwara Act, 1947. Section 68 authorized the extension of certain chapters to certain areas with modifications. The next instance mentioned was the . By section 9 of this Act it was provided that the Central Government may by notification exclude from the operation of any part of this Act the 952 whole or any part of a cantonment or direct that any provi sions of this Act shall in the case of any cantonment apply with such modifications as may be so specified. The third instance mentioned was in section 30 of the . Here it was provided that the Central Government may by notification apply all or any of the provisions of this Act with such modifications as it may think fit to any other dangerous inflammable substance. This is an instance of adding certain items to the schedule annexed to an Act. These three instances show that between the year 1917 and 1934, a period of seventeen years, three instances occurred of legislation, though not of the same kind as contained in the , but bearing some similarity to that kind of legislation. No conclusion from those instances of any uniform legislative practice can be drawn. The learned counsel appearing for the Government of Uttar Pradesh submitted a note in which an instance is mentioned of the Uttar Pradesh Land Revenue Act, III of 1901, which in section 1 of subsection (2) provided that the State Government may by notification extend the whole or any part of this Act to all or any of the areas so excepted subject to such exceptions or modifications as it thinks fit. This instance does not materially affect the situation. After the research of a fortnight the learned Attorney General gave us a supplementary list of instances in support of his contention. Two instances contained in this list are from sections 8 and 9 of Act XXII of 1869 discussed in Burah 's case(1). The third instance is from section 39 of Act XXIII of 1861, again considered in that case, and these have already been discussed in an earlier part of this judgment. The only new instance cited is from the Aircraft Act of 1934, which authorized modification in the specification of an aircraft. It confers no authority to modify any law. Two instances in ' this list are from the Airforce Act 1950, which was enacted subsequent to (1) 5 I.A. 178. 953 the enactment under reference to us and cannot be considered relevant on this subject. The last instance cited is from the Madras Local Boards Act, 1920, which authorizes the Governor to extend the Act with certain modifications to areas to which it originally had not been made applica ble. This instance of 1920 bears no relevancy for deter mining the validity of section 7 of the Act of 1912, enacted eight years before this instance came into existence. A seemingly similar instance to the enactment contained in section 7 of the is in section 8 of Act XXII of 1869, considered by the Privy Council in Burah 's case(1). That instance, however, when closely examined, has no real resemblance to section 7 of the . Act XXII of 1869 was enacted to remove the Garo Hills from the jurisdiction of tribunals established under the General Regulations. That was its limited purpose. By section 5 the administration of this part was vested in the officers appointed by the Lieutenant Governor of Bengal and those officers had to be under his control and were to work under his instructions. The executive administration of this territory was, therefore, vested in the Lieutenant Governor of Bengal. By section 8 of the Act, already cited, the Lieutenant Governor was authorized by notification in the Calcutta Gazette to extend to the excluded territories laws in force in the other territories subject to his government or laws which might thereafter be enacted by the Council of the Governor General or the Lieutenant Governor in respect of those territories. Both these authorities were competent to make laws for the province of Bengal. The validity of section 8 was not questioned in Burah 's case(1) and no argument was addressed about it. Regarding this section, however, the following observations occur in the judgment of their Lordships which were emphasized before us: "The Governor General in Council has determined, in the due and ordinary course of legislation, to remove (1) 5 t. A. 178 954 a particular district from the jurisdiction of the ordinary courts and offices, and to place it under new courts and offices, to be appointed by and responsible to the Lieu tenant Governor of Bengal; leaving it to the Lieutenant Governor to say at what time that change shall take place; and also enabling him, not to make what laws he pleases for that or any other district but to apply by public notifica tion to that district any law, or part of a law, which either already was, or from time to time might be, in force, by proper legislative authority, in the other territories subject to his government. ' The legislature determined that, so far, a certain change should take place; but that it was expedient to leave the time, and the manner, of carrying it into effect to the discretion of the Lieutenant Governor; and also, that the laws which were or might be in force in the other territories subject to the same Govern ment were such as it might be fit and proper to apply to this district also. " All that these observations mean is that a law 'having been made by a competent legislature for the territory under his jurisdiction could be made applicable to a district excluded for certain purposes by a notification of the LieutenantGovernor. As already pointed out, the Lieutenant Governor could make laws for the whole province of Bengal and similarly, the Governor General in Council could do so. The law having been made by a competent legislature for the territory for which it had power to legislate, the only power left in the Governor General was to extend that legis lation to an excluded area; but this is not what 'the had done. As will be shown later, the in section 7 has authorized the Governor General in his executive capacity to extend to Delhi laws made by legisla tures which had no jurisdiction or competence to make laws for Delhi. Having stated the principles on which answer has to be given to the questions referred to us, I now proceed to give my opinion on each of the three questions. 955 The first question relates to section 7 of the , and concerns its validity in whole or in part. The section as enacted in 1912 was in these terms : "The Governor General in Council may by notification in the official gazette extend with such restrictions and modifications as he thinks fit to the Province of Delhi or any part thereof any enactment which is in force in any part of British India at the date of such notification. " The section gives a carte blanche to the GovernorGeneral to extend to the newly formed province any enactment in force in any part of British India at the date of the noti fication and not necessarily any enactment in force in British India at the date of the passing of the . No schedule was annexed to the Act of the enactments that were in force in any part in British India at the date of the passing of the Act. As regards the enactments that may be in force in any part of British India at the date of any notification, there was no knowing what those laws would be. Laws that were to be made after 1912, their principle and policy could not be known to the legislature that enact ed section 7 of the . It seems obvious that the legislature could not have exercised its judgment, nor its discretion in respect of those laws. It also conferred on the Governor General power of modifying existing and future enactments passed by different legislatures in the country. The power of modification implies within it the power of amending those statutes. To use the words of a learned Judge, the section conferred a kind of a vague, wide, vagrant and uncanalised authority on the Governor General. There is no provision within the section by virtue of which the mind of the legislature could ever be applied to the amendments maple by the Governor General in the different statutes passed by different legislatures in India and extended to Delhi. 123 956 Illustratively, it may be pointed out that numerous rent control Acts have been passed by different legislatures in India, laying down basically different policies and princi ples. The Provincial Government under the is authorised to apply the policy of any one of these Acts to Delhi or the policy which it might evolve by combining different such statutes passed by different State legisla tures. Legislative policy in the matter of rent control had not been evolved by the year 1912. Another illustration may be taken from the law of prohibition. Different State gov ernments have adopted a policy of either complete prohibi tion or of local option. What policy is to be applied to Delhi and who is to decide that policy ? Obviously, under section 7 the Provincial Government can without going to the legislature adopt any policy it likes whether of partial or of complete prohibition and may apply to Delhi any law it thinks fit. It is obvious therefore that within the wide charter of delegated power given to the executive by section 7 of the it could exercise essential legisla tive functions and in effect it became the legislature for Delhi. It seems to me that by enacting section 7 the legis lature virtually abdicated its legislative power in favour of the executive. That, in my judgment, was not warranted by the Indian Councils Act, 1861, or by any decision of the Privy Council or on the basis of any legislative practice. The section therefore, in my opinion, is ultra vires the Indian Councils Act, 1861, in the following particulars: (i)inasmuch as it permits the executive to apply to Delhi laws enacted by legislatures not competent to make laws for Delhi and which these legislatures may make within their own legislative field, and (ii) inasmuch as it clothes the executive with co extensive legislative authority in the matter of modification of laws made by legislative bodies in India. If any list of the existing laws passed by the Governor General in Council in his legislative capacity and of laws adopted by it though passed by other legislatures was annexed to the Act, to that extent the delegation of power, but 957 without any power of modifications in favour of the execu tive, might have been valid, but that is not what was enact ed in section 7 of the . Power to extend laws made in the future by the GovernorGeneral in Council for the whole of India or adopted by it though passed later by other legislatures would also be intra vires, but farther than that the legislature could not go. If one may say so, sec tion 7 declares that the legislature has no policy of its own and that the Governor General in Council can declare it and can determine what laws would be in force in Delhi. The second question concerns section 2 of the Ajmer Mer wara (Extension of Laws) Act, 1947, which provides for extension of enactments to Ajmer Merwara. It says: "The Central Government may by notification in the official gazette extend to the province of AjmerMet warn with such restrictions and modifications as it thinks fit any enactment which is in force in any other province at the date of such notification. " For the reasons given for holding that section 7 of the is ultra vires the constitution in two par ticulars, this section also is ultra vires the Government of India Act, 193s, in those particulars. The section does not declare any law but gives the Central Government power to declare what the law shall be. The choice to select any enactment in force in any province at the date of such notification clearly shows that the legislature declared no principles or policies as regards the law to be made on any subject. It may be pointed out that under the Act of 1935 different provinces had the exclusive power of laying down their policies in respect to subjects within their own legiSlative field. What policy was to be adopted for Delhi, whether that adopted in the province of Punjab or of Bombay, was left to the Central Government. Illustratively, the mischief of such law making may be pointed out with refer ence to what happened in pursuance of this section in Ajmer Merwara. The Bombay Agricultural Debtors ' Relief Acco, 1947, has been 958 extended under cover of this section to Ajmer Merwara and under the power of modification by amending the definition of the word 'debtor ' the whole policy of the Bombay Act has been altered. Under the Bombay Act a person is a debtor who is indebted and whose annual income from sources other than agricultural and manly labour does not exceed 33 per cent of his total annual income or does not exceed Rs. 500, whichev er is greater. In the modified statute "debtor" means an agriculturist who owes a debt, and "agriculturist" means a person who earns his livelihood by agriculture and whose income from such source exceeds 66 per cent of his total income. The outside limit of Rs. 500 is removed. The exer cise of this power amounts to making a new law by a body which was not in the contemplation of the Constitution and was not authorized to enact any laws. Shortly stated, the question is, could the Indian legislature under the Act of 1935 enact that the executive could extend to Delhi laws that may be made hereinafter by a legislature in Timbuctoo or Soviet Russia with modifications. The answer would be in the negative because the policy of those laws could never be determined by the law making body entrusted with making laws for Delhi. The Provincial legislatures in India under the Constitution Act of 1935 qua Delhi constitutionally stood on no better footing than the legislatures of Timbuctoo and Soviet Russia though geographically and politically they were in a different situation. The third question concerns section 2 of the Part C States (Laws) Act, 1950, which provides that " The Central Government may by notification in the official gazette extend to any Part C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State, with such restrictions or modifications as it thinks fit any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State." 959 For reasons given for answering questions 1 and 2 that the enactments mentioned therein are ultra rites the consti tution in the particulars stated, this question is also answered similarly. It might, however, be observed that in this case express power to repeal or amend laws already applicable in Part C States has been conferred on the Cen tral Government. Power to repeal or amend laws is a power which can only be exercised by an authority that has the power to enact laws. It is a power co ordinate and co exten sive with the power of the legislature itself. In bestowing on the Central Government and clothing it with the same capacity as is possessed by the legislature itself the Parliament has acted unconstitutionally. In offering my opinion on the questions mentioned in the reference I have approached this matter with great caution and patient attention and having in mind the rule that the benefit of reasonable doubt on questions on the constitu tional validity of a statute has to be resolved in favour of legislative action. The legislative action, however, in the enactments which are the subject matter of the reference has been of such a drastic and wide and indefinite nature con sidered in its full amplitude that it is not possible to hold that in every particular these enactments are constitu tional. MUKHERJEA J. This is a reference made by the President of India, under article 143 (1) of the Constitution, invit ing this Court to consider and report to him its opinion on the three following questions : (1) Was section 7 of the , or any of the provisions thereof, and in what particular or particu lars or to what extent ultra vires the Legislature which passed the said Act ? (2) Was the Ajmer Merwara (Extension of Laws) Act, 1947, or any of the provisions thereof, and in what particular or particulars or to what extent ultra vires the Legislature which passed the said Act ? (3) Is section 2 of the Part C States (Laws) Act, 1950, or any of the provisions thereof, and in what 960 particular or particulars or to what extent ultra vires the Parliament ? The necessity of seeking the advisory opinion of this Court is stated to have arisen from the fact that because of the decision of the Federal Court in Jatindra Nath Gupta vs The Province of Bihar(1), which held the proviso to sub section (3) of section 1 of the Bihar Maintenance of Public Order Act, 1947, ultra vires the Bihar Provincial Legisla ture, by reason of its amounting to a delegation of its legislative powers to an extraneous authority, doubts have arisen regarding the validity of the three legislative provisions mentioned above, the legality of the first and the second being actually called in question in certain judicial proceedings which are pending before some of the High Courts in India. The , which is the earliest of the enactments referred to above, was passed in 1912 by the Governor General in Council at its legislative meeting, that being the legislature constituted for British India at that time, under the provisions of the group of statutes known as Indian Councils Acts (1861 1909). Delhi, which up till the 17th of September, 1912, was a part of the province of the Punjab, was created a Chief Commissioner 's Province on that date and on the following date the Governor General 's Legis lative Council enacted the (Act XIII) 1912 which came into force on and from the 1st of October, 1912. Section 7 of the Act, in regard to which the controversy has arisen, provides as follows : "The Provincial Government may, by notification in the official gazette, extend with such restrictions and modifi cations as it thinks fit, to the province of Delhi or any part thereof any enactment which is in force in any part of British India at the date of such notification. " The Ajmer Merwara (Extension of Laws) Act was enacted on the 31st December, 1947, by the Dominion (1) 961 Legislature of India under the provisions of the Government of India Act, 1935 (as adapted under the Indian Independence Act of 1947). Section 2 of the Act is in the following terms : "2. 'Extension of enactments to Ajmer Merwara. The Central Government may be notification in the official gazette extend to the province of Ajmer Merwara with such restrictions and modifications as it thinks fit any enact ment which is in force in any other province at the date of such notification. " Part C States (Laws) Act, 1950, has been enacted by the Indian Parliament after the new Constitution came into force and the provision of section 2 of the Act to which the dispute relates is worded thus: "2. Power to extend enactments to certain Part C States. The Central Government may, by notification in the official gazette, extend to any Part C State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State with such ' restrictions and modifications as it thinks fit any enactment which is in force in a Part A State at the date of the notification; and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State. " It will be noticed that in all the three items of legis lation, mentioned above, there has been, what may be de scribed, as conferment by the legislatures, which passed the respective enactments, to an outside authority, of some of the powers which the legislative bodies themselves could exercise; and the authority in whose favour the delegation has been made has not only been empowered to extend to particular areas the laws which are in force in other parts of India but has also been given a right to introduce into such laws, any restrictions or modifications as it thinks fit. The controversy centres round the point as to whether such delegation was or is within the competency of the particular legislature which passed these enactments, 962 The contention of the learned Attorney General, who represents the President of, India, in substance is that a legislature which is competent to legislate on a particular subject has the competence also to delegate its legislative powers in respect of that subject to any agent or external authority as it thinks proper. The extent to which such delegation should be made is entirely a matter for consider ation by the legislature itself and a court of law has no say in the matter. There could be according to the learned Attorney General, only two possible limitations upon the exercise of such right of delegation by a competent legis lative body. One is that the legislature cannot abdicate or surrender its powers altogether or bring into existence a new legislative power not authorised by the constitutional instrument. The second is that if the constitutional docu ment has provided for distribution of powers amongst differ ent legislative bodies, one legislature cannot delegate to another, powers, which are vested in it, exclusively under the Constitution. It is argued that, save and except these two limitations, the doctrine of inhibition of delegation by legislative authority has no place in a Constitution mo delled on the English system which does not recognise the principle of separation of powers as obtains in the American system. These questions are of great constitutional impor tance and require careful consideration. In America the rule of inhibition against delegation of legislative powers is based primarily upon the traditional American doctrine of "separation of powers". Another principle is also called in to aid in support of the rule, which is expressed in the wellknown maxim of Private Law, "delegatus non potest delegare", the authority for the same, being based on one of the dieta of Sir Edward Coke. The modern doctrine of , 'separation of powers" was a leading tenet in the political philosophy of the 18th century. It was elaborated by Montesquieu in his "Lesprit des lois" in explanation of the English political doctrine and was adopt ed, in theory at least, in all its fulness and 963 rigidity by the constitution makers of America. The consti tution of America provides for the separation of the govern mental powers into three basic divisions the executive, the legislative, and the judicial and the powers appertaining to each department have been vested in a separate body of public servants. It is considered to be an essential princi ple(1) underlying the constitution that powers entrusted to one department should be exercised exclusively by that department without encroaching upon the powers confided to others. As is said by Cooley,(2) "The different classes of power have been apportioned to different departments; and as all derive their authority from the same instrument, there is an implied exclusion of each department from exercising the functions conferred upon the others. " The other doctrine that is invoked in support of the anti delegation rule is the well accepted principle of municipal law, which prevents a person upon whom a power has been conferred, or to whom a mandate has been given, from delegating his powers to other people. The legislature is supposed to be a delegate deriving its powers from the 'people ' who are the ultimate repository of all powers, and hence it is considered incapable of transferring such powers to any other authority. These doctrines, though well recognised in theory, have a restricted and limited application in actual practice. Mr. Justice Story said(3) "But when we speak of a separation of the three great departments of Government and maintain that that separation is indispensable to public liberty, we are to understand this maxim in a limited sense. It is not meant to affirm that they must be kept wholly and entirely separate and distinct, and have no common link of connection or depend ence, the one upon (1) See Kilbourn vs Thomson, ; at p. 190. i2) See Cooley 's "Constitutional Limitations", 7th Edition, page 126. (3) Story 's Constitution, section 525, 124 964 the other, in the slightest degree. The true meaning is that the whole power of one of these departments should not be exercised by the same hands which possess the whole power of either of the other departments: and that such exercise of the whole would subvert the principles of free constitu tion. " As regards the maxim delegatus non potest delegare, its origin and theoretical basis are undoubtedly different from those of the doctrine of separation of powers. But, for practical purposes, both these doctrines are linked together and are used as arguments against the Congress attempting to invest any other authority with legislative powers. Accord ing to Willis, the disability of the Congress to delegate its legislative powers to the executive, purports to be based upon the doctrine of separation of powers; while its incapacity to bestow its authority upon an independent body like a Board or Commission is said to rest on the maxim delegatus non potest delegare(1). As said above, a considerable amount of flexibility was allowed in the practical application of these theories even from early times. The vast complexities of social and eco nomic conditions of the modern age, and the ever growing amount of complicated legislation that is called for by the progressive social necessities, have made it practically impossible for the legislature to provide rules of law which are complete in all their details. Delegation of some sort, therefore, has become indispensable for making the law more effective and adaptable to the varying needs of society. Thus in America, despite the theory which prohibits delegation of legislative power, one comes across numerous rules and regulations passed by non legislative bodies in exercise of authority bestowed on them by the legislature in some shape or other. The legislature has always been deemed competent to create a municipal authority and empower it to make by laws. In fact, such legislation is based upon the immemorial (1) Willis on Constitutional Law, p. 965 Anglo Saxon practice of leaving to each local community the management and control of local affairs. The Congress can authorise a public officer to make regulations, or the Judges of the Court to frame rules of procedure which are binding in the same way as laws proper. It can authorise some other body to determine the conditions or contingencies under which a statute shall become operative and can empower administrative functionaries to determine facts and apply standards. "The separation of powers between the Congress and the Executive", thus observed Cardozo, J. in his dis senting judgment in Panama Refining Company vs Ryan(1), "is not a doctrinaire concept to be made use of with pedantic rigour. There must be sensible approximation, there must be elasticity of adjustment in response to the practical neces sities of Government which cannot foresee today the develop ments of tomorrow in their nearly infinite variety". In fact, the rule of non delegation has so many exceptions engrafted upon it that a well known writer(2) of constitu tional law has tersely expressed that it is difficult to decide whether the dogma or the exceptions state the rule correctly. It does not admit of any serious dispute that the doc trine of separation of powers has, strictly speaking, no place in the system of government that India has at the present day under her own Constitution or which she had during the British rule. Unlike the American and Australian Constitutions, the Indian Constitution does not expressly vest the different sets of powers in the different organs of the State. Under article 53(1), the executive power is indeed vested in the President, but there is no similar vesting provision regarding the legislative and the judicial powers. Our Constitution, though federal in its structure, is modelled on the British Parliamentary system, the essen tial feature of which is the responsibility of the executive to the legislature. The President, as the head of the executive, is to act on the advice of the Council of (1) ; at 440. (2) See Willis on Constitutional Law, p. 137, 966 Ministers, and this Council of Ministers, like the British Cabinet, is a "hyphen which joins, a buckle which fastens, the legislative part of the State to the executive part. " There could undoubtedly be no question of 'the executive being responsible to the legislature in the year 1912, when the Delhi Act X111 of 1912 was passed, but at that time it was the executive which really dominated the legislature, and the idea of a responsible government was altogether absent. It was the Executive Council of the GovernorGeneral which together with sixty additional members, of whom 33 were nominated, constituted the GovernorGeneral 's Legisla tive Council and had powers to legislate for the whole of British India. The local legislatures in the provinces were constituted in a similar manner. The first advance in the direction of responsible government was made by the Govern ment of India Act, 1919, which introduced dyarchy in the provinces. The Government of India Act, 1935, brought in Provincial autonomy, and ministerial responsibility was established in the provinces subject to certain reserved powers of the Governor. In the Centre the responsibility was still limited and apart from the discretionary powers of the Governor General the Defence and External Affairs were kept outside the purview of ministerial and legislative control. Thus whatever might have been the relation between the legislature and the executive in the different constitu tional set ups that existed at different periods of Indian history since the advent of British rule in this country, there has never been a rigid or institutional separation of powers in the form that exists in America. The maxim delegatus non potest delegare is sometimes spoken of as laying down a rule of the law of agency; its ambit is certainly wider than that and it is made use of in various fields of law as a doctrine which prohibits a person upon whom a duty or office has devolved or a trust has been imposed from delegating his duties or powers to other per sons. The 967 introduction of this maxim into the constitutional field cannot be said to be altogether unwarranted, though its basis rests upon a doubtful political doctrine. To attract the application of this maxim, it is essential that the authority attempting to delegate its powers must itself be a delegate of some other authority. The legislature, as it exists in India at the present day, undoubtedly is the creature of the Indian Constitution, which defines its powers and lays down its duties; and the Constitution itself is a gift of the people of India to themselves. But it is not a sound political theory, that the legislature acts merely as a delegate of the people. This theory once popula rised by Locke and eulogized by early American writers is not much in favour in modern times. With regard to the Indian Legislature as it existed in British days constitut ed under the Indian Councils Act, it was definitely held by the Judicial Committee in the well known case of Queen vs Burah (1) that it was in no sense a delegate of the British Parliament. In that case the question arose as to the validity of section 9 of Act XXII of 1869 passed by the Governor General 's Legislative Council. The Act provided that certain special laws, which had the effect of excluding the jurisdiction of the High Court, should apply to a cer tain district. known as Garo Hills, and section 9 empowered the Lieutenant Governor of Bengal to extend the operation of these laws to certain other areas if and when the Lieuten ant Governor, by notification in the Calcutta Gazette, would declare that they should be so applied. The majority of the Judges of the Calcutta High Court upheld the contention of the respondent, Burah, that the authority conferred on the Lieutenant Governor to extend the Act in this way was in excess of the powers of the Governor General in Council, and in support of this view, one of the learned Judges relied inter alia upon the principles of the law of agency. This view was negatived by the Judicial Committee, and Lord Selborne, in delivering the judgment, observed as follows: (1) 5 I.A. 178. 968 "The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament which created it, and it can, of course, do nothing beyond the limits which cir cumscribe these powers. But when acting within those limits, it is not in any sense an agent or delegate of the Imperial Parliament, but has, and was intended to have, plenary powers of legislation as large and of the same nature as those of parliament itself." Practically the same observations were reiterated by the Judicial Committee in the case of Hodge vs The Queen(1) while describing the position of the Provincial Legislature under the Canadian Constitution and stress was laid upon the plenitude of power which such Legislature could exercise when acting within the limits prescribed for it by the Imperial Parliament. I am quite willing to concede that the doctrine of separation of powers cannot be of any assistance to us in the solution of the problems that require consideration in the present case. In my opinion, too much importance need not also be attached to the maxim delegatus non potest delegare, although as an epigrammatic saying it embodies a general principle that it is not irrelevant for our present purpose. But even then I am unable to agree with the broad proposition enunciated by the learned Attorney General that a legislative power per se includes within its ambit a right for the legislative body to delegate the exercise of that power in any manner it likes to another person or authority. I am unable also to accept his contention that in this respect the authority of the Indian Legislature is as ple nary as that of the British Parliament, and, provided the subject matter of legislation is not one outside the field of its legislative competence, the legislature in India is able to do through an agent anything which it could do itself. It is to be noted that so far as the British Parliament is concerned, there is no constitutional limitation upon its authority or power. In the words of Sir 9 App. 969 Edward Coke (1), "the power and jurisdiction of Parliament is so transcendent and absolute that it cannot be confined, either for causes or persons, within any bounds. . . . It hath sovereign and uncon trollable authority in the making, confirming, enlarging, abrogating, repealing, reviving and expounding of laws. . . . this being the place where that absolute despotic power which must in all governments reside somewhere is entrusted by the constitution of these king doms. " The British Parliament can not only legislate on any subject it likes and alter or repeal any law it likes, but being both "a legislative and a constituent assembly", it can change and modify the so called constitutional laws and they can be changed by the same body and in the same manner as ordinary laws; and no act of the Parliament can be held to be unconstitutional in a British Court of Law. (2) This sovereign character was not, and could not be, predicated of the Legislative Council of British India as it was constituted under the Indian Councils Act, even though it had very wide powers of legislation and within the scope of its authority could pass laws as important as those passed by the British Parliament (3). It is not present also in the Indian Parliament of the present day which is a creature of the Indian Constitution and has got to exercise its legislative powers within the limits laid down by the Constitution itself. Acting in its ordinary capacity as a legislative body, the Indian Parliament cannot go beyond the Constitution or touch any of the Constitutional or fundamen tal laws, and its acts can always be questioned in a court of law. Consequences of great constitutional importance flow from this difference and they have a material bearing on the question before us. The contention of the learned Attorney General in substance is that the power of delegation of legislative authority without any limitation as to its extent is (1) See Coke 's Fourth Institute, p. 36. (2) See Dicey 's Law of the Constitution, p. 88 (9th Edi tion.) (3) See Dicey 's Law of the Constitution, p. 99 (9th Edition). 970 implicit in the exercise of the power itself, and in support of his contention he refers to the unrestricted rights of delegation which are exercised by the British Parliament. But the validity or invalidity of a delegation of legisla tive power by the British Parliament is not and cannot be a constitutional question at all in the United Kingdom, for the Parliament being the omnipotent sovereign is legally competent to do anything it likes arid no objection to the constitutionality of its acts can be raised in a court of law. Therefore, from the mere fact that the British Parlia ment exercises unfettered rights of delegation in respect of its legislative powers, the conclusion does not follow that such right of delegation is an inseparable adjunct of the legislative power itself. The position simply is this that in England, no matter, to whichever department of the powers exercisable by the British Parliament the right of delega tion of legislative authority may be attributed and there is no dispute that all the sovereign powers are vested in the Parliament no objection can be taken to the legality of the exercise of such right. But in India the position even at the present day is different. There being a written constitution which defines and limits the rights of the legislature, the question whether the right of delegation, either limited or unlimited, is included within, and forms an integral part of, the right of legislation is a question which must be answered on a proper interpretation of the terms of the Constitution itself. We need not for this purpose pay any attention to the American doctrine of sepa ration of powers; we must look to the express language of our own Constitution and our approach should be to the essential principles underlying the process of law making which our Constitution envisages. According to the Indian Constitution, the power of law making can be exercised by the Union Parliament or a State Legislature which is to be constituted in a particular manner and the process of legis lation has been described in detail in various articles(1). Powers have been given to the President (1) Vide Articles 107 and 111; 196 to 200, 971 in article 123 and to the Governor of a State under article 213 to promulgate Ordinances during recess of the respective legislatures. Specific provisions have also been made for exercise of the legislative powers by the President on proclamation of emergency and in respect of Part D territo ries. Law making undoubtedly is a task of the highest impor tance and responsibility, and, as our Constitution has entrusted this task to particular bodies of persons chosen in particular ways, and not only does it set up a machinery for law making but regulates the methods by which it is to be exercised and makes specific provisions for cases where departure from the normal procedure has been sanctioned, the prima facie presumption must be that the intention of the Constitution is that the duty of law making is to be per formed primarily by the legislative body itself. The power of the Parliament to confer on the President legislative authority to make laws and also to authorise the President to delegate the power so conferred to any other authority has been recognised only as an emergency provision in arti cle 357 of ' the Constitution. Save and except this, there is no other provision in the Constitution under which the legislature has been expressly authorised to delegate its legislative powers. "It is a well known rule of construction that if a statute directs that certain acts shall be done in a specified manner or by certain persons, then performance in any other manner than that specified or by any other persons than those named is impliedly prohibited(1). " It has been observed by Baker in his treatise on "Fundamental Laws" that quite apart from the doctrine of separation of powers, there are other cogent reasons why legislative power cannot be delegated. "Representative government," thus observes the ]earned author,(2) "vests in the persons chosen to exercise the power of voting taxes and enacting laws, the most important and sacred trust known to civil government. The representatives of the people are (1) Vide Crawford 's Statutory Construction, p. 334. (2) Baker 's Fundamental Laws, Vol. I, p. 287. 125 972 required to exercise wise discretion and a sound judgment, having due regard for the purposes and the needs of the executive and judicial department, the ability of the tax payer to respond and the general public welfare. It follows as a self evident proposition that a responsible legis lative assembly must exercise its own judgment. " In the same strain are the observations made by Cooley in his "Constitutional Law ,,(1) that the reason against delegation of power by the legislature is found in the very existence of its own powers. "This high prerogative has been entrusted to its own wisdom, judgment and patriotism, and not to those of other persons, and it will act ultra vires if it under takes to delegate the trust instead of executing it. " The same considerations are applicable with regard to the legislative bodies which exercised the powers of law making at the relevant periods when the of 1912 and the Ajmer Merwara Act of 1947 were enacted. Under the Indian Councils Act, 1861, the power of making laws and regulations was expressly vested in a distinct body consist ing of the members of the Governor General 's Council and certain additional members who were nominated by the Governor General for a period of two years. The number of such additional members which was originally from 6 to 12 was increased by the subsequent amending Acts and under the Indian Councils Act 'of 1909, it was fixed at 60, of which 27 were elected and the rest nominated by the Governor General. It was this legislative body that was empowered by the Indian Councils Act to legislate for the whole of Brit ish India and there were certain local legislatures in addition to this in some of the provinces. Section 18 of the Indian Councils Act of 1861 empowered the Governor General to make rules for the conduct of busi ness at meetings of the Council for the purpose of making laws; section 15 prescribed the quorum necessary for such. meetings and further provided that the seniormost ordinary member could preside in the absence of the Governor General. This was (1) Vide Fourth Edition, p. 138, 973 the normal process of law making as laid down by the Indian Councils Act. Special provisions were made for exceptional cases when the normal procedure could be departed from. Thus section 23 of the Act of 1861 empowered the Governor General to make ordinances having the force of law in case of urgent necessity; and later on under section 1 of the Indian Councils Act of 1870 the executive government was given the power to make regulations for certain parts of India to which the provisions of the section were declared to be applicable by the Secretary of State. Besides these exceptions for which specific provisions were made, there is nothing in the parliamentary Acts passed during this period to suggest that legislative powers could be exercised by any other person or authority except the Legislative Councils mentioned above. The Ajmer Merwara Act was passed by the Dominion Legis lature constituted under the Government of India Act, 1935, as adapted under the Indian Independence Act of 1937. The provisions of the Constitution Act of 1945 in regard to the powers and functions of the legislative bodies were similar to those that exist under the present Constitution and no detailed reference to them is necessary. The point for consideration now is that if this is the correct position with regard to exercise of powers by the legislature, then no delegation of legislative function, however small it might be, would be permissible at all. The answer is that delegation of legislative authority could be permissible but only as ancillary to, or in aid of, the exercise of law making powers by the proper legislature, and not as a means to be used by the latter to relieve itself of its own responsibility or essential duties by devolving the same on some other agent or machinery. A constitutional power may be held to imply a power of delegation of authori ty which is necessary to effect its purpose; and to this extent delegation of a power may be taken to be implicit in the exercise of that power. This is on the principle "that everything necessary to the exercise of a power 974 is implied in the grant of the power. Everything necessary to the effective exercise of legislation must, therefore be taken to be conferred by the Constitution within that power. But it is not open to the legislature to strip itself of its essential legislative function and vest the same on an extraneous authority. The primary or essential duty of law making has got to be discharged by the legisla ture itself; delegation may be resorted to only as a second ary or ancillary measure. Quite apart from the decisions of American courts, to some of which I will refer presently, the soundness of the doctrine rests, as I have said already, upon the essential principles involved in our written Constitution. The work of law making should be done primarily by the authority to which that duty is entrusted, although such authority can employ an outside agency or machinery for the purpose of enabling it to discharge its duties properly and effectively; but it can on no account throw the responsibility which the Constitution imposes upon it on the shoulders of an agent or delegate and thereby practically abdicate its own powers. The learned Attorney General in support of the position he took up placed considerable reliance on the observations of the Judicial Committee in the case of Queen vs Burah(2), which I have referred to already and which have been repeat ed almost in identical language in more than one subse quent pronouncement of the Judicial Committee. The Privy Council made those observations for the purpose of clearing up a misconception which prevailed for a time in certain quarters that the Indian or the Colonial Legislatures were mere agents or delegates of the Imperial Parliament, and being in a sense holders of mandates from the latter, were bound to execute these mandates personally. This concep tion, the Privy Council pointed out, was wrong. The Indian Legislature, or for the matter of that the Colonial Parlia ment could, of course, do nothing beyond the limits (1) Per O 'Connor J. in Baxter vs Ah Way, ; at 637. (2) 5 IA. 975 prescribed for them by the British Parliament. But acting within these limits they were in no sense agents of another body and had plenary powers of legislation as large and of the same nature as those of the Parliament itself. It should be noted that the majority of the Judges of the Calcutta High Court in Queen vs Burgh(1) proceeded on the view that the impugned provision of Act XXII of 1869 was not a legislation but amounted to delegation of legislative power and Mr. Justice Markby in his judgment relied express ly upon the doctrine of agency. This view of Mr. Justice Markby was held to be wrong by the Privy Council in the observations mentioned above and as regards the first and the main point the Judicial Committee pointed out that the majority of the Judges of the High Court laboured under a mistaken view of the nature and principles of legislation, for as a matter of fact nothing like delegation of legisla tion was attempted in the case at all. It seems to me that the observations relied on by the Attorney General do not show that in the opinion of the Privy Council the Indian, Legislative Council had the same unrestricted rights of delegation of legislative powers as are possessed by the British Parliament. If that were so there was no necessity of proceeding any further and the case could have been disposed of on the simple point that even if there was any delegation of legislative powers made by the Indian Legisla tive Council it was quite within the ambit of its authority. In my opinion, the object of making the observations was to elucidate the character in which the Indian Legislative Council exercised its legislative powers. It exercised the powers in its own right and not as an agent or delegate of the British Parliament. If the doctrine of agency is to be imported, the act of the agent would be regarded as the act of the principal, but the legislation passed by the Indian Legislature was the act of the Legislature itself acting within the ambit of its authority and not of the British Parliament, although it derived its authority from the latter. This view has been clearly 5 I.A.78. 976 expressed by Rand J. of the Supreme Court of Canada while the learned Judge was speaking about the essential character of the legislation passed by the legislative bodies in Canada (1). The observations of the learned Judge are as follows : "The essential quality of legislation enacted by these bodies is that it is deemed to be the law of legislatures of Canada as a self governing political organization and not law of Imperial Parliament. It was law within the Empire and law within the Commonwealth, but it is not law as if enacted at Westminster, though its source or authority is derived from that Parliament. " It should be noted further that in their judgment in Burah 's case(2) the Privy Council while dealing with the matter of delegated authority was fully alive to the implications of a written constitution entrusting the exercise of legislative powers to a legisla ture constituted and defined in a particular manner and imposing a disability on such legislature to go beyond the specific constitutional provisions. Just after stating that the Indian Legislature was in no sense a delegate of the Imperial Parliament the Privy Council observed: "The Gover nor General in Council could not by any form of an enactment create in India and arm with legislative authority a new legislative power not created and authorised by the Coun cils Act." Almost in the same strain were the observations of the Judicial Committee in In re The Initiative and Referendum Act, 1919 (3); and while speaking about the powers of the Provincial Legislature under the Canadian Act of 1867 Lord Haldane said : "Section 92 of the Act of 1867 entrusts the legislative power in a province to its legislature and to that legisla ture only. No doubt a body with a power of legislation on the subjects entrusted to it so ample as that enjoyed by the provincial legislature in Canada could, while preserving its own capacity intact, seek (1) See Attorney General of Nova Scotia vs Attorney General of Canada, at p. 383. (2) 5 I.A. 178. (3) at p. 945. 977 the assistance of subordinate agencies as had been done when in Hodge vs Queen(1) the legislature of Ontario was held entitled to entrust to a Board of Commissioners authority to enact regulations relating to taverns; but it does not follow that it can create and endow with its own capacity a new legislative power not created by the Act to which it owes its own existence. " It is not correct to say that what these observations contemplate is a total effacement of the legislative body on surrender of all its powers in favour of another authority not recognised by the constitution. Such a thing is almost outside the range of practical consideration. The observa tions of Lord Haldane quoted above make it quite clear that his Lordship had in mind the distinction between "seeking the assistance of a subordinate agency in the framing of rules and regulations which are to become a part of the law," and "conferring on another body the essential legisla tive function which under the constitution should be exer cised by the legislature itself. " The word "abdication" is somewhat misleading, but if the word is to be used at all, it is not necessary in my opinion to constitute legal abdi cation that the legislature should extinguish itself com pletely and efface itself out of the pages of the constitu tion bequeathing all its rights to another authority which is to step into its shoes and succeed to its rights. The abdication contemplated here is the surrender of essential legislative authority even in respect of a particular sub ject matter of legislation in favour of another person or authority which is not empowered by the constitution to exercise this function. I will now attempt to set out in some detail the limits of permissible delegation, in the matter of making laws, with reference to decided authorities. For this purpose it will be necessary to advert to some of the more important cases on the, subject decided by the highest courts of America, Canada and Australia. We have also a number of pronouncements of the Judicial Committee in appeals from India and the Colonies. I confess that no uniform view can be gathered from (1) 9 App. 978 these decisions and none could possibly be expected in view of the fact that the pronouncements emanate from Judges in different countries acting under the influence of their respective traditional theories and the weight of opinion of their own courts on the subject. None of these authorities, however, are binding on this court and it is not necessary for us to make any attempt at reconciliation. We are free to accept the view which appears to us to be well founded on principle and based on sound juridical reasoning. Broadly speaking, the question of delegated legislation has come up for consideration before courts of law in two distinct classes of cases. One of these classes comprises what is known as cases of "conditional legislation," where according to the generally accepted view, the element of delegation that is present relates not to any legislative function at all, but to the determination of a contingency or event, upon the happening of which the legislative provi sions are made to operate. The other class comprises cases of delegation proper, where admittedly some portion of the legislative power has been conferred by the legislative body upon what is described as a subordinate agent or authority. I will take up for consideration these two types of cases one after the other. In a conditional legislation, the law is full and com plete when it leaves the legislative chamber, but the opera tion of the law is made dependent upon the fulfilment of a condition, and what is delegated to an outside body is the authority to determine, by the exercise of its own judgment, whether or not the condition has been fulfilled. "The aim of all legislation", said O 'Connor J. in Baxter vs Ah Way (1) "is to project their minds as far as possible into the future and to provide in terms as general as possible for all contingencies likely to arise in the application of the law. But it is not possible to provide specifically for all cases and therefore legislation from the very earnest times, and particularly in more (1) ; at 637, 979 modern times, has taken the form of conditional legis lation, leaving it to some specified authority to deter mine the circumstances in which the law shall be applied or to what its operation shall be extended, or the particular class of persons or goods or things to which it shall be applied. " In spite of the doctrine of separation of powers, this form of legislation is well recognised in the legisla tive practice of America, and is not considered as an en croachment upon the anti delegation rule at all. As stated in a leading Pennsylvania case (1), "the legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend. To deny this would be to stop the wheels of Govern ment. There are many things upon which wise and useful legislation must depend, which cannot be known to the law making power and must, therefore, be a subject of inquiry and determination outside the halls of legislation. " One of the earliest pronouncements of the Judicial Committee on the subject of conditional legislation is to be found in Queen vs Burah(2). In that case, as said already, the Lieutenant Governor of Bengal was given the authority to extend all or any of the provisions contained in a statute to certain districts at such time he considered proper by notification in the official gazette. There was no legisla tive act to be performed by the Lieutenant Governor himself. The Judicial Committee observed in their judgment : "The proper legislature has exercised its judgment as to place, persons, laws, powers, and the result of that judg ment has been to legislate conditionally as to those things. The conditions being fulfilled, the legislation is now absolute." Just four years after this decision was given, the case of Russell vs The Queen(3) came up before the (1) Locke 's Appeal, (8) 7 App. 829 (2) 5 I.A. 178. 126 980 Judicial Committee. The subject matter of dispute in that case was the Canadian Temperance Act of 1878, the prohibito ry and penal provisions of which were to be operative in any county or city, only if upon a vote of the majority of the electors of that county or city favouring such a course the Governor General by Order in Council declared the relative part of the Act to be in force. One of the contentions raised before the Judicial Committee was that the provision was void as amounting to a delegation of legislative author ity to a majority of voters in the city or county. This contention was negatived by the Privy Council, and the decision in Queen vs Burah(1) was expressly relied upon. ', The short answer to this question," thus observed the Judi cial Committee, "is that the Act does not delegate any legislative powers whatsoever. It contains within itself the whole legislation on the matter with which it deals. The provision that certain parts of the Act shall come into operation only on the petition of a majority of electors does not confer authority or power to legislate. Parliament itself enacts the condition and everything which is to follow upon the condition being fulfilled. Conditional legislation of this kind is in many cases convenient and is certainly not unusual and the power so to legislate cannot be denied to the Parliament of Canada when the subject of legislation is within its competency. " The same principle was applied by the Judicial Commit tee in King vs Benoari Lal Sarma(2). In that case, the validity of an emergency ordinance by the Governor General of India was challenged inter alia on the ground that it provided for setting up of special criminal courts for particular kinds of offences, but the actual setting up of the courts was left to the Provincial Governments which were authorised to set them up at such time and place as they considered proper. The Judicial Committee held that "this is not delegated legislation at all. It is merely an example of the not uncommon legislative power by which the local appli cation of the provisions of a statute is determined (1) 5 I.A. 178. (2) 72 I.A. 57. 981 by the judgment of a local administrative body as to its necessity. " Thus, conditional legislation has all along been treated in judicial pronouncements not to be a species of delegated legislation at all. It comes under a separate category, and, if in a particular case all the elements of a conditional legislation exist, the question does not arise as to whether in leaving the task of determining the condition to an outside authority, the legislature acted beyond the scope of its powers. I now come to the other and more important group of cases where admittedly a. portion of the law making power of the legislature is conferred or bestowed upon a subordinate authority and the rules and regulations which are to be framed by the latter constitute an integral portion of the statute itself. As said already, it is within powers of Parliament or any competent legislative body when legislat ing within its legislative field, to confer subordinate administrative and legislative powers upon some other au thority. The question is what are the limits within which such conferment or bestowing of powers could be properly made? It is conceded by the learned Attorney General that the legislature cannot totally abdicate its functions and invest another authority with all the powers of legislation which it possesses. Subordinate legislation, it is not disputed, must operate under the control of the legislature from which it derives its authority, and on the continuing operation of which, its capacity to function rests. As was said by Dixon J. (1) "a subordinate legislation cannot have the independent and unqualified authority which is an attribute of true legislative power. " It is pointed out by this learned Judge that several legal consequences flow from this doctrine of subordinate legislation. An offence against subordinate legislation is regarded as an offence against the statute and on the repeal of the statute the regulations automatically collapse. So far, the propositions cannot, and need not, be disputed. But, (1) Vide Victoria Stevedoring and General Contracting Company vs Dignan, ; at 102. 982 according to the learned Attorney General all that is neces sary in subordinate legislation is that the legislature should not totally abdicate its powers and that it should retain its control over the subordinate agency which it can destroy later at any time it likes. If this is proved to exist in a particular case, then the character or extent of the powers delegated to or conferred upon such subordinate agent is quite immaterial and into that question the courts have no jurisdiction to enter. This argument seems plausible at first sight, but on closer examination, I find myself unable to accept it as sound. In my opinion, it is not enough that the legislature retains control over the subor dinate agent and could recall him at any time it likes, to justify its arming the delegate with all the legislative powers in regard to a particular subject. Subordinate legis lation not only connotes the subordinate or dependent char acter of the agency which is entrusted with the power to legislate, but also implies the subordinate or ancillary character of the legislation itself, the making of which such agent is entrusted with. If the legislature hands over its essential legislative powers to an outside authority, that would, in my opinion, amount to a virtual abdication of its powers and such an act would be in excess of the limits of permissible delegation. The essential legislative function consists in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. It is open to the legislature to formulate the policy as broadly and with as little or as much details as it thinks proper and it may delegate the rest of the legis lative work to a subordinate authority who will work out the details within the framework of that policy. "So long as a policy is laid down and a standard established by statute no constitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determi nation of facts to which the legislation is to apply"(1). (1) Vide Schechter Poultry Corp. vs United States, 295 U.S. 495 983 The Supreme Court of America has held in more cases than one that the policy of the law making body and the standards to guide the administrative agency may be laid down in very broad and general terms. It is enough if the legislature lays down an intelligible principle which can be implemented by the subordinate authorities for specific cases or classes of cases(1). The Court has been exceedingly loath to find violation of this principle and in fact there are, only two cases, viz., Panama Refining Co. vs Ryan(2) and Schechter Poultry Corp. vs U.S.(3) where the federal legislation was held invalid on the ground that the standard laid down by the Congress for guiding administrative discretion was not sufficiently definite. In Panama Refining Co. vs Ryan(2) Chief Justice Hughes very clearly stated "that the Congress manifestly is not permitted to abdicate or transfer to others the essential legislative functions with which it is invested." "In every case" the learned Chief Justice contin ued," in which the question has been raised the court has recognised that there are limits of delegation which there is no constitutional authority to transcend. We think that section 9(c) goes beyond those limits; as to transpor tation of oil production in excess of state permission the Congress has declared no policy, has established no stand ard, has laid down no rule. There is no requirement, no definition of circumstances and conditions in which the transportation is to be allowed or prohibited." Mr. Justice Cardozo differed from the majority view m this case and held that a reference express or implied to the policy of Con gress as declared in section 1 was a sufficient definition of a standard to make the statute valid. "Discretion is not unconfined and vagrant" thus observed the learned Judge. "It is confined within banks that keep it from overflowing. " It is interesting to note that in the later case of Schechter Poultry Corporation(3), where the legislative power was held to be unconstitutionally delegated by the provision of section 3 of the National Industrial (1) Vdie J. IV. Hampton vs U.S.; , (2) ; (3) ; 184 Recovery Act of 1933 as no definite standard was set up or indicated by the legislature, Cardozo J. agreed with the opinion of the Court and held that the delegated power of legislation which had found expression in that Code was not canalised within banks but was unconfined and vagrant. "Here in the case before us" thus observed the learned Judge, "is an attempted delegation not confined to any single act nor to any class or group of acts identified or described by reference to a standard. This is delegation running riot. No such plenitude of powers is capable of transfer. " As said above, these are the only two cases up till now in which the statutes of Congress have been de clared invalid because of delegation of essential legis lative powers. In the later cases the court has invari bly found the standard established by the Congress suffi ciently definite to satisfy the prohibition against delega tion of legislative powers, and in all such cases a most liberal construction has been put upon the enactment of the legislature(1). We are not concerned with the actual decisions in these cases. The decisions are to be valued in so far as they lay down any principles. The manner of applying the principles to the facts of a particular case is not at all material. The decisions referred to above clearly lay down that the legislature cannot part with its essential legislative function which consists in declaring its policy and making it a binding rule of ' conduct. A surrender of this essen tial function would amount to abdication of legislative powers in the eye of law. 'the policy may be particularised in as few or as many words as the legislature thinks proper and it is enough if an intelligent guidance is given to the subordinate authority. The Court can interfere if no policy is discernible at all or the delegation is of such an indef inite character as to amount to abdication, but as the discretion vests with the legislature in determining wheth er there is necessity (1) See Opp Cotton Mills vs Administrator of Wages, ; ; Yakus vs United States, ; ; American Pt. & Lt. Co. vs Securities and Exchange Commission, ; 985 for delegation or not, the exercise of such discretion is not to be disturbed by the court except in clear cases of abuse. These I consider to be the fundamental principles and in respect to the powers of the legislature the constitu tional position in India approximates more to the American than to the English pattern. There is a basic difference between the Indian and the British Parliament in this re spect. There is no constitutional limitation to restrain the British Parliament from assigning its powers where it will, but the Indian Parliament qua legislative body is lettered by a written constitution and it does not possess the sover eign powers of the British Parliament. The limits of the powers of delegation in India would therefore have to be ascertained as a matter of construction from the provisions of the Constitution itself and as I have said the right of delegation may be implied in the exercise of legislative power only to the extent that it is necessary to make the exercise of the power effective and complete. It is said by Schwartz in his work on American Administrative Law "that these doctrines enable the American courts to ensure that the growth of executive power necessitated by the rise of the administrative process will not be an uncontrollable one. Delegation of powers must be limited ones limited either by legislative prescription of ends and means, or even of details or by limitations upon the area of the power delegated. The enabling legislation must, in other words, contain a framework within which the executive action must operate"(1). It would be worth while mentioning in this connection that the report of the Committee on Ministers ' Power recom mended something very much similar to this American doctrine as a proper check on delegated legislation. The report says that "the precise limits of a law making power which Parlia ment intends to confer on a Minister should always be ex pressly defined in clear language by the statute which confers it, when discretion is conferred its limits should be defined with (1) Schwartz 's American Administrative Law, p. 22. 986 equal clearness"(1). It is true that what in America is a question of vires and is subject to scrutiny by courts, in the United Kingdom it is a question of policy having a purely political significance. But the recommendation of the Committee would clearly indicate that the rules laid down and acted upon by the American Judges particularly in later years can be supported on perfectly clear and sound democratic principles. I will now advert to the leading Canadian and Australi an cases on the subject and see how far these decisions lend support to the principles set out above. Many of these Canadian cases, it may be noted, went up on appeal to the Judicial Committee. I will start with the case of Hodge vs The Queen(2) which came up before the Judicial Committee on appeal from the decision of the Court of Appeal for Ontario in the year 1883. The facts of the case are quite simple. The appellant was convicted for permitting and suffering a billiard table to be used and a game of billiard to be played thereon in violation of a resolution of the License Commissioners who were authorised by the Liquor License Act of 1877 to enact regulations regulating the use of taverns, with power to create offences and annex penalties there to. One of the questions raised was whether the Ontario Legisla ture could delegate powers to the License Commissioners to frame regulations by which new offences could be created. The Privy Council agreed with the High Court in holding that the legislature for Ontario was not in any sense exercising delegated authority from the Imperial Parliament and it had full authority to confide to a municipal institution or body of its own creation authority to make by laws or resolutions as to subjects specified in the enactment and with the object of carrying the enactment into operation and effect. It was observed : "Such an authority is ancillary to legislation;. the very full and very elaborate judgment of the (1) Vide Report, page 65. (2) 9 App, Cas, 117. 987 Court of Appeal contains abundance of precedents for the legislature entrusting a limited discretionary authority to others and as many illustrations of its necessity and con venience. " It will be seen that what was delegated by the Ontario Legislature to the License Commissioners was simply the power to regulate tavern licenses. There was no question of parting with substantial legislative powers in this case. But although the Privy Council stated clearly that the Ontario legislature was quite supreme within its own sphere and enjoyed the same authority as the Imperial or the Dominion Parliament, they described the power delegated as authority ancillary to legislation and expressly referred to the "abundance of precedents for the legislature entrusting a limited discretionary authority to others. " There was no necessity for the Privy Council to use the guarded language it used if in fact the Ontario legislature had the same right of delegating its powers as the British Parliament. It would be pertinent to note that Davey, Q.C., who appeared for the Crown in support of the judgment appealed against. did not contend before the Privy Council that the Ontario legislature had full rights of delegation like the British Parliament and consequently its acts could not be challenged as unconstitutional. His argument was that in this ease there was no delegation of legislative authority and what was delegated was only the power to make by laws. By legis lative authority the learned Counsel apparently meant the essential legislative function as distinguished from the power to make rules and regulations and the argument implied that the essential legislative powers could not be delegated at all. The case of Powell vs Appollo Candle Co. (1) is the next case in point of time which has a bearing on the question before us. That case came up on appeal from a decision of the Supreme Court of New South Wales, and the question arose whether section 133 of (1) 10 App. 127 988 the Customs Regulation Act of 1879of the Colony, was or was not ultra vires the Colonial legislature. The attack on the validity of the legislation was inter alia on the ground that it conferred upon the Government power to levy duty on certain articles which in the opinion of the Collector were substituted for other dutiable articles. The question was whether such power could be validly conferred. The Privy Council had no difficulty in holding that the provision was perfectly valid and it was quite within the competence of the Colonial legislature which was in no sense a delegate of the Imperial Parliament, to confer a discretion of this character on the executive for the purpose of making the statute properly effective. The policy of the law as well as the main principles were laid down in the Act itself. What was left to the executive was a power to enforce the provisions of the Act more properly and effectively by levying duties on articles which could be used for similar purposes as the dutiable articles mentioned in the statute. The legislature itself laid down the standard and it was sufficiently definite to guide the executive officers. I now come to the decision of the Supreme Court of Canada in In re Gray (1), which was decided during the first world war. The Dominion War Measures Act, 1914, passed by the Dominion Parliament of Canada empowered the Governor General to make "such regulations as he may, by reason of the existence of real or apprehended war. . deem necessary or advisable for the security, defence, peace, order and welfare of Canada"; and the question arose whether such transfer of power was permitted by the British North America Act. The Supreme Court decided by a majority of four to two that the Act was valid, though the Judges who adopted the majority view were not unanimous regarding the reasons upon which they purported to base their decision. The Chief Justice was of the opinion that there was nothing in the Constitutional Act which so far as material to the question (1) 57 S.C.R. 150. 989 under consideration would impose any limitation on the authority of the Parliament of Canada to which the Imperial Parliament was not subject. Anglin J. referred to the deci sion in Hodge vs The Queen(1) (supra) in the course of his judgment. He seemed to think that the British North America Act did not contemplate complete abdication of its legisla tive powers by the Dominion Parliament, but considered such abdication to be something so inconceivable that the consti tutionality of an attempt to do anything of that kind was outside the range of practical consideration. Apparently the learned Judge gave the expression "abdication" a very narrow meaning. The opinion of Duff J. was much the same, and he considered that there was no abandonment of legislative powers in this case, as the powers granted could at any time be revoked and anything done thereunder nullified by the Parliament. Idington and Brodeur JJ. dissented from this majority view. This decision was followed in the "Reference in the Matter of the Validity of the Regulations in Relation to Chemicals Enacted by the Governor General of Canada under the War Measures Act ", which is to be found reported in In this case the question raised related to the validi ty of certain regulations made by an Order in Council in terms of the powers conferred upon the Governor in Council by the War Measures Act and the Department of Munitions and Supply Act. It was held that with the, exception of para graph 4 of the Order in Council the rest of the Order was not ultra vires. It appears from the report that in this case it was not disputed before the court that powers could be delegated by the legislature to the Governor in Council under the War Measures Act. The question raised was whether the Governor in Council could further delegate his powers to subordinate agencies. The question was answered in the affirmative, the reason given being that the power of dele gation being absolutely essential in the circumstances for which the War Measures Act has been designed so as to have a workable Act, the power (1) 9 App. 990 delegated must be deemed to form part of the powers con ferred by Parliament in the Act. These are war time decisions and it is apparent that the doctrine of delegation has been pushed too far in the Chemical Reference case. In In re Gray (1) the learned Chief Justice at the conclusion of his judgment expressly stated that the security of the country was the supreme law against which no other law could prevail. I agree with the Attorney General that the competency of the Parliament to legislate could not be made dependent upon the fact as to whether the law was a war time or a peace time measure. But on the other hand, it is possible to argue that in a legis lation passed by a Parliament in times of war when the liberty and security of the country are in jeopardy, the only policy which the legislature can possibly formulate is the policy of effectively carrying on the war and this necessarily implies vesting of all war operations in the hands of the executive. There appears to be considerable substance in the observations made by Dixon J.(2) that "it may be considered that the exigencies which must be dealt with under the defence powers are so many, so great and so urgent and so much the proper concern of the executive that from its very nature the power appears by necessary intend ment to authorise delegation otherwise generally forbidden by the legislature. " It may be mentioned here that the decision in In re Gray(1) was sought t6 be distinguished in a subsequent Canadian case on the ground that in case of emergency it was possible to pass legislation of this sort by taking recourse to the residuary powers conferred on the Dominion Parliament by section 91 of the North America Act (3). In point of time, the case of In re The Initiative and Referendum Act(4) comes immediately after that of In re Gray(1). The dispute in this case related to an Act (1) 57 S.C.R. 150. (2) Vide Victoria Stevedoring and General Contracting Co. vs Dignan; , at p. 99.

Section 7 of the , provided that "The Provincial Government may by notification in the official gazette extend, with such restrictions and modifications as it thinks fit, to the Province of Delhi, or any part there of, any enactment which is in force in any part of British India at the date of such notification". Section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, provided that "The Central Government may, by notification in the official gazette, extend to the Province of Ajmer Merwara, with such restrictions and modifications as it thinks fit, any enact ment which is in force in any other Province at the date of such notification. Section 2 of the Part C States (Laws) Act, 1950, provided that "The Central Government may, by notification in the official gazette extend to any Part C State . . or to any part of such State, with such restrictions and modifications as it thinks fit, any enact ment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law . which is for the time being applicable to that Part C State. As a result of a decision of the Federal Court, doubts were entertained with regard to the validity of laws delegating legislative powers to the executive Government and the President of India made a reference to the Supreme Court under article 143 (1) of the Constitution for considering the question whether the above mentioned sec tions or any provisions thereof were to any extent, and if so to what extent 748 and in what particulars, ultra vires the legislatures that respectively passed these laws, and for reporting to him the opinion of the Court thereon: Held, (1)per FAzL ALl, PATANJALI SASTRI, MUKHERJEA, DAS and Bose JJ., (KANIA C.J., and MAHAJAN J., dissenting). Section 7 of the , and section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, are wholly intra vires. KANIA C.J. Section 7 of the , and section 2 of the Ajmer Merwara (Extension of Laws) Act, 1947, are ultra vires to the extent power is given to the Government to extend Acts other than Acts of the Central Legislature to the Provinces of Delhi and Ajmer Merwara respectively inasmuch as to that extent the Central Legisla ture has abdicated its functions and delegated them to the executive government. MAHAJAN J. The above said sections are ultra vires in the following particulars: (i) inasmuch as they permit the executive to apply to Delhi and Ajmer Merwara, laws enacted by legislatures not competent to make laws for those territories and which these legislatures may make within their own legislative field, and (ii) inasmuch as they clothe the executive with co extensive legislative authority in the matter of modification of laws made by legislative bodies in India. (2) Per FAZL ALI, PATANJALI SASTRI, MUKHERJEA, DAS and BOSE JJ. The first portion of section 2 of the Part C States (Laws) Act, ;950, which empowers the Central Government to extend to any Part C State or to any part of such State with such modifications and restrictions as it thinks fit any enactment which is in force in a Part A State, is intra vires. Per KANIA C.J., MAHAJAN, MUKHERJEA and Boss JJ. The latter portion of the said section which empowers the Cen tral Government to make provision in any enactment extended to a Part C State, for repeal or amendment of any law (other than a Central Act) which is for the time being applicable to that Part C State, is ultra vires. Per FAzL ALI, PATAN JALI SASTRI and DAS JJ. The latter portion of section 2 of the Part C States (Laws) Act, 1950, is also intra vires. KANIA C.J. To the extent that section 2 of the Part C States (Laws) Act, 1950, empowers the Central Government to extend laws passed by any Legislature of a Part A Slate to a Part C State it is ultra vires. MAHAJAN J. Section 2 of the Part C States (Laws) Act, 1950, is ultra vires in so far as it empowers the Central Government (i) to extend to a Part C State laws passed by a legislature which is not competent to make laws for that Part C State and (ii) to make modifications of laws made by the legislatures of India and (iii) to repeal or amend laws already applicable to that Part C State. 749 KANIA C.J. (i) The essentials of a legislative function are the determination of the legislative policy and its formulation as a rule of conduct and these essentials are the characteristics of a legislature by itself. Those essentials arc preserved when the legislature specifies the basic conclusions of fact upon the ascertainment of which from relevant data by a designated administrative agency it ordains that its statutory command is to be effective. The legislature having thus made its laws, every detail for working it out and for carrying the enactment into operation and effect may be done by the legislature or may be left to another subordinate agency or to some executive officer. While this is also sometimes described as delegation of legislative powers, in essence it is different from delega tion of legislative power as this does not involve the delegation of the power to determine the legislative policy and formulation of the same as a rule of conduct. While the so called delegation which empowers the making of rules and regulations has been recognised as ancillary to legislative power, the Indian Legislature had no power prior to 1935 to delegate legislative power in its true sense. Apart from the sovereign character of the British Parliament whose powers are absolute and unlimited, a general power in the legislature to delegate legislative powers is not recognised in any state. The powers of the Indian Legislature under the Constitution Acts of 1935 and 1950 are not different in this respect. (ii)An "abdication" of its powers by a legis lature need not necessarily amount to complete effacement of itself. It may be partial. If full powers to do everything that the legislature can do are conferred on a subordinate authority, although the legislature retains the power to control the action of the subordinate authority by recalling such power or repealing the Acts passed by the subordinate authority, there is an abdication or effacement of the legislature conferring such power. FAzL ALl J. (i) The legislature must formally dis charge its primary legislative function itself and not through others. (ii) Once it has been established that it has sovereign powers within a certain sphere, it is free to legislate within that sphere in any way which appears to it to be the best way to give effect to its intention and policy in making a particular law and it may.utilise any outside agency to any extent it finds necessary for doing things, which it is unable to do itself or finds it incon venient to (iii) It cannot, however abdicate its legislative functions and therefore, while entrusting power to an out side agency, it must see that such agency acts as a subordi nate authority and does not become a parallel legislature. (iv) As the courts of India are not committed to the doc trine of separation of powers and the judicial interpreta tion it has received in America, there are only two main checks in this country on the power of the legislature to delegate, these being its good sense and the principle that it should not cross the line beyond which delegation amounts to 750 'abdication and self effacement. ' (v) The power to intro duce necessary restrictions and modifications is incidental to the power to adapt or apply the law. The modifications contemplated are such as can be made within the framework of the Act and not such as to affect its identity or structure or the essential purpose to be served by it. PATANJALI SASTRI J. (i) It is now established beyond doubt that the Indian Legislature, when acting within the limits circumscribing its legislative power, has and was intended to have plenary powers of legislation as large and of the same nature as those of the British Parliament itself and no constitutional limitation on the delegation of legislative power to a subordinate unit is to be found in the Indian Councils Act, 1861, Or the Government of India Act, 1935, or the Constitution of 1950. It is therefore as competent for the Indian Legislature to make a law delegating legislative power, both quantitatively and qualitatively. as it is for the British Parliament to do so, provided it acts within the circumscribed limits. (ii) Delegation of legislative au thority is different from the creation of a new legislative power. III the former, the delegating body does not efface itself but retains its legislative power intact and merely elects to exercise such power through an agency or instru mentality of its choice. In the latter, there is no delega tion of power to subordinate units but a grant Of power to an independent and co ordinate body to make laws operative of their own force. For the first, no express provision authorising delegation is required. In the absence of a constitutional inhibition, delegation of legislative power, however extensive, could be made so long as the delegating body retains its own legislative power intact. For the second, however, a positive enabling provision in the con stitutional document is required. (iii) The maxim delegates non potest delegare is not part of the constitutional law of India and has no more force than a political precept to be acted upon by legislatures in the discharge of their func tion of making laws, and the courts cannot strike down an Act of parliament as unconstitutional merely because Parlia ment decides in a particular instance to entrust its legis lative power to another in whom it has confidence or, in other words, to exercise such power through its appointed instrumentality, however repugnant such entrustment may be to the democratic process. What may be regarded as politi cally undesirable is constitutionally competent. (iv) Howev er wide a meaning may be attributed to the expression "restrictions and modifications," it would not affect the constitutionality of the delegating statute. 'MAHAJAN J. (i) It is a settled maxim of constitu tional law that a legislative body cannot delegate its power. Not only the nature of legislative power but the very existence of representative government depends on the doc trine that legislative powers cannot be transferred. The legislature cannot substitute the 751 judgment, wisdom, and patriotism of any other body, for those to which alone the people have seen fit to confide this sovereign trust. The view that unless expressly prohib ited a legislature has a general power to delegate its legislative functions to a subordinate authority is not supported by authority or principle. The correct view is that unless the power to delegate is expressly given by the constitution, a legislature cannot delegate its essential legislative functions. As the Indian Constitution does not give such power to the legislature, it has no power to delegate essential legislative functions to any other body. (ii) Abdication by a legislative body need not necessarily amount to complete effacement. There is an abdication when in respect of a subject in the Legislative List that body says in effect that it will not legislate but would leave it to another to legislate on it. MUKHERJEA J. As regards constitutionality of the delegation legislative powers, the Indian Legislature cannot be in the same position as the omnipotent British Parliament and how far delegation is permissible has to be ascertained in India as a matter of construction from the express provisions of the Indian Constitution. It cannot be said that an unlimit ed right of delegation is inherent in the legislative power itself. This is not warranted by the provisions of the constitution and the legitimacy of delegation depends en tirely upon its being used as an ancillary measure which the legislature considers to be necessary for the purpose of exercising its legislative powers effectively and complete ly. The legislature must retain in its own hands the essen tial. legislative functions which consist in declaring the legislative policy and laying down the standard which is to be enacted into a rule of law and what can be delegeted is the task of subordinate legislation which by its very nature is ancillary to the statute which delegates the power to make it. Provided the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case. Das J. (i) The principle of non delegation of legisla tive powers founded either on the doctrine of separation of powers or the theory of agency has no application to the British Parliament or the legislature constituted by an Act of the British Parliament;(ii) in the ever present complex ity of conditions with which governments have to deal, the.power of delegation is necessary for, and ancillary to, the exercise of. legislative power and is a component part of it; (iii) the operation of the act performed under dele gated power is directly and immediately under and by virtue of the law by which the power was delegated and its efficacy is referable to that antecedent law; (iv) if what the legis lature does is legislation within the general scope of the affirmative words which give the power and if it violates no express 752 Condition or restriction by which that power is limited, then it is not for the court to inquire further or enlarge constructively those conditions or restrictions; (v) while the legislature is acting within its prescribed sphere there is, except as herein after stated, no degree of, or limit to, its power of delegation of its legislative power, it being for the legislature to determine how far it should seek the aid of subordinate agencies and how long it shall continue them, and it is not for the court to prescribe any limit to the legislature 's power of delegation; (vi) the power of delegation is however subject to the qualification that the legislature may not abdicate or efface itself, that is, it may not, without preserving its own capacity intact, create and endow with its own capacity a new legislative power not created or authorised by the Act to which it owes its own existence. (vii) The impugned laws may also be supported as instances of conditional legislation within the meaning of the decision in Queen vs Burah. Bose J. The Indian Parliament can legislate along the lines of Queen vs Burgh, that is to say, it can leave to another person or body the introduction or application of laws which are, or may be, in existence at that time in any part of India which is subject to the legislative control of Parliament, whether those laws are enacted by Parliament or by a State Legislature set up by the constitution. But delegation of this kind cannot proceed beyond that; it cannot extend to the repealing or altering in essential particulars laws which are already in force in the area in question.

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Civil Appeal No.2877 of 1977. From the Judgment and Decree dated 19.8.1977 of the Punjab and Haryana High Court in R.S.A. No. 334 of 1975. R. Bana for the Appellants. Harbans Lal and G.K. Bansal for the Respondents. The following Order of the Court was delivered: Kehar Singh had two wives, Basant Kaur and Sahib Devi. Sahib Devi died during Kehar Singh 's life time. Sahib Devi 's son was Niranjan Singh who also died during Kehar Singh 's life time. Niranjan Singh had four sons and one daughter. On 26th April, 1947 Kehar Singh in lieu of maintenance made three oral gifts of properties situated in three different villages in favour of his wife Basant Kaur. The question which arose for consideration before the lower Court was whether Basant Kaur got an absolute estate in the gifted properties as result of the passing of the . In regard to the land in village Ballowal the lower Courts have held that she got an absolute estate. The High Court was concerned in the second Appeal with the lands in village Dhaipai and Chominda, and it held the gift having been without any power of alienation would fall under Section 14(2). The Exhibit D I was the report of the Patwari in connection with the mutation proceedings and it said: "Today Kehar Singh owner of Khewat came alongwith Narain Singh Lambardar and stated that he had on 14th April, 1947, made an oral gift of land half of total land measuring 8 bighas Pukhta, 3 Biswas and 3 Biswani, which is 4 Bighas Pukhta, 12 Biswas and 1 Biswani as detailed in favour of his wife Mst. Basant Kaur, and given possession of the same. I had only one son who is dead and he had four sons and no other male issue. There is no certainty of life. She served me. Lambardar attests so the mutation is entered. " 387 On 30th July, 1947, the Assistant Collector made the following orders: "In the gathering, Kehar Singh donor and Basant Kaur donee, identified by Kishan Singh Lambardar are present. The change of possession of this case is admitted and verified by the donor and the donee. Donor stated that he has got no son. I had got two wives. My grand sons, it is possible may not gift maintenance to my wife. With this view I make the gift. Gift is for maintenance. After gift there would be no powers of mortgage or sale. After the death of Basant Kaur Malkiat Singh, Amar Singh, Gurdeep Singh and Mohan Singh, children would be heirs. This gift is of 1/2 share or Khasra No.4658/2468 measuring 4 Bighas, 12 Biswas 1 Biswani, Khewat Nos. 324 to 326, which is attested in favour of Mst. Basant Kaur donee. " The High Court on interpretation of the Assistant Collector 's report came into conclusion that Basant Kaur derived only a limited estate inasmuch as such a gift, according to the high Court, would fall directly under section 14(2) of the and as such the limited estate of Basant Kaur would not stand enlarged into an absolute estate. The challenge was to the gift made by Basant Kaur in favour of two step grand sons ignoring the other two. There is no doubt that Basant Kaur had the right of maintenance and the gift was explicitly in lieu of maintenance. As such we are of the view that it was not a case of her acquiring any new property by virtue of the gift but it was a case of her right of maintenance being given to her by way of a gift. It was a property acquired by gift in lieu of maintenance. This acquisition on 26th April, 1947 having been prior to the , we are of the view that she having acquired this property by way of gift in lieu of her antecedent right to maintenance, it would fall under sub section (1) and not under sub section (2) of section 14 of the . In this view we are in consonance with the decisions in Bai Vijia (Dead) by Lrs. vs Thakorbhai Chelabhai & Ors., ; ; Gulwant Kaur & Anr. vs Mohinder Singh & Ors., [19871 3 SCC 674; Maharaja Pillai Lakshmi Ammal vs Maharaja Pillai Thillanayakom Pillai & Anr., ; and Jaswant Kaur vs Major Harpal Singh, In view of the facts and circumstances, we are of the view that the decisions of Mst. Karmi vs Amru & Ors., [ and Kothi Satyanarayana vs Galla Sithayya & Ors. , [ ; are distinguishable on facts. 388 In the result, the Judgment and decree of the High Court are set aside, this appeal is allowed and the suit is dismissed. However, under the facts and circumstances of the case, we make no orders as to costs. G.N. Appeal allowed.

The grandfather of the appellants and respondents had two wives. The first wife and her only son died during his life time. The pre deceased son left behind four sons and a daughter. In 1947, the grand father made three oral gifts of certain properties in favour of his second wife, in lieu of maintenance. Later, the grandmother gifted some of these properties to two step grandsons. The gift was challenged by the other two grandsons. The lower court held that she had the absolute estate in the properties after the possing of the . In Second Appeal, the High Court held that she derived only a limited estate inasmuch as the gift in her favour would fall directly under section 14(2) of the and as such her limited estate would not stand enlarged into an absolute estate. This appeal is against the said judgment of the High Court. Allowing the appeal, this Court, HELD: 1. There is no doubt that the donee had the right of maintenance and the gift was explicitly in lieu of maintenance. It was a case of her acquiring any new property by virtue of the gift but it was a case of her right of maintenance being given to her by way of a gift. It was a property acquired by gift in lieu of maintenance. The acquisition made on 26th April, 1947 having been prior to the , and she having acquired the property by way of gift in lieu of her antecedent right to maintenance, it would fail under sub section (1) and not under sub section (2) of section 14 of the and she derived absolute estate in the properties. [387E F] Bai Vajia (Dead) by Lrs. vs Thakorbhai Chelabhai & Ors. ; ; Gulwant Kaur & Anr. vs Mohinder Singh & Ors., ; ; Maharaja Pillai Lakshmi Ammal vs Maharaja Pillai Thillanayakom Pillai & Anr. , ; ; Jaswant Kaur V. Major 386 Harpal Singh, ; relied on. Karmi vs Amru & Ors., ; Kothi Satyanarayana vs Galla Sithayya & Ors. , ; ; distinguished.

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ivil Appeal Nos. 998 999 of 1991. From the Judgment and Order dasted 1.3.1990 of the Allahabad 480 High Court in C.M.W.P. Nos. 11465 & 3085 of 1987. Satish Chandra, and Prashant Bhushan for the Appellants. V.C.Mahajan, S.D. Sharma, S.N.Terdol and Mrs.Suri for the Respondents. The Judgment of the Court was delivered by YOGESHWAR DAYAL, J. 1. Civil Appeal Nos. 998 and 999 of 1991 have been filed against the judgment of the Division Bench of the Allahabad High Court dated 1st March, 1990 whereby the Allahabad High Court dismissed the writ petitions filed by the District Exhibitors Association, Muzaffarnagar and others as well as some other Theatres upholding the Notification dated 30th April, 1986 issued by the Central Government under Section 5 read with sub section (1) of Section 7 of the Employees ' Provident Funds and Miscellaneous Provisions Act,1952 (hereinafter referred to as`the Provident Funds Act ').The main judgment was delivered by the High Court in the Civil Miscellaneous Writ Petition filed on behalf of Shakti Theatre, Civil Lines, Bijnore, which was followed in the petition filled by the District Exhibitors Association Muzaffarnagar and others and some other writ petitions. Before us also the Notification dated 30th April, 1986 of the Goernment of India, Ministry of Labour, amending the Employees ' provident Funds Scheme, 1952 (For short `Scheme ') issued under the Provident Funds Act has been challenged. 2.The Provident Funds Act came into force on 14th March,1952. The preamble of the Act states that it is an Act to provide for the institution of provident funds, family pension fund and deposit linked insurance fund for employees in factories and other establishments. The Act by Section 1(3) makes it applicable to every factory referred to in clause (a) and also to any other establishment referred to in clause (b) employing twenty or more persons or class of such establishments which the Central Government may, by Notification in the Official Gazette, specify in that behalf. The scheme under Section 5 alongwith other schemes were issued in 1952. The Provident Funds Act by Notification of the Government of India issued on 31st July, 1961, under Section 1(3) was made applicable to cinema theatres employing twenty or more persons. The (hereinafter referred to as `the Cinema 481 Theatre Workers Act) received the assent of the President on 24th December, 1981, and was published in the Gazette on the same day. The Cinema Theatre Workers Act came into force with effect from 1st October, 1984. The preamble of the Act says that it is to provide for the regulation of the conditions of employment of certain cine workers and cinema theatre workers and for matters connected therewith. Section 2(a) defines `cinema theatre ' to mean a place which is licensed under of the , or under any other law for the time being in force in a State for the exhibition of cinematograph films. Section 24 enacts: "The provisions of the Employees~ Provident Funds and Miscellaneouss Provisions Act, 1952, as in force for the time being, shall apply to every cinema theatre in which five or more workers are employed on any day, as if such cinema theatre were an establishment to which the aforesaid Act had been applied by a notification of the Central Government under the proviso to sub section (3) of section 1 thereof, and as if each such worker were an employee within the meaning of that Act." 4. The Notification of the Government of India amending the Scheme under the Provident Funds Act was issued in conformity with Section 24 of the Cinema Theatre Workers Act. The impugned Notification dated 30th April, 1986 is being reproduced for facility of under standing the submissions made on behalf of the appellants: `NOTIFICATION G.S.R. In exercise of the powers conferred by Section 5 read with Sub section (1) of Section 7 of the (19 of 1952), the Central Government hereby makes the following Scheme further to further to amend the Employees ' Provident Funds Scheme, 1952 namely; 1. This Scheme may be called the Employees ' Provident Funds (Amendment) Scheme, 1986. In the Employees ' Provident Funds Scheme in paragraph 1, in sub paragraph (3), in clause (b) after item (XOV11) the following item shall be added, namely: 482 `(XOV11) as respect the Cinema Theatre employing 5 or more workers as specified in Section 24 of the Cine WorKers and Cinema Theatres Workers (Regulation of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984 '. (No. S 35016/1/86 SS11) Sd/ A.K.Bhattari Under Secretary 30.4.1986 ' 5. A perusal of the Notification shows that the Scheme has been retrospectively made applicable in respect of cinema theatres employing five or more workers as specified in Section 24 of the Cinema Theatre Workers Act with effect from 1st October , 1984 though the Notification was issued on 30th April, 1986. 1st October, 1984 is also the date of coming into force of Cinema Theatre Workers Act. Before the High Court the main arguments raised by the appellants were: a) that the Notification dated 30th April 1986 was ultra vires of the provisions of the provident Funds Act inasmuch as the Central Government could not extend the scheme to an establishment which is neither an industry nor a notified establishment under Section 3(b) of the Provident Funds Act; b) that there was no liability under the scheme framed by the Central Government to make contribution towards the provident fund in respect of the employees who ceased to be a cinema employee before the Provident Funds Act came into force from 30th April,1986:and c) that the demand of the Provident Funds Commissioner from the employers about the arrears of contribution even for prediscovery period i.e. the date from which the scheme became applicable to employers, who were called upon to pay contribution by notice, leads to hardship and injustice and, therefore, violates Article 14 of the Constitution. 483 7. The High Court while dealing with these submissions took the view that Section 24 of the Cinema Theatre Workers Act has applied the provisions of the Provident Funds Act to every cinema theatre in which five or more workers were employed on any day, as if such cinema theatre were an establishment to which the provisions of the Provident Funds had been applied by a Notification of the Central Government under the proviso to clause (b) of sub section (3) of Section 1 of the Provident Funds Act. The High Court, in view of the averments made in the counter affidavit filed on behalf of the respondent as well as on the interpretation of the scheme, took the view that only those employees who were in employment on 30th April, 1986 and had not ceased working in a cinema in respect of whom the benefit was being claimed, could be entitled to get the benefit of the scheme. In the notice the demand of contribution was sought under the Sachem in respect of the employees working on 30th April, 1986 with effect from Ist October, 1984. The High Court took the view that since the demand was made for the employers ' contribution in respect of the employees who were working on 30th April, 1986, it was wrong to argue that the scheme was being incorrectly applied. Those workers who had left the cinema and had ceased to be its workers on 3oth April, 1986, would certainly not be entitled to any benefit under the scheme. Regarding the challenge to the demand by the Provident Fund Commissioner from the employers about the arrears of contribution, the High Court felt that there was no substance in that argument. Before us Mr. Satish Chandra, learned counsel for the appellants submitted: i) that the Provident Funds Act would not be applicable so long as the Notification as required by the proviso to Section 1(3)(b) has not been issued; ii) even if we assume that Section 24 of the Cinema Theatre Workers Act takes the place of a Notification being issued as contemplated by the proviso to Section 1(3)(b) of the Provident Funds Act, an express Notification under Section 5 is required to make the scheme applicable to those establishments and without such a Notification the scheme will not be applicable: iii) that under Section 6 of the Provident Funds Act, the liability is only fixed for employers; share of contribution towards Provident Funds and there is no liability fixed to 484 pay employees ' share, and unless paragraph 30 of the scheme is made applicable there is no inability of the employers to pay employees ' share; iv) that the Notification is very harsh and unjust as the appellants are being asked to pay the contribution of the employees share to the Provident Fund Account retrospectively without the corresponding right of employer to recover it from the wages of employees. It may be mentioned that the vires of any of the provision of the Provident Funds Act or the Scheme has not been challenged before us. As would be seen from the preamble of the Provident Funds Act, the Act is intended for the benefit of the employees. It is also so clear from its objects and reasons extracted below: "The question of making some provision for the future of the industrial worker after he retires or for his dependants in case of his early death, has been under consideration for some years. The ideal way would have been provision through old age and survivors ' pensions as has been done in the industrially advance countries. But in the prevailing conditions in India the institution of a pension scheme cannot be visualised in the near future. Another alternative maY be for provision of gratuities after a prescribed period of service. The main defect of a gratuity scheme, however, is that amount paid to a worker or his dependants would be small, as the worker, would not himself he making any contribution to the fund. Taking into account the various difficulties, financial and administrative, the most appropriate course appears to be the institution compulsorily of contributory provident funds in which both the worker and the employer would contribute. Apart from other advantages, there is the obvious one of cultivating among the workers a spirit of saving something regularly. The institution of a provident fund of this type would also encourage the stabilisation of a steady labour force in industrial centres". It is a legislation for the benefit of the worker sections of the society and the beneficial legislation is made applicable to cinema theatres if it employs five or more workers. The classification of cinema theatres as a separate class for purposes of coverage under the Provi 485 dent Funds Act has also not been challenged. Further no challenge has been made to any of the provision of the Cinema Theatre Workers Act. Before we deal with the submissions of learned counsel for the appellants we may notice the relevant part of provisions of the Provident Funds Act and the Scheme. Section 1(3) of the Provident Funds Act reads as follows: "Subject to the provisions contained in Section 16, it applies (a) to very establishment which is a factory engaged in any industry specified in Schedule 1 and in which twenty or more persons are employed, and (b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided that the Central Government may, after giving not less than two months ' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification. Section 5(1) and (2) provide as follows: "5. Employees ' Provident Fund Schemes (1) The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees ' Provident fund Scheme for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments or class of establishments to which the said Scheme shall apply and there shall be established as soon as may be after the framing of Scheme, a Fund in accordance with the provisions of this Act and the Scheme. (1 A). . . (1 B). . . 486 (2) A Scheme framed under sub section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme" 14. The relevant part of Section 6 reads as follows: "6. Contributions and matters which may be provided for in Schemes The contribution which shall be paid by the employer to the Fund shall be eight and one third per cent of the basic wages, dearness allowance and retaining allowance, if any, for the time being payable to each of the employees, whether employed by him directly or by or through a contractor, and the employee 's contributions shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, b an amount exceeding eight and one third per cent of his basic wages, dearness allowance and retaining allowance, if any, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section. Para 1(1) and relevant parts of paras 1(3)(a) and 1(3)(b) of the Scheme read as follows: "1. Short title and application (1) This Scheme may be called the Employees ' Provident Funds Scheme 1952. (2). . . (3)(a) Subject to the provisions of Sections 16 and 17 of the Act, this Scheme shall apply to all factories and other establishments to which the Act applies or is applied under sub section (3) or sub section 4(1) of Section 1 or Section 3 thereof: . . . (b) Provisions of this Scheme shall . . . . (xcviii) as respect the cinema theatres employing 5 or more workers as specified in Section 24 of the Cine Workers and Cinema Theatres Workers (Regulations of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984." 487 16. The relevant parts of paras 30 and 32 of the Scheme read as follows: "30. Payment of contribution (1) The employer shall, in the first instance, pay both the contribution payable by himself in this Scheme referred to as the employer 's contribution and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member 's in the Scheme referred to as the member 's contribution. (2). . . (3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges. Explanation . . . . 32. Recovery of a member 's share or contribution (1) The amount of a member 's contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise: Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable: . . . . Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writting of the Inspector, be made from the subsequent wages. (2). . . (3). . . 17. A combined reading of Section 6 of the Provident Funds Act 488 and paras 30 to 32 of the Scheme is that the contribution to the Provident Fund is to be 12 1/2% of the basic wages and dearness allowance, that is to be borne equally by the employer and the employee and that the employer is to pay the whole of it, half on his account, and the other half on account of the employee and he is to recoup himself by deducting it from the wages of the employee. A bare reading of Section 24 of the Cinema Theatre Workers Act shows that it has fulfilled the purpose of the Notification which the Central Government could have issued under Section 1(3)(b) of the Provident Funds Act read with the proviso. Therefore, no further Notification as contemplated by Section 1(3)(b) of the Provident Funds Act was necessary. Section 24 has taken the place of the Notification contemplated by Section 1(3) (b) of the Provident Funds Act read with the proviso thereto. Therefore the Provident Funds Act became applicable to the theatres who employ five or more workers with effect from 1st October, 1984. Again in view of Section 6 of the Provident Funds Act, noticed earlier, the employers became liable to pay their contribution to the fund as soon as the Act came into force i.e. w.e.f. 1st October, 1984. It is also clear from reading of Section 5 of the Provident Funds Act that before the Provident Funds Scheme can become applicable, the Central Government has to frame a Scheme and also specify the establishment to which the said Scheme shall apply. Till the impugned Notification dated 30th April, 1986 was published the Scheme was not applicable to such cinema theatres who are employing less than 20 employees and it became applicable to cinema theatres employing five or more workers only when the impugned Notification was issued under Section 5 of the Provident Funds Act. It is only by the impugned Notification that the scheme was amended so as to be made applicable in respect of cinema theatres employing five or more persons. Without such a Notification the Scheme would not have became applicable. The Notification on the face of it shows that the Scheme has been made applicable to the cinema theatres covered by the Notification with effect from 1st October, 1984. This could be done in view of not only the provisions of Section 5(2) of the Provident Funds Act but also in view of Section 7(1) of the Provident Funds Act. Both these provisions confer express powers of making the Scheme applicable retrospectively. The question however, is whether by making the Scheme with retrospective operation, the employer could be saddled with the 489 liability to pay employees ' contribution w.e.f. 1st October, 1984 and if not from what other date? The answer to the question turns upon the implementation of the Scheme and in particular the giving effect to paras 30 and 32 of the Scheme. Para 30 provides that the employer shall, in the first instance, pay both the contributions payable by himself and also the contribution payable by the employees. It shall be the responsibility of the principal employer to pay both the contributions payable by himself and also in respect of the employees directly employed by himself and also in respect of the employees directly employed by himself and also in respect of the employees employed by him or through a contractor. Para 32 confers upon the employer the right to recover the employees contribution that has been paid by him under para 30. That could be recovered by the employer by means of deduction from the wage of the employees who are liable to pay. First proviso to para 32(1) however, limits that liability in expressly stating that no such deduction may be made from any wage other than that which is paid in respect of the period of which the contribution, is payable. It is obvious from paras 30 and 32 that the employer has to pay the contribution of the employee 's share but he has a right to recover that payment by deducting the same from the wages due and payable to the employees. It is significant to note that the deduction is not from the wages payable for any period, but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees. In other words, the payment of employees contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the correct period during which the employer has also to pay his contribution. In the instant case for the period from 1st October, 1984 up to the date of the impugned Notification the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment. By retrospectively applying the scheme, could he be asked to pay the employees contribution for the period antecedent to the impugned notification. We think not. The Act and the Scheme neither permit any such payment nor deduction. He cannot be saddled with the liability to pay the employees ' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees. Mr. Vikram Mahajan, learned counsel for the Central Government submitted that it may be possible for the employers to make deduction from subsequent wages of the workmen with the consent in writing of the Inspector as required under the third proviso to 490 para 32(1) of the Scheme. This submission cannot be accepted since the third proviso could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative. Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned. The case with which we are concerned is not covered by the third proviso. It is not the case of any body that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error. The employer indeed could not have made the deduction prior to the impugned notification dated 30th April, 1986 since the Scheme was not then applicable. The Scheme has been given retrospective effect w.e.f. 1st October, 1984. The employer therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees contribution in their wages payable in future. Reference was also made to the decisions of this Court in M/s. Orissa Cement Ltd. vs Union of India, [1962] (Suppl) 3 SCR 837 and in M/s. Lohia Machines Ltd., vs Union of India and Ors., [1965]2 SCR 686 by learned counsel for the appellants in support of his contentions. It will be noticed that the Supreme Court in Orissa Cement Ltd. [1962] (Suppl) 3 SCR 837 was concerned with the validity of certain Notifications which were struck down as infringing Article 19(1)(g) of the Constitution. The decision, has no applicability to the facts of the present case. Equally, the decision, in Lohia Machines Ltd., has also no applicability to the facts of the present case. In the result and for the foregoing reasons, we allow the appeals as indicated above by setting aside the judgment of the High Court. We declare that the appellants are not liable to pay the employees contribution for the period from 1st October, 1984 to 30th April, 1986. In the facts and circumstances of the case, however, we make no order as to costs. G.N. Appeals partlly allowed.

On 30.4.1986, a Notification was issued by the Government of India amending the scheme under the in conformity with Section 24 of the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, with retrospective effect from 1.10.1984. The effect of the amendment was to extend the benefit of the Provident Funds Act and the Scheme thereunder to the Cine Workers and Cinema theatre workers. The appellants challenged the validity of the Notification before the High Court by way of writ Petitions, contending that the said Notification was ultra vires the provisions of the Provident Fund Act since the Central Government could not extent the scheme to an establishment which is neither an industry nor a notified establishment under Section 3(b) of the Act and there was no liability under the scheme to make contribution towards Provident Fund in respect of the employees who ceased to be Cinema workers before 30.4.1986. It was further contended that calling upon the employers to contribute arrears from the date the scheme was made applicable led to hardship and injustice and hence violative of Article 14 of the Constitution of India. The Writ Petitions were dismissed by the High Court. In their appeals to this Court, the appellants contended that so long as the Notification as required by the proviso to Section 1(3)(b) of the Provident Funds Act has not been issued, the Act cannot be made applicable to them and even assuming that Section 24 of the Cinema Theatre Workers Act takes the place of the required Notification, an express notification under Section 5 would be required. It was also contended 478 that under Section 6 of the Provident Funds Act the liability is fixed only for employers 'share of contribution and not the employees 'share, and since paragraph 30 of the Provident Fund Scheme was not made applicable, there arose no liability of the employers to pay employees 'share and as the appellants were being asked to pay the contribution of the employees ' share retrospectively without the corresponding right of employer to recover it from the wages of employees, it was harsh and unjust. On behalf of the Respondents, it was contended that it might be possible for the appellants to make deduction from subsequent wages of workmen with the consent of the Inspector as required under the third proviso to para 32(1) of the Provident Fund Scheme. Partly allowing the appeals, this Court, HELD: 1. Section 24 of the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 has fulfilled the purpose of the Notification which the Central Government could have issued under Section 1(3)(b) of the Provident Funds Act read with the proviso. Therefore, no further Notification as contemplated by Section 1(3)(b) of the Provident Funds Act was necessary. Section 24 has taken the place of the Notification contemplated by Section 1(3)(b) of the Provident Funds Act read with the proviso thereto. Therfore, the Provident Funds Act became applicable to the theatres who employ five or more workers with effect from 1st October, 1984. Again in view of Section 6 of the Provident Funds Act, the employers became liable to pay their contribution to the fund as soon as the Act came into force i.e.w.e.f.1st October, 1984. [488B D] M/s. Orissa Cement Ltd. vs union of India, [1962] (Suppl) 3 SCR 837 and M/s. Lohia Machines Ltd.v. Union of India and Ors., , distinguished. It is only by the Notification dated 30.4.1986 that the Provident Funds Scheme was amended so as to be made applicable in respect of the cinema theatres employing five or more persons. Without such a Notification the Scheme has been made applicable to the cinema theatres covered by the Notification with effect from 1st October, 1984. This could be done in view of not only the provisions of Section 5(2) of the Provident Funds Act but also in view of Section 7(1) of the Provident Funds Act. Both these provisions confer express powers of making the 479 Scheme applicable retrospectively.[488E G] 3. It is obvious from paras 30 and 32 of the Provident Funds Scheme that the employer has to pay the contribution of the employee 's share, but he has a right to recover that payment by deducting the same from the wages due and payable to the employees. It is significant to note that the deduction is not from the wages payable for any period but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees. In other words, the payment of employees 'contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the current period during which the employer has also to pay his contribution. [489A E] 4. In the instant case, for the period from 1st October, 1984 up to the date of the Notification i.e.30th April 1986 the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment. By retrospectively applying the scheme, he could not be asked to pay the employees ' contribution for the period antecedent to the notification. The Act and the Scheme neither permit any such payment nor deduction . The employer cannot be saddled with the liability to pay the employees ' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees. [489F G] 5. The third proviso to paragraph 32(1)of the Provident Funds Scheme could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative. Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned. The present case is not covered by the third proviso. The employer could not have made the deduction prior to the notification dated 30th April, 1986 since the Scheme was not applicable then. The Scheme has been given retrospective effect w.e.f. 1st October, 1984. The employer, therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees 'contribution in their wages payable in future.[489H;490A C]

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N: Civil Appeal No. 135 of 1991. From the Judgment and order dated 16.6.1989 of the Madras High Court Crl. M.P. No. 2717 of 1988. T.S. Krishnamoorthy Iyer, K. Rajeswara, N.D.B. Raju and K.R. Chaudhary for the Appellant. K.K. Lahiri, R.K. Jain (NP), Sreekant, N. Terdal, Mrs. Sushma Suri and A Subba Rao for the Respondent. The Judgment of the Court was delivered by 745 K.N.SAIKIA, J. Special leave granted. The appellant Captain Subhash Kumar was the Master of the Merchant ship M.V. Eamaco owned by Eamaco Shipping Co. (P) Ltd. Singapore, hereinafter called `the ship '. On 12.8.86 the ship went into distress due to the vessel 's hold Nos. 2 & 3 taking in water, the pumping operations being insufficient and though initially the appellant sent radio message for help he failed to launch the life boats and life crafts and to abandon the ship to enable M.V. Shoun World to pick them up and due to the failure of motor life boats and life crafts, when the ship sank, only 11 out of 28 persons were rescued resulting in loss of life to the remaining persons. At about 18.25 Hrs. that day Madras Radio, which was the communication centre between the land and seafaring ships, informed the office of the Principal Officer, Mercantile Marine Department, Madras, District Madras, hereinafter called as `Principal Officer ', that an urgent message had been received by the said Radio from the appellant and from that communication it was clear that the ship under the command of the appellant was posted at position 11 degrees 08 minutes North, 83 degrees 41 minutes East on 12th at 11.30 Greenwich meantime. The said message further indicated that the vessel 's hold Nos. 2 & 3 were taking in water and the pumping out operation was not sufficient and it called the assistance from all ships in the vicinity. At 20.28 Hrs. the Madras Radio again contacted the Principle officer and said that the Radio had received SOS message (distress message) and he took necessary steps. The Principal Officer filed a complaint in court of 14th Metropolitan Magistrate, Egmore, Madras 8 against the appellant for initiation of an inquiry proceeding under section 363 of the (Central Act No.4 of 1958), hereinafter called `the Act, complaining about the negligence of the appellant while he was the Master of the ship as aforesaid; and that at that time he was residing at Laxmi Niwas, 41, Marshal Road, Egmore, Madras 8 and further stating that the shipping casualty had occurred due to sheer negligence and gross incompetence on the part of the appellant in commanding the ship and the crew; and that the very fact that the life boats and life floats were not used and not even lowered so as to make use of that indicated that the appellant had not even thought about that which a Captain of the ship should have done, resulting in loss of the ship, the cargo and valuable lives of the sailors who had at no time doubted about the competency of the Master or revolted against him. The complaint accordingly said that the Magistrate 's Court by the provisions of section 363 had got powers to make inquiry into the charges of 746 incompetence or of misconduct of the appellant therein. It also said that the inquiry be commenced in accordance with the provisions of the Act so as to cancel the certificates of competency of the Master, namely, the appellant, which had been granted by the Central Government; and that cancellation might be recommended under the Act after holding the aforesaid inquiry. The complaint also said that the appellant rendered himself liable to be proceeded against under the provisions of part XII of the Act which envisaged various modes of investigation and inquiry; and under section 363 the court had powers to make an inquiry into the charges of incompetency or misconduct of the appellant. On 25.3.1988, the appellant received a notice stating that the inquiry proceedings were instituted against him before the 14th Metropolitan Magistrate under section 363 of the Act. The appellant thereupon filed Cr. M.P. No.2717 of 1988 in the High Court under section 482 of the Cr. P.C. stating that the proceedings were by an abuse of process of the court and the Court had no jurisdiction to proceed with the complaint against the appellant when there was no negligence on his part. It was also stated that the fact that the appellant was a holder of a Master certificate issued by the Director General of Shipping, Calcutta would not attract the provisions of the Act inasmuch as the ship was a foreign ship and the Master certificate had been issued by a foreign country and the casualty had occurred in the high seas nearly 232 nautical miles away from India and being in open sea the ship was subject to the jurisdiction and also to the protection of the State under whose maritime flag it sailed. The appellant was, it was further stated, to be in command of the ship by virtue of the certificate issued by the Panamanian Government, the flag of the ship was of Panama and, therefore, the provisions of the Act would not at all apply, much less its section 363. In other words the proceedings were allegedly intended to harass the appellant without jurisdiction and it amounted to an abuse of process of court. The learned Single Judge who heard the petition rejected the contention that in view of the language of section 2 of the Act it would not be applicable and that it would not be a shipping casualty as defined in section 358 of the Act, and held that the Act was applicable in the instant case and the action of the petitioner amounted to sheer negligence and called for investigation and inquiry under the Act. Hence this appeal. Mr. T. Krishnamurthy Iyer, the learned cousel for the appel 747 lant, submits, inter alia, that the negligence complained of having occurred in respect of foreign ship flying foreign flag at a place 232 nautical miles away from India, and as such, outside the territorial waters of India the Act would not be applicable; and that even if it was applicable it would not amount to a shipping casualty as envisaged in part XII of the Act; and lastly that even assuming that chapter XII applied, the complaint could not have been filed by the Principal Officer in the court of the 14th Metropolitan Magistrate, Egmore, Madras 8 under section 363 of the Act. Mr. K. Lahiri, the learned counsel for the respondents submits that the shipping casualty having occurred within the territorial waters of India which extended up to 200 nautical miles, the Act would be applicable and the complaint was rightly filed under section 363 of the Act; and that the High Court under section 482 of the Code of Criminal Procedure rightly refused to quash the proceedings. Three questions, therefore, are to be decided in this appeal. First, whether the Act would at all be applicable in the facts and circumstances of the case; secondly, if the Act was applicable whether part XII of the Act would apply; and thirdly, if both the Act and part XII were applicable whether the complaint made by the Principal Officer under section 363 of the Act would be maintainable. Taking the first question first, the Act is one to foster the development and ensure the efficient maintenance of India Mercantile Marine in the manner best suited to serve the national interest and for that purpose to establish a National Shipping Board and Shipping National Fund to provide for registration of India ship and the law relating to Merchant shipping. Section 2 of the Act deals with its application and says; "(1) Unless otherwise expressly provided, the provisions of this Act which apply to (a) any vessel which is registered in India; or (b) any vessel which is required by this Act to be so registered; or (c) any other vessel which is owned wholly by persons to each of whom any of the descriptions specified in clause (a) or in clause (b) or in clause (c), as the case may be, of 748 section 21 applies, shall so apply wherever the vessel may be. (2) Unless otherwise expressly provided, the provisions of this Act which apply to vessels other than those referred to in sub section (1) shall so apply only while any such vessel is within India, including the territorial waters thereof." In the instant case the ship was not registered in India and was not required by this Act to be so registered. Clause (c) refers so clauses (a), (b) and (c) of section 21 which defines Indian ships, and says: "For the purposes of this Act, a ship shall not be deemed to be an Indian ship unless owned wholly by persons to each to whom any of the following descriptions applies: (a) a citizen of India; or (b) a company which satisfies the following requirements, namely: (i) the principal place of business of the company is in India; (ii) at least seventy five per cent of the share capital of the company is held by citizens of India: Provided that the Central Government may, by notification in the official Gazette, alter such minimum percentage, and where the minimum percentage is so altered, the altered percentage shall, as from the date of the notification, be deemed to be substituted for the percentage specified in this sub clause; (iii) not less than three fourths of the total number of directors of the company are citizens of India; (iv) the chairmen of the board of directions and the managing director, if any, of the company are citizens of India; (v) the managing agents, if any, of the company are citizens of India or in any case where a company is the managing agent, the company satisfies the requirements specified in sub cls. (i), (ii), (iii) and (iv). or 749 (c) a co operative society which satisfies the following requirements, namely: (i) the co operative society is registered or deemed to be registered under the , or any other law relating to co operative societies for the time being in force in any State, (ii) every individual who is a member of the co operative society and where any other co operative society is a member thereof, every individual who is a member of such other co operative society, is a citizen of India. " The ship was not a ship owned wholly by persons each of whom was a citizen of India or by a company satisfying the descriptions under clause (b) or (c). Sub section (2) of section 2 makes the provisions of the Act applicable to vessels other than those referred to in sub section (1) only while any such vessel is within India, including the territorial waters thereof. The ship a Panamanian ship registered in Panama would come within the purview of the Act only it is within India including the territorial waters. This leads us to the question as to the extent of territorial waters of India. The Territorial Waters, Continental shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (Act No. 80 of 1976) is an Act to provide for certain matters relating to the territorial waters continental shelf, exclusive economic zone, and other maritime zones of India. Section 2 of the Act defines "limit" in relation to the territorial waters, the continental shelf, the exclusive economic zone or any other maritime zones of India to mean the limit of such waters shelf or zone with reference to the mainland of India as well as the individual or composite group or groups of islands constituting part of the territory of India. Section 3 deals with sovereignty over, and limits of, territorial waters and says: "(1) The sovereignty of India extends and has always extended to the territorial waters of India (hereinafter referred to as the territorial waters) and to the seabed and subsoil underlying, and the air space over such waters. (2) The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline. 750 (3) Notwithstanding anything contained in sub section (2), the Central Government may whenever it considers necessary so to do having regard to International Law and State practice, alter, by notification in the Official Gazette, the limit of the territorial waters. (4) No notification shall be issued under sub section (3) unless resolutions approving the issue of such notification are passed by both Houses of Parliament." Thus sub section (2) clearly provides that the limit of the territorial waters is a line every point of which is at a distance of 12 nautical miles from the nearest point of the appropriate baseline. Under Article 297 of the Constitution of India things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union. It says: "(1) All lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union. (2) All other resources of the exclusive economic zone of India shall also vest in the Union and be held for the purposes of the Union. (3) The limits of the territorial waters, the continental shelf, the exclusive economic zone, and other maritime zone, of India shall be such as may be specified, from time to time, by or under any law made by Parliament. " Sub section (3), thus, empowers the Central Government if it considers necessary so to do having regard to the International Law and State practice, alter, by notification in the Official Gazette, the limit of territorial waters. Under sub section (4) no such notification shall be issued unless resolutions approving the issue of such notification are passed by both Houses of Parliament. A proclamation was made by the President of India published on September 30, 1967 in the Gazette of India Extraordinary, Part III, section 2 Notification of the Government of India in the Ministry of External Affairs No. FL/III (1) 67. By a Notification of the Government of India dated 15th 751 January, 1977 the exclusive economic zone of India has been extended upto a distance of 200 nautical miles into the sea from shore and other maritime zones, 1976 under the 40th Constitution Amendment Act, 1976. The concepts of territorial waters, continental shelf and exclusive economic zone are different concepts and the proclamation of exclusive economic zone to the limit of 200 nautical miles into the sea from the shore baseline would in no way extend the limit of territorial waters which extends to 12 nautical miles measured from the appropriate baseline. The submission that territorial waters extends to the limit of 200 nautical miles by virtue of the notification extending exclusive economic zone to 200 nautical miles has, therefore, to be rejected. Admittedly the ship (M.V.Eamaco) at the time of the casualty was at a place beyond the territorial waters of India and even the exclusive economic zone of India. If this be the position, the ship would not be covered by the provisions of section 2 of the Act and consequently the provisions of the Act would not apply to the instant casualty. Taking the second question it is obvious that the Act itself having not been applicable Chapter XII being a part of the Act will also not be applicable. This Chapter deals with investigations and inquiries and contain sections 357 to 389. Section 357 defines "coasts" to include the coasts of creeks and tidal rivers. Section 358 deals with shipping casualties and report thereof and says: "(1) For the purpose of investigations and inquiries under this Part, a shipping casualty shall be deemed to occur when (a) on or near the coasts of India, any ship is lost, abandoned, stranded or materially damaged; (b) on or near the coasts of India, any ship causes loss of material damage to any other ship; (c) any loss of life ensues by reason of any casualty happening to or on board any ship on or near the coasts of India; (d) in any place, any such loss, abandonment, stranding, material damage or casualty as above mentioned occurs to or on board any India ship and any competent witness thereof is found in India; 752 (e) any Indian ship is lost or is supposed to have been lost and any evidence is obtainable in India as to the circumstances under which she proceeded to sea or was last heard of. (2) In the cases mentioned in clauses (a), (b) and (c) of sub section (1), the master, pilot, harbour master or other person in charge of the ship, or (where two ships are concerned) in charge of each ship at the time of the shipping casualty, and in the cases mentioned in clause (d) of sub section (1), where the master of the ship concerned or (except in the case of a loss) where the ship concerned proceeds to any place in India from the place where the shipping casualty has occurred, the master of the ship, shall, on arriving in India, give immediate notice of the shipping casualty to the officer appointed in this behalf by the Central Government. " Clause (d) envisages shipping casualty in any place but occurring to or on board any Indian ship whether the Master of the ship concerned (except in the case of a loss) where the ship concerned proceeds to any place in India from the place where the shipping casualty of the ship has occurred, the Master of the ship. Thus this provision will not cover the ship. The conclusion, therefore, is inescapable that the casualty in the instant case would not be a shipping casualty envisaged in section 358. Subsequent sections, namely, 359, 360, 361 and 362, relate to shipping casualties as envisaged in section 358. The impugned complaint was ex facie made under section 363 of the Act which deals with power of Central Government to direct inquiry into the charges of incompetency or misconduct, it says: "(1) If the Central Government has reason to believe that there are grounds for charging any master, mate or engineer with incompetency or misconduct, otherwise than in the course of a formal investigation into shipping casualty, the Central Government. (a) if the master, mate or engineer holds a certificate under this Act, in any case; 753 (b) if the master, mate or engineer holds a certificate under the law of any country outside India, in any case where the incompetency or misconduct has occurred on board an Indian ship; may transmit a statement of the case of any court having jurisdiction under section 361 which is at or nearest to the place where it may be convenient for the parties and witnesses to attend, and may direct that court to make an inquiry into that charge. (2) Before commencing the inquiry, the court shall cause the master, mate or engineer so charged to be furnished with a copy of the statement transmitted by the Central Government. " From the above provisions it appears that section 359 envisages the officers referred to in sub section (2) of section 358. Receiving the information that a shipping casualty has occurred and reporting in writing the information to the Central Government and his proceeding to make a preliminary inquiry into the casualty and sending a report thereof to the Central Government or such other authority as may be appointed by it in that behalf. Under section 360 the officer, whether he has made a preliminary inquiry or not, may, and, where the Central Government so directs, shall make an application to the court empowered under section 361 requesting it to make a formal investigation into any shipping casualty and the court shall thereupon make such investigation. Thus the officer himself may or when directed by the Central Government shall make an application to the court requesting it to make a formal investigation into any shipping casualty. Section 361 empowers the court to make a formal investigation under Part XII. A Judicial Magistrate of the first class specially empowered in this behalf by the Central Government and a Metropolitan Magistrate shall have jurisdiction to make formal investigation into any shipping casualty under Part XII. What has to be noted in this section is that the court on an application of the officer makes a formal investigation into shipping casualties and not a preliminary inquiry which could have been done by the officer referred to in sub section (2) of section 358, and under section 359 send a report to the Central Government. Section 360 also envisages making of application to court by the officer whether he had made preliminary inquiry or not, requesting it to make formal investigation into any shipping casualty. Thus under section 361 what is being envisaged is a formal investigation into a shipping 754 casualty and not a preliminary inquiry. Section 362 deals with only formal investigation and says that while making such investigation into a shipping casualty the court may inquire, into any charge of incompetency or misconduct arising, in the course of the investigation, against any master, mate or engineer, as well as into any charge of a wrongful act or default on his part causing the shipping casualty. Under sub section (2) a statement of the case has to be furnished to the Master, mate or Engineer. Section 362 does not envisage inquiring into any charge of incompetency or misconduct otherwise than in the course of the formal investigation into a shipping casualty, Section 363 (1) envisages the Central Government, when it has reason to believe that there are grounds for charging any master, mate or engineer with incompetency or misconduct, otherwise than in the course of a formal investigation into shipping casualty, (b) if he holds a certificate under the law or any country outside India, in any case where the incompetency or misconduct has occurred on board an Indian ship, and the transmitting of the statement of the case to any court having jurisdiction under section 361 where it may be convenient for the parties and witnesses to attend, and the Central Government may direct that court to make an inquiry into that charge. Under clause (a) the Central Government may exercise the power if the Master, mate or Engineer holds a certificate under the Act, in any case. Thus under this section the Central Government must have reason to believe that there are grounds for charging any master etc. with incompetency or misconduct, otherwise than in the course of a formal investigation into shipping casualty, in case of a master of a foreign ship who holds a certificate under the Act "in any case". It also envisages the transmitting the statement of the case to any court having a jurisdiction under section 361. The question is what would be the meaning of the words "in any case". Would it mean any case of shipping casualty, or it would mean any case irrespective of shipping casualty. In other words, under the above provisions if the appellant was the master of the ship and the casualty was outside the territorial waters of India and the ship involved was a foreign ship would the expression "in any case" cover the instanct case? If the preceding sections of Part XII dealt with only Shipping casualty, will it be permissible to interpret the words "in any case" irrespective of shipping casualty and anywhere outside the territorial waters of India and whoever is the owner of the Vessel? Will not the ejusdem generis rule apply? Again when the Act itself is not applicable to a case, can these words be given a meaning beyond the applicability of the Act? Verba secundum materiam subjectam intelligi nemo est qui nesciat. There is no one who does not know that words are to be understood according to their subject matter. The subject matter of 755 Part XII is investigations and inquiries into shipping casualty. Would 'in any case" then mean in any case of shipping casualty? We have read the other relevant provisions of the Act. Nemo aliquam partem recti intelligere potest, antequam totum interum atque itrerum parlegerit. No one can properly understand any part of a statute till he had read through the whole again and again. We find that Part VI of the Act deals with certificates of officers, namely, Masters, mates and Engineers, Section 76(1) provides: "Every foreign going Indian ship, every home trade Indian ship of two hundred tons gross or more when going to sea from any port or place in India and every ship carrying passengers between ports or places in India shall be provided with officers duly certificated under this Act according to the following scale, namely: (a) in every case, with a duly certificated master; (b) if the ship is a foreign going ship or a home trade passenger ship of one hundred and fifty tons gross or more, with at least one officer besides the master holding a certificate not lower than that of first mate in the case of a foreign going ship and of mate in the case of a home trade passenger ship; (c) if the ship is a home trade ship, not being a passenger ship, of four hundred and fifty tons gross or more, with at least one officer besides the master holding a certificate not lower than that of mate. (d) if the ship is a foreign going ship and carries more than one mate, then with the second mate duly certificated. " Section 79 deals with examination for, and grant of, certificate. Section 82 provides that a note of all orders made for canceling, suspending, altering or otherwise affecting any certificate of competency, in pursuance of the powers contained in this Act, shall be entered on the copy of the certificate kept under section 81. Section 87 empowers the Central Government to make rules, inter alia, to (f) prescribe the circumstances or cases if which certificates of competency may be canceled or suspended. Section 363 of the Act does not refer to Part VI and the rules for 756 suspension or cancellation of certificates. This would be consistent with the view that section 363 confines itself to cases of misconduct or incompetency associated with a shipping casualty. Assuming that it covers a case of a foreign ship on high seas, it would only be to make an inquiry into that charge and not into the shipping casualty itself. The question then arises, as has been submitted by Mr. Krishnamurthy Iyer, when the entire Act is not applicable to there instant casualty would it be consistent with the extent of applicability of the Act to pick up three words, namely, "in any case" and apply it to the prejudice of the appellant. Mr Lahiri submits that the certificate of competency issued under the Act by the appropriate authorities under part VI are valuable certificates and if the holder of such a certificate of competency issued under the provisions of Part VI is alleged to have committed misconduct or acts of incompetency there is no reason why an inquiry into that misconduct or incompetency cannot be ordered by the Central Government to a court competent to exercise jurisdiction under section 361 of the Act. Section 363 does not envisage the court acting on a statement transmitted by the Central Government to conduct a formal investigation into the shipping casualty but only the courts ' making an inquiry into the charge of incompetency or misconduct. Section 364 provides giving of opportunity to the person to make defence. Section 365 empowers the court to regulate its proceedings. Section 369 provides that the court shall, in the case of all investigations or inquiries under this Part, transmit to the Central Government a full report or its conclusions which it has arrived at together with the evidence. Under sub section (2) of that section where the investigation or inquiry affects master or an officer of a ship other than an Indian ship who holds a certificate under the law of any country outside India, the Central Government may tansmit a copy of the report together with the evidence to the proper authority in that country. Section 370 deals with power of court as to certificates granted by Central Government. A certificate can be canceled or suspended under clause (a) by a court holding formal investigation and under clause (v) by a court holding inquiry under this part into the conduct of the master, mate or engineer if the court finds that he is incompetent or has been guilty of any gross act of drunkenness, tyranny or other misconduct or in a case of collision has failed to render such assistance or gave such information as is required by section 348. Under sub section (3), where the court 757 cancels or suspends a certificate, the court shall forward it to the Central Government together with the report which it is required by this Part to transmit to it. Thus, this section deals with power of the court while holding a formal investigation into a shipping casualty under clause (a) and while holding an inquiry into the conduct of the master, mate or engineer i.e. otherwise than while holding a formal investigation into shipping casualty. If the expression "In any case" is interpreted to cover a foreign ship by a foreign master but holding an Indian certificate having a shipping casualty outside the territorial water sections 363 and 370b) may be applicable. If on the other hand the words "in any case" is not allowed to be interpreted to include such a master of such a ship and in such a casualty it may not be covered. The question then is whether the instant complaint can be construed as a statement of the Central Government as envisaged in section 363. One of the requisites of section 363 is that the Central Government must have reason to believe that there are grounds for charging any master etc. with incompetency or misconduct; and such reason to believe must have been arrived at otherwise than in the course of a formal investigation into the shipping casualty and it is the Central Government who why transmit the statement of a case to a court having jurisdiction under section 361. We have to examine whether the complaint is ex facie under section 363. It nowhere mentions that the Central Government had such reason to believe. It nowhere mentions that it was a transmission of the statement of a case to the court by the Central Government. It also nowhere mentions that reason to believe had been found otherwise than in the course of a formal investigation into the shipping casualty. On the other hand in para 2 it says that the complainant is the Principal Officer who is competent person appointed under the Act to complain about the negligence of the accused. There is no doubt that he is not empowered under section 363. In para 6 the complaint says that the court under section 363 has got powers to make an inquiry into the charges of incompetency or misconduct of the accused and para 8 mentions: "The inquiry so as to cancel the certificate of the competency of the master namely the accused which has been granted by the Central Government may be recommended under this Act after holding the above said inquiry and thus render justice." Therefore, prima facie the complaint does not disclose the ingredients required under section 363. We enquired of the respondents as to whether there have been earlier instances of such an inquiry having ever been made; and the 758 answer is in the negative. We feel that had such interpretation been given earlier the Act being an old one of 1958, some instances ought to have been available. However, the instant appeal is from an order of the High Court refusing to quash the complaint and the proceedings. Quashing of the complaint could have been done, if taken on its face value it failed to disclose any ingredient of the offence. The High Court found as fact that the appellant had two certificates issued under section 78 of the Act from the Director General of Shipping, Calcutta and Bombay respectively. The High Court correctly observed that section 363 enables the Central Government to transmit a case to the court which has jurisdiction under section 361 to make an inquiry against master, mate or engineer into the charges for incompetency or misconduct otherwise than in the course of formal investigation into shipping casualties but the High Court failed to notice that the complainant himself had no power under section 363. High Court has not considered the extent of applicability of the Act and whether all ingredients required under section 363 were satisfied in the impugned complaint. We accordingly set aside the Judgment of the High Court, quash the complaint and the proceedings before the 14th Metropolitan Magistrate, Egmore, Madras 8, but make it clear the it shall still be open for the Central Government to act under section 363 of the Act according to law if it so decides. Appeal allowed. R.S.S. Appeal allowed.

The appellant was the Master of the Merchant ship, M.V. Eamaco, when it sank in the high seas nearly 232 nautical miles away from India. The appellant was holder of a Master 's certificate issued by the Director General of Shipping, Calcutta. The ship was owned by a Singapore company and was flying Panamian flag. The first respondent filed a complaint in the Court of 14th Metropolitan Magistrate, Egmore, Madras against the appellant for initiation of enquiry proceedings under section 363 of the Merchant Shiping Act, 1958 complaining about the negligence of the appellant while he was the Master of the ship and further stating that the shipping casualty had occurred due to sheer negligence and gross in competence of the Master when he failed to launch the life boats and life crafts which resulted in loss of the ship, the cargo and valuable lives of sailors. The appellant filed a Criminal Miscellaneous Petition in the High Court under section 482 of the Cr. P.C. stating that the proceedings were by an abuse of process of the court and the Court had no jurisdiction to proceed with the complaint against the appellant when there was no negligence on his part. The High Court rejected the petition and held that the Shipping Act was applicable to the instant case and the action of the petitioner amounted to sheer negligence and called for investigation and inquiry under the Act. The appellant has appealed to this Court. In this court it was inter alia contended on behalf of the appellant that (i) the negligence complained of having occurred in respect of a foreign ship, flying foreign flag, at a place 232 natuical miles away from India, and as such, outside the territorial waters of India, the Act was 743 not applicable; (ii) even if the Act was applicable it would not amount to a shipping casualty as envisaged in part XII of the Act; and (iii) even assuming that Chapter XII applied the complaint could not have been filed by the appellant in the court of the 14th Metropolitan Magistrate, Egmore under Section 363 of the Act. On behalf of the respondent it was contended that the shipping casualty having occurred within the territorial waters of India which extended up to 200 nautical miles, the Act would be applicable. It was further submitted that the certificate of competentence issued under the provisions of Part VI of the Act was a valuable certificate and if the holder of such a certificate of competency was alleged to have committed misconduct or acts of incompetency there was no reason why an inquiry into that misconduct or incompetency could not be orderd by the Central Government to a court competent to exercise jurisdiction under section 361 of the Act. Allowing the appeal, setting aside the judgment of the High Court, and quashing the complaint and the proceedings against the appellants, this Court. HELD: (1) The ship was not a ship owned wholly by persons each of whom was a citizen of India or by a company satisfying the description under clause (b) or (c) of sub section (2) of Section 2 of the Act. The ship being a Panamanian ship registered in Panama would come within the purview of the Act only while it was within India including its territorial waters. [749C D] (2) By a notification of the Government of India dated 15th January, 1977 the exclusive economic zone of India had been extended upto a distance of 200 nautical miles into the sea from the shore and other maritime zones, under the 40th Constitution Amendement Act, 1976. [750H 751A] (3) The concepts of territorial waters, continental shelf and exclusive economic zone are different concepts and the proclamation of exclusive economic zone to the limit of 200 nautical miles into the sea from the shore baseline would in no way extend the limit of territorial waters which extends to 12 nautical miles measured from the appropriate baseline. [751B] (4) Admittedly the ship at the time of the casualty was at a place beyond the territorial waters of India and even the exclusive economic zone of India. If this be the position, the ship would not be covered by the provisions of section 2 of the Act and consequently the provisions of 744 the Act would not apply to the instant casualty. [751C] (5) The Act itself having not been applicable, Chapter XII being a part of the Act will also not be applicable. [751D] (6) What is envisaged under section 361 is a formal investigation into a shiping casualty and not a preliminary inquiry. Similarly section 262 does not envisage inquiring into any charge of incompetency or misconduct otherwise than in the course of the formal investigation into a shipping casualty. [753H 754B] (7) Prima facie, the complaint does not disclose the ingredients required under section 363 of the Act. It nowhere mentions that it was a transmission of the statement of a case to the court by the Central Government; it also nowhere mentions that the reason to believe had been founded otherwise than in the course of a formal investigation into the shipping casualty. On the other hand in para 2 it says that the complainant is the Principal Officer who is competent person appointed under the Act to complain about the negligence of the accused. There is however no doubt that he is not so empowered under section 363. [757G,E F] (8) The High Court correctly observed that section 363 enabled the Central Government to transmit a case to the court which had jurisdiction under section 361 to make an inquiry against master, mate or engineer into the charges for incompetency or misconduct otherwise than in the course of formal investigation into shipping casualties, but the High Court failed to notice that the complainant himself had no power under section 363. [758C D]

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ivil Appeal Nos. 657 of 1979 & 2117 21 of 1977. From the Judgment and Order dated 20.1.1978 & 6.5.1976 of Allahabad High Court in Income Tax Rule No. 502/74 and Income Tax Reference No. 827 of 1973. S.B.L. Srivastava, Manoj Swarup and Lalita Kohli for the Appellants. J. Ram Murthy, K.P. Bhatnagar and Ms. A. Subhashini for the Respondent. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. The common question which arises for decision in these appeals by special leave is whether the interest paid on a debit balance of Rs. 1,75,310 taken over by the assessee firm from the erstwhile Hindu Undivided Family (HUF), would be an allowable deduction under Section 36(1) (iii) of the Income Tax Act, 1922. 922 The partners of the firm were members of the HUF which carried on business at Varanasi in the name of M/s Badal Ram Laxmi Narain. The family had no capital of its own and had been running business with the help of borrowed money. On 20 October 1951, there was partial partition in the family. As a result whereof the business of the family was partitioned between the members of the family. The members formed themselves into partnership and continued the same business. On the date of partition, there was a debit balance of Rs. 1,75,310 in the capital account of the family. This debit balance was transferred in equal proportion to the personal accounts of the three partners of the firm. The newly formed firm took over the business assets as well as liabilities of the HUF. The question arose as to whether the interest paid by the firm on the said debit balance was an allowable deduction in the computation of its income? One of the contentions urged for the firm was that the debit balance was taken over by the firm in consideration of the goodwill of the business. The Appellate Assistant Commissioner had held that the HUF business had no goodwill. The Tribunal did not agree with the Appellate Assistant Commissioner. It has observed that the business of the HUF was of a very long standing and the previous years returns and assessment of income prior to the date of partition indicated that the HUF had flourishing business. Since the running business was taken over by the assessee with the debit balance, the Tribunal expressed the view that the firm could be deemed to have taken the liability of Rs. 1,75,310 in consideration of the sale of goodwill and the interest paid thereon was an allowable deduction. The following question of law was referred to the High Court. "Whether on the facts and in the circumstances of the case, the assessee was entitled to the deduction of interest on a debit balance of Rs.1,75,310 taken over from the erstwhile Hindu Undivided Family?" The High Court examined the facts of the case to find out whether there was any sale of the goodwill. It observed that the goodwill of the HUF business was never sold or purchased. Had there been any such transaction, appropriate entries in the books of account of the HUF would have been made. The HUF should have credited the amount in its account in respect of the price paid for the goodwill and since there was no such entries, there could not be any inference that the firm has taken over the liability of Rs. 1,75,310 for the sale of goodwill. The High Court also has observed that the partners of the 923 firm were bound to take over the liability of HUF because, the liability was that of the family of which they were members and on partition every member became liable to discharge the debt according to his share. Clause (iii) of Section 36(1) applies only where capital has been borrowed for the purposes of the business or profession. The amount of interest paid on the borrowed capital is an allowable deduction. It is not in dispute and indeed cannot be disputed that if the goodwill is purchased out of the borrowed capital, the interest paid on the borrowed capital is an allowable deduction. The Tribunal has correlated the debit balance to the purchase of goodwill since the firm has taken over the running business. The High Court has held that there was no sale of goodwill by the HUF to the firm in view of the absence of related entries in the books of account of HUF. The conclusion of the High Court seems to be as much an inference as that of the Tribunal on the same set of facts and circumstances. It is important to point out that there was only a partial partition in the family, particularly with regard to HUF business. It was not necessary for the firm to have taken over the debit balance of the HUF since the HUF had other properties. The conclusion of the Tribunal that the firm has taken over the debit balance of Rs.1,75,310 in consideration of the sale of the goodwill, in the premises, stands to reason. Indeed, it seems to be neither unreasonable or unwarranted, nor arbitrary or unjust. The High Court ought not to interfere with such conclusion even if another view is possible. The second reason given by the High Court is also not acceptable. we are concerned with the rights of the assessee and not the liability of the individual members of the HUF. The claim of the assessee for allowable deduction of the interest paid cannot be defeated by the existence of personal liability of the members of the HUF. That is wholly beside the point. We are therefore, unable to sustain the order of the High Court. In the result, the appeal are allowed and the decision of the High Court is set aside. The question referred to the High Court in each case is answered in favour of the assessee and against the revenue. The assessee shall be entitled to one set of costs in this Court. N.P.V. Appeals allowed.

The partners of the assays firm were members of a HUF, which was carrying on business with borrowed capital. Consequent on partial partition in the family and partition of the family business, the members formed the assays firm. There was a debit balance in the capital account of the family which was transferred to the personal accounts of the partners of the firm. The firm, which continued the family business and took over the business assets and the liabilities of the HUF, claimed that the interest paid on the debit balance was an allowable deduction in the computation of income since it had taken over the debit balance in consideration of the goodwill of the business. The Appellate Assistant Commissioner held that the HUF business had no goodwill. On appeal, the Tribunal held that the HUF had a very long standing and flourishing business, and hence the firm could be deemed to have taken over the liability in consideration of the sale of goodwill and the interest paid thereon was an allowable deduction. On a reference made by the Tribunal the High Court held that the goodwill of the HUF business was never sold or purchased, and that the partners of the firm were bound to take over the HUF 's liability, since it was that of the family of which they were members, and became liable to discharge their share of the debt. Allowing the appeals preferred by the assessee, this Court HELD: 1.1 Clause (iii) of Section 36(1) of the Income Tax Act, 1922 applies only where capital has been borrowed for the purposes of the business or profession. The amount of interest paid on the borrowed capital is an allowable deduction. It cannot be disputed that if the goodwill is purchased out of the borrowed capital, the interest paid on the borrowed capital is an allowable deduction. [923B] 921 1.2 In the instant case, there was only a partial partition in the family, particularly with regard to HUF business and it was not necessary for the firm to have taken over the debit balance of the HUF, since the HUF had other properties. [923D] 1.3 The Tribunal has correlated the debit balance to the purchase of goodwill since the firm had taken over the business. The High Court has held that there was no sale of goodwill by the HUF to the firm in view of the absence of related entries in the books of account of HUF. The conclusion of the High Court is as much an inference as that the Tribunal on the same set of facts and circumstances. The Tribunal was right in holding that the firm had taken over the debit balance in consideration of the sale of the goodwill and this conclusion is neither unreasonable or unwarranted, nor arbitrary or unjust. The High Court ought not to interfere with such conclusion even if another view is possible. Besides, the relevant point to be considered is the rights of the assessee and not the liability of the individual members of the HUF. The claim of the assessee for allowable deduction of the interest paid cannot be defeated by the existence of personal liability of the members of HUF. [923C, E, F]

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Civil Appeal No.1396 of 1991. From the Judgement and Order dated 8.3.1990 of the Orissa High Court in Case No. 2867 of 1987. Mrs. Uma Metha Jain and M.A. Firoz for the Appellant. Ashok Kumar Panda for the Respondents. The Judgement of the Court was delivered by KULDIP SINGH, J. Special leave granted. Rabinarayan Mohapatra the appellant was appointed as Hindi Teacher in Bani gochha, M.E. School (Orrisa) for a period of 89 days or till a candidate selected by the State Selection Board was made available. He joined the school on July 12, 1982. The appointment was made by the District Inspector (Schools) on the recommendation of the managing committee of the school. He continued to serve the school with repeated spells of 89 day appointments and one day break in between the spells, till May 25, 1986. He was not paid the salary for the period of summer vacations during all these years. Although the period of summer vacation during all these years. Although the appellant continues to serve the school to date under orders of the managing committee yet his appointment after 1986 has not been approved by the educational authorities. The managing committee even passed a resolution on July 6,1987, requesting the educational authorities of the State of Orissa to approve the continuous appointment of the appellant as Hindi Teacher but no action was taken by the said authorities. The appellant filed a writ petition under Article 226 of the Constitution of India before the Orissa High Court claiming regularisation as Hindi Teacher with effect from July 12,1982. The only argument raised before the High Court was that the appellant was entitled to be regularised in terms of the provisions of Section 3 of the Orissa Aided Educational Institutions (Appointment of Teachers Validation) Act, 1989 (hereinafter called 'the Validation Act '). The relevant part of Section 3 of the Act is reproduced hereinafter : 3. Validation of certain appointments Not withstanding 993 anything contained in the Education Act or in the Rules or Regulations framed thereunder. (a) graduate teacher, intermediate and matriculate teachers, physical education teachers and classical teachers and Hindi teachers of aided schools appointed by the managing authorities of such schools on ad hoc basic on or after the 1st December , 1976 but not later than the 31st December, 1984; (b) . . . (c) . . . who have continuous service as such teachers or lecturers for a period of at least one year without any break or with a break or breaks in one or more aided schools or Colleges and who are continuing as such teachers or whose services have been terminated after the 31st December ,1984 save for misconduct or. . . shall for all intents and purposes, be deemed to have been validly and regularly appointed, and no such appointment shall be challenged in any court of law merely on the ground that the appointment was made otherwise than in accordance with procedure laid down in the Education Act and the Rules and Regulations framed thereunder;. . . . . The High Court rejected the prayer for regularisation, and held that the appellant was not entitled to the benefit of the Validation Act, on the following reasoning; "Admittedly, the petitioner was appointed on 12.7.1982 and continued till 18.7.1986 with breaks in between and the petitioner 's appointment was conditioned by the stipulation that he would continue until replaced by a candidate from the Select List. His case, therefore, will not come within the preview of the Validation Act and, therefore, the question of issuing any direction to regularise his service in a substantive vacancy because of the Validation Act does not arise. " We have heard Mrs. Uma Mehta Jain, learned counsel for the applellant. This Court in Rattan Lal vs State of Haryana. A.I.R. 1987 S.C. 478 speaking through Venkataramaiah, J. (as the learned Judge then was ) observed as under: 994 "The State Government of Haryana has failed to discharge that duty in these cases. It has been appointing teachers for quite some time on an ad hoc basis for short periods as stated above without any justifiable reason. In some cases the appointments are made for a period of six months only and they are renewed after break of a few days. The number of teachers in the State of Haryana who are thus appointed on such ad hoc basis is very large indeed. If the teachers had been appointed regularly, they would have been entitled to the benefits of summer vacation along with the salary and allowances payable in respect of that period and to all other privileges such as casual leave, medical leave, maternity leave etc. available to all the Government servants. These benefits are denied to these ad hoc teachers unreasonably on account of this pernicious system of appointment adopted by the State Government. These ad hoc teachers are unnecessarily subjected to an arbitrary `hiring and firing ' policy. These teachers who constitute the bulk of the educated unemployed are compelled to accept these jobs on an ad hoc basis with miserable conditions of service. The Government appears to be exploiting this situation. This is not a sound personnel policy. It is bound to have serious repurcussions on the education institutions and the children studying there. The policy of `ad hocism ' followed by the State Government for a long period has led to the breach of Article 14 of the Constitution. Such a situation cannot be permitted to last any longer. It is needless to say that the State Government is expected to function as a model employer". "We strongly deprecate the policy of the State Government under which `ad hoc ' teachers are denied the salary and allowances or the period of the summer vacation by resorting to the fictional breaks of the type referred to above. These `ad hoc ' teachers shall be paid salary and allowances for the period of summer vacation as long as they hold the office under this order. Those who are entitled to maternity or medical leave shall also be granted such leave in accordance with the rules. " The Validation Act has been enacted by the Orissa legislature with the obvious object of granting relief to those members of teaching community who are being exploited for years together by keeping 995 them in short spell appointments like 89 day appointments as here with one day break and in the process denying them their rightful dues and other service benefits. Inspite of repeated depreciation by this Court the practice continues to be followed by various State Governments in the country. Under the Constitution the State is committed to secure right to education for all citizens. Bulk of our population is yet illiterate. Till the time illiteracy is effaced from the country the resolution enshrined in the Preamble cannot be fulfilled. Education is the dire need of the country. There are neither enough schools nor teachers to teach. Insecurity is writ large on the face of the teaching community because of nebulous and unsatisfactory conditions of service. In order to make the existing educational set up effective and efficient it is necessary to do away with ad hocism in teaching appointments. An appointment on 89 day basis with one day break which deprives a teacher of his salary for the period of summer vacation and other service benefits, is wholly arbitrary and suffers from the vice of discrimination. The Validation Act covers the field upto December 31, 1984. The State of Orissa will do well to consider the cases of all those who have completed one year or more as ad hoc teachers after December, 31, 1984 and come out with a scheme or any other appropriate measure to regularise their services. Mrs. Jain contended that on the plain reading of Section 3 of the Validation Act the appellant is entitled to be regularised as Hindi Teacher with effect from July 12,1982. To come within the purview of the Validation Act the following conditions are to be satisfied: 1. The appointment by the managing authority of the school on ad hoc basis must be on or after the 1st December, 1976 but not later than 31st December, 1984; 2. The service as such teacher is continuous for a period of atleast one year without any break or with a break or breaks in one or more aided schools; 3. Is continuing as such teacher or his services were terminated after the 31st December, 1984 save for misconduct. The apellant was appointed on July 12,1982 and has been working with the approval of the authorities for almost 4 years with short breaks. The managing committee is still utilising his services though there is no approval by the educational authorities for the period subsequent to 1986. It is no body 's case that his services were 996 ever terminated on grounds of inefficiency or misconduct. The case of the appellant is, thus, fully covered by Section 3 of the Validation Act. We are of the view that the High Court erred in denying the benefit of the Validation Act to the appellant on the ground that his initial appointment for 89 days was conditioned by the stipulation that he would continue until replaced by a candidate from the select list. The High Court read into the Act what was not there. In response to the notice issued in the Special Leave Petition the managing committee through its Secretary cum Head Master has stated that the appellant is still continuing to serve as Hindi teacher in the school under the orders of the managing committee. We therefore, set aside the judgment of the High Court and direct the respondents to treat the appellant as the regularly appointed Hindi teacher in the school with effect from July 12, 1982. The appeallant shall be entitled to his salary, including the salary for summer vacations and other breaks which must be taken as non est, from the date of his regular appointment i.e. July 12, 1982. The respondents are directed to pay the arrears of salary and other emoluments due to the appellant as a result of his regularisation within a period of 3 months from today.

The appellant was appointed as Hindi Teacher in the M.E. School for a period of 89 days from July 12,1982 by the District Inspector (Schools) on the recommendation of the Managing Committee of the School. He continued to serve the school with repeated spells of 89 day appointments and one day break in between the spells, till may 25, 1986. He was not paid the salary for the period of summer vacations during all these years. Although the appellant continues to serve the school to date under orders of the managing committee, but his appointment after 1986 was not approved by the educational authorities, in spite of the resolution of the managing committee dated July 6,1987. The appellant filed a writ petition before the High Court claiming regularisation with effect from July 12,1982, contending that he was entitled to be regularsed in terms of the provisions of Section 3 of the Orissa Aided Educational Institutions (Appointment of Teachers Validation) Act, 1989. The High Court dismissed the petition holding that the appellant was not entitled to the benefit of the Validation ACt, against which present appeal was filed by the appellant contending that his services were to be regularised with effect from July 12, 1982 under the provisions contained in Section 3 of the Validation Act. Allowing the appeal, this Court, 991 HELD:1.1. The Validation Act has been enacted by the Orissa Legislature with the obvious object of granting relief to those members of the teaching community who are being exploited for years together by keeping them in short spell appointments like 89 day appointments with one day break and in the process denying them their rightful dues and other service benefits.[994G 995A] 1.2 An appointment on 89 day basis with one day break which deprives a teacher of his salary for the period of summer vacation and other service benefits, is wholly arbitrary and suffers from the vice of discrimination. The Validation Act covers the field upto December 31, 1984. The State of Orissa will do well to consider the cases of all those who have completed one year or more as ad hoc teachers after December 31,1984 and come out with a scheme or any other appropriate measure to regularise their services.[995C D] 2. To come with in the preview of the Validation Act the following conditions are to be satisfied: 1. The appointment by the managing authority of the school on ad hoc basis must be on or after the 1st December 1976 but not later than 31st December 1984. The services as such teacher is continuous for a period of at least one year without any break or with a break or breaks in one or more aided schools; 3. Is continuing as such teacher or his services were terminated after the 31st December ,1984 save for misconduct.[995E G] 2.2. The appellant was appointed on July 12,1982 and has been working with the approval of the authorities for almost 4 years with short breaks. The managing committee is still utilising his services though there is no approval by the educational authorities for the period subsequent to 1986. The case of the appellant is, thus, fully covered by Section 3 of the Validation Act.[995G 996A] 3. The High Court erred in denying the benefit of the Validation Act to the appellant on the ground that his initial appointment for 89 days was conditioned by the stipulation that he would continue until replaced by a candidate from the select list. The High Court read into the Act what was not there,[996A B] 992 Rattan Lal vs State of Haryana, A.I.R. 1987 S.C. 478, followed.

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ivil Appeal No. 8613 of 1983. From the Judgment and Order dated 21.1.1981 of the Delhi High Court in Civil Writ No. 41 of 1981. P.K.Goswamy and Kailash Vasudev for the Appellant. V.C. Mahajan, Ashok Bhan and C.V. Subba Rao for the Respondent. This appeal was earlier heared by a Division Bench and was referred to a Constitution Bench for examining the question whether a candidate whose name appears in the merit list on the basis of a competitive examination, acquires indefeasible right of appointment as a Government servant if a vacancy exists. Reference was made to the decision in State of Haryana vs Subhash Chander Marwaha and Others, ; ; Miss Neelima Shangla, Ph.D.v. State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and Others. [1985] 1SCR 899. 570 2. The appellant was selected in the combined Civil Services Examination held by the Union Public Service Commission for appointment to several services including the Indian Police Service (in short `the IPS ') and the Police Services Group `B '. The examination had been held in October, 1977 and the result was announced in May 1978. A combined merit list for the IPS and the Police Services Group `B ' was announced which included the name of the appellant. Out of the total number of 70 vacancies in the IPS announced to be filled up, 54 were of general category and the remaining 16 reserved for Scheduled Castes/Scheduled Tribes candidates. The position of the appellant in the merit list was not high enough to be included in the IPS and he was offered appointment to the Delhi Andaman and Nicobar police Service (hereinafter referred to as the `DANIP ')in Police Service Group `B ' which he accepted. On account of several candidates, allotted to Police Services Group `B 'not Joining, the position of the appellant improved and ultimately he was on the top of the list. In June, 1979, 14 Vacancies arose in the IPS due to selected candidates not joining the service. Out of the same, 11 were in the general category and 3 in the reserved category. Three vacancies in the reserved category were filled up by the candidates who had been earlier appointed in DANIP Service, but no appointments were made to general category vacancies. The appellant, by a representation, prayed that these vacancies also should be filled up. The request was turned down, and the appellant moved the Delhi High Court by a writ application under Article 226 of the Constitution, which was dismissed in limine by the impugned order. The case of the appellant is that since ultimately several vacancies in the general category of the IPS remained unfilled, he was entitled to be appointed in one of them, and the authorities were not right in rejecting his representation. It has been contended that after calculating the number of vacancies in the IPS, it was announced that appointments would be made in 54 vacancies of general category, and steps for recruitment were accordingly taken. The appellant along with others appeared at the elaborate test held for the purpose and he was found qualified for the appointment .In that situation the respondent could not refuse to fill up the vacancies and proceed to appoint the appellant in the Police Services Group `B '. It has been argued that the correct procedure in similar situation was followed with respect to the reserved category and the three vacancies arising in identical situation were filled up from the candidates selected for DANIP Service, and 571 there was no justification to refuse similar benefit to the appellant in the general category. According to the case of the Union of India, the process for the recruitment in question started in 1977, and the tentative service allocation for IPS was completed before the commencement of the foundational course in July, 1978. All the candidates selected for IPS, excepting those who were eligible to appear at the examination for the Indian Administrative Service scheduled to be held in October November, 1978, and such other candidates who had not been finally cleared on account of pending medical examination or character verification had to attend the foundational course. Candidates allocated to Police Services Group `B ' were not required to undergo this course. By June, 1978, 7 more vacancies arose on account of candidates not joining IPS due to various reasons, and 7 persons in order of merit from the joint list of the IPS and the Police Services Group `B ' were allowed to fill up these vacancies. The last one in this list of 7 candidates was Shekhar Singh at serial No. 94. The appellant could not get a chance as his position was 100th. This process of final service allocation was closed on 24.10.1978 or at the latest by 4.11.1978, in view of the process for recruitment for the year 1978, which had already started. The additional vacancies arising later,therefore, remained unfilled. The entire procedure which is followed for recruitment to the Services has been given in several affidavits of the respondent, and detailed information in this regard was supplemented by a further affidavit during the hearing of the hearing of the appeal filed in the light of observations of the Bench. 6.Dealing with the appointments to reserved category,it has been stated in the counter affidavit that the process which was followed in connection with the general category and which was being earlier followed for the reserved category also, was relaxed in pursuance of a policy decision taken after examining all relevant circumstances and materials in regard to this category including the strength of the reserve category in the IPS, the result of the examinations for the year 1975,1976 and 1977. The procedure which was being followed in the past was not relaxed in regard to the general category on account of vital differences obtaining in the relevant conditions in the two categories and the appellant 's plea of alleged discrimination does not have any merit. Similarly the case of one Km. Vandana Srivastava cited by the appellant has also been distinguished and Mr. Goswami, therefore , did not pursue this plea any further in his final reply. 572 7. It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied. Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post. Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies. However, it does not mean that the State has the licence of acting in an arbitrary manner. The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons. And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted. This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Haryana vs Subhash Chander Marwaha and Others, ; ; Miss Neelima Shangla vs State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and Others, 8. In State of Haryana vs Subhash Chander Marwaha and Others, (supra) 15 vacancies of Subordinate Judges were advertised, and out of the selection list only 7, who had secured more than 55% marks, were appointed, although under the relevant rules the eligibility condition required only 45% marks. Since the High Court had recommended earlier, to the Punjab Government that only the candidates securing 55% marks or more should be appointed as Subordinate Judges, the other candidates included in the select list were not appointed. They filed a writ petition before the High Court claiming a right of being appointed on the ground that vacancies existed and they were qualified and were found suitable. The writ application was allowed. While reversing the decision of the High Court, it was observed by this Court that it was open to the Government to decide how MANY appointments should be made and although the High Court had appreciated the position correctly, it had ``somehow persuaded itself to spell out a right in the candidates because in fact there were 15 vacancies ' '. It was expressly ruled that the existence of vacancies does not give a legal right to a selected candidate. Similarly, the claim of some of the candidates selected for appointment, who were petitioners in Jitendra Kumar and Others vs State of Punjab and Others, was turned down holding that it was open to the Government to decide how many appointments would be made. The plea of arbitrariness was rejected in view of the facts of the case and it was had that the candi 573 dates did not acquire any right merely by applying for selection or even after selection. It is true that the claim of the petitioner in the case of Miss Neelima Shangla vs State of Haryana was allowed by this Court but, not on the ground that she had acquired any right by her selection and existence of vacancies. The fact was that the matter had been referred to the Public Service Commission which sent to the Government only the names of 17 candidates belonging to the general category on the assumption that only 17 posts were to be filled up. The Government accordingly made only 17 appointments and stated before the Court that they were unable to select and appoint more candidates as the Commission had not recommended any other candidate. In this background it was observed that it is, of course, open to the Government not to fill up all the vacancies for a valid reason, but the selection cannot be arbitrarily restricted to a few candidates notwithstanding the number of vacancies and the availability of qualified candidates; and there must be a conscious application of mind by the Government and the High Court before the number of persons selected for appointment is restricted. The fact that it was not for the Public Service Commission to take a decision in this regard was emphasised in this judgment. None of these decisions, therefore, supports the appellant. Mr. Goswami appearing in support of the appeal has contended that in view of the relevant statutory rules, the authorities were under a duty to continue with the process of filling up all the vacancies until none remained vacant. Reference was made to r. 4 of the Indian Police Service (Cadre) Rules, 1954, rr. 3,4,6 and 7 of the Indian Police Service (Recruitment) Rules, 1954 and rr., 2(1)(a), 2(1)(c), 8 and 13 of the Indian Police Service (Appointment by competitive Examination) Regulations, 1965. We do not think any of these rules comes to the aid of the appellant. Rule 3 of the Cadre Rules directs constitution of separate cadres for States or group of States, and r. 4 empowers the Central Government to determine the strength in consultation with the State Governments. The strength has to be re examined at intervals of 3 years. Rule 3 of Recruitment Rules deals with the constitution of the Service, and r. 4 the method of recruitment. Rules 6 and 7 give further details in this regard. The learned counsel could not point out any provision indicating that all the notified vacancies have to be filled up. Similar is the position with respect to the Competitive Examination Regulations. Regulation 2(1)(a) defines available vacancies as vacancies determined by the Central Government to be filled on the results of the examination, described in Regulation 2(1)(a). Regulation 8 prescribes that the candidates would be considered for appointment to the available 574 vacancies subject to provisions 9 to 12 and Regulation 13 clarifies the position that a candidate does not get any right to appointment by mere inclusion of his name in the list. The final selection is subject to satisfactory report on the character, antecedent and suitability of the candidates. We, therefore, reject that the claim that the appellant had acquired a right to be appointed against the vacancy arising later on the basis of any of the rules. The main contention on behalf of the appellant has been, however, that the authorities in keeping the vacancies arising later unfilled, acted arbitrarily. Mr. Goswami referred to several documents annexed to the special leave petition and affidavits filed on behalf of the parties and contended that although appointments of many candidates in the other services were made in the later vacancies, the vacancy in the Indian Police Service which subsequently became available to the appellant was refused without any just cause, resulting in illegal discrimination. This was emphatically denied on behalf of the respondent. Since the matter did not appear to be free from ambiguity on the basis of the affidavits before us, we decided to examine the factual aspects more thoroughly by examining the other available materials on the records of the Union of India, and accordingly the learned counsel for the respondent got the relevant departmental files called. Two further affidavits were also filed along with photostat copies of a large number of documents, which we examined at some length with the aid of the learned advocates for both sides. From the materials produced before us it is fully established that there has not been any arbitrariness whatsover on the part of the respondent in filling up the vacancies in question or the other vacancies referred to by the learned counsel for the appellant. The process of final selection had to be closed at some stage as was actually done. A decision in this regard was accordingly taken and the process for further allotment to any vacancy arising later was closed. Mr. Goswami relied upon certain appointments actually made subsequent to this stage and urged that by those dates the further vacancies in the Indian Police Service had arisen to which the appellant and the other successful candidates should have been adjusted. We do not find any merit in this contention. It is not material if in pursuance of a decision already taken before closing the process of final selection, the formal appointments were concluded later. What is relevant is to see as to when the process of final selection was closed. Mere completing the formalities cannot be of any help to the appellant. We do not consider it necessary to mention all the details in this connection available from the large number of documents which we closely examined during the hearing at considerable length and do not 575 have any hesitation in rejecting the argument of the learned counsel in this regard based on the factual aspect. So far the decision to adopt a different policy with respect to filling up of the reserved vacancies is concerned the same is justified on account of the special circumstances mentioned in the respondent 's affidavits. The decision to depart from the confirmed policy was taken after a consideration by the authorities of the position in regard to unavailability of qualified candidates from year to year adversely affecting the desired strength of the reserved candidates in the services and cannot be condemned on the grounds of arbitrariness and illegal discrimination. In the result, we do not find any merit in the appeal which is accordingly dismissed, but, in the circumstances, without costs. N.P.V. Appeal dismissed.

On the basis of the results of the combined Civil Services Examination held by the Union Public Service Commission for appointment to several Services and the position in the combined merit list for the Indian Police Service and Police Services, Group `B ' the appellant was appointed to the Delhi Andaman and Nicobar Police Service,also Known as DANIP. Subsequently when certain vacancies arose in the Indian Police Service, due to selected candidates not joining the Service, and only the reserved category vacancies were filled up by the candidates, who had been earlier appointed in DANIP Service, the appellant who came to occupy top position, represented to the authorities for filling the general vacancies also, but his request was turned down .Hence the appellant filed writ application before the High Court, which was dismissed in limine . In the appeal before this Court, on behalf of the appellant it was contended that since ultimately several vacancies in the general category of the IPS remained unfilled, he was entitled to be appointed in one of them, that since 54 vacancies were notified for general category and he was found qualified for the appointment, the respondent could not refuse to fill up the vacancies, and there was no justification to refuse to follow the procedure adopted in similar situation with respect to the reserved category, in regard to the general category vacancies also and that in view of the relevant statutory rules, the authorities were under a duty to continue with the process of filling up the vacancies until nonremained vacant, and by keeping the posts unfilled, they had acted arbitrarily. 568 On behalf of the respondent Union of India it was contended that the tentative service allocation for IPS was completed before the commencement of the foundational course for the IPS, and the process of final service allocation was closed after filling up certain vacancies, which had arisen, since the process for recruitment for the next year had already started, and hence the additional vacancies arising later remained unfilled, that the process followed in connection with the reserved category, was not followed in regard to the general category vacancies on account of vital differences obtaining in the relevant conditions in the two categories, and hence there was no discrimination or arbitrariness, in keeping the general category vacancies unfilled. Dismissing the appeal, this Court HELD: 1.1 Even if vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates do not acquire an indefeasible right to be appointed. Ordinarily, the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post. Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies. However, it does not mean that the State has the licence of acting in an arbitrary manner. The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons. And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted. [572A C] State of Haryana vs Subhash Chander Marwaha and Others,[1974] 1 SCR 165; Miss Neelima Shangla vs State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and others, , referred to. 1.2 The appellant had not acquired a right to be appointed against the vacancy arising later on the basis of any of the rules, namely, Rule 4 of the Indian Police Service (Cadre) Rules, 1954, Rules 3,4,6 and 7 of the Indian Police Service (Recruitment) Rules, 1954 and Regulations 2(1)(a) and (c), 8 and 13 of the Indian Police Service (Appointment by Competitive Examination) Regulations, 1955.These Provisions do not indicate that all the notified vacancies are to be filled up.[573G,574B] 1.3 From the materials placed before the Court it is fully estab 569 lished that there has not been any arbitrariness whatsoever on the part of the respondent in filling up the vacancies in question or other vacancies. The process of final selection had to be closed at some stage as was actually done. A decision in this regard was accordingly taken and the process for further allotment to any vacancy arising later was closed. It is not material if in pursuance of a decision already taken before closing the process of final selection, the formal appointments were concluded later. What is relevant is to see as to when the process of final selection was closed. Mere completing the formalities dose not give any right to appointment. [574E G] 1.4 The decision to adopt a different policy with respect to filling up of the reserved vacancies is justified on account of the special circumstances. The decision to depart from the confirmed policy was taken after consideration by the authorities of the position in regard to unavailability of qualified candidates from year to year adversely affecting the desired strength of the reserved candidates in the services and cannot be condemned on the grounds of arbitrariness and illegal discrimination. [575B]

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ition No. 13029 of 1985. (Under Articles 32 of the Constitution of India). Petitioner in person. Altaf Ahmed, Additional Solicitor General , Sri Narain Mathur, R. Mohan, Ms. Anil Katiyar, Ms. Sushma Suri, K. Swamy, R.K. Maheshwari and S.M. Ashri for the Respondents. The Judgement of the Court was delivered by. RANGANATH MISRA, CJ. This is an application under Article 32 of the Constitution in the public interest litigation sector. A practising advocate who is the Chairman of the Environment Protection Cell operating at Delhi is the petioner. This Court has been asked to issue directions for closing down of hazardous industries located in the densely populated areas of Delhi and for regulation of air pollution caused by automobiles operating in the area as also the thermal units generating power for the Delhi Electric Supply Undertaking, (here after referred to as `DESU '). The Union Territory of Delhi has a total population of about 96 868 lakhs, out of which the urban area consisting of old Delhi, New Delhi and the Cantonment has a population of around 90 lakhs. By 1947 when the country became independent, Delhi had a population of a little over 5 lakhs. In these little more than two scores of years the population has, thus, multiplied by 18 times. Though it is a spread out city, in some pockets, the density of population is very high and these have become congested. The problem of environmental pollution is global in a increasingly small world and concerns all countries irrespective of their size, level of development or ideology. Notwithstanding political division of the world into national units, the oceanic world in an inter connected whole; the winds that blow over the countries are also one. Pollution is capable of moving from continent to continent. If USSR carries out a nuclear test, the fall out may be carried by the winds to any part of the world and such fall out or irresponsible disposal of radio active waste from a remote energy plant in one country may turn out to have greater adverse effect on the neighbouring countries that the danger of full fledged war. Informed public mind is already agitated over the polluting effect of the Gulf War and the common concern of the entire homosapien race is obsessed by the apprehension of acid rain, toxic effect on the seas and even on the atmosphere. The awareness of interaction of man with his environment is of recent origin. The Declaration of the United Nations Conference on the Human Environment held in Stockholm in June, 1972 stated: "Man is both creature and moulder of his environment which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth. In the long and tortuous evolution of the human race on this planet a stage has been reached when, through rapid acceleration of science and technology, man has acquired the power to transform his environment in countless ways and on an unprecedented scale. Both aspects of man 's environment, the natural and the man made, are essential to his well being and to the enjoyment of basic human rights even of life itself." Principle No. 1 of the same Declaration went on to say: "Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality 869 that permits a life of dignity and well being, and he bears solemn responsibility to protect and improve the environment for present and future generations. ". The closeness of the undeveloped and under developed communities to nature is not found in the developed ones. Our ancestors had realised the importance of the tie between man and his environment. The Samaveda note that Flute of Divine love by saying: "Listen to the melodious music of the divine poet. He plays upon the flute of love, the notes soar to high heaven and reach the distant stars and dance on the raging waves of the sea." The earth, the seas, the sky, the stars are all woven together by the soft strains of the divine music. Its vibrants echo through the corridors of time in the endless canopy of the sky." Norman Myers quoted in Sir Edmond Hillary 's Ecology 2,000 ' has rightly observed: " The fate of African environments is thus determined not only by local circumstances. It is influenced, in part at least, by the lifestyles of the developed world. These economic ecological linkages between different members of the international community are little recognized to date, but they represent a significant factor for land use patterns in Africa 's Savannahs". Our Constitution by the Forty Second Amendment introduced Article 48A as also Article 51A into the Constitution. these Articles provide: "48A. The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country."" 51A. It shall be the duty of every citizen of India: (g) to protect and improve the natural environment including forests, rivers and wild life, and to have compassion for living creatures. " 870 The incorporation of protection of environment as an obligation of the State in the Directive Principles and the mandate in Article 51 A to the citizens of India as part of fundamental duty are indications of the Constitutional recognition of importance of environment on life both the flora and the fauna. Ours is a great country territorywise, from the stand point of population as also legacy wise. Though politically divided into many States throughout the ages it has been bound by a common culture short lived empires have grown up and Delhi became the capital of such empires of the north. Delhi was the capital of the Mughals too but the Britishers had in the initial period Calcutta as their capital and it was only 1911 that the Indian capital of the British empire was shifted from Calcutta to Delhi. With the growth of importance of Delhi, on the outskirts of the then city gradually industries developed. Lack of vision and inadequate statesmanship allowed many of these industries to grow perilously close to human habitation and in the process of expansion of the city with the growth of population and activity, the industrial belt became a part of the city. Hindustan Insecticides Limited, which is respondent No. 6 before us, is one of such industries, DESU has three generating units One known as the indraprastha Power Station, the other as the GT Power Stations and the third as the RPR Power Station. These too are located within the densely populated area. The Delhi Transport Corporation (hereafter DTC) which provides the public transport facility to the residents of Delhi operates thousands of buses has been impleaded as respondent No. 5 on the allegation that it is one of the notorious polluting agencies. A monitoring Committee on ambient and automotive emission levels was set up for examining the impact of surface transport on air environment of Delhi at the instance of the Director of Transport, Delhi Administration. The facts and figures available from the report may briefly be indicated. As on March 31, 1982. Delhi had a total number of 5,92,584 vehicles of which 65% were two wheelers, 3.5% were three wheelers, 25% cars, jeeps and other medium size vehicles and 1.5% were buses and the remaining 7% were goods carriers. The affidavit of the Deputy Director of Transport of the Delhi Administration indicates that the vehicular population of 1990 is 13.5 lakhs. This means that within about 8 years there has been an increase of about 8 lakhs of vehicles in Delhi which would work out to an addition of 871 about 1 lakh every year. The proportion of the two wheelers has perhaps not been seriously disturbed. Though the Deputy director of Transport has indicated that the automobiles contribute about 50% of the polluting factor there is material to suggest that the proportion is still higher. Two wheelers and three wheelers contribute over sixty percent of the total emission of carbon monoxide and about eighty percent of the total hydrocarbons. To meet the challenging task of controlling pollution, Air (Prevention and Control of Pollution) Act, 1981 has been enacted. Respondent 3 is the Central Board set up under the Act. The statute authorise Government in consultation with the Board to instruct the Transport Authorities for developing expertise by taking vehicular pollution survey covering all ramifications. The Union Territory of Delhi was chosen on selective basis because it maintains the highest traffic volume. Under the Motor Vehicles Act of 1989 certain provision have been made for regulating emission resulting in pollution. Transport Authorities of the Delhi Administration had placed facts and figures relating to steps taken under the Act for regulating pollution. Emission checking. prosecution as also steps for canceling of registration are said to be the normal steps taken by the Administration in this behalf. We were , however, not satisfied that the action taken in this behalf was adequate and the challenging task of pollution control could not be successfully dealt with that way. Law alone also cannot help in restoring a balance in the biospheric disturbance. Nor can funds help effectively. The situation requires a clear perception and imaginative planning. It also requires sustained effort and result oriented strategic action. Campaign for general awakening of the people using automobiles of different classifications and among the people inhabiting the capital is indispensable preliminary. All persons using automobiles should have a fair knowledge of the baneful effect on the community including those who use such vehicles on account of the emission from such vehicles. Until that is done in an effective way the appropriate attitude would not develop and cooperation for reducing pollution would not emerge. A brief extract from the journal entitled `Environmetal Policy & law ' vol. 13 nos. 1 2 Spring 1983) published from North Holland describes the problem thus: 872 "It became clear that all these measures are not themselves sufficient to come to grips with the problem of air pollution caused by road traffic. In every one of the towns and cities, the problem of air pollution from motor vehicle traffic is a considerable one, and it was more or less generally apparent that present norms for motor vehicle exhausts are not adequate so as to achieve the necessary reductions in a rapid space of time. In fact, the problem is, in part, on the increase. This is not only true of private cars, especially diesel powered vehicles, but also of commercial vehicles . " "Despite the legal and other restrictions mentioned above, which hamper the towns and cities involved in pursuing effective policies aimed at limiting motor vehicle exhausts, some interesting strategies have been thought up which have either led to improvements in themselves or at least stimulated attitudes towards environmental policies. For example, in formulating their regulations in the event of smog, both Munich and Berlin offered positive stimulus for the purchase of vehicles fitted with catalytic converters. As far as city owned motor vehicles are concerned, some authorities have pursued a deliberate policy of purchasing those automobiles with improved exhaust systems. " In course of the hearing of this matter we had called upon counsel to look at the problem not as an adversial litigation but to come forward with useful deliberations so that something concreate could finally emerge for easing the situation. We were shown some literature and even gadgets which might help reduction of pollution. The question of eliminating use of motor spirit and replacement of battery operated two wheelers was also mooted. The Association of Indian Automobile Manufacturers had made an application for intervention and was present in Court. Some of the aspects which came up for discussion were indeed sufficiently technical. Some other aspects require laboratory testing and probe into efficacy. Therefore, the question of setting up of a high powered committee was also mooted. We are happy to find that the deliberations in course of the hearing have taken a concreate shape and the Ministry of Environment & Forests has ultimately instructed the learned Attorney General in writing (copy placed on the record) that a Committee could be set up by the Court to look into the problem of vehicular pollution in Delhi 873 and for devising methods of solution of the problem. The Ministry has agreed that a retired Judge of this Court could act as Chairman and has suggested that Shri M.C. Mehta, the petitioner herein and Shri. N.S. Tiwana, Chairman of he Central Pollution Control Board may be made the Members of the Committee. We find this suggestion of the Ministry acceptable subject to certain modification. We are inclined to take the view that Shri Sudhakar Girdharlal Shah representing the Association of Indian Automobile Manufacturers could be taken as a member of the Committee and the Committee would also have the power to co opt experts not exceeding three for its efficient working from time to time. Shri Justice K.N. Saikia who has recently retired as a Judge of this Court is appointed as the Chairman of the Committee with Shri N.S. Tiwana, Shri M.C. Mehta and Shri. S.G. Shah as Members. The Joint Secretary in the Ministry of Environment and Forests shall be the convenor Secretary of the Committee. Shri Justice Saikia shall be entitled to all the benefits to which a retired Judge of this Court while called back to duty is entitled. The Committee may be constituted with effect from 18th March, 1991, under an appropriate Notification of the Union Government in the relevant Ministry. The terms of reference for the time being as recommended by the Ministry are the following: "(i) To make an assessment of the technologies available for vehicular pollution control in the world; (ii) To make an assessment of the current status of technology available in India for controlling vehicular pollution; (iii) To look at the low cost alternatives for operating vehicles at reduced pollution levels in the metropolitan cities of India. (iv) To examine the feasibility of measures to reduce/eliminate pollution from motor vehicles both on short term and long term basis and make appropriate recommendations in this regard; (v) To make specific recommendations on the administrative/legal regulations required for implementing the recommendations in (iii) above. " For the time being the Committee may proceed to consider these. 874 other relevant aspects may be taken into consideration by the Committee. This writ petition shall be deemed to be pending for the purpose of monitoring. The Committee shall furnish a report to this Court once in two months as to the steps taken in the matter. The Union Government and the Delhi Administration are directed to effectively cooperate with the Committee for its successful operation. V.P.R. Petition pending for monitoring.

The petitioner, an Advocate and Chairman of the Environmental Protection Cell filed the petition under Article 32 asking the Court to issue directions for closing down of hazardous industries located in the densely populated areas of Delhi, and for regulation of air pollution caused by automobiles operating in the area as also the thermal units generating power for the Delhi Electric Supply Undertaking. Making an interim order, and keeping the writ petition pending for the purpose of monitoring, the Court. HELD: 1. The incorporation of protection of environment as an obligation of the State in the Directive Principles and the mandate in Article 51 A to the citizens of India as part of fundamental duty are indications of the Constitutional recognition of importance of environment of life both the flora and the fauna. [870 A B] 2. Law alone also cannot help in restoring a balance in the biospheric disturbance. Nor can funds help effectively. The situation requires a perception and imaginative planning. It also requires sustained effort and result oriented strategic action. Campaign for general awakening of the people using automobiles of different classification and among the people inhabiting the Capital is an indispensable preliminary. [871E G] 3. All persons using automobiles should have a fair knowledge of the baneful effect on the community including those who use such vehicles on account of the emission from such vehicles. Until that is done in an effective way the appropriate attitude would not develop and cooperation for reducing pollution would not emerge. [871 F H] 867 4. A Committee is set up by this court to look into the problem of vehicular pollution in Delhi and for devising methods of solution of the problem. [ 872 H 873 A]. A retired Judge of this court to act as Chairman, the petitioner and the Chairman of the Central Pollution Control Board and the person representing the Association of Indian Automobiles Manufacturers could be the members of the Committee. The Committee would also have the power to co opt experts not exceeding three for its efficient working from time to time. The Joint Secretary in the Ministry of Environment and Forests shall be the Convenor Secretary of the Committee. [873A D] 6. The Committee may be constituted with effect from 18th March, 1991, under an appropriate Notification of the Union Government. [873D] 7. The Committee shall furnish a report to this Court once in two months as to the steps taken in the matter. The Union Government and the Delhi Administration are directed to effectively cooperate with the Committee for its successful operation. [874B]

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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.

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.

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103 of 1958. Petition under article 32 of the Constitution for enforcement of fundamental rights. M. T. Paikeday and Ganpat Rai, for the petitioner. Sardar Bahadur, for respondent No. 1. M. R. Krishna Pillai, for respondent No. 3. 788 1958. December 11. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is a petition under article 32 of the Constitution by one C. K. Achuthan, who claims to have held a contract for the supply of milk and other articles of diet for the year 1958 1959 but whose contract for supply of milk is said to have been cancelled by the District Medical Officer (second respondent herein). The contract for the. supply of milk has now been given to the third respondent, the Co operative Milk Supplies Society, Cannanore. From the petition, it appears that the petitioner held contracts for the supply of milk to the Government Hospital at Cannanore (Kerala State) ever since 1946, and that previous to this, his brother in the same business held similar contracts from 1936. In 1957, a " uniform procedure for fixing up contracts " was adopted, and by a notification, conditions for acceptance of tender were laid down. The petitioner as well as the third respondent submitted their respective tenders, which were to be opened by the Superintendent of the Hospital in the presence of interested parties. We need not refer to all the conditions under which tenders were to be accepted, except those which have a bearing upon this matter. It was stated in the conditions that no tender marked at " current market rates " would be accepted, and further that in the supply of milk, preference would be given to approved Co operative Milk Supply Unions and Societies, if their tender was within a margin of 5 per cent. over the market rate or the lowest tendered rate, whichever was less. All persons making tender for the contract had to produce a certificate of solvency and tax clearance certificates, and to make a deposit with the tender. On January 20, 1958, the tenders which were submitted were scrutinised and the tender of the petitioner for the supply of milk was accepted and that of the third respondent rejected. It appears that the Superintendent (respondent No. 2) communicated to the Director of Public Health, her reasons for accepting the tender of the petitioner and not accepting that 789 of the third respondent. Certain correspondence then ensued between the Director of Health Services and the second respondent, as a result of which the petitioner was informed that the contract for the supply of milk given to him was cancelled. He was informed that it was the policy of Government that in the matter of supply to Government medical institutions in Cannanore District the Co operative Milk Supplies Union was to be given contracts on the basis of prices fixed by the Revenue Department. It appears that some more correspondence between the Director of Health Services and the second respondent ensued, and it was pointed out to the second respondent that action should have been taken under Cl. 20 of the conditions of the tender and the contract only cancelled after giving a month 's notice to the petitioner. In furtherance of these instructions, the second respondent issued a notice in terms of Cl. 20 of the tender, and cancelled the contract after the notice period. The present petition has been filed to question the several orders referred to above. It may be pointed out that previous to this, the petitioner had applied under article 226 of the Constitution to the High Court of Kerala, but his petition (O. P. No. 201 of 1958) was rejected by Raman Nayar, J., on June 6, 1958. A Letters Patent Appeal was also dismissed by Koshi, C. J., and Vaidialingam, J. (A. section No. 354 of 1958 decided on July 7, 1958). The High Court held that the present matter was no more than a breach, if any, of the contract by the State Government, and that the appropriate remedy was to file a civil suit and not to proceed under article 226. It appears that no special leave to appeal was sought from this Court against the above orders, and the matter has been brought for adjudication, not by way of appeal but directly under article 32 of the Constitution as an infringement of the fundamental right of the petitioner. The contention of the petitioner in this behalf is that he is entitled to an equal treatment in the eye of law, and that there has been discrimination against him vis a vis, the third respondent. He claims protection under articles 14, 16(1), 19(1)(g) and 790 31 of the Constitution. In our opinion, none of these Articles can be made applicable to the facts of the present case. No doubt, the petitioner claims to have succeeded in obtaining the contract from the Government, and the third respondent failed to do so. But even if he held the contract, the petitioner did not acquire an absolute right to be continued in that contract, because power was reserved by the Government under Cl. 20 to terminate the contract after giving a month 's notice. Whether the exercise of that power in the present case was regular or legal, is not a matter on which we are called upon to pronounce, because adjudication of such dispute can appropriately take place only before the ordinary Civil Courts, where evidence can be gone into and examined at length. The gist of the present matter is the breach, if any, of the contract said to have been given to the petitioner which has been cancelled either for good or for bad reasons. There is no discrimination, because it is perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfill contracts which they wish to be performed. When one person is chosen rather than another, the aggrieved party cannot claim the protection of article 14, because the choice of the person to fulfill a particular contract must be left to the Government. Similarly, a contract which is held from Government stands on no different footing from a contract held from a private party. The breach of the contract, if any, may entitle the person aggrieved to sue for damages or in appropriate cases, even specific performance, but he cannot complain that there has been a deprivation of the right to practise any profession or to carry on any occupation, trade or business, such as is contemplated by article 19(1)(g). Nor has it been shown how article 31 of the Constitution may be invoked to prevent cancellation of a contract in exercise of powers conferred by one of the terms of the contract itself. The main contention of the petitioner before us was thus under article 16(1) of the Constitution, and he claimed equal opportunity of employment under the 791 State. To begin with, a contract for the supply of goods is not a contract of employment in the sense in which that word has been used in the Article. The petitioner wag not to be employed as a servant to fetch milk on behalf of the institution, but was a contractor for supplying the articles on payment of price. He claimed to have been given a contract for supply of milk, and did not claim to be an employee of the State. Article 16(1) of the Constitution , both in its terms and in the collocation of the words, indicates that it is confined to " employment " by the State, and has reference to employment in service rather than as contractors. Of course, there may be cases in which the contract may include within itself an element of service. In the present case, however, such a consideration does not arise, and it is therefore not necessary for us to examine whether those cases are covered by the said Article. But it is clear that every person whose offer to perform a contract of supply is refused or whose contract for such supply is breached cannot be said to have been denied equal opportunity of employment, and it is to this matter that this case is confined. Looking to the facts of the case, it is manifest that the petitioner was supplying, or in other words, selling milk and other articles of diet to the State for the use of hospitals and similar institutions. He was in no sense a servant, and no question of employment qua servant arose. In these circumstances, it is plain that article 16(1) of the Constitution is not attracted to the facts. In our opinion, the petition under article 32 of the Constitution is wholly misconceived. No fundamental right is involved. At best, it is a right to take the matter to the Civil Court, if so advised, and to claim damages for breach of contract, if any. The petition accordingly fails, and is dismissed with costs. Petition dismissed.

For the supply of milk to the Government Hospital at Cannanore for the year 1948 49, the petitioner and the third respondent, the Co operative Milk Supplies Society, Cannanore, had submitted tenders, and the Superintendent who scrutinised them accepted that of the petitioner and communicated to the Director of Public Health the reasons for the decision. Subsequently, the contract to the petitioner was cancelled after giving the requisite notice in terms of Cl. 20 Of the tender, and he was informed that it was the policy of the Government that in the matter of supply to Government medical institutions in Cannanore District, the Co operative Milk Supplies Union was to be given contracts on the basis of prices fixed by the Revenue Department. The petitioner contended, in a petition filed under article 32 Of the Constitution, that there had been discrimination against him vis a vis the third respondent, that he was denied equal opportunity of employment under the State, and that the fundamental rights under articles 14, 16(1), 19(1) (g) and 31 had been infringed. Held, that none of the fundamental rights were involved in the present case. A contract which is held from Government stands on no different footing from a contract held from a private party and when one person is chosen rather than another the aggrieved party cannot claim the protection of article 14. A contract for the supply of goods is not a contract of employment and the petitioner who was supplying milk to the State hospital was in no sense a servant and no question of employment qua servant arose. Article 16 (1) was therefore not attracted to the case.

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Appeal No.3985 of 1988. From the Judgment and Order dated 31.12.1987 of the Andhra Pradesh Administrative Tribunal, Hyderabad in R.P.No. 967 of 1987. WITH S.L.P. (C) No. 9290 of 1988 with S.L.P (C) No. 2150/87 CMP No. 25521/88 and C.A.1342/86 K.Madhava Reddy, C. Sitaramiah, P.P.Rao, G. Prabhakar, K.R. 31 Nagaraja, P.K. Rao, Ms. C.K. Sucharita, B. Kanta Rao, K. Ram Kumar, B. Krishna Prasad and T.V.S.N. chari (N.P.) for the appearing parties. The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. The questions that arise for consideration in all these connected cases are confined only to some of the posts of civil services of Andhra Pradesh in view of certain special provisions applicable to these services. Article 371D of the Constitution of India is peculiar to the State of Andhra Pradesh due to historical background. It was enacted by the Constitution (Thirty Second) Amendment Act which applied only to the State of Andhra Pradesh, with a view to give effect to certain safe guards in the matter of employment opportunities for resi dents of Telangana region. This Article empowers President to provide by order for equitable opportunities and facili ties for the people belonging to different parts of the State of Andhra Pradesh in the matter of public employment and in the matter of education. This Article also provides for constitution of an Administrative Tribunal to receive representations for the redressal of the grievances and for passing necessary orders. Accordingly the President of India made Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975 ( 'Presidential Order ' for short) by virtue of which the State of Andhra Pradesh has been divided into six zones and local cadres of posts in respect of the local areas were created. In respect of Andhra Pradesh Panchayati Raj Engi neering Service the two such zonal posts are junior Engineer and Assistant Engineer. The main question that arises for consideration in these cases is whether the promotion from Junior Engineer to Assistant Engineer should be on the basis of Statewide list or the zonal list. Some of the promotions made were questioned by the affected persons before the Administrative Tribunal which disposed them of indicating that such promotions should be made on the basis of the Statewide list. The State of Andhra Pradesh has questioned the same in C.A.No. 1342/86, C.A.No. 3985/88 and S.L.P. (Civil) No. 9290/88 mainly on the ground that promotions should be confined to only within local cadres and zonal posts. S.L.P. (Civil) No. 2150/87 is filed by two such Engineers whose representation was disposed of by the Tribu nal directing the Government to redetermine their positions in the Seniority list instead of giving a definite declara tion as prayed for by them. Shri K.Madhava Reddy, learned counsel appearing for the State of Andhra Pradesh, submitted that both the posts of Junior Engineer and Assistant Engineer are zonal posts under the Presidential Order and the zonal seniority list has to be followed in the matter of promotions from 32 Junior Engineer to Assistant Engineer and not the Statewide seniority list of Junior Engineers. He also submitted that all promotions made so far pursuant to certain orders should be treated as provisional and that the State Government should be permitted to review these promotions on the basis of the zonal seniority list and that all further promotions shall be made on the basis of the zonal seniority list. According to the learned counsel, for the purpose of promo tion to the higher post of Executive Engineer which is not a zonal post, a Statewide seniority list of Assistant Engi neers of all zones should be prepared on the basis of which promotion to the post of Executive Engineer will be made. Shri Sitaramiah, learned counsel appearing for respondents, submitted that Article 371D(2) refers only to direct re cruitment and the Presidential Order made under the said Article cannot make a departure and cannot be made applica ble for promotions also. On the other hand, it is the State wide list that should be the basis for promotions. In sup port of his submissions he invited our attention to the provisions of Article 371D and the Presidential Order and emphasised the word 'employment ' as occurring in the Article should be confined only to direct recruitment. Shri P.P. Rao, learned counsel appearing for other set of respondents in the appeals filed by the State of Andhra Pradesh, submit ted that even if either of the lists is to form the basis for promotions his clients are not affected and their promo tions are being unnecessarily delayed. Some of the Engineers of the Andhra Pradesh Panchayati Raj Engineering Service got themselves impleaded in the appeal filed by the State of Andhra Pradesh and Shri B. Kanta Rao appearing on their behalf supported the stand taken by the Government of Andhra Pradesh. To appreciate these rival contentions it becomes neces sary to refer to some of the relevant provisions of Article 371D as well as the Presidential Order and some of the notifications made thereunder and the relevant provisions of the A.P. Panchayati Raj Engineering Service Rules. On Novem ber 1, 1956 as a result of reorganisation of the States the erstwhile State of Hyderabad was trifurcated and Telangana region became a part of the newly formed State of Andhra Pradesh. Certain safeguards were envisaged for the Telangana area in the matter of development and also in the matter of employment opportunities and education facilities for the residents of that area. In the year 1957 the Public Employ ment (Requirement as to Residence) Act was enacted inter alia to provide for employment opportunities for residents of Telangana area. Some of the relevant provisions were held to be unconstitutional by the Supreme Court due to a variety of causes. The working of the safeguards gave rise to dis satisfaction sometimes in the Telangana area and sometimes in the other areas of the State and even led to violent agitations. A consensus was arrived 33 among several leaders of Andhra Pradesh to make a concerted effort to analyse the factors which have been giving rise to the dissatisfaction and they suggested certain measures known as "Six Point Formula" and the same has been endorsed by the State Government. A bill was brought forward to provide for necessary constitutional authority for giving effect to this formula and the same became the Constitution (Thirty Second) amendment Act under which Article 371D was introduced. The relevant provisions of this Article for our purpose are as under: "371 D. Special provisions with respect to the State of Andhra Pradesh (1) The President may by order made with respect to the State of Andhra Pradesh provide, having regard to the requirements of the State as a whole, for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of education and different provisions may be made for various parts of the State. (2) An order made under clause (1) may, in particular: (a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised; (b) specify any part or parts of the State which shall be regarded as the local area (i) for direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government; (ii) for direct recruitment to posts in any cadre under any local authority within the State; and (iii) for the purpose of admission to any University within the State or to any other educational institution which is subject to the control of the State Government; XX XX XX (10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force. " 34 It may be noted that clause (3) provides for constitu tion of an Administrative Tribunal. Now we may note some of the relevant provision in the Presidential Order. In para 2 definitions of the various expression used in the Order are given. They read thus: "Para 2. Interpretations: (1) In this Order, unless the co text otherwise requires: (a) xx xx xx (b) 'direct recruitment ' includes recruitment made on a temporary basis but does not include recruitment made in pursuance of any scheme approved by the State Government providing for the regularisation of the services of persons holding posts on a temporary basis before the commencement this order; (c) 'local area ' in relation to any local cadre, means the local area specified in paragraph 6 for direct recruitment to posts such local cadre, and includes, in respect of posts belonging the category of Civil Assist ant Surgeons, the local area specified in sub paragraph (5) of paragraph 8 of this Order; (d) 'local authority ' does not include any local authority which is not subject to the control of the State Government; (e) 'local cadre ' means any local cadre of post under the State Government organised in pursuance of paragraph 3, or constituted otherwise for any part of the State; (f) 'local candidate ' in relation to any local area, means a candidate who qualifies under paragraph 7 as a local candidate relation to such local area; (g) xx xx xx (h) 'Schedule ' means a Schedule appended to this Order; (i) xx xx xx (j) 'specified gazetted category ' means any gazetted category specified in the Third Schedule and includes any other gazetted category notifies as such by the Central Government; (k) xx xx xx (l) xx xx xx 35 (m) 'Zone ' means a zone specified in the Second Schedule comprising the territories mentioned therein. xx xx xx Para 3. Organisations of Local Cadres: (1) The State Government shall, within a period of eighteen months from the commencement of this order, organise classes of posts in the civil services of, and classes of civil posts under the state into different local cadres for different parts of the State to the extent, and in the manner, hereinafter provided. (G.O. Ms. No. 794, G.A.(A) dated 12.11.1976) "Provided that, notwithstanding the expira tions of the said period, the president may by order, require the State Government, whenever he considers it expedient so to do, to orga nise any classes of posts in the civil serv ices of, and classes of civil posts, under the State into different local cadres for differ ent parts of the State." (Proviso is added as per G.O. Ms. No. 34, G.A.D. (SPFA), dated 24th January, 1981). (2) The posts belonging to the category of Junior Assistant, and to each of the other categories equivalent to, or lower than that of a Junior Assistant in each department in each district shall be organised into a sepa rate cadre. Explanation: For the purposes of this sub paragraph, subparagraph (1) of paragraph 6, and sub paragraph (1) of paragraph 8, a cate gory shall be deemed to be equivalent to or lower than that of a Junior Assistant if the minimum of the scale of pay, of a post belong ing to a category or where the post carries a fixed pay, such fixed pay equal to or lower than the minimum of the scale of pay of a Junior Assistant. (3) The posts belonging to each non gazetted category, other than those referred to in sub paragraph (2), in each department in each zone shall be organised into a separate cadre. (4) The posts belonging to each specified gazetted category in each department in each zone shall be organised into a separate cadre. (5) Notwithstanding anything contained in sub paragraphs (3) and (4), the State Govern ment may, where it considers it expedient to do so and with the approval of the Central Government, organise the posts belonging to any of the categories 36 referred to therein, in any department, or any establishment thereof, in two or more continu ous zones into a single cadre. xx xx xx Para 4. Allotment of persons: (1) Persons holding posts required to be organised into local cadres shall be allotted to such cadres by the State Government or any officer or authority authorised by it in this behalf in accordance with the principles and procedure hereinafter specified. (2) In allotting persons to local cadres due regards shall be had to all or any of the following, namely: (a) the administrative needs of the posts in the local cadres; (b) the need for the composition of balanced local cadres with reference to age and senior ity, groups; (c) the length of service of the persons concerned in the part of the State for which the local cadre is organised; (d) knowledge of the persons concerned of the languages spoken and the law in force in the part of the State lot which the local cadre is organised; (e) preference of the persons concerned for allotment to any local cadre, where feasible. xx xx xx Para 5. Local cadres and transfer of persons: (1) Each part of the State for which a local cadre has been organised in respect of any category of posts, shall be a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer, and such other matters, as may be specified by the State Government, in respect of that category of posts. xx xx xx Para 13. Certain appointments and promotions to be provisional: Any certain appointments and promotions made after the commencement of this order or any order made in pursuance of the proviso to paragraph 3, as the case may be, and before any local cadre has been orga nised under the provisions of this Order made in pursuance of the Proviso to 37 paragraph 3, to any post which is required to be included in such cadre shall be provisional and shall, within a period of twelve months after such organisation, be reviewed and readjusted in accordance with the provisions of this order. Explanation: For the purposes of this para graph, any local cadre shall be deemed to be organised, with the allotment of persons to it under paragraph 4. (Substituted as per G.O. Ms. No. 234, GAD (SPF A) Dept., dated 24th Jan., 1981). xx xx xx THE SECOND SCHEDULE (See paragraphs 2 (1) (m) and 8 (4) Zones Zone I Shrikakulam and Visakhapatnam districts. Zone II East Godavari, West Godavari and Krishna districts. Zone III Gunrur, Prakasam and Nellore districts. Zone VI Chittoor, Cuddapah, Anantapur and Kurnool districts. Zone V Adilabad, Karimnagar, Warangal and Khammam districts. Zone VI Hyderabad, Nizamabad, Mahabubnagar, Medak and Nalgonda districts. THE THIRD SCHEDULE [See paragraphs 2(1) (j) and (4) Specified Gazetted Categories Sr. No. Category Name of the Department (1) (2) (3) xx xx xx 30. Assistant Engineers Panchyati Raj Enginee ring Department 30 A. Junior Engineers do xx xx xx 40. Junior Engineers Public Works Department (Irrigation) 41. Assistant Engineers Public Works Department (Irrigation) 42. Junior Engineers Public Works Department (R&B) 43. Assistant Engineers do " (emphasis supplied ) 38 It is clear from these provisos that the primary purpose of Article 371D was to promote speedy development of the backward areas of the State of Andhra Pradesh with a view to secure balance in the development of the State as a whole and to provide equitable opportunities to different areas of the State in the matter of education, employment and career prospects in public service. Accordingly the Presidential Order was made. From the above extracted provisions of the Order it can be seen that State of Andhra Pradesh was divided into six zones and the 4th zone, with which we are concerned, com prises of Chittoor, Cuddapah, Anantpur and Kurnool Dis tricts. As noted above Schedule III enumerates various specified gazetted categories and Junior Engineers and Assistant Engineers in the Panchayati Raj Engineering De partment as well as in the Public Works Department (Irriga tion) and (Roads and Buildings) are among those various categories mentioned therein. Paragraph 3 provided for organisation of local cadres in respect of classes of posts in the civil services in the State of Andhra Pradesh. Under para 3(4) the posts belonging to each specified category in each department in each zone shall be organised into a separate cadre. Para 4 provides for the allotment of persons holding posts into such local cadres to be organised. Para 5 which is important, lays down that each part of the State for which a local cadre has been organised in respect of any category of posts, shall be a separate unit for purposes of not only recruitment etc. but also in respect of promotion. Para 13 lays down that in certain appointments or promotions after the commencement of the Presidential Order or any order made in pursuance of the proviso to paragraph 3 and before any local cadre has been organised, shall be provi sional and shall within a period of twelve months after such organisation of local cadre, be reviewed and readjusted in accordance with the provisions of the Presidential Order. A.P. Panchayati Raj Engineering Service Rules were framed in the year 1963. These Rules provide for the ap pointments of different categories of engineers. After the Presidential Order was issued a new Rule 2 A was introduced on 26.11.79 to bring the State Rules in conformity with the provisions of the Presidential Order. Rule 2 A reads thus: "Rule 2 A Unit of Appointment: For purposes of recruitment,appointment, discharge for want of vacancy, re appointment, seniori ty, transfer, promotion and appointment as full member in respect of category 4, Deputy Executive Engineers, each 39 zone comprising the districts specified against each shall be a separate unit: xx xx xx Zone IV: Chittoor, Cuddapah, Anantpur and Kurnool districts. xx xx xx Provided that the post of Deputy Executive Engineers in the office of the Chief Engineer (Panchayati Raj) shall be filled on a tenure basis by drafting persons equitably from different units and the period of tenure shall not ordinarily exceed three years; Provided further that the posts of Deputy Executive Engineers in the Rigs Divisions notified as Special Officers under the Andhra Pradesh Public Employment (Organisations of Local Cadres and Regulation of Direct Recruit ment) Order, 1975 shall be filled by drafting persons from the units over which the respec tive Rigs Division is having jurisdiction. (G.O. Ms. No. 1024 PR, dated 26.11.1979). " Regarding the scope of this rule it is the submission of the learned counsel for the State of Andhra Pradesh that a combined reading of Rule 2 A read with para 13 of the Presi dential Order would show that the said Rule has retrospec tive effect, therefore the Government is at liberty to revise the promotions made otherwise then on the basis of the zonal seniority list. But Shri Sitaramiah, learned counsel, submitted that the said Rule cannot be given retro spective effect and the same applies to vacancies arising thereafter and therefore the promotions already made should not be disturbed. It is an admitted fact that there was a Statewide list of Junior Engineers before 28.10.75 namely before the Presi dential Order was made. Questioning some of the promotions made by the Government, representation petitions were filed before the A.P. Administrative Tribunal. In such matters the Tribunal observed that as a precautionary measure the jun iors to the petitioners therein in the Statewide list cannot be promoted before the petitioners ' cases are considered for the appointment to the post of Executive Engineer which is a higher post. In all the orders passed by the Tribunal there is an indication that the Statewide list should be the basis for promotion. Though they appear to be in the nature of interim 40 directions but the ratio relied upon is that the promotion should be on the basis of the Statewide list. Therefore the question that has been canvassed by the State Government in all these matters is that the observation and the directions given by the Administrative Tribunal are opposed to the very object underlying the Presidential Order and is contrary to various provisions therein. At this juncture it is essential to note the principle and object underlying the zonal system as provided for in the Presidential Order. We have already noted that the object underlying Article 371D is to promote speedy develop ment of the backward areas and to provide equal opportuni ties to different areas of the State in the matter of em ployment etc. This Article is a special provision which makes departure from the general scheme of the Constitution. In High Court of Andhra Pradesh and Ors. vs V.V.S. Krishnamurthy and Ors., after referring to the Statement of Objects and ' Reasons of the Constitution (Thirty Second) Amendment Act, it was observed as under: "It will be seen from the above extract, that the primary purpose of enacting Article 371D was two fold; (i) To promote "accelerated development of the backward areas of the State of Andhra Pradesh so as to secure the balanced development of the State as a whole". and (ii) to provide "equitable opportunities" to dif ferent areas of the State in the matter of education, employment and career prospects in public service. (1) To achieve this primary object, Clause (1) of Article 371D empowers the President to provide by order, "for equitable opportunities and facilities for the people belonging to different parts of the State in the matter of public employment and in the matter of educa tion. " Clause (2) of the Article is complemen tary to Clause (1). It particularises the matters which an order made under Clause (1) may provide. For instance, its sub clause (c) (i) enables the President to specify in his Order, "the extent to which, the manner in which and the conditions subject to which, preference or reservations shall be given or made in the matter of direct recruitment to posts in any local cadre under the State Government or under any local authority. Sub clause (c) further makes it clear that resi dence for a specified period in the local area, can be made a condition for recruitment to any such local cadre. Thus, Clause (4) also, directly is designed to achieve the primary object of the legislation. " 41 The Presidential Order was made keeping in view this Object and suitable provisions are inserted. With a view to achieve this Object and in conformity with the provisions of the Order, the State is divided into six zones and certain specified gazetted services are included in the local cadres. The A.P. Panchayati Raj Engineering Services is one such and two categories of posts namely Junior Engineers and Assistant Engineers are such zonal posts. It may be men tioned here that the validity of the Presidential Order is not being questioned. Therefore we have to proceed on the basis that all the provisions of the Presidential Order are valid. The further and rather the main submission of the re spondents is that the Presidential Order only lays down the criteria for claiming eligibility as a local candidate on the basis of the period of residence or of stay in that local area and reservations are meant to be made to the local cadre only in respect of direct recruitment to the said posts mentioned therein and therefore the power con ferred under the Article should be confined only to direct recruitment. In this context the learned counsel also relied very much on the expressions used in Article 371D (1) and (2). The learned counsel also submitted that initially the Junior Engineers are selected by the Public Service Commis sion and are given a ranking and they are allotted to the local cadre and to that extent that may become a zonal post. But when it is a question of promotion to the higher post of Assistant Engineer though shown as a zonal post by virtue of being included in the local cadre, it should be only on the basis of the seniority in the Statewide list originally prepared by the public Service Commission. The learned counsel very much relied on the expression 'in the matter of public employment ' and the other expressions used in Article 371D (1) and (2). First we shall consider the submission that the purport of Article 371D and the Presidential Order in respect of direct recruitment does not apply to promotion. The expres sion 'in the matter of public employment ' in clause (1), in our view, is of wider import. The public employment can be by way of direct recruitment or by promotion. In The General Manager; Southern Railway vs Rangachari, ; this Court considered the scope of Articles 16 (1), (2) and (4) and it was observed that Articles 16 (1) and (2) of the Constitution are intended to give effect to Articles 14 and 15(1) of the Constitution and they arc supplemented to each other. Regarding the meaning of the word "employment" it is noted that: "Article 16 (1) should, therefore, be con strued in a broad and general, and not pedan tic and technical way, so construed, "matters relating to employment" cannot mean merely matters prior to the act of appointment nor can 'appointment ' to any 42 office mean merely the initial appointment but must include all matters relating to employ ment, whether prior or subsequent to the employment, that are either incidental to such employment or form part of its terms and conditions and also include promotion a selec tion post. "Although Article 16(4) which in substance is an exception to articles 16 (1) and 16(2) and should, therefore, be strictly construed, the court cannot in construing it overlook the extreme solicitude shown by the Constitution for the advancement of socially and education ally backward classes of citizens. " It is thus concluded that Article 16(4) authorises the State to provide for reservation of appointments as well as selection posts. At this juncture it may be noted that Article 371D (10) declares that any order made by the Presi dent shall have effect notwithstanding anything in any other provision of the Constitution or in any other law for the time being in force. Therefore notwithstanding anything contained in the A.P. Panchayati Raj Engineering Service Rules, the promotions have to be based on zonal list other wise the very object sought to be achieved as per Article 371D and the Presidential Order would be defeated. Shri Sitaramiah, however, laid considerable stress on Article 371D (2) which empowers the President to make an order "in particular" to specify any part or parts of the State which shall be regarded as the local area for direct recruitment in any local cadre. It is submitted that if clauses (1) and (2) of Article 371D are read together the Presidential Order can make provision only in respect of appointments by way of direct recruitment and cannot be applied for promotion also. But as laid down in Rangachari 's case the word "employment" should be interpreted in a broad and general manner. The ratio therein should be applied in interpreting the words "in the matter of public employment" occurring in Article 371D also. Consequently it must be held that Article 371D and the Presidential Order apply both for direct recruitment and for promotion in respect of categories specified in the Third Schedule. Article 371D (2) does not make any departure from this principle. The words "in particular" therein only lay emphasis on the aspect of creating local cadres for different parts of the State for the purpose of direct recruitment and treat such parts as local areas. This does not in any manner restrict the scope of Article 371D wherein it is clearly declared that in the matter of public employ ment, the President is empowered to make an order in the manner stated therein and the public employment cannot but be interpreted to include promotion also. It therefore emerges that Article 371D is in general terms and applies to the public employment as a whole and Article 371D(2) in particular applies to direct recruitment. It is only comple mentary to clause (1) and particularises 43 the matters which an order made under clause (1) provides for. Any other interpretation would defeat the object under lying these two provisions. The other submission of Shri Sitaramiah, as already noted, is that even assuming that Rule 2 (a) which came into existence in 1979 is valid and applies to promotion also then it can have only prospective effect and all the promo tions prior to this Rule should be only on the basis of the Statewide list. In considering this argument we have to bear in mind para 13 of the Presidential Order which specifically lays down that certain appointments and promotions after the commencement of the Order should be treated as provisional and the same should be reviewed an readjusted in accordance with the Presidential Order for the purpos of preparing the local cadres and allotting to the zones. The learned coun sel, however, relied on two judgments of this Court in Y. V. Rangiah and Others etc. vs J. Sreenivasa Rao and Others etc., , and N.T. Devin Katti and Others vs Karnataka Public Service Commission and Others, ; , in support of his submission that the said Rule cannot be given retrospective effect and that the promotions should be made only in accordance with the unamended A.P. Pan chayati Raj Engineering Service Rules, 1963. But having regard to the historical background and the object underly ing Article 371D and the Presidential Order and in particu lar para 13 of the Order the promotions, if any, made, should be treated only as provisional. If Rule 2(a) is viewed from this angle particularly in the light of paras 5 and 13 of the Presidential Order it becomes clear that the said Rule has to be given retrospective effect so that the promotions to the junior posts can be brought in conformity with Article 371D and the Presidential Order. Accordingly any promotions made should be treated only as provisional and they should be reviewed and readjusted. This leads us to the question whether the promotions from the post of Junior Engineer to Assistant Engineer should be based on zonal seniority list or on the Statewide seniority list. Rule 2(a) makes it abundantly clear that for the purpose of recruitment, appointment, promotion, transfer etc. each zone shall be a separate unit. Para 5 of the Presidential Order is also to the same effect. When once each zone is treated as a separate unit for the purpose of promotion also in respect of zonal posts then by virtue of Article 371D and the Presidential Order, as observed above, the promotion from the post of Junior Engineer to the post ' of Assistant Engineer which are both zonal posts, should be on the basis of the zonal seniority list inasmuch as the post of Junior Engineer and the next promotion post namely" Assistant Engineer are included in the local cadre and the zonal list as we find in the Third Schedule. With regards the higher posts which are not included in the local cadre and which are Statewide posts, it 44 becomes obvious that the Statewide seniority list of the Assistant Engineers of all zones should be prepared and that should be the basis of promotion to the post of Executive Engineer which is not a zonal post. Therefore it emerges that the directions given by the Tribunal to ensure that no Junior Engineer is promoted earlier than their seniors in the Statewide seniority list to the post of Executive Engi neer, should be quashed. Shri Sitaramiah, however, pointed out certain anamolies if such a principle is to be followed. According to the learned counsel, if the promotions are to be made only on the basis of the zonal list than there is every possibility of some of the seniors in the Statewide list not getting promotions and the same would result in some of the juniors becoming seniors which would ultimately affect the promo tional avenues for the Statewide higher post like Executive Engineer. But it must be noted that Article 371D is of exceptional nature and the object is to provide equal oppor tunities in the backward areas in respect of the specified posts mentioned in the Third Schedule which are included in the local cadre which thus became zonal posts. As mentioned in para 5 of the Presidential Order and Rule 2 (a) of the Engineering Service Rules such zones should be treated as separate units for the purpose of promotions also. Therefore there is valid nexus to the object that is sought to be achieved and even if there is some anamoly it cannot on that basis be said that such promotions for zonal posts on the basis of the zonal seniority list amounts to discrimination. In S.Prakasha Rao and another vs Commissioner of Commercial Taxes and Others, , a Bench of three Judges of this Court affirmed the view taken by the Administrative Tribunal, Andhra Pradesh that the zonal seniority list prepared pursuant to the initial organisation and creation of local cadres is to be maintained and such zonal seniority list is the criteria for promotion. In the result we hold that all promotions of Junior Engineers (redesignated as Assistant Executive Engineers) to the next higher post of Assistant Engineers (re designated as Deputy Executive Engineers) have to be made on the basis of the zonal seniority lists as indicated above and not on the basis of the Statewide seniority list of Junior Engi neers. The promotions made after the Presidential Order dated 18.11.75 should be treated as provisional and the Government is permitted to review these promotions on the basis of zonal seniority lists and re adjust the same. All the future promotions from the post of Junior Engineer to the post of Assistant Engineer should necessarily be made on the basis of the zonal seniority lists. For the purpose of promotion to the post of Executive Engineer, which is not a zonal post, a Statewide seniority list of the Assistant Engineers of all zones should be prepared and such Statewide seniority 45 list should form the basis of promotion to the post of Executive Engineer. The State Government is accordingly directed to prepare such lists i.e. zonal seniority lists of various zones for the purpose of promotions from Junior Engineers to Assistant Engineers within the zones and also Statewide seniority list of the Assistant Engineers of all zones for the purpose of promotion to the post of Executive Engineer. Such of the Directions given by the Tribunal in the matters before us which are contrary to or different from the above conclusions, remain quashed. The inter se seniority and the consequent promotions of respondent Nos. 1 to 5 in Civil Appeal No. 3935/88 as well as the petitioners in Special Leave Petition (Civil) No. 2150/87 shall be determined subject to the above directions. All these mat ters are disposed of accordingly with the above directions. In the circumstances of the cases, there will be no order as to costs. G.N. Appeals disposed of.

Article 371D of the Constitution of India, which is peculiar to the State of Andhra Pradesh only, empowers the President to provide by order for equitable opportunities and facilities for the people belonging to different parts of the State in the matters of public employment and educa tion. As provided therein the President of India made the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Orders, 1975, by virtue of which the State was divided into six zones, and local cadres of posts in respect of the local areas were created. In respect of Andhra Pradesh Panchayati Raj Engi neering Service the two such zonal posts were Junior Engi neer and Assistant Engineer. Before the Administrative Tribunal, some promotions made from Junior Engineer to Assistant Engineer were questioned, and the Tribunal held that promotions should be made on the basis of the Statewide list and directed the State Government to redetermine the position of the petitioners before it, in the seniority list. Aggrieved by the Tribunal 's order, the State Government and the affected officials have approached this Court by way of the present appeals and special leave petitions. On behalf of the State Government, it was contended that both the posts of Junior Engineer and Assistant Engineer were zonal posts under the Presidential Order and the zonal seniority list had to be followed in the 28 matter of promotions from Junior Engineer to Assistant Engineer and not the Statewide seniority list of Junior Engineers. On behalf of the Respondents it was contended that Article 371D (2) of the Constitution refers only to direct recruitment and the Presidential Order made under the said Article cannot make a departure and cannot be made applica ble for promotions also. It was further contended that it is the Statewide list that should be the basis for promotion. Disposing of these matters, this Court, HELD: 1. Notwithstanding anything contained in the A.P. Panchayati Raj Engineering Service Rules, 1963 the promo tions have to be based on zonal list; otherwise the very object sought to be achieved as per Article 371D of the Constitution of India and the Presidential Order issued thereunder would be defeated. The word 'employment ' should be interpreted in a broad and general manner. The expression 'in the matter of public employment ' in clause (1) of Arti cle 371D is of wider import. The public employment can be by way of direct recruitment or by promotion. The Presidential Order would apply both for direct recruitment and for promo tion in respect of categories specified in the Third Sched ule. Article 371D (2) does not make any departure from this principle. The words 'in particular, therein only lay empha sis on the aspect of creating local cadres for different parts of the State for the purpose/of direct recruitment and treat such parts as local areas. This does not in any manner restrict the scope of Article 371D wherein it is clearly declared that in the matter of public employment, the Presi dent is empowered to make an order in the manner stated therein and the public employment cannot but be interpreted to include promotion also. It, therefore, emerges that Article 371D is in general terms and applies to the public employment as whole and Article 371D(2) in particular ap plies to direct recruitment. It is only complementary to clause (1) and particularises the matters which an order made under clause (1) provides for. Any other interpretation would defeat the object underlying these two provisions. [42 D H, 43 A] The General Manager, Southern Railway vs Rangachari, ; , relied on. Article 371D is of exceptional nature and the objective is to provide equal opportunities in the backward areas in respect of the specified posts mentioned in the Third Schedule which are included in the local cadres which thus became zonal posts. As mentioned in para 5 of the 29 Presidential Order and Rule 2 A of the A.P. Panchayati Raj Engineering Service Rules, such zones should be treated as separate units for the purpose of promotions also. There fore, there is valid nexus to the object that is sought to be achieved and even if there is some anamoly it cannot on that basis be said that such promotions for zonal posts on the basis of the zonal seniority list amounts to discrimina tion. [44 D E] 2.2. Rule 2 A makes it abundantly clear that for the purpose of recruitment, appointment, promotion, transfer etc. each zone shall be a separate unit. Para 5 of the Presidential Order is also to the same effect. When once each zone is treated as separate unit for the purpose of promotion also in respect of zonal posts then by virtue of Article 371D and the Presidential Order, the promotion from the post of junior Engineer to the post of Assistant Engi neer which are both zonal posts, should be on the basis of the zonal seniority list inasmuch as the post of Junior Engineer and the next promotion post namely Assistant/Engi neer are included in the local cadres and the zonal list in the Third Schedule. With regard to the higher post which included in the local cadre and which are Statewide posts, it becomes obvious that the Statewide seniority list of the Assistant Engineer of all zones should be prepared and that should be the basis of promotion to the post of Executive Engineer which is not a zonal post. Therefore, the direc tions given by the Tribunal to ensure that no Junior Engi neer is promoted earlier than their seniors in the Statewide seniority list to the post of Executive Engineer, should be quashed. [43 F H, 44 A B] section Prakasha Rao and Anr. vs Commissioner of Commercial Taxes and Ors., , relied on. High Court of Andhra Pradesh and Ors. vs V.V.S. Krishna murthy and Ors., , referred to. All promotions of Junior Engineers (redesignated as Assistant Executive Engineers) to the next higher post of Assistant Engineers (redesignated as Deputy Executive Engi neers) have to be made on the basis of the zonal seniority list and not on the basis of the Statewide seniority list of Junior Engineers. Having regard to the historical background and the object underlying Article 371D and the Presidential Order and in particular para 13 of the Presidential Order, the promotions, if any made should be 30 treated only as provisional. If Rule 2 A is viewed from this angle particularly in the light of paras 5 and 13 of the Presidential Order it becomes clear that the said Rule has to be given retrospective effect so that the promotions to the junior posts can be brought in conformity with Articles 371D and the Presidential Order. The promotions made after the Presidential Order dated 18.11.1975 should be treated as provisional and the Government is permitted to review these promotions on the basis of zonal seniority lists and re adjust the same all the future promotions. from the post of Junior Engineer to the post of Assistant Engineer should necessarily be made on the basis of the zonal seniority lists. For the purpose of promotion to the post of Executive Engineer, which is not a zonal post, a Statewide seniority list of the Assistant Engineers of all zones should be prepared and such statewide seniority list should form the basis of promotion to the post of Executive Engineer. The State Government is accordingly directed to prepare such lists i.e. zonal seniority lists of various zones for the purpose of promotions from Junior Engineers to Assistant Engineers within the zones and also the statewide seniority list of the Assistant Engineers of all zones for the purpose of promotions to the post of Executive Engineer. Such of the directions given by the Tribunal in the matters, which are contrary to and different from the conclusions now reached, shall remain quashed. [44 D E; 44 D H; 45 A B] 3.3. The inter se seniority and the consequent promo tions of Respondent Nos. 1 to 5 in Civil Appeal No. 3935/88 as well as the petitioners in Special Leave Petition (Civil) No. 2150/87 shall be determined subject to the directions, now given. [45 B C] Y. N. Rangiah and Ors. J. Sreenivasa Rao and Ors. , [1983]3 SCC 284; N.T. Devin Katti and Ors. vs Karnata ka Public Sen,ice Commission and Ors., ; , referred to.

6833.txt

Civil Appeal No. 140 of 1951. Appeal from a Judgment and Decree dated 22nd Septem ber, 1947, of the High Court of Judicature at Bombay (Sen and Bavdekar JJ.) in Appeal No. 41 of 1943 arising out of decree dated 4th September, 1942, of the Court of the First Class Subordinate Judge at Poona in Civil Suit No. 808 of 1941. Roshan Lal and B.S. Shastri for the appellant. Hardyal Hardy for the respondent. February 22. The Judgment of the Court was deliv ered by BOSE J. This is a defendant 's appeal in a suit on two mortgages. The first was executed on the 7th of April, 1931, by the defendant and his father. The second was dated the 17th of December, 1935, and was executed by the defend ant alone. The first was for a sum of Rs, 9,500, the second for Rs. 3,500. The same property was mortgaged each time. The claim on the two deeds together was for Rs. 20,774 3 0. These mortgages were in favour of one Narayan Gopal Sathe. On the 28th of March, 1940, the mortgagee assigned them both to the plaintiff who now sues on them. The defence was that both mortgages were satisfied. The main evidence on which the defendant relied to prove satisfaction was an agreement dated the 17th of October, 1937, executed by the mortgagee Narayan Gopal Sathe in favour of the defendant. The document has been excluded from evidence by the trial Court as well as by the High Court on appeal on the ground that it required registration. If this document is excluded, then there is a concurrent finding of fact by both the Courts that the rest of the evidence is not good enough to prove satisfaction. They have disbelieved it and decreed the plaintiff 's claim in full. The only ques tions before us are (1) whether this document required registration and (2) whether, if it did, it 493 cannot still be used for what the defendant claims is a collateral purpose, namely proving full payment of the mortgage amount. The agreement came about in this fashion. The mortga gee, Narayan Sathe, was appointed Receiver of two Cinemas in Poona. The Court appointing him required him to produce a surety in the sum of Rs. 10,000. The defendant agreed to undertake this responsibility and as a consideration for that the mortgagee executed the agreement in question. The portions of the document relevant for the present purpose are as follows. The mortgages are there described as the "transactions of give and take." "(3) It is extremely necessary to explain beforehand the transaction of give and take outstanding between both of us. (4) Whereas two transactions have been done between you and me. Therefore you have agreed to stand surety. And only for that reason I am executing this agreement and giving it to you in writing and thereunder I am settling and formulating some new terms and I am confirming some very terms which were declared before. (5) Although in the matter of the transaction relating to the aforesaid mortgage deeds the rate of interest men tioned in the documents purporting to be the mortgage deeds is 14 annas per mensem per centum, still the actual interest is to be received only at the rate of 8 annas per mensem per centum; so it is settled between you and me and I have also agreed to the same. And even at that rate I have also been receiving the interest and I shall also receive hereafter. (6) As regards the transaction of the second mortgage deed. if as agreed at that time between you and me you pay me Rs. 1,800 in the lump then it will be understood that the transaction of give and take subsisting between you and me has been wholly completed and fully paid up. As you have no sufficiency of funds to make up and pay in full the above sum at once it is settled that you are to pay to me Rs. 80 per 64 494 month and thus you are to make payment in full. In accord ance with the agreement arrived at between us both subse quent to the document purporting to be the second mortgage deed the said documents and papers and the written receipts in respect of interest given to you by me relating to the payment in full made by you in respect of interest and principal on account of the first transaction dated 7 4 31 have been kept with me. * * (8) As mentioned above (vide paras 5 and 6) no interest of any nature whatever has remained claimable by me from you in accordance with the agreement arrived at between us both from the date of your suretyship onward and prior to it and in like manner I understand that the whole of the principal has been fully paid. (10) If you so wish or if necessity may arise then at any time you may ask for it and I shall give you this agree ment on being written out on stamped paper and on being registered. " In our opinion, this is a document which limits and extinguishes interests in immoveable property in the present within the meaning of section 17(1) (b) of the Indian Regis tration Act. Clause (4) of the agreement expressly says so. Referring to the two mortgages it says "I am settling and formulating some new terms. " This speaks from the present. It does not say that this was some past agreement, and that fact is underlined in the next sentence which reads "and I am confirming some very terms which were declared before. " Among the new terms is the following. The rate of inter est agreed upon in the two mortgage deeds was 14 annas per cent per month. Clause (5) reduces this to 8 annas. It is true that according to clause (5) only 8 annas had actually been paid all along but that hardly 495 matters because the question is not what was paid but what was due and what the mortgagee could have enforced under his bond. It is evident from clause (4) that it was the agree ment embodied in the document which effected the change and therefore it was the document itself which brought the altered terms into being. The next question is whether this limits an interest in immoveable property. We are of opinion it does. We agree with the learned Rangoon Judges in U. Po Thin vs Official Assignee(1) that one part of the "interest" which a mortga gee has in mortgaged property is the right to receive inter est at a certain rate when the document provides for inter est. If that rate is varied, whether to his advantage or otherwise, then, in our judgment, his "interest" in the property is affected. If the subsequent agreement substi tutes a higher rate, then to the extent of the difference it "creates" a fresh "interest" which was not there before. If the rate is lowered, then his original "interest" is limited. The question of a higher rate was considered by their Lordships of the Privy Council in Tika Ram vs Deputy Commis sioner of Bara Banki(2). There, the mortgagors gave the mortgagees an unregistered rukka or written promise simulta neously with the registered mortgage stipulating that they would pay an extra 6 per cent per annum over and above the 15 per cent entered in the mortgage. their Lordships held that these rukkas could not be used to fetter the equity of redemption. They did not decide whether the personal cove nant in the rukkas could be enforced because that point had not been raised in the plaint and pleadings, nor did they refer to the Registration Act, but we think the words "an unregistered instrument which the statute declares is not to affect the mortgaged property" can only have reference to that Act. (1) (1938) R.L.R. 293: A.I.R. 1938 R. 285. (2) (1899) 26 I.A. 97 at 100. 496 It was argued, on the strength of Mahim Chandra Dey vs Ram Dayal Dutta,(1) Ram Ranjan vs Jayanti lal(2) and Collec tor of Etah vs Kishori Lal(3), that it is always open to a mortgagee to release or remit a part of the debt, and when he does so he does not limit or extinguish an interest in immovable property any more than when he passes a receipt acknowledging payment of the whole or part of the money. The effect of the payment, or of the release, may be to extin guish the mortgage but in themselves they do not limit the interest. Extending this, the learned counsel for the defendant contended that when a mortgagee agrees to accept a lower rate of interest he does no more than release that part of the debt which would be covered by the difference in rate. We do not agree. There is a difference between a re ceipt and a remission or a release. A receipt is not the payment, nor does the document in such a case serve to extinguish the mortgage or limit the liability. It is the payment of the money which does that and the receipt does no more than evidence the fact. Not so a release. The extin guishment or diminution of liability is in that event ef fected by the agreement itself and not by something external to it. If the agreement is oral, it is hit by proviso 4 to section 92 of the Evidence Act, for it "rescinds" or "modi fies" the contract of mortgage. If it is in writing, it is hit by section 17 (1) (b) of the Registration Act, for in that case the writing itself "limits" or "extinguishes" the liability under the mortgage. It is to be observed that when the mortgagor pays money due on the mortgage, in whole or in part, he is carrying out the terms of the bond and is not making any alteration in it, and even though the fact of payment may limit or extin guish the mortgagee 's interest that is only because the bond is working itself out by the force of its own terms and not by reason of some new agreement which seeks to modify it or limit or extinguish the interest which it creates. A simple test (1)A.I.R. (3) A.I.R. 1930 All. 721 at 725 F.B. (2) A.I.R. 1926 Cal. 906. 497 is this: see whether the mortgagee can, in the face of the subsequent agreement, enforce the terms of his bond. If he cannot, then it is plain that the subsequent undertaking has effected a modification, and if that has the effect of limiting or extinguishing the mortgagee 's interest, it is at once hit either by section 17 (1) (b) or section 92 proviso 4. But when there is a mere payment of money, that is done under the terms of the bond, for the contract of mortgage postulates that the mortgagor should repay the money bor rowed and that when he does so the mortgagee 's interest in the property shall be "limited" to the extent of the repay ment or, when all is repaid, be wholly extinguished; nor, of course, does a payment have to be made by a written or registered instrument, or even evidenced by one. Clause (xi) to section 17 (2) of the Registration Act is based on this principle. It draws a distinction between a document which, by the force of its terms. effects the extinguishment, or purports to do so, and one which merely evidences an exter nal fact which brings about that result. Now apply the test just given to the present case. Under the mortgages the mortgagee is entitled to interest at 14 annas per cent. per month but the mortgagor says he cannot claim that. Why ? Because, according to him, the subsequent agreement altered the terms of the bond and reduced his liability to only 8 annas. It hardly matters what the agreement is called, whether a release or a remission, nor is it germane to the question that the mortgagee is enti tled to remit or release the whole or a part of the debt; the fact remains that his agreement to do so effects an alteration in the original contract and by the force of its terms or extinguishes his interest, Assume that the mortga gor repaid the whole of the interest at the altered rate and the whole of the principaL, would those repayments by them selves effect an extinguishment of the mortgage ? Clearly not, because unless the subsequent agreement is called in aid, more would be due under the terms of the bond on ac count of the higher rate of interest. It is evident then that it is the 498 agreement which limits the mortgagee 's interest ' and serves to extinguish the mortgage and not mere payment at the reduced rate. Similar observations apply to clause (6) of the agree ment. It begins by reciting a past agreement in which the mortgagor had promised to pay Rs. 1,800 in a lump sum. We are left to infer that this was to extinguish the mortgage. If it was, then it would be hit by either section 92, provi so 4, of the Evidence Act or section 17(1)(b) of the Regis tration Act, but that does not matter because the present document varies even that agreement and substitutes a third agreement in its place, namely that payment of Rs. 1,800 by instalments at the rate of Rs 80 a month will effect "pay ment in full", that is to say, will extinguish the mortgage. This speaks from the date of the document, for it says, referring to this agreement, that ' it is settled" etc. Next we come to clause (8). That refers us back to clauses (5) and (6) and says that "as mentioned there no interest of any nature whatever has remained claimable by me" and speaking of the principal says "and in like manner I understand the whole of the prin cipal has been fully paid". We have already dealt with clauses (5) and (6). Clause (8) carries us no further and merely states that because of clauses (5) and (6) neither interest nor principal is now claimable; and of course if neither interest nor principal is claimable that extinguish es the mortgage, and in this case the extinguishment is brought about, not by mere payment in accordance with the terms of the bond, but because of the fresh agreement. Clause (10) remains for consideration. It was argued that this brings the matter within section 17(2) (v) of the Registration Act because it gives the defendant the right to obtain another document which will effect the extinguish ment. We do not agree because clause (v) of sub section (2) of section 17 of the Act postulates that the document shall not of itself create, declare, 499 assign, limit, extinguish any right etc., and that it shall merely create a right to obtain another document etc. (The stress is on the words "itself" and "merely ". ) We agree with Sir Dinsha Mulla at page 86 of the 5th edition of his Indian Registration Act that "If the document itself creates an interest in immove able property, the fact that it contemplates the execution of another document will not exempt it from registration under this clause. " As we have seen, this document of itself limits or extinguishes certain interests in the mortgaged property),. The operative words are reasonably clear. Consequently, the document is not one which merely confers a right to obtain another document. It confers the right only in certain contingencies, namely, "if you so wish" or "if necessity may arise. " Its purport is to effect an immediate alteration in the terms of the two bonds and because of that alteration to effect an immediate extinguishment and limitation. Clause (10) merely confers an additional right, namely the right to obtain another document "if you so wish" or "if necessity may arise." Therefore, the document in question is not one which merely creates a right to obtain another. An agreement to sell, or an agreement to transfer at some future date, is to be distinguished because that sort of document does not of itself purport to effect the trans fer. It merely embodies a present agreement to execute another document in the future which will, when executed, have that effect. The document in hand is not of that type. It does not postpone the effect of extinguishment or limita tion of the mortgages to a future date. It does not say that the agreement it embodies shall take effect in the future. It purports to limit and extinguish the liabilities on the two mortgages at once by virtue of the document itself and merely adds that "if it is necessary or should you want another document, I will repeat the present 500 agreement in a registered agreement. " By implication it means that if it is not necessary, or if the mortgagor does not want a registered instrument, the document itself will have effect. Incidentally, one effect of holding that this document does not limit or extinguish the mortgagor 's li ability would be that there is no agreement to that effect yet in force, This may or may not give the mortgagor a right to obtain specific performance of his right to obtain such an agreement but until he does that there would be no bar to the mortgagee 's claim in this suit. However, it is not necessary to go as far as that because we are of opinion that this document is not exempt from registration under section 17(2) (v), and we so hold. The next question is whether the document can be used in evidence under the proviso to section 49 of the Registration Act. We are clear it cannot. This is not a suit for specif ic performance nor does any question of part performance under section 53A of the Transfer of Property Act arise. It remains then to be seen whether the use now sought to be made of the document is to evidence a collateral transaction not required to be evidenced by a registered instrument. But what is the 'transaction sought to be proved but the very agreement which the document not merely evidences but, by reason of its own force, creates ? That is not a collat eral transaction and even if it were a transaction of that type, it would require a registered instrument for the reasons we have already given. Section 53A of the Transfer of Property Act was re ferred to but it has no application, for the agreement we are concerned with is not a transfer. There are no words of conveyance in it; also the mortgagor is not continuing in possession in part performance of the contract. Both mort gages were simple and the right to possession never resided in the mortgagee. He might in due course have acquired it by process of law if he obtained a decree and purchased at the sale; on the other hand, a stranger might have purchased and the right to possession would 'in that event have passed elsewhere, But he had no right to possession at the 501 date of the agreement and having none he could not have transferred it. The mortgagor 's possession was consequently not referable to the agreement. The appeal fails and is dismissed with costs. Appeal dismissed.

A suit to recover money based on two mortgages was resist ed by the defendant on the plea that the mortgages were satisfied as the assignor of the mortgages to the plaintiff had executed an agreement in favour of the defendant which proved satisfaction. This agreement was not registered and the question for determination was whether it required registration and whether if it did, it could not be used for the collateral purpose of proving full payment of the mort gage amount. The agreement contained, inter alia, the following terms: "(i) I am settling and formulating new terms and I am confirming some very terms which were de clared before; (iii Although the rate of interest mentioned in the mortgage deeds is 14 annas still the actual rate is to be received at the rate of 8 annas and so it is settled between the original parties; (iii) It was agreed that if you pay me Rs. 1,800 in a lump it will be understood that the transaction has been wholly completed and paid up. As you have no sufficiency of funds. . . it is settled that you are to pay me Rs. 80 per month; (iv) As mentioned above no interest of any nature whatever has remained claimable by me. . and in like manner I understand whole of the principal has been fully paid; (v) If you so wish or if necessity may arise then at any time you may ask for it I shall give you this agreement written out on stamp paper and on being registered. " Held, that the agreement was not exempt from registra tion because the document itself limited and extinguished an "interest ' ' in immoveable property in the present within the meaning of section 17 (1)(b) of the Indian Registration Act, and it was not exempt under section 17 (2) (v). Held, also that the document could not be used under the proviso to section 49 of the Registration Act as the suit was not for specific performance and no question of part performance arose in the case and also no question of using the document for a collateral transaction arose because the document was to be used to prove the very agreement which it created itself. U. Po Thin vs Official Assignee (A.I.R. 1938 Rang. 285) and Tikaram vs Deputy Commissioner of Bara Banki (26 I.A 97), Mahim Chandra Dey vs Ram Dayal Dutta (A.I,R. 1926 Cal. 170). 492 Ram Ranjan vs Jayantilal (A.I.R. and Collec tor of Etah vs Kishori Lal (A.I.R. 1930 All. 721) referred to.

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Petition Nos. 5704 and 8842 of 1990. IN Writ Petition (Crl.) No. 1171 of 1986. (Under Article 32 of the Constitution of India). Altaf Ahmed, Additional Solicitor General, A.S. Nambiar, Laxmi Kant Pandey in person, Ms. A. Subhashini, Ms. Niranja na Singh, Ms. Shanta Vasudeva, P.K. Manohar, K.R. Nambiar, Jagdeep Kishore, T.V.S.N. Chari, Ms. Suruchi Aggarwal, Ms. Manjula Gupta, Bharati Reddy, Ms. Kusum Choudharv, Ms, Bina Gupta, Ms. Monika Mohil, Ms. Vandana Saggar, Gopal Singh, A.S. Pundir, Manoj Swarup, V. Krishnamurthy, Ms. H. Wahi, B.B. Singh, D.N. Mukherjee, P.H. Parekh, Ms. Chandan Rama murthi, Ms. Kamini Jaiswal, R.K. Mehta, Ms. Urmila Kapoor, M. Veerappa, Uma Nath Singh, A.S. Bhasme, Kailash Vasdev, G. Prabhakar, S.K. Bhattacharya, R.S. Suri, Ms. section Dikshit, Prabir Choudhary, K. Swamy, Aruneshwar Gupta, Ms. M. Karan jawala, H.K. Puri and Ms. Rani Chhabra for the appearing parties. The following Order of the Court was delivered: In Laxmikant Pandey vs Union of India, ; this Court laid down the procedure to be followed in adop tion of children by foreigners. The Court observed the fact that children are a supremely important national asset and the future well being of the nation 'depends upon ' how the children grow and develop. It quoted with approval the report of the Study Team on Social Welfare where it was said: "The physical and mental health of the nation is determined largely by the manner in which it is shapped in the early stages. " 571 This Court also quoted with approval from the National Policy for the Welfare of Children where it was Said: "The nation 's children are a supremely impor tant assets. Their nurture and solicitude are our responsibility. Children 's programme should find a prominent part in our national plans for the development of human resources, so that our children grow up to become robust citizens, physically fit, mentally alert and morally healthy, endowed with the skills and motivations needed by society. Equal opportu nities for development to all children during the period ' of growth should be our aim, for this would serve our larger purpose of reduc ing inequality and ensuring social justice. " Thus saying, this Court laid down the procedure to be followed and while doing so, the CoUrt referred to recog nised child welfare agencies and provided for their licens ing or registration by the Central Government. Petitioners in this application ' are some of the licensed welfare agen cies contemplated under the judgment of this court and petition No. 2 is the Central Voluntary Adoption Resources Agency which is a coordinating unit based at Delhi. In these applications petitioners have made the following prayers: (a)(i) All GOvernment/juvenile homes, nursing homes and hospitals Government or private, will apply for declaration of a child as abandoned and free for placement and if the parents of the child are not known, such children should be transferred to the recog nised institution/placement agency as request ed for by them within a fixed time frame; (ii) all recognised placement agencies 'de pending upon their capacity to accommodate and care for those children after accounting for their age and qualification should be allowed to seek transfer of those children ,from Government/juvenile courts and nursing 'homes/hospitals and such institutions should be obliged to transfer the children such placement agencies; 572 (iii) Juvenile Welfare Boards/Courts should allow the aforesaid transfers in favour of the recognised agencies for rehabilitation through guardianshiP/adoPtion from VCAs/ CVARAS or otherwise; (iv) Juvenile Welfare Boards/Courts should not disturb the custody of children abandoned directly with the recognised placement agen cies when approached for declaring them as abandoned and free for placement and such orders may be passed ex parte and confirmed after notice to the concerned parties; (b)(i) Quota fixed by the Central Government for placement of children with Indian families may be quashed as being contrary to the deci sion in Laxmikant Pandey 's case; (ii) in the alternative, if this Court upholds the validity of the circular fixing the quota, the percentsge may be suitably reduced; (iii) this court may direct that if the quota is to be fixed, children with handicaps, medical problems and other drawbacks should be excluded from the total count as also girls above one year and boys above two years of age should be exclude from counting; (c) The State Governments and the various Union Teritories should be directed to issue birth certificates based upon attested copies. of court 's certificate (decree), adoption deed or on the basis of affidavits of officials of the licensed agencies; (d) This Court may approve by way Of revision of expenses by about 25% with effect from the date of the application and another 10% in crease annually to enable the agencies to maintain high Standards of care for the chil dren; (e) The Indian children adopted abroad or to be allowed to retain their citizenship/nation ality till they attain the age of majority. wherever they should exercise their option one way or the other; (f)(i) The Central Government should be di rected to act 573 by itself or through the State/Union Territory Governments to issue show cause notice before refusing to extend recognition arid grant personal hearing before taking official action and reasoned orders should be made in support of such action; (ii) In the "event of cancellation of recogni tion, a time frame should be fixed to clear all the cases already in the pipeline for being processed; (ii) An appellate authority should be pre scribed for challenge of governmental action as stated above; (g)(i) The Court may direct stay of governmen tal action in the matter of setting up of Central Adoption Resource Agency (CARA) and ultimately hold that there was no longer any need for such as agency in view of the fact that many private agencies were not available to monitor the programme. Notice was ordered on these petitions on September 21, 1990, and these several months that have followed have been taken by different State Governments and Union Territories and others to place their affidavits for consideration of this Court. We have heard counsel for the appearing parties at length. Before we deal with ' several prayers placed before the Court for consideration it is perhaps necessary 'to refer to the provisions of the Children 's Act of 1960 and the Juvenile JUstice Act of 1986. The ' scheme of these two Acts is not very different. The definitions of. 'neglected child ' and 'neglected juvenile ' is absolutely 'the same. The mechanism for:administering the statutes is also more or less the same. Under section 4(1) of the Children 's Act, a Child Welfare Board is intended to take charge of neglected children. Under section 4(1) of the Juvenile Justice Act, a Welfare Board for the neglected juveniles is similarly contemplated. Sub sections (3) and (4) of either Act autho rise 'the Board to ' function as a Bench of Magistrates and confers on such Board certain powers under Criminal Proce dure Code conferable on a Metropolitan Magistrate or a Judicial Magistrate of the First Class. Section 9 of the Children 'section Act contemplates of Children 's Homes and de tailed provisions have been made in the matter of setting up of such homes and management thereof. Section 11 contem plates of Observation Homes. Chapter III deals with neglect ed children. 574 Under Chapter II of the ACt of 1986 provision has been made for. setting up of Juvenile Homes (section 9), Special Homes (section 10) and Observation Homes (section 11). Both the Acts provide. for After Care organisation. Though these, two statutes in recognition of the impor tance of children to society have made these beneficial provisions, nothing concrete and substantial appears to have been done yet for implementing either statute in a serious way. The Children 's Act has been operative for more than 30 years while the Act of 1986 is in force for about five years. Yet most of the provisions in the two statutes are still to be worked out in a real way. The Union of India has set up a Department of Women and Child Development and most of the States and Union Territo ries have corresponding departments, ,yet full coordination has not been achieved. The responsibility of administering the two statutes is not properly shared. Monitoring seems to be very much wanting. In course of hearing of this petition we asked learned Additional Solicitor General appearing for the Union Govern ment to tell us as to what happens to the children both boys and girls who are lodged in the Homes when they cease to be children under the statute. It may be pointed out that under the Children 's Act boys Upto 16 and a girl upto 18 years come within the definition of "child". If 'children ' within the meaning of the. term are lodged in various, types of homes indicated in the two statutes what exactly happens to them when they cease to be children by passing of time has remained an,enigma in the absence of a clear answer. Obviously no provision has been made in these two Acts to meet such a situation. Is it the intention of the stautes then that once a boy. Or girl ceases to be a child. and does not come within the purview of the stautes he/she would have, to be thrown out from the home on to the street as no more cared for? What then would be the effect of such a situation? Since that is not very relevant for disposing of this petition, we do not intend to proceed with that aspect any longer. We are inclined to keep the handicapped children out Of the purview of the judgment of this Court. We do not, howev er, agree that Indian citizenship should continue until 'the adopted child attains the age of majority and is legally competent to opt. Such a step ,would run counter to the need of quick assimilation and may often stand as a barrier to the requirements of the early cementing of the adopted child into the adoptive family. In regard to the issue of the birth certificate 575 of the adopted child we are of the view that such certifi cate should be obtained on the basis of application of the society sponsoring adoption. In most of these cases the registration of birth may not be available because that would not have been done. We are of the view that on the basis of the application and such other material which may be, relevant to be found in an affidavit to accompany the application made by a responsible person belonging to the agency the local magistrate should have the authority to make an order approving the particulars to be entered in the birth certificate and on the basis of the Magisterial order the requisite certificate 'should be granted. This process should. be done only after adoption is finalised and the particulars of the adopting foreign parents are available to be inclined. There is no point in having two birth certifi cates, one before the child is placed for adoption and another when adoption is completed. If the procedure for taking out a birth certificate is deferred until adoption is finalised the certificate can be obtained once for all. We are of the view that the 'Chief District Medical Officer (CDMO) may be involved in the matter of ascertainment of the age and the magistrate may ordinarily act on the certificate granted by the CDMO. We gather that many of these agencies have indeed no child care facilities. In the event of such facilities not being available maintaining children in hygienic condition and in an environment which would be healthy for the chil dren 's growth and mental development would indeed be diffi cult. The licensing authority should ordinarily ensure that the registered agency has proper child care facilities so that an agency which does not have such facilities may over a period of years go out ,of the field. The affidavit of the Union Government indicates that it never intended to fix any quota for the purpose of allowing renewal of registration or licence. In view of the clear statement in the affidavit we must hold that it is not the policy of the Government of India require the agency to satisfy the condition of any quota. In fact the Government of India 's circular letter is intended to emphasise on the feature that registered societies to entitle themselves for renewal of registration or licence should exhibit their involvement in the process of adoption and the authority should have evidence to satisfy that the agency is really involved in the activity, We would accept the stand taken by the petitioner that in the event of registration/licence being proposed to be cancelled, an opportunity should be granted to such agency. That would answer the 576 requirements of natural justice and would uphold a healthy scheme of administration. We have not been able to see any. positive justification for opposition to the setting up of CARA. Such an institution would be an organisation of prima cy and would work as a useful agency in the field. While we agree that there should be no keen, competition for offering adoptions, regulated competition may perhaps keep up 'the system in a healthy condition. Existence 'of CARA in that field is, therefore, welcome. We do not agree with the stand of the petitioner that the scheme envisaged by the main judgment Should be altered in this regard. The judgment laid down a scale of expenses to be recov ered by the agency offering placement for maintaining the child from the adoptive parents. There was some modification in 1986. Keeping in view the general rise in cost of living we are prepared to allow escalation of 30%. We do not, however, agree to an escalation of 10% every year. The matter may be reviewed once in three years so far as escala tion of expenses in concerned. Only one aspect is left for consideration and that is the petitioner 's prayer for transfer of children from statu tory homes to recognised agencies for placement. The chil dren who can be transferred for such purposes would be those whose parents are not known, orphans and perhaps those who are declared as abandoned children. We have. pointed out already that the homes are not set up in several States and areas. Even Juvenile Boards have not been properly function ing and the recognised agencies do not have the facility of child care. In these circumstances to order transfer of children from statutory homes to recognised agencies can indeed not be accepted as a rule. We are prepared to observe that as and when such a request is received from recognised agencies, the Juvenile Court or the Board set up under the Act may consider the feasibility of such transfer and keep ing the interest of the child in view, the possibility of an adoption within a short period and the facilities available in the recognised agency as also, other relevant features, make appropriate orders. A strait jacket formula may very often be injurious to the interest of the child. This order disposes of the petitions. V.P.R. Petition Partly al lowed.

The writ petitioners some of the licensed welfare agencies contemplated under the judgment of this Court in ; , and petitioner No. 2, the Central Volun tary Adoption Resource Agency prayed that the Indian chil dren adopted to he allowed to retain their citizenship till they attain the age of majority; that birth certificates to be issued based upon attested copies of Court 's certificate (decree), adoption deed or affidavits of the officials of the licensed agencies; that quota fixed for placement of children with Indian families he quashed; that show cause notice he issued before cancellation of registration/ li cence to the registered agency; that setting up of Central Adoption Resource Agency be stayed; that to enable the agencies to maintain high standards of care for the chil dren, expenses by about 25% be revised and annual escalation of 10% be made; and that transfer of children from Statutory homes to recognised agencies for placement he allowed. Partly allowing the writ petition, this Court, HELD: 1. If the Indian citizenship is allowed to contin ue until the adopted child attains the age of majority, it would run counter to the need of quick assimilation and may often stand as a barrier to the requirements of the early cementing of the adopted child into the adoptive family. [574G H] 2. The birth certificate of the adopted child be ob tained on the basis of application of the society sponsoring adoption. On the basis of the application and such other material which may he relevant to he found in an affidavit to accompany the application made by a responsible person belonging to the agency, the local magistrate should have the authority to make an order approving the particulars to he entered in the birth certificate and on the basis of the magisterial order the requi 569 site certificate should be granted. This process should be done only after adoption is finalised and the particulars of the adopting foreign parents are available to be included. The Chief District Medical Officer (CDMO) may be involved in the matter of ascertainment of the age and the magistrate may ordinarily act on the certificate granted by the CDMO. [574H 575D] 3. Registered societies to entitle themselves for renew al of registration of licence should exhibit their involve ment in the process of adoption and the authority should have evidence to satisfy that the agency is really involved in the activity. [575G] 4. The licensing authority should ordinarily ensure that the registered agency has proper child care facilities so that an agency which does not have such facilities may over a period of years go out of the field. [575E] 5.In the event of registration/licence being proposed to be cancelled, an opportunity should be granted to such agency. That would answer the requirements of natural jus tice and would uphold a healthy scheme of administration. [575H 576A] 6. The setting up of CARA is justified. Such an institu tion would be an organisation of primacy and would work as a useful agency in the field. Although there should be no keen competition for offering adoptions, regulated competition may perhaps keep up the system in a healthy condition. Existence of CARA in that field is, therefore, welcome. [576A B] 7. Keeping in view the general rise in cost of living an escalation by 30% is allowed. The matter may be reviewed once in three years so far as escalation of expenses is concerned. [576C D] 8.1. The children, who can be transferred for the pur poses for placement, would be those, whose parents are not known, orphans and perhaps those who are declared as aban doned children. The homes are not set up in several States and areas. Even Juvenile Boards have not been properly functioning and the recognised agencies do not have the facility of child care. In these circumstances to order transfer of children from statutory homes to recognised agencies can indeed nOt be accepted as a rule. [576D F] 570 8.2. As and when such a request is received from recog nised agencies, the Juvenile Court or the Board set up under the Act may consider the feasibility of such transfer and keeping the interest of the child in view, the possibility of an adoption within a short period and the facilities available in the recognised agency as also other relevant features, make appropriate orders. A strait jacket formula may very often be injurious to the interest of the child. [576F G]

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ivil Appeal No. 3237 of 1991. From the Judgment and Order dated 10.10.1990 of the Delhi High Court in C.W. No. 3204 of 1990. Soli J. Sorabjee, S.V. Deshpande and C.L. Sahu, Advs. for the Appellant. Dr. Y.S. Chitale, and S.K. Sinha for the Respondents. The Judgment of the Court was delivered by VERMA, J. Leave is granted. Respondent No. 6, Jupiter Cooperative Group Housing Society Limited, was formed in 1979 for providing houses to its 130 members including the appellant Prem Jeer Kumar. The appellant was earlier the Secretary and then the President of the Society till 1985, by which time substantial con struction had been completed. The members were allotted three room flat for a sum of Rs. 1, 10,000. In August, 1985, Respondent No. 3, Registrar, Delhi Cooperative Societies, appointed 784 an Administrator to look into the affairs of the Society since the appel. lant and other office bearers had held the office for more than two terms. The controversy giving rise to this proceeding relates to the alleged discrepancy re garding purchase of some building material in January, 1984, for the construction of flats for members of the Society in Vikas Puri at New Delhi. The New Managing Committee of the Society formed in September, 1986, complained to the Regis trar, COoperative Societies alleging irregularities by the previous Managing Committee of which the appellant was the President. This matter was referred to arbitration by order dated 12.10.1989 passed by the Joint Registrar (Arbitration) Cooperative Societies, Delhi Administration. Respondent No, 1, Surender Gandotra was appointed the Arbitrator, who gave his AWard on 1.5. 1990. The relevant portion of the Award is as under: "It is also interesting to discuss the conduct of these two respondents of this case, Shri Poonam Dhand and Shri P.J. Kumar as they have been moving applications after applications in this court raising vicious and frivolous grounds just to delay the delivery of justice in this case. The miscellaneous applications relating to the dispute of juris diction of this court and then that since criminal proceedings are pending with the Delhi Police, proceedings in this Court should be kept pending till final decision in the criminal proceedings. All these applications were properly attended, scrutinized and dis posed of legally. It is also interesting that despite number of chances/opportunities having been given to the respondent to file reply to the main points of the claimant society, the defendants S/Shri Poonam Dhand and Shri P.J. Kumar did not file any reply and followed delaying and dilatory tactics and to defeat the ends of justice. Even today 30th April, 1990, fixed for hearing none came from the side of S/Shir Poonam Dhand, P.J. Kumar either presonally or through Advocate. The advocate of the claimant society Shri Tomar argued that ex parte proceedings may be initiated against the respondents who have absented from these proceedings. In view of these cricumstances, and the conduct of 'respondents in this case 0right from the very inception of this case, there is no other alternative left for me but to proceed ex parte against the respondents S/Shri Poonam Dhand and P.J. Kumar. Ex parte award is announced with the following details; . 785 Principal amount to be paid by the respon dents to the Jupiter Cooperative Societies Limited, Vikas Puri, New Delhi. Rs 1,46,2 10.20 Interest at the rate of 18% from 17.4.1985 till all the dues are cleared by the respond ents. Cost allowed Rs.5,000.00 With the above observations, ex parte award is given against the respondents S/Shri Poonam Dhand, P.3, Kumar who are jointly and severally responsible to pay the Jupiter Cooperative Group Housing Society Limited, Vikas Puri, New Delhi, principal amount of Rs. 1,46,210.00 NPS plus 18% interest from 17.4.1985 till all the dues are cleared and costs of Rs.5,000. " , The appellant then filed an appeal under section 76 of the Delhi Cooperative Societies Act, 1972 (hereinafter referred to as 'the Delhi Act ') in the Delhi Cooperative Tribunal (Respondent No. 2) challenging the Award dated 1.5.1990. The Tribunal held that the Arbitrator 's act of proceeding ex parte against the appellant is justified and taking the view that the appeal had no merit, dismissed the same. The appellant then filed a writ petition in the High Court challenging the Award and dismissal of his appeal by the Tribunal on 3.7.1990. The said writ petition has been dismissed by the High Court on 10.10.1990. It is in these circumstances that the appellant assails the Award, dismiss al of the appeal and then the .writ petition. The argument of Shri Sorabjee, learned counsel for the appellant, is that it is section 59 and not section 60 of the Delhi Act which applies to the present case. In reply, Dr. Chitale on behalf of the contesting respondents contended that section 60 relating to arbitration and not section 59 pertaining to surcharge applies to the present case. Sections59 and 60 of the Delhi Act, insofar as relevant, are quoted hereinbelow: "59. Surcharge (1) If in the course of an audit, inquiry, inspection or the wind ing up of a cooperative society, it is found that any person, who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act, the rules or the bye laWs or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has misappropriated or fraudulently retained any money 786 or other property belonging to such society, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorised by him, by an order in writing in this behalf, to inquire 'into the conduct of such person; Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub section. (2) Where an inquiry is made under sub section (1), the Registrar may, after giving the person concerned an opportunity of being heard, make an order, requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable." "60. Disputes which may be referred to arbitration(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitu tion, management or the business of a coopera tive society other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society arises (a) among members, past members and persons claiming through members, past members and deceased members, or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its com mittee or any officer, agent or employee of the society or liquidator, past or present, or (c) between the society or its commit tee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or (d) between the society and any other cooperative society, between a society and liquidator of another society 787 or between the liquidator of another society. such disputes shall be referred to the Regis trar for decisior and no court shall have jurisdiction to entertain any suit other proceedings in re spect of such dispute. (2) For the purposes of sub section (1), the following shall be deemed to be disputed touching the constitution management or the business of a cooperative society namely (a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal rep resentatives of a deceased member, whether such debt of demand is admitted or not; (b) a claim by a surety against the principal debtor where the society has recov ered from the surety any amount in respect of any debt or demand due to it from the princi pal debtor as a result Of the default of the principal debtor, whether such debt or demand is admitted or not; (c) any dispute arising in connection with the elec tion of any officer of a society other than a society mentioned in sub section (1) of section 31. (3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the consitution, management or the business of cooperative society, the decision thereon of the Registra shall be final and shall not be called in question in an court. i (4) . . . ." In substance the contention of the learned counsel for the appeal lant is that the proper action to take in such a case is to resort to section 59 dealing with surcharge and not to settlement of dispute by arbitration since it is not one of the disputes which may be referred to arbitration in terms of section 60 of the Delhi Act. It was argued that sub section (2) of section 60 is exhaustive and not merely illustrative, which shows that the present dispute does not fall within the ambit 0 section 60. Dr. Chitale, on the other hand, asserted that it is sub 788 section (1) of section 60 which indicates the true scope of section 60 while sub section (2) is merely illustrative and no exhaustive. It was urged that clause (c) of sub section (1) of section 60 expressly provides that if any dispute touching the constitution, ' management or the business of the cooperative society arises between the society or its committee and any past committee, any officer, agent or employee or any past officer of the society, the dispute shall be refered to arbitration. Reliance is placed on behalf of the appellant on Chander Nagar Cooperative House Building Society Ltd. and Anr. vs Ashok Ohri, A. 1. R. 1976 63 Delhi 299 wherein the learned Single Judge took the view that sub section (2) of section 60 of the Delhi Act is exhaustive and not merely illustra tive. That decision overlooks the decision of this Court in Srirakulu referred hereafter and conflicts with it. Further consideration of the same is, therefore, not necessary. Dr. Chitale placed reliance in Pentakota Srirakulu vs The Cooperative Marketing Society Ltd.; , to contend that this point was concluded against the appellant. In our opinion, the contention of Dr. Chitale has to be accepted. The decision of this Court in Srirakulu was ren dered 'with reference to the Madras Cooperative Societies Act, 1932 (hereinafter referred to as 'the Madras Act ') wherein section 51 relating to settlement of disputes by arbitration was the provision corresponding to section 60 of the Delhi Act Clause (c) of sub section (L) of section 51 of the Madras Act was substantially the same as clause (c) of sub section (1)of section 60 of the Delhi Act. The explana tion in sub section (1) of section 51 of the Madras Act was substantially similar to clause (a)of sub section (2) of section 60 of the Delhi Act. The material part of section 51 of the Madras Act, on the basis of which the decision was endered in Srirakulu quoted therein is as under " section 51 Arbitration: Disputes: 51. (1) If any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society) arises (a) . . . . . . . (b) . . . . . . 789 (c) between the society or its com mittee and any past committee, any officer, agent or servant, or any past officer, past agent or past servant, or the nominee, heirs or legal representatives of any deceased officer, deceased agent or deceased servant, of the society, or (d) . . . . . . Explanation A claim by a registered society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or demand be admitted or not, is a dispute touching the business of the society within the meaning of this sub sec tion. " In the Madras Act, section 49 was the provision correspond ing to section 59 of the Delhi Act. It was, therefore, on the basis of similar corresponding provisions that the question arose for decision of this Court in Srirakulu. In Srirakulu also the facts disclosed in the inquiry that certain loss was caused to the society by the acts of past Managing Committee and, therefore, a special officer ap pointed to look into the affairs of the society made a claim under section 51 of the Madras Act before the Registrar against the past President of the Society: It was held that the Registrar 's order under section 51 of the Madras Act could not be challenged. We do not find any significant difference between the provisions of the Madras Act which form the basis .of this Court 's decision in Srirakulu and sections 59 and 60 of the Delhi Act with which we are con cerned to justify taking a different view as suggested by learned. counsel for the appellant. Following the view taken in Srirakulu, this appeal must fail. Consequently, the appeal is dismissed with costs quantified at Rs.5,000. N.P.V. Appeal dis missed.

On a complaint made by the Managing Committee of the 6th respondent Cooperative Housing Society, the third respond ent, Registrar, Cooperative Societies, referred the dispute relating to irregularities in the purchase of building material for construction of flats for members of society by the past Managing Committee, of which the appellant was the President at the relevant time, to arbitration. The first respondent Arbitrator, gave his ex parte award, on the failure of the appellant and another person to file their reply to the claim of the claimant society, and directed the appellant and the other person to pay the society certain sum with interest thereon. The appellant challenged the award before second re spondent, the Delhi Cooperative Tribunal, which dismissed the same holding that the Arbitrator 's act of proceeding ex parte was justified and that the appeal had no merit. The appellant 's writ petition was also dismissed by the High Court. In the appeal before this Court on behalf of the appel lant it was contended that it was Sec. 59 dealing with surchage which was applicable to the instant case and not Section 60, which pertained to settlement of disputes by arbitration since the dispute in question was one which could not be referred to arbitration in terms of Section 60 of the Act. On behalf of the contesting respondents it was submitted that it was Section 60, which was applicable and not Section 59. Dismissing the appeal, this Court, HELD: 1.1 Sub Section (1) of Section 60 of the Delhi Co operative 783 Societies Act, 1972 indicates the true scope of the Section 60, while sub section (2) is merely illustrative, and not exhaustive. Clause (c) of sub section (1) expressly provides that if any dispute touching the constitution/management or the business of the cooperative society arises between the society or its committee and any past committee. any offi cer, agent or employee or any past officer of the society, the dispute should be referred to the arbitration. [787H, 788A B, D] 1.2 In the instant case, the dispute, viz. irregulari ties in the purchase of building material for construction of flats for the members of the Society by the previous Managing Committee, touches the management of the Society and fails within the ambit of Section 60 of the Act. The third respondent, Registrar, Cooperative, Societies was, therefore, right in referring the dispute to arbitration. [789D F] Pentakota Srirakulu vs The Cooperative Marketing Society Ltd. ; , followed. Change Nagar Cooperative House Building Society Ltd. and Anr. Ashok Ohri, AIR 1976 63 Delhi 239, disapproved.

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vil Appeal Nos. 2266 69 of 1979. 705 From the Judgment dated 9.8.1978 of the Punjab and Haryana High Court in L.P.A. Nos. 576 to 579 of 1975. Harbans Lal and M.V. Goswami for the Appellants. Iqbal Singh for the Respondent. The following Order of the Court was delivered: These appeals by special Leave are directed against the common judgment and decree of the Punjab and Haryana High Court passed in L.P.A. Nos. 576 79 of 1975. Three brothers, by means of four sale deeds executed on June 25, 1968, sold some parcels of land to Harbhajan Singh respondent herein. The 4th brother by the name of Ujagar Singh, whose legal representatives are the appellants herein,. filed four suits of preemption ,against the vendee and those were decreed on July 15, 1970, on terms of payment of pre emption money on or before August 30, 1970. Four appeals were filed by the plaintiff pre emptors before the District Judge for the reduction of the pre emption money. On an application moved by the pre emptors the time for deposit of the amount fixed under the decree by the Trial Court was extended till further orders. The appeals finally were rejected under Order 41 Rule 3 of the Code of Civil Procedure as being insufficiently stamped and hence not properly presented. Before hand, however, 'the laintiff pre emptors all the same, deposited the pre emption amount in the Trial Court, on their own, on October 26, 1970. After the rejection of their appeals, the pre emptors sought execution of the pre emption decrees which attracted objections by the vendee judgment debtor. The primary objec tion raised was that the suits stood automatically dismissed for non deposit of the preemption money within the time identically stipulated under the questioned decrees. The plea of the vendee was based on the mandate of Order 20 Rule 14, Civil Procedure 'Code whereunder the Court when decree ing the claim to pre emption is required to specify in the decree on or before which the pre emption money shall be paid, if not already paid, and further if it is not so paid, the suit shall stand dismissed with costs. (Whatever is relevant in Order 21 Rule 14 alone has been taken note of). The date specified by the Trial Court as said before was August 30, 1970 and under the interim orders of the Appel late Court the time for depositing the said money was ex tended till 706 further orders. Undeniably the Court never passed any fur ther orders in that regard and thus the time for depositing the said money stood extended without any limit. objec tion was sustained by the Trial/ Executing Court. On appeal to the Appellate Court at the instance of the pre emptors, the District Judge took .a contrary view permitting the execution to proceed. A learned Single Judge of the High Court in appeal upheld the view of the District Judge, but a Division Bench of the High Court. In Letters Patent Appeals, reversed the District Judge as also the Single Judge uphold ing the objection by the vendee that there were no decrees which could be executed. We have heard learned counsel for the appellant for he alonewas present. There has been a sea change in the law of pre emption in the States of Punjab and Haryana where from these appeals have arisen. Whereas in Punjab the Punjab Pre emption Act itself has been repealed, in Haryana it has substantially been chopped down by justicing. This Court in Atam Parkash vs State of Haryana & Ors., ; declared ultra vires section 15(1) of the Punjab Pre emption Act, as ap plicable to Haryana, whereunder certain relatives of the vendor had been given the right to pre empt a sale of immov able. property. The view of this Court and the present state of law is not by any means insignificant or irrelevant for judging the present matter and for resolving the controversy in hand. Rather its pervasive thought permeats the mind. Learned counsel for the appellants would have the con troversy determined on the anvil of Section 148 of the Code of Civil Procedure, pleading for time to be extended by the Court, as it is extendable when any period is fixed or granted by the Court for the doing of any act prescribed or allowed by the Court, even though the period originally fixed or granted has already expired. He has brought to our notice that in the main matter when the appeal was rejected by the District Judge as being insufficiently stamped time was asked from the District Judge to make good the deficien cy in the stamp duty but that was rejected and though he concedes that the matter was not taken up in revision before the High Court, it is still contended that this Court should exercise its plenary power to extend the time in the inter ests of justice and have the Court fee made good. He also concedes that when the District Judge was asked to extend and specify the time for deposit of the pre emption money, he had declined to exercise his discretion, so as to regula rise payment, when the appellants had by themselves 707 deposited the pre emption money on October 26, 1970 before hand,leaving the matter to be agitated before the executing Court. Likewise it is contended that this Court can and should specify the time for deposit so as to regularise it in exercise of powers under Section 148 C.P.C. He also high lights that the mistake herein was that of the Courtand for both the propositions he takes aid of Jogdhayan vs Babu Ram & Ors., ; and Jagat Dhish Bhargava vs Jawahar Lal Bhargava and Others, ; In any event he concedes that for the later wrongful non exercise of discre tion of the District Judge, the matter was not taken in Second Appeal or Revision, as the case may be, before the High Court. We have pondered over, the matter. Our view may appear some what slanting but we cannot disassociate ourselves from the canvass now spread, showing there is no law of pre emp tion permitting a decree to be drawn in terms of Section 15(1) of the Punjab Pre emption Act. Were we to exercise at all the discretions on the subject afore mentioned we would in any event be completing the process of decreeing the suits; the suits which have been held to fall down under Order 20 Rule 14 of the Code of Civil Procedure, tantamount ing to their dismissal, and that too on present day when such decrees cannot be passed. The High Court however, took the controversy in a different light. It took the view that the insufficiently stamped appeals be/ore the District Judge were no appeals in the eye of law, as was contende don behalf of the vendee, and the view of the District Judge in not extending time was right as it was rightly considered that the appeals had not been entertained at all. Support was also taken for its view by the High Court from the circumstance of the order of the Court extending time ex parte, which conferred no obligation on the vendee to treat the decree operative against him as and when the pre emptors chose to deposit the pre emption money. The High COurt on this reasoning restored the judg ment of the Trial/Executing Court,upholding the objections of the vendee. Where the High Court arrived by following one way, we have been led to arrive by another. The end result, however, is the same that the objections of the vendee mustremain sustained and the pre emptor appellants must fail in the event,not getting their suits for pre emption de creed. The appeals must thus inevitably fail and are hereby dismissed. Decreetal money deposited by the appellants may be permitted to be withdrawn by them, ii not already with drawn. No costs for there is no opposition. V.P.R. Appeals dis missed.

Three brothers executed four sale deeds on June 25, 1968, to respondent. The 4th brother, whose legal represen tatives are the appellants, filed four suits of pre emption against the vendee respondent and those were decreed on terms of payment of pre emption money on or before August 30, 1970. The plaintiff pre emptors appellants filed four appeals before the District Judge for the reduction of the pre emption money. On an application moved by the pre emptors the time for deposit of the amount fixed under the decree by the Trial Court was extended till further orders. The appeals were rejected under Order 41 Rule 3 of the Code of Civil Procedure as being insufficiently stamped and not properly presented. Before hand, however on 26.10.1970, the plaintiff pre emptors, deposited the pre emption amount in the Trial Court. The pre emptors sought execution of the pre emption decrees. The vendee judgment debtor raised objections stat ing that the suits stood automatically dismissed for non deposit of the pre emption money within the time identically stipulated under the decrees. The objection was sustained by the Trial/Executing Court. 704 The appeal to the Appellate Court at the instance of the preemptors, was allowed, permitting the execution to pro ceed. A Single Judge of the High Court in further appeal upheld the view of the District Judge, but the Division Bench of the High Court allowed the Letters Patent Appeals, upholding the objection made by the vendee respondent, that there were no decrees which could be executed, against which these appeals by special leave to this Court .were filed. The appellants contended that the controversy could be determined on the anvil of Section 148 of the Code of Civil Procedure by extending time by the Court, as it was extend able when any period was fixed or granted by the Court for the doing of any act prescribed or allowed by the Court, even though the period originally fixed or granted had already expired; that this Court should exercise its plenary power in the interests of justice to extend the time. Dismissing the appeals, this Court, HELD: 1. There is no law of pre emption permitting a decree to be drawn in terms of Section 15(1) of the Punjab Pre emption Act. Were the Court to exercise at all the discretions on the subject, the Court would in any event be completing the process of decreeing the suits; the suits which have been held to fall down under Order 20 Rule 14 of the Code of Civil Procedure, tantamounting to their dismiss al, and that too on present day when such decrees cannot be passed. [707C D] 2. The objections of the vendee must remain sustained and the pre emptor appellants must fail in the event, not getting their suits for pre emption decreed. Decretal money deposited by the appellants may be permitted to be withdrawn by them, if not already withdrawn. [707F G] Atarn Parkash vs State of Haryana & Ors., ; , followed. Jogdhayan vs Babu Ram & Ors., ; and Jagar Dhish Bhargava vs Jawahar Lal Bhargava and Others, ; , referred to.

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ew policy which is in vogue. The licensing period is for two years commencing from 1.4.1991 to 31.3.1993. Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufac ture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court. Any direc tion in this regard would not only interfere with the li cences granted to them, but also create a hiatus in opera tional system. This Court cannot direct the State Government to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new policy area and to grant licence to the petitioner. It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from 1.4.1991. As regards the Government Distilleries at Ratlam is concerned for grant of D 1(s) licence, as requested for, we have no sufficient material whether any arrangements have 494 been made to any other parties for supply area in that regard. Under these circumstances, it is extremely difficult to accede to the request made by the counsel for the peti tioner. [498E 499A] & ORIGINAL JURISDICTION: Writ Petition No. 729 of 1988. (Under Article 32 of the Constitution of India). R.F. Nariman and P.H. Parekh for the Petitioners. V.N. Ganpule. V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain. R.S. Singh and Rameshwar Nath for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. In this writ petition under article 32 of the Constitution, the petitioner, a partnership firm seeks reliefs of mandamus to direct the State Government and the Commissioner of Excise of M.P. to allow the petitioner to set up a distillery pursuant to the cabinet policy dated December 30, 1984 and to grant D 2 licence; to declare the letter dated February 8, 1982 as unconstitutional, illegal and of no effect in law and to direct the respondent Nos. 1 and 2 to grant a licence to manufacture potable Alcohol within the state of Madhya Pradesh and to grant D 1 licence to supply country made liquor, etc. This case has behind it chequered history which is necessary to adumbrate. In the State of M.P. vs NandlaI Jaiswal & Ors., ; this court considered the legality of the policy, the subject matter in the writ petition. It was held therein that nine distilleries in the State of Madhya Pradesh in cluding the one at U j jain were set up on the lands and buildings belonging to the Government. The plants and ma chinery therein initially were of the Government, but in course of time the licensees installed or replaced the plants and machinery and became the owners. The petitioner and its predecessors had licence for the distillery at Ujjain for well over 40 years to manufacture rectified spirit. The last of the licences held by the petitioner was for the years April 1, 1976 to March 31, 198 1. The period of licence was at that time for five years. The practice as per the provisions of the M.P. Excise Act 1915 for short 'the Act ' and M.P. Distilleries, Breweries and Warehouses Rules for short 'the rules ' issued in exercise of the powers under section 62 was to call for the tenders to manufacture and supply the rectified spirit or denatured spirit, spirit (country made) to the retail vendors 495 within the area attached to the distillery. Rajdahani Dis tillers Corporation, for short 'RDC ' became the successful tenderer for the licensing period starting from April 1, 1981 to March 31, 1986. The petitioner challenged in Misc. Petition No. 701/81 in the M.P. High Court under article 226. Initially stay was granted, but later it was vacated on August 20, 1981 Licence was granted for the period starting from August 25,1981 to March 31, 1986 to RDC and the dis tillery, plant and machinery at Ujjain was handed over to RDC on August 28. 198 1. Thereafter the petitioner filed another writ petition No. 169/82 on March 16, 1982 for redelivery Of the plant and machinery and the warehouses and other consequential reliefs. That writ petition was dis missed by the High Court against which Civil Appeal No. 5483/83 was filed, which is just now disposed of. The peti tioner had applied for grant of licence on February 19, 1982 and he reiterated his request in number of reminders includ ing one oh November 3, 1986. In the interregnum the Govt. changed the policy by a Cabinet Sub Committee policy deci sion dated December 30, 1984 under which they decided to grant licence to the existing licensees of the distilleries and that they should construct the factories at their ex penses on the land allotted by the State Govt. or acquired and allotted by the State Govt. and that they shift the business to new factories and the licence would be for a period of five years. Calling in question of that policy several writ petitions including the one by the petitioner were filed in the M.P. High Court. The Division Bench partly allowed the writ petition and quashed part of the policy decision. Against it appeals and special leave petitions were filed by the State and the unsuccessful petitioners including the petitioner. It was disposed of by this court reported in Jaiswal 's case. During the hearing of the writ petition, the Attorney General of India conceded that if the petitioner makes any application for grant of licence it would be considered by the State Govt. and be disposed of quickly. That concession was noted and the argument was founded thereon to hold that the Govt. did not intend to create any monopoly in favour of the existing licensees. This court upheld the policy of the Govt. and allowed the appeals and dismissed the special leave petitions of the petitioner and other. Pursuant thereto the petitioner made an application on December 25, 1987 followed by several reminders. Ultimately the State Govt. rejected the petition by letter dated February 8, 1988, which is impugned in this writ petition. Under section 13 of the Act, the State Govt. is empowered to grant licence to manufacture, possession and sale of recti fied spirit and the liquor in the distilleries or the brew eries. Under section 14 and Rule XXII the licensee should also have licence to establish distillery to distil 496 rectified spirit or denatured spirit or liquor and a ware house wherein any intoxicant be deposited and kept without payment of duty, but subject to payment of the fee to the State Govt. as it may direct. No intoxicant shall be sold by operation of section 17, except under the authority and subject to the terms and conditions of the licence granted in that behalf. Rule XXII provides the method of disposal of the licence which reads thus: "XXII. Disposal of licences (1) Licence for the manufacture or sale of intoxicants shall be disposed of by tender. auction. fixed licence fee or in such other manner as the State Govt. may, by general or special order, direct. Except where otherwise prescribed, licence shall be granted by the Collector or by an Officer authorised by him in that be half." Rule III to V of the Distillery and Warehouse Rules also made inter alia under sub section 2(h) of section 62 deal with the subject of grant of ' licence and provide, in the follow ing terms, for different kinds of licences which may be issued, viz., licences in Forms D 1, D 1(s) and D 2: "III. Subject to the sanction of the State Government, the Excise Commissioner may grant a licence in Form D 1 and Form D 1(s) for the wholesale supply of country spirit to retail vendors. The Collector may issue, on payment of a fee of Rs. 1000 a licence in Form D 2 for the construction and working of a distillery to any person to whom a wholesale supply licence has been issued. V. Subject to sanction of the State Government the Excise Commissioner may issue a licence in Form D 2 for the construction and working of a distillery on payment of a fee of Rs. 1000. " The State Govt. rejected application of the petitioner on three grounds. namely, (1) that the petitioner requested to issue a licence at the old place at Ujjain Distillery which is no longer available; (2) present policy of the State and the Central Govt. was to discourage manufacture of liquor for drinking purpose, except for molasses. (3) 497 However, if it is manufactured from other raw materials other than the Mahua, his application would be considered. If the petitioner makes an application for establishment or manufacturing denatured spirit at other places and if they produce a No Objection Certificate from Central Government and Environmental Department, his application would be considered. The contention of Sri Nariman, the learned counsel for the petitioner, is that the State Govt. having made solemn undertaking before this court and the arguments were heard in Nandlal Jaiswal 's case on the basis that the application of the petitioner would be considered and disposed of it was with an intention to grant licence to the petitioner, but rejection is contrary to the undertaking given to this court. It was also contended that the petitioner have a long, clean and commendable history of 40 years in manufac turing country made liquor in the distillery and supply thereof within the area attached to U j jain Distillery. The State Government 's non grant of licence thereto is only a rouse to defeat the fundamental rights of the petitioner to establish and trade in the manufacture and distribution of the liquor in terms of the provisions of the Act and the rules and the instructions of the Govt. in that regard. Having given the licence to the other distilleries, the petitioner being similarly placed, non grant thereto is arbitrary, discriminatory and violating article 14 of the Constitution. It was also further contended that the peti tioner if for any reason cannot be granted D 2 licence at U j jain, D 2 licence may be granted on Government distillery at Ratlam and supply area attached to it under D 1(s) so as to do complete justice to the petitioner. It was resisted by Sri Ganpule, learned senior counsel for the State contending that pursuant to the undertaking given to this court, the application was considered and found not feasible to grant the licence to the petitioner due to grounds stated in the impugned order which are relevant and existant being in conformity with the change of the policy, and so this Court cannot interfere and may not issue the writ as prayed for. Though rule nisi was ordered on March 17, 1989, despite notice of the Registry dated April 24, 1989, neither copies of the writ petition, nor the requisite process fee for service of the rule nisi on the respondents were deposited in the court. As a result the rule nisi was not issued to the contesting respondents Nos. 3 to 10. Along with the connected appeal which is just disposed, Sri Tarkunde, the learned senior counsel appearing for RDC which was impleaded as 5th respondent to whom licence was given for Ujjain Distillery, contended that unless there is cut in the supply area of the operation of the existing 498 licences and a separate supply area is carved out, no D 2 licence could be issued to the petitioner. The licensing period of 1986 to 1991 had expired by efflux of time. New policy is in vogue for the succeeding licensing period of 199 1 to 1993. The licences having been granted to the respective persons, who are not represented in this court, the relief asked for cannot be granted in their absence. In our view there is force in the contentions of the respondents. The only question for consideration is whether it is a fit case for interference by this court due to the aforestated sequence of events. Undoubtedly the learned Attorney General assured this court that the application, if filed by the petitioner, would be considered. Obviously in accordance with the provisions of the Act and the rules. The policy of 1984 was upheld by this court under which nine distilleries were granted D 2 licences to manufacture recti fied spirit and liquor and to supply to the retailers under D 1 licence within the area attached to each of the distill eries. The petitioner admittedly made application to grant licence to manufacture country made liquor, obviously with Mahua flowers or molasses at Ujjain. The RDC established new distillery at Ujjain in terms of the new policy, at its expense, and is manufacturing and supplying the liquor. It vacated the old distillery at Ujjain which we are informed that the building is still existing. RDC had manufactured the spirit and country made liquor in terms of D 2 licence and supplied in terms of D 1 licence. The period of the licence also expired by efflux of time. Again there is change in the new policy which is in vogue. The licensing period is for two years commencing from April 1, 199 1 to March 31, 1993. Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufacture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court. Any direction in this regard would not only interfere with the licences granted to them, but also create a hiatus in operational system. This court cannot direct the State Govt. to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new supply area and to grant licence to the petitioner. It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from April 1, 1991. As regards the Govt. Distilleries at Ratlam is concerned for grant of D 1 (S) licence as requested for, we have no sufficient material whether any arrangements have been made to any other parties for supply area in that regard. Under these circumstances, it is extremely difficult to accede to the request made by the 499 counsel for the petitioner, Though the petitioner had estab lished long career in the field to manufacture, supply and distribution of intoxicants in the State of Madhya Pradesh for about 40 years, we cannot issue any direction as asked for. Under these circumstances we are constrained to dismiss the writ petition, but without costs. Y.L. Petition allowed.

The petitioner and its predecessors had licence for distillery at Ujjain to manufacture rectified spirit and the last of such licence held by the petitioner was for the period 1.4.1976 to 31.3.1981. For the licensing period commencing from 1.4.1981 to 31.3.1986, the petitioner was unsuccessful and the licence was granted in favour of Rajd hani Distillery Corporation. The petitioner impugned the same but failed both before the High Court as also before the Court. Thereafter, the petitioner filed a writ petition in the High Court claiming restitution of the distillery but failed and an appeal against the High Court 's order was preferred before this Court, which has been disposed of whereby this Court has declined to grant restitution but directed that the petitioner should move an application before the State Government to have the value of the plants licence on February 19,1982 and reiterated his request by number of reminders including the one in November 3, 1986. In the interregnum, the Government policy was changed by a cabinet sub committe policy decision dated 30.12.1984, whereby they decided to grant licence to the existing licen sees of the distilleries and that they should construct the factories at their expenses on the land allotted by the State Government or acquired and allotted by the State Government and that they shift the business to new factories and the licence would be for a period of five years. Several writ petitions including the one by the petitioner were filed in the High Court challenging the policy. The High Court quashed part of the policy decision. Against that order, petitions were filed by the State and the unsuccess ful petitioners including the petitioner in this Court. Those petitions were disposed of by this Court by its judg ment in the case of State of M.P.v. Nandlal Jaiswal and Ors. , ; The court upheld the validity of the Government policy. During the course of the arguments, the Attorney General of India conceded that if the petitioner makes an application for grant of licence, it would be considered by the Govern 493 ment and disposed of quickly. Pursuant thereto the petition er made an application on December 25, 1987. The State Government rejected the application by letter dated February 8, 1988, which among other things is impugned in this peti tion under Article 32 of the Constitution. It is contended on behalf of the petitioner that the intention behind the solemn undertaking given by the State in Nandlal Jaiswal 's case clearly showed that the intention was to grant the licence to the petitioner rejection is contrary to the undertaking and violating the fundamental right of the petitioner to establish and trade in the manu facture and distribution of the liquor; further it is dis criminatory is as much as licences have been issued to others similarly placed. Alternatively, it is contended that if it is not found feasible to grant licence for Ujjain, the same be granted for Ratlam Distillery. Counsel for the State urged that it has not been found feasible to grant licence to the petitioner due to grounds stated in the order which are in confermity with the change in policy and the court should not interfere. On behalf of Rajdhani Distillery Corpn. it was urged that unless there is cut in the supply area of the operation of the existing licences and a sepa rate supply area is carved out, no licence could be issued to the petitioner; that new policy is in vogue for the succeeding licensing period of 1991 to 1993, and the li cences having been issued to persons, who are not represent ed in this court, the court should not grant the relief asked 1or in the writ petition. Dismissing the writ petition, this Court,

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N: Civil Appeal Nos. 5969 70 (NM) of 1990. From the Order dated 21.8.1990 of the Customs, Excise and Gold (Control), Appellate Tribunal, New Delhi in Appeal Nos. ED/SB/T/945/80 A and ED/SB/T/A. No. 586/81 A (Order No. 1284 to 1286/90 A.). Dr. Debi Paul, Harish Salve, Darshan Singh, Ms. Suman J. Khaitan and Ms. Priya Hingorani for the appellant. A. Subba Rao for the Respondent. The following Order of the Court was delivered: These appeals arise out of and directed against the common appellate order dated 21.8.1990 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ( 'Tribunal ' for short) m ' Appeals Nos. ED/SB/T 945/80A and ED/SB/T/586/8 1A. By the same order another appeal of the appellant was also disposed of but that matter is not car ried up in appeal here. The appellant, M/s. Texmaco Ltd., pursuant to con tracts entered into in this behalf with the Railway Adminis tration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways. The invoices raised by the appellant respecting these wagons reflected only the price of the wagon bodies without includ ing the value of the "wheel sets" on which the wagon bodies were mounted. The goods were cleared for purposes of Excise duties on such invoice value. The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also. This claim for recov ery of the short levy having been adjudicated against the appellant, an appeal was taken before the Tribunal. Before the Tribunal, it would appear, two contentions were raised: First that the goods manufactured by the appel lant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Administration and that, therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" 326 supplied by the Railways and, secondly, that at all events the value in excess of the 'invoice value ' which represented the price of the wagonbodies was exempt from levy of duty under the Exemption Notification No. 120/75 CE dated 30 April, 1975 issued under Rule 8 of the Central Excise Rules, 1944. What is implicit in the second contention is that, but for the said Notification No. 120/75 CE dated 30.4.1975, the assessable value would otherwise require the exclusion in it the value of the "wheel sets" also on the premise that the "wheel sets" became an integral part of the wagons, even though the "wheel sets" had been supplied free of cost by the Railways themselves. The Notification No. 120/75 CE exempted "so much of the duty of excise . . as is in excess of the duty calculated on the basis of invoice prices". On the first contention: that the 'assessable value ' of the 'goods ' could not include the "wheel sets" which were not fabricated or manufactured by the appellant, the Tribu nal, rejecting the contention said: "On going through the facts and in view of the clear findings given by the lower authorities that no wagon is complete without the wheels; what has been cleared and removed by the appellants is the wagon mounted on wheel sets and not the wagon body alone . On the issue of determination of assessable value, the Supreme Court has held that for the purpose of levy of excise duty, the value of the article is the full intrinsic value of the article inclusive of the cost of the materials and components supplied free by the customer and irrespective of the fact that no expenditure was incurred by the manufactur er on such components." No fault can be found with this reasoning of the Tribunal, indeed, considerations of ownership of the goods are extra neous to levy of duties of excise which are imposts on manufacture. The second contention on which Dr. Pal laid particu lar emphasis, indeed, assumes the correctness of the first proposition and claims exemption on the strength of the Notification No. 120/75 CE. That Notification says: "The Central Government has exempted goods falling 327 under Item No. 68 of the First Schedule to the (1 of 1944), cleared from the factory of manufac ture, on sale, from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the invoice price (excluding duty and local taxes, if any, included in such price) charged by the manu facturer for the sale of such goods: Provided that the aforesaid exemp tion shall be admissible only if (i) the manufacturer files with the Superin tendent of Central Excise having jurisdiction a written declaration to the effect that he opts to avail of the said exemption: (ii) Omitted as unnecessary (iii) (iv) the invoice price is not influenced by any commercial, financial or other relation ship whether by contract or otherwise between the manufacturer or any person associated in business with the manufacturer and the buyer other than the relationship created by sale of the aforesaid goods: (v) Omitted as unnecessary. Provided . (Omitted as unnecessary) The Tribunal also rejected the claims for exemption under the Notification. It said: "We are unable to agree with the arguments of the appellants ' counsel that assessable value of the article is different from the consideration received by the appel lants to claim benefit under Notification 120/75. To claim exemption on benefit under Notification 120/75 it should be subjected to in compliance with the conditions specified therein. Condition No. IV of Notification No. 120/75 required that the invoice value should be 328 the full commercial price of the article. According to the decision of the Supreme Court (supra) the value of the article is the in trinsic value and not restricted consideration received by the appellant as urged by the appellants ' counsel. In the view we have taken, the appellants are not entitled to concession under Notification No. 120/75 dated 30.4. 1975 . Dr. Pal appearing in support of the appeals urged that the Tribunal misdirected itself in law in its construc tion of the exemption Notification and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissibility of its benefit in the present case. Dr. Pal said that it was erroneous to read the said condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheelsets". Dr. Pal said that clause (iv) did no more than merely importing the requirement that the invoice price should reflect a transaction at arms ' length and not that appellant 's invoice price should also include the value of the "wheel sets" supplied by the Railways. Dr. Pal further urged that the very purpose of the exemption was to relieve the manufacturer from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Adminis tration itself free of charge. If Clause (iv) was construed in the way in which the Tribunal did, the effect, counsel said, would be to take away with one hand what the notifica tion gave with the other. Shri Subba Rao, learned counsel for the Revenue, with his usual tenacity contended that Clause (iv) of the Notifi cation signified and imported idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct. On a consideration of the matter we are afraid the Tribu nal fell in to an error in its understanding of the notifi cation. The Notification posits and predicates the possibil ity that the 'invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay ' duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "in excess of the duty calculated on the basis of the 'i nvoice price '. There is no dipute in this case that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways. The invoice price 329 could not be required to include the value of the "wheel sets". But the "assessable value" would take into account the full commercial value including that of the "wheel sets". It is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated. There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets". The contract between the parties does not also require this. The way in which the Tribunal looked at the Notification is neither good sense nor good law. Such con struction would make the Notification and the exemption contemplated thereunder meaningless. The need for the exemp tion arose in view of the fact that "assessable value" was higher than the 'invoice value '. Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself. Shri Subba Rao placed strong reliance on the pro nouncement of this Court in M/s. Burn Standard Company Ltd. & Anr. vs Union of India & Ors., [1991] 3 Judgments Today 108. On the contentions raised and argued in that case the judgment, if we may say so with great respect, is correct. The question of the effect of the exemption Notification No. 120/7.5 CE was not raised and argued in that case. That apart, the exemption Notification itself makes it clear that it does not apply or is attracted to every case automatical ly, but that the manufacturer should expressly opt for the benefit of the Notification. Since no such claim was made in that case, the decision therein is of no assistance to the revenue. We accordingly allow these appeals; set aside the order of the authorities as well the affirming order of the Tribunal under appeal and hold that the appellant was enti tled under the said Notification No 120/75/CE, to exemption from that part of the duty as was in excess of the invoice price which, we hold, was not required to include the value of the "wheel sets". V.P.R. Appeals allowed.

The appellant pursuant to contracts entered into with the Railway Administration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways. The appellant 's invoices, reflected only the price of the wagonbodies without including the value of the "wheel sets" on which the wagon bodies were mounted. The goods were cleared for purposes of Excise duties on such invoice value. The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also. The claim for recovery of the short levy having been adjudicated against the appellant, appeals were filed before the Tribunal, by the appellant contending that the goods manufactured by the appellant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Adminis tration; and therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" supplied by the Railways; and that at all events the value in excess of the 'invoice value ' which represented the price of the wagon bodies was exempt from levy of duty under the Exemption Notification No. 120/75CE dated 30th April, 1975 issued under Rule 8 of the Central Excise Rules, 1944. The Tribunal dismissed the appeals, against which, the present appeals were filed before this Court. The appellant contended that the Tribunal misdirected itself in law in its construction of the exemption Notifica tion and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissi bility of its benefit in the present case; that 324 it was erroneous to read the condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheel sets"; that the very purpose of the exemption was to relieve the manufactur er from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Administration itself free of charge. The Revenue Respondent contended that Clause (iv) of the Notification signified and imported the idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct. This Court allowing the appeals, HELD. 1. The Notification posits and predicates the possibility that the invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "inexcess of the duty" calculated on the basis of the 'i nvoiceprice '. [328G H] 2. The way in which the Tribunal looked at the Notifica tion is neither good sense nor good law. Such construction would make the Notification and the exemption contemplated thereunder meaningless. The need for the exemption arose in view of the fact that "assessablevalue" was higher than the 'invoice value '. Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself. [329B C] 3. In this case, there is no dispute that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways. The invoice price could not be required to include the value of the "wheel sets". But the "assessable value" would take into account the full commercial value including that of the "wheel sets". 1t is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated. [328H 329B] 4. There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets". The contract between the parties does not also require this. [329B] 325 M/s. Burn Standard Company Ltd. & Anr. vs Union of India

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ivil Appeal No. 3382 of 1991. From the Judgment and Order dated 19.5. 1989/24.5. 1989 of Delhi High Court in W.P. No. 2915 of 1988. D.D. Thakur, V.C. Mahajan, N.S. Das Bahl, D.N. Puri, Mukul Mudgal, Ms. A. Subhashini, K. Vasudev, section Mathur, Syed Ali Ahmad, Syed Tanweer Ahmed, section Balakrishnan, M.K.D. Nambodiri, P.P. Tripathi and Ms. Sangita Garg for the ap pearing parties. The Judgment of the Court was delivered by OJHA, J. Special leave granted. This Civil appeal by special leave is directed against the order of the Delhi High Court dated 19th May, 1989 as clarified by order dated 24th May, 1989 in Writ Petition No. 29 15 of 1988. The facts in brief necessary for the decision of this appeal are that some land was proposed by the Central Government to be allotted for the resettlement of displaced persons. In October 1959 the Rehabilitation Ministry Employ ees ' Cooperative House Building Society Ltd., New Delhi, Respondent No. 1 (hereinafter referred to as the Society) was formed and incorporated. After completing necessary formalities an allotment of 60 acres of land was made by the Central Government in favour of the Society which, however, was subsequently cancelled on 7th May, 1979. The Society challenged the aforesaid order of cancellation before the Delhi High Court in Writ Petition No. 654 of 1979 which was allowed by a Single Judge of that Court on 1st September, 1980. This judgment Was challenged by the Delhi Development Authority before the High Court in Letters Patent Appeal No. 254 of 1980 which was dismissed by a Division Bench of the High Court on 5th January, 1981. Aggrieved by these orders the Delhi Development Authority filed Special Leave Petition (Civil) No. 3762 of 1981 before this Court in which the parties entered into a compromise inter alia providing that an area of 45 acres of land in 842 place of 60 was to be allotted to the Society and that membership of the society was to be 'restricted to persons who were members as on 1st September, 1980 in accordance with the bye laws of the SoCiety as then prevailing. 1st September, 1980 was the date on which Writ Petition No. 654 of 1979 giving rise to Special Leave Petition (Civil) No. 3762 of 1981 had been allowed by the High Court. In pursu ance of the compromise learned counsel for the Delhi Devel opment Authority prayed for and was granted leave on 6th May, 1982 to withdraw the said special leave petition. In consequence, the order of the High Court stood modified in the light of the compromise entered into between the par ties. The Society thereafter proceeded to make allotment of land to its members and draw of lots was held by the Society on 14th December, 1988. This draw of lots was challenged by the appellants before the Delhi High Court in Writ Petition No. 29 15 of 1988 in which the orders appealed against were passed. In order to appreciate the nature of dispute which was raised in this writ petition with reference to the draw of lots it is necessary to advert to some more facts. Appellants 1 and 2 even though employees of Rehabilita tion Ministry stood posted in its subordinate offices out side Delhi. It appears that even though only such persons who were employed and posted in the Rehabilitation Ministry in Delhi itself were intended to be eligible for membership of the Society, appellants 1 and 2 were enrolled as members of the Society on 22nd November, 1972 and 11th January, 1974 respectively. Likewise, certain other persons who were not employees of Rehabilitation Ministry but were employees of departments which were under the charge of the Minister/Minister of State of the Rehabilitation Ministry, were also enrolled as its members by the Society. With regard to such members who even though employees of the Rehabilitation Ministry, Were posted outside Delhi, the ' Union Cabinet in 1977 accepted a suggestion to enable Cen tral Government employees serving outside Delhi to become members of cooperative housing societies in Delhi. In pursu ance thereof the Lt. Governor of Delhi passed a consequen tial general order on 9th June, 1977 directing that the condition with regard to bona fide residents of Delhi will stand relaxed to the extent that in case the Government servant during the term of employment and with a view to settle in Delhi after retirement has become a member of a Cooperative House Building Society, he will not be debarred from the membership of the Society simply on the 843 ground that he was not a resident of Delhi at the time of enrolment. In pursuance of this general order the appellants and some other similar persons who had been ,enrolled as members by the Society became eligible to be members of the Society and subsequently their membership was approved. As regards those persons who were employed in other departments under the charge of Minister/Minister of State of the Reha bilitation Ministry the Society by its Resolution dated 14th December, 1980 proposed an amendment of the bye laws so as to enable such persons also to become eligible for member ship of the Society. The proposed amendment which was to be inserted as bye law 5(1)(a) (iii) was sent by the Society to the Registrar for approval. The Registrar, however, refused to approve and register the proposed amendment. Aggrieved, the Society preferred an appeal before the Lt. Governor of Delhi Which was allowed on 19th August, 1985. The Lt. Governor directed the bye laWs to be so amended as to pro vide for eligibility of employees of a Ministry of which Department of Rehabilitation had been a part. In pursuance of the aforesaid direction the amended bye law 5(1)(a)(iii) was registered and incorporated into the bye laws by the Registrar on 10th March, 1986. At this place Section 12 of the Delhi Cooperative Socie ties Act, 1972 (hereinafter referred to as the Act) may be referred to which provides that an amendment of the bye laws of a cooperative society shall, unless it is expressed to come into operation on a particular day, come into force on the day on which it is registered. Nothing to the contrary having been provided in this behalf the amended bye law 5(1)(a)(iii) was, in view of section 12 of the Act, to come into operation from both March, 1986 on which date the said amended bye Law was registered as stated above. It appears that realising this difficulty, the Society wrote to the Registrar on 3rd February, 1987 to move the Lt. Governor for relaxing the provisions of Section 12 of the Act. A reminder was sent by the Society on 26th March, 1987 to approve the aforesaid amended bye law with retrospective effect. The Registrar seems to have moved the Government accordingly and necessary order in this behalf appears to have been passed by the Lt. Governor, the terms whereof are to be found in a Notification dated 27th October, 1987 issued by ' the Office of the Registrar, Cooperative Societies which reads as hereunder: "OFFICE OF THE REGISTRAR COOPERATIVE SOCIETIES New Delhi the 27th October, 1987 844 NOTIFICATION No. F. 46/2007/115/85/Bye laws/Coop/5398: In exercise of the powers conferred under Section 88 of the Delhi Coop erative Societies Act, 1972, the Lt. Governor Delhi has been pleased to exempt the Rehabili tation Min. House Building Society Ltd. New Delhi from the provision of Section 12 of the said Act in respect of the amended bye laws No: 5(1)(a) (iii) of ' the said socie ty as registered on 10.3.86 will have retro spective effect from 10.1.1968, instead of 10.2.1986. By Order on behalf of L.G., Delhi. G.P. Sewallia, Spl. (Coop)" The effect of the order of the Lt. Governor indicated in the aforesaid Notification was that employees of other departments under the charge of Minister/Minister of State of Rehabilitation Ministry became eligible to the membership of the Society with effect from 10th January, 1968. There was a third category of members which too 'had given rise to the disputes raised in Writ Petition No. 29 15 of 1988. One of the conditions for being eligible to be a member of the Society was that the person sought to be enrolled as a member of the Society had to file an affidavit that he or she did not own a residential house or plot either in his or her name or in the name of his or her spouse, parents or dependent relations. 15 persons had not, in their affidavits filed along with their applications for membership, given full particulars in this behalf. It appears that subsequent ly this lacuna having come to its notice the Society kept their membership in abeyance and gave them an opportunity to file fresh affidavits giving full particulars which they did and on that basis their membership was regularised. In the writ petition giving rise to this appeal Shri S.C. Saxena, Secretary of the Society had filed an affidavit which contained three lists. List 'A ' contained the names of 572 persons whose membership had been cleared both by the Registrar of Cooperative Societies and the Ministry of Home Affairs (Department of Rehabilitation) in accordance with the dates of their enrolment. List 'B ' contained the names of 26 members who were employees of the Ministries in Delhi/ New Delhi which were under the charge of the Minister/Minis ter of State of Rehabilitation Ministry. List 'C ' on the other hand contained the names of such persons who were employees in the subordinate 845 offices of the Ministry/Department of Rehabilitation and were posted outside Delhi but wanted to settle in Delhi/New Delhi after retirement. The appellants as noticed earlier fell in the category of members shown in List 'C '. Their membership had, in pursuance of the order of the Lt. Gover nor dated 9th June, 1977 referred to above, been approved by the Society in the meeting of its Managing Committee held on 17th November, 1979. In the same meeting by another Resolu tion the membership of the 15 persons referred to above as persons falling in the third category was also regularised on the basis of the fresh affidavits filed by them. As regards those members whose names were mentioned in List 'B ' aforesaid it has been pointed out by the High Court in the judgment appealed against that "there is no dispute that the membership of these 26 persons mentioned in List 'B ' was either approved by the General Body in the meeting held on 8th July, 1970 or approved by the Managing Committee on 22nd March, 1974 or by the Administrator on or before 9th June, 1976. " As regards members mentioned in List 'B ' the grievance of the appellants before the High Court was that the order of the Lt. Governor expressed in the Notification dated 27th October, 1987 was ultra vires his powers in so far as it made the amended bye law 5(1)(a)(iii) effective retrospec tively from 10th January, 1968. As regards 15 persons of the third category referred to above the grievance of the appel lants before the High Court on the other hand was that they having filed fresh affidavits after the appellants had been enrolled as members could not be given seniority over the appellants in the matter of drawing of lots. These conten tions having been repelled by the High Court by the orders appealed against the appellants have preferred this civil appeal in which subsequently various interlocutory applica tions for impleadment and other directions were made which too are being considered hereinafter along with the appeal. In the appeal the real question which arises for consid eration is about the seniority of the members of the Society which constitutes the basis for allotment of plots at the time of drawing of lots. As regards the seniority of the 15 members who have been referred to above as members falling in third category namely those who had been accepted as members of the society but subsequently whose membership was kept in abeyance on some defects being notices in their affidavits and who on an opportunity being given in this behalf filed fresh affidavits giving full particulars and were on the basis of such affidavits treated as regular members, the appellants ' grievance has been, as noticed earlier, that they having filed fresh affidavits after the appellants had 846 been enrolled as members could not be given seniority over the appellants. The High Court in the orders appealed against has pointed out that the cases of these 15 persons were scrutinised by the screening committee Who recommended that they should be treated as regular member of the society and share certificates be issued to them. It has, further, been found by the High Court that these 15 persons were admitted as members of the society either by the Managing Committee or the General Body or the Administrator prior to 17th November, 1979 and that the record indicated that their membership was kept in abeyance because of full information not being furnished in their affidavits. It has held that since the membership of 26 persons falling in category 'C ' including the appellants was for the first time approved by the Managing Committee in its meeting held on 17th NOvember 1979 and the 15 persons referred to above had been admitted as members prior to 17th November 1979 and in the meeting held on 17th November, 1979 their membership was only regu larised, the 26 persons of Category 'C ' including the appel lants would obviously be junior tO the 15 members referred to above. In our opinion, the view taken by the High Court in this behalf does not suffer from any such error which may justify interference under Article 136 of the Constitution. Indeed no serious argument was addressed on this point on behalf of the appellants. Now, we advert to the main submission made on behalf of the appellants with regard to the validity of the Order of the Lt. Governor indicated in the notification dated 27th October, 1987 giving the amended Bye law No. 5(1)(a)(iii) retrospective effect from 10th January 1968. Before dealing with this plea, however, it is necessary to point out that during the pendency of the special leave petition giving rise to this appeal, the Lt. Governor issued another notifi cation dated 29th August, 1990, the relevant portion of which reads as hereunder: DELHI ADMINISTRATION, DELHI (COOPERATIVE DEPARTMENT) OLD COURT 'S BUILDING PARLIAMENT STREET: NEW DELHI Dated the 29th August, 1990 NOTIFICATION No. F. 46/2007/115/85/Bye laws/Coop./The Lt. Governor of the Union Territory of Delhi is pleased to rescind his notifica tion No. 27th October, 1987, issued under Section 88 of the Delhi Cooperative Societies Act, 1972 by which the Rehabilitation Ministry Employees Cooperative House Building Society Ltd. was exempted from the provisions of Section 12 of the said Act in respect of the amended bye law No. 5(1)(a)(iii) of the said Society. with retrospective effect from 10.1.1968 instead of 18.2.1986. By order and in the name of the Lt. Governor of the Union Territory of Delhi. (A.C. KHER) Spl. (Cooperation) Delhi Administration, Delhi. " By Order dated 30th August, 1990 and a subsequent Order dated 7th April, 1991 passed by this Court, the parties were permitted to challenge the validity of this notification and IA No. 13/1991 has been filed by Shri B.R. Puri and six others in this behalf. It has been urged by learned counsel for the appellants that if the subsequent notification dated 29th August, 1990 is held to be valid the orders appealed against passed by the High Court deserve to be set aside on that ground alone inasmuch as they are based on the earlier notification dated 27th October, 1987 which has been rescinded. In the alterna tive, it has been urged that if the notification dated 29th August, 1990 is held to be invalid, the orders appealed against yet deserve to be set aside inasmuch as the earlier notification dated 27th October, 1987 which forms the basis of these orders is ultra vires. Since the validity of the notification dated 29th Au gust, 1990 would to a large extent depend upon the true nature and import of the earlier notification dated 27th October, 1987 we propose to consider the question of the validity of the notification dated 27th October, 1987 first. As noticed earlier, it was in pursuance of the order passed by the Lt. Governor on 19th August, 1985 that the amended bye law 5(1)(a)(iii), was registered and incorporated in the Bye laws by the Registrar on 10th March 1986. This order had been passed by Lt. Governor in an appeal filed by the Socie ty against the order of the Registrar refusing to register the aforesaid amendment and rejecting the proposal made in this behalf by the Society. This appeal had obviously been filed under Section 76(1)(b) of the Act and was entertained 848 and decided by the Lt. Governor in view of the provision contained in this behalf in Section 76(2)(c) of the Act. It cannot be disputed that the jurisdiction which the Lt. Governor exercised in entertaining and deciding the appeal was of a quasi judicial character. For allowing the appeal the Lt. Governor in his order dated 19th August, 1985 gave the following reasons: "The rest of the proposed amendments, which are based on model bye laws, with certain modifications, are designed to regularise such of the members, as were not the employees of the Department of Rehabilitation, but were employees of the Ministries, of which the Department of Rehabilitation had been a part, from time to time, under one Minister/Minister of State. As these persons, whose number is stated to be not large, became members of the society many years ago, and their names also figured, as has been stated by the counsel for the appellant, in the list of members which was supplied by the society to the Department of Rehabilitation, and which formed the basis for the allotment of land to the society by the Ministry of Rehabilitation, it would be neither fair nor just to leave them in the lurch now, by depriving them of their member ship, when they cannot become members of any other society. " It would, thus, appear that what weighed with the Lt. Governor apart from the other considerations stated in his order was that the proposed amendment to the bye laws was "designed to regularise such of the members" . . "whose number is stated to be not ' large" and who "became members of the Society many years ago" and that "it would neither be fair nor just to leave them in the lurch now, by depriving them of their membership, when they cannot become members, of any other society". If these were the considra tions which ' weighed with the Lt. Governor in allowing the proposed amendment it can hardly be denied that the purpose of the order was not to give effect to the amended bye law from the date on which it was registered as contemplated by Section 12 of the Act, which date in the instant case came to be 10th March; 1986 but from the date on which the first person under this category was enrolled as a member, for otherwise the purpose of the order Was bound to be frustrat ed and the order would in that event be hit by the doctrine of brutum fulmen. This quasi judicial order passed by the Lt. Governor has become final and 849 it was really to give effect to this order that the order of the Lt. Governor referred to in the notification dated 27th October, 1987 was passed. In the normal course, it would not be just and proper to interfere with such an order under Article 136 of the Constitution. Learned counsel for the appellants has, however, strenu ously urged that the notification dated 27th October, 1987 is ultra vires the powers of the Lt. Governor. He pointed out that Section 88 of the Act under Which the said notifi cation was issued does not authorise the issue of a notifi cation such as the notification dated 27th October, 1987. Having given our anxious consideration to the submissions made by learned counsel in this behalf, we find it difficult to agree with them. Section 88 of the Act may usefully be reproduced here. It reads: "88. Power to extempt cooperative societies from provisions of the Act. The Lt. Governor may, by general order, to be published in the. Delhi Gazette, exempt any cooperative society or any class of cooperative societies from any of the provisions of this Act, or may direct that such provisions shall apply to such societies or class of societies with such modifications as may be specified in the order. " The notification dated 27th October, 1987 has already been quoted above. Its perusal indicates that by its earlier part the Lt. Governor has exempted the society from the provision of Section 12 of the Act. This was clearly permis sible on a plain reading of Section 88. By its later part the notification provides that the amended bye law 5(1)(a)(iii) "will have retrospective effect with effect from 10.1. " The word "Which" seems to have been omit ted after "as registered on 10.3.86" and before "will have retrospective effect". It is clear not only from the context of the notification but also from its Hindi version a photo stat copy whereof has been produced before us. Transliterat ed in Roman Script, it reads: "Dilli ke up Rajyapal, Dilli Sahkari Samitiyan Adhiniyam 1972 ki dhara 88 ke Antargat pradatt Shaktiyon ka prayog karte hue the Rehabilita tion Ministry Employees Cooperative Society Ltd. naee Dilli ko ukta Adhiniyam ki dhara 12 me diye gaye pravidhan. ke anusar ukta Samiti ko bye laws me dhara 5(1)(a) tatha (iii) me sanshodhan dinank 10.3.86 ki apeksha 10.1.68 se lagu hone ki chhut dete hain." According to the Hindi version, the Society has been permit ted 850 to enforce the amended bye law 5(1)(a)(iii) with effect from 10.1.68. Section 12 contemplates "unless it is expressed to come into operation on a particular day". The notification really permits to express 10.1.68 as the particular day on which the amended bye law aforesaid is to come into opera tion. Suppose the notification dated 27th October, 1987 had said "At the end of Section 12 of the Act add provided that the amendement of the bye law made by the Rehabilitation Ministry. Employees Cooperative House Building Society Ltd. , New Delhi, shall come into force on 10.1.68". Could it be said that this would be beyond the power con ferred by Section 88 of the Act? The answer would have to be in the negative on a plain reading of Section 88. Except for the unhappy language used therein the notification dated 27th October, 1987, does not seem to have been issued by the Lt. Governor in excess of the powers conferred on him by Section 88 of the Act. In such matters, substance has to prevail over the form. We have been informed by learned counsel for the appplicants in IA No. 13 of 1991 that 10th January, 1968 mentioned in the notification dated 27th October, 1987 is the date on which the first member failing in category 'B ' referred to above had applied for enrolment. As indicated above this was really the purpose of the quasi judicial order dated 19th August, 1985 passed by the Lt. Governor in the appeal filed by the Society and the notification has obviously been issued to subserve that purpose. In so far as we have taken the view that the word "which" seems to have been omitted in the Notification dated 27th October, 1987 and it has to be read there, we may point out that in Surjit Singh vs Kalra, ; it has been held in paragraph 19 of the Report: "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 construc tion which deprives certain existing words of all meaning, it is permissible to supply the words" (Craies Statute Law, 7th edn., p. 109). Similar are the observations in Hameedia Hardware Stores vs B. Mohan Lal Sowcar; , 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 851 statute. (See: Sirajul Haq Khan vs Sunni Central Board of Waqf, Learned counsel for.the appellants then urged that a delegated legislation could not be given retrospective effect unless it was specifically provided for. He relied on the following passages from Wade on Administrative Law (Fifth Edition): "It follows likewise that the courts must determine the validity of delegated legisla tion by applying the test of ultra vires, just as they do in other contexts. Delegated legis lation in no way partakes of the immunity which Acts of Parliament enjoy from challenge in the courts, for there is a fundamental difference between a sovereign and a subordi nate law making power. Acts of Parliament have sovereign force, but legislation made under delegated power can be valid only if it con forms exactly to the power granted." (page 748). "Whether delegated legislation can have retrospective operation without express Parliamentary sanction is a question upon which there is scant authority. It is natural to presume that Parliament is unlikely to confer a power which it uses only most spar ingly itself." (page 751). "Just as with other kinds of admin istrative action, the courts must sometimes condemn rules or regulations for unreasonable ness. In interpreting statutes it is natural to make the assumption that Parliament could not have intended powers of delegated legisla tion to be exercised unreasonably, so that the legality of the regulations becomes dependent upon their content." (page 752). Reference was made to similar passages even from Maxwell on the Interpretation of Statutes and Vepa P. Sarthi 's Interpretation of Statutes. Certain decisions of this Court were. also cited in support of the above propositions Relying on Partap Singh vs State of Punjab, ; it was further urged that mala fides vitiates an order. Even though there can be no dispute with the legal propositions enunciated above we find it difficult to apply them in the instant Case to nullify the notification dated 27th October, 1987. Firstly, the power exercised by the Lt. Governor as indicated earlier was within the ambit 852 of and permissible under Section 88 of the Act, Secondly, keeping in view the facts of the instant case and the pur pose of amending bye law 5(1)(a)(iii) we find that the notification is neither unreasonable nor can any mala fide be attributed in issuing the same. In Kruse vs Johnson, , it was held that in determining the validity of bye laws made by public representative bodies, such as county councils, the Court ought to be slow to hold that a bye law is void for unrea sonableness. A bye law so made ought to be supported unless it is manifestly partial and unequal in its operation be tween different classes, or unjust, or made in bad faith, or clearly involving an unjustifiable interference with the liberty of those subject to it. In view of this legal posi tion the notification dated 27th October, 1987 deserves to be upheld as, in our opinion, it does not fall within any of the exceptions referred to in the case of Kurse vs Johnson (supra). Learned counsel for the appellants further submitted that the notification dated 27th October, 1987 had the effect of defeating the purpose of the Act and was conse quently bad. Reliance was placed on Registrar of Cooperative Societies, Trivandrum and Anr. vs K. Kunhambu & Ors. , [ ; at p. 267 where with reference to Section 60 of the Madras Cooperative Societies Act, 1932, it was held: "Section 60 empowers the State Government to exempt a registered society from any of the provisions of the Act or to direct that such provision shall apply to such society with specified modifications. The power given to the Government under Section 60 of the Act is to be exercised so as to advance the policy and objects of the Act, according to the guidelines as may be gleaned from the preamble and other provisions which we have already pointed out, are clear. " We are of the view that the said Notification cannot be held to be bad on this score as well for the simple reason that the bye law 5(1)(a)(iii) introduced by amendment consequent upon the quasijudicial order of the Lt. Governor passed in appeal on 19th August, 1985 has not been challenged on the ground that it was beyond the power conferred by the Act. What has been challenged is the retrospective operation thereof. As seen above, if the amended bye law was not made retrospective its very purpose was to stand defeated. So far as the Notification dated 27th October, 1987 is concerned, it really subserves the purpose of the amended bye law made under the Act 853 and does not defeat it. Lastly, it was urged by learned counsel for the appel lants that at worst the effect of the Notification is that the amended bye law 5(1)(a)(iii) would be deemed to be there with effect from 10.1.68 but from that fact alone the re spondents could not become members unless their membership was approved as contemplated by Rule 24 of the Delhi Co operative Societies Rules, 1973. Suffice it to point out so far as this submission is concerned that with regard to members whose names were mentioned in List 'B ' of the affi davit.filed by Shri S.C. Saxena before it, the High Court, as already noticed earlier, has held in the judgment ap pealed against that "there is no dispute that the membership of these 26 persons mentioned in List 'B ' was either ap proved by the General Body in the meeting held on 8th July, 1970 or approved by the Managing Committee on 22nd March, 1974 or by the Administrator on or before 9th June, 1976. " If the Notification dated 27th October, 1987 is valid it had by legal fiction the effect of making persons mentioned in List 'B ' aforesaid eligible for membership of the Society with effect from 10th January, 1968 and the approval of the membership of these persons on various dates as pointed out by the High Court could not be held to be invalid simply because those dates happened to be prior to the date on which bye law 5(1)(a)(iii) was actually incorporated in the bye laws of the Society. As pointed out by Lord Asquith in East End Dwellings Co. Ltd. vs Finisbury Borough Council, [1952] Appeal Cases 109 at p. 132, if you are bidden to treat an imaginary state of affairs as real, you must sure ly, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have fol lowed from or accompanied it and that when the statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corol laries of that state of affairs. Learned counsel for the appellants, however, urged that the aforesaid principle of legal faction cannot be invoked to put life in a still born action and relied on the deci sion of this Court in B. Shama Rao vs The Union Territory of Pondicherry, ; Having gone through the decision we are of the view that it is clearly distinugisha ble. The facts of that case were that the legislative assem bly for the Union Territory of Pondicherry passed the Pondi cherry General Sales Tax Act (10 of 1965) which was pub lished on June 30, 854 1965. Section 1 (2) of the Act provided, that it would come into force on such date as the Pondicherry Government may, by notification, appoint and section 2(1) provided that the Madras General Sales Tax Act, 1959, as in force in the State of Madras immediately before the commencement of the Pondi cherry Act, shall be extended to Pondicherry subject to certain modifications, one of which related to the constitu tion of the Appellate Tribunal. The Act also enacted a Schedule, giving the description of goods, the point of levy and the rates of tax. The Pondicherry Government issued a notification on March 1, 1966, appointing April 1,. 1966 as the date of commencement. Prior to the issue of the notifi cation, the Madras legislature had amended the Madras Act and consequently it was the Madras Act as amended up to April 1, 1966 which was brought into force in Pondicherry. When the Act had come into force, the petitioner was served with a notice to register himself as a dealer and he thereupon filed a writ petition challenging the validity of the Act. After the petition was filed, the Pondicherry Legisla ture passed the Pondicherry General Sales Tax (Amendment) Act ', 13 of 1966, whereby section 1(2) of the principal Act was amended to read that the latter Act "shall come into force on the 1st day of April 1980", it was also provided that all taxes levied or collected and all proceedings taken and things done were to be deemed valid as if the principal Act as amended had been in force in all material times. On these facts it was held that the Act of 1965 was void and still born and could not be revived by the amendment Act of 1966. In this connection it was pointed out at page 660: "In the present case it is clear that the Pondicherry legislature not only adopted the Madras Act as it stood at the date when it passed the Principal Act but also enacted that if the Madras legislature were to amend its Act prior to the date when the Pondicherry government would issue its notification it would be the amended Act which would apply. The legislature at that stage could not antic ipate that the Madras Act would not be amended nor could it predicate what amendment or amendments would be carried out or whether they would be of a sweeping character or whether they would be suitable in Pondicherry. In point of fact the Madras Act was amended and by reason of section 2(1) read with sec tion 1(2) of the Principal Act it was the 855 amended Act which was brought into operation in Pondicherry. The result was that the Pondi cherry legislature accepted the amended Act though it was not and could not be aware what the provisions of the amended Act would be. There was in these circumstances a total surrender in the matter of sales tax legisla tion by the Pondicherry Assembly in favour of the Madras legislature and for that reason we must agree with Mr. Desai that the Act was void or as is often said 'still born '. " Such is obviously not the position in the instant case. In view of what has been discussed above no exception can be taken to the view of the High Court holding the said Notifi cation to be valid. The question of validity of the subsequent Notification dated 29th August, 1990 whereby the earlier Notification dated 27th October, 1987 was rescinded may now be consid ered. As noticed earlier, the Lt. Governor had passed the quasi judicial order on 19th August 1985 in an appeal flied by the society against the order of the Registrar declining amendment of the bye law concerned. Relevant findings of the Lt. Governor along with the reasons there for have already been extracted above. We have already pointed out that what weighed with the Lt. Governor in passing that order was that persons for whose benefit the bye law was sought to be amended had become members of the society many years ago, that their names figured even in the list of members which was supplied by the society to the Department of Rehabilita tion and which formed the basis for allotment of land to the society and that it would be neither fair nor just to leave them in the lurch now by depriving them of their membership when they cannot become members of any other society. It was pointed out by the Lt. Governor that the proposed amendment in the bye law was "designed to regularise such of the members". From the tenor of this order there can be no manner of doubt that the order was passed with a view to ensure that the persons who had become members of the socie ty many years ago should get the benefit of the amended bye law by having their membership regularised. Such members could obviously get the benefit of the bye law only if it was made retrospectively effective. The order of the Lt. Governor did not contemplate fresh enrolment of those per sons as members after the passing of that order and the bye law being amended in consequence thereof but it contem plated regularisation of their membership. This clearly indicated that those persons were sought to be treated as members as from the dates on which they had factually become members 856 of the society. We have also pointed out above that in our opinion in having the notification dated 27th October, 1987 issued, the Lt Governor only took steps to give effect to the quasi judicial order could be achieved. This being the true nature of the notification dated 27th October, 1987, the Lt. Governor cannot be said to have in any manner re viewed the quasi judicial order dated 19th August, 1985. On the other hand, the subsequent notification dated 29th August, 1990 even though purported to rescind that earlier notification dated 27th October, 1987 only it had keeping in view the nature and purpose of the notification dated 27th October, 1987 really the effect of reviewing and nullifying the quasi judicial order passed by the Lt. Governor on 19th August, 1985. In a matter such as this, it is the substance and the consequence of the notification dated 29th August, 1990 which has to be kept in mind while considering the true import of that notification. It is settled law that a quasi judicial order once passed and having become final cannot be reviewed by the authority passing that order unless power of review has been specifically conferred. The qausijudical order dated 19th August, 1985, as seen above, had been passed by the Lt. Governor under Section 76 of the Act. No power to review such an order has been conferred by the Act. In G.V. Rao vs Govt. of Andhra Pradesh and Ors. , [1966] 2 SCR, p. 172, an order had been passed by the Gov ernment under Section 62 of the Andhra Pradesh Panchayat Samithies and Zila Parishads Act. 1959, it was subsequently reviewed. The validity of this order of review was in ques tion in that case. No power of review had been conferred for review of an order passed under Section 62. What was, howev er, argued was that the Government was competent to review that order in exercise of power conferred by Section 13 of the Madras General Clauses Act, 1891. Repelling this argu ment, it was held: "The learned counsel for the State then con tended that the order dated April 18, 1963, could itself be sustained under section 62 of the Act. Reliance is placed upon section 13 of the Madras General Clauses Act, 1891, whereunder if any power is conferred on the Government, that power may be exercised from time to time as occasion requires. But that section cannot apply to an order made in exercise of a quasi judicial power. Section 62 of the Act confers a power on the Government to cancel or suspend the resolution of a Panchayat Samithi, in the circumstances mentioned therein, after giving an opportunity for explanation to the Panchay at Samithi. If the Government in exercise of that power cancels or confirms a resolution to the Panchayat 857 Samithi, qua that order it becomes functus officio. Section 62, unlike section 72 of the Act does not confer a power on the Government to review its orders. Therefore, there are no merits in this contention. " We are aware that the notification dated 29th August, 1990 purports to rescind the earlier notification dated 27th October, 1987 only and does not speak in clear terms that the quasi judicial order dated 19th August, 1985 was also being rescinded. On the facts and circumstances of this case, as emphasised above, we are of the opinion that this circumstance hardly makes any difference inasmuch as even though the quasi judicial order dated 19th August, 1985 has not been expressly nullified, it has certainly for all practical purposes been nullified by necessary implication. This, in our opinion, could not be done and the notification dated 29th August, 1990 is ultra vires on this ground alone. The matter can be looked at from another angle also. It cannot be disputed that as a consequence of the quasi judi cial order of the Lt. Governor dated 19th August, 1985 and the notification dated 27th October, 1987, a substantive right was created in favour of the 26 persons whose names had been mentioned in list 'B ' of the affidavit by Shri S.C. Saxena filed in the High Court. The challenge to that noti fication had already failed before the High Court and the matter was subjudice before this Court in special leave petition giving rise to this civil appeal when the notifica tion dated 29th August, 1990 was issued. The notification dated 27th October, 1987 had specifically been issued under section 88 of the Act. Even though the subsequent notification dated 29th August, 1990 does not disclose the source of the power under which it had been issued, learned counsel for the appellants traced its source to section 88 itself read with the powers to add, to amend, vary or rescind notifications, orders, rules or bye laws contained in section 21 of the . In State of Kerala and Ors. vs K.G. Madhavan Pillai and Ors., [1988] 4 SCR p. 669, it was held by the High Court that if in pursuance of an earlier order passed by the Government some person acquires a right en forceable in law, the said right cannot be taken away by a subsequent order under general power of rescindment avail able to the Government under the and that the said power of rescindment had to be determined in the light of the subject matter, context and the effect of the relevant provisions of the statute. The view taken by the High Court was upheld by this Court in paragraph 27 of the report. The notification dated 29th August, 1990, would, therefore, be invalid on this ground also. In view of the foregoing discussion, the civil appeal deserves to be dis missed. 858 At this place we consider it proper to make a note that learned counsel for the applicants in IA 13 of 1991 had attacked the Notification dated 29th August, 1990 on two other grounds also. One was that the said Notification was vitiated for breach of principles of natural justice, it having taken away vested rights of the applicants created by the quasi judicial order of the Lt. Governor dated 19th August, 1985 and the Notification dated 27th October, 1987, and the other that the effect of dismissal of an earlier Special Leave Petition by this Court on 19th March, 1990 could not be nullified by the Notification dated 29th Au gust, 1990, In the view we have taken we have not found it necessary to go into these questions. We now take up Interlocutory Applications made in the appeal. Some of these applications have already been dis posed of by various orders passed from time to time. The only applications which are surviving are IA No. 1/89, IA Nos. 4 and 5/89, IA Nos. 6 and 8/89 and IA No. 13/91. The nature and purpose of IA No. 13/91 has already been indicat ed above: Since the notification dated 29th August, 1990 has been, found by us to be ultra vires and the civil appeal is being dismissed, this application deserves to be allowed. So does IA No. 1/89 also which has been made by the same cate gory of members Who have made IA No. 13/91. The applicants in IA Nos. 6 and 8/89 have taken the same stand as the appellants and their learned counsel has before us also adopted the arguments made by learned counsel for the appel lants. Since the appeal is being dismissed, no further order on IA Nos. 6 and 8/89 is necessary. The appellant in IA Nos. 4 and 5/89 was really aggrieved by the interim order passed by this Court in the special leave petition on 19th July, 1989 and since with the dismissal of the appeal the said interim order will automatically stand vacated, no further order in these applications also is necessary. In the result, the appeal fails and is dismissed. Orders on the interim applications aforementioned shall be as already indicated hereinabove. They are disposed of accord ingly. In the circumstances of the case, however, the par ties shall bear their own costs. , Y.Lal. Appeal dismissed.

Respondent No. 1 is a Cooperative House Building Society registered under the Delhi Cooperative Societies Act, 1972. It was formed in October 1959, with a view to procure land, which the Central Government proposed to allot for the resettlement of displaced persons. The members of the Socie ty fail in three categories viz., (i) employees of the Ministry of Rehabilitation, New Delhi (ii) employees of the MiniStries in Delhi/New Delhi which were under the charge of the Minister/Minister Of State of Rehabilitation Ministry and (iii) employees working in the subordinate offices of the Ministry/Department of Rehabilitation who were posted outside Delhi/New Delhi and wanted to settle in Delhi after their superannuation. It may be mentioned that the members in the third category were enrolled as members pursuant to the amended bye law 5(1)(a) (iii), at the Society 's Managing Committee 's meeting held on 17.11.1979. At the said meeting the cases of 15 other members were also regularised, as the affidavits furnished by them earlier were on scrutiny found defective, which they had replaced by filing fresh affida vits. The Society proceeded to make allotment of land to its members and draw of lots was held on 14.12.1988. The draw of lots was challenged by the appellants before the Delhi High Court on the ground that they are senior to 15 persons aforementioned and others. The appellants also challenged ,the validity of the Notification dated 27th October 1987 insofar as it made the amended bye law 5(1)(a)(iii) effec tive retrospectively. The High Court having dismissed the petition, the appellants have filed this appeal after ob taining special leave, and the question involved for deter mination in the appeal inter alia relates to the seniority of the members of the society which constitutes the basis for allot 840 ment of plots at the time of drawing of lots. DiSmissing the appeal, this Court, HELD: The notification dated 27th October, 1987, indi cates that by its earlier part the Lt. Governor has exempted the society from the provision of Section 12 of the Act. This was clearly permissible on a plain reading of Section 88. By its later part the notification provides that the amended bye law 5(1)(a) i(iii) "will have retrospective effect with effect from 10.1.1968. " The word "which" seems to have been omitted after "as registered on 10.3.86" and before "will have retrospective effect". It is clear not only from the context of the notification but also from its Hindi version. [849E F] What weighed with the Lt. Governor in passing the order dated 10.8.1985 was that persons for whose benefit the bye law was sought to be amended had become members of the society many years ago, that their names figured even in the list of members which was supplied by the Society to the Department of Rehabilitation and which formed the basis for allotment of land to the society and that it would be neither fair nor just to leave them in the lurch now by depriving them of their membership when they cannot become members of any other society. It was pointed out by the Lt. Governor that the proposed amendment in the bye law was "designed to regularise such of the members." [855E F] The notification dated 29.8.1990 purports to rescind the earlier notification dated 27th October 1987 only and does not speak in clear terms that the quasi judicial order dated 19.8.1985 was also being rescinded. On the facts and circum stances this hardly makes any difference inasmuch as even though the quasi judicial order dated 19th August 1985 has not been expressly nullified, it has certainly for all practical purposes been nullified by necessary implication. This could not be done and the notification dated 29th August 1990 is ultra vires on this ground alone. [857B C] A quasi judicial order once passed and having become final cannot be reviewed by the authority passing that order unless power of review has been specifically conferred. [856C] The quasi judical order dated 19th August, 1985 had been passed by the Lt. Governor under Section 76 of the Act. No power to review such an order has been conferred by the Act. [856D] 841 Partap Singh vs State of Punjab, ; ; Kruse vs Johnson, ; Registrar of Cooperative Societies, Trivandrum & Anr. K. Kunhambu & Ors., ; at p. 267 and State of Kerala & Ors. K.G. Madhhvan Pillai & Ors., , referred to.

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Appeal No. 1934 of 1978. From the Judgment and Order dated 21.12.1977 of the Allaha bad 11 High Court in Civil Misc. Writ Petition No. 227 of 1977. Ms. Rachna Gupta for the Appellant. S.C. Manchanda and K.P. Bhatnagar for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. The Income tax Act, 1961 replaced the Indian Income tax Act, 1922 w.e.f. 1.4.1962. The repeal of the earlier Act necessitated the enactment of transitional provisions to facilitate the change over. Perhaps the sim plest course would have been to provide that the new Act would apply to all proceedings for the assessment year 1962 63 and thereafter. The legislature, however, evolved a more complicated procedure. While section 297(1) of the new Act declared that the Indian Income tax Act, 1922 stood repealed by the new Act, sub section (2) of the above sec tion made detailed and meticulous provisions in clauses (a) to (m) as to whether the new Act or the old Act will govern in the various situations dealt with therein. These provi sions have led to a lot of litigation and the controversy in this appeal also arises out of one such provision. We are concerned here with the scope of proceedings for reassess ment in respect of assessment years prior to 1962 63 and the answer to the question before us turns on the provisions of the following two sections of the 1961 Act: Section 297 "297(1) xxx xxx xxx (2) Notwithstanding the repeal of the Indian Income tax Act, 1922 (11 of 1922) (hereinafter referred to as 'the repealed Act ') xxx xxx xxx xxx (d) where in respect of any assessment year after the year ending on the 31st day of March 1940 (i) a notice under section 34 of the re pealed Act had been issued before the com mencement of this Act, the proceedings in pursuance of such notice may be continued and disposed of as if this Act had not been passed; 12 (ii) any income chargeable to tax had es caped assessment within the meaning of that expression in section 147 and no proceedings under section 34 of the repealed Act in re spect of any such income are pending at the commencement of this Act, a notice under section 148 may, subject to the provisions contained in section 149 or section 150 be issued with respect to that assessment year and all the provisions of this Act shall apply accordingly. " Section 150 "150(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recom putation in consequence or, or to give effect to, any finding or direction contained in an order passed by any authority in any proceed ing under this Act by way of appeal, reference or revision." (underlining ours) We may proceed now to set out how the question arises in the present case: The appeal arises out of an order of the High Court in a writ petition filed by one Mahadeo Prasad Bais (since deceased, represented by his legal representa tives) challenging reassessment proceedings initiated against him for the assessment years 1953 54 to 1963 64. The appeal is, however, restricted to the assessment years 1953 54 to 1961 62. Upto assessment year 1948 49, the appel lant was being assessed as the Karta of a Hindu Undivided Family consisting of himself, his mother, his wife and three sons. For the assessment year 1949 50 and subsequent years upto 1961 62 he had filed a return in his individual capaci ty on the footing that there had been a total partition of the family within the meaning of Section 25A of the Indian Income tax Act, 1922 and that he was assessable in respect of the income from the properties of the family allotted to him at the partition. In the alternative, he claimed partial partition of some of the joint family properties.f Both these claims were initially negatived and the entire income was assessed in the hands of the Hindu Undivided Family. The returns filed by the appellant in his individual capacity were finalised by holding that there was no income assessa ble in his individual capacity. The Hindu Undivided Family went up in appeals and ultimately the Tribunal accepted the claim of partial partition in respect of some of the proper ties with effect from different dates. This conclusion of the Tribunal was also affirmed by the High Court in the decision reported as Mahadeo Prasad Bais vs Income tax Officer, which related . 13 to the assessment years 1956 57 to 1958 59. Consequent on these decisions of the Tribunal and the High Court, the income from some of the erstwhile family properties stood excluded from the assessment of the Hindu Undivided Family and became liable to be included in the hands of the present appellant. The assessment for 1949 50 and subsequent years upto 1961 62 on the family had been completed and the ap peals and reference disposed of under the Indian Income tax Act, 1922. The original assessments made on the appellant as an individual for the assessment years 1953 54 to 1961 62 had been completed under the Indian Income tax Act, 1922. In these assessments no income from the erstwhile joint family properties had been included as the officer was of the view, as in 1949 50, that it was assessable in the hands of the family. There were no proceedings initiated or pending under Section 34 of the 1922 Act in respect of these assessment years as on 1.4.1962. Quite sometime after the High Court had decided the reference for 1949 50 in the case of the family, the Income tax Officer thought of steps to include the income assessable in the hands of the appellant conse quent on the decisions of the Tribunal and the High Court which he had failed 10 assess earlier. He, therefore, served on the appellant on 19.3.1977 notices for reassessment, as required by section 297(2)(d)(ii), under section 148 of the 1961 Act. The appellant resisted these proceedings, inter alia, on the ground that the notices were barred by limita tion. The department, however, contended that, though nor mally reassessment proceedings had to be initiated within a period of four, eight or sixteen years as the case may be, under the then provisions of Section 149 of the 1961 Act, the reassessment proceedings in this case were saved by the provisions of Section 150(1) of the 1961 Act set out earli er. This contention of the department has been accepted by the High Court in the decision under appeal before us which is reported in The issue involved in this appeal is basically a short one turning on the language of section 150(1). Before con sidering the interpretation of this section, we may, howev er, point out that, on this question, there appears to be a conflict of judicial opinion between the several High Courts. The Allahabad High Court, in the decision presently under appeal (1980)125 I.T.R. 49 and the Calcutta High Court in I.T.O. vs Eastern Coal Co. Ltd., have taken the view that a reassessment in such circumstances is saved by the provisions of Section 150(1) of the 1961 Act. An earlier Allahabad decision in C.I.T. vs Kamalapat Moti lal, (1977)110 I.T.R. 769 and an earlier Bombay decision in Ambaji Traders vs 1.T.O., (1976)105 I.T.R. 273 took a simi lar view on the analogous provision contained in section 153(3) of the 1961 Act but a contrary view was taken by the latter 14 High Court in the latter case reported as CIT vs T.P. Asrani, Both sets of decisions have placed reliance on certain observations of this Court in differing contexts. But it will be best to have a look at the statuto ry provisions first, in the context of the facts of the present case. To start with, there is no dispute that reassessment proceedings were rightly initiated under section 148 of the Act. It is also common ground that on the language of sec tion 148, as it stood at the relevant time, no notice under section 148 could have been issued in March 1977 for the assessment years in question. The Revenue can successfully support the validity of this notice only by reference to section 150 (1). Two questions then arise: (i) Are the provisions of section 150 (1) attracted ? (ii) If yes, do they save the impugned proceedings ? The answer to the first question is furnished by section 297 (2) (d) (ii), the very clause which authorises the issue of the notice of reassess ment under section 148. It permits the issue of the notice under section 148, "subject to the provisions contained in section 149 or section 150". Though the words "subject to" may be appropriate in the context of section 149 and section 150 (2) (which place restrictions on the issue of the notice u/s 148), they are somewhat inappropriate a propos section 150 (1) which relaxes the conditions for issue. But there is no doubt that the statute clearly intends that the benefit of enlargement of the time limited under section 149 should be available in respect of the notice issued under section 148 read with section 297 (2) (d) (ii). The answer to the second question is furnished by section 150 (1).itself. It removes the bar of time when the reassessment proceedings are initiated in consequence of or to give effect to a finding contained in an order passed by any authority in any proceeding by way of appeal, reference or revision. There is no difficulty here for the orders of the Tribunal and the High Court for the several years between 1949 50 and 1961 62 were passed in proceedings by way of appeals and reference and there is no dispute that the reassessment proceedings have been initiat ed to give effect to findings in such orders. There is, however, a catch in applying the terms of section 150(1) ' to this case. There is no doubt that the whole idea of the sub section was to lift the embargo placed on initiation of reassessment proceedings and to remove the time limit where the notice of reassessment is issued with a view to give effect to a direction or finding contained in an appellate order or an order passed on revision or on reference. Unfor tunately, however, in expressing its above intention, the legislature has worded the exemption from time limit so as to cover only cases where the finding or direction is con tained in an order passed by any such authority in any such proceeding "under this Act" i.e. the 1961 Act. In the present case the assessments for 1949 50 and subsequent years in the case of the family were made under the old Act and were the subject matters of appeal to the 15 Appellate Assistant Commissioner and Tribunal and of refer ence to the High Court under the provisions of the 1922 Act. In other words, the finding in consequence of which the assessments presently under consideration are being sought to be reopened is a finding contained in orders passed not 'under this Act ' but in orders passed under the 1922 Act. Literally applied, therefore, the language of section 150 (1) does not help the department to overcome the bar of limitation otherwise imposed by Section 149. Pressing for the literal construction of the sub sec tion, it is contended for the appellant that there are good reasons why this construction should be accepted: (1) To accept the contention of the depart ment would mean the virtual deletion of the words "under this Act" from section 150 (1); (2) It seems clear that the above words have not been inadvertantly used in the statute. If one turns 10 s.153 (3), which is an extension of section 150 (1 ) removing the time ban for the completion of reassessments initiated for the same purpose, the legislature goes further than section 150 (1) and makes specific refer ence to particular provisions of the new Act; (3) The provisions of section 150 (1) will not become redundant if read in the manner con tended for by the assessee. While no doubt the proceedings are initiated, in all cases cov ered by section 297 (2) (d) (ii), under the new Act, the orders, for giving effect to a finding or direction in which such proceedings are initiated, may belong to either category they may be orders passed under the old Act or they may be orders passed under the new Act. The terms of section 150 (1) will be effective in the latter category of cases; and (4) The provisions contained in Ss. 150 (1) and 153 (3) are provisions exempting the applicability of a normal rule of limitation otherwise applicable to actions for reassess ment and such provisions should be construed strictly. On the other hand, it is contended for the department that the object of the provision being very obvious, namely, that where reassessment proceedings are initiated to give effect to orders on appeal, reference or 16 revision, there should be no time limit tying down the hands of the Revenue as such orders are seldom likely to be passed within the limits of time mentioned in section 149, we should give effect to the clear intention of the legislature and should not frustrate its object. It is, therefore, necessary to examine the provisions of section 297 (2) (d) (ii) and section 150 (1) a little more closely and examine which of the two interpretations is preferable. Taking up the appellant 's interpretation first, it has no doubt the attractiveness of simplicity. It is a strict and literal interpretation of section 150 (1). This apart, learned counsel drew our attention to the fact that the decided cases have referred to certain decisions of this Court in this context. We do not, however, think that the decisions of this Court in Jain vs Mahendra, and Govinddas vs I.T.O, (1976)103 ITR 123 cited by appellant 's counsel arc of any assistance to them. In the former case, a notice u/s 34 had been issued before 1.4.1962 but it had been quashed as without jurisdiction as it was barred by time. The question was whether the proceedings initiated by the notice can be said to have been pending as on 1.4.1962. The Court answered the question in the affirma tive. It held that, for purposes of section 297 (2) (d) (ii), all that had to be seen was whether proceedings under section 34 of the 1922 Act were factually pending on 1.4.1962. That the notice issued before that date was barred by time and was held so later was immaterial. The notice had in fact been quashed by the High Court in a writ only much later, on 6.3.1963, and so proceedings under section 34 were pending as on 1.4.1962. We are unable to see how this decision is of any help here. In the second case, the claim by the assessee, a Hindu undivided family, that there had been a partial parti tion on 15.11.1955 (as a result of which the share income from two firms had ceased to be the income of the family from that date) was accepted by the Income tax Officer. Subsequently, the assessments of the two firms for the assessment years 1950 51 to 1956 57 had been reopened and reassessments were made on them enhancing their income. Consequently action was also taken to reopen the assessments of the family (which, for the relevant previous years had a share in the firms ' income). These assessments were initiat ed under the new Act in accordance with the provisions of section 297 (2) (d) (ii). The assessee had no grievance thus far. But, while completing the reassessment, the officer, in addition to reassessing the family, also took advantage of the provisions enacted in Ss. 171(6) and (7) of the 1961 Act which had no counter part in the 1922 Act and passed orders apportioning the tax assessed on the family amongst its members. This was objected to by the assessee. The department, referring to the language of section 297 (2) (d) (ii) "that all the provisions of this Act shall apply ac cordingly", contended that the I.T.O. could legitimately invoke the provisions of Ss. 171 (6) and (7) as well while 17 making the reassessments. This contention was negatived. The Court observed: "These words merely refer to the machinery provided in the new Act for the assessment of the escaped income. They do not import any substantive provisions of the new Act which create rights or liabilities. The word "ac cordingly" in the context means nothing more than "for the purpose of assessment" and it clearly suggests that the provisions of the new Act which are made applicable are those relating to the machinery of assessment. " It will be at once clear that this line of approach can have no validity in the context of section 297 (2) (d) (ii). Here there is no need to guess or speculate on which provi sions of the new Act are to apply. The section itself, in so many words, provides that Ss. 148, 149 and 150 will apply to the initiation of a reassessment proceeding under section 297 (2) (d) (ii) and this cannot be negatived by the last few words of that clause. On the contrary, as pointed out earlier, they place it beyond all doubt that the provisions of the 1961 Act have to be applied to the reassessment on the basis that Ss. 148 to 150 apply. This case also does not, there fore, advance the case of the assessees. It is next contended by the appellant 's counsel that the very issue before us had been considered in the decision of this Court in Seth Gujarmal Modi vs CIT, and this concludes the issue in his favour. The second headnote at page 261 seems to bear out this contention. It reads: " . . Since the Appellate Assistant Com missioner 's order was not passed under the 1961 Act, the department could not take any support from section 150 (1) of the Act." A perusal of the decision shows, indeed, that this was the ground on which a separate contention urged on behalf of the department on the basis of section 150 (1) was repelled. It is no doubt seen from the facts of the case that it was a case of reassessment under section 297 (2) (d) (i) of the Act and the Court specifically held that reassessment pro ceedings should have been initiated under section 34 of the 1922 Act and not under section 148 of the 1961 Act. In view of this conclusion no question of drawing any support from section 150 (1) could at all arise. Still an argument was addressed and was repelled on the basis of the words "under this 18 Act" used in section 150 (1) thus upholding the literal construction argument now addressed on behalf of the asses see. We shall consider this decision later after considering the department 's contentions. As against the above contentions, Sri Manchanda submits that the provisions of section 150 (1) should be applied not blindly but with necessary modifications to suit the situa tion. In support of this plea, he relies strongly on the last few words of section 297 (2) (d) (ii). It is urged that the expression :"all the provisions of this Act shall apply accordingly" should be so construed as to enable the Revenue to invoke reassessment proceedings on the footing that the orders on appeal or reference were ones passed "under this Act" within the meaning of section 150 (1). Sri Manchanda cited two decisions in support of his contention. In Third I.T.O. vs Damodar Bhat, the question was whether proceedings under section 226 (3) of the new Act would apply with respect to a tax liability incurred under the 1922 Act. The answer to this question, in the affirmative, turned on the language of section 297 (2) (j). which provided that any tax or other dues payable under the 1922 Act may, notwithstanding the repeal of the 1922 Act, be recovered under the Act. The contrary interpretation accepted by the High Court in that case would have had the effect of nulli fying the provisions of section 297 (2)(j). Again, in Jain Bros. v,. Union of India; , , it was held that penalty could be imposed under section 271 (1) of the 1961 Act in respect of returns filed before 1.4.1962 and assessments completed after 1.4.1962 but under the 1922 Act. This was because of section 297 (2) (g), the special transitory provision in this behalf, which provided that "any proceeding for the initiation of a penalty in respect of any assessment for the year ending on the 31st day of March 1962 or any earlier year, which is completed on or after the 1st day of April, 1962, may be initiated and any such penalty may be imposed under this Act. " Here again section 297 (2) (g) had been enacted to provide for the exact situation in question and to have held to the contrary would have rendered the provisions of section 297 (2) (g) meaningless and redundant. The position is no doubt a little different here. The provisions of section 150 (1) have been specially made applicable and operative in respect of the notice under section 148 issued in pursuance of section 297 (2) (d)(ii) and, as pointed out earlier, the application of the provisions of section 297 (2)(d)(ii) gives rise to two sets of situations to one of which the language of section 150(1) would squarely apply and so the interpretation sought for by the appellant does not render the words of section 150 (1) redundant. Despite this point of difference in the two situations, we think that the principle of the above decisions that the mutatis mutandis rule should be invoked in interpreting 19 section 297 (2) has application here also. Not to do so would no doubt not make section 150(1) redundant but it will bring about an unintended and inequitable situation. It is clear that section 150 (1) will operate to lift the time bar in cases where the reassessment is initiated under section 148 to give effect to an order passed under the 1961 Act. Equal ly, where assessments had been reopened under section 34 of the 1922 Act before 1.4.1962 to give effect to orders passed under the 1922 Act and are continued after that date by virtue of section 297 (2) (d) (i), the provisions of the second proviso to section 34 (3) of that Act would preclude the operation of the normal rule of limitation for reassess ments. In this situation, it will be a great anomaly to reach the conclusion that the time limit will operate in cases where proceedings under section 148 are initiated to give effect to an order on appeal, revision and reference merely because such order is one passed under the 1922 Act. Neither reason nor rhyme can explain how the statue could have intended such anomaly or why it should be so interpret ed as to result in a discriminatory treatment only to this class of cases. An interpretation which will result in such anomaly or absurdity should be avoided. It is also necessary to remember that section 297 (2) is a provision enacted with a view to provide for continuity of proceedings in the context of repeal of one Act by a fresh one broadly containing analogous provisions and the transitory provisions should, as far as possible, be construed so as to effect such conti nuity and not so as to create a lacuna. For these reasons we think that it will be appropriate to so read the words of section 297 (2)(d)(ii) as to permit the applicability of section 150 (or section 153) with the necessary modifica tions. To paraphrase, the last words of section 297(2)(d)(ii) should be read to mean that where the proceedings initiated under section 148, subject to the relaxations and limitation of Ss. 149 and 150, all the provisions of the Act shall apply accordingly: that is to say, in the same manner as they would apply in case of proceedings normally initiated under these provisions. Since reassessment proceedings so initiat ed to give effect to orders on appeal, revision or reference will not be subject to a time limit, the proceedings like wise initiated under section 297(2)(d)(ii) read with section 148 will also not be subject to any limitations save to the extent mentioned in section 150(2). We would like to add that, even if section 150(1) is to be read literally and considered as posing a hurdle as contended for by the appellant, we think this result can be overcome by a liberal interpretation of section 297(2)(k). This clause reads: "any agreement entered into, appointment made, approval given, recognition granted, direc tion, instruction, notification, 20 order, or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly;" This is principally a provision intended to save admin istrative steps taken under the 1922 Act by deeming them to be steps taken under the 1961 Act. Strictly construed, the words "order issued" also would seem, prima facie, to carry only a similar connotation. But we see no objection, for our present purposes, in the way of our construing these words liberally and consequently deeming the orders passed and issued by the Tribunal and the High Court in this case for the assessment year 1949 50 and subsequent assessment years as orders passed or issued under the corresponding provi sions of the new Act. Once this deeming is made, there is no difficulty in the way of accepting the Revenue 's contention. We think that the circumstances justify a slight straining of the language of this clause and applying it so interpret ed to the problem before us so as to avoid a meaningless anomaly. Thus construed, the statute can be said not to have misfired in its application to the situation in the present case. We should, before we conclude, refer to the decision of this Court in the Gujar Mat Modi case. As we have pointed out earlier, the principal conclusion reached in that case was that proceedings under section 148 could not have been initiated as the case fell under the provisions of section 297(2)(d)(i). It was, therefore, unnecessary to deal with the contention based upon section 150. Moreover, this part of the decision was only based on a prima facie reading of section 150(1) and contains no discussion of the various aspects that need consideration and have been touched upon above. We do not, therefore, think that the above decision can be treated as conclusive on the issue before us which, for the reasons discussed above, we think, should be an swered differently. We affirm the conclusion of the High Court and dismiss the appeal. No costs. Y.L. Appeal dismissed.

The appellant (since deceased) was being assessed as the Karta of the Hindu Undivided Family consisting of himself, his mother, his wife and three sons until the assessment years 1948 49. For the assessment year 1949 50 and subse quent years upto 1961 62 he filed a return in his individual capacity claiming that there had been a total partition of the family and that he was assessable in respect of the income from the properties of the family that fell to his share on partition; in the alternative he claimed partial partition. Both of his claims having been negatived, the entire income was assessed in the hands of the Hindu Undi vided Family and the returns filed by the appellant in his individual capacity were finalised on the footing that there was no income assessable in his individual capacity. The Hindu Undivided Family went up in appeals and ultimately the Tribunal accepted the claim of partial partition in respect of some of the properties. The conclusion of the Tribunal was affirmed by the High Court, with the result that the income from some of the erstwhile family properties stood excluded from the assessment of the Hindu Undivided Family and became liable to be included in the hands of the appel lant. The original assessments made on the appellant as an individual for the assessment upto 1961 62 had been complet ed under the Income tax Act, 1922 and in these assessments no income from the erstwhile joint family properties had been included as the Income Tax Officer was of the view, as in 1949 50, that it was assessable in the hands of the family. There were no proceedings initiated or pending under Section 34 of the 1922 Act in respect of these assessment years as on 1.4.1962, when the 1922 Act was repealed by the 1962 Act. The Income Tax Officer therefore, served a notice for reassessment on the appellant, invoking the provisions of Section 297(2)(d)(ii) of the Act. The appellant resisted the reassessment proceedings on the ground that notice was barred by limitation while the department contended that the reassessment proceedings in this case were saved by the provisions of Section 150(1) of the 1961 Act. The High Court accepted the contention of the department. 10 Dismissing the assessee 's appeal, this Court, HELD: The provisions of Section 150(1) have been spe cially made applicable and operative in respect of a notice under section 148 issued in pursuance of Section 297(2)(d)(ii). The application of the provisions of Section 297(2)(d)(ii) gives rise to two sets of situations to one of which the language of Section 150(1) would squarely apply. Section 150(1) will operate to lift the time bar in cases where the reassessment is initiated under section 148 to give effect to an order passed under the 1961 Act. Section 297(2) is a provision enacted with a view to provide for continuity of proceedings in the context of repeal of one Act by a fresh one broadly containing analogous provisions and the transitory provisions should as far as possible, be construed so as to affect such continuity and not so as to create a lacuna. It will therefore be appropriate to so read the words of section 297(2)(d)(ii) as to permit the applica bility of section 150 (or section 153) with the necessary modifications. [18 G, 19A B, D E] The last words of Section 297(2)(d)(ii) should be read to mean that where the proceedings initiated under Section 148, subject to the relaxations and limitation of Sections 149 and 150, all the provisions of the Act shall apply accordingly: that is to say, in the same manner as they would apply in case of proceedings normally initiated under these provisions. Since reassessment proceedings so initiat ed to give effect to orders on appeal, revision or reference will not be subject to a time limit, the proceedings like wise initiated under Section 297(2)(d)(ii) read with Section 149 will also not be subject to any limitations save to the extent mentioned in Section 150(2). [19 E F] Income Tax Officer vs Eastern Coal Co. Ltd., ; Commissioner of Income Tax ' vs Kamalapat Moti lal, ; Ambaji Traders vs Income Tax Officer, ; Commissioner of Income Tax vs T.P. Asrani, ; Jain vs Mahendra, ; Govinddas vs Income Tax Officer, ; Seth Gujannal Modi vs Commissioner of Income Tax, ; Third Income Tax Officer vs Damodar Bhat, ; Jain Bros. vs Union of India, ; , referred to.

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ecial Leave Petition (C) No. 3790 of 199 1. From the Judgment and Order dated 29.3. 1990 of the Madras High Court in W.A. No 1028 of 1989. G. Ramaswamy, Attorney General, R. Mohan, V. Krishna murthy and R. Ayyam Perumal for the Petitioners. K. Parasaran, K.R. Chaudhary, T.V.S.N. Chari, Ms. Suruchi Aggarwal and Ms. Manjula Gupta for the Respondents. The Judgment of the Court was delivered by SHARMA, J. The respondents have successfully challenged a notification under Section 4 of the Land Acquisition Act, 1894 proposing to acquire their land before the Madras High Court. Their writ petition was allowed by a learned Single Judge and on appeal the order was confirmed by Division Bench. The State of Tamil Nadu has challenged the decision by the present Special Leave Petition. The acquisition proceeding, which is the subject matter of present case, was started for obtaining land for construction of houses by the Tamil Nadu Housing Board, constituted under Section 3 of the Madras State Housing Board Act, 1961 (Madras Act No. 17 of 1961) (hereinafter referred to as the 'Housing Board Act ') and this was men tioned in the impugned notification. The High Court has held that the public purpose mentioned in the notification was too vague in absence of details relating to the scheme for which the acquisition is sought to be made, and consequently the land owners cannot effectively avail of the benefits under Section 5A of the Land Acquisition Act by filing their objection. The learned Attorney General, appearing for the petitioner State, has contended that the notification has adequately described the nature of the public purpose by mentioning the proposed construction of residential build ings, and the respondents ought to have filed their objec tions under Section 5A instead of 378 moving the High Court with a writ application. Relying on the decision in Babu Barkya Thakur vs The State of Bombay and Others, it has been argued that even assuming that the public purpose was not mentioned in the notification with sufficient particularity, the proceeding cannot be quashed at this stage and the High Court should have dismissed the writ petition by pointing out that the remedy of the land owners was under Section 5A. 3. The reply of Mr. Parasaran, the learned counsel for the respondents, is that in view of the provisions of the Housing Board Act a proceeding for land acquisition can be commenced only after a scheme under the Act is framed, which has not been done in the present case. The land acquisition proceeding, therefore, being premature has been rightly quashed. As is indicated by the preamble of the Housing Board Act, the object of establishment of the Housing Board is to provide for the execution of housing and improvement schemes. The Act envisages eight types of schemes detailed in section 40, the housing scheme, as in the present case, being one of them. The framing of the schemes is dealt with in Chapter VII (Section 35 to 69) and Chapter VIII contain ing sections 70, 71 and 72 provides for acquisition and disposal of land. Section 70 states that land required by the Board for any of the purposes of this Act may be ac quired under the provisions of the Land Acquisition Act and accordingly the present land acquisition proceeding was commenced. The procedure prescribed for preparation of a scheme indicates that before it can be finalised, full publicity has to be given inviting objections; and in case of objec tions, the same have to be duly considered before granting sanction. Further, if anybody is still aggrieved, he has a right of appeal to the State Government. It is only after this stage is over that the scheme becomes final and en forceable. Admittedly the proposal to build houses in the present case has not been put in the shape of a scheme at all and as stated on behalf of the petitioner a draft scheme with relevant details will be drawn up after the possession of the land is secured. The question for decision is whether the acquisition proceeding can be initiated only after the framing of the proposed scheme and not earlier. The learned Attorney Gener al contended that having regard to the provisions of the Act and the other relevant considerations it must be held that the procedure in regard to the preparation of 379 the scheme has to await the conclusion of the land acquisi tion proceeding. It is only after the possession of the land is delivered to the Board that its engineers and other experts can go over the land, make necessary inspection and collect vital data, on the basis of which the scheme can be drawn up. It is essential to have a clear idea of the area of the land, its boundaries, and the nature of the soil for deciding about the details of the proposed scheme, and this is not possible so long the owner of the land continues in possession. Any attempt to draw up a scheme earlier has been described by the learned counsel as an exercise in futility. Alternatively it has been contended that even if it be held to be permissible to frame the scheme without waiting for the acquisition and possession of the land, it cannot be further assumed that the land acquisition proceeding has to await the finalisation of the scheme. In other words, both the proceedings may continue simultaneously, or any of the proceeding including one for land acquisition can be com menced without waiting for the other. In any event, the land acquisition proceeding should not be condemned as pre mature on the ground that the scheme has not been framed. We have closely examined the entire Act with the assistance of the learned counsel for the parties and in our view the conten tion on behalf of the respondents that the proceeding for acquiring land can be commenced only after the scheme is framed, is well founded. As has been stated earlier, Chapter VII containing sections 35 to 69 deals with the framing of the scheme. The Act has laid down separate procedures for the different types of schemes, according to necessity and suitability. Some of the schemes do not require acquisition of land, which is however, essential for constructing residential buildings under the housing scheme. Section 39 of the Act, therefore, while enumerating the matters to be included in the scheme, specifically mentions acquisition of land in clause (a). If the acquisition is contemplated as a subject matter of the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included. The Act requires the proposed scheme to be published permitting objections to be made, and if they are found to be valid, under section 53, the scheme to be modified or abandoned. Sub section (1) of section 49 directs the notice of the draft housing scheme to include and specify the following information as contained in clause (b) for the purpose of publication and information to the general pub lic: "(b) the place or places at which particulars of the scheme a map of the area, and details of the land which it is pro 380 posed to acquire and of the land in regard to which it is proposed to recover a betterment fee, may be seen at reasonable hours." (emphasis added) The underlined words above reaffirm the position that the acquisition of the land has to be a part of the scheme, which can be executed only after its finalisation. Apart from the provisions of section 53 mentioned above, section 56 further clothes the Board with the power to alter or cancel the scheme even after it is finally sanctioned. The language of clause (b) of the proviso to the section, which is quoted below, once more leads to the same conclusion that acquisition of the land has to await the framing of the scheme: "(b) If any alteration involves the acquisi tion otherwise than by agreement of any land not previously proposed to be acquired in the original scheme, the procedure prescribed in the forgoing sections of this Chapter shall, so far as it may be applicable, be followed as if the alteration were a separate scheme." (emphasis added) 8. Mr. Attorney General repeatedly said that unless the Board gets actual possession of the land in question its officers cannot go over the same for collecting the informa tion essential for drawing up of the scheme. It has, there fore, been suggested that it is wholly impractical to expect the scheme to be framed before obtaining the possession of the land. Mr. Parasaran, the learned counsel for the re spondents, rightly pointed out that the provisions of sec tion 147 furnish a complete answer to this argument. The section empowers the Chairman (now the Managing Director) of the Board or any person either generally or specially autho rised by him in this behalf to enter into or upon any land with or without assistants or workmen for the purpose of making any inspection, survey, measurement, valuation or enquiry or to take levels or to dig or bore into sub soil or to set out boundaries and intended lines of work et cetera. The last clause in the section gives wide power to do any other thing which may appear necessary for achieving the purpose of the Act subject to certain reasonable restric tions. The learned Attorney General also relied on sections 55 and 72 in support of the petitioners ' stand. Section 55 directs the Board to proceed to execute the scheme as soon as it becomes enforceable. It is 381 contended that if the acquisition proceeding is not over by the time the scheme is ready, undue delay is bound to take place. The fallacy in the argument is that it assumes that the acquisition of the land is not a part of the execution of the scheme itself. As has been indicated earlier the position is otherwise Since the acquisition is included in the scheme the process of execution of the scheme starts immediately when steps for acquisition are taken. Thus there is no question of any disregard of the command in section 55. Section 72 empowers the Board to lease, sell, exchange or otherwise dispose of any land vested in or acquired by it. This power has been granted to the Board, according to the petitioners, so that if the scheme is abandoned under section 53 the land already acquired can be disposed of. We do not see any warrant for linking section 72 with section 53. The Board has been given the power to dispose of any land whenever it is considered in the interest of the Board to do so; and the circumstances where it may be expedient to use this power may be many, as for example, when the scheme is altered or cancelled under section 56 due to a new devel opment. On the other hand, the order, in which the different steps for the preparation of the scheme and the acquisition of the land, is suggested on behalf of the petitioners to be taken, appears to be impractical and defeating the purpose of section 5A of the Land Acquisition Act. If the notifica tion under section 4 under the Land Acquisition Act is published without waiting for the scheme, as has been done in the present case, it will not be possible for the land owners to object to the proposed acquisition on the ground that the land is not suitable for the scheme at all, and therefore does not serve any public purpose, or that another piece of land in the area concerned, is far more suitable, leading to the possible conclusion that the proposed acqui sition is mala fide. As discussed above, the provisions of the Housing Board Act also suggest the same. The Board has not been vested with the unrestricted power to frame any scheme, as suggested by its planners. It has to take into account the representation by the local authority as men tioned under section 50 and the objection of any other person under section 53 and decide the same on merits before according sanction. The matter is not concluded even at that stage; the aggrieved person may appeal to the State Govern ment and it is only subject to the final result therein that the scheme becomes enforceable. In this set up it will be practical and consistent with common sense to have the scheme finalised before starting an acquisition proceeding We, accordingly, hold that a proceeding under the Land Acquisition Act read with section 70 of the Madras Housing Board Act, can be commenced only after framing the scheme of 382 which the land is required. The notification issued under section 4 in the present case must, therefore, be held to be pre mature, and it was rightly quashed by the High Court. Before closing his argument Mr. Attorney General stated that in the past a large number of land acquisition proceedings have been concluded and lands acquired without first framing the scheme and on the basis of the present judgement there may be an attempt by the land owners of those lands to re open the matter. We do not think that as a result of this judgment the concluded land acquisition proceedings can be allowed to be re opened. Although we have held that the initiation of the proceeding for acquisition has to await framing of a scheme, it does not mean that the concluded acquisition proceeding can be condemned as void so as to be ignored later. However, to avoid unnecessary con troversy we are hereby clarifying the position that a ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision. The special leave petition is dismissed, but in the circumstances without costs. V.P.R. Petition dismissed.

Under Section 4 of the Land Acquisition Act, 1894 a notification was issued by the petitioners proposing to acquire the land of the respondents for construction of houses by the Tamil Nadu Housing Board, constituted under section 3 of the Madras State Housing Board Act, 1961. The respondents challenged the impugned notification in a writ petition, which was allowed by the Single Judge of the High Court holding that the public purpose mentioned in the notification was too vague in absence of details relat ing to the scheme for which the acquisition was sought to be made, and consequently the land owners could not effectively avail of the benefits under section 5A of the Land Acquisi tion Act by filing objection. This order was affirmed by the Division Bench of the High Court. The State the petitioners filed this Special Leave Petition contending that the notification had adequately described the nature of the public purpose by mentioning the proposed construction of residential buildings and the respondents ought to have filed their objections under section 5 A instead of filing the writ petition; that the procedure in regard to the preparation of the scheme has to await the conclusion of the land acquisition proceeding; that the land acquisition proceeding should not be condemned as pre mature on the ground that the scheme has not been framed. The respondents contended that in view of the provi sions of the Housing Board Act a proceeding for land acqui sition can be commenced only after a scheme under the Act is framed, which has not been done in the present case. The land acquisition proceeding, being pre mature has been rightly quashed. 376 On the question whether the acquisition proceeding could De initiated only after the framing, of the proposed scheme and not earlier, dismissing the Special Leave Peti tion of the State, this Court, HELD: 1.01. The procedure prescribed for preparation of a scheme indicates that before it can be finalised, full publicity has to be given inviting objections; and in case of objections, the same have to be duly considered before granting sanction. Further, if anybody is still aggrieved, he has a right of appeal to the State Government. It is only after this stage is over that the scheme becomes final and enforceable. [378F] 1.02. Section 39 of the Madras State Housing Act, 1961 while enumerating the matters to be included in the scheme, specifically mentions acquisition of land in clause (a). If the acquisition is contemplated as a subject matter of the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included. [379F] 1.03. The acquisition of the land is a part of the execution of the scheme itself. Since the acquisition is included in the scheme the process of execution of the scheme starts immediately when steps for acquisition are taken. [381A B] 1.04. If the notification under section 4 under the Land Acquisition Act is published without waiting for the scheme, it will not be possible for the land owners to object to the proposed acquisition on the ground that the land is not suitable for the scheme at all, and therefore does not serve any public purpose, or that another piece of land in the area concerned, is far more suitable, leading to the possi ble conclusion that the proposed acquisition is mala fide. The provisions of the Housing Board Act also suggest the same. [381 DF] 1.05. It will be practical and consistent with common sense to have the scheme finalised before starting an acqui sition proceeding. A proceeding ' under the Land Acquisition Act read with section 70 of the Madras Housing Board Act, can be commenced only after framing the scheme for which the land is required. The notification issued under section 4 hi the present case must, therefore, be held to be pre mature, and it was rightly quashed by the High Court. [381G 382A] 1.06. Although the initiation of the proceeding for acquisition has to await framing of a scheme, it does not mean that the concluded acquisition proceeding can be con demned as void so as to be ignored 377 later. A ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision. [382C D] Babu Barkya Thakur vs The State of Bombay and Others, , distinguished.

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ivil Appeal No. 3574 of 1991. From the Judgment and Order dated 5.9.1990 of the Punjab and Haryana High Court in L.P.A. No. 127 of 1983. S.K. Mehta, Dhruv Mehta and Aman Vachher for the Appel lant. O.P. Sharma, K.R. Gupta, Vivek Sharma, R.C. Gubrele and Ms. Nanita Sharma for the Respondents. The Judgment of the Court was delivered by KANIA, J. Leave granted. Counsel heard. The appellant, Bhatinda Improvement Trust, framed a development scheme under the Punjab Town Improvement Act, 1922 (referred to hereinafter as "the said Act"). Notices under Section 36 of the said Act in respect of the said scheme, setting out the particulars referred to in the said Section, were published in the Daily Tribune on May 31, 1977, June 7, 1977, and June 14, 1977. The said notices were also published in the local daily Ajit on May 30, 1977, June 6, 1977, and June 13, 1977 and in Punjab Government Gazette on June 17, 1977, June 24, 1977 and July 1977, respectively. A Notification as required under Section 42 of the said Act was published on June 30, 1980 sanctioning the said develop ment scheme. The said Notices and 931 Notifications were challenged by the respondents in Civil Writ No. 2508 of 1982 filed in the High Court of Punjab and Haryana, inter alia, on the ground that the Notification under Section 42 was not issued within the stipulated period of three years from the first publication of the Notice under Section 36 and on that account it was bad in law. This contention found favour with the learned Single Judge of Punjab and Haryana High Court who allowed the writ petition and set aside the Notification under Section 42 which was issued on June 30, 1980. A Letters Patent Appeal preferred against the said Judgment was dismissed by a Division Bench of the said High Court and the present petition is directed against the aforesaid judgment of the Division Bench, dis missing the said Letters Patent Appeal. It was submitted by Mr. Mehta, learned Counsel for the appellant that the time limit of three years for the issue of the Notification under Section 42 of the said Act was not prescribed under the said Act and that the first proviso to Section 6 of the Land Acquisition Act. 1894, was not ap plicable to the scheme in question. It was submitted by him that the provisions of Section 6 of the Land Acquisition Act were, in effect, incorporated into the said Act which was enacted in 1922 from the very time of its enactment and hence, any amendment to the said section after that date would not be applicable to acquisitions under the said Act. It was pointed out by him that the aforesaid time limit of three years was inserted in the Land Acquisition Act in 1984, long after the said Act was enacted as set out partic ularly, hereinafter and hence, it could not have any appli cation to the acquisitions made for the purposes of the said Act. In order to examine the correctness of the submissions of Mr. Mehta, it is necessary to take note of the relevant provisions of the said Act and the Land Acquisition Act. Section 28 of the said Act sets out the matters which may be provided for in a scheme. Under sub section (2) clause (i) of the said section it is inter alia provided that a scheme under said Act may provide for the acquisition under the Land Acquisition Act as modified by the said Act. Section 36 of the said Act provides that when a scheme under the said Act has been framed, the trust shall prepare a notice set ting out the particulars contained in the said section. The relevant part of sub section (2) of the said Section runs as follows: (2) The trust shall: "(a) notwithstanding anything contained in Section 78 932 cause the said notice to be published weekly for three consecutive weeks in the official Gazette and in a newspaper or newspapers with a statement of the period within which objec tions will be received. ". Sub section (1) of Section 42 provides that the State Government shall notify the sanction of every scheme under the said Act and the trust shall forthwith proceed to exe cute the scheme and so on. Subsection (2) of the said Sec tion provides that a Notification under subsection (1) thereof shall be conclusive evidence that the scheme has been framed and sanctioned. Section 58 provides for the constitution of a tribunal for the purposes of performing the functions of a court in a reference to acquisition of land for improvement trust under the Land Acquisition Act. Section 59 provides for modification of the Land Acquisition Act, as set out therein for the purposes of acquiring the land under the Land Acquisition Act for the said trust. We are not concerned with the actual modifications referred to in Section 59. We need only note that under sub section (b) of Section 59 it is provided that the Land Acquisition Act may be subject to further modifications as indicated in the Schedule to the said Act. Sub clause (1) of Clause 2 of the Schedule to the said Act, referred to in Section 59, runs as follows: "(2) Notification under section 4 and declara tion under section 6 to be replaced by notifi cation under sections 36 and 42 of this Act (1) The first publication of a notice of any improvement scheme under section 36 of this Act shall be substituted for and have the same effect as publication in the Official Gazette and in the locality of a notification under subsection (1) of section 4 of the said Act, except where a declaration under section 4 or section 6 of the said Act has previously been made and is still in force. " Sub section (1) of Section 4 of the Land Acquisition Act, inter alia, provides that whenever it appears to the appro priate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the Official Gazette as prescribed in the said section. Section 5 A deals with hearing of objections. Sub section (1) of Section 6, inter alia provides that when the appropriate Government is satis fied after considering the 933 report, if any, made under Section 5 A, sub section (2), that any particular land is needed for a public purpose, a declaration to that effect shall be made as prescribed in the said section. The relevant part of the first proviso to the said sub section as substituted by Act 68 of 1984 runs as follows: "Provided that no declaration in respect of any particular land covered by a notification under Section 4, sub section (1) (i) published after the commencement of the Land Acquisition (Amendment and Validation) Ordinance, 1967 (1of 1967), but before the commencement of the Land Acquisition (Amend ment) Act, 1984, shall be made after the expiry of three years from the date of the publication of the notification; or". It was by this substituted proviso that the said time limit of three years was prescribed. Sub section (2) of Section 6 provides for the publication of the declaration under Section 6 and prescribes the manner in which the same shall be done. It is the submission of learned Counsel for the appel lant that by the aforesaid provisions, and in particular, Sections 28, 58 and 59 of the said Act certain provisions of the Land Acquisition Act, and particularly, Section 6 there of were, in effect, incorporated into the said Act by refer ence and hence, it is only such provisions of the Land Acquisition Act as were in existence at the time when the said Act was enacted in 1922 which could be said to be incorporated into the said Act. In support of his submission he placed strong reliance on the decision of a Bench com prising three learned Judges Bench of this Court in the case of Mahindra and Mahindra Ltd. vs Union of India and Another., ; In that case it has been point ed out that Section 55 of the (referred to hereinafter as the "MRTP Act") provides that any person aggrieved by the order made by the Central Government or the Commission (The Monop olies and Restrictive Trade Practices Commission) under Section 13 or Section 37 of the MRTP Act may prefer an appeal to the Supreme Court on one or more of the grounds specified in Section 100 of the Code of Civil Procedure. It was pointed out in the judgment that on the date on which the MRTP Act came into force, Section 100 of the Code of Civil Procedure specified 3 grounds on which a second appeal could lie to the High Court, one of them being that the decision appealed against, was contrary to law. By 934 an amendment made in 1976, Section 100 of the Code was subsituted by a new section which provides that a second appeal shall lie to the High Court only if the High Court is satisfied that the case involves a substantial question of law. The appellant took the stand that under the provisions of Section 100 of the Civil Procedure Code, as it stood when the MRTP Act was enacted, the appeal was clearly maintain able as the impugned order was contrary to law. The respond ents contended that, although this might be so, no substan tial question of law was involved in the second appeal and hence, the appeal was not maintainable. It was submitted by the respondents that the maintainability of the appeal would have to be determined on the basis of Section 100 of the Code as amended. This Court took the view that the appeal was maintainable. It was held that on a proper interpreta tion of Section 55 it must be held that the grounds speci fied in Section 100 of the Code as it stood when the MRTP Act was enacted in 1969, were incorporated in Section 55 of the MRTP Act and the substitution of the new Section 100 did not affect or restrict the grounds as incorporated in Sec tion 55. In the said judgment this Court cited with approval the judgment of the Privy Council in Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd., [1958] I.A. 259 at 267. where the Judicial Committee observed: "In this country it is accepted that where a statute is incorporated by reference into a second statute, the repeal of the first stat ute does not affect the second; (see the case collected in Craies on Statute Law, 3rd edn. pp. 349,350)". We find ourselves unable to accept the submissions of learned Counsel for the appellant. As pointed out by the Supreme Court and the Judicial Committee in the aforesaid decisions, it is well settled law that where a statute is incorporated by a reference into a second statute, the repeal of the first statute does not affect the second. Similarly, in a case where a statute is incorporated by a reference into another statute an amendment of the statute so incorporated after the date of incorporation does not affect the second statute and the provisions of the latter statute remain the same as they were at the time of incorpo ration. It is again well settled that where one statute is referred to in another, it may be merely by way of reference or by way of incorporation of the same. This depends on the language used in the latter statute and other relevant circumstances. In the present case, however, we find that there is no question of incorporation of any of the provi sions of the Land Acquisition Act into the said Act at all. The said Act does not deal with acquisition of land for the purposes of a 935 scheme as contemplated under the said Act. The acquisition of such land for the purposes of the scheme is left to the general law of the land in that connection, namely, the Land Acquisition Act, which has to be resorted to for the pur poses of acquisition of land for the purposes of the schemes contemplated under the said Act. The only difference is that some of the provisions of the Land Acquisition Act, as referred to in the relevant sections of the said Act are given effect to as amended by the relevant sections of the said Act. In these circumstances, it cannot be held that any provisions of the Land Acquisition Act have been incorporat ed into the said Act and the provisions of the Land Acquisi tion Act which have to be applied, are the provisions as they stand at the relevant time, namely, at the time of acquisition, in the absence of a contrary intention. There is nothing to indicate that there was any such contrary intention in the present case. In these circumstances, the notification under Section 42 should have been published within the period of three. years of the date of publication of the notification under Section 4(1) of the Land Acquisi tion Act, as required under the first proviso to Section '6 of the Land Acquisition Act. Under sub clause (1) of clause (2) of the Schedule to the said Act, which we have referred to earlier, the first publication of a notice of any im provement scheme under Section 36 of the said Act, is sub stituted for and has the same effect as the publication in the Government Gazette of a notification under sub section (1) of Section 4 of the Land Acquisition Act. The notice under section 36 of the said Act is required to be pub lished, inter alia, in a newspaper or newspapers as set out in section 36(2)(a) of the said Act. In the present case, such a notice was first published in the daily 'Ajit ' on May 30, 1977, and hence, the notification under Section 42 of the said Act should have been published on or before May 30, 1980. In fact, the notification under Section 42 of the said Act, admittedly, was published on June 30, 1980, and hence, was clearly beyond time. In these circumstances, the notice under Section 36 of the said Act lapsed on the expiry of three years from May 3G, 1977, and no action pursuant to the said notice could be taken thereafter. The notification under Section 42 of the said Act was clearly beyond time and bad in law, as it was not published within the period pro vided. The acquisition proceedings lapsed. The submission of learned Counsel for the appellant must be rejected. No other point was canvassed before us. In the result, the appeal fails and is dismissed with costs. V.P.R. Appeal dis missed.

The appellant the Improvement Trust framed a develop ment scheme under the Punjab Town Improvement Act, 1922 and notices under Section 36 of the Act were published in the Daily Tribune on May 31, 1977, June 7, 1977 and June 14, 1977 and in the local Daily Ajit on May 30, 1977, June 6, 1977 and June 13, 1977 and in the Punjab Government Gazette on June 17, 1977, June 24, 1977 and July 1977, respectively. A notification as required under Section 42 of the Act was published on June 30, 1980 sanctioning the development scheme. The notification was challenged by the Respondents in a writ petition in the High Court on the ground that the notification was not issued within the stipulated period of three years from the first publications of the notice. The Single Judge of the High Court allowed the writ application and the Division Bench of the High Court dis missed the Letters Patent Appeal, against which the present petition has been filed by the Improvement Trust, contending that the time limit of three years for the issue of the notification under section 42 of the Act was not prescribed under the Act; that the first proviso to section 6 of the Land Acquisition Act, 1894, was not applicable to the scheme in question, and; that the provisions of Section 6 of the Land Acquisition Act were 929 incorporated in the Act from the very time of its enactment and hence, any amendment to the said section after that date would not be applicable to acquisitions under Act. Dismissing the appeal, this Court, HELD: 1. In a case where a statute is incorporated by a reference into another statute, an amendment of the statute so incorporated after the date of incorporation does not affect the second statute and the provisions of the latter statute remain the same as they were at the time of incorpo ration. [934F G] 2. Where one statute is referred to in another, it may be merely by way of reference or by way of incorporation of the same. This depends on the language used in the latter statute and other relevant circumstances. [934G] 3. In the present case, there is no question of incorpo ration of any of the provisions of the Land Acquisition Act into the Punjab Improvement Act 1922 at all as the latter Act does not deal with acquisition of land for the purposes of a scheme as contemplated under the Act. The acquisition of such land for the purposes of the scheme is left to the general law of the land in that connection, namely, the Land Acquisition Act, which has to be resorted to for the pur poses of acquisition of land for the purposes of a scheme as contemplated under the Punjab Town Improvement Act. The only difference is that some of the provisions of the Land Acqui sition Act, as referred to in the relevant sections of the Act, are given effect to as amended by the relevant sections of the Act. In these circumstances, it cannot be held that any provisions of the Land Acquisition Act have been incor porated into the Act and the provisions of the Land Acquisi tion Act which have to be applied, are the provisions as they stood at the relevant time, namely, at the time of acquisition, in the absence of a contrary intention. [934G C] 4. The notification under Section 42 should have been published within the period of three years of the date of publication of the notification under Section 4(1) of the Land Acquisition Act, as required under the first proviso to Section 6 of the Land Acquisition Act. Under sub clause (1) of Clause (2) of the Schedule to the said Act, the first publication of a notice of any improvement scheme under section 36 of the said Act, is 930 substituted for and has the same effect as the publication in the Government Gazette of a notification under sub sec tion (1) of Section 4 of the Land Acquisition Act. The notice under section 36 of the said Act is required to he published, inter alia, in a newspaper or newspapers as set out in section 36(2)(a) of the said Act. In the present case, such a notice was first published in the daily 'Ajit ' on May 30, 1977, and hence, the notification under Section 42 of the said Act should have been published on or before May 30, 1980. In fact, the notification under Section 42 of the said Act, admittedly, was published on June 30, 1980 and hence, was clearly beyond time. [935C F] Mahindra and Mahindra Ltd. vs Union of India and Anoth er; , and Secretary of State for India in Council vs Hindustan Cooperative Insurance Society Ltd., [1958] IA 259 at 267, referred to.

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Vil Appeal No. 6071 (NM) of 1990. From the Order dated 31.5.90 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/2586/86 C with E/Cross/478/86 C. (Order No. 541/90 C). M. Gauri Shankarmurthy, K. Swamy and P. Parmeshwaran for the Appellant. Santosh Hegde and K.R. Nambiar for the Respondent. The Judgment of the Court was delivered by V. RAMASWAMI, J. The short question of law that arises for consideration in this appeal is as to what is the rele vant date for the purpose of calculation of the period of one year provided under section 35E(3) of The Central Ex cises & Salt Act, 1944 (hereinafter called the Act). Briefly stated the question arises in the following circumstances. By order in Original No. 34 of 1984 dated 28.11.1984, the Collector of Central Excise, Madras as an adjudicating authority within the meaning of the Act, held as barred by limitation the demand from the respondent towards excise duty on biaxially oriental polypropylene films as set out in the show cause notice dated 25.10.1983 and dropped further proceedings against the respondent. A copy of this order was attested by the Superintendent of the office on 21.12.1984 and despatched to the respondent. It was received by the respondent on 21.12.1984. The Central Board of Excise and Customs (hereinafter called the. Board), after consideration of the order, on 11.12.1985 directed the Collector of Cen tral Excise, Madras under the provisions of Section 35E(1) to apply to the Customs, Excise & Gold (Control) Appellate Tribunal, New Delhi, for correct determination of the points arising out of the aforesaid order and accordingly the Collector filed the application before the Tribunal 'as provided under Section 35E(4) of the Act. Before the Tribunal the respondent urged that the rele vant date of the Collector 's (adjudicating authority) order for the purposes of Section 35E(3) should be taken as 28.11.1984 and not 21.12.1984 when it was received by the respondent and on that basis the order of the Board under Section 35E(1) of the Act should be held as beyond the 866 period of one year from the date of the decision or order of the adjudicating authority and therefore the application before the Tribunal was incompetent. The Tribunal accepted this contention and held that the application was not main tainable. In this appeal filed under Section 35L of the Act the learned counsel for the appellant contended that mere writ ing an order in file kept in the office is no order in the eye of law in the sense of affecting the rights of the parties for whom the order is meant and that though the order of the adjudicating authority was made on 28.11.1984 a copy of the same was sent to the respondent only on 21.12.1984 and received by him on the very day and that therefore the limitation would start only at the earliest from 21.12.1984. He stated that the order was received by the Board also only subsequent to 21.12.1984. His further submission was that enabling the giving of the direction under Section 35E(1) and the application under Section 35E(4) in pursuance of that direction shall be treated as if a right of appeal given to the department. On this basis his argument was that the departmental authorities and the private parties are to be treated equally as aggrieved persons for the purposes of calculating the time for making the direction under Section 35E(3) of the Act. Before we discuss the arguments of the learned counsel, it is necessary to set out some relevant provisions in the Act. Section 35 of the Act, provides for an appeal to a person aggrieved by any decision or order passed under the Act by a Central Excise Officer lower than a Collector of Central Excise ' and that such an appeal will have to be filed "within three months from the date of the communica tion to him of such decision or order". Clause 5 of Section 35A requires that on the disposal of the appeal, the Collec tor (Appeals) shall communicate the order passed by him to the Appellant, the adjudicating authority and the Collector of Central Excise Section 35B provides for a right of appeal to any person aggrieved by, among other orders, (1) an order passed by the Collector (Appeals) under Section 35A and (2) a decision or order passed by the Collector of Central Excise as an adjudicating authoritY. Such an appeal will have to be filed "within three months from the date on which the order sought to be appealed against is communicat ed to the Collector of Central Excise or as the case may be the other party preferring the appeal. " The Appellate Tribu nal also is required to send a copy of the order passed in the appeal to the Collector of Central Excise and the other party to the appeal. Section 35E(1) authorises the Board "of its own motion, call for and examine the record of any proceeding in which a Collector of Central Excise as 867 an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector to apply to the Appel late Tribunal. or as the case may be the Customs and Excise Revenues Appellate Tribunal established under Section 3 of the for the determination of such points arising out of the decision or order as may be specified by the Board in its order. " As sub section (2) is also relevant for considera tion that may also be set here and that reads: "2. The Collector of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudi cating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legal ity or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be spcified by the Collector or Central Excise in his order. It may be seen that the direction to file an appeal under these two sub sections by the Board and the Collector, as the case may be, is to the very adjudicating authority who would otherwise be bound by his own order and not ex pected to be aggrieved by the same. When an appeal is filed on such direction, the appellant will be the adjudicating authority himself and not the authority who gave the direc tion. Sub Section (3) of Section 35E of the Act which deals with the limitation for exercise of the powers under sub sections (1) and (2) of the Act and which is the relevant provision for consideration in this appeal reads as follows: "No order shall be made under sub section (1) or subsection (2) after the expiry of one year from the date of the decision or order of the adjudicating authority. " At this stage itself we may state that sub section (4) of the Act provides that the adjudicating authority shall file the application before the Tribunal in pursuance of the order made under sub section (1) or sub section (2)"within a period of. three months from the date of communication of the order under sub section (1) or sub section (2) to the adjudicating authority. " 868 The words "from the date of decision or order" used with reference to the limitation for filing an appeal or revision under certain statutory provisions had come up for consider ation in a number of cases. We may state that the ratio of the decisions uniformly is that in the case of a person aggrieved filing the appeal or revision, it shall mean the date of communication of the decision or order appealed against. However, we may note a few leading cases on this aspect. Under section 25 of the Madras Boundary Act, 1860 the starting point of limitation for appeal byway of suit al lowed by that section was the passing of the Survey Offi cer 's decision and in two of the earliest cases, namely, Annamalai Chetti vs Col. J.G. Cloete, Mad. 189 and Sesharnrna vs Sankara, Mad. 1, it was held that the decision was passed when it was communicated to the parties. In The Secretary of State for India in Council vs Gopisetti Narayanaswami Naidu Guru, ILR 34 Madras 151, construing a similar provision in the Survey and Boundary Act, 1897 the same High Court held that a decision cannot properly be said to be passed until it is in some way pro nounced or published under such circumstances the parties affected by it have a reasonable opporunity of knowing what it contains. "Till then though it may be written out, signed and dated, it is nothing but a decision which the officer intends to pass. It is not passed so long it is open to him to tear off what he has written and write something else." In Raja Harish Chandra Raj Singh vs The Deputy Land Acquisi tion Officer & Anr., [1962] 1 SCR 676 construing the proviso to Section 18 of the Land Acquisition Act which prescribed for applications seeking reference to the Court, a time limit of six weeks of the receipt the notice from the Col lector under Section 12(2) or within six months from the date of the Collector 's award whichever first expires, this Court held that the six months period will have to be calcu lated from the date of communication of the award. In Asstt. Transport Commissioner (Administration) U.P. & Ors. vs Sri Nand Singh, construing the provision of Section 15 of the U.P. Motor Vehicle Taxation Act, it was held that for an aggrieved party the limitation will run from the date when the order was communicated to him. The ratio of these judgments were applied in interpret ing section 33A(2) of the Indian Income Tax Act, 1922 in Muthia Chettiar vs CIT, ILR with reference to a right of revision provided to an aggrieved assessee. , Section 33A(1) of the Act on the other hand authorised the Commissioner to suo moto call for the records of any pro ceedings under the Act in which an order has been passed by any 869 authority subordinate to him and pass such order thereon as he thinks fit. The proviso, however, stated that the Commis sioner shall not revise any order under that sub section" if the order (sought to be revised) has been made more than one year previously". Construing this provision the High Court in Muthia Chettiar 's case held that the power to call for the records and pass the order will cease with the lapse of one year from the date of the order by the subordinate authority and the ratio of date of the knowledge of the order applicable to an aggrieved party is not applicable for the purpose of exercising suo moto power. Similarly in another decision reported in Viswanathan Chettiar vs Commis sioner of Income Tax, Madras, construing the time limit for completion of an assessment under section 34(2) of the Income Tax Act, 1922, which provided that it shall be made "within four years from the end of the year in which the income, profit and gains were first assessable," it was held that the time limit of four years for exercise of the power should be calculated with reference to the date on which the assessment or reassessment was made and not the date on which such assessment or reassessment order made under Section 34(2) was served on the assessee. It may be seen therefore, that, if an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed there for. The order or decision of such authority comes into force or becomes operative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made: that is to say when he ceases to have any authority to tear it off and draft a different order and when he ceases to have any locuspaetentiae. Normally that happens when the order or decision is made public or notified in some form or when it can be said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time. So far as the party who is affected by the order or decision for seeking his remedies against the same, he should be made aware of passing of such order. Therefore Courts have uniformly laid down as a rule of law that for seeking the remedy the limitation starts from the date on which the order was communicated to him on the date on which it was pronounced or published under such circumstances that the parties affected by it have a reasonable opportunity of knowing of passing of the order and what it contains, The knowledge of the party 870 affected by Such a decision, either actual or constructive is thus an essential element which must be satisfied before the decision can be said to have been concluded and binding on him. Otherwise the party affected by it will have no means of obeying the order or acting in conformity with it or of appealing against it or otherwise having it set. This is based upon, as observed by Rajamanner, CJ in Muthia Chettiar vs CIT, supra "a salutary and just principle". The application ' of this rule so far as the aggrieved party is concerned is not dependant on the provisions of the particu lar statute, but it is so under the general law. In Muthia Chettiar 's case (supra) both these aspects came up for consideration. The relevant provisions consid ered therein were Section 33A(1) and (2) of the ' Indian Income Tax Act, 1922, which read as follows: "33A. (1) The Commissioner may of his own motion call for the record of any proceeding under this Act in which an order has been passed by any authority subordinate to him and may make such inquiry or cause such. inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee as he thinks it: Provided that the Commissioner shall not revise any order under this sub section if (a) x x x (b) x x X x (c) the order has been made more than one year previously." "(2) The Commissioner may, on application by an assessee for revision of an order under this Act, passed by any authority subordinate to the Commissioner, made within one year from the date of the order,. call for the record of the proceeding in which such order was passed, and. . may pass such order thereon. as he thinks fit: Interpreting these provision the Court observed: "In a case falling under sub section (1) the Commissioner acts of his own motion. There is no question of the 871 aggrieved party invoking his jurisdiction, there can therefore be no occasion to apply the rule enunciated in Secretary of State for India in Council vs Gopisetti Narayanaswami Naidu, Mad, 15 1. It may be said that the Commissioner 's power to call for the record ceases with the lapes of one year from the date of the order by the subordinate authority. But in a case failing under sub section (2) the party aggrieved has got to take the step of applying for revision and he is allowed one year from the date of the order. The provision is, therefore, certainly in the nature of a time limit for the applica tion for revision." The decision in Viswanathan Chettiar 's case (supra) related to the reassessment power under Section 34(2) of the Income Tax Act, 1922 which read as follows: "No order of assessment under Section 23 or of assessment or reassesment under sub section (1) of this section shall be made after the expiry, in any case to which clause (c) of sub section (1) of section 28 applies, of eight years and in any other case, of four years from the end of the year in which the income, profits or gains were first assessa ble." After referring to some of the provisions in the Act and some of the earlier decisions and in particular Muthia Chettiar 's case (supra) the learned judges observed: "As we have already pointed out, the time limit of four years for which sub section (2) of Section 34 provided was the period within which the Income tax Officer had to complete one stage of the proceedings, that is, the assessment of the income and determination of the tax payable, and that stage could be completed by the Income tax Officer himself, even if the terms of the order of assessment were not communi cated within that period of four years to the assessee. The rights of the assessee aggrieved by such an order of assessment have been specifically provided for by other sections of the Act. " Thus if the intention or design of the statutory provision was to protect the interest of the person adverse ly affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as com 872 mencing from the date of communication of the order. But if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo moto power over the subordinate authorities ' orders, the date on which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this distinction may also be found ed on the principle that the Government is bound by the proceedings of its officers but persons affected are not concluded by the decision. Section 35E comes under the latter category of an au thority exercising its own powers under the Act. It is not correct to equate the Board, as contended by Sri Gaurishan kar Murthy, to one of the two parties to a quasi judicial proceeding before the Collector and the Board 's right under Section 35E to the exercise of the right of appeal by an aggrieved assessee from an order passed to its prejudice. The power under Section 35E is a power of superintendence conferred on a superior authority to ensure that the subor dinate officers exercise their powers under the Act correct ly and properly. Where a time is limited for the purposes by the statute, such power, as under Section 33A(2) of the Indian Income tax Act, 1922 referred to in Muthia Chettiar (supra), should be exercised within the specified period from the date of the order sought to be reconsidered. To hold to the contrary would be inequitable and will also introduce uncertainties into the administration of the Act for the following reason. There appears to be no provision in the Act requiring the endorsement, by a Collector, of all orders passed by him to the Board. If there is such a prac tice in fact or requirement in law, the period of one year from the date of the order is more than adequate to ensure action in appropriate cases particularly in comparison with the much shorter period an assessee has within which to exercise his right of appeal. If, on the other hand, there is no such requirement or practice and the period within which the Board can interfere is left to depend on the off chance of the Board coming to know of the existence of a particular order at some point of time, however, distant, only administrative chaos can result. We are, therefore, of the opinion that the period of one year fixed under sub section (3) of Section 35E of the Act should be given its literal meaning and so construed the impugned direction of the Board was beyond the period of limitation prescribed therein and therefore invalid and ineffective. For the foregoing. reasons we are of the view that the Tribunal was right in holding that the application before them was out of time. This appeal is accordingly dismissed. There will be no order as to costs. V.P.R. Appeal dis missed.

The appellant, an adjudicating authority held the demand from the respondent towards excise duty on biaxially orien tal polypropylene films as set ant in the show cause notice dated 25.10.1983 as barred by limitation and dropped further proceedings. A copy of the order despatched on 21.12.1984 was received by the respondent on 21.12.1984. The Central Board of Excise and Customs after considera tion of the order, on 11.12.198S directed the appellant to apply under Section 3SE(1) of the Central Excises & Salt Act, 1944, to the Customs, Excise & Gold (Control) Appellate Tribunal for correct determination of the points arising out of the order dated 21.12.1984 and the appellant filed the application under section 35E(4) of the Act. Before the Tribunal the respondent urged that the rele vant date of the Collector 's (adjudicating authority 's) order for the purposes of Section 35E(3) should he taken as 28.11.1984 and not 21.12.1984 when it was received by the respondent and on that basis the order of the Board under Section 35E(1) of the Act should he held as beyond the period of one year from the date of the decision or order of the adjudicating authority and therefore the application before the Tribunal was incompetent. 863 The Tribunal dismissed the application holding that the application was not maintainable. In this appeal tided under Section 35L of the Act, the appellant contended that mere writing an order in file kept in the office was no order in the eye of law in the sense of affecting the rights of the parties for whom the order was meant and that though the order of the adjudicat ing authority was made on 28.11.1984 a copy of the same was sent to the respondent only on 21.12.1984 and received by him on the very day and that therefore the limitation would start only at the earliest from 21.12.1984; that enabling the giving of the direction under Section 35E(1) and the application under Section 35E(4) in pursuance of that direc tion should he treated as if a right of appeal given to the department; that the departmental authorities and the pri vate parties were to he treated equally as aggrieved persons for the purposes of calculating the time for making the direction under Section 35E(3) of the Act. On the question, what is the relevant date for the purpose of calculation of the period of one year provided under Section 35E(3) of the Central Excises & Salt Act, 1944, dismissing the appeal, this Court, HELD: 1. If an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period or limitation pre scribed therefore. The order or decision of such authority comes into force or becomes operative or becomes an effec tive order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made; that is to say when he ceases to have any authority to tear it off and draft a different order and when.he ceases to have any locuspaetentiae. Normally that happens when the order or decision is made public or notified in some form or when it can he said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time. [869D F] 2. If the intention or design of the statutory provi sion was to protect the interest of the person adversely affected, by providing a remedy against the order or deri sion any period of limitation prescribed with reference to invoking such remedy shall he read as commencing from the date of communication of the order. But if it is a limita tion for a competent authority to make an order the date of exer 864 cise of that power and in the case of exercise, of suo moto power over the subordinate authorities ' orders, the date on which such power was exercised by making an order are the relevant date for determining the limitation. [871H 872B] 3. Section 35E comes under the latter category of an authority exercising its own powers under the Act. It is not correct to equate the Board to one of the two parties to a quasi judicial proceeding before the Collector and the Board 's right under Section 35E to the exercise of the right of appeal by an aggrieved assessee from an order passed to its prejudice. [872B C] 4. The power under Section 35E is a power of superin tendence conferred on a superior authority to ensure that the subordinate officers exercise their powers under the Act correctly and properly. Where a time is limited for the purposes by the statute, such power should he exercised within the specified period from the date of the order sought to he reconsidered. To hold to the contrary would he inequitable and will also introduce uncertainties into the administration of the Act. [872C E] 5. The direction to file an appeal under Sections 35E(1)(2) of the Act by the Board and the Collector, as the case may he, is to the very adjudicating authority who would otherwise he bound by his own order and not expected to he aggrieved by the same. When an appeal is filed on such direction, the appellant will be the adjudicating authority himself and not the authority who gave the direction. [867D E] 6. The period of one year fixed under sub section (3) of Section 35E of the Act should he given its literal meaning and so construed the impugned direction of the Board was beyond the period of limitation prescribed therein and therefore invalid and ineffective. [872G] Annamalai Chetti vs Col. J.G. Cloete, Mad. 189, Seshamma vs Sankara, Mad. 1; The Secre tary of State for India in Council vs Gopisetti Narayanaswa mi Naidu Guru, ILR 34 Madras 151; Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer & Anr., [1962] 1 SCR 676; Asstt. Transport Commissioner (Administration) U.P. & Ors. vs Sri Nand Singh, ; Muthia Chettiar vs CIT, ILR and Viswanathan Chettiar vs Commissioner of Income Tax, Madras, , referred to. 865

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ivil Appeal No. 3504 of 1991. the Judgment and Order dated 5.10.1990 of the Bombay High Court in W.P. No. 210 of 1990. Dhruv Mehta, S.K. Mehta and Aman Vachher for the Appellants. Jitender Sharma for the Respondents. The Judgment of the Court was delivered by SHARMA, J. Special leave is granted. The appellant was injured in a road accident and his claim petition has been dismissed as being barred by limita tion. The accident took place on 22.1.1989. The Motor Vehi cles Act, 1939 was repealed by section 217(1) of the which came into force on 1.7.1989. The period of limitation for filing a claim petition both under the old Act and the new Act being six months expired on 22.7.1989. The claim petition of the appellant, however, was filed belatedly on 15.3.1990 with ,a prayer for condonation of delay. The Accident Claims Tribunal held that in view of the provisions of subsection (3) of section 166 of the new , the delay of more than six months could not be condoned. The application was accordingly dismissed. The appellant unsuccessfully challenged the decision before the High Court. 915 3. It has been contended that since the accident took place when the old was in force, the proceeding before the Accident Claims Tribunal must be held to be governed by the old Act, and his petition cannot be dismissed on the basis of the provisions in the new Act. The period of limitation for filing a claim petition both under the old Act and the new Act is six months from the date of the accident. The difference in the two Acts, which is relevant in the present case, is in regard to the provisions relating to condonation of delay. In view of the proviso to sub section (3) of section 166 of the new Act, the maximum period of delay which can be condoned is six months, which expired on 22.1.1990. If the new Act is held to be applicable, the appellant 's petition filed in March had to be dismissed. The case of the appellant is that the accident having taken place before the new Act came into force, the proceeding is governed by the old Act, where there was no such restriction as in the new Act. The ques tion is as to which Act is applicable; the new Act or the old. It has been contended by the learned counsel that under the old Act the appellant had a right to file a claim petition even more than six months after the expiry of the period of limitation, and this right is preserved by reason of the provisions of section 6 of the . Reliance has been placed on clauses (c) and (e). The relevant portion of the section reads thus: "6. Effect of repeal Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enact ment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a). . (b). . (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in 916 respect of any such right, privilege, obliga tion, liability, penalty, forfeiture or pun ishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repeating Act or Regulation had not been passed. " We are unable to agree. Clause (e) is not attracted because, by the enactment of the new law the remedy of the appellant has not been affected at all. His right to claim compensa tion by filing the claim within the same period of limita tion has been preserved. And there was no application for condonation of delay in a proceeding pending at the time of repeal so as to allow him to claim any privilege available under the old Act. So far the applicability of clause (c) is concerned, the question depends on whether the appellant had got an accrued right or privilege under the old law which he could not have been deprived of by the repealing legisla tion. Even independent of the , it is firmly established that unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the other hand, a law which is procedural in nature, and does not affect the rights, has to be held to be retrospectively applicable. The question is whether the appellant has been deprived of an accrued right or privilege in the present case 7. It is true that the appellant earlier could file an application even more than six months after the expiry of the period of limitation, but can this be treated to be a right which the appellant had acquired. The answer is in the negative. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly en forceable as a right. So far the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act subject to two, conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it impractical for him to avail of the remedy. This principle has been followed by this Court in many cases and by way of illustra tion we would like to mention New India Insurance Co. Ltd. vs Smt. Shanti 917 Misra; , The husband of the respondent in that case died in an accident in 1966. A period of two years was available to the respondent for instituting a suit for recovery of damages. In March, 1967 the Claims Tribunal under section 110 of the was con stituted, barring the jurisdiction of the civil court and prescribing 60 days as the period of limitation. The re spondent filed the application in July, 1967. It was held that not having filed a suit before March, 1967 the only remedy of the respondent was by way of an application before the Tribunal. So far the period of limitation was concerned, it was observed that a new law of limitation providing for a shorter period cannot certainly extinguish a vested right of action. In view of the change of the law it was held that the application could be filed within a reasonable time after the constitution of the Tribunal; and, that the time of about four months taken by the respondent in approaching the Tribunal after its constitution, could be held to be either reasonable time or the delay of about two months could be condoned under the proviso.to section 110A(3). The learned counsel strenuously contended that the present case must be considered as one where an accrued right has been affected, because the option to move an application for condonation of delay belatedly filed should be treated as a right. This cannot be accepted. There is a vital difference between an application claiming compensa tion and a prayer to condone the delay in filing such an application. Liberty to apply for a right is not in it selt an accrued right or privilege. To illustrate the point, we may refer to some cases. In Director of Public Works and Another vs Ho Po Sang and Others, ; a Crown lessee in respect of certain premises which were in occupation of tenants and sub tenants entered into an agreement with the appellant Director for developing the site by erecting buildings. The erection of the new buildings necessitated the demolition of the existing buildings. Under the provisions of an Ordinance a Crown lessee was entitled to recover vacant possession of the premises if he obtained a re building certificate from the Director. On the application of the Crown lessee a proceeding for grant of the certificate was started and the Director issued a notice under the Ordinance indicating his intention to grant the re building certificate. Before the certificate could be finally issued, the relevant provision of the Ordinance entitling the lessee to recover vacant possession of the premises was repealed. The lessee claimed the right to vacant possession by relying on certain provi sions dealing with rules of interpretation similar in terms to section 6 of our . The plea 918 was rejected on the ground that although the lessee was entitled to make an application for vacant possession before the Ordinance was repealed, it did not amount to an accrued right or privilege, capable of being preserved after the repeal of the Ordinance, as the right was dependent on the actual issuance of a certificate. In an earlier case of Abbott vs Minister of Lands, the appellant was entitled to make purchases of Crown land adjoining his holding by virtue of certain statutory provisions, which were repealed before he could effectively enforce his right. Besides raising other grounds in respect of his claim, he argued that the right which he had under the repealed enactment was a "right accrued" and of which he could not be deprived of by the repeal. Reject ing the plea, it was observed that the mere right existing in a class of persons to take advantage of an enactment, cannot in absence of any act done by the claimant towards availing himself of that right be deemed a "right accrued". In Isha Valimohammad & Anr. vs Haji Gulam Mohammad & Haji Dada Trust, [1975] 1 SCR 720 the respondents let out the premises in question to the appellants in 1951 in a place where, by the Saurashtra Rent Control Act, sub letting by a tenant was prohibited. The appellants sub let the premises at a time when the Act was in force. In 1963 the Act was repealed and the Bombay Rent Act was made applica ble, under which there was no such prohibition against sub letting. In a suit for eviction filed subsequently the High Court assumed that a notice under the Transfer of Property Act was necessary to terminate the tenancy which had not been done before the repeal, but still held that since the respondents had an accrued right within the meaning of section 51 of the Bombay Rent Act (the provisions whereof were similar to those in section 6 of the ) the respondents were entitled to a decree. The decree was confirmed by the Supreme Court but not on the above ground. This Court held that a notice under the Transfer of Properties Act was not necessary and in that view it con firmed the decree of the High Court. With respect to the finding of the High Court regarding the respondents acquir ing an accrued right even on the assumption that a notice under the Transfer of Properties Act was necessary, it was held that the right of a landlord to recover possession is not an accrued right before the issue of a notice if under any law it was necessary for the landlord to issue the notice to determine the tenancy. The principle laid down there supports our view. 919 A question, though not identical, but somewhat similar Came up for consideration by this Court in Lalji Raja and Sons vs Firm Hansraj Nathuram, ; The appel lants had obtained a money decree against the respondents in a court in West Bengal in 1949, and got it transferred for execution to the court at Morena in the then State of Madhya Bharat. On the respondents objection on the ground of lack of jurisdiction the Madhya Bharat Court dismissed the execu tion petition. The matter was thereafter taken to the High Court and this Court, but without any success. The decision partly rested on the ground that the Indian Code of Civil Procedure was not applicable to the State of Madhya Bharat. Subsequently the Code was extended tO that area which had become a part of the State of Madhya Pradesh and a fresh order was passed by the West Bengal Court transferring the decree to Morena Court. The judgment debtors challenged the jurisdiction of the court on various grounds. One of the points which was urged was that in view of section 20 clause (b) of the Code of Civil Procedure (amendment) Act, 1951 by which the Code was extended to Madhya Bharat and other areas, the Judgment debtors ' right to resist the execution was protected. Reliance was placed on the proviso to the repeal clause in the section which declared that the repeal would not affect any fight, privilege, obligation or liabil ity acquired accrued or incurred under the repealed clause. The judgment debtors objection was over ruled by this Court. Relying on several English decisions including that in Abbott vs Minister for Lands, , it was observed that the mere right existing at the date of the repeal of statute, to take advantage of provisions of the statute repealed is not a "right accrued" within the meaning of the usual saving clause. In the case before us the period of limitation for lodging the claim under the old as well as the new Act was same six months which expired three weeks after coming in force of the new Act. It was open to the appellant to file his claim within this period or even later by 22.7.1989 with a prayer to condone the delay. His right to claim cOmpensa tion was not affected at all by the substitution of one Act with another. Since the period of limitation remained the same there was no question of the appellant being taken by surprise. So far the question of condonation of six months delay was concerned, there was no change in the position under the new Act. In this background the appellant 's fur ther default has to be considered. If in a given case the accident had taken place more than a year before the new Act coming in force and the claimant had actually filed his petition while the old Act was in force but after a period of one year, the position could be different. Having actual ly initiated the proceeding when the old Act 920 covered the field a claimant could say that his right which had accrued on filing of the petition could not be taken away. The present case is different. The right or privilege to claim benefit of a provision for condonation of delay can be governed only by the law in force at the time of delay. Even the hope or expectation of getting the benefit of an enactment presupposes applicability of the enactment when the need arises to take its benefit. In the present case the occasion to take the benefit of the provision for condona tion of delay in filing the claim arose only after repeal of the old law. Obviously the ground for condonation set up as 'sufficient cause ' also relates to the time after the re peal. The benefit of the repealed law could not, therefore, be available simply because the cause of action for the claim arose before repeal. 'Sufficient cause ' as a ground of condonation of delay in filing the claim is distinct from 'cause of action ' for the claim itself. The question of condonation of delay must, therefore, be governed by the new law. We accordingly hold that the High Court was right in its view that the case was covered by the new Act, and delay for a longer period than six months could not be condoned. The appeal is dismissed, but in the circumstances, without costs. G.N. Appeal dis missed.

The appellant was injured in a road accident on 22.1.1989, and a claim petition was filed belatedly on 15.3.1990 with a prayer for condonation of delay, before the Claims Tribunal. Meanwhile, the was repealed and the came into force with effect from 1.7.1989. The Claims Tribunal held that in view of the provisions of sub section (3) of Section 166 of the new Act, the delay of more than six months could not be condoned, and dismissed the claim. Before the High Court the appellant challenged the Tribunal 's decision, but was not successful. Thereafter, he preferred this appeal by special leave. On behalf of the appellant, it was contended that since the accident took place when the old Act was in force, the proceeding before the Accident Claims Tribunal must be held to be governed by the old Act under which the appellant had a right to file a claim petition even more than six months after the expiry of the period of limitation and this right is preserved by reason of the provisions of Section 6 of the ; and that his claim could not have been rejected on the ground of limitation under the new Act. Dismissing the appeal, this Court, HELD: 1. 'The High Court was right in taking the view that the case was covered by the new Act, and delay for a longer period than six months could not be condoned. [920D] 2. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly en forceable as a right. So far the 913 period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be gov erned by the new Act subject to two conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it impractical for him to avail of the remedy. [916F G] New India Insurance Co. Ltd. vs Smt. Shanti Misra, ; , relied on. There is a vital difference between an application claiming compensation and a prayer to condone the delay in filing such an application. Liberty to apply for a right is not in itself an accrued right or privilege. [917E] Isha Valimohammad & Anr. vs Haji Gulam Mohammad & Haji Dada Dust, [1975] 1 SCR 720 and Lalji Raja and Sons vs Firm Hansraj Nathuram, ; , relied on. Director of Public Works and Anr. vs Ho Po Sang and Ors., ; and Abbott vs Minister of Lands, , referred to. In the instant case the period of limitation for lodging the claim under the old as well as the new Act was the same viz., six months which expired three weeks after coming into force of the new Act. It was open to the appel lant to file his claim within this period or even later by 22.7.1989 with a prayer to condone the delay. His right to claim compensation was not affected at all by the substitu tion of one Act with another. Since the period of limitation remained the same there was no question of the appellant being taken by surprise. So far the question of condonation of six months delay was concerned, there was no charge in the position under the new Act. The right or privilege to claim benefit of a provision for condonation of delay can be governed only by the law in force at the time of delay. Even the hope or expectation of getting the benefit of an enact ment presupposes applicability of the enactment when the need arises to take its benefit. The occasion to take the benefit of the provision for condonation of delay in filing the claim arose only after repeal of the old law. Obviously the ground for condonation set up as 'sufficient cause ' also relates to the time after the repeal. The 914 benefit of the repealed law could not, therefore, be avail able simply because the cause of action for the claim arose before repeal. 'Sufficient cause ' as a ground of condonation of delay in filing the claim is distinct from `cause of action ' for the claim itself. The question of condonation of delay must, therefore, be governed by the new law. [919F H; A C 920A] 5. Clause (e) of Section 6 of is also not attracted because, by the enactment of the new law, viz., the remedy of the appellant has not been affected at all. Appellant 's right to claim compensation by filing the claim within the same period of limitation has been preserved. And there was no application for condonation of delay in a proceeding pending at the time of repeal so as to allow him to claim any privilege avail able under the old Act. [916C]

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Appeal No. 1720 of 1986. From the Judgment and Order dated 5.7.1985 of the Andhra Pradesh High Court in Writ Appeal No. 577 of 1985. B. Kanta Rao for the Appellant. K. Madhava Reddy and G. Prabhakar for the Respondents. The Judgment of the Court was delivered by KANIA, J. This is an appeal by Special Leave from the judgment of a Division Bench of the Andhra Pradesh High Court dismissing the Writ Appeal No.577 of 1985 filed in that Court. Very few facts are necessary for the disposal of this ap peal. The appellant is the owner of a plot comprising roughly 2 acres of land in Ramavarappadu village, Vijayawada Taluk, in the Krishna District in Andhra Pradesh. The Government of Andhra Pradesh sought to acquire about 1 acre and 89 cents out of the aforesaid land for a public propose. A Notifica tion under section 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as "the said Act") was published in the Government 117 Gazette on February 9, 1976. The substance of the said notification was published in the locality where the land proposed to be acquired is situated, on April 2, 1978, long after the period of 40 days within which it was required to be published as per the provisions of section 4(1) of the said Act as amended by the Andhra Pradesh (Amendment) Act, 1983, (Act 9 of 1983). Enquiry under section 5A of the said Act was dispensed with invoking the urgency clause as per section 17(4) of the said Act. Notification under section 6 was published on the same day as the publication of the notification under section 4(1) of the said Act. An inquiry was conducted regarding the fixation of compensation to be awarded to the appellant and others whose lands were ac quired under the said notification. It appears that during the course of the said inquiry the appellant stated to the Land Acquisition Officer concerned that he was willing to agree to the land being acquired provided he was given compensation in a lump sum. Probably the reason was that if the compensation was awarded in a lump sum without delay, the appellant might have been able to purchase some other land, as his holding was under the ceiling limit. The aforesaid facts have been found by the Trial Court and accepted by the High Court. On November 9, 1979, before any award was made, the consent to the acquisi tion of the land given by the appellant, as aforestated, was withdrawn by him and on May 14, 1981, the appellant filed a writ petition in the High Court questioning the validity of the land acquisition proceedings. The learned Single Judge before whom the said writ petition along with another writ petition came up for hearing held that the appellant had agreed to the acquisition of the said land on compensation being paid as aforestated, and hence it was not open to the appellant to challenge the validity of the said notifica tions issued under section 4(1) and section 6 of the said Act. It was held by him that the withdrawal of the said representation or consent by the appellant did not in any manner assist him. The learned Judge dismissed the writ petition filed by the appellant without going into the merits of the aforesaid petition on the aforesaid basis. This judgment was upheld by the Division Bench of the High Court which dismissed the aforesaid writ appeal. It is the correctness of these decisions which is impugned before us. In our view, the learned Single Judge and the Division Bench of the High Court of Andhra Pradesh were, with re spect, clearly in error in dismissing the respective writ petition and the appeal filed by the appellant on the ground that the appellant had stated that he was willing to accept the acquisition provided a lump sum compensation was awarded to him. The statement of the appellant amounted in law to no more than an offer in terms of the Contract Act. The said offer was never accepted by the Land Acquisition Officer to whom it was made. Leave alone, making 118 the award of lump sum compensation, no award at all was made by the said officer awarding compensation to the appellant till November 9, 1979, when the aforesaid offer was with drawn by the appellant or even till the writ petition was filed. Till the offer was accepted there was no contract between the parties and the appellant was entitled to with draw his offer. There was nothing inequitable or improper in withdrawing the offer, as the appellant was in no way bound to keep the offer open indefinitely. The writ petition, therefore, ought not to have been dismissed on the ground of the appellant having made a statement or consented as afore stated before the Land Acquisition Officer. On the merits, it is clear that the acquisition of the land is bad in law because the substance of the notification under section 40) of the said Act was not published in the locality within forty days of the publication of the notifi cation in the Government Gazette. The time limit of forty days for such publication in the locality has been made mandatory by section 4(1) of the said Act as amended by the Andhra Pradesh (Amendment) Act. It is well settled that such non compliance renders acquisition bad in law. In the result, the appeal succeeds and Rule in the writ petition is made absolute. It is declared that the acquisi tion of the aforesaid land of the appellant is bad in law. If the possession has been taken, the same must be returned to the appellant. The appeal is allowed as aforestated with costs throughout. T.N.A. Appeal Allowed.

Proceedings for acquisition of appellant 's land were initiated. and a Notification under section 4(1) of the Land Acquisition Act, 1894 was published in the Government Ga zette. The substance of the said Notification was published in the locality long after 40 days within which it was required to be published under Section 4(1) of 1894 Act 'as amended by the Andhra pradesh(Amendment) Act, 1983. During the course of enquiry regarding the fixation of compensa tion, the appellant consented to his land being acquired provided he was given compensation in a lump sum. However, before any award was made he withdrew his consent and filed a petition challenging the validity of the acquisition proceedings. A Single Judge of the High Court dismissed his petition by holding that since he gave his consent to the acquisition of land he could not challenge the acquisition proceedings. On appeal the decision of the Single Judge was confirmed by the Division Bench of the High Court. Against the decision of the Division Bench of the High Court, an appeal was filed in this Court. Allowing the appeal, this Court, HELD: 1. The Single Judge and the Division Bench of the. High Court were clearly in error in dismissing the respective writ petition and the appeal filed by the appel lant respectively. The appellant 's statement that he was willing to accept the acquisition provided a lump sum com pensation was awarded to him amounted 115 116 in law to no more than an offer in terms of the Contract ACt. The said offer was never accepted by the Land Acquisi tion Officer to whom it was made. Leave alone, making the award of lump sum compensation, no award at all was made by the said officer awarding compensation to the appellant till the aforesaid offer was withdrawn by the appellant or even till the writ petition was filed. Till the offer was accept ed there was no contract between the parties and the appel lant was entitled to withdraw his offer. There was nothing inequitable or improper in withdrawing the offer, as the appellant was in no way bound to keep the offer open indefi nitely. 1117 G H, 118 A] 2. The acquisition of the appellant 's land is bad in law because the substance of the Notification was not pub lished in the locality within forty days of the publication of the Notification in the Government Gazette. The time limit of forty days for such publication in the locality has been made mandatory by section 4(1) of the 1894 Act as amended by the Andhra Pradesh (Amendment) Act, 1983. Such non compliance renders acquisition bad in law. [118 C]

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Appeal No.2168 of 1980. From the Judgment and Order dated 2.8.1979 of the Patna High Court in C.W.J.C. No.1819 of 1979. R.K. Khanna and R.P. Singh for the Appellant. L.C. Goyal for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. The appellant, the Ex Treasurer of the Gopalganj Co op. Development & Cane Marketing Union, Gopal ganj, was said to have defalcated a sum of Rs. 95,790.54 and for recovery thereof, proceedings were initiated under section 48 of the Bihar and Orissa Co operative Societies Act, VI of 1935, for short 'the Act ' with interest accrued thereon of Rs. 25,555 as on December 30, 1976. The Registrar referred the matter to the Asstt. Registrar, Gopalganj, who on en quiry and having given the opportunity to the appellant passed an award in Case No. 400 of 1975 on December 30, 1976 for the aforesaid sums. On appeal, the Deputy Registrar set aside the award on the ground that the appellant was surch arged in Surcharge Case No. 18 of 1976. On further revision, the first respondent set aside the appellate order and confirmed the award with a further direction to pay interest till date of recovery. The appellant filed C.W.J.C. No. 1819 of 1979 which was dismissed in limine by the Patna High Court on August 2, 1979. Thus this appeal by Special Leave. The learned counsel for the appellant raised two fold contentions. His first contention is that the Registrar has no revisional jurisdiction under section 56 since the award of the Asstt. Registrar is by the Registrar under the Act and the Asstt. Registrar acted as his delegate. In support thereof he placed strong reliance on Din Dayal Singh vs The Bihar State Cooperative Marketing Union Ltd, It is further contended that surcharge proceedings against the appellant were initiated under section 40 in 147 which the appellant was found payable of partial amount as against which the society filed an appeal before the Govern ment which is pending. The award amounts to double jeopardy for the same liability. Therefore, it is illegal. We find no substance in either contention. Section 2 (i) of the Act defines 'Registrar ', which means a person appointed to perform the duties of Registrar of Co operative Societies under this Act. Section 6 in Chapter II provides thus: "6. The Registrar (1) The State Government may appoint a person to be registrar of Co operative Societies for the State or any portion of it, and may appoint persons to assist such Registrar. (2) The State Government may, by general or special order published in the Official Ga zette, confer (a) on any person appointed under sub section (1), to assist the Registrar, all or any of the powers of the Registrar under this Act except the powers under Section 26; and (b) on any Co operative Federation or financ ing bank all or any of the powers of the Registrar under Section 20, sub section (3) of Section 28 and Section 33. (3) Where the State Government is of opinion that the Registrar needs the assistance of Additional Registrar for speedy disposal of business, it may by order published in the Official Gazette, appoint such number of Additional Registrar as it may deem fit. (4) Notwithstanding anything to the contrary contained in any other provision of the Act, the Registrar may delegate, transfer or assign to the Additional Registrar such of his powers and functions and duties as he may consider necessary including the power under sections 26 and 56 and the Additional Registrar shall, thereupon have powers of Registrar in matters so delegated, transferred or assigned to him. " From a reading of sub sections (1) to (3) of section 6, it is clear that the State Government may appoint a person to be the Registrar of the Cooperative Societies besides Addition al Registrar and also appoint persons to assist such Regis trar. Under sub section 2 (a) the persons appointed to 148 assist the Registrar are entitled to exercise all or any of the powers of the Registrar under the Act except under section 26. Sub section (4) gives power to the Registrar to dele gate, transfer or assign to the Addl. Registrar all the powers including the power under sections 26 and 56 and thereupon the Addl. Registrar as a delegate of the Registrar is empow ered to exercise powers so transferred or assigned or dele gated to him. Section 6 thereby makes a clear distinction between the. exercise of the powers of the Registrar, by the Addl. Registrars as a delegate of the Registrar and of the Assn. Registrars or Dy. Registrars appointed to assist the Registrar empowered as such in the discharge of their func tions under the Act. Such assistants are entitled by statu tory operation to exercise the powers under the Act con ferred by the State Govt. except to the extent expressly excluded by the statute. Section 48 provides procedure to adjudicate any dispute touching the business of a registered Society other than a dispute regarding disciplinary action taken by the Society or its Managing Committee against a paid servant of the society, arising amongst its members covered by clauses (a) to (e) and (c) covering any officer, agent or servant of the society (past or present). Such disputes shall be referred to the Registrar. Under sub section (2) thereof the Regis trar may on receipt of such reference (a) decides the dis pute by himself or (b) transfer for disposal to "any person exercising the powers of the Registrar in this behalf '. Under sub section (3) the Registrar (Assistant or Deputy) on reference shall dispose of the same in th manner provided and the rules. A right of appeal under s.48 (6) is provided against the award made under sub section (3). Sub section (9) provides the subject to the orders of the Registrar on appeal or review a decision given in a dispute transferred or referred under clauses (b) and (c) shall be final. Sec tion 56 provides power of revision thus: Power of revision by Registrar The Registrar may on application or of his own motion revise any order passed by a person exercising the powers of a Registrar or by a liquidator under section 44" A bare reading of these relevant provisions clearly manifests the legislative intention that the Registrar on reference, himself may decide the dispute or transfer it for disposal to a person exercising powers of the Registrar in this behalf. If the Registrar himself decides the dispute under section 48(3) the question of either appeal or revision to him does not arise except a review. This dichotomy is to be maintained when a revisional power is to be exercised by the Registrar. The power of the revision is conferred expressly only, either on application or suo moto, against any 149 order passed by "a person exercising the powers of the Registrar". Obviously it refers to the person appointed to assist him under section 6(2)(a) of the Act. In Chintapalli Agency Taluk Arrack Sales Co op. Society Ltd. vs Society (Food & Agriculture), Govt. of Andhra Pradesh, ; a similar question had arisen. The Dy. Registrar of Co operative Societies gave notice to the appellant and amended under section 16 (5) of the A.P. Co operative Societies Act, the Bye laws of the Society so as to restrict the area of operation within the specified area. On a revision filed against the order under section 77, the Registrar gave certain directions which was assailed being without jurisdiction. When it came before the High Court, the High Court allowed the writ petition. On appeal this court held that the power of the Registrar is in accordance with the pre eminent position accorded by the Act to the Registrar under whose supervision any other person appointed under s.3 (1) may function and act. "It is, therefore, not correct that the Registrar could not exercise powers under section 77 in examining the correctness, legality or propriety of the proceedings initiated by the Dy. Registrar under section 16(5) of the Act". It was further held that the power under s.16 is that of the Registrar, but the Dy. Registrar is empowered by the Government to exercise the powers, but under the general superintendence of the Registrar. Accord ingly it was held that the revision was maintainable. The same ratio applies to the facts on hand. The Registrar under section 6 (1) of the Act has his pre eminent supervisory authori ty over the functions and orders of the Registrars appointed under section 6(2) (a) to assist him in the discharge of the duties or functions under the Act except over his delegate under sub section (4) of section 6. His supervisory or revisional power is to correct all palpable material errors in the orders passed or the action taken by the subordinate offi cers feeding injustice. The language couched in section 56 advis edly was wide of the mark to reach injustice whenever found in the orders or actions of his subordinate officers. Merely because the Asstt. Registrar on reference exercised the power under sub section (3) of s.48, the Registrar is not denuded of his supervisory or revisional powers under section 56 of the Act. Therefore, the Addl. Registrar as delegate of the Registrar is clearly within his power to exercise his revi sional power over the appellate order under section 48 (6) of the Act. It is accordingly legal and valid. The ratio in Roop Chand vs State of Punjab, [1963] Suppl. 1 SCR 539 is clearly distinguishable. Therein the State Govt. have expressly delegated their power to the Asstt. Director. Thereby the Subordinate Officer exercised the powers of the State Govt. as their delegate. The Govt. was thereafter devoid of powers to exercise the revisional powers over the subordinate officers. This court in Chintapalli Agency 's case (supra) distinguished Roop 150 Chand 's ratio. Din Dayal Singh 's case (supra) no doubt supports the contention of the appellant. Relying upon the language in sub section (9) of section 48 "save as expressly provided in this section ", the Division Bench construed that the appellate order of the Deputy Registrar passed under section 48 (6) was otherwise provided and so was not amena ble to revision under section 56. The learned Judges construed that since the appellate order shall be final. The effect of language under sub sec. (9) of section 48 was to exclude the revisional jurisdiction of the Registrar under section 36. In addition, the Division Bench also construed that the Regis trar himself referred the dispute to the Asstt. Registrar and any person exercising the power of the Registrar in this behalf is to be in the parameters of his delegate and that, therefore, the Registrar himself cannot revise his own order under section 56. We find it difficult to approve the ratio of the High Court. At the cost of repetition we point out that section 6, sub section (1) and sub section 2 (a) make a distinc tion between "the Registrar" and "a person exercising the powers of the Registrar". Sub section (4) further amplifies the exercise of the power of the Registrar by the Additional Registrar as his delegate. That apart, it is clear that the Registrar is the final supervisory authority over the subor dinate officers exercising the powers or performing the duties under the Act. The language in section 56 was couched very widely without being hedged with any limitation like the revisional powers under section 115 C.P.C. or the similar language used in sister Acts in some other States like A.P. The reason appears to be obvious. The order of the Dy. Registrar by language of sub section (6) of section 48, undoubt edly shall be final. We are aware that when the legislature gives "finality" to an order, it is normally not open to revision. But still in must be construed in the light of the scheme of the Act, its operation and resultant effect. The language in s.56 is not hedged with any limitation of the finality in sub section (6) of section 48. Thus we hold that the revisional power under section 56 is independent of the appellate power under section 48(6). The letter is amenable to revi sion by the Registrar. The ratio of the Division Bench in Din Dayal 's case (supra) is, therefore, not good law. The second contention that the award of the Asstt. Registrar amounts to double jeopardy offending his right under article 20 is misconceived and without substance. Un doubtedly section 40 gives power to the Registrar to initiate surcharge proceedings, on receipt of audit report under section 33 or an enquiry under section 35 or on inspection under Ss. 34, 36 or 37 or of the winding up proceedings, if it appears to the Registrar that any person who has taken part in the organisation or the management of the society or any past or present officers of the society made any illegal payment under clause (a); or by reason of his culpable negligence or mis 151 conduct causes loss or deficiency to the funds of the socie ty under clause (b); or failed to bring into account any sums which ought to have been brought into the account under clause (d); or misappropriated or fraudulently retained any property of the society or of the financing bank etc. The proceedings under section ,18 are in the nature of a civil suit, otherwise cognisable by a civil court under section 9 of the C.P.C. The statute has taken out the jurisdication of the civil court and expressly conferred on the Registrar or a person exercising the powers of the Registrar to decide the dispute touching the business or management of the society between its members, past members etc. or their office bearers, agent or officers or servants of the society etc. The proceedings under section 40 are not in substitution of section 48, but are independent of and in addition to the normal civil remedy under section ,18. The culpable negligence, miscon duct, misappropriation, fraudulent conduct etc. are relevant facts to be established in the proceedings under section 40. But that is not so under section 48. Therefore, mere initiation or an order passed under section 40 does not divest the jurisdiction or power of the Registrar under section 48 when it was referred to for a decision of the dispute. Exercise of the jurisdiction to pass an award under section ,18(3) or revision under section 56 does not amount to double jeopardy. We are informed that an appeal before the Government is pending against surcharge order under section 40. We express no opinion thereon. We hold that exercise of the power to pass an award under section 48 does not amount to double jeopardy. The appellate order of the Dy. Registrar is obviously and palpably illegal and rightly corrected. The appeal is accordingly dismissed, but since none appeared for the respondents we order no costs. V.P.R Appeal dismissed.

The appellant, an Ex Treasurer of a Co operative Society was said to have defalcated a sum of Rs. 95,790.54 and for recovery thereof, proceedings were initiated under section 48 of the Bihar and Orissa Co operative Societies Act, 1935 with interest accrued thereon of Rs. 25,55 as on December 30, 1976. The Registrar referred the matter to the Asstt. Regis trar who on enquiry and having given the opportunity to the appellant passed an award, against which appeal was filed. The Deputy Registrar allowed the appeal on the ground that the appellant was surcharged. On revision, the first respondent set aside the appel late order and confirmed the award with a further direction to pay interest till date of recovery. The appellant filed a writ petition which was dismissed in limine by the High Court against which this appeal by special leave. The appellant contended that the Registrar had no revi sional 144 jurisdiction under Section 56 since the award of the Asstt. Registrar was by the Registrar under the Act acting as Registrar 's delegate; that surcharge proceedings against the appellant were initiated under Section 40 in which the appellant was found payable of partial amount, as against which, the society filed an appeal before the Government, which was pending and the award amounted to double jeopardy for the same liability and therefore, it was illegal. Dismissing the appeal, this Court, HELD: 1. A bare reading of the relevant provisions in Section 48 clearly manifests the legislative intention that the Registrar on reference, himself may decide the dispute or transfer it for disposal to a person exercising powers of the Registrar in this behalf. If the Registrar himself decides the dispute under Section 48(3) the question of either appeal or revision to him does not arise except a review. This dichotomy is to be maintained when a revisional power is to be exercised by the Registrar. The power of revision is conferred expressly only, either on application or suo moto, against any order passed by "a person exercis ing the powers of the Registrar". Obviously it refers to the person appointed to assist him under section 6(2) (a) of the Act. [148G H, 149 A] 2. The Registrar under section 6(1) of the Act has his pre eminent supervisory authority over the function and orders of the Registrars appointed under section 6(2)(a) to assist him in the discharge of the duties or functions under the Act except over his delegate under sub section (4) of section 6. His supervisory or revisional power is to correct all palpable material errors in the orders passed or the action taken by the subordinate officers feeding injustice. Merely because the Asstt. Registrar on reference exercised the powers under sub,section (3) of section 48. The Registrar is not denuded of his supervisory or revisional powers under section 56 of the Act. Therefore, the Addl. Registrar as delegate of the Registrar is clearly within his power to exercise his revisional power over the appellate order under section 48(6) of the Act. It is accordingly legal and valid. [149 E G] 3. The language in section 56 was couched very widely without being hedged with any limitation like the revisional powers under section 115 C.P.C. or the similar language used in sister Acts in some other States. The reason appears to be obvious. The order of the Dy. Registrar by language 145 of sub section (6) ors. 48, undoubtedly shall be final. When the legislature gives 'finality ' to an order, it is normally not open to revision. But still it must be construed in the light of the scheme of the Act, its operation and resultant effect. The language in section 56 is not hedged with any limita tion of the finality in sub section (6) of Section 48. The revisional power under section 56 is independent of the appellate powers under section 48(6). The latter is amenable to revision by the Registrar. [150 D F] 4. The proceedings under section 40 are not in substitution of section 48, but are independent of and in addition to the normal civil remedy under section 48. The culpable negligence, misconduct, misappropriation, fraudulent conduct etc. are relevant facts to be established in the proceedings under section 40. But that is not so under section 48. Therefore, mere initiation or an order passed under section 40 does not divest the jurisdiction or power of the Registrar under section 48 when it was referred to for a decision of the dispute. Exercise of the jurisdiction to pass an award under section 48(3) or revision under section 56 does not amount to double jeopardy. [151 C D] 5. Section 2(i) of the Act defines "Registrar", which means a person appointed to perform the duties of Registrar or Co operative Societies under this Act. The State Govern ment may appoint a person to be the Registrar of the Co operative Societies besides Additional Registrar and also appoint persons to assist such Registrar. Under sub section 2(a) the persons appointed to assist the Registrar are entitled to exercise all or any of the powers of the Regis trar under the Act except under section 26. Sub section (4) of Section 6 gives power to the Registrar to delegate, transfer or assign to the Addl. Registrar all the powers including the powers under section 26 and 56 and thereupon the Addl. Regis trar as a delegate of the Registrar is empowered to exercise powers so transferred or assigned or delegated to him. Section 6 thereby makes a clear distinction between the exercise of the powers of the Registrar, by the Addl. Regis trar as a delegate of the Registrar and of the Asstt. Registrars or Dy. Registrars appointed to assist the Regis trar empowered as such in the discharge of their functions under the Act. Such assistants are entitled by statutory operation to exercise the powers under the Act conferred by the State Govt. except to the extent expressly excluded by the statute. [147 B, 148 A B] Din Dayal Singh vs The Bihar State Cooperative Marketing Union Ltd., 146 , over ruled Chintapalli Agency Taluk Arrack Sales Co op. Society Ltd. vs Secretary (Food & Agricultural), Govt. of Andhra Pradesh, ; , followed. Roop Chand vs State of Punjab, [1963] Suppl. 1 SCR 539, distinguished.

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vil Appeals Nos. 359394 of 1989. From the Order dated 26.5.1988 of the Customs Excise and (;old (Control) Appellate Tribunal, New Delhi in 545 546/88 C in Appeal No. E/COD/699/87 C in Appeal No. E/847/84 C with E/1/85 C. WITH Civil Appeals Nos. 642 643/91, 1723 1731/91. A.K. Ganguli, Ms. Sushma Suri, P. Parmeshwaran and A. Subba Rao for the Appellant. Rajinder Sachar, Aruneshwar Gupta, Manu Mridul, P.I. Jose and Sanjay Parekh for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. These appeals by the Revenue under Section 35L of the in volve the interpretation of the Notification No. 179/77 CE dated 18.6.1977. The Notification read thus: "In exercise of the powers conferred by sub rule (1) of rule 8 of 128 the Central Excise Rules, 1944, the Central Government hereby exempts all goods failing under Item No. 68 of the First Schedule to the (1 of 1944) in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power, from whole of the duty of excise leviable thereon". Tariff Item 68 during the relevant period read: "All other goods, not elsewhere specified, manufactured in a factory but excluding. " M/s. Rajasthan State Chemical Works, the respondents in Civil Appeals Nos. 3593 94 of 1989, are manufacturers of crude sodium sulphate. In the process of manufacture of common salt from brine, in the salt pans in which the proc ess of evaporation takes place some quantities of sodium sulphate present in the brine also crystalise and settle at the bottom as crust. The sodium sulphate is thus obtained as a bye product. For the purpose of the manufacture, brine is pumped into salt pans using diesel pumps. The benefit of the aforesaid notification was not given to these respondents as pumping of brine into the pans was carried on with the aid of power. The claim for exemption though denied by the original authority, was allowed by the Collector of Customs (Appeals) and that order was affirmed by the Tribunal. M/s. Sunderson (Minerals) Ltd., the respondents in Civil Appeals Nos. 642 643 of 1991 and 1723 1731 of 1991 are manufacturers of lime from coke and lime stone. The raw materials are lifted to the platform at the head of the kiln by the aid of power. At the kiln head, the raw materials are mixed manually and fed into the kiln. Since power is used for lifting the raw materials at the kiln head, these re spondents were denied the benefit of the notification by the Assistant Collector. The appeal before the Collector of Appeals was dismissed. The Tribunal, however, accepted the claim of the respondents. The Revenue being aggrieved has challenged the respec tive orders of the Tribunal in these appeals. 129 In both these set of cases, the view taken by the Tribu nal is that the manufacturing process starts from the stage of feeding raw materials into the salt pan or the kiln as the case may be. The transportation of the raw materials to the platform at the kiln head and the pumping of brine into the salt pan is a stage prior to the commencement of manu facturing process. Therefore, the transferring of the raw materials is not a part of the process of manufacture and the use of power for such transfer would not disentitle the respondents from the benefit under the notification. It has been contended before us on behalf of the appel lant that pumping the brine into the pan o: lifting the raw materials to the kiln head is a process in relation to the manufacture of the final product and since that process with the aid of power is integrally connected with the manufac ture, the exemption would not apply. On the other hand, it is reiterated for the respondents that if the process car ried on with the aid of power does not bring about any change in the raw material, it cannot be said that any process in or in relation to the manufacture of an article has been carried on with the aid of power and, therefore, mere transfer of raw materials by the use of power cannot be considered as a process of manufacture. The Central Government has exempted all goods failing under Item No. 68 of the First Schedule to the Act in or in relation to the manufacture of which no process is ordinari ly carried on with the aid of power from the whole of the duty of excise leviable thereon. The exemption under this notification is available only when the goods are manufac tured without the aid of power at any stage of the process. Where manufacture involves series of processes and if anyone of such processes is carried on with the aid of power, the case is taken out of the purview of the notification. We have to consider what activity amounts to process in or in relation to manufacture of goods for the application of the notification. The word 'manufacture ' has been defined in Section 2(1) of the , thus: "2(1). 'Manufacture ' includes any process (i) incidental or ancillary to the completion of a manufactured product; and (ii) which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the as amounting to manufacture". 130 Clause (f) gives an inclusive definition of the term 'manufacture ', According to the dictionary, the term 'manu facture ' means a process which results in an alteration or change in the goods which are subjected to the process of manufacturing leading to the production of a commercially new article. In determining what constitutes 'manufacture ' no hard and fast rule can be applied and each case must be decided on its own facts having regard to the context in which the term is used in the provision under consideration. Manufacture implies a change but every change is not manufacture, yet every change of an article is the result of treatment, labour and manipulation. Naturally, manufacture is the end result of one or more processes through which the original commodities are 'made to pass. The nature and extent of processing may vary from one class to another. There may be several stages of processing, a different kind of processing at each stage. With each process suffered the original commodity experiences a change. Whenever a commodi ty undergoes a change as a result of some operation per formed on it or in regard to it, such operation would amount to processing of the commodity. But it is only when the change or a series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Manufacture thus involves series of processes. Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw material is subjected to, manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture of processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. The natural meaning of the word 'process ' is a mode of treatment of certain materials in order to produce a good result, a species of activity performed on the subject matter in order to transform or reduce it to a certain stage. According to Oxford Dictionary one of the meanings of the word 'process ' is "a continuous and regular action or succession of actions taking place or carried on in a defi nite manner and leading to the accomplishment of some re sult. " The activity contemplated by the definition 131 is perfectly general requiring only the continuous or quick succession. It is not one of the requisites that the activi ty should involve some operation on some material in order to its conversion to some particular stage. There is nothing in the natural meaning of the word 'process ' to exclude its application to handling. There may be a process which con sists only in handling and there may be a process which involves no handling or not merely handling but use or also use. It may be a process involving the handling of the material and it need not be a process involving the use of material. The activity may be subordinate but one in rela tion to the further process of manufacture. In J.K. Cotton Mills vs S.T. Officer; , , this Court 'in construing the expression 'in the manufacture of goods ' held thus: "But there is no warrant for limiting the meaning of the expression 'in the manufacture of goods ' to the process of production of goods only. The expression 'in the manufac ture ' takes in within its compass, all proc esses which are directly related to the actual production". The Court further held thus: "The expression 'in the manufacture of goods ' would normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judg ment, fail within the expression 'in the manufacture of goods '. " In that case, the assessee carrying on the business of manufacturing textile goods claimed that certain goods namely drawing material etc. were used in the manufacture. The Court said that if the process of designing is so inte grally connected with the process of manufacturing of cloth, there is no reason to regard the process of designing as not being a part of the process of manufacture. The process of designing may be distinct from the actual process of turning out finished goods but, there is no warrant for limiting the meaning of the expression 'in the manufacture of goods ' to the process of production of goods only. The expressions ' 'in the manufacture of goods ' takes within its encompass all processes which are directly related to the actual produc tion. 132 In Union of India vs Delhi Cloth & General Mills, [1963] Supp. 1 S.C.R. 586, this Court held thus: "The definition of 'manufacture ' as in section 2 (13 puts it beyond any possibility of contro versy that if power is used for any of the numerous processes that are required to turn the raw material into a finished article known to the market the clause will be applicable; and an argument that power is not used in the whole process of manufacture using the word in its ordinary sense, will not be available." In that case, it was contended that manufacture is complete as soon as by the application of one or more proc esses the raw material undergoes some change. In answering the contention, the Court stated thus: "We are unable to agree with the learned Counsel that by inserting this defini tion of the word "manufacture" in section 2 (f) the legislature intended to equate "processing" to "manufacture" and intended to make mere "processing" as distinct from "manufacture" in the same sense of bringing into existence of a new substance known to the market, liable to duty. The sole purpose of inserting this definition is to make it clear that at certain places in the Act the word 'manufacture ' has been used to mean a process incidental to the manufacture of the article. Thus in the very item under which the excise duty is claimed in these cases, we find the words: "in or, in relation to the manufacture of which any process is ordinarily carried on with the aid of power". The definition of 'manufacture ' as in section 2 (f) puts it beyond any possibility of controversy that if power is used for any of the numerous processes that are required to turn the raw material into a finished article known to the market the clause will be ap plicable; and an argument that power is not used in the whole process of manufacture using the word in its ordinary sense, will not be available. It is only with this limited pur pose that the legislature, in our opinion, inserted this definition of the word 'manufac ture ' in the definition section and not with a view to make the mere '*processing" of goods as liable to excise duty. " A process is a manufacturing process when it brings out a complete transformation for the whole components so as to produce a commercially different article or a commodity. But, that process itself may consist of 133 several processes which may or may not bring about any change at every intermediate stage. But the activities or the operations may be so integrally connected that the final result is the production of a commercially different arti cle. Therefore, any activity or operation which is the essential requirement and is so related to the further operations for the end result would also be a process in or in relation to manufacture to attract the relevant clause in the exemption notification. In our view, the word 'process ' in the context in which it appears in the aforesaid notifi cation includes an operation or activity in relation to manufacture. The transfer of raw material to the reacting vessel is a preliminary operation but it is part of a continuous process but for which the manufacture would be impossible. The handling of the raw materials for the purpose of such trans fer is then integrally connected with the process of manu facture. The handling for the purpose of transfer may be manual or mechanical but if power is used for such opera tion, it cannot be denied that an activity has been carried on with the aid of power in the manufacturing process. The use of diesel pump sets to fill the pans with brine is in activity with the aid of power and that activity is in relation to the manufacture. It is not correct to say that the process of manufacture starts only when evaporation starts. The preliminary steps like pumping brine and filling the salt pans form integral part of the manufacturing proc ess even though the change in the raw material commences only when evaporation takes place. The preliminary activity cannot be disintegrated from the rest of the operations in the whole process of manufacture. Similarly, when coke and lime are taken to the platform in definite proportions for the purpose of mixing, such operation is a step in the manufacturing process. It precedes the feeding of the mix ture into the kiln where the burning takes place. The whole process is an integrated one consisting of the lifting of the raw materials to the platform mixing coke and lime and then feeding into the kiln and burning. These operations are so interrelated that without anyone of these operations manufacturing process is impossible to be completed. There fore, if power is used in anyone of these operations or anyone of the operations is carried on with the aid of power, it is a case where in or in relation to the manufac ture the process is carried on with the aid of power. Learned counsel for the appellant relying on the deci sion of the Gujarat High Court in Nirma Chemical Works & Ors. vs Union of india & Ors., , submitted that process means an operation which brings about some change in the raw material. That in the present case, the operation of putting the raw materials, namely, coke ,red lime 134 stone on the kiln head does not bring about any change in the raw material but the raw materials remain in the same shape as they were when they were brought in the truck and were dumped separately on the ground and, therefore, this operation can be termed only 'transportation ' and cannot be called a 'process '. The Gujarat High Court in Nirma Chemi cal Works (supra) said: "It must be made clear that it is only at the stage of transferring liquid raw materials from the motor tanker to the storage tank that power is used and at no subsequent stage is any power used. If no change is brought about in the raw material until it reaches the re action ves sel, then no process of manufacture can be said to have taken place until the raw materi als are taken to the re action vessel. Till then they are all preparations made but the raw materials continue to be the same raw materials. Until sulphuric acid and alkyd benzene start re acting on each other, no change takes place in the raw materials. Merely because the goods are stored in one place, may be at an elevated place above the ground, it cannot be said that a process of manufacture which would convert the raw mate rial by different stages into the final product has been undergone. In view of the decision in Chowgule & Co. 's (supra) as to what is meant by processing, it is clear that unless and until some change takes place in the raw material of the original commodity, no process can be said to have been gone through. Before any operation can be characterised as a process, the commodity must, as a result of the operation, experience some change. " Counsel for the respondents submitted that a process in or in relation to the manufacture commences as soon as the change is brought about in the raw material and ends till the manufactured product is marketed. Until some change physical or chemical is brought about in the raw material, there is no process in or in relation to the manufacture. Mere collecting, storing or dealing with the raw material are operations and/or activities prior to the beginning of process. Mere physical alteration of the site or placement of raw materials or stacking, storing the same cannot be said to be a process in relation to manufacture. In the case of preparation of sodium sulphate, it is said that the process in or in relation to manufacture commences after the brine is placed in the salt pans. The counsel 135 submits that if every operation and/or activity and/or action is treated as a 'process ' in or in relation to manu facture then power is used in (i) erection of factory where steel, cement, bricks etc. are used, (ii) day to day trans portation and (iii) use of electricity for lights, fans etc. These arguments are far fetched. The activity in relation to which power is used is not to be considered into isolation where the activity is such that it forms an integral part of the whole process. The Gujarat High Court in interpreting the word 'process ' has assumed that 'process ' is synonymous to 'processing ' and has drawn support from the observations of this Court in Chowgule & Co. Pvt. Ltd. vs Union of India, ; We are afraid, the observations had not been properly understood or applied in drawing inference that process when used in relation to manufacture must be one that produces a change in the commodity. It has been made clear in Dy. Commissioner, Sales Tax; Ernakulam vs Pio Food Packers, ; that: "Commonly manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that manufacture can be said to take place? It has been made clear in Union of India vs Delhi Cloth & Genera, Mills (supra) that the definition of the word 'manufacture ' in Section 2 (f) puts it beyond any possibili ty of controversy that if the power is used for any of the numerous processes that are required to turn the raw materi als into a finished article known to the market, it would be a case where in or in relation to manufacture process has ordinarily been carried on with the aid of power. It is, therefore, wrong to conclude that every operation in the course of the manufacture should bring about a change and if any operation with the aid of power does not result in a change, it cannot be an integral part of the process in or in relation to manufacture. In Chowgule & Co. Pvt. Ltd. case, what this Court said is that: 136 "Wherever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. " What is necessary in order to characterise an operation as "processing" is that the commodity must, as a result of the operation, experience some change. The question is not whether there is manual application of energy or there is application of mechanical force. Whatever be the means employed for the purpose of carrying out the operation, it is the effect of the operation on the commodity that is material for the purpose of determining whether the opera tion constitutes "processing". In drawing the distinction between 'processing ' and 'manufacture ', this Court observed in Delhi Cloth Mills case thus: "To say this is to equate "processing" to "manufacture" and for this we can find no warrant in law. The word "manufacture" used as a verb is generally understood to mean as "bringing into existence a new substance" and does not mean merely "to produce some change in a substance", however minor in consequence the change may be." Thus "processing" may be an intermediate stage in manu facture and until some change has taken place and the com modity retains a continuing substantial identity through the processing stage, we cannot say that it has been manufac tured. That does not, however, mean that any operation in :he course of such process is not in relation to the manu facture. While interpreting the same exemption notification in Standard Fireworks Industries vs Collector, , it was held that manufacture of fireworks requires cutting of steel wires and the treatment of papers red, therefore, it is a process for manufacture of goods in question. The Notification purports to allow exemption from duty only when in relation to the manufacture of goods no process is ordinarily carried on with the aid of power. It was observed that cutting of steel wires or the treatment of the papers is a process for the manufacture of goods in question. We are, therefore, of the view that if any operation in the course of manufacture is so integrally connected with the further operations which result in the emergence of manufactured goods and such operation is carried on with the aid of power, the process in or in relation to the manufac ture must be deemed to be one carried on with the aid of power. In this 137 view of the matter, we are unable to accept the contention that since the pumping of the brine into the salt pans or the lifting of coke and lime stone with the aid of power does not bring about any change in the raw material, the case is not taken out of the Notification. The exemption under the Notification is not available in these cases. Accordingly, we allow these appeals. In the facts and cir cumstances of the case, we make no order as to costs. G.N. Appeals allowed.

By way of notification dated 18.6.1977, the Central Government exempted from duty all goods falling under Tariff item No. 68 of the First Schedule to the in or in relation to manufacture of which no process was ordinarily carried on with the aid of power. The respondents in the first set of appeals have been manufacturing crude sodium sulphate. Since the respondents used diesel pumps for pumping brine into salt pans, in the process of manufacture, the benefit of the said notification was denied to them on the ground that the process of manu facture was carried on with the aid of power. However, on appeal, the Collector of Customs (Appeals) allowed the benefit to the respondents. Revenue preferred an appeal and the Tribunal affirmed the Collector 's order. In the other appeals, the Respondents, manufacturer of lime, used to lift the raw materials to the platform at the head of the kiln by the aid of power and the raw materials were mixed manually into the kiln. The benefit of the said notification was denied to the Respondents by the Assistant Collector. Even an appeal before the Collector of Appeals failed. However, on appeal the Tribunal accepted the claim of the Respondents. In all these matters the Tribunal took the view that the manufacturing process started from the stage of feeding raw materials into the salt pan or the kiln as the case may be and the transferring of the raw materials was a stage prior to the manufacturing process and so the 125 use of power for such transfer would not disentitle the respondents from the benefit under the said notification. Aggrieved by the orders of the Tribunal, the Revenue has preferred the present appeals. Before this Court, the Revenue contended that pumping the brine into the pan or lifting the raw materials to the kiln head was a process in relation to the manufacture of the final product and since that process with the aid of power was integrally connected with the manufacture, the exemption would not apply. The Respondents contended that if the process carried on with the aid of power does not bring about any change in the raw materials, it cannot be said that any process in or in relation to the manufacture of an article has been carried on with the aid of power and, therefore, mere transfer of raw materials by the use of power cannot be considered as a process of manufacture. Allowing the appeals, this Court, HELD: 1. Process in manufacture or in relation to manufacture implies not only the production but the various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes to which the raw materials is subjected to the manufactured product emerges. Therefore, each step towards such production would be a process in relation to manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture of processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture. [130 E F). 2.1 The natural meaning of the word 'process ' is a mode of treatment of certain materials in order to produce a good result, a species of activity performed on the subject matter in order to transform or reduce it to a certain stage. There is nothing in the natural meaning of the word 'process ' to exclude its application to handling. There may be process which consists only in handling and there may be a process which involves no handling or not merely handling but also use. It may be a process involving the handling of the material and it need not be a process involving the use of material. The activity may be subordinate but one in relation to the further process of manufacture. [130G, 131 A B] 126 2.2 A process is a manufacturing process when it brings out a complete transformation for the whole compo nents so as to produce a commercially different article or a commodity. But, that process itself may consist of several processes which may or may not bring about any change at every intermediate stage. But the activities or the opera tions may be so integrally connected that the final result is the production of a commercially different article. Therefore, any activity or operation which is the essential requirement and is so related to the further operations for the end result would also be a process in or in relation to manufacture to attract the relevant clause in the exemption notification. The word 'process ' in the context in which it appears in the notification includes an operation or activi ty in relation to manufacture. [132H, 133 A B] J.K. Cotton Mills vs S.T. Officer; , ; Union of lndia vs Delhi Cloth & General Mills, [1963] Supp. 1 SCR 586, relied on. 3.1 The transfer of raw material to the reacting vessel is a preliminary operation but it is part of a continuous process ,but for which the manufacture would be impossible. The handling of the raw materials for the purpose of such transfer is then integrally connected with the process of manufacture. The handling for the purpose of transfer may be manual or mechanical but if power is used for such opera tion, it cannot be denied that an activity has been carried on with the aid of power in the manufacturing process. The use of diesel pump sets to fill the pans with brine is an activity with the aid of power and that activity is in relation to the manufacture. It is not correct to say that the process of manufacture starts only when evaporation starts. The preliminary steps like pumping brine and filling the salt pans form integral part of the manufacturing proc ess even though the change in the raw material commences only when evaporation takes place. The preliminary activity cannot be disintegrated from the rest of the operations in the whole process of manufacture. Similarly, when coke and lime are taken to the platform in definite proportions for the purpose of mixing, such operation is a step in the manufacturing process. It precedes the feeding of the mix ture into the kiln where the burning takes place. The whole process is an integrated one consisting of the lifting of the raw materials to the platform mixing coke and lime and then feeding into the kiln and burning. These operations are so interrelated that without anyone of these operations manufacturing process is impossible to be completed. There fore, if power is used in 127 anyone of these operations or anyone of the operations is carried on with the aid of power, it is a case when in or in relation to the manufacture the process is carried on with the aid of power. [133 C G] 3.2 'Processing ' may be an intermediate stage in manu facture and until some change has taken place and the com modity retains a continuing substantial identity through the processing stage, one cannot say that it has been manufac tured. That does not, however, mean that any operation in the course of such process is not in relation to the manu facture. [136 E] Dy. Commissioner, Sales Tax; Ernakulam vs Pio Food Packers, ; ; Union of India vs Delhi Cloth & General Mills, [1963] Suppl. 1 SCR 586; Standard Fireworks Industries vs Collector, , relied on. Nirma Chemical Works & Ors. vs Union of India & Ors. , ; Chowgule & Co. Pvt. Ltd. vs Union of India, ; , referred to.

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vil Appeal No. 4336 (NL) of 1991, From the Judgment and Order dated 14.9.1989 of the Madras High Court in Writ Appeal No. 697 of 1989. M.K. Ramamurthy, Mrs. Chandan Ramamurthy and M.A.Krish namurthy for the Appellants. F.S.Nariman, R.F.Nariman, T.S.Gopalan, Raian Karanjiwa la, Mrs. Manik Karanjiwala, Mrs. V.S.Rekha and Sajai Singh for the Respondents. The Judgment of the Court was delivered by KULDIP SINGH, J. Special leave granted. The Reptakos Brett & Co. Ltd. (hereinafter called the 'Company ') is engaged in the manufacture of pharmaceutical and dietetic speciality products and is having three units, two at Bombay and one at Madras. The Madras factory. with which we are concerned, was set up in the year 1959. The Company on its own provided slab system of Dearness Allow ance (DA) which means the DA paid to the workmen was linked to cost of living index as well as the basic wage. The said double linked DA Scheme was included in various settlements between the Company and the workmen and remained operative for about thirty years. The question for our consideration is whether the Company is entitled to re structure the DA scheme by abolishing the slab system and substituting the same by the Scheme prejudicial to the workmen on the ground that the slab system 134 has resulted in over neutralisation thereby landing the workmen in the high wage island. The first settlement between the Company and the workmen was entered into on August 11, 1964. While accepting the double linked DA it further provided variable DA limited to the cost of living index up to 5.41 5.50. Further relief was given to the workmen in the settlement dated July 18, 1969 when the limit on the variable DA was removed. The Company revised the rates of DA on August 7, 1971. Thereafter, two more settlements were entered into on July 4, 1974, and January 4, 1979, respectively. Slab system with variable DA continued to be the basic constituent of the wage structure in the company from its inception. The position which emerges is that in the year 1959 the Company on its own introduced slab system of DA. In 1964 in addition, variable DA to the limited extent was introduced but the said limit was removed in the 1969 settlement. The said DA scheme was reiterated in the 1979 settlement. It is thus obvious that the slab system of DA introduced by the Company in the year 1959 and its progressive modifications by various settlements over a period of almost thirty years, has been consciously accepted by the parties and it has become a basic feature of the wage structure in the Company. The workmen raised several demands in the year 1983 which were referred for adjudication to the Industrial Tribunal, Madras. The Company in turn made counter demands which were also referred to the said Tribunal. One of the issues before the Tribunal was as under: "Whether the demand of the Management for re structuring of the dearness allowance scheme is justified, if so, to frame a scheme?" The Tribunal decided the above issue in favour of the Company and by its award dated October 14, 1987 abolished the existing slab system of DA and directed that in future dearness allowance in the Company, be linked only to the cost of living index at 33 paise per point over 100 points of the Madras City Cost of living Index 1936 base. The Tribunal disposed of the two References by a common award. The Company as well as the workmen filed separate writ petitions before the Madras High Court challenging the award of the Tribunal. While the two writ petitions were pending the parties filed a joint memorandum dated June 13, 1988, before the High Court in the following terms: 135 "In view of the settlement dated 13.5.1988 entered into between the parties, a copy of which is enclosed, both the parties are not pressing theft respective writ petitions except with regard to the issue relating to re structuring of dearness allow The learned Single Judge of High Court upheld the find ings of the Tribunal on the sole surviving issue and dis missed the writ petition of the workmen. The writ appeal filed by the workmen was also dismissed by the High Court by its judgment dated September 14, 1989. The present appeal by special leave is against the award of the Tribunal as upheld by the High Court. Mr. M.K. Ramamurthy, learned counsel for the appel lants has raised following points for our cosideration: (i) The Tribunal and the High Court grossly erred in taking Rs. 26 as a per war wage of a worker in Madras region and, on that arith metic, reaching a conclusion that the rate of neutralisation on the basis of cost of living index in December 1984 was 192 per cent. (ii) Even if it is assumed that there was over neutralisation unless the pay structure of the workmen is within the concept of a 'living wage ' and in addition it is proved that financially the Company is unable to bear the burden the existing pay structure/DA scheme cannot be revised to the prejudice of the work men. (iii) In any case the DA scheme which was voluntarily introduced by the Company and reiterated in various settlements cannot be altered to the determent of the workmen. " Before the points are dealt with, we may have a fresh look into various concepts of wage structure in the industry. Broadly, the wage structure can be divided into three categories the basic "minimum wage" which provides bare subsistence and is at poverty line level, a little above is the "fair wage" and finally the "living wage" which comes at a comfort level. It is not possible to demarcate these levels of wage structure with any preci sion. There are, however, well accepted norms which broadly distinguish one category of pay structure from another. The Fair Wages Commit tee, in its report published by the Government of India, Ministry of Labour, in 1949, defined the "living wage" as under: "the living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, 136 clothing and shelter but a measure of frugal comfort including education for the the chil dren, protection against illhealth, require ments of essential social needs, and a measure of insurance against the more important mis fortunes including old age." "The Committee 's view regarding "minimum wage was as under: "the minimum wage must provide not merely for the bare sustenance of life but for the preservation of the efficien cy of the worker. For this purpose the minimum wage must also provide for some measure of education. medical require ments and amenities. " The Fair Wages Committee 's Report has been broadly approved by this Court in Express Newspapers (P) Ltd. vs Union of India, and Standard Vacuum Refining Co. of India vs Its Workmen and Anr., ; The Tripartite Committee of the Indian Labour Conference held in New Delhi in 1957 declared the wage policy which was to be followed during the Second Five Year Plan. The Committee accepted the following five norms for the fixation of 'minimum wage ': "(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for one earner; the earnings of women, children and adolescents should be disregarded. (ii) Minimum food requirement should be calculated on the basis of a net intake of calories, as recommended by Dr. Aykroyd for an average Indian adult of moderate activity. (iii) Clothing requirements should be esti mated at per capita consumption of 18 yards per annum which would give for the average workers ' family of four, a total of 72 yards. (iv) In respect of housing, the rent corre sponding to the minimum area provided for under Government 's Industrial Housing Scheme should be taken into consideration in fixing the minimum wage. (v) Fuel, lighting and other 'miscellaneous ' items of expenditure should constitute 20% of the total minimum wage. " This Court in Standard Vacuum Refining Compa ny 's case (supra) has referred to the above norms with approval. The concept of 'minimum wage ' is no longer the same as it was in 137 1936. Even 1957 is way behind. A worker 's wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under the labour laws. Each category of the wage structure has to be tested at the anvil of social justice which is the live fibre of our society today. Keeping in view the socio economic aspect of the wage structure, we are of the view that it is necessary to add the following additional component as a guide for fixing the minimum wage in the industry: "(vi) children education, medical require ment, minimum recreation including festivals/ceremonies and provision for old age, marriages etc. should further constitute 25% of the total minimum wage. The wage structure which approximately answers the above six components is nothing more than a minimum wage at subsist ence level. The employees are entitled to the minimum wage at all times and under all circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry. A living wage has been promised to the workers under the constitution. A 'socialist ' framework to enable the working people a decent standard of life, has further been promised by the 42nd Amendment. The workers are hopefully looking forward to achieve the said ideal. The promises are pilling up but the day of fulfilment is nowhere in sight. Industrial wage looking as a whole has not yet risen higher than the level of minimum wage. Adverting to the first point raised by Mr. Ramamurthy it would be convenient to quote from the award the conten tions of the Company and the findings reached by the Tribu nal. The Company 's case as noticed by the tribunal is as under: "It is stated that the pre war wage of a worker in the Madras Region was Rs.26. It is evidenced by the decision of the Labour Appel late Tribunal reported in 1951 1I L.L.J. page 314 (Buckingham and Carnatic Mills vs Their workers) and 1951 II L.L.J. page 718 (Good Pastor Press vs Their workers). It is contend ed that taking the pre war minimum wage of worker at Madr,ks being R:,. 26 per month equivalent to 100 per cent neutralization the rate of Dearness Allowance at 26 paisa for every point above 100 points of cost of living index would work out to 100 per cent neutrali sation. On the above basis at 138 2780 points of cost of living index in Decem ber 1984, the 100 per cent neutralised wage should be Rs. 722.80 (basic wage of Rs. 26 plus dearness allowance of Rs. 696.80). As against the above wage a workman of lower grade in the Petitioner 'Company in December 1984 was getting a total wage of Rs. 1,`394/comprising of basic plus dearness allowance plus house rent allowance and the rate of neutralisation of dearness allowance correspondingly works out to 192 per cent. " The Tribunal accepted the above contentions of the Company. The evidence produced by the Company, regarding prevailing DA schemes in the comparable industries in the region, was also taken into consideration. The Tribunal finally decided as under: "Taking an overall view of the rate of dear ness allowance paid by these comparable con cerns in the region and the higher total emoluments received by the workmen in this establishment, the slab system of dearness allowance now in existence shall stand abol ished and in future, dearness allowance in the Petitioner Management would be linked only to the cost of living index at 33 paise per point over 100 points of the Madras City Cost of Living Index 1936 base and it shall be effec tive from the month in which the award is published in the Tamil Nadu Gazette. " The learned Single Judge of the High Court upheld the above findings of the Tribunal. The Division Bench of the High Court, in writ appeal, approved the award and the judgment of the learned Single Judge in the following words "The learned judge has observed that the counsel for the Management had taken him through all the relevant materials which were filed in the form of Exhibits before the Tribunal in order to show that the matter of over neutralisation cannot be in dispute. Thus the learned Judge proceeded on the basis that there is over neutralisation which called for devising a scheme for restructuring the wage scale. This finding cannot be interfered with as no materials have been placed before us by the learned counsel for the appellant to show that the exhibits which were perused by the learned Judge do not support his conclusion. Hence, we hold that the contention that there are no compelling circumstances in this case to revise the pattern of dearness allowance is unsustainable. " 139 According to the Company the only purpose of DA is to enable a worker in the event of a rise in cost of living to purchase the same amount of goods of basic necessity as before. In other words the DA is to neutralise the rise in prices. the said purpose can be achieved by providing maxi mum of 100 per cent neutralisation. Accepting the calcula tions of the Company based on Rs. 26 being the pre war (1936) minimum wage in Madras region the Tribunal came to the finding that there was 192 per cent neutralisation. The Tribunal accepted Rs. 26 as the pre war minimum wage in Madras region on the basis of the decisions of Labour Appellate Tribunal of India in Buckingham and Carnatic Mills Ltd. vs Their workers, and Good Pastor Press vs Their workers, In Buckingham case the appellate tribunal came to the conclusion that the basic wage of the lowest category of operatives on the living cost of index of the year 1936 was Rs. 28. The said wage included Rs.16 1/2 as expenses on diet. The workers relied upon the Textile Enquiry Commit tee 's report to claim 25% addition to the diet expenses. The Appellate Tribunal rejected the report on the ground that the recommendations in the said report were for the purpose of attaining the standard of "living wage" and not of 'min imum wage '. The Appellate Tribunal stated as under: "The Union however, contends that Dr. Akroyd revised his opinion when submitting a specially prepared note to assist the Textile Enquiry Committee, Bombay of which Mr. Justice Divatia was the Chairman, where he is said to have stated that 25 per cent more will have to be added for obtaining a balanced diet for a minimum wage earner. The report of that Enquiry Committee, which was published in 1940, however, shows that Dr. Akroyd added 25 per cent as the costs of the extra items to his standard menu such as sugar etc., for the purpose of attaining the standard menu of 'living wages ' (final report of the Textile Labour Enquiry Committee 1940, Vol. II, pages 70 to 71). Therefore, for the purpose of fixing 'minimum wages ' that 25 per cent is not to be added. " The question as to whether the recommendations of Textile Enquiry Committee were in relation to 'living wage ' or 'minimum wage ' came for consideration before this Court in Standard Vacuum case (supra). This Court held as under: "It is obvious that the Committee was really thinking of what 140 is today described as the minimum need based wage, and it found that judged by the said standard the current wages were deficient. In its report the Committee has used the word 'minimum ' in regard to some of the constitu ents of the concept of living wage, and its calculations show that it did not proceed beyond the minimum level in respect of any of the said constituents. Therefore, though the expression 'living wage standard ' has been used by the Committee in its report we are satisfied that Rs. 50 to Rs. 55 cannot be regarded as anything higher than the need based minimum wage at that time. If that be the true position the whole basis adopted by the appellant in making its calculations turns out to be illusory." This Court, therefore, in Standard Vacuum case came to the conclusion that the Textile Labour Committee Report in the year 1940 in its calculations did not proceed beyond the minimum level of the wage structure. It was further held that Rs. 50 to Rs. 55 was the need based minimum wage in the year 1940. The Appellate Tribunal in Buckingham case, therefore misread the Textile Committee Report and was not justified in rejecting the same on the ground that it related to the category of 'living wage ' We are of the view that it would not be safe to accept the findings of the Appellate Tribunal in Buckingham case as the basis for fixing the wage structure to the prejudice of the workmen. This court in Standard Vacuum case (supra) has further held that in Bombay the minimum wage in the year 1940 was Rs.50 to Rs.55. On that finding it is not possible to accept that the minimum wage in the year 1936 in Madras region was Rs.26/28. So far as the Good Pastor Press case is concerned the question of determining the minimum wage in per war 1936 was not before the Appellate Tribunal. It only mentioned the fact that Rs.26 was held to be so by some of the subordinate tribunals. There was no discussion at all on this point. The Tribunal 's reliance on this case was wholly misplaced. In any cause we are of the opinion that purchasing power of today 's wage cannot be judged by making calculations which are solely based on 30/40 years old wage structure. The only reasonable way to determine the category of wage structure is to evaluate each component of the category concerned in the light of the prevailing prices. There has been sky rocking rise in the prices and the inflation chart is going up so fast that the only way to do justice to the labour is to determine the money value of various components of the minimum wage in the context of today. 141 We may now move on to the second and third point raised by Mr. Ramamurthy. We take up these points together. Mr. F.S. Nariman, learned counsel appearing for the Company, contended that the existing DA scheme can be revised even to the prejudice of the workmen and for that proposition he relied upon the judgment of this Court in M/s. Crown Alumin ium works vs Their Workmen; , Mr. Rama murthy has, however, argued that even if the contention of Mr. Nariman is accepted in principle, the Company has not been able to make out a case for such a revision. In M/s. Crown Aluminium Works case this Court speaking through Gajendragadkar, J.(as he then was) held as under: "The question posed before us by Mr. Sen is: Can the wage structure fixed in a given indus try be never revised to the prejudice of its workmen? Considered as a general question in the abstract it must be answered in favour of Mr. Sen. We do not think it would be correct to say that in no conceivable circumstances can the wage structure be revised to the prejudice of workmen. When we make this obser vation, we must add that even theoretically no wage structure can or should be revised to the prejudice of workmen if the structure in question falls in the category of the bare subsistence or the minimum wage. If the wage structure in question falls in a higher cate gory, then it would be open to the employer to claim its revision even to the prejudice of the workmen provided a case for such revision is made out on the merits to the satisfaction of the tribunal. In dealing with a claim for such revision, the tribunal may have to con sider, as in the present case whether the employer 's financial difficulties could not be adequately met by retrechment in personnel already effected by the employer and sanc tioned by the tribunal. The tribunal may also enquire whether the financial difficulties facing the employer are likely to be of a short duration or are going to face the em ployer for a fairly long time. It is not necessary, and would indeed be very difficult, to state exhaustively all considerations which may be relevant in a given case. It would, however, be enough to observe that, after considering all the relevant facts, if the tribunal is satisfied that a case for reduc tion in the wage structure has been estab lished then it would be open to the tribunal to accede to the request of the employer to make appropriate reduction in the wage struc ture, subject to such conditions as to time or otherwise that the tribunal may deem fit or expedient to impose. " 142 The above dicta was reiterated by this Court in Ahmeda bad Mills Owners, Association etc. vs The Textiles Labour Association, wherein this Court through Gajendragadkar, CJ, laid down as under: "The other aspect of the matter which cannot be ignored is that if a fair wage structure is constructed by industrial adjudication and in course of time, experience shows that the employer cannot bear the burden of such wage structure, industrial adjudication can, and in a proper case should revise the wage struc ture, though such revision may result in the reduction of the wages paid to the employees. . . . if it appears that the employer cannot really bear the burden of the increasing wages bill industrial adjudication, on principle, cannot refuse to examine the employer 's case and should not hesitate to give him relief if it is satisfied that if such relief is not given, the employer may have to close down his business. . . This principle, however, does not apply to cases where the wages paid to the employees are no better than the basic minimum wage. If, what the employer pays to his employees is just the basic sub sistence wage, then it would not be open to the employer to contend that even such a wage is beyond his paying capacity. " The ratio which emerges from the judgments of this Court is that the management can revise the wage structure to the prejudice of the workmen in a case where due to financial stringency it is unable to bear the burden of the existing wage. But in an industry or employment where the wage struc ture is at the level of minimum wage, no such revision at all, is permissible not even on the ground of financial stringency. It is, therefore, for the management, which is seeking restructuring of DA scheme to the disadvantage of the workmen to prove to the satisfaction of the tribunal that the wage structure in the industry concerned is well above minimum level and the management is financially not in a position to bear the burden of the existing wage struc ture. Mr. Ramamurthy further relied upon this Court 's judgment in MonthlyRated workmen at the Wadala factory of the Indian Hume Pipe Co. Ltd. vs Indian Hume Pipe Co. Ltd., Bombay, ; and contended that an employer cannot be permitted to abolish the DA scheme which has worked smoothly for almost thirty years on the plea that the said scheme is more beneficial than the DA schemes adopted by other indus tries in the region. In the Indian Hume Pipe Co. Ltd case the management pleaded that the dearness allowance enjoyed by the workmen was so high in certain cases that neutralisation was at rates much higher than 100%. It was further contended that the manage ment did not have the capacity to pay the slab system of DA and in the event of a claim for similar DA by other workmen the management might have to close down the factories. Khalid, J. spoke for the court as under: "We thought it necessary to refer to the various awards read by Mr.Pai only for the completeness of the judgment. It has to be borne in mind that in most of these cases, awards were passed at the instance of the employees when demands were made for raising the dearness allowance paid to them. Here, we have the case of the employer trying to get over a system of dearness allowance which had worked smoothly for 18 years, on the specious plea that at the time the slab system was introduced, it was not in the expectation of anyone that the cost of price index would spiral up so much as to make it impossible for the company to pay according to this scheme. From the materials available we do not find that this plea can be accepted. The records produced show that despite this system of dearness allowance the Company has been making profits and has been improving its position year by year. . . we do not think it necessary to deal at length about the evolu tion of the concept of dearness allowance. Suffice it to say that this Court has, often times, emphasised the need for a living wage to workmen instead of a subsisting wage. It is indeed a matter of concern and mortification that even today the aspirations of a living wage for workmen remain a mirage and a distant dream. Nothing short of a living wage can be a fair wage. It should be the combined effort of all concerned including the Courts to extend to workmen a helping hand so that they get a living wage which would keep them to some extent at least free from want. It is against this background that a claim by em ployers to change the conditions of service of workmen to their detriment has to be consid ered and it is against this background that we have considered the award review. We are not satisfied that a case has been made out on the facts available for a change. . . . The question is often asked as to whether it would be advisa ble for Tribunals and Courts to revise the wage structure of workmen to their prejudice when a dispute arises. Normally the answer would be in the negative. Tribunals and Courts can take judicial notice of one fact; and that is that the wages of workmen, except inexcep tionally rare cases, 144 fail within the category of mere "sub sisting wages". That being so, it would be inadvisable to tinker with the wage structure of workmen except under compelling circum stances. " We agree with Mr. Ramamurthy that the DA scheme which had stood the test of time for almost thirty years and had been approved by various settlements between the parties has been unjustificably abolished by the Courts below and as such the award of the Tribunal and the High Court Judgments are unsustainable. Mr. Nariman has also relied on the judgment of this Court in Killick Nixon Ltd. vs Killick & Allied Companies Employees ' Union, to support the findings of the Tribunal and the High Court. The said case does not lay down that in all cases the slab system of DA should be abolished to the prejudice of the workers. In the said case this Court on the facts of the case came to the conclusion that the employer had made out a case for putting a ceiling on the dearness allowance. The ratio of that case cannot be extended to interfere with the existing DA schemes in every case where such schemes are beneficial to the workmen. Mr. Nariman has invited our attention to para 20 of the Award wherein the tribunal has held as under: "These figures as detailed in exhibit M 13 would establish that the company is not in a finan cial position to bear the additional burden on account of increased wages. " From the above finding it was sought to be shown that the Company has proved to the satisfaction of the Tribunal that financially it was not in a position to bear the burden of the existing DA scheme. We do not agree with the learned counsel. The Tribunal gave the above finding in the refer ence made on behalf of the workmen asking for bonus increase and various other monetary benefits. While rejecting the demands of the workmen the Tribunal gave the above finding which related to the additional burden accruing in the event of acceptance of the workers ' demands. The Tribunal nowhere considered the financial position of the company vis avis the existing DA scheme. The Company neither pleaded nor argued before the Tribunal that its financial position had so much deteriorated that it was not possible for it to bear the burden of the slab system of DA. The Tribunal has not dealt with this aspect of the matter while considering the demand of the Company for re structuring the DA scheme. It has been pleaded by the company that its workmen are in a high wage island and as such the revision of DA scheme was justified. The 145 Company also produced evidence before the Tribunal to show that comparable concerns in the region were paying lesser DA to its workmen. On the basis of the material produced before the Tribunal all that the Company has been able to show is that the DA paid by the Company is somewhat higher than what is being paid by the other similar industries in the region. There is, however, no material on the record to show that what is being paid by the company is higher than what would be required by the concept of need based minimum wage. In any case there is a very long way between the need based wage and the living wage. Mr. Nariman reminded us of the limits on our jurisdic tion under Article 136 of the Constitution of India and relying upon Shaw Wallace & Co. Ltd. vs Workmen, and The Statesman Ltd. vs Workmen, ; contended that so long as there is "some basis, some materi al to validate the award" the "jurisdiction under Article 136 stands repelled". The Tribunal and the High Court, in this case, has acted in total oblivion of the legal position as propounded by this court in various judgments referred to by us. Manifest injustice has been caused to the workmen by the award under appeal. We see no force in the contention of the learned counsel. In view of the above discussion we are of the view that the Tribunal was not justified m abolishing the slab system of DA which was operating in the Company for almost thirty years. We allow the appeal and set aside the award of the Tribunal and the judgment of the learned Single Judge in the writ petition and of the Division Bench in the Writ Appeal. The reference of the Company on the issue of re structuring of the dearness allowance is declined and rejected. The Appellant workmen shall be entitled to their costs through out which we assess at Rs. 25,000.

The respondent company, in its factory set up at Madras 1959, introduced slab system of dearness allowance (DA) i.e. the DA paid to the workmen was linked to the cost of living index as well as the basic pay. The double linked DA scheme, being consciously accepted as basic constituent by the company and its workmen in various settlements between them, became basic feature of the wagestructure and remained operative in the company for about 30 years, In the year 1983, a dispute arose between the company and its workmen. The matter was referred to the industrial Tribunal. One of the issues before the Tribunal was based on the demand of the Management for restructuring of the dear ness allowance scheme and to frame a new scheme. The Tribu nal abolished the existing slab system of DA and directed the dearness allowance to be linked only to the cost of living index at 33 paise per point over 100 points at the Madras city cost of living index 1936 base. Before the High Court, both the parties agreed not to press their respective writ petitions except on the issue of restructuring of 130 DA. Upholding the findings of the Tribunal on the sole surviving issue, the Single Judge dismissed the workmen 's writ petition. The intra Court appeal filed by the workmen was also dismissed. grieved, the workmen filed the appeal by special leave to this Court. It was contended on behalf of the workmen that the Tribunal and High Court grossly erred in taking Rs. 26 as a pre war wage of a worker in Madras region and holding that the rate of neutralization on the basis of cost of living index in December, 1984 was 192%; that even assuming that there was over neutralization, the existing pay structure/DA scheme could not be revised to the prejudice of the workmen unless their pay structure was within the concept of 'living wage ' and, in addition, it was proved that financially the company was unable to bear the burden; and that the company could not be permitted to abolish the DA scheme to the detriment of the workmen much less on the plea that the said scheme was more beneficial than the DA schemes adopted by other industries in the region. The respondent, contended that the company had proved to the satisfaction of the Tribunal that financially it was not in a position to bear the burden of existing DA scheme; that its workmen were in a high wage island and as such the revision of DA scheme was justified. It was also contended that so long as there was some basis and material to vali date the award, the jurisdiction under Article 136 of the Constitution stood repelled. On the question; whether the Management is entitled to restructure the DA scheme to the prejudice of the workmen on the ground that the existing system had resulted in over neutralization thereby landing the workmen in the high wage island Allowing the appeal of the workmen, this Court, HELD: 1.1. The management can revise the wage structure to the prejudice of the workmen in a case where due to financial stringency it is unable to bear the burden of the existing wage. But in an industry or the employment where the wage structure is at the level of minimum wage, no such revision at all, is permissible not even on the ground of financial stringency. [p. 142 E] Monthly Rated workmen at the Wadala factory of the Indian Hume 131 Pipe Co. Ltd. vs Indian Hume Pipe Co. Ltd., Bombay, ; , relied on. M/s Crown Aluminium Works vs Their Workmen, ; & Ahmedabad Mills Owners ' Association etc. vs The Textiles Labour Assosication; , , referred to. Killick Nixon Ltd. vs Killick & Allied Companies Employ ees Union, , distinguished. 1.2 The employees are entitled to the minimum wage at all times and under all circumstances. An employer who cannot pay the minimum wage has no right to engage labour and no justification to run the industry. [p. 137 C] 1.3 It is for the management, seeking to restructure the DA scheme to the disadvantage of the workmen, to prove to the satisfaction of the tribunal that the wage structure in the industry concerned is well above minimum level and the management is financially not in a position to bear the burden of the existing wagestructure. [p. 142 F] 2.1 'The concept of 'minimum wage ' is no longer the same as it was in 1936. Even 1957 is way behind. A worker 's wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under the labour laws. Each category of the wage structure has to be tested at the anvil of social justice which is the live fibre of our society today. [pp. 136 H, 137 A] 2.2 The Tripartite Committee of the Indian Labour Con ference ' 1957 has formulated five norms for the fixation of 'minimum wage ' (i) three consumption units for one earner disregarding earnings of women, children and adolescents; (ii) minimum food requirement based on net intake calories; (iii) clothing requirement at 72 yards per annum for an average working family of four; (iv) house rent correspond ing to minimum area provided for under the Government 's Industrial Housing Scheme; (v) 20% of total minimum wage for fuel, lighting and other miscellaneous items. [p. 136 D G] Express Newspapers (P) Ltd. vs Union of India, , followed. Standard Vacuum Refining Co. of India vs Its Workmen & Anr., ; , relied on. 132 Keeping in view the socio economic aspect of the wage structure the following additional component has also to be taken into account: "(vi) children education, medical require ment, minimum recreation including festivals/ceremonies and provision for old age, marriages etc. should further constitute 25% of the total minimum wage," The wage structure which approximately answers these six components is nothing more than a minimum wage at subsist ence level. [p. 137 A C] 2.3 In spite of the promise by the Constitution of a living wage and a 'socialist ' framework to enable the work ing people a decent standard of life, industrial wage, looking as a whole, has not yet risen higher than the level of minimum wage. [p. 137 D E] 3.1 Purchasing power of today 's wage cannot be judged by making calculations which are solely based on 30/40 years old wagestructure. The only reasonable way to determine the category of wage structure is to evaluate each component of the category concerned in the light of the prevailing prices. There has been skyrocking rise in the prices and the inflation chart is going up so fast that the only way to do justice to the labour is to determine the money value of various components of the minimum wage in the context of today. [p. 140 F H] 3.2 In the instant case, the Company neither pleaded nor argued before the Tribunal that its financial position had so much deteriorated that it was not possible for it to bear the burden of the slab system of DA; nor did the Tribunal deal with this aspect of the matter while considering the demand of the Company for re structuring the DA scheme. [p. 144 F G] 3.3 Although the DA paid by the Company was somewhat higher than what was being paid by the other similar indus tries in the region, yet it could not be shown that what was being paid by the Company was higher than what would be required by the concept of need based minimum wage. In any case there is a very long way between the need based wage and the living wage. [p. 145 AB] 4. The Tribunal and the High Court acted in total oblivion of the legal position. Consequently, manifest injustice has been caused 133 to the workmen by the award. It can, therefore, not be said that jurisdiction under article 136 stands repelled. [p. 145 CD] Shaw Wallace & Co. Ltd. vs Workmen, & The Statesman Ltd. vs Workmen, ; , referred to. The Tribunal was not justified in abolishing the slab system of DA which had stood the test of time for almost 30 years and had been approved by various settlements between the parties and as such the award of the Tribunal and the High Court judgments were unsustainable. [pp. 144 AB; 145 DE] Buckingham and Carnatic Mills Ltd. vs Their Workers, [1951] 2 L.L,. J. 314 & Good Pastor Press vs Their Workers, , referred to.

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(Criminal)No. 1339 of 1991. (Under Article 32 of the Constitution of India). R.K: Jain, A. Mariarputham, Ms. Aruna Mathut, Udai Lalit, Shankar C. Ghosh and Ms. Chanchal Ganguli for the Petitioner. The Judgment of the Court was delivered by K.N. SINGH, J. Smt. Shashi Nayar wife of Raj Gopal Nayar who has been awarded death sentence for offence under Sec tion 302 of the Indian Penal Code [ 'IPC ' for short] has approached this Court by means of this petition under Arti cle 32 of the Constitution challenging the constitutional validity of death penalty. Raj Goapal Nayar, the petitioner 's husband was tried for offence under Section 302, IPC for having killed his father and step brother. The Sessions Judge by his judgment and order dated 24.4.1986 convicted Raj Gopal Nayar and awarded sentence of death. On appeal, the High Court confirmed the death penalty and dismissed Raj Gopal 's appeal against the order of the Sessions Judge. Raj Gopal thereafter filed a special leave petition before this Court challenging the judgment and order of the Sessions Judge and the High Court, but the special leave petition was also dismissed by this Court. Review petition filed by him was also dismissed. Consequently, his conviction and the sentence of death stood confirmed by all the courts. Thereupon, he filed mercy petitions before the Governor of Jammu & Kashmir and the President of India, but the same were rejected. 'He chal lenged the order of the President of India rejecting the mercy petition before this Court by means of a writ petition under Article 32 of the Constitution, but the same was also dismissed. Another writ petition under Article 226 of the Constitution was filed before the Jammu & Kashmir High Court for quashing the sentence imposed on him but the same was also rejected. As the legal proceedings before the court failed, he was to be hanged on 26.10.1991. Shashi Nayar, the petitioner, thereupon filed the present petition under Article 32 of the Constitution before this Court challenging the validity of the capital punishment with a prayer for the quashing of the sentence awarded to Raj Gopal Nayar. The petition was entertained by a Division Bench on 25.10.1991 and the matter was referred to the Constitution Bench for consideration, and meanwhile the execution of the condemned prisoner was stayed. Mr. Ravi K. jain, learned counsel for the petitioner made the following submissions: 106 (1) Capital punishment is violative of Article 21 of the Constitution of India as the Article absolutely prohibits deprivation of a person 's life. (2) Capital punishment does not serve any social purpose and in the absence of any study, the barbaric penalty of death should not be awarded to any person as it has no deterrent effect. (3) The penalty of death sentence has a dehumanising effect on the close relations of the victims and it deprives them of their fundamental rights under Article 21 of the Constitution, to a meaningful life. (4) The execution of capital punishment by hanging is barbaric and dehumanising. This should be substituted by d some other decent and less painful method in executing the sentence. The questions raised by Shri Jain have already been consid ered by this Court in detail on more than one occasion. In Jagmohan Singh vs State of U.P.,[1973] 1 SCC 20 and in Bachan Singh vs State of Punjab, , this Court has on a detailed consideration, held that the capital punishment does not violate Article 21 of the Constitution. In Bachan Singh 's case (supra), the court considered all the questions raised in this petition except question No.4, and the majority judgment rejected the same by a detailed rea soned order. Since we fully agree with those reasons, we do not consider it necessary to reiterate the same. Learned counsel further urged that the view taken in Jagmohan Singh 's and Bachan Singh 's cases (supra) is incor rect and it requires reconsideration by a larger Bench. He, therefore, requested us to refer the matter to a larger Bench as the question relates to the life of a citizen. He urged that the award of death penalty is a serious matter as it deprives a citizen of his life in violation of Article 21 of the Constitution and as such the court should consider the matter again. We are fully conscious of the effect of the award of capital punishment. But we are of the opinion that the capital punishment as provided by the law is to be awarded in rarest of the rare cases as held by this Court. The procedure established by law for awarding the death penalty is reasonable and it does not in any way violate the mandate of Article 21 of the Constitution. Since we agree with the view taken by the majority in Bachan Singh 's and Jagmohan Singh 's cases (supra), we do not find any valid ground to refer the matter to a larger Bench. Learned coun sel urged that the majority opinion in Bachan Singh 's case (supra) was founded upon the 35th Report of the Law Commis sion submitted in 1967, which summarises the recommendations in the following words: 107 "Having regard, however, to the conditions in India, to the variety of the social upbringing of its inhabitants, to the disparity in the level of morality and education in the coun try, to the vastness of its area, to the diversity of its population and to the para mount need for maintaining law and order in the country at the present juncture India cannot risk the experiment of abolition of capital punishment." Shri Jain urged that the above Report indicates that in 1967 the Law Commission was of the opinion that the country should not take the risk of experimenting abolition of capital punishment. However, since then much water has flown. Further, there is no empirical study before the Court to show that the situation which prevailed in 1967 is still continuing. Hence, the Court should reconsider the matter. We do not find any merit in this submission. The death penalty has a deterrent effect and it does serve a social purpose. The majority opinion in Bachan Singh 's case (supra) held that having regard to the social conditions in our country the stage was not ripe for taking a risk of abolishing it. No material has been placed before us to show that the view taken in Bachan Singh 's case(supra) requires reconsideration. Further, a judicial notice can be taken of the fact that the law and order situation in the country has not only not improved since 1967 but has deteriorated over the years and is fast worsening today. The present is, therefore, the most in opportune time to reconsider the law on the subject. Hence the request for referring the matter to a larger Bench is rejected. As regards the method of execution of the capital pun ishment by hanging, this Court considered the same in detail in Deena alias Deen Dayal & Ors. etc., vs Union of India & Ors. etc. , [1983] 4 SCC 645 and held that hanging by neck was a scientific and one of the least pain ful methods of execution of the death sentence. We find no justification for taking a different view. Shri Jain, howev er, brought to our notice that a learned Judge of this Court while sitting during vacation had issued notice to the State on the question as to whether the execution by hanging is a cruel and unusual procedure. Hence, he urged that we should entertain this petition and reconsider the question. Since the question of the mode of execution of capital punishment has already been considered in detail by this Court m Deen Dayal 's case (supra), we do not find any good reason to take a different view. The question of reasonableness in the award of the capital punishment to Raj Gopal Nayar has been considered by the High Court and this 108 A Court at various stages and consistently it has been answered against the prisoner. Hence the petition fails and is accordingly dismissed. Interim relief order dated 25.10. 1991 is vacated. V.P.R. Petition dismissed.

The petitioner 's husband was tried under Section 302, IPC for having killed his father and step brother. The Sessions Judge convicted awarding sentence of death. On appeal, the High Court confirmed the death penalty against which a special leave petition before this Court was filed and same was also dismissed. The Review Petition filed by him was also dismissed. His mercy petitions filed before the Governor of Jammu & Kashmir and the President of India, were rejected. He chal lenged the order of the President of india rejecting the mercy petition before this Court in a writ petition under Article 32 of the Constitution, which was also dismissed. Another writ petition under Article 226 of the Constitu tion was filed before the Jammu & Kashmir High Court for quashing the sentence imposed on him. The High Court dis missed the same. The husband of this petitioner, the condemned prisoner, was to be hanged on 26.10.1991. The petitioner, filed the present petition under Article 32 of the Constitution challenging the validity of the capital punishment 104 with a prayer for the quashing of the sentence awarded to her husband. The petition was entertained by a Division Bench on 25.10.91 and the matter was referred to the Constitution Bench for consideration staying the execution of the condem ned prisoner. Petitioner contended that capital punishment was violative of Article 21 of the Constitution of India as the Article absolutely prohibits deprivation of a person 's life; that capital punishment did not serve any social purpose and the barbaric penalty of death should not be awarded to any person as it had no deterrent effect; that the penalty of death sentence had a dehumanising effect on the close rela tions of the victims and it deprived them of their fundamen tal rights under Article 21 of the Constitution, to a mean ingful life; that the execution of capital punishment by hanging was barbaric and dehumanising and it should be substituted by some other decent and less painful method in executing the sentence. Dismissing the petition, this Court, HELD: 1. The capital punishment as provided by the law is to be awarded in rarest of the rare cases. The procedure established by law for awarding the death penalty is reason able and it does not in any way violate the mandate of Article 21 of the Constitution. Hanging by neck was a scien tific and one of the least painful methods of execution of the death sentence. [106 G, 107 F] 2. The death penalty has a deterrent effect and it does serve a social purpose, having regard to the social condi tions in our country the stage was not ripe for taking a risk of abolishing it. [107 C D] 3. A judicial notice can be taken of the fact that the law and order situation in the country has not only not improvided since 1967 but has deteriorated over the years and is fast worsening today. The present is, therefore, the most inopportune time to reconsider the law on the subject. [107 E] Jagmohan Singh vs State of U.P.,[1973] 1 SCC 20; Bachan Singh vs State of Punjab, ; Deena alias Deen Dayal & Ors. vs Union of India & Ors. etc. , [1983] 4 SCC 645, referred to. 105

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Civil Appeal No. 4380 of 1991. From the Judgment and Order dated 10.4.1991 of the Madras High Court in Writ Appeal No. 38 of 1991. K. Parasaran, K.V. Vijaya Kumar and V. Bala Chandran for the Appellants. C.T. Selvamani and P.P. Tripathi for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. Special Leave is granted. This appeal is against the judgment dated April 4, 1991 of the Madras High Court. A sum of Rs. 12,163.50 p. was alleged to have been misappropriated by the appellant (now he was acquitted of the charge of misappropriation) and for the recovery thereof his 13.07 acres of coffee estate situated in Semmanthaputhur village was brought to sale under the Tamil Nadu Revenue Recovery Act, 1894 (for short 'The Act '). On March 30, 1979 the sale by auction was held by the Tahsildar. The first respondent purchased for a sum of Rs. 12,225 and deposited a sum of Rs.2,000 being 15 per cent of the sale price. Under Sec. 36 of the Act, the first respondent should have deposit ed the balance consideration within 30 days from the date of the auction. On October 23,1981 the sale was confirmed and the balance amount was deposited on November 4, 1981. The appellant filed an application but by proceed ing dated October 23, 1981, the Revenue Divi sional Officer overruled the objections and dismissed the application. On appeal the Addl. Distt. Collector, Salem set aside the sale on October 13,1982. The first respondent filed writ petition 184 No. 246 of 1984 in the High Court. The learned Single Judge by judgment dated August 21, 1990 quashed the order of the Addl. Collec tor. On writ appeal, the Division Bench dis missed it. Thus this appeal. The formidable objection raised by the appellant is that it is mandatory under Sec.36 that the date and place of sale shall be published in the Gazette and that the publica tion did not mention the place of sale. There fore, the sale is invalid in law. It is also his further plea that it is equally mandatory that the balance sale consideration of 85% should be deposited within 30 days from the date of sale which was done only on November 4, 1981 long after one year and eight months of the date of sale. The sale and Confirmation thereof are, therefore, illegal. The learned Single Judge and the Division Bench held that Form 7A of the forms prescribed under the Act read with relevant provisions of the Board Standing Order No.41 does not prescribe the place of sale and that, therefore, the omis sion to specify the place of sale does not render the sale invalid nor an irregularity. Shri Selvamam, the first respondent in person (himself a practising Advocate) contended that it is Form 7 and not Form 7A that would be applicable to the facts of the case. Form 7 contains the place of sale and that it was complied with. Therefore, the sale is not illegal. It is also contended that the deposit was made after protracted correspondence and that, therefore, the non deposit within 30 days from the date of sale is not illegal. At any rate, having accepted the amount, the authority acquiesced to the deposit/Therefore, the confirmation of the sale is not illegal. We find no substance in either of the conten tions. The contention that Form 7 and not Form 7A would be applicable to the facts, is not the case set up or argued either before the authorities or the courts below. For the first time he cannot raise that plea in this Court. That apart specifically the High Court (learned Single Judge and the Division Bench) held that it is form 7A that is applicable and that it does not prescribe publication of place of sale and therefore, the omission thereof does not render the sale invalid. The High Court wholly misconceived of Sec.36. A reading of Sec. 36 manifests that the word 'shall ' is mandatory in the context. The publication is an invitation to the intending bidders to prepare and participate at the bid. Unless there is a due publication of the date and place of sale, the intending purchasers cannot be expected to run after the Sale Officer to find out the date and place of sale and to participate thereat. The Sale officer has a statutory duty and a responsi bility to have the date and place of sale men tioned in the notice and given due publication in terms of the Act and the Rules. Public auction is one of the modes of sale intending to get highest competitive price for the property. Public auction also ensures fairness in actions of the public authorities or the sale 185 officers who should act fairly, objectively and kindly. Their action should be legitimate. Their dealing should be free from suspicion. Nothing should be suggestive of bias, favouri tism, napotism or beset with suspicious fea tures of underbidding detrimental to the legitimate interest of the debtor. The fair and objective public auction would relieve the public authorities or sale officers from above features and accountability. Any infraction in this regard would render the sale invalid. It is settled law that the word 'shall ' be construed in the light of the purpose the Act or Rule that seeks to serve. It is not an invariable rule that even though the word 'shall ' is ordinarily mandatory but in the context or if the intention is otherwise, it may be construed to be directory. The construc tion ultimately depends upon the provisions itself, keeping in view the intendment of the enactment or of the context in which the word 'shall ' has been used and the mischief it seeks to avoid. Where the consequence of failure to comply with any requirement of a provision is provided by the statute itself, the consequence has to be determined with reference to the nature of the provision, the purpose of enactment and the effect of non compliance thereof. In its absence the conse quence has to be determined with reference to the effect of the non compliance of the provi sion of the legislature. Mere use of the word 'shall ' need not be given that connotation in each and every case that the provision would be invariably interpreted to be mandatory or directory. But given due consideration to the object, design, purpose and scope of the legislation the word shall be construed and interpreted in that design and given due emphasis. See.36 obligates the Sale Officer (Tahsildar) that he shall publish the date and place of sale. The object thereby is an invita tion to the public at large that the notified property would be brought to sale at that specified time and place and that they are invited to participate, if they so desire. To reiterate for emphasis and continuity that the object of the sale is to secure the maximum price and to avoid arbitrariness in the proce dure adopted before sale and to prevent under hand dealings in effecting sale and purchase of the debtor 's property. As a responsibility as sale officer and a duty towards the debtor, the sale officer should conduct the sale strictly in conformity with the prescribed procedure under the statute and the rules as the case may be. Such due and wide publicity would relieve the debtor from the maximum liability he owes and payable to the creditor. This responsibility is not only salutory to vouchsafe bonafides in the conduct of the sale officer but also to ensure fairness in the procedure adopted in bringing the property of the debtor to sale. Considered from this perspective the non compliance of Sec.35 i.e., omission to mention the place of sale world visit with deprivation of the property to the debtor 186 for an inadequate sale consideration due to absence of competing bidders. Thus, we hold that specification of the date and place of sale shall be mandatory. The forms either 7 or 7A are only procedural and they should be in conformity with Sec. 36. The form cannot prevail over the statute. The omission of specification of the place of sale in the form renders the sale not merely irregulate but also invalid. Equally the second objection is insur mountable. It is mandatory that "the balance of the sale amount shall be remitted within 30 days from the date of auction" and if not the earnest money deposited is liable to forfei ture. Confirmation of the sale should precede the deposit of the sale amount. 36 man dates remittance of the balance of 85% of the sale consideration within 30 days from the date of auction. It is obligatory on the purchaser to deposit the amount within that period unless he is prevented by an order of the court or tribunal from so making depos it. The 'non compliance renders the 15% depos it liable to forfeiture. Therefore, the con firmation of the sale without compliance is illegal. We hold that the sale is vitiated by manifest error of law and rightly set aside by the Addl. Collector, Salem (Appellate Authority). The High Court, both the learned Single Judge and the Division Bench committed menifest error of law in interfering with the order of the appellate authority. The appeal is accordingly allowed. The writ petition stands dismissed and that of the order of the Addl. Distt. Collector, Salem restored, but in the circumstances parties are directed to bear their own costs throughout. S.B. Appeal allowed.

The appellant was alleged to have misap propriated a sum of Rs. 12,163.50 [though acquitted of the charge of misappropriation] and for the recovery thereof his 13.07 acres of coffee estate was brought to sale under the Tamil Nadu Revenue Recovery Act, 1894. On March 30,1979 the sale by public auc tion was held by the Tehsildar. The first respondent purchased the said estate for a sum of Rs. 12,225 and deposited a sum of Rupees 2000 being 15% of the sale price. Under sec tion 36 of the Act, he should have deposited the balance consideration within 30 days from the date of the auction. This sale was con firmed on October 23,1981 and the balance amount was deposited on November 4, 1981. So the appellant filed an application to set aside the sale but the Revenue Divisional Officer overruled the objections and dismissed the application. On appeal to Additional District Collector on October 13, 1982, the sale was set aside. So the first respondent filed writ petition in the High Court and the single High Court Judge quashed the order of the Additional District Collector. The writ appeal by the appellant to the Division Bench was also dismissed. Hence the appellant came to this Court. The appellant urged that under section 36 of the Act it is mandatory that the date and place of sale 'shall ' be published in the Gazetee and that the publication did not mention the place of sale so the sale is invalid in law. It was further submitted that it was equally mandatory that the balance sale consideration of 85% should be deposited within 30 days from the date of sale which was done by the first respondent only on November 4, 1981 long after one year 182 and eight months of the date of sale and therefore illegal. While the first respondent contended that it was Form 7 and not Form 7A that would be applicable to the facts of the instant case and that Form 7 contains the place o[ sale and that it was complied with. Therefore, the said sale is not illegal. It was further submitted that the deposit was made after protracted correspondence and that the non deposit within 30 days from the date of sale is not illegal since the deposit was accepted by the authority. Therefore the confirmation of the sale is not illegal. Granting the special leave, dismissing the writ Petition, setting aside the Judgment of the High Court, and restoring the order of the Additional District Collector, the Court HELD: That in the instant case, the High Court has wholly misconceived section 36 of the Act. A reading of the said section mani fests that the word 'shall ' is mandatory in the context. The publication is an invitation to the intending bidders to prepare an partic ipate at the bid. Unless there is due publica tion of the date and the place of sale, the intending purchasers cannot be expected to run after the sale officer. The sale officer has a statutory duty and a responsibility to have the date and place of sale mentioned in the notice giving due, publication in terms of the Act and the Rules. Public auction is one of the modes of sale intending to get highest competitive price for the property and it also ensures fairness in actions of the public authorities or the sale officers who should act fairly objectively and kindly. Nothing should be suggestive of bias favouritism nepotism or beset with suspicious features of under bidding detrimental to the legitimate interest of the debtor. [184 F, G 1 85 A] Further it is settled law that the word 'shall ' be construed in the light of the purpose of the Act or Rule that seeks to serve. Even though the word 'shall ' be ordi narily mandatory but in the context or if the intention is otherwise it may be construed to be directory. The construction ultimately depends upon the provision itself. Considered from this prospective of non compliance of section 35 that is comission to mention the place of sale would visit the deprivation of the property to the debtor for an adequate consideration due to absence of competing bidders. Hence the specification of the date & place of sale 'shall ' be mandatory. The forms either 7 or 7A are only procedural and they should be in conformity with section 36. The form cannot prevail over the statute. The omission of specification of the place of sale in the form renders the sale not merely irreg ular but also invalid. [185 C; H 186 B] 183 Equally the second objection is insur mountable. It is mandatory that the balance of the sale amount shall be remitted within 30 days from the date of auction and if not the earnest money deposited is liable to forfei ture. Section 36 mandates remittance of the balance of 85% of the sale consideration within 30 days from the date of auction. It is obligatory on the purchaser to deposit the amount within the period unless prevented by an order of the Court or Tribunal. So the confirmation of sale without compliance is illegal and the sale is vitiated by manifest error of Law & rightly set aside by the Addi tional District Magistrate. The High Court has committed error in law in interfering with the order of the appellate authority. [186 B D]

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vil Appeals Nos. 1221 & 1222 of 1977. From the Judgment dated 20.1.1976 of the Andhra Pradesh High Court in Appeal Nos. 758 and 632 of 1975. Mrs. Shyamala Pappu and Ms. Indira Sawhney for the Appel lants. T.V.S.N. Chari for the Respondent. The Judgment of the Court was delivered by FATHIMA BEEVI, J. The appellants arc aggrieved that the High Court by the common judgment dated 20.1.1976 in two cases had substantially reduced on erroneous grounds the enhanced compensation allowed by the Subordinate Judge on reference under Section 18 of the Land Acquisition Act (for short the Act). Civil Appeal No. 1222 of 1977 relates to acquisition of Ac. 8.33 cents of land in Survey No. 2/1 of Dondaparthi village in pursuance to Notification under Section 4(1) of the Act published on 7.7.1966 for construction of quarters for the staff of Porl Trust. Civil Appeal No. 1221 of 1977 relates to acquisition of Ac.1.68 cents of land in Survey No. 2/2A of the same village in pursuance to the Notification published on 1.8.1968 for the purpose of formation of the national highway diversion road. The appellants claimed land value at the rate of Rs. 10 per sq. yard since the Land Acquisition Officer awarded only 0.88 paise per sq. yard. The learned Subordinate Judge determined the market value of the land at the rate of Rs. 11 per sq yard accepting as basis the value of land under the transactions evidenced by Exhibits A 1 to A 4, but granted the compensa 175 tion at the rate of Rs. 10 per sq. yard as the claimants themselves had claimed compensation at the rate of Rs. 10 per sq. yard. The State preferred appeal against the said judgment of the 'Subordinate Judge to the High Court of Andhra Pradesh. The High Court accepted Exhibits A I to A 4 as reflecting the value of land in the neighbourhood. It however following the decision of this Court in Tribeni Devi vs Collector, Ranchi, ; , that a deduction of 1/3 of the value is to be made when large extent of land is acquired under housing scheme, determined the market value of the appellants land at the rate of Rs. 6.50 paise per sq. yard and accordingly reduced the total compensation allowed by the Subordinate Judge. The learned counsel for the appellants contended before us that the High Court had erroneously applied the principle laid down in Tribeni Devi 's case (supra) without properly appreciating the nature of the land in question and the purpose for which it had been acquired. It was submitted that the land in question was fully developed and eminently suitable for being used as house sites and, therefore, there was no justification for making any deduction. It is also pointed out that even in respect of the land acquired for the purpose of formation of the road, the High Court wrongly proceeded on the basis that expenses have to be incurred for development and thus in awarding the compensa tion, the High Court wrongly applied principles of deduction of 1/3 of the value. The learned counsel has taken us through the relevant evidence and maintained that the learned Subordinate Judge had reduced the land value to Rs. 10 per sq. yard though the market value was higher at Rs. 11 per sq. yard only because the appellants had themselves limited the claim to Rs. 10 per sq. yard The learned counsel for the respondent maintained that the appellants ' land forms part of large tract acquired for the purpose of construction of houses, that the sale deed Exhibits A 1 to A 4 relate to small plots which are fully developed and when the transaction is compared, it is neces sary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that the High Court was right in making the deduction of 1/3 of the value in the facts and circumstances of the case. In awarding compensation in acquisition proceedings, the Court has necessarily to determine the market value of the land as on the date of the relevant Notification. It is useful to consider the value paid for similar land at the material time under genuine transactions. The market value envisages the price which a willing purchaser may pay under bona fide trans 176 fer to a willing seller. The land value can differ depending upon the extent and nature of the land sold. A fully de veloped small plot in an important locality may fetch a higher value than a larger area in an undeveloped condition and situated in a remote locality. By comparing the price shown in the transactions all variables have to be taken into consideration. The transaction in regard to smaller property cannot, therefore, be taken as a real basis for fixing the compensation for larger tracts of property. In fixing the market value of a large property on the basis of a sale transaction for smaller property, generally a deduc tion is given taking into consideration the expenses re quired for development of the larger tract to make smaller plots within that area in order to compare with the small plots dealt with under the sale transaction. This principle has been stated by this Court in Tribeni Devi 's case (supra). In Kaushalya Devi vs Land Acquisition Officer, ; , this Court observed at pages 912 913 as under: "When large tracts are acquired, the transac tion in respect of small properties do not offer a proper guideline . . . . In certain other cases this Court indicated that for determining the market value of a large property on the basis of a sale transaction for smaller property a deduction should be given. " We shall also refer to the observations of this Court in Administrator General of West Bengal vs Collector, Varanasi, ; "The principle that evidence of market value of sales of small, developed plots is not a safe guide in valuing large extents of land has to be understood in its proper perspec tive. The principle requires that prices fetched for small developed plots cannot directly be adopted in valuing large extents. However, if it is shown that the large extent to be valued does admit of and is ripe for use for building purposes; that building lots that could be laid out on the land would be good selling propositions and that valuation on the basis of the method of a hypothetical lay out could with justification be adopted, then in valuing such small, laid out sites the valua tion indicated by sale of comparable small sites in the area at or about the time of the notification would be relevant. In such a case, necessary deductions for the extent of land required for the formation of roads and other civic amenities; expenses of development of the sites by laying out roads, drains sewers, water and electricity lines, and the interest on the outlays for the period of deferment of the realisation of the price; the profits on the venture etc. are to be made. " 177 This Court has in a recent decision in Special Tahsil dar Land Acquisition, Vishakapatnam vs Smt. A. Mangala Gowri, 1991(2) Scale 301, following Tribeni Devi 's case pointed out as under: "It is to be noted that in building Regula tions setting apart the lands for development of roads, drainage and other amenities like electricity etc. are condition precedent to approve lay out for building colonies. There fore, based upon the .situation of the land and the need for development the deduction shall be made. Where acquired land is in the midst of already developed land with amenities of roads, drainage, electricity etc. then deduction of 1/3 would not be justified. In the rural areas housing schemes relating to weaker sections deduction of 1/4 may be justi fied. " The principle of deduction in the land value covered by the comparable sale is thus adopted in order to arrive at the market value of the acquired land. In applying the principle it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition, the only relevant factor. Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position. lf smaller area within the large tract is already developed and suitable for build ing purposes and have in its vicinity roads, drainage, electricity, communications etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified. The national highway runs very near to the proposed Port trust colony. The lands acquired already for the South Eastern Railway Staff Quarters lie to the southern side of the land under acquisition. The town planning trust road runs on the northern side of the land under acquisition. The colony is in the fast developing part of the municipal town. The plot of Ac. 1.68 cents in Survey No. 2/2A acquired for the formation of the diversion road is adjacent to built in area. The land involved in these cases is of even level and fit for construction without the necessity for levelling or reclamation. The High Court has itself conclud ed on the evidence that the lands covered by the acquisition are located by the side of the National Highway and the southern railway staff quarters with the town planning trust road on the north. The neighbouring areas are already de veloped ones and houses have been constructed, and the land has potential value for being used as building sites. Having found that the land is to be valued only as building sites and stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduc tion. It is not in every case that such deduction is to be allowed. Where the acquired land is in the 178 midst of already developed land with amenities of roads, electricity etc. , the deduction in the value of the compara ble land is not warranted. The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circumstances it would be permissible to take into account the price fetched by the small plots of land. If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a developed area with little or no require ment of further development, the principle of deduction of the value for purpose of comparison is not warranted. With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other ameni ties and is adjacent to a developed colony and in such circumstances it is possible to utilise the entire area in question as house sites. In respect of the land acquired for the road, the same advantages are available and it did not require any further development. We are, therefore, of the view that the High Court has erred in applying the principle of deduction; and reducing the fair market value of land from Rs. 10 per sq. yard to Rs. 6.50 paise per sq. yard. In our opinion, no such deduction is justified in the facts and circumstances of these cases. The appellants, therefore, succeed. In the result, the appeals are allowed and the respond ent is directed to pay the compensation as determined by the learned Subordinate Judge with interest and solatium in accordance with law. In the circumstances of the case, we make no order as to costs. G.N. Appeals allowed.

The appellants ' lands were acquired under the Land Acquisition Act. The appellants claimed land value at the rate of Rs. 10 per sq. yard, but the Land Acquisition Offi cer awarded compensation at the rate of Rs.0.88 per sq. yard. On a reference the Sub Judge determined the market value at Rs. 11 per sq. yard on the basis of certain com parable transactions, but granted the compensation at the rate of Rs. I0 as the appellants themselves had claimed only at that rate. On an appeal preferred by the Respondent State, the High Court determined the market value of the lands at the rate of Rs. 6.50 per sq. yard and reduced the total compensation, following the decision of this Court in Tribeni Devi vs Collector, Ranchi, AIR 1972 SC 141 that a deduction of 1/3 of the value is to be made when large extent of land is acquired under housing scheme. Aggrieved by the High Court 's decision, the appellants preferred the present appeals, contending that the High Court had erroneously applied the principle laid down in Tribeni Devi 's case without properly appreciating the nature of the land in question and the purpose for which it had been acquired. It was further contended that there was no justification for making any deduction since the land in question was fully developed and eminently suitable for being used as house sites. Even in respect of the land acquired for the purpose of formation of the road, it was argued, the High Court wrongly proceeded on the basis that expenses have to be incurred for development. On behalf of the Respondents, it was contended that the appellants ' lands form part of large tract acquired for the purpose of construction of 173 houses, that the other transaction based .on which compensa tion was decided by the Sub Judge, related to small plots of land which were fully developed and while comparing the transactions, it was necessary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that 1/3 of the value was rightly deducted. Allowing the appeals, this Court, HELD 1. The principle of deduction in the laud value covered by the comparable sale is adopted in order to arrive at the market value of the acquired land. In applying the principle it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisi tion, the only relevant factor. Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position. If smaller area within the large tract is already developed and suitable for building purposes and have in its vicinity roads, drainage, electricity, communications etc. then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified. [177 D]. Tribeni Devi vs Collector, Ranchi, ; , distinguished. Kaushalya Devi vs Land Acquisition Officer, ; ; Administrator General of West Bengal vs Collector, Varanasi, ; ; Special Tahsildar, Land Acquisi tion, Vishakapatnam vs Smt, A. Mangala Gown, ; , relied on. 2 In the instant case, the lands involved are of even level and fit for construction without the necessity for levelling or reclamation. Having found that the land is to be valued only as building sites and stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduction. [177 F H] 3. The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circum stances it would be permissible to take into account the price fetched by the small plots of land. If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a 174 developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted. With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possi ble to utilise the entire area in question as house sites. In respect of the land acquired for the road, the same advantages are available and it did not require any further development. [178 B,C).

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Appeals Nos. 713 to 715 of 1957. Appeals by special leave from the judgment and order dated May 25, 1956, of the Labour Appellate Tribunal of India (Lucknow Bench) in Appeals Nos. 111 272, 282 and 327 of 1955, arising out of an Award dated August 18, 1955, of the Additional Industrial Tribunal, Delhi. M. C. Setalvad, Attorney General for India, B. Sen and section N. Mukherjee, for the appellants. A. V. Viswanatha Sastri and Janardan Sharma, for the respondents. February 2. The Judgment of the Court was delivered by section K. DAS, J. These are three appeals by special leave. The appellant in all the three appeals is a company called Messrs. Lipton Ltd., London, having an office at Asaf Ali Road, New Delhi (hereinafter referred to as the Lipton, Ltd.). The respondents are the employees of the Delhi office of the said Lipton, Ltd. represented by the Lipton Employees Union (hereinafter referred to as the Union). On April 14, 1958, a petition was filed on behalf of the appellant for an amendment of the cause title of the three appeals, wherein it was stated that as a matter of internal arrangement the Board of Directors of the 153 Lipton Ltd., London, decided to separate the export side of its business from its internal trade in respect of its branch in India and on April 4, 1957, a separate sterling company called Lipton (India) Ltd., was incorporated in the United Kingdom and this new Company took over the internal side of the business in India on and from January 5, 1958, but the export side of the business continued to be a branch of the Lipton Ltd., London. Pursuant to the aforesaid arrangement, the employees of the Delhi office of the Lipton, Ltd., were notified of the formation of the new Company and on and from January 5, 1958, their services were transferred to Lipton (India) Ltd., on condition that their services would be treated as continuous, uninterrupted and on the same terms as before. On the aforesaid statements, the appellant made a prayer that the cause title of the three appeals should be amended by substituting Lipton (India) Ltd. in place of Lipton, Ltd. We directed that Lipton (India) Ltd. be added as one of the appellants without prejudice to either party on the merits of the case. Two of the appeals (Civil Appeals Nos. 713 and 714 of 1957) were consolidated by an order of this Court, and they raise certain common questions with regard to (1) fixation of grades and scales of pay of the respondent employees and (2) bonus for the year 195 1. The third appeal (Civil Appeal No. 715 of 1957) raises a somewhat different question with regard to overtime payment and is directed against an order of the Additional Industrial Tribunal, Delhi, dated October 15, 1955, by which the Tribunal made a modification in its award dated August 18, 1955, in respect of overtime payment. It will be convenient if Civil Appeal No. 715 of 1957 is dealt with separately from the other two appeals. It is necessary now to state very briefly some of the facts which have given rise to these three appeals. The Lipton, Ltd., is a company incorporated in England having its registered office in London. Its business in the United Kingdom consists of stores and groceries, including tea which represents only about 20 154 10% of its business there. Its operations in India are carried on by a branch with its head office in Calcutta. This branch, which may be conveniently called the Indian branch, has been operating in this country for more than 60 years. The company is principally interested in the sale of " packeted " tea throughout India together with small sales of imported tinned milk and also in the export of tea to all parts of the world. The Lipton, Ltd., does not own any tea gardens in India and has no financial interest in the producing side of the industry. All the teas which are sold in India or which are exported are purchased from producers in India, either through public auctions in Calcutta and Cochin or by private contract. It has factories in Calcutta, Allahabad and Conoor in which teas are blended and packed into retail packets for sale throughout India. It sells tea direct to retail dealers and, with relatively minor exceptions, does not operate through wholesalers. Dealers are supplied by the company 's own salesmen each of whom has a sales depot at which he maintains stocks of the company 's products. The salesman sells these teas at the company 's wholesale prices to dealers for cash and remits the cash through banking channels to Calcutta. The sales Organisation is controlled through six offices, one of which is located at Delhi. The Delhi office controls the salesmen and other employees employed in the Punjab, Delhi State, Rajasthan and Uttar Pradesh on its. business; but the Delhi office has no connexion with the export side of the business. So far as the export business is concerned, it consists of two different types of trade activities. In some foreign countries the Indian branch sells packet tea under the Lipton label on which it is able to make a profit; these profits appear in the accounts of the Indian branch, which are separately maintained and audited. This type of trade activity is mostly confined to Burma, Iraq, Iran and certain small Middle East countries. The greater part of the export trade, however, consists of purchases made at the Calcutta auctions on behalf of overseas buyers, who utilise the services of Lipton 's expert tea tasting staff in Calcutta 155 to buy tea on their account at the auctions and the Indian branch is remunerated for this service by the payment of a commission of one per cent. The Indian branch has no subscribed capital nor any reserves. A. W. Samuel, Administrator, Lipton, Ltd., thus explained the position with regard to the capital of the Indian branch in his evidence: " Our Company has no subscribed capital in India nor any reserves. The capital used in India is money advanced from the company 's fund in England, and the amount of this advance at the balance sheet date is shown as the balance of the current account with the Liptons Ltd., London. We have also to resort to overdraft on the local banks to meet the working capital demand in India ". It appears that an account is maintained which is known as the London General Account and the capital which enables the Indian branch to operate in India is recorded as the balance of the current account in the Indian books and to determine the amount of capital employed in India a daily average of the current account has to be taken and the working capital of the Indian branch is the amount by which the fixed current assets exceed the total liabilities. The Delhi office of the Indian branch employs peons, sweepers, van workers, godown workers, village salesmen, drivers,. junior clerks, godown keepers, senior clerks, stenographers, divisional salesmen and other categories of workers, details whereof need not be set out in full at this stage. The case of the Union was that as far back as June, 1951, the workers of the Delhi office had made a representation for an increase in pay; the representation was repeated in April, 1952. As the management did not accede to their request a union of Lipton employees was formed in September 1953. This Union framed a charter of demands and submitted it in December, 1953. The charter of demands consisted of a large number of items and as the management contended that it %,as not in a position to meet the demands, certain conciliation proceedings followed. They, however, came to nothing and on October 1, 1954, the industrial dispute 156 between the Lipton, Ltd., and the Union was referred to the Additional Industrial Tribunal, Delhi, for adjudication. The reference set forth in a sub joined schedule the matters upon which adjudication was necessary, and the schedule contained twenty terms of reference out of which the two items with which we are now concerned related to (a) fixation of grades and scales of pay including the question whether the new scales should be given retrospective effect from January 1, 1953, and (b) bonus for each of the years 1951, 1952 and 1953. After hearing the parties the Tribunal made its award on August 18, 1955. It disallowed the claim of bonus, but as to the fixation of grades and scales of pay it allowed an increase of about 20 per cent. to all workers over their present wages and proportionate increase in the dearness allowance, details whereof we shall state at a later stage. As to overtime payment which was item No. 8 of the terms of reference the Tribunal said: " Since the company is allowed by law to take 48 hours work in a week from its employees, it is only fair that if a worker puts in over time work in any week within a total of 48 working hours, he should be only paid at the single rate for all over time work that he puts in between 39 and 48 hours in the week. If the over time work done by the worker brings his total working, hours during the week to more than 48 hours, any excess over time work above 48 hours should be paid at double the rate. I direct accordingly. " It may be stated here that there was a dispute about the working hours also and the Tribunal changed the working hours from 9 30 a.m. 5 p.m. to 10 a.m.5 p.m. on week days with half an hour 's interval for lunch, and 10 a.m. to I p.m. on Saturdays thus bringing the total to 36 hours in a week,. The question of over time arose only if a workman was asked to Work in excess of the working hours fixed by the Tribunal. On October 12, 1955, the Union made an application in which it stated that the figure " 39 " occurring in paragraph 24 of the award relating to over time payment was obviously a mistake for " 36 "; because the 157 learned Tribunal had fixed. in paragraph 23 of the award that the working hours of a workman should be 36 hours a week. The learned Tribunal considered this application without any notice to the present appellant and corrected the error by amending the figure 39 to 36. The Tribunal proceeded on the footing that the mistake was a clerical error due to an accidental slip which could be corrected under r. 23 of the Industrial Disputes (Central) Rules, 1947. Against the award of the Industrial Tribunal three appeals were taken to the Labour Appellate Tribunal (Lucknow Bench). The two main appeals before the Appellate Tribunal, namely, No. 272 of 1955 and No. 282 of 1955, were filed by the Lipton, Ltd., and the Union respectively and related to the various items of the terms of reference on which the Industrial Tribunal had given its decision. The third appeal, No. 327 of 1955, related to the subsidiary matter of over time payment regarding which the Industrial Tribunal had amended its award. So far as the two items with which in Civil Appeals Nos. 713 and 714 of 1957 we are now concerned, the Labour Appellate Tribunal in its decision dated May 25, 1956, upheld the decision of the Industrial Tribunal as respects fixation of grades and scales of pay comprised in the term of reference numbered 1 (a); it also upheld the decision of the Industrial Tribunal to give retrospective effect to the new scales of pay from January 1, 1954, which was covered by the term of reference numbered I (b). As to bonus, which was item 4 of the terms of reference, the Appellate Tribunal upheld the decision of the Industrial Tribunal with regard to the years 1952 and 1953 but for 1951 it awarded an extra two months salary as bonus for that year in addition to the bonus of one month 's salary which the Lipton, Ltd., had already granted ex gratia to the workmen. As to the subsidiary appeal relating to the over time payment, the Appellate Tribunal agreed with the view of the Industrial Tribunal that there was an error in computing the working hours and the error being of a clerical nature, it was open to the Tribunal to correct it. From the decision of the Labour Appellate Tribunal 158 in the three appeals in question, the appellant obtained special leave to appeal to this Court on June 27, 1956, and in pursuance of the order of this Court granting such special leave, the present appeals have been preferred. Civil Appeal No. 715 of 1957. It is now convenient to dispose of Civil Appeal No. 715 of 1957. We have no doubt in our mind that the error in computing the working hours with regard to over time payment was due to an 'accidental slip in making the calculation; it was nothing but a clerical error which the Industrial Tribunal was entitled to correct even without notice to the appellant. The learned Attorney General who appeared for the appellant in these three appeals has not pressed Appeal No. 715 of 1957. This appeal must accordingly be dismissed with costs. Civil Appeals Nos. 713 and 714 of 1957. We now turn to the other two appeals, namely, Civil Appeals 713 and 714 of 1957. We have already stated that the only points which survive for decision are those relating to items 1(a), 1(b) and 4 of the terms of reference. These items relate to fixation of grades and scales of pay, whether retrospective effect should be given to the new scales of pay, and bonus for 1951. The other items of the award relating to City compensatory allowance, leave, holidays, etc., have not been challenged before us. We are, therefore, saying nothing about those items of the award, which must necessarily stand. It may be made clear, however, at this stage that one of the points taken before the Industrial Tribunal on behalf of the Lipton, Ltd., was that the Industrial Tribunal had no jurisdiction to make an award in respect of employees of the Delhi office who were employed outside the State of Delhi. This point of jurisdiction was decided against the appellant and the Industrial Tribunal pointed out that all the workmen of the Delhi office, whether they worked in Delhi or not, received their salaries from the Delhi office; they were controlled from the Delhi office in the matter of leave, transfer, supervision, etc., and, therefore, the Delhi State Government was the appropriate Government within the meaning of section 2 of the Industrial 159 Disputes Act, 1947, relating to the dispute which arose between the Lipton, Ltd., and the Union and under section 18 of the said Act the award made by the Tribunal was binding on all persons employed in the Delhi office. The Appellate Tribunal upheld the decision of the Industrial Tribunal on this point and though this question of jurisdiction was raised in the appeals before us, it was not seriously pressed by the learned AttorneyGeneral. We are of the view that the Industrial Tribunal had jurisdiction to adjudicate on the dispute between the Lipton, Ltd., and its workmen of the Delhi office. Now, we go on to the two main points urged on behalf of the appellant. We take up first the question of bonus. Item 4 of the terms of reference related to bonus and the claim of the Union was made in two parts. Item 4 reads thus: " Bonus: (a) Whether every workman be, paid bonus at the rate of 5 months ' salary for each of the years 1951, 1952 and 1953 and what other directions are necessary in this respect ? (b) Whether special bonus equivalent to three months salary should be paid to all workmen in honour of the company 's Diamond Jubilee celebration for the year 1953 ? " Before the Industrial Tribunal the claim of the Union was that the total global profits of the Lipton, Ltd., should be the basis for determining the claim to bonus ; the contention on behalf of the Lipton, Ltd., was that the profits of the Indian business only should be taken into account in assessing any available surplus for the payment of bonus. The Industrial Tribunal held that as both labour and capital contributed to the earnings of an industrial concern, labour must have its legitimate share of the profits to which it has contributed; since, however, the employees of the Lipton, Ltd., in India do not by any stretch of reasoning contribute to the profits which accrue to the Lipton, Ltd., in respect of its trading activities outside India, the employees in India cannot claim bonus on account of any profits which the Lipton, Ltd., derive from its ex India business. On this footing the 160 Industrial Tribunal considered the question of bonus and held that for 1951 there was no available surplus for distribution as bonus to the employees in India in accordance with the formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowner 's Association, Bombay vs Rashtriya Mill Mazdoor Sangh (1) generally though not completely approved by this Court in Muir Mills Co ' Ltd. vs Suti Mills Mazdoor Union, Kanpur (2). For 1952 and 1953 the claim of the Union for bonus, the Industrial Tribunal held, was still weaker, because in those years there was still less available surplus for distribution as bonus to its workers, and so far as the second part of the claim of the Union, namely, Diamond Jubilee bonus, was concerned the Industrial Tribunal rejected it outright. The Labour Appellate Tribunal substantially affirmed the decision of the Industrial Tribunal and gave several reasons why the global profits of the Lipton, Ltd., could not be taken into account for the payment of bonus to its workers in India. After having given those reasons, the Labour Appellate Tribunal referred to the auditors ' report dated March 17, 1952, with regard to the profit and loss account and balance sheet of the Indian business as on January 5, 1952. In that report which related to the year 1951 it was stated that the value of the stocks of tea held at the end of 1951 had been written down below cost by Rs. 9,93,824 5 3. The auditors ' report then said: " We estimate the net realisable value of the total stocks of tea as on January 5, 1952, to be in excess of their cost and, therefore, in our opinion, such stocks have been undervalued to the extent of the above reduction below cost. " Relying on this report the Labour Appellate Tribunal added back Rs. 9,93,824 to the available surplus of Rs. 9,66,654 which the profit and loss account of the Indian business for the year 1951 showed. Adding the two figures the Labour Appellate Tribunal opined that the available surplus at the end of 1951 was Rs. 19,60,478. After deducting therefrom the (1) (2) ; 161 legitimate prior charges on account of (a) rehabilitation, (b) a four per cent. return on capital and (c) one month 's bonus already paid to the workers, the Labour Appellate Tribunal came to the conclusion that there was a clear available surplus of Rs. 4,11,478 for distribution of extra bonus over and above the bonus of one month 's salary. which the Lipton, Ltd., had already paid to its workers. It has been contended before us, and rightly in our opinion, that the Labour Appellate Tribunal committed a manifest error with regard to the sum of Rs. 9,93,824 and odd. It is true that the auditors in their report referred to the under valuation of the stock of tea available at the end of 1951 by a sum of Rs. 9,93,824 and odd. An explanation of such undervaluation was given in the written statement of the Lipton, Ltd., dated February 8, 1955. It was stated therein: " It is a well recollected fact and the Court will not need evidence in support of this that the tea market dropped rapidly and in a catastrophic fashion to,wards the end of 1951. As a result of this the Company apprehended severe losses on the stocks which it was carrying and provision for this loss was made in the 1951 accounts by an adjustment to the value of stocks of tea on hand at the end of December, 1951. The amount of this adjustment was Rs. 9,93,824. As a result of this, the profits made during 1951 were understated in the company 's accounts and overstated in the accounts for 1952. It should be noted that the Income tax Department insisted that these profits were made in 1951 and not in 1952 and the Company was taxed accordingly. " What is worthy of note is that when the Income tax Department insisted that the sum of Rs. 9,93,824 should be treated as the profits of 1951, the said amount was added back in the summarised profit and loss account of the Indian branch and the available surplus of Rs. 9,66,654 was shown therein after having taken into consideration the sum of Rs. 9,93,824. This is clear from the summarised profit and loss account 21 162 of the Indian branch. It is clear, therefore, that the 1951 profit and loss account took into consideration the sum of Rs. 9,93,824 and after adding back that sum to the profits of 1951, the available surplus of Rs. 9,66,654 was arrived at. The Labour Appellate Tribunal was, therefore, manifestly in error in adding back the sum of Rs. 9,93,824; because that amount had already been added back in arriving at the available surplus of 1951. Thus, the main reason which the Labour Appellate Tribunal gave for its decision to award the payment of extra bonus for 1951 disappears, and it is not disputed that if the available surplus for 1951 was only Rs. 9,66,654, then after making the necessary deduction for prior charges, nothing would be left for payment as extra bonus in 1951 to the workers in India. So far as the other two years, 1952 and 1953, are concerned, it is unnecessary to consider the profits of those two years, because there is no appeal before us on behalf of the Union. On behalf of the Union, however, it has been very strongly contended that the bonus for 1951 as awarded by the Labour Appellate Tribunal can be justified, if the global profits of the Lipton, Ltd., are taken into consideration, and it has been argued before us that there is no reason why the Lipton, Ltd., should not be treated as one integrated industry which has trading activities in various countries and, for the purpose of the payment of bonus, why the total global profits of the Lipton, Ltd., should not be taken into consideration. We do not think that the Union is justified in asking for bonus for a particular year on the basis of the world profits of the Lipton, Ltd. The true nature of a claim for bonus has been the subject of many decisions in Labour Tribunals and Courts. It has been judicially recognised that bonus is not deferred wage, and the justification for a demand of bonus as an " industrial claim " arises when wages fall short of the living wage and the industry makes sufficient profits to which both labour and capital have contributed. Substantially, the claim for bonus is a claim which is paid out of the available surplus from the profits of an 163 industrial undertaking, to which both labour and capital have contributed. This aspect of bonus was considered in. Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur (1). It has also been said in some cases that bonus is a temporary and partial filling up of the gap that exists between a living wage and the actual wage paid: where the goal of living wage has been attained, bonus is a mere cash incentive to greater efficiency and production, but where an industry has not the capacity to pay a living wage or its capacity varies or is expected to vary from year to year so that the industry cannot afford to pay a living wage, the payment of bonus may be looked upon as a temporary satisfaction, wholly or in part, of the needs of the employees. Learned counsel for the Union has emphasised this latter aspect and has contended that there is nothing unfair in considering the global profits of the Lipton, Ltd., in awarding a temporary satisfaction, in part, of the needs of its Indian employees. We do not think that it is necessary or advisable to lay down any inflexible, general rule as to the basis of a claim for bonus by some of its employees in an industrial undertaking which carries on trade activities in several countries or even in different parts of the same country. So far as foreign countries are concerned, many considerations such as restrictions on foreign remittances and other trade restrictions may have to be taken into account in determining the question, as in Ganesh Flour Mills vs Employees of Ganesh Flour Mills (2). There are a number of decisions of Labour Tribunals, most of which were noticed in Ganesh Flour Mills Co. Ltd. vs Employees of Ganesh Flour Mills (2), where a distinction has been made between a parent concern and subsidiary concerns or even between different units of the same concern, and, speaking generally, the test laid down for the payment of bonus in such cases is (1) if the different units are so connected together or integrated that the payment of bonus to one section of employees will violate the principle that all workers should share in the prosperity to which they have jointly contributed, or (2) the (1) ; (2) A.I.R. 1958 S.C. 382. 164 different units are so separated or unconnected that the trade activity of one and the contribution of labour made in the profits thereof has no necessary connexion with the trade activity and profits of the other units. In the former case the undertaking has been treated as a whole as in Burn and Co., Calcutta vs Their Employees (1); and Baroda Borough Municipality vs Its Workmen(2) ; in the latter, it has been held that each unit must rest its claim for bonus on the profits made by that unit. Whether a particular case comes under the former category or the latter must depend on its own facts and circumstances, and we may readily agree that the more keeping of separate accounts may not in all cases be the proper criterion for determining whether the different units are integrated or not. For the purpose of these appeals it is sufficient, however, to state that in view of the findings arrived at by the Tribunals below, it will be unfair and unjust to grant bonus to the Indian workers on the global profits of the Lipton, Ltd. The Tribunals below have clearly found that the Indian workmen do not in any way contribute to the profits which the Lipton, Ltd., derive from its ex India business. As a matter of fact, even the nature of the trade activity is not quite the same ; tea represents only about 10 per cent. of the trading activities of the Lipton, Ltd., in the United Kingdom, whereas tea is the main commodity of the trading activity of the Indian branch. The Indian branch maintains separate accounts which have been audited and accepted by the Income tax authorities as showing the profit and loss of the Indian branch of the business. The Labour Appellate Tribunal has very clearly found that though, at the relevant time, the Lipton, Ltd., was one legal entity and the capital of the Indian branch came from London, the Indian branch was treated as a separate entity for all practical purposes. It said: " Lipton, London never interferes with the trading operations of Lipton, India, in India. Lipton, India buys vast quantity of tea amounting to millions (1) ; (2) ; 165 of tons at auctions in India and sells the same loose or in packets at a profit in the markets of India. Profits thus made go entirely to the credit of the Indian concern. No part of the profits is diverted to England. Lipton, India also purchases tea for export. Trading results of Lipton, India must be regarded to be restricted to the earning of commission on tea exported and returns on sale of tea loose or in packets in the internal markets in India. Lipton, India has got ,to pay income tax to the Government of India on the basis of its earnings on those two heads. Workmen of the Indian Organisation have to work mainly for purchase of tea at auctions in India, for sale of tea at profit in Indian markets and for export of tea on commission to a lesser extent. Therefore, the returns on these heads are the only things upon which the staff of the Indian Organisation may depend for bonus. " In the appeals before us the claim for bonus was made really on the basis of an available surplus of profits, and we agree with the Labour Appellate Tribunal that the Indian workers can claim bonus if there is an available surplus of profits out of the Indian business. In the circumstances in which the Lipton, Ltd., operated in India at the relevant time, it would be unjust to award bonus to the Indian work men on the basis of the global profits of the Lipton, Lid. It is not disputed that the Lipton, Ltd., is a very big Organisation and has huge reserves which were built up in previous years out of its world profits. There is no evidence to show to what extent, if any, the Indian business contributed to those profits. On the finding of the Labour Appellate Tribunal that no part of the profits made in India is diverted to England and on the further finding that the Indian business depends on its own trading results, we are of the view that the Tribunals below correctly held that the global profits of the Lipton, Ltd., could not be the basis for awarding bonus to its Indian workmen. There was some argument before us as to whether the 1% commission which the Indian branch earned on the export of tea correctly represented the proper remuneration payable to the Indian business. That, 166 however, is a question which we do not think is open to enquiry in the present appeals. The Income tax authorities accepted as correct the returns of the Lipton, Ltd., as to their Indian business. It was not suggested that anything more than 1% was in fact taken as commission by the Indian branch, or that the accounts were " cooked " in that respect. Whether the 1% commission was the normal market rate of commission for purchases on behalf of overseas buyers was not investigated ; on the contrary, the accounts filed by the Lipton, Ltd., in this respect were accepted as correct. That being the position, it is not open to the respondent to contend that the available surplus should be determined on mere speculation as to what the Indian branch should have earned in the export side of its business. On a consideration of all the relevant factors, we are of the view that the Labour Appellate Tribunal was in error in awarding an extra two months ' bonus for 1951 and the decision of the Industrial Tribunal was correct. Therefore, the award in so far as it directs the payment of extra two months ' bonus for 1951 must be set aside. We now go to the more difficult question of fixation of grades and wages. What the Union demanded in the matter of fixation of grades and scales of pay will appear from the terms of reference. These terms were: " Fixation of grades and scales of pay: 1(a) Whether the following pay scales should be adopted and what directions are necessary in this respect: Peon, Sweeper, Van Mazdurs and God . 60 3 90 4 130 5 155. own Mazdurs. Village salesmen. 70 5 120 7 1/2 195 10 245. Drivers. . .Rs. 90 71/2 150 10 250 15 325. Junior Clerks, Typ ists, Salesmen and Assistant Godown. 90 71/2 150 10 250 15 325. Keepers. Godown Keepers. 120 10 200 12 320 20 460. 167 Senior Clerks, Steno graphers, Compto. . 150 10 250 15 400 20 500. meter operator and Div. Salesmen. (b) Whether pay scales as stated in 'a ' above should come into effect retrospectively from 1 1 53 and what should be the method of adjustments while fixing the actual pay in the revised scale? " The Industrial Tribunal gave an increase of 20% to all workers and set out in tabular form the category of workers, their present grades, and the revised grades which the Tribunal was allowing on the basis of a 20% increase. It is necessary to set out the tabular form here: "CATEGORY PRESENT REVISED GRADE GRADE Peons, Sweepers, Van Mazdoors and Godown Mazdoors. 27 2 45 35 2 55 Village Salesman. 40 0 50 50 2 60 Drivers. 65 3 95 78 3 114 Junior Clerks and Typists. 70 5 125 84 6 150 Salesman. 50 0 75 60 5 90 Godown Keepers Gr. 1 70 5 130 84 6 150 2 125 8 200 150 9 240 3 195 10 235 230 10 280 Senior Clerks and Comptometer Operators. 120 8 200 140 10 240 Stenographers. 125 8 205 150 10 240 Divisional Salesman 80 0 125 100 10 150. " As to the date from which the revised grades were to take effect, the Tribunal directed that they should have retrospective effect from January 1, 1954, instead of January 1, 1953, as claimed by the Union. This direction the Tribunal gave because the Union had presented its demands to the Lipton, Ltd., for the first time towards the end of December, 1953. The Tribunal also gave certain directions as to how the present employees should be brought into the 168 new scales and what adjustments should be made therefor. The Tribunal proceeded on the footing that the existing wage structure, though not far below what it called the minimum fair wage, was far below the standard of a living wage, the progressive attainment of which (the Tribunal said) is the aim of all labour laws. The Tribunal then considered the question of financial capacity of the Lipton, Ltd., to bear a higher wage structure and expressed itself as follows : " Since as remarked before, the existing wage level of the company 's employees cannot be said to be far below the minimum fair wage level obtaining in this country, this wage level can be increased only if it can be found that the company is in a financially sound position to bear the additional burden. This again brings us face to face with the question whether it is the company 's capacity to pay on an all world basis that should be considered for this purpose or only the prosperity of its Indian branch. So far as bonus is concerned, since bonus according to the latest theory represents a due share of the labour in the profits of business so largely contributed to by it, profit accruing from foreign business does not come into the picture in distributing bonus. The same principle cannot be extended to the fixing of the wage level of the workers for all the employees in India are of course employees of the parent company. . . . . The company 's global resources cannot, therefore, be disregarded in determining its capacity to pay. At the same time, the company 's overall balance sheet and state of business cannot furnish the sole criterion for the fixing of the upper limit of the fair wage in India, for if a burden is imposed upon the company which is out of all proportion to the income that it derives from the business in India, the company may very well be tempted to close down its business in India and employ the capital thus released elsewhere. No one can be happy over a situation like this, the company 's employees least of all. While, therefore, the company 's global capacity to pay cannot be kept 169 out of consideration in fixing the wage level of its Indian employees, any increase in the wages cannot be granted on a level that would not leave it worth while for the company to continue its business in India. In other words, while the company 's overall prosperity may be considered in fixing the wage level in India, I should see to it that the increase should not be such that it drives the company out of India altogether. " The Tribunal pointed out that according to the last balance sheet filed in the case the share capital of the Lipton, Ltd., amounted in 1954 to pound 2,75,000 (but the balance sheet however shows pound 2,500,000) while the reserve capital stood at pound 3,60,417. The Tribunal expressed the view that having regard to its global resources, the Lipton, Ltd., was financially able to bear a slightly higher wage structure in order to bridge the gap, in part at least, between the existing wage structure and the living wage standard. The Tribunal also referred to the circumstance that though the Lipton, Ltd., had incurred losses in 1949 and 1950, it bad turned the corner in 1951 and the Company having overhauled its system of sales, there was a rea sonable expectation of larger profits in future years. The Tribunal said that in the course of arguments before it, it put to the parties whether an overall increase of five lakhs of rupees in the wage structure on an all India basis could be borne by the company. The Tribunal then said: " Mr. Samuel was prepared to accept this additional burden on the condition that in future there will be no liability on the Company to, pay bonus to their workers on an ex gratia basis, which they have been paying so far to their workers every year at the rate of one month 's basic salary." On the aforesaid grounds, the Tribunal came to the conclusion that the Lipton, Ltd., could easily stand an additional burden to the tune of five or six lakhs of rupees over the wages and dearness allowance at present paid to its employees all over India, and as the total annual wage bill of the Indian workmen was 22 170 in the neighbourhood of about twenty lakhs, an increase of 20% allowed to all workers over their present wages and proportionate increase in the dearness allowance would not exceed six lakhs. On this basis the Industrial Tribunal gave its award. The Labour Appellate Tribunal substantially affirmed the reasons given by the Industrial Tribunal and said that the two questions which arose for determination were (1) whether the existing scales of pay required revision and (2) whether the revised scales as fixed by the Industrial Tribunal were unwarranted and beyond the financial capacity of the Lipton, Ltd. Both these questions the Appellate Tribunal answered in favour of the respondent workmen. In the appeals before us, the learned AttorneyGeneral appearing for the Lipton, Ltd., has very strongly contended that the reasons given by the Tribunals below for a revision of the wage structure are unsound in principle and unjustified on facts ; he has particularly laid stress on the contradiction involved in taking the global financial resources of the Lipton, Ltd., in support of an increase in wages while holding that the Indian branch is a separate entity dependent on its own profits for the payment of bonus. He has also submitted that the financial resources of the Indian branch do not show any capacity to pay higher wages; nor was there, according to him, any reliable evidence to show that the existing wage structure required revision if it was compared to the wage structure in similar industries in the Delhi region. He pointed out that the Tribunal was wrong in thinking that the Lipton, Ltd., turned the corner in 1951 and that there was a reasonable expectation of larger profits in future years, and in support of his contention, he referred to the appellant 's statement of the case, wherein the appellant stated in the following chart from the profit and loss figures of. the Indian branch from 1949 to 1957 in the context of its average capital: 171 1949 1950 1951 1952 1953 1954 1955 1956 1957 (in lakhs of rupees) 1 2 year. Average Capital (re presenting 162 158 167 209 195 235 245 193 165 Head office Current Ac count). Net Profit (after taxa 8.2 3.6 2.4 6.3 7.08.2 2.8 10.6 6.6 tion) (loss)(loss) (loss) (loss) Percen tage of Net Profit/Loss 5.1 2.3 1.4 3.0 3.6 3.5 1.0 5.5 3.6 to the Aver (loss) (loss) (loss) (loss) age Capital The learned Attorney General then referred to the alleged admission of Samuel as to the capacity of the Lipton, Ltd., to bear an additional burden of about five lakhs and drew our attention to the affidavit of section K. Choudhury, personnel officer of the Lipton Ltd., made before the Appellate Tribunal, in which it was stated that Samuel never agreed that the appellant was able to bear an additional burden of five lakhs in the wage structure. On these submissions, the learned Attorney General has very strongly contended that the Tribunals below were wrong, in principle as well as on facts, in disturbing the present wage structure. We think that, in the main, three questions arise for consideration: (1) were the Tribunals below wrong in having regard to the global financial resources of the Lipton Ltd., in fixing the wage structure whereas for the payment of bonus the profits of the Indian branch only were taken into consideration; (2) did the existing wage structure require revision and was there any reliable evidence to show the wage structure of any comparable industry in the same region, on the assumption that the capacity to pay should be gauged on the industry cum region basis; and (3) has Lipton Ltd., financial capacity to bear the additional burden on its Indian resources ? 172 It is necessary first to state that there is a distinction between bonus and wage a distinction to which we had earlier adverted in this judgment. Bonus comes out of profits and can claim no priority over dividend or other prior charges; bonus is paid if after meeting prior charges, there is an available surplus. Wages stand on a somewhat different footing; wages primarily rest on contract and are determined on a long term basis and are not necessarily dependent on profits made in a particular year. The distinction between the two has been adverted to in two recent decisions of this Court: Messrs. Crown Aluminium Works vs Their Workmen (1) and Express Newspapers (Private) Ltd. vs The Union of India (2). In the Crown Aluminium Works (1) this Court has observed: " The old principle of the absolute freedom of contract and the doctrine of laissez faire have yielded place to new principles of social welfare and common good. Labour naturally looks upon the constitution of wage structures as affording ' a bulwark against the dangers of a depression, safeguard against unfair methods of competition between employers and a guarantee of wages necessary for the minimum requirements of employees '. There can be no doubt that in fixing wage structures in different industries, industrial adjudication attempts,. gradually and by stages though it may be, to attain the principal objective of a welfare state to secure 'to all citizens justice, social and economic To the attainment of this ideal the Indian Constitution has given a place of pride and that is the basis of the new guiding principles of social welfare and common good to which we have just referred. " In so far as bare minimum wage is concerned, it has been held that no industry has the right to exist unless it is able to pay its workmen at least a bare minimum wage; in other words, minimum wage is the first charge on an industry. In the later decision of the Express NewsPapers (Private) Ltd. (2) the three concepts of the minimum wage, fair wage and living wage have been examined, and it has been pointed out that (1) ; , 660. (2) 173 the content of the expressions " minimum wage ", " fair wage " and " living wage " is not fixed and static; it varies and is bound to vary from time to time. The present case is not one of payment of the minimum wage; it is a case of payment of a fair wage which still falls short of a living wage. For the payment of a fair wage as for a living wage, the financial capacity of the industry is undoubtedly a relevant consideration. The question before us is how is the financial capacity of the Lipton, Ltd., to be judged? The question of the capacity of the industry to pay a fair wage has been considered in the Express Newspapers (Private) Ltd. (1) (at p. 89) and the following observations are apposite " The capacity of industry to pay can mean one of three things, viz., (i) the capacity of a particular unit (marginal, representative or average) to pay, (ii) the capacity of a particular industry as a whole to pay or (iii) the capacity of all industries in the country to pay. The Committee on Fair Wages had said (pp. 13 15 of the report) : " In determining the capacity of an industry to pay, it would be wrong to take the capacity of a particular unit or the capacity of all industries in the country. The relevant criterion should be the capacity of a particular industry in a specified region and, as far as possible, the same wages should be prescribed for all units of that industry in that region. " This is known as the industry cum region basis for the fixation of wages. In the Express Newspapers (Private) Ltd. (1) this Court has laid down the following principles for the fixation of wages (at p. 92): " The principles which emerge from the above discussion are: (1) that in the fixation of rates of wages which include within its compass the fixation of scales of wages also, the capacity of the industry to pay is one (1) 174 of the essential circumstances to be taken into con sideration except in cases of bare subsistence or mini. mum wage where the employer is bound to pay the same irrespective of such capacity; (2) that the capacity of the industry to pay is to be considered on an industry cum region basis after taking a fair cross section of the industry; and (3) that the proper measure for gauging the capacity of the industry to pay should take into account the elasticity of demand for the product, the possibility of tightening up the Organisation so that the industry could pay higher wages without difficulty and the possibility of increase in the efficiency of the lowest paid workers resulting in increase in production considered in conjunction with the elasticity of demand for the product no doubt against the ultimate background that the burden of the increased rate should not be such as to drive the employer out of business. " We do not think that it is necessary to decide in the present case whether the Tribunals below were right in having regard to the global resources of the Lipton, Ltd., in the matter of the revision of the wagestructure; because we consider that on an application of the principle of industry cum region, the revision of the wage structure made by the Tribunals below cannot be said to be unjustified on the financial resources of the Lipton, Ltd., as disclosed by its trading results in India. The learned Attorney General has referred to certain larger considerations: he has suggested that if the global resources of a company like the Lipton, Ltd., which operates in several countries are taken into consideration in determining the wage structure, it way result in disparity of wages in different regions giving rise to industrial unrest and it may also have the effect of stopping new industries in this country and thereby increase unemployment. These are matters which may require serious consideration in a more appropriate case; but in the present case we may examine the problem from the narrower point of view, namely, the trading results in India if the Lipton, Ltd. We may first. dispose of a subsidiary but connected 175 point. In the Industrial Tribunal the case proceeded on the footing that the Lipton, Ltd., had a uniform system of wages in India and if the wage structure of the Delhi employees was revised it would mean revising the wage structure of the employees in other Indian offices as well. It was further suggested that if the wage structure was uniformly revised at all other places, then the cost of the increase in wages taken along with the cost of other reliefs granted by the Industrial Tribunal, would be much more than five or six lakhs. We do not think that this would be a good ground for setting aside the award. The Industrial Tribunal, Delhi, had jurisdiction to make an award in respect of the employees of the Delhi office only ; it had no jurisdiction to make an all India award. Moreover, if the true principle for fixation of wages is region cum industry, then there is no reason why the Delhi award should automatically apply to all the other regions. It has not been disputed before us that the existing wage of the Delhi employees is far below the living wage. The first question is was there any reliable evidence to show that in comparable industries in the same region, the wages were higher and, therefore, the wage structure required revision to the extent allowed by the Industrial Tribunal. On behalf of the Union evidence was given about the scales of pay of employees in the Delhi office of a number of industrial undertakings, such as the Standard Vacuum Oil Company, Thomas Cook (Continental) Overseas, Burma Shell, Lever Brothers (India) Ltd. and Associated Companies, and Marshall Sons and Co. (India) Ltd. On behalf of the appellant it has been contended that none of the above are comparable industries; some are oil companies, some engineering concerns and some manufacturing concerns. On behalf of the Union, it has been pointed out that so far as the drivers, sweepers, peons, clerks, godown keepers, typists, stenogra phers and the like are concerned, and these form the bulk of the employees, their nature of work is about the same in all the aforesaid industries and, therefore, there was a basis for comparison on which the 176 Tribunals below could proceed. We are of the view that it is impossible to say in this case that there was no evidence on which the Tribunals could proceed to revise the wage structure; on the contrary there was evidence accepted by the Tribunals below which justified a revision of the wage structure. The Appellate Tribunal also referred to the scales of pay obtaining in Brooke Bond, India, and opined that the appellant 's scales of pay were lower than the Brooke Bond scales. This opinion of the Appellate Tribunal has been challenged before us; firstly, it has been contended that though Brooke Bond has a similar trading activity in tea, it is not a comparable industry because it owns tea gardens in India; secondly, it has been pointed out that no evidence of the Brooke Bond 's scales of pay was given and the opinion of the Appellate Tribunal was a mere surmise. It appears that no evidence was given before the Industrial Tribunal about the Brooke Bond 's scales of pay, but some additional evidence was offered at the appellate stage; this was not, however, accepted. In the circumstances, we do not think that the Brooke Bond 's scales of pay can be taken into consideration. But as we have earlier said, there was other evidence on which a comparison could be and was made by the Tribunals below. That comparison justified an increase in the The next question is do the trading results in India of the Lipton, Ltd., show that it has the financial capacity to bear the burden of the wave increase? The statement, in chart form, of the profit and loss figures from 1949 1957 to which we have earlier referred, shows that net profits in 1952 exceeded six lakhs, in 1953 seven lakhs, in 1954 eight lakhs and in 1956 ten lakhs. We have said earlier that wages do not necessarily come out of the net profits of a particular year, and it cannot be said that a fair wage must inevitably be postponed till a fair return on capital is obtained. Wages are fixed on a long term basis and depend also on the cost of living and the needs of workmen. Judging the trading results of the Indian business of the Lipton, Ltd., over a period of years, 177 we cannot say that the Tribunals below committed any error in revising the wage structure. It is germane to point out here that Samuel 's evidence showed that the managerial staff of the Indian business, recruited in England, receive very high salaries. Samuel said that the General Manager, who is the Chief Executive Officer of the Indian branch of the Lipton, Ltd., gets a salary of Rs. 5,000 per month. The next officer is the Administrator whose pay is Rs. 4,250 per month. The third man, who is the Manager of the Tea Depart ment, gets the same pay as the Administrator. The fourth is the Accountant of the company and his pay is Rs. 3,800 per month. The fifth is the Marketing Controller whose pay is Rs. 3,650 per month. The Factory Manager gets Rs. 3,350 per month. There are several other officers who also get a very high salary and the total number of covenated Executive Officers consists of 32 Europeans and 17 Indians. Now, the point taken on behalf of the Union is that the wage structure of the Indian branch is top heavy, in the sense that the higher administrative officers get a salary which is out of all proportion to the wage scale of the employees with whom we are now concerned. It is further contended that the high salaries paid to the superior Executive show (1) that the wage structure of the lower employees requires revision and (2) that the financial capacity of the Indian branch is not as negligible as the appellant wants to make out. We think, however, that it is not the duty of a Labour Tribunal or Court to dictate to an industrial concern what salaries should be paid to superior executive officers who are not workmen within the meaning of the Industrial,Disputes Act, 1947. We have pointed out, however, in the Express Newspapers (Private) Ltd. (1) that " the possibility of tightening up the organisation so that the industry could pay higher wages without difficulty and the possibility of increase in the efficiency of the lowest paid workers resulting in increase in production must be considered in conjunction with the elasticity of demand for the product (1) 23 178 no doubt against the ultimate background that the burden of the increased rate should not be such as to drive the employer out of business ". This is an aspect of the matter which the Tribunals below had considered and the Industrial Tribunal had particularly said that the increase in the wage structure was not such as would drive the Lipton, Ltd., out of its Indian business. Our attention has been drawn to the financial implications of the award and it has been pointed out that the total annual cost to the company of the increase in the wage structure of the employees in the Delhi office would be in the neighbourhood of Rs. 49,721 per year; on an all India basis it would be in the neighbourhood of Rs. 2,71,000 and odd. Having regard to the evidence which Samuel gave it cannot be said that the burden of the increased rate was such as would be beyond the financial resources of the Lip ton, Ltd., on its trading results in India or was such as would drive the Lipton, Ltd., out of India. Even on the basis of all the reliefs granted by the award, the total cost to the company for the Delhi office would be in the neighbourhood of Rs. 1,15,000 and on an all India basis Rs. 6,34,000. We have said earlier that the award was not an all India award, and so far as the fixation of wages is concerned, it must be judged on the principle of industry cum region. So judged, we do not think that the increase is beyond the financial resources of the Lipton, Ltd., as disclosed by its trading results in India. On behalf of the appellant, it has been submitted that one of the tests for measuring the capacity of the industry to pay the increased wage is, amongst others, the selling price of the product and it has been pointed out that by reason of the imposition in 1953 of an excise duty of three annas per pound of packet tea, there is serious competition from those who sell tea in loose form and any further increase in price will give rise to consumers ' resistance and ultimately result in lesser sale and lesser profits. In our opinion the industrial Tribunal rightly pointed out that the moderate increase in the wage scale proposed by it would only 179 be a very small fraction of the overall cost of production of a packet of tea and would have very little repercussion in its price. Lastly, our attention was drawn to an award of the Special Industrial Tribunal, Madras, dated October 15, 1956, between the management of the Lipton, Ltd., Madras and its workers employed in Madras where on more or less similar facts the Industrial Tribunal repelled the argument on behalf of the workmen that the global financial position of the Lipton, Ltd., should be taken into account in considering the capacity of the company to pay higher salaries and dearness allowance, and it was held that the Lipton, Ltd., could not be burdened with any additional liability and the employees must wait for better days. That award is not the subject of the present appeals and we consider it unnecessary, and indeed inadvisable, to make any pronouncement as to the correctness or otherwise of that award. The only other point which requires consideration is the question of the date from which the new scales of pay should come into effect. The Industrial Tribunal fixed January 1, 1954, on the ground that the Union had presented its charter of demands to the appellant for the first time towards the end of December 1953. We are unable to agree with the Tribunals below that the circumstance that a charter of demands was presented in December 1953 is a good ground for giving retrospective effect to the new scales of pay. The charter of demands presented by the Union consisted of 20 items and in the matter of the wage scale what the Union demanded was in some cases more than 50 to 75% increase on the existing scales of pay. Obviously, the demands were exorbitant and the management was justified in refusing to accept the demands in toto. We are, therefore, unable to agree that retrospective effect should be given to the new scales of pay from January 1, 1954. The award was made on August 18, 1955, and it was published on October 6, 1955. We think that it will be more just to bring the new scales of pay with effect from November 1, 1955, and we direct accordingly. ' The other directions given 180 by the Industrial Tribunal to bring the present employees into the new scales of pay will stand subject to the necessary modification that instead of January 1, 1954, the relevant date should be November 1, 1955. The result, therefore, is as follows: Appeal No. 715 of 1957 is dismissed with costs. Appeals Nos. 713 and 714 of 1957 are allowed to the extent indicated above. The order for the grant of bonus for 1951 is set aside and the new scales of pay will take effect from November 1, 1955, instead of from January 1, 1954. There will be no order for costs in these two appeals. Appeals Nos. 713 and 714 allowed in part. Appeal No. 715 dismissed.

The appellant company was incorporated in the United Kingdom, with its registered office in London and its business in the United Kingdom consisted of stores and groceries, including tea which represented only about 10% of its business there. Its operations in India were carried on by a branch with its head office in Calcutta, and the business there consisted mainly in the sale of " packeted " tea throughout India. The Delhi office of its Indian branch controlled the salesmen and other employees employed in the Punjab, Delhi State, Rajasthan and Uttar Pradesh, but had no connexion with the export side of the business. The Indian Branch had no subscribed capital nor any reserves, and the capital used in India was money advanced from the company 's fund in England. The dispute between the respondents who were the employees of the Delhi office and the company related, inter alia, to (1) fixation of grades and scales of pay; (2) whether retrospective effect should be given to the new scales of, pay; and (3) bonus for the year 1951. The respondents contended that the total global profits of the appellant company should form the basis for determining the claim to bonus on the ground that it was an integrated industry which had trading activities in various countries. The Tribunal found that the Indian workmen did not in any way contribute to the profits which the appellant company derived from its ex India business, that the Indian branch maintained separate accounts which had been audited and accepted by the Income tax authorities as showing the profit and loss of the Indian branch of the business, and that though, at the relevant time, the appellant company was one legal entity and the capital of the Indian branch came from London, the Indian branch was treated as a separate entity for all practical purposes. The Tribunal also found that for 195 I there was no available surplus for distribution as bonus to the employees in India. In the matter of fixation of grades and scales of pay, the Tribunal found that the existing scale of wages of the Delhi employees was far below the standard of a living wage, and for fixing the wage level it took into consideration the company 's global capacity to pay and came to the conclusion that having regard to its global 151 resources the company was financially able to bear a slightly higher wage structure. Accordingly, the Tribunal revised the grades by giving an increase of 20% to all workers. As to the date from which the revised grades were to take effect, the Tribunal directed that they should have retrospective effect from January 1, 1954, instead of January 1, 1953, as claimed by the Union. The appellant contended that the Tribunal erred in taking into consideration the global financial resources of the company in support of an increase in wages while holding that the Indian branch was a separate entity for the payment of bonus, that the financial resources of the Indian branch did not show any capacity to pay higher wages, and that, in any case, there was no reliable evidence to show that the existing wage structure required revision if it was compared to the wage structure in similar industries in the Delhi region. A question was also raised as to whether the Industrial Tribunal, Delhi, had jurisdiction to make an award in respect of employees of the Delhi office who were employed outside the State of Delhi. Held: (1) that on the finding that the Delhi office controlled all its employees in the matter of appointment, leave, transfer, supervision, etc., whether employed in Delhi State or outside it, the Industrial Tribunal, Delhi, had jurisdiction to adjudicate on the dispute between the appellant company and its workmen of the Delhi office, as the Delhi State Government was the appropriate Government within the meaning of section 2 of the , and under section 18 of the Act the award made by the Tribunal was binding on all persons employed in the Delhi office; (2) that in the circumstances in which the appellant com pany operated in India at the relevant time and on the finding that no part of the profits made in India was diverted to England and that the Indian business depended on its own trading results the global profits of the company could not be made the basis for awarding bonus to Indian workmen, and that the latter can claim bonus only if there was an available surplus of profits of the Indian business; Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , Ganesh Flour Mills Co. Ltd vs Employees of Ganesh Flour Mills, A.I.R. 1958 S.C. 382, Burn and Co., Calcutta vs Their Employees, ; and Baroda Borough Municipality vs Its workmen; , , referred to. (3) that in determining the question of a revision of the wage scale, the relevant considerations were : (1) whether the existing wage structure required revision by reason of its being below the standard of living wage, and (2) whether the industry could bear the additional burden of an increase in the wage scale on the basis of industry cum region by reason of its financial resources in India ; that judged by the considerations stated 152 above, it could not be said that the Tribunal erred in revising the wage structure on the basis of the evidence adduced before it ; and that the increase in the wages was not beyond the financial resources of the company as disclosed by its trading results in India. There is a distinction between bonus and wage. Bonus comes out of profits and is paid, if after meeting prior charges, there is an available surplus. Wages primarily rest on contract and are determined on a long term basis and are not necessarily dependent on profits made in a particular year. Crown Aluminium Works vs Their Workmen, ; and Express Newspapers (Private) Ltd. vs The Union of India, , relied on. (4) that the new scales of pay should be brought into effect from November 1, 1955, instead of January 1, 1954, as directed by the Tribunal.

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: Criminal Appeal No 572 of 1981. From the Judgment and Order dated 26.8.1980 of the Patna High Court in Criminal Appeal No. 15 of 1976. Ranjit Kumar for the Appellants. D. Goburdhan for the Respondent. The Judgment of the Court was delivered by PUNCHHI, J. This appeal by special leave is against the judgment 609 and order of the High Court at Patna dated August 26, 1980 passed in Criminal Appeal No 15 of 1976. The facts giving rise to this appeal are that a dacoity took place at about midnight on the night intervening 5th 6th April, 1970 in the house of Dhaniram Singh, P.W.11, in village Awadhiya. According to the prosecution 25 to 30 persons armed with guns, lathis, bhalas and gharasa etc. committed the dacoity and apart from looting away belongings of Dhaniram Singh, his uncle Khobari Singh was shot dead and as many as 8 persons including Dhaniram Singh P.W.11 re ceived injuries. The First Information Report was lodged by Dhaniram Singh, P.W.11, at 6.30 a.m. on April 6, 1970 at police station, Bhabhua at a distance of about 7 miles from the place of the occurrence. In it he could name 7 persons specifically as being members of the gang of dacoits. The remaining dacoits were left unnamed. The investigating agency when set into motion took steps as necessary. But at this stage, it would be sufficient to mention that neither could the investigation recover the looted property valued by the concerned P.Ws. at about Rs. 8,000 nor could it get the particulars of a large number of other participants in the dacoity. When the matter went to triaL before the First Additional Sessions Judge, Arrah, against the 6 named per sons and one other, the old Criminal Procedure of 1898 governed the trial and before hand there were commitment proceedings before a Magistrate in which evidence was recorded. At the commitment stage, 10 persons were put to face the enquiry. One accused named Kanhaiya Singh in the meantime died. Two other accused Sukhari Singh and Gulab Gosain also died. There remained 6 of the original accused named in the F.I.R. and one more, Ram Naresh Singh, not so named to face trial and bear the conviction. The Learned Additional Sessions Judge convicted all the 7 accused under Section 396 I.P.C. and imposed on them a sentence of life imprisonment. On appeal to the High Court two of them namely Ram Naresh Singh the one unnamed in the F.I.R. and Charittar Ahir, one of the so named, were acquitted but the convic tions of Munni Singh, Fekoo Singh, Behari Singh, Dadan Singh and Guput Singh, the appellants herein, were maintained. The appellants are residents of village Awadhiya where the occurrence took place. The victims of the crime and other prosecution witnesses are also from Awadhiya. The village appears to be a small one consisting only of 26 27 houses comprising of various castes like Brahmins, Rajputs, 610 Kahars, Ahirs and Kurmis. This is what Hira Singh, P.W.2 has deposed at the trial. The first informant suggested that there was a simmering discontent between his family and the family of Sukhari Singh accused. Munni Singh, appellant is the son of Sukhari Singh, Fekoo Singh and Behari Singh, appellants are the nephews of Sukhari Singh and Guput Singh, appellants, is the brother of Sukhari Singh. Thus they are closely related. There was a pond measuring about 3 acres in the village, which Sukhari Singh claimed, had been bestowed on him by the erstwhile Zamindar before the coming into force of the Zamindari Abolition Act. He had taken control of the Tank but some time before the occurrence had sown "singhara" in it and had prevented people to let their cattle come there to drink water from it. The Panchayat of the village when approached had taken note of it and had 3/4 days prior to the occurrence suggested to Sukhari Singh that he should rather surrender the Tank in the name of the Shiva Temple. But, he had correspondingly suggested to the Pan chayat that the place constructed and occupied by the com plainant party Khobari Singh and others for tying their cattle at the bank of the pond, which was part of unsettled lands, should also be likewise given to the shiva Temple. The Panchayat was not agreeable to the counter suggestion because the possession and usage of that land by Khobari Singh was very old. With such grudge in mind, it is the case of the prosecution, that the assault was masterminded and made at the house of the complainant with the sole purpose to avenge and to commit dacoity. The details of the occurrence are provided by Dhaniram Singh, P.W.11, the first informant. He stated that on the day of the occurrence he was in his village having come on a month 's leave from his posting as a Weapon Senior Engineer in District Kanpur. On the night of the incident, three cots lay spread in the outer courtyard of their house. He was sleeping on one of them, and on the remaining two individu ally were his cousin Baliram Singh, P.W.3, and his uncle Khobari Singh (deceased). He was awaken by some noise as if some persons were coming. He stood up and switched on his five cell torch and saw 20 25 dacoits armed with lathis, bhallas, Garasas, and guns coming towards his house. On his focussing the torch they stopped. Then the dacoits also switched on their torches. Dhaniram Singh then claims that he recognised in the torch light the accused inclusive of 5 appellants. Munni Singh and Fekoo, appellants had guns and the remaining 5 had some other arms. Sukhari Singh shouted kill kill. Munni Singh then fired with his gun towards Dhaniram Singh but 611 he rolled down and by the fall hurt himself on the thigh and the gun fire did not hit him. Then he got up and started running. One of the dacoits hit him with a stick with an iron ring. There was some oozing of blood but it was not profuse. He ran for about 30 steps to get to his wheat field, which was about 2 to 3 feet below the level of his courtyard. From there he claims to have seen the remaining part of the occurrence. He saw that when his uncle Khobari Singh had been awakened Munni Singh appellant fired at him and he fell down. Other dacoits who were near him started hitting him with spears. One of the dacoits held a ladder in his hand, through which he climbed up to the roof of the inner house, from where he jumped into the female apartment and opened the outer door. Then the dacoits entered the house and started looting and plundering. Two dacoits scold ed his brother Baliram, P.W.3 to keep lying down on his cot. In the occurrence, however, Baliram Singh. P.W.3, received no injury. The dacoits were active for about 15 to 20 minutes. On hearing the noise and commotion, other villag ers then started collecting. The dacoits then decamped with the looted goods. Some of the villagers followed them to some distance but the dacoits kept firing on them. With the result that some of them were injured. Khobari Singh and other injured persons were removed to be taken to the hospi tal but Khobari Singh died on the way and then Dhaniram Singh proceeded to the Police Station, Bhabua, taking the dead body of his uncle with him where the Office in charge, P.W.12 Ram Nagad Tiwari, recorded his statement at 6.30 a.m. on 6.4.1970. Shri Tiwari went to the spot and saw the evi dence of dacoity in the form of things lying scattered and some of the articles left behind by the dacoits. He had the injured persons examined medically. He arrested the accused persons. Finally investigation was completed by another officer and the accused persons were put up for trial as mentioned earlier. Before the High Court, as also here, it is admitted that there was commission of dacoity in the house of the first informant on the day as alleged, in which Khobari Singh was killed and others were injured. It is also not disputed that the dacoity being a conjoint act all persons participating in the crime would be equally liable for the killing of Khobari Singh. Thus the only exercise before the High Court, as also here, is to determine who were the persons who took part in the commission of the dacoity. It is note worthy that prosecution had four sets of witnesses 612 which could establish identity of the dacoity. Three sets became redundant and only on the basis of one set was iden tity of the appellants established. The first set consisted of three injured persons Ramadar Singh, Dinanath Singh and Dhirja Singh who were not examined at the trial by the prosecution. This set did not help the prosecution at all. The second set consisted of the evidence of Baliram Singh, P.W.3 Rambali Singh, P.W.4 and Jhuri Singh P. W. 9 .The names of P.Ws 4 and 9 were not mentioned in the F.I.R. and their evidence was left out of consideration by the Trial Judge as well as the High Court. Even the statement of P.W.3 was left aside by the High Court. So this set too did not further the prosecution case. In the third set was the evidence of P.W.1 Bishwanath Chaubey, P.W. 5 Jokhan Bind and P.W. 8 Chirkut Singh who did not identify any of the da coits. None of these witnesses was declared hostile. Thus their evidence rather goes adverse to the prosecution. The fourth set consisted of evidence of P.W.2 Hira Singh and P.W.11 Dhaniram Singh whose evidence has been relied upon by the High Court to identify the 5 appellants and on the basis of the very same evidence two co accused, that is, Ram Naresh Singh and Charittar Ahir were acquitted because P.W. 2 named one and excluded the other and P.W.11 named the other one and excluded the former, giving rise to a doubt about the complicity of those two. Thus we are left to see whether the conviction of the appellants can be based on the evidence of these eye witnesses P.Ws 2 and 11. We have already given a condensed version of Dhaniram Singh, P.W.11. Now according to the Hira Singh P.W.2, his house is 4 5 houses away from the house of the complainant and when he became awake on hearing the noise he went to see the occur rence taking a torch which kept lighting. According to him he hid himself behind a Bahaya tree and from where he could keep watching the activities of the dacoits whose faces he saw. As he says he could identify 8 dacoits. These were Munni Singh, Fekoo Singh Dadan Singh, Guput Singh and Behari Singh appellants as respectively armed. In addition there were Sukhari Singh (since deceased), Ram Naresh Singh and Kanhiya Singh who are no longer in the picture. After the departure of the dacoits he went close to the scene and found Khobari Singh to have been hit by gun shots and that his condition at that time was serious. Then he went in the company of P.W. 11 firstly towards the hospital and then to the police Station. According to this witness though he focussed the torch for 3 or 4 minutes before he went in hiding, the focus did not fall on the faces of the dacoits and after having gone in hiding he 613 had not lit his torch. Yet he claims that he had identified the dacoits in the torch light. He is also certain that no dacoit had muffled his face. The appellants, according to him, had painted their faces but were not in a position to conceal their identity. He admitted that 3 or 4 day prior to the incident, a Panchayat had been convened in which Sukhari Singh was asked to surrender the Tank but he said he would if Khobari Singh demolishes and surrenders the house built on the bank of the Tank first. And further that when the Panchayat told Sukhari Singh that the house having been there for a long time, could not be demolished and even Khobari Singh was not agreeable to do so, all were angry with the accused persons on account of the Tank. So far as Dhaniram Singh, P.W.11 is concerned, he too admits about the convening of the Panchayat 3 or 4 days earlier on which acount Sukhari Singh had nursed an angry feeling due to the happenings in the Panchayat. With regard to the actual ocurrence, P.W. 11 says that when the first shot aimed at him had not hit him, and the second shot had been fired at his uncle, he then ran 25 30 steps and hid himself in the field of the wheat crop and while running he heard the firing of the third shot. At that juncture he claimed to have kept lighting his torch now and then from the place of his hiding to see what was happening. The point which rises for consideration is whether P.Ws2 and 11 could individually, with the aid of their respective torches, identify the dacoits which were 25 30 in number and would the dacoits let them be identified by letting them switch on their torches off and on as claimed ? Would these two wit nesses not have attracted attention of the dacoits to be taken care of in priority in their place of hiding ? It seems to us that seeing the formidable force of the dacoits and their number these two P.Ws. would have been so non pulsed that they would not have dared to betray their presence by switching on and off their torches especially when they were unarmed and were no match to the might of the dacoits. These two witnesses do not claim that they could identify the dacoits by means other than their torches. This part of the story of the prosecution obviously does not inspire confidence. It is also worthy of notice that P.W.11 was injured on the head before he ran for safety. That was enough to shake and frighten him. But before the receipt of such injury he claims to have switched on his torch first and to have seen in the first glimpse the appellants and others. But his flash of the torch was met instantaneously with numerous torch flashes by the dacoits and it was like day light as said by P.W.1 Bishwanath Chaubey. It is 614 difficult in this situation to believe P.W. 11 that he could in a split second have such a perception so as to identify all the five appellants and some others, It is obvious and natural that behind a lit torch darkness prevails hiding the identify of the torch bearer and persons situated close. So identity of the dacoits was not possible by P.W.11 Moreover it is ununder standable that when the dacoits had chosen dark hours for committing the dacoity, obviously to take advantage of the darkness, and when they were 25 30 in number, most of them unknown persons, where was the need for the appellants to be in the forefront to risk themselves for identification. This view we are entertaining apart from what the High Court has opined that muffling of faces and concealment of identify by dacoits is not universally parac tised. Thus in the facts and circumstances of the case, we entertain a grave doubt about the participation of the appellants in the crime because of the failure of the prose cution to lead convincing evidence about the identity of the appellants as dacoits. There is even no corroboration worth the name in the form of recovery of fire arms and other weapons, or of the looted articles from the appellants, so as to lend some assurance to the particpation of the appel lants in the cirme. It may well be that the motive asserted by the prosecution relating to the dispute about the pond may have given cause to Dhaniram Singh, P.W.11 to assume that the appellants were responsible for the dacoity commit ted in his house and for Hira Singh P.W. 2, to entertain that belief in a sweep. For the foregoing reasons, we find it difficult to sustain the conviction of the appellants. Accordingly, they are acquited of the charge. The appeal is accepted.

The appellants, the victims of the dacoity and other prosecution witnesses were residents of the village, where the crime took place in the house of P.W.11. The accused were closely related. P.W. 11 's cousin and uncle were P.W. 3 and the deceased, respectively, and P.W. 2 was also a close relative of P.W. 11. There was a simmering discontent between the family of P.W. 11 and the family of the accused, Sukhari Singh. The accused Sukhari Singh claimed that a pond was bestowed of him by the erstwhile Zamindar before the coming into force of the Zamindari Abolition Act. As the tank was under the control of the accused, he prevented the cattle of the villagers from drinking water from it. 3/4 days prior to the occurrence of dacoity, the Pan chayat of the village suggested to the accused Sukhari Singh to surrender the tank in the name of a Shiva temple. The accused suggested to the Panchayat the place constructed and occupied by the complainant party, (the deceased and his relatives) for tying their cattle on the unsettled lands at the bank of the pond also should be likewise given to the Shiva temple. The Panchayat was not agreeable to the counter suggestion of the accused. It was the case of the prosecution that the dacoity was mastermined and made at the house of the complainant with a sole purpose to avenge. On the night intervening 5th 6th April, 1970 the P.W. 11, the first informant and his cousin, P.W.3 and his uncle, the deceased were sleeping 606 on the cots lay spread in the outer courtyard of their house. P.W. 11 was awaken by some noise as if some persons were coming. He stood up and switched on his five cell torch and saw 20 25 dacoits armed with lathis, bhallas, garasas, and guns coming towards his house. On his focussing the torch they stopped. Then the dacoits also switched on their torches. P.W.11 recognised in the torch light the accused inclusive of 5 appellants. Accused sukhari Singh shouted, "kill kill." Accused Munni Singh fired with his gun at P. W. 11 but the gun fire did not his him. While P.W. 11 was running, one of the dacoits hit him with a stick with an iron ring. There was some oozing of blood but it was not profuse. He ran for about 30 steps to get to his wheat field, which was about 2 to 3 feet below the level of his courtyard. From there he saw the remaining part of the occurrence. P.W. 11 's uncle was shot by the accused Munni Singh and he fell down Other dacoits who were near him started hitting him with spears. One of the dacoits held a ladder in his hand, through which he climbed up to the roof of the inner house, from where he jumped into the female apartment and opened the outer door. Then the dacoits entered the house and started looting and plundering. Two dacoits scolded his cousin P.W. 3 to keep lying down on his cot. In the occurrence, P.W.3 received no injury. The dacoits were active for about 15 to 20 minutes. On hearing the noise and commotion of the vil lagers, the dacoits decamped with the looted goods. Some of the villagers followed them to some distance but the dacoits kept firing on them. With the result that some of them were injured. P.W. 11 's uncle and other injured persons were removed to be taken to the hospital, but P.W. 's uncle died on the way. Then P.W.11 proceeded to the Police Station, taking the dead body of his uncle with him, and lodged F.I.R. P.W.12 went to the spot and saw the evidence of dacoity in the form of thing lying scattered and some of the articles left behind by the dacoits. He had the injured persons examined medically. He arrested the accused persons Finally investigation was completed by another officer and the accused persons were put up for trial. The matter went to trial under the old Code of Criminal Procedure before the First Additional Sessions Judge against the 6 named persons and one other. There were commitment proceedings before a Magistrate 607 in which evidence was recorded. At the commitment stage, 10 persons were put to face the enquiry, out of which three accused died. There remained 6 of the original accused named in the F.I.R. and one more, not so named to face trial. The trial court convicted all the 7 accused under Section 396, IPC and imposed on them a sentence of life imprisonment. On appeal, the High Court acquitted two of them, namely Ram Narain Singh, the one unnamed in the F.I.R. and one Charittar Ahir, one of the so named and maintained the convictions of other accused. This appeal by special leave was by the other accused challenging the judgment of the High Court, Allowing the appeal of the accused, this Court, HELD : 1. 01. The prosecution had four sets of witnesses which could establish identity of the dacoity. Three sets became redundant and only on the basis of one set was identity of the appellants established. The first set consisted of three injured persons who were not examined at the trial by the prosecution. This set did not help the prosecution at all. The second set consisted of the evidence of P.W. 3, P.W.4 and P.W.9. The names of P.Ws.4 and 9 were not mentioned in the F.I.R. and their evidence was left out of consideration by the Courts below. Statement of P.W. 3 was left aside by the High Court. In the third set was the evidence of P.W.I P.W.5 and P.W.8, who did not identify any of the dacoits. None of these witnesses was declared hos tile. Thus their evidence rather goes adverse to the prose cution. The fourth set consisted of evidence of P.W.2 and P.W.11 whose evidence has been relied upon by the High Court to identify the 5 appellants and on the basis of the very same evidence two co accused, were acquitted because P.W.2 named one and excluded the other and P.w.11 named the other one and excluded the former giving rise to a doubt about the complicity of those two. [611 612D] 1.02. Seeing the formidable force of the dacoits and their number, the two P.Ws.2 and 11 would have been so non pulsed that they would not have dared to betray their presence by switching on and off their torches especially when they were unarmed and were no match to the might of the dacoits. These two witnesses do not claim that they could identify the 608 dacoits by means other than their torches. This part of the story of the prosecution obviously does not inspire confi dence. It is also worthy of notice that P.W.11 was injured on the head before he ran for safety. That was enough to shake and frighten him. But before the receipt of such injury he claims to have switched on his torch first and to have seen in the first glimpse the appellants and others. But his flash of the torch was met instantaneously with numerous torch flashes by the dacoits and its was like day light as said by P.W.1. [613 F H] 1.03. It is difficult in the situation to believe P.W.11 that he could in a split second have such a perception so as to identify all the five appellants and some others. It is obvious and natural that behind a lit torch darkness prevails hiding the identity of the torch bearer and persons situated close. So identity of the da coits was not possible by P.W.11. [613 H614 A] 1.04. In the facts and circumstances of the case, there is a grave doubt about the participation of the appel lants in the crime because of the failure of the prosecution to lead convincing evidence about the identity of the appel lants as dacoits. There is even no corroboration worth the name in the form of recovery of fire arms and other weapons, or of the looted articles from the appellants, so as to lend some assurance to the participation of the appellants in the crime. It may well be that the motive asserted by the prose cution relating to the dispute about the pond may have given cause to P.W.11 to assume that the appellants were responsi ble for the dacoity committed in his house and for P.W.2, to entertain that belief in a sweep. [614 C E]

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It is the Vice President of India who is ex officio Chairman of the Rajya Sabha and his position being akin to that of the President of India, is different from that of the Speaker. The observations relating to the office of the speaker do not apply to the chairman of the Rajya Sabha, that is the Vice President of India. [805F G] 8.7. Since the conferment of authority is on the Speaker and the provision being unworkable for the Lok sabha and the State Legislatures, cannot be sustained, even without para 7, the entire Tenth Schedule is rendered invalid in the absence of any valid authority for decision of the dispute notwithstanding the fact that this defect would not apply to the Rajya sabha alone whose Chairman is the Vice President of India. The statutory exception of doctrine of necessity has no application since designation of authority in the Tenth Schedule is made by choice while enacting the legislation instead of adopting the other available options. [805H, 806A B] & ORIGINAL JURISDICTION: Transfer Petition (Civil) No.40 of 1991. (Under Article 139 A(1) of the Constitution of India). WITH Writ Petition (Civil) No. 17 of 1991. Soli J. Sorabjee, Vijay Hansaria and Sunil Kr. Jain for the Petitioner Ejaz Maqbool and Markand D. Adkar for the Respondents. The Judgment of the Court was delivered by 711 (OPERATIVE CONCLUSIONS IN THE MAJORITY OPINION) [Per VENKATACHALIAH, K, JAYACHANDRA REDDY AND AGRAWAL, JJ. ]. The Writ Petitions, Transfer Petitions, Civil Appeals, Special Leave Petitions and other connected matters raising common questions as to the constitutional validity of the constitution (52nd Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule in the Constitution of India, were heard together. Some of these matters involve investigation and determination of factual controversies and of the extent of applicability to them of the conclusions reached on the various constitutional issues. That exercise shall have to be undertaken in the individual cases separately. The present judgment is pronounced in the Transfer Petition No. 40 of 1991 seeking the transfer of the Writ Petition, Rule No. 2421/90 on the file of the High Court of Guwahati to this Court. The Transfer Petition is allowed and the aforesaid Writ Petition is withdrawn to this Court for the purpose of deciding the constitutional issues and of declaring the law on the matter. For the reasons to be set out in the detailed judgment to follow, the following are the operative conclusions in the majority opinion on the various constitutional issues: (A) That having regard to the background and evolution of the principles underlying the Constitution (52nd Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule in the Constitution of India, the provisions of Paragraph 7 of the Tenth Schedule of the Constitution in terms and in effect bring about a change in the operation and effect of Articles 136, 226 and 227 of the Constitution of India and, therefore, the amendment would require to be ratified in accordance with the proviso to sub Article (2) of Article 368 of the Constitution of India. (B) That there is nothing in the said proviso to Article 368 (2) which detracts from the severability of a provision on account of the inclusion of which the Bill containing the Amendment requires ratification from the rest of the provisions of such Bill 712 Which do not attract and require such ratification. Having regard to the mandatory language of Article 368 (2) that "thereupon the constitution shall stand amended" the operation of the proviso should not be extended to constitutional amendments in a Bill which can stand by themselves without such ratification. (C) That accordingly, the Constitution (52nd Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule in the constitution of India, to the extent of its provisions which are amenable to the legal sovereign of the amending process of the union Parliament cannot be overborne by the proviso which cannot operate in that area. There is no justification for the view that even the rest of the provisions of the constitution (52nd Amendment) Act, 1985, excluding Paragraph 7 of the Tenth Schedule become constitutionally infirm by reason alone of the fact that one of its severable provisions which attracted and required ratification under the proviso to Article 368 (2) was not so ratified. (D) That Paragraph 7 of the Tenth Schedule contains a provision which is independent of, and stands apart from, the main provisions of the Tenth Schedule which are intended to provide a remedy for the evil of unprincipled and unethical political defections and, therefore, is a severable part. The remaining provisions of the Tenth Schedule can and do stand independently of Paragraph 7 and are complete in themselves workable and are not truncated by the excision of Paragraph 7. (E) That the Paragraph 2 of the Tenth Schedule to the Constitution is valid. Its provisions do not suffer from the vice of subverting democratic rights of elected Members of Parliament and the Legislatures of the States. It does not violate their freedom of speech, freedom of vote and conscience as contended. The provisions of Paragraph 2 do not violet any rights or freedom under Article 105 and 194 of the Constitution. The provisions are salutory and are intended to strengthen the 713 fabric of Indian parliamentary democracy by curbing unprincipled and unethical political defections. (F) The contention that the provisions of the Tenth Schedule, even with the exclusion of Paragraph 7, violate the basic structure of the Constitution in that they affect the democratic rights of elected members and, therefore, of the principles of Parliamentary democracy is unsound and is rejected. (G) The Speakers, Chairmen while exercising powers and discharging functions under the Tenth Schedule act as Tribunal adjucating rights and obligations under the Tenth Schedule and their decisions in that capacity are amenable to judicial review. However, having regard to the Constitutional Scheme in the Tenth Schedule, judicial review should not cover any stage prior to the making of a decision by the speakers/Chairmen. Having regard to the Constitutional intendment and the status of the repository of the adjudicatory power, no quia timet actions are permissible, the only exception for any interlocutory interference being cases of interlocutory disqualifications or suspensions which may have grave, immediate and irreversible repercussions and consequence. (H) That Paragraph 6(1) of the Tenth Schedule, to the extent it seeks to impart finality to the decision of the Speakers/Chairmen is valid. But the concept of statutory finality embodied in Paragraph 6 (1) does not detract from or abrogate judicial review under Articles 136,226 and 227 of the Constitution in so far as infirmities based on violations of constitutional mandates, mala fides, non compliance with Rules of Natural Justice and perversity, are concerned. (I) That the deeming provision in Paragraph 6 (2) of the Tenth Schedule attracts an immunity analogous to that in Articles 122 (1) and 212 (1) of the Constitution as understood and explained in Keshav singh 's Case (Spl. Ref., No. 1; , to protect the validity of proceedings from mere irregularities of procedure. The deeming provision, having regard to the words "be deemed to be proceedings in Parliament" or "proceedings 714 in the Legislature of a State" confines the scope of the fiction accordingly. (J) That contention that the investiture of adjudicatory functions in the Speakers/Chairmen would by itself vitiate the provision on the ground of likelihood of political bias is unsound and is rejected. The Speakers/Chairmen hold a pivotal position in the scheme of Parliamentary democracy and are guardians of the rights and privileges of the House. They are expected to and do take far reaching decisions in the functioning of Parliamentary democracy. Vestiture of power to adjudicate questions under the Tenth Schedule in such a constitutional functionaries should not be considered exceptionable. (K) In the view we take of the validity of Paragraph 7 it is unnecessary to pronounce on the contention that judicial review is a basic structure of the Constitution and Paragraph 7 of the Tenth Schedule violates such basic structure . The factual controversies raised in the Writ Petition will, however, have to be decided by the High Court applying the principles declared and laid down by this judgment. The Writ Petition is, accordingly,, remitted to the High Court for such disposal in accordance with law. (Operative conclusions in the minority opinion) [Per SHARMA AND VERMA, JJ.] For the reasons to be given in our detailed judgment to follow, our operative conclusions in the minority opinion on the various constitutional issues are as follows: 1. Para 7 of the Tenth Schedule,in clear terms and in effect excludes the jurisdiction of all courts, including the Supreme Court under Article 136 and the High Courts under Articles 226 and 227 to entertain any challenge to the decision under para 6 on any ground even of illegality or perveristy, not only at an interim stage but also after the final decision on the question of disqualification on the ground of defection. Para 7 of the Tenth Schedule, therefore, in terms and in effect, 715 makes a change in Article 136 in Chapter IV of Part V; and Articles 226 and 227 in Chapter V of Part VI of the Constitution, attracting the proviso to clause (2) of Article 368. In view of para 7 in the Bill resulting in the Constitution (Fifty Second Amendment) Act, 1985 it was required to be ratified by the Legislature of not less than one half of the States as a condition precedent before the Bill could be presented to the President for assent, in accordance with the mandatory special procedure prescribed in the Proviso to clause (2) of Article 368 for exercise of the constituent power. Without ratification by the specified number of State Legislatures, the stage for presenting the Bill for assent of the President did not reach and, therefore, the so called assent of the President was non est and did not result in the Constitution standing amended in accordance with the terms of the Bill. In the absence of ratification by the specified number of State Legislatures before presentation of the Bill to the President for his assent, as required by the Proviso to clause (2) of Article 368, it is not merely para 7 but, the entire Constitution (Fifty Second Amendment) Act, 1985 which is rendered unconstitutional, since the constituent power was not exercised as prescribed in Article 368, and therefore, the Constitution did not stand amended in accordance with the terms of the Bill providing for the amendment. Doctrine of Severability cannot be applied to a Bill making a constitutional amendment where any part thereof attracts the Proviso to clause (2) of Article 368. Doctrine of Severability is not applicable to permit striking down para 7 alone saving the remaining provisions of the Bill making the Constitutional Amendment on the ground that para 7 alone attracts the proviso to clause (2) of Article 368. Even otherwise, having regard to the provisions of the Tenth Schedule of the Constitution inserted by the Constitution (Fifty_Second Amendment) Act, 1985, the Doctrine of Severability does not apply to it. 8.Democracy is a part of the basic structure of the Constitution and free and fair elections with provision for resolution of disputes relating to 716 the same as also for adjudication of those relating to subsequent disqualification by an independent body outside the House are essential features of the democratic system in our Constitution. Accordingly, an independent adjudicatory machinery for resolving disputes relating to the competence of Member of the House is envisaged as an attribute of this basic feature. The tenure of the Speaker who is the authority in the Tenth Schedule to decide this dispute is dependent on the continuous support of the majority in the House and, therefore,, he (the Speaker) does not satisfy the requirement of such an independent adjudicatory authority; and his choice as the sole arbiter in the matter violates an essential attribute of the basic feature. Consequently, the entire constitution (Fifty Second Amendment) Act, 1985 which inserted the Tenth Schedule together with clause (2) in Articles 102 and 191, must be declared unconstitutional or an abortive attempt to so amend the constitution. It follows that all decisions rendered by the several Speakers under the Tenth Schedule must also be declared nullity and liable to be ignored. On the above conclusions, it does not appear necessary or appropriate to decide the remaining question urged. ORDER The Transfer Petition is allowed and the Writ Petition, Rule No. 2421 of 1990 on the file of the High Court of Guwahati is withdrawn to this Court for the purpose of deciding the constitutional issues and of declaring the law on the matter. In accordance with the majority opinion, the factual controversies raised in the Writ Petition will, however, have to be decided by the High Court Applying the principles declared and laid down by the majority. The Writ Petition is, accordingly remitted to the High Court for such disposal in accordance with law. VENKATACHALIAH, J. In these petitions the constitutional validity of the Tenth Schedule of the Constitution introduced by the Constitution (Fifty Second Amendment) Act. 1985, is assailed. These two cases were 717 amongst a batch of Writ Petitions, Transfer Petitions, civil Appeals, Special Leave Petitions and other similar and connected matters raising common questions which were all heard together. On 12.11.1991 we made an order pronouncing our findings and conclusions upholding the constitutional validity of the amendment and of the provisions of the Tenth Schedule, except for Paragraph 7 which was declared invalid for want of ratification in terms of and as required by the proviso to Article 368 (2) of the Constitution. In the order dated 12.11.1991 our conclusions were set out and we indicated that the reasons for the conclusions would follow later. The reasons for the conclusions are now set out. This order is made in Transfer Petition No. 40 of 1991 and in Writ Petition No. 17 of 1991. We have not gone into the factual controversies raised in the Writ Petition before the Writ Petition before the Guwahati High Court in Rule No.2421 of 1990 from which Transfer Petition No. 40 of 1991 arises. Indeed, in the order of 12th November, 1991 itself the said Writ Petition was remitted to the High Court for its disposal in accordance with law. Shri F.S. Nariman, Shri Shanti Bhushan, Shri M.C. Bhandare, Shri Kapil Sibal, Shri Sharma and shri Bhim Singh, learned counsel addressed arguments in support of the petitions. Learned Attorney General, Shri Soli J. Sorabjee,Shri R.K. Garg,Shri Santhosh Hegde sought to support the constitutional validity of the amendment. Shri Ram Jethmalani has attacked the validity of the amendment for the same reasons as put forward by Shri Sharma. Before we proceed to record our reasons for the conclusions reached in our order dated 12th November, 1991, on the contentions raised and argued, it is necessary to have a brief look at the provisions of the Tenth Schedule. The Statement of Objects and Reasons appended to the Bill which was adopted as the Constitution (Fifty Second Amendment) Act, 1985 says: "The evil of political defections has been a matter of national concern. If it is not combated, it is likely to undermine the very foundation of our democracy and the principles which sustain it. With this object, an assurance was given in the Address by the President to Parliament that the Government intended to introduce in the current session of Parliament an anti defection 718 Bill. This Bill is meant for outlawing defection and fulfilling the above assurance. " On December 8, 1967, the Lok sabha had passed an unanimous Resolution in terms following: "a high level Committee consisting of representatives of political parties and constitutional experts be set up immediately by Government to consider the problem of legislators changing their allegiance from one party to another and their frequent crossing of the floor in all its aspects and make recommendations in this regard. " The said Committee known as the "Committee on Defections" in its report dated January 7, 1969, inter alia, observed: "Following the Fourth General Election, in the short period between March 1967 and February, 1968, the Indian political scene was characterised by numerous instances of change of party allegiance by legislators in several States. Compared to roughly 542 cases in the entire period between the First and Fourth General Election, at least 438 defections occurred in these 12 months alone. Among Independents, 157 out of a total of 376 elected joined various parties in this period. That the lure of office played a dominant part in decisions of legislators to defect was obvious from the fact that out of 210 defecting legislators of the States of Bihar, Haryana, Madhya Pradesh, Punjab, Rajasthan Uttar Pradesh and West Bengal, 116 were included in the Council of Ministers which they helped to bring into being by defections. The other disturbing features of this phenomenon were: multiple acts of defections by the same persons or set of persons (Haryana affording a conspicuous example); few resignations of the membership of the legislature of explanations by individual defectors, indifference on the part of defectors to political proprieties, constituency preference or public opinion; and the belief held by the people and expressed in the press that corruption and bribery were behind some of these defections". (emphasis supplied) 719 The Committee on Defections recommended that a defector should be debarred for a period of one year or till such time as he resigned his seat and got himself re elected from appointment to the office of a Minister including Deputy Minister or Speaker or Deputy Speaker, or any post carrying salaries or allowances to be paid from the Consolidated Fund of India or of the State or from the funds of Government Undertakings in public sector in addition to those to which the defector might be entitled as legislator. The Committee on Defections could not however, reach an agreed conclusion in the matter of disqualifying a defector from continuing to be a Member of Parliament/State Legislator. Keeping in view the recommendations of the committee on Defections, the Constitution (Thirty Second Amendment) Bill,, 1973 was introduced in the Lok Sabha on May 16, 1973. It provided for disqualifying a Member from continuing as a Member of either House of Parliament or the State Legislature on his voluntarily giving up his membership of the political party by which he was set up as a candidate at such election or of which he became a Member after such election, or on his voting or abstaining from voting in such House contrary to any direction issued by such political party or by any person or authority authorised by it in this behalf without obtaining prior permission of such party, person or authority. The said Bill, however, lapsed on account of dissolution of the House. Thereafter, the Constitution (Forty eight Amendment) Bill, 1979 was introduced in the Lok Sabha which also contained similar provisions for disqualification on the ground of defection. This Bill also lapsed and it was followed by the Bill which was enacted into the Constitution (Fifty Second Amendment) Act, 1985. This brings to the fore the object underlying the provisions in the Tenth Schedule. The object is to curb the evil of political defections motivated by lure of office or other similar considerations which endanger the foundations of our democracy. The remedy proposed is to disqualify the Member of either House of Parliament or of the State Legislature who is found to have defected from continuing as a Member of the House. The grounds of disqualification are specified in Paragraph 2 of the Tenth Schedule. Paragraph 2(1) relates to a Member of the House belonging to a political party by which he was set up as a candidate at the election. Under 720 Paragraph 2(1) (a) such a Member would incur disqualification if he voluntarily gives up his membership of such political party. Under clause (b) he would incur the disqualification if he votes or abstains from voting in the House contrary to "any direction" issued by the political party to which he belongs or by any person or authority authorised by it in this behalf without obtaining, in either case, prior permission of such political party, person or authourity and such voting or abstention has not been condoned by such political party, person or authority within fifteen days from the date of such voting or abstention. This sub para would also apply to a nominated member who is a Member of a political party on the date of his nomination as such Member or who joins a political party within six months of his taking oath. Paragraph 2(2) deals with a Member who has been elected otherwise than as a candidate set up by any political party and would incur the disqualification if he joins any political party after such election. A nominated Member of the House would incur his disqualification under sub para (3) if he joins any political party after the expiry of six months from the date on which he takes his seat. Paragraphs 3 and 4 of the Tenth Schedule, however, exclude the applicability of the provisions for disqualification under para 2 in cases of "split" in the original political party or merger of the original political party with another political party. These provisions in the Tenth Schedule give recognition to the role of political parties in the political process. A political party goes before the electorate with a particular programme and it sets up candidates at the election on the basis of such programme. A person who gets elected as a candidate set up by a political party is so elected on the basis of the programme of that political party. The provisions of Paragraph 2(1) (a) proceed on the premise that political propriety and morality demand that if such a person, after the election, changes his affiliation and leaves and political party which had set him up as a candidate at the election, then he should give up his Membership of the legislature and go back before the electorate. The same yard stick is applied to a person who is elected as an Independent candidate and wishes to join a political party after the election. Paragraph 2 (1) (b) deals with a slightly different situation i.e. a variant where dissent becomes defection. If a Member while remaining a 721 Member of the political party which had set him up as a candidate at the election, votes or abstains from voting contrary to "any direction" issued by the political party to which he belongs or by any person or authority authorised by it in this behalf he incurs the disqualification. In other words, it deals with a Member who expresses his dissent from the stand of the political party to which he belongs by voting or abstaining from voting in the House contrary to the direction issued by the political party. Paragraph 6 of the Tenth Schedule reads: "6 (1) If any question arises as to whether a Member of a House has become subject to disqualification under this Schedule the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final: Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such Member of the House as the House may elect in this behalf and his decision shall be final. (2) All proceedings under sub Paragraph (1) of this Paragraph in relation to any question as to disqualification of a Member of a House under this Schedule shall be deemed to be proceedings in Parliament within the meaning of Article 122 or, as the case may be, proceedings in the Legislature of a State within the meaning of Article 212. " Paragraph 7 says: "7. Bar of jurisdiction of courts: Notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a Member of a House under this Schedule. The challenge to the constitutional validity of the Amendment which introduces the Tenth Schedule is sought to be sustained of many grounds. It is urged that the constitutional Amendment introducing Paragraph 7 of the Tenth Schedule, in terms and in effect, seeks to make a change in Chapter IV of Part V of the Constitution in that it denudes the jurisdiction of the 722 Supreme Court under Article 136 of the Constitution of India and in Chapter V of part VI in that it takes away the jurisdiction of the High Courts under Article 226 and that, therefore, the legislative Bill, before presentation to the President for assent, would require to be ratified by the Legislature of not less than one half of the States by resolution to that effect. In view of the admitted position that no such ratification was obtained for the Bill, it is contended, the whole Amending Bill not merely Paragraph 7 fails and the amendment merely remains an abortive attempt to bring about an amendment. It is further contended that the very concept of disqualification for defection is violative of the fundamental values and principles underlying Parliamentary democracy and violates an elected representative 's freedom of speech, right to dissent and freedom of conscience and is, therefore, unconstitutional as destructive of a basic feature of the Indian Constitution. It is also urged that the investiture in the Speaker or the Chairman of the power to adjudicate disputed defections would violate an important incident of another basic feature of the Constitution, viz., Parliamentary democracy. It is contended that an independent, fair and impartial machinery for resolution of electoral disputes is an essential and important incident of democracy and that the vesting of the power of adjudication in the Speaker or the Chairman who, in the India Parliamentary system are nominees of political parties and are not obliged to resign their party affiliations after election is violative of this requirement. It is alternatively contended that if it is to be held that the amendment does not attract the proviso to Article 368(2), then Paragraph 7 in so far as it takes away the power of judicial review, which, in itself, is one of the basic features of the Constitution is liable to be struck down. There are certain other contentions which, upon a closer examination, raise issues more of construction than constitutionality. For instance, some arguments were expanded on the exact connotations of a "split" as distinct from a "defection" within the meaning of Paragraph 3. Then again, it was urged that under Paragraph 2(b) the expression "any direction" is so wide that even a direction,, which if given effect to and implemented might bring about a result which may itself be obnoxious to and violative of constitutional ideals and values would be a source of disqualification . These are,, indeed, matters of construction as to how,, in the context in which the occasion for the introduction of the Tenth Schedule arose and the high purpose it is intended to serve, the expression "any direction" occurring in Paragraph 723 2(b) is to be understood. Indeed, in one of the decisions cited before us (Prakash Singh Badal & Ors. vs Union of India & Ors. , AIR 1987 Punjab and Haryana 263) this aspect has been considered by the High Court. The decision was relied upon before us. We shall examine it presently. Supporting the constitutionality of the Amendment, respondents urge that the Tenth Schedule creates a non justiciable constitutional area dealing with certain complex political issues which have no strict adjudicatory disposition. New rights and obligations are created for the first time uno flatu by the Constitution and the Constitution itself has envisaged a distinct constitutional machinery for the resolution of those disputes. These rights, obligations and remedies, it is urged, which are in their very nature and innate complexities are in political thickets and are not amenable to judicial processes and the Tenth Schedule has merely recognised this complex character of the issues and that the exclusion of this area is constitutionally preserved by imparting a finality to the decisions of the Speaker or the Chairman and by deeming the whole proceedings as proceedings within Parliament or within the House of Legislature of the States envisaged in Articles 122 and 212, respectively, and further by expressly excluding the Courts ' jurisdiction under Paragraph 7. Indeed, in constitutional and legal theory, it is urged,, there is really no ouster of jurisdiction of Courts or of Judicial Review as the subject matter itself by its inherent character and complexities is not amenable to but outside judicial power and that the ouster of jurisdiction under Paragraph 7 is merely a consequential constitutional recognition of the non amenability of the subject matter to the judicial power of the State, the corollary of which is that the Speaker or the Chairman,, as the case may be, exercising powers under Paragraph 6(1) of the Tenth Schedule function not as a statutory Tribunal but as a part of the State 's Legislative Department. It is, therefore, urged that no question of the ouster of jurisdiction of Courts would at all arise inasmuch as in the first place, having regard to the political nature of the issues, the subject matter is itself not amenable to judicial power. It is urged that the question in the last analyses pertains to the constitution of the House and the Legislature is entitled to deal with it exclusively. It is further urged that Judicial Review apart from Judicial Review of the legislation as inherent under a written constitution is 724 merely a branch of administrative law remedies and is by no means a basic feature of the Constitution and that, therefore, Paragraph 7, being a constitutional provision cannot be invalidated on some general doctrine not found in the Constitution itself. On the contentions raised and urged at the hearing the questions that fall for consideration are the following: (A) The Constitution (Fifty Second Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule is destructive of the basic structure of the constitution as it is violative of the fundamental principles of Parliamentary democracy, a basic feature of the Indian constitutionalism and is destructive of the freedom of speech, right to dissent and freedom of conscience as the provisions of the Tenth Schedule seek to penalise and disqualify elected representatives for the exercise of these rights and freedoms which are essential to the sustenance of the system of Parliamentary democracy. (B) Having regard to the legislative history and evolution of the principles underlying the Tenth Schedule, Paragraph 7 thereof in terms and in effect, brings about a change in the operation and effect of Article 136,, 226 and 227 of the Constitution of India and, therefore, the Bill introducing the amendment attracts the proviso to Article 368(2) of the constitution and would require to be ratified by the legislative of the States before the Bill is presented for Presidential assent. (C) In view of the admitted non compliance with proviso to Article 368(2) not only Paragraph 7 of the Tenth Schedule, but also the entire Bill resulting in the Constitution (Fifty Second Amendment) Act, 1985, stands vitiated and the purported amendment is abortive and does not in law bring about a valid amendment. Or whether, the effect of such non compliance invalidates Paragraph 7 alone and the other provisions which, by themselves, do not attract the proviso do not become invalid. (D) That even if the effect of non ratification by the legislature 725 of the States is to invalidate Paragraph 7 alone, the whole of the Tenth Schedule fails for non severability. Doctrine of severability, as applied to ordinary statutes to promote their constitutionality, is inapplicable to constitutional Amendments. Even otherwise, having regard to legislative intent and scheme of the Tenth Schedule, the other provisions of the Tenth Schedule, after the severance and excision of Paragraph 7, become truncated, and unworkable and cannot stand and operate independently. The Legislature would not have enacted the Tenth Schedule without Paragraph 7 which forms its heart and core. (E) That the deeming provision in Paragraph 6(2) of the Tenth Schedule attracts the immunity under Articles 122 and 212. The Speaker and the Chairman in relation to the exercise of the powers under the Tenth Schedule shall not be subjected to the jurisdiction of any Court. The Tenth Schedule seeks to and does create a new and non justiciable area of rights, obligations and remedies to be resolved in the exclusive manner envisaged by the Constitution and is not amenable to , but constitutionally immune from curial adjudicative processes. (F) That even if Paragraph 7 erecting a bar on the jurisdiction of Courts is held inoperative, the Courts ' jurisdiction is, in any event, barred as Paragraph 6(1) which imparts a constitutional `finality 'to the decision of the Speaker or the Chairman, as the case may be, and that such concept of `finality ' bars examination of the matter by the Courts. (G) The concept of free and fair elections as a necessary concomitant and attribute of democracy which is a basic feature includes an independent impartial machinery for the adjudication of the electoral disputes. The Speaker and the Chairman do not satisfy these incidents of an independent adjudicatory machinery. The investiture of the determinative and adjudicative jurisdiction 726 in the Speaker or the Chairman, as the case may be, would, by itself, vitiate the provision on the ground of reasonable likelihood of bias and lack of impartiality and therefore denies the imperative of an independent adjudicatory machinery. The Speaker and Chairman are elected and hold office on the support of the majority party and are not required to resign their Membership of the political party after their election to the office of the Speaker or Chairman. (H) That even if Paragraph 7 of the Tenth Schedule is held not to bring about a change or affect Articles 136, 226 and 227 of the Constitution, the amendment is unconstitutional as it erodes and destroys judicial review which is one of the basic features of the constitution. Re: Contention(A): (The Tenth Schedule is part of the constitution and attracts the same cannons of construction as are applicable to the expounding of the fundamental law. One constitutional power is necessarily conditioned by the others as the Constitution is one "coherent document". Learned counsel for the petitioners accordingly say that Tenth Schedule should be read subject to the basic features of the Constitution. The Tenth Schedule and certain essential incidents of democracy, it is urged, cannot co exist. In expounding the processes of the fundamental law, the Constitution must be treated as a logical whole. Westel Woodbury Willoughby in the "Constitutional Law of the United States" states: "The Constitution is a logical whole, each provision of which is an integral part thereof, and it is, therefore,, logically proper, and indeed imperative, to construe one part in the light of the provisions of the other parts." [2nd Edn. Vol.1 page 65] A constitutional document outlines only broad and general principles meant to endure and be capable of flexible application to changing circumstances a distinction which differentiates a statue from a Charter under which all statutes are made. Cooley on "Constitutional Limitations" says: 727 "Upon the adoption of an amendment to a constitution, the amendment becomes a part thereof; as much so as if it had been originally incorporated in the Constitution; and it is to be construed accordingly." [8th Edn. 1 page 129] 13. In considering the validity of a constitutional amendment the changing and the changed circumstances that compelled the amendment are important criteria. The observations of the U.S. Supreme Court in Maxwell vs Dow (44 lawyer 's Edition 597 at page 605) are worthy of note: ". to read its language in connection with the known condition of affairs out of which the occasion for its adoption may have arisen and then to construe it,, if there be therein any doubtful expressions, in a way so far as is reasonably possible, to forward the known purpose or object for which the amendment was adopted. ." The report of the Committee on Defections took note of the unprincipled and unethical defections induced by considerations of personal gains said: ". What was most heartening was the feeling of deep concern over these unhealthy developments in national life on the part of the leaders of political parties themselves. Parliament mirrored this widespread concern. " [page 1] 14. It was strenuously contended by Shri Ram Jethmalani and Shri Sharma that the provisions of the Tenth Schedule constitute a flagrant violation of those fundamental principles and values which are basic to the sustenance of the very system of Parliamentary democracy. The Tenth Schedule, it is urged, negates those very foundational assumptions of Parliamentary democracy; of freedom of speech; of the right to dissent and of the freedom of conscience. It is urged that unprincipled political defections may be an evil, but it will be the beginning of much greater evils if the remedies, graver than the disease itself, are adopted. The Tenth Schedule, they say, seeks to throw away the baby with the bath water. Learned counsel argue that "crossing the floor", as it has come to be called, mirrors the meanderings of a troubled conscience on issues of political 728 morality and to punish an elected representative for what really amounts to an expression of conscience negates the very democratic principles which the Tenth Schedule is supposed to preserve and sustain. Learned counsel referred to the famous speech to the Electors of Bristol, 1774, where Edmund Burke reportedly said: "It ought to be the happiness and glory of a representative to live in the strictest union, the closest correspondence, and the most unreserved communication with his constituents. Their wishes ought to have great weight with him; their opinion, high respect; their business, unremitted attention. It is his duty to sacrifice his repose, his pleasures, his satisfactions to theirs and above all, ever, and in all cases, to prefer their interest to his own. But his unbiased opinion, his mature judgment, his enlightened conscience, he ought not to sacrifice to you, to any man, or to any set of men living. Your representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion. " [see: Parliament Functions, Practice & Procedures by JAG Griffith and Michael Ryle 1989 Edn. page 70] 15. Shri Jethmalani and Shri sharma also relied upon certain observations of Lord Shaw in Amalgamated Society or Railway Servants vs Osborne, to contend that a provision which seeks to attach a liability of disqualification of an elected Member for freely expressing his views on matters of conscience, faith and political belief are indeed restraints on the freedom of speech restraints opposed to public policy. In that case a registered trade union framed a rule enabling it to levy contributions on the Members to support its efforts to obtain Parliamentary representation by setting up candidates at elections. It also framed a rule requiring all such candidates to sign and accept the conditions of the Labour Party and be subject to its whip. The observations in the case relied upon by learned counsel are those of Lord Shaw of Dunfermline who observed: "Take the testing instance: should his view as to right and wrong on a public issue as to the true line of service to the realm, as to the real interests of the constituency which has elected him, or even of the society which pays him, differ from the decision of the parliamentary party and the maintenance by it of its 729 policy, he has come under a contract to place his vote and action into subjection not to his own convictions, but to their decisions. My Lords, I do not think that such a subjection is compatible either with the spirit of our parliamentary constitution or with that independence and freedom which have hither to been held to lie at the basis of representative government in the United Kingdom." [page 111] "For the people having reserved to themselves the choice of their representatives, as the fence to their properties, could do it for no other end but that they might always be freely chosen, and so chosen freely act and advise, as the necessity of the commonwealth and the public good should upon examination and mature debate be judged to require. ." [page 113] "Still further, in regard to the Members of Parliament himself, he too is to be free; he is not to be the paid mandatory of any man, or organization of men, nor is he entitled to bind himself to subordinate his opinions on public questions to others, for wages, or at the peril of pecuniary loss; and any contract of this character would not be recognized by a Court of law, either for its enforcement or in respect of its breach. " [page 115] It is relevant to observe here that the rule impugned in that case was struck down by the Court of Appeal whose decision was upheld by the House of Lords on grounds of the Society 's competence to make the rule. It was held that the rule was beyond its powers. Lord Shaw, however, was of the view that the impugned rule was opposed to those principles of public policy essential to the working of a representative government. The view expressed by Lord Shaw was not the decision of the House of Lords in the case. But, the real question is whether under the Indian constitutional scheme is there any immunity from constitutional correctives against a 730 legislatively perceived political evil of unprincipled defections induced by the lure of office and monetary inducements? 16. The points raised in the petitions are, indeed, far reaching and of no small importance invoking the `sense of relevance of constitutionally stated principles to unfamiliar settings '. On the one hand there is the real and imminent threat to the very fabric of Indian democracy posed by certain levels of political behavior conspicuous by their utter and total disregard of well recognised political proprieties and morality. These trends tend to degrade the tone of political life and, in their wider propensities, are dangerous to and undermine the very survival of the cherished values of democracy. there is the legislative determination through experimental constitutional processes to combat that evil. On the other hand, there are, as in all political and economic experimentations, certain side effects and fall out which might affect and hurt even honest dissenters and conscientious objectors. These are the usual plus and minus of all areas of experimental legislation. In these areas the distinction between what is constitutionally permissible and what is outside it is marked by a `hazy gray line ' and it is the Court 's duty to identify, " darken and deepen" the demarcating line of constitutionality a task in which some element of Judges ' own perceptions of the constitutional ideals inevitably participate. There is no single litmus test of constitutionality. Any suggested sure decisive test, might after all furnish a "transitory delusion of certitude" where the "complexities of the strands in the web of constitutionality which the Judge must alone disentangle" do not lend themselves to easy and sure formulations one way or the other. It is here that it becomes difficult to refute the inevitable legislative element in all constitutional adjudications. All distinctions of law even Constitutional law are, in the ultimate analyses, "matters of degree". At what line the `white ' fades into the `black ' is essentially a legislatively perceived demarcation. In his work "Oliver Wendell Holmes Free Speech and the Living Constitution" (1991 Edition: New York University Publication) Pohlman says: "All distinctions of law, as Holmes never tired of saying, were 731 therefore "matters of degree." Even in the case of constitutional adjudication, in which the issue was whether a particular exercise of power was within or without the legislature 's authority, the judge 's decision "will depend on a judgment or intuition more subtle than any articulate major premise." As the particular exertion of legislative power approached the hazy gray line separating individual rights from legislative powers, the judge 's assessment of constitutionality became a subtle value judgment. The judge 's decision was therefore not deductive, formal, or conceptual in any sense. [page 217] [emphasis supplied] Justice Holmes himself had said: "Two widely different cases suggest a general distinction, which is a clear one when stated broadly. But as new cases cluster around the opposite poles, and begin to approach each other, the distinction becomes more difficult to trace; the determinations are made one way or the other on a very slight preponderance of feeling, rather than articulate reason; and at last a mathematical line is arrived at by the contact of contrary decisions, which is so far arbitrary that it might equally well have been drawn a little further to the one side or to the other." [Emphasis supplied] [See: "Theory of Torts" American Law Review 7 (1873) The argument that the constitutional remedies against the immorality and unprincipled chameleon like changes of political hues in pursuit of power and pelf suffer from something violative of some basic feature of the Constitution, perhaps, ignores the essential organic and evolutionary character of a Constitution and its flexibility as a living entity to provide for the demands and compulsions of the changing times and needs. The people of this country were not beguiled into believing that the menace of unethical and unprincipled changes of political affiliations is something which the law is helpless against and is to be endured as a necessary concomitant of freedom of conscience. The onslaughts on their sensibilities 732 by the incessant unethical political defections did not dull their perception of this phenomenon as a canker eating into the vitals of those values that make democracy a living and worth while faith. This is prominently an area where Judges should defer to legislative perception of and reaction to the pervasive dangers of unprincipled defections to protect the community. "Legislation may begin where an evil begins". Referring to the judicial philosophy of Justice Holmes in such areas, Pohlman again says: "A number of Holmes 's famous aphorisms point in the direction that judges should defer when the legislature reflected the pervasive and predominant values and interests of the community. He had, for example, no "practical" criterion to go on except "what the crowd wanted." He suggested, in a humorous vein that his epitaph. . . .No judge ought to interpret a provision of the Constitution in a way that would prevent the American people from doing what it really wanted to do. If the general consensus was that a certain condition was an "evil" that ought to be corrected by certain means, then the government had the power to do it: "Legislation may begin where an evil begins"; "Constitutional law like other mortal contrivances has to take some chances." "Some play must be allowed to the joints if the machine is to work. " All of these rhetorical flourishes suggest that Holmes deferred to the legislature if and when he thought it accurately mirrored the abiding beliefs, interests, and values of the american public." (emphasis supplied) [See: Justice Oliver Wendell Holmes Free Speech and the Living Constitution by H.L. Pohlman 1991 Edn. page 233] 18. Shri Sharma contends that the rights and immunities under Article 105(2) of the Constitution which according to him are placed by judicial decisions even higher than the fundamental right in Article 19(1)(a), have violated the Tenth Schedule. There are at least two objections to the acceptability of this contention. The first is that the Tenth Schedule does not impinge upon the rights or immunities under Article 105(2). Article 105(2) of the Constitution provides: "105. Powers, privileges, etc., of the Houses of Parliament and 733 of the Members and committees thereof. (1). . (2) No Member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of either House of Parliament of any report, paper, votes or proceedings. The freedom of speech of a Member is not an absolute freedom. That apart, the provisions of the Tenth Schedule do not purport to make a Member of a House liable in any `Court ' for anything said or any vote given by him in Parliament. It is difficult to conceive how Article 105(2) is a source of immunity from the consequences of unprincipled floor crossing. Secondly, on the nature and character of electoral rights this Court in Jyoti Basu & Ors. vs Debi Ghosal & 3 S.C.R. 318 observed: "A right to elect, fundamental though it is to a democracy, is, anomalously enough, neither a fundamental right nor a Common Law Right. It is pure and simple, a statutory right. So is the right to be elected. So is the right to dispute an election. Outside of statute, there is no right to elect, no right to be elected and no right to dispute an election. Statutory creations they are, and therefore, subject to statutory limitation. ' [Page 326] Democracy is a basic feature of the constitution. Whether any particular brand or system of Government by itself, has this attribute of a basic feature, as lone as the essential characteristics that entitle a system of government to be called democratic are otherwise satisfied is not necessary to be gone into. Election conducted at regular, prescribed intervals is essential to the democratic system envisaged in the constitution. So is the need to protect and sustain the purity of the electoral process. That may take within it the quality, efficacy and adequacy of the machinery for resolution of electoral disputes. From that it does not necessarily follow that the rights and immunities under sub article (2) of Article 105 of the Constitution, are elevated into fundamental rights and that the Tenth Schedule would have to be struck down for its inconsistency with Article 734 105 (2) as urged by Shri Sharma. 19.Parliamentary democracy envisages that matters involving implementation of policies of the Government should be discussed by the elected representatives of the people. Debate, discussion and persuasion are, therefor, the means and essence of the democratic process. During the debates the Members put forward different points of view. Members belonging to the same political party may also have, and may give expression to, differences of opinion on a matter. Not unoften the view expressed by the Members in the House have resulted in substantial modification, and even the withdrawal, of the proposals under consideration. Debate and expression of different points of view, thus, serve an essential and healthy purpose in the functioning of Parliamentary democracy. At times such an expression of views during the debate in the House may lead to voting or abstenance from voting in the House otherwise than on party lines. But a political party functions on the strength of shared beliefs. Its own political stability and social utility depends on such shared beliefs and concerted action of its Members in furtherance of those commonly held principles. Any freedom of its members to vote as they please independently of the political party 's declared policies will not only embarrass its public image and popularity but also undermine public confidence in it which, in the ultimate analysis, is its source of sustenance nay, indeed, its very survival. Intra party debates are of course a different thing. But a public image of disparate stands by Members of the same political party is not looked upon,in political tradition, as a desirable state of things. Griffith and Ryle on "Parliament, Functions, Practice & Procedure" (1989 Edn. page 119) say: "Loyalty to party is the norm, being based on shared beliefs. A divided party is looked on with suspicion by the electorate. It is natural for Members to accept the opinion of their Leaders and Spokesmen on the wide variety of matters on which those Members have no specialist knowledge. Generally Members will accept majority decisions in the party even when they disagree. It is understandable therefore that a Member who rejects the party whip even on a single occasion will attract attention and more criticism than sympathy. To abstain from voting when required by party to vote is to suggest a degree of unreliability. To vote against party is disloyalty. To join with others in abstention 735 or voting with the other side smacks of conspiracy." (emphasis supplied) Clause (b) of sub para (1) of Paragraph 2 of the Tenth Schedule gives effect to this principle and sentiment by imposing a disqualification on a Member who votes or abstains from voting contrary to "any directions" Issued by the political party. The provision, however, recognises two exceptions: one when the Member obtains from the political party prior permission to vote or abstain from voting and the other when the Member has voted without obtaining such permission but his action has been condoned by the political party. This provision itself accommodates the possibility that there may be occasions when a Member may vote or abstain from voting contrary to the direction of the party to which he belongs. This, in itself again, may provide a clue to the proper understanding and construction of the expression "Any Direction" in clause (b) of Paragraph 2(1) whether really all directions or whips from the party entail the statutory consequences or whether having regard to the extra ordinary nature and sweep of the power and the very serious consequences that flow including the extreme penalty of disqualification the expression should be given a meaning confining its operation to the contexts indicated by the objects and purposes of the Tenth Schedule. We shall deal with this aspect separately. The working of the modern Parliamentary democracy is complex. The area of the inter se relationship between the electoral constituencies and their elected representatives has many complex features and overtones. The citizen as the electorate is said to be the political sovereign. As long as regular general elections occur, the electorate remains the arbiter of the ultimate composition of the representative legislative body to which the Government of the day is responsible. There are, of course,, larger issues of theoretical and philosophical objections to the legitimacy of a representative Government which might achieve a majority of the seats but obtains only minority of the electoral votes. It is said that even in England this has been the phenomenon in every general elections in this century except the four in the years 1900, 1918, 1931 and 1935. But in the area of the inter relationship between the constituency and its elected representative, it is the avowed endeavour of the latter to requite the expectations of his voters. Occasionally, this might conflict with his political obligations to the political party sponsoring him which expects 736 and exacts in its own way loyalty to it. This duality of capacity and functions are referred to by a learned author thus: "The functions of Members are of two kinds and flow from the working of representative government. When a voter at a general election, in that hiatus between parliaments, puts his cross against the name of the candidate he is [most often] consciously performing two functions: seeking to return a particular person to the house of commons as Member for that constituency; and seeking to return to power as the government of the country a group of individuals of the same party as that particular person. The voter votes for a representative and for a government. He may know that the candidate he votes has little chance of being elected. . ." "When a candidate is elected as a Member of the House of Commons, he reflects those two functions of the voter. Whatever other part he may play, he will be a constituency M.P. As such, his job will be to help his constituents as individuals in their dealings with the departments of State. He must listen to their grievances and often seek to persuade those in authority to provide remedies. He must have no regard to the political leanings of his constituents for the represents those who voted against him or who did not vote at all as much as those who voted for him. Even if he strongly disagrees with their complaint he may still seek to represent it, though the degree of enthusiasm with which he does so is likely to be less great." [See: Parliament Function. Practice and Procedures by JAG Griffith and Ryle 1989 Edn. page 69] So far as his own personal views on freedom of conscience are concerned,, there may be exceptional occasions when the elected representative finds himself compelled to consider more closely how he should act. Referring to these dilemmas the authors say: ". The first is that he may feel that the policy of his party whether it is in office or in opposition, on a particular matter is not one of which he approves. He may think this because of his personal opinions or because of its special consequences 737 for his constituents or outside interests or because it reflects a general position within the party with which he cannot agree. On many occasions, he may support the party despite his disapproval. But occasionally the strength of his feeling will be such that he is obliged to express his opposition either by speaking or by abstaining on a vote or even by voting with the other side. Such opposition will not pass unnoticed and, unless the matter is clearly one of conscience, he will not be popular with the party whips. The second complication is caused by a special aspect of parliamentary conduct which not frequently transcends party lines. Members, who are neither Ministers nor front bench Opposition spokesmen, do regard as an important part of their function the general scrutiny of Governmental activity. This is particularly the role of select committees which have, as we shall see, gained new prominence since 1979. No doubt, it is superficially paradoxical to see Members on the Government side of the House joining in detailed criticism of the administration and yet voting to maintain that Government in office. But as one prominent critic of government has said, there is nothing inherently contradictory in a Member sustaining the Executive in its power or helping it to overcome opposition at the same time as scrutinising the work of the executive in order both to improve it and to see that power is being exercised in a proper and legitimate fashion." [page 69 and 70] Speaking of the claims of the political party on its elected Member Rodney Brazier says: "Once returned to the House of Commons the Member 's party expects him to be loyal. This is not entirely unfair or improper, for it is the price of the party 's label which secured his election. But the question is whether the balance of a Member 's obligations has tilted too far in favour of the requirements of party. The nonsense that a Whip even a three line whip is no more than a summons to attend the House, and that, once there, the Member is completely free to speak and vote as he thinks fit, was 738 still being put about, by the Parliamentary Private Secretary to the Prime Minister, as recently as 1986. No one can honestly believe that. Failure to vote with his party on a three line whip without permission invites a party reaction. This will range (depending on the circumstances and whether the offence is repeated) from a quiet word from a Whip and appeals to future loyalty, to a ticking off or a formal reprimand (perhaps from the Chief Whip himself), to any one of a number of threats. The armoury of intimidation includes the menaces that the Member will never get ministerial office, or go on overseas trips sponsored by the party, or be nominated by his party for Commons Committee Memberships, or that he might be deprived of his party 's whip in the House, or that he might be reported to his constituency which might wish to consider his behaviour when reselection comes round again. .Does the Member not enjoy the Parliamentary privilege of freedom of speech? How can his speech be free in the face of such party threats? The answer to the inquiring citizen is that the whip system is part of the conventionally established machinery of political organisation in the house, and has been ruled not to infringe a Member 's parliamentary privilege in any way. The political parties are only too aware of utility of such a system,, and would fight in the last ditch to keep it." [See; Constitutional Reform Reshaping the British Political System by Rodney Brazier, 1991 Edn. pages 48 and 49] The learned author, referring to cases in which an elected Member is seriously unrepresentative of the general constituency opinion, or whose personal behaviour falls below standards acceptable to his constituents commends that what is needed is some additional device to ensure that a Member pays heed to constituents ' views. Brazier speaks of the efficacy of device where the constituency can recall its representative. Brazier says: "What sort of conduct might attract the operation of the recall power? First, a Member might have misused his Membership of the House, for example to further his personal financial interests in a manner offensive to his constituents. They might consider that the action taken against him by the house (or, indeed, lack 739 of action) was inadequate. .Thirdly, the use of a recall power might be particularly apt when a member changed his party but declined to resign his seats and fight an immediate by election. It is not unreasonable to expect a Member who crosses the floor of the House, or who joins a new party, to resubmit himself quickly to the electors who had returned him in different colours. Of course, in all those three areas of controversial conduct the ordinary process of reselection might well result in the Member being dropped as his party 's candidate (and obviously would definitely have that result in the third case). But that could only occur when the time for reselection came; and in any event the constituency would still have the Member representing them until the next general election. A cleaner and more timely parting of the ways would be preferable. Sometimes a suspended sentence does not meet the case." [page 52 and 53] Indeed, in a sense an anti defection law is a statutory variant of its moral principle and justification underlying the power of recall. What might justify a provision for recall would justify a provision for disqualification for defection. Unprincipled defection is a political and social evil. It is perceived as such by the legislature. People, apparently, have grown distrustful of the emotive political exultations that such floor crossings belong to the sacred area of freedom of conscience, or of the right to dissent or of intellectual freedom. The anti defection law seeks to recognise the practical need to place the proprieties of political and personal conduct whose awkward erosion and grotesque manifestations have been the base of the times above certain theoretical assumptions which in reality have fallen into a morass of personal and political degradation. We should, we think, defer to this legislative wisdom and perception. The choices in constitutional adjudications quite clearly indicate the need for such deference. "Let the end be legitimate, let it be within the scope of the Constitution and all means which are appropriate, which are adopted to that end. " are constitutional. [See Kazurbach vs Morgan: ; 21. It was then urged by Shri Jethmalani that the distinction between the conception of "defection" and "split" in the Tenth Schedule is so thin and artificial that the differences on which the distinction rests are indeed 740 an outrageous defiance of logic. Shri Jethmalani urged that if floor crossing by one Member is an evil, then a collective perpetration of it by 1/3rd of the elected Members of a party is no better and should be regarded as an aggravated evil both logically and from the part of its aggravated consequences. But the Tenth Schedule, says Shri Jethmalani, employs its own inverse ratiocination and perverse logic to declare that where such evil is perpetrated collectively by an artificially classified group of not less than 1/3rd Members of that political party that would not be a "defection" but a permissible "split" or "merger". This exercise to so hold up the provision as such crass imperfection is performed by Shri Jethmalani with his wonted forensic skill. But we are afraid what was so attractively articulated, on closer examination, is, perhaps, more attractive than sound. The underlying premise in declaring an individual act of defection as forbidden is that lure of office or money could be presumed to have prevailed. Legislature has made this presumption on its own perception and assessment of the extant standards of political proprieties and morality. At the same time legislature evisaged the need to provide for such "floor crossing" on the basis of honest dissent. That a particular course of conduct commended itself to a number of elected representatives might, in itself, lend credence and reassurance to a presumption of bonafide. The presumptive impropriety of motives progressively weakens according as the numbers sharing the action and there is nothing capricious and arbitrary in this legislative perception of the distinction between `defection ' and `split '. Where is the line to be drawn? What number can be said to generate a presumption of bonafides ? Here again the Courts have nothing else to go by except the legislative wisdom and, again, as Justice Holmes said, the Court has no practical criterion to go by except "what the crowd wanted". We find no substance in the attack on the statutory distinction between "defection" and "split". Accordingly we hold: "that the Paragraph 2 of the Tenth Schedule to the Constitution is valid. Its provisions do not suffer from the vice of subverting democratic rights of elected Members of Parliament and the Legislatures of the States. It does not violate their freedom of 741 speech, freedom of vote and conscience as contended. The Provisions of Paragraph 2 do not violate any rights or freedom under Articles 105 and 194 of the Constitution. The provisions are salutory and are intended to strengthen the fabric of Indian Parliamentary democracy by curbing unprincipled and unethical political defections. The contention that the provisions of the Tenth Schedule, even with the exclusion of Paragraph 7, violate the basic structure of the Constitution in they affect the democratic rights of elected Members and, therefore, of the principles of Parliamentary democracy is unsound and is rejected. Re: Contention (B): The thrust of the point is that Paragraph 7 brings about a change in the provisions of chapter IV of Part V and chapter V of Part VI of the Constitution and that, therefore, the amending Bill falls within proviso to Article 368 (2). We might, at the outset, notice Shri Sibal 's submission on a point of construction of Paragraph 7. Shri Sibal urged that Paragraph 7, properly construed, does not seek to oust the jurisdiction of courts under Articles, 136, 226 and 227 but merely prevents an interlocutory intervention or a quia timet action. He urged that the words "in respect of any matters connected with the disqualification of a Member" seek to bar jurisdiction only till the matter is finally decided by the speaker or Chairman, as the case may be, and does not extend beyond that stage and that in dealing with the dimensions of exclusion of the exercise of judicial power the broad considerations are that provisions which seek to exclude Courts ' jurisdiction shall be strictly construed. Any construction which results in denying the Courts ' it, it is urged, not favoured. Shri Sibhal relied upon the following observations of this Court in H.H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur & Ors: vs Union of India, ; ". The proper forum under our Constitution for determining a legal dispute is the Court which is by training and experience, assisted by properly qualified advocates, fitted to perform that task. A provision which purports to exclude the jurisdiction of the Courts in certain matters and to deprive the aggrieved party 742 of the normal remedy will be strictly construed, for it is a principle not to be whittled down that an aggrieved party will not, unless the jurisdiction of the Courts is by clear enactment or necessary implication barred, be denied his right to seek recourse to the Courts for determination of his rights. . ". "The Court will avoid imputing to the Legislature an intention to enact a provision which flouts notions of justice and norms of fairplay, unless a contrary intention is manifest from words plain and unambiguous. A provision in a statute will not be construed to defeat its manifest purpose and general values which animate its structure. In an avowedly democratic polity, statutory provisions ensuring the security of fundamental human rights including the right to property will, unless the contrary mandate be precise and unqualified, be construed liberally so as to uphold the right. These rules apply to the interpretation of constitutional and statutory provisions alike." [page 94 95] It is true that the provision which seeks to exclude the jurisdiction of Courts is strictly construed. See also, Mask & Co., vs Secretary of State, AIR 1940 P.C. 105. But the rules of construction are attracted where two or more reasonably possible constructions are open on the language of the statute. But, here both on the language of paragraph 7 and having regard to the legislative evolution of the provision, the legislative intent is plain and manifest. The words "no Court shall have any jurisdiction in respect of any matter connected with the disqualification of a member" are of wide import and leave no constructional options. This is reinforced by the legislative history of the anti defection law. The deliberate and purposed presence of Paragraph 7 is clear from the history of the previous proposed legislations on the subject. A comparison of the provisions of the Constitution (Thirty second Amendment) Bill, 1973 and the Constitution (Forty eight Amendment) Bill, 1978, (both of which had lapsed) on the one hand and the Constitution (52nd Amendment) Bill, 1985, would bring out the avowed and deliberate intent of Paragraph 7 in the Tenth Schedule. The previous constitution (32th and 48th Amendment) Bills contained similar provisions for 743 disqualification on grounds of defections, but these Bills did not contain any clause ousting the jurisdiction of the court. Determination of disputed disqualifications was left to the Election Commission as in the case of other disqualifications under Article 102 and 103 in the case of members of Parliament and Articles 191 and 192 in the case of Members of Legislature of the States. The Constitution (Fifty second Amendment) Bill for the first time envisaged the investiture of the power to decide disputes on the speaker or the Chairman. The purpose of the enactment of Paragraph 7, as the debates in the House indicate, was to bar the jurisdiction of the Courts under Articles 136, 226 and 227 of the Constitution of India, Shri Sibal 's suggested contention would go against all these over whelming interpretative criteria apart from its unacceptability on the express language of paragraph 7. But it was urged that no question of change in Articles 136, 226 and 227 of the Constitution within the meaning of clause (b) of the proviso to Article 368(2) arises at all in view of the fact that the area of these rights and obligations being constitutionally rendered non justiciable, there is no judicial review under Articles 136,226 and 227 at all in the first instance so as to admit of any idea of its exclusion. Reliance was placed on the decisions of this Court in Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; and Sajjan Singh vs State of Rajasthan, ; 24. In Sankari Prasad 's case, the question was whether the Amendment introducing Articles 31A and 31B in the Constitution required ratification under the said proviso. Repelling this contention it was observed: "It will be seen that these articles do not either in terms or in effect seek to make any change in article 226 or in articles 132 and 136. Article 31A aims at saving laws providing for the compulsory acquisition by the State of certain kind of property from the operation of articles 13 read with other relevant articles in Part III, while article 31B purports to validate certain specified Acts and Regulations already passed, which, but for such a provision, would be liable to be impugned under Article 13. It is not correct to say that the powers of the High Court under Article 226 to issue writs "for the enforcement of any of the rights conferred by Part III" or of this Court under Articles 132 and 136 to entertain appeals from orders issuing or refusing such writs are in any way affected. They remain just the same 744 as they were before: only a certain class of case has been excluded from the purview of Part III and the courts could no longer interfere, no because their powers were curtailed in any manner or to any extent, but because there would be no occasion hereafter for the exercise of their power in such cases." at 108] In Sajjan Singh 's case, a similar contention was raised against the validity of the Constitution (17th Amendment) Act, 1964 by which Article 31 A was again amended and 44 statutes was whether the amendment required ratification under the proviso the Article 368. This Court noticed the question thus : "The question which calls for our decision is: what would be the requirement about making an amendment in a constitutional provision contained in Part III, if as a result of the said amendment, the powers conferred on the High Courts under Article 226 are likely to be affected?" [P. 940] Negativing the challenge to the amendment on the ground of nonratification, it was held: ". Thus, if the pith and substance test is applied to the amendment made by the impugned Act, it would be clear that Parliament is seeking to amend fundamental rights solely with the object of removing any possible obstacle in the fulfillment of the socio economic policy in which the party in power believes. If that be so, the effect of the amendment on the area over which the High Courts 'powers prescribed by Article 226 operate, is incidental and in the present case can be described as of an insignificant order. The impugned Act does not purport to change the provisions of Article 226 and it cannot be said even to have that effect directly or in any appreciable measure. That is why we think that the argument that the impugned Act falls under the proviso, cannot be sustained. " [P.944] 745 The propositions that fell for consideration is Sankari Prasad Singh 's and Sajjan Singh 's cases are indeed different. There the jurisdiction and power of the Courts under Articles 136 and 226 were not sought to be taken away nor was there any change brought about in those provisions either "in terms or in effect", since the very rights which could be adjudicated under and enforced by the Courts were themselves taken away by the Constitution. The result was that there was no area for the jurisdiction of the Courts to operate upon. Matters are entirely different in the context of paragraph 7. Indeed the aforesaid cases, by necessary implication support the point urged for the petitioners. The changes in Chapter IV of Part V and Chapter V of Part VI envisaged by the proviso need not be direct. The change could be either "in terms of or in effect". It is not necessary to change the language of Articles 136 and 226 of the Constitution to attract the proviso. If in effect these Articles are rendered ineffective and made inapplicable where these articles could otherwise have been invoked or would, but for Paragraph 7, have operated there is `in effect ' a change in those provisions attracting the proviso. Indeed this position was recognised in Sajjan Singh 's case where it was observed: "If the effect of the amendment made in the fundamental rights on Article 226 is direct and not incidental and is of a very significant order, different considerations may perhaps arise." [P.944] In the present cases, though the amendment does not bring in any change directly in the language of Article 136, 226 and 227 of the Constitution, however, in effect paragraph 7 curtails the operation of those Articles respecting matters falling under the Tenth Schedule. There is a change in the effect in Article 136, 226 and 227 within the meaning of clause (b) of the proviso to Article 368(2). Paragraph 7, therefore, attracts the proviso and ratification was necessary. Accordingly, on Point B, we hold: "That having regard to the background and evolution of the principles underlying the Constitution (52nd Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule in the Constitution of India, the provisions of Paragraph 7 of the Tenth Schedule of the constitution in terms and in effect bring 746 about a change in the operation and effect to Articles 136, 226 and 227 of the Constitution of India and, therefore, the amendment would require to be ratified in accordance with the proviso to sub Article (2) of Article 368 of the Constitution of India. Re: Contentions `C ' and `D ' : The criterion for determining the validity of a law is the competence of law making authority. The competence of the law making authority would depend on the ambit of the legislative power, and the limitations imposed thereon as also the limitations on mode of exercise of the power. Though the amending power in a constitution is in the nature of a constituent power and differs in content from the Legislative power, the limitations imposed on the constituent power my be substantive as well as procedural. Substantive limitations are those which restrict the field of exercise of the amending power and exclude some areas fro its ambit. Procedural limitations are those which impose restrictions with regard to the mode of the exercise of the amending power. Both these limitations, however, touch and affect the constituent power itself, disregard of which invalidates its exercise. The Constitution provides for amendment in Articles 4, 169, 368, paragraph 7 of Fifth Schedule and paragraph 21 of Sixth Schedule. Article 4 makes provisions for amendment of the First and the Fourth Schedules, Article 169 provides for amendment in the provision of the Constitution which may be necessary for abolition or creation of Legislative Councils in States, paragraph 7 of the Fifth Schedule provides for amendment of the Fifth Schedule and paragraph 21 of Sixth Schedule provides for amendment of the Sixth Schedule. All these provisions prescribe that the said amendments can be made by a law made by Parliament which can be passed like any other law by a simple majority in the House of Parliament. Article 368 confers the power to amend the rest of the provisions of the Constitution. In sub Article (2) of Article 368, a special majority two thirds of the members of each House of Parliament present and voting and majority of total membership of such House is required to effectuate the amendments. The proviso to sub article (2) of Article 368 imposes a further requirement that if any change in the provisions set out in clauses (a) to (e) of the proviso, is intended it would then be necessary that the amendment 747 be ratified by the legislature of not less than one half of the States. Although there is no specific enumerated substantive limitation on the power in Article 368, but as arising from very limitation in the word `amend ', a substantive limitation is inherent on the amending power so that the amendment does not alter the basic structure or destroy the basic features of the Constitution. The amending power under Article 368 is subject to the substantive limitation in that the basic structure cannot be altered or the basic features of the Constitution destroyed. The limitation requiring a special majority is a procedural one. Both these limitations impose a fetter on the competence of Parliament to amend the Constitution and any amendment made in disregard of these limitations would go beyond the amending power. While examining the constitutional validity of laws the principle that is applied is that if it is possible to construe a statute so that its validity can be sustained against a constitutional attack it should be so construed and that when part of a statute is valid and part is void, the valid part must be separated from the invalid part. This is done by applying the doctrine of severability. The rationale of this doctrine has been explained by Cooley in the following words; "It will sometimes be found that an act of the legislature is opposed in some of its provisions to the constitution, while others, standing by themselves, would be unobjectionable. So the forms observed in passing it may be sufficient for some of the purposes sought to be accomplished by it, but insufficient for others. In any such case the portion which conflicts with the constitution, or inregard to which the necessary conditions have not been observed, must be treated as a nullity. Whether the other parts of the statute must also be adjudged void because of the association must depend upon a consideration of the object of the law, and in what manner and to what extent the unconstitutional portion affects the remainder. A statute, it has been said, is judicially held to be unconstitutional, because it is not within the scope of legislative authority; it may either propose to accomplish something prohibited by the constitution, or to accomplish some lawful, and even laudable object, by means repugnant to the Constitution of the United States 748 or of the State. A statute may contain some such provisions, and yet the same act, having received the sanction of all branches of the legislature, and being in the form of law, may contain other useful and salutary provisions, not obnoxious to any just constitutional exception. It would be inconsistent with all just principles of constitutional law to adjudge these enactments void because they are associated in the same act, but not connected with or dependent on others which are unconstitutional." [Cooley 's Constitutional Limitations; 8th Edn. Vol. 1, p. 359 360] In R.M.D. Chamarbaugwalla vs Union of India, ; , this Court has observed: "The question whether a statute, which is void in part is to be treated as void in toto, or whether it is capable of enforcement as to that part which is valid is one which can arise only with reference to laws enacted by bodies which do not possess unlimited powers of legislation as, for example, the legislatures in a Federal Union. The limitation on their powers may be of two kinds: It may be with reference to the subject matter on which they could legislate, as, for example, the topics enumerated in the Lists in the Seventh Schedule in the Indian Constitution, sections 91 and 92 of the Canadian Constitution, and section 51 of the Australian Constitution; or it may be with reference to the character of the legislation which they could enact in respect of subjects assigned to them as for example, in relation to the fundamental rights guaranteed in Part III of the Constitution and similar constitutionally protected rights in the American and other Constitutions. When a legislature whose authority is subject to limitations aforesaid enacts a law which is wholly in excess of its powers, it is entirely void and must be completely ignored. But 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; but does it on that account become necessarily void in its entirety? The answer to this question must depend on whether what is valid could be separated from what 749 is invalid, and that is a question which has to be decided by the court on a consideration of the provisions of the Act. " [P.940] The doctrine of severability has been applied by this Court in cases of challenge to the validity of an amendment on the ground of disregard of the substantive limitations on the amending power, namely, alteration of the basic structure. But only the offending part of the amendment which had the effect of altering the basic structure was struck down while the rest of the amendment was unheld, See : Shri Kesavananda Bharti Sripadagalavaru vs State of Kerala, [1973] Supp. SCR 1; Minerva Mills Ltd.& Ors. vs Union of India & Ors. , ; ; P. Sambhamurthy & Ors, etc. vs State of Andhra Pradesh & Anr. , ; 28.Is there anything in the procedural limitations imposed by sub Article (2) of Article 368 which excludes the doctrine of severability in respect of a law which violates the said limitations? Such a violation may arise when there is a composite Bill or what is in statutory context or jargon called a `Rag Bag ' measure seeking amendments to several statutes under one amending measure which seeks to amend various provisions of the Constitution some of which may attract clauses (a) to (e) of the proviso to Article 368(2) and the Bill, though passed by the requisite majority in both the Houses of Parliament has received the assent of the President without it being sent to States for ratification or having been so sent fails to receive such ratification from not less than half the States before the Bill is presented for assent. Such an Amendment Act is within the competence of Parliament insofar as it relates to provisions other than those mentioned in clauses (a) to (e) of proviso to Article 368(2) but in respect of the amendments introduced in provisions referred to in clauses (a) to (e) of proviso to Article 368(2), Parliament alone is not competent to make such amendments on account of some constitutionally recognised federal principle being invoked. If the doctrine of severability can be applied it can be upheld as valid in respect of the amendments within the competence of Parliament and only the amendments which Parliament alone was not competent to make could be declared invalid. Is there anything compelling in the proviso to Article 368(2) requiring it to be construed as excluding the doctrine of severability to such an amendment? It is settled rule of statutory construction that "the proper function of a proviso is to except and deal with a case which could 750 otherwise fall within the general language of the main enactment, and its effect is confined to that case" and that where "the language of the main enactment is clear and unambiguous, a proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it by implication what clearly falls within its express terms". [See : Madras & Southern Mahratta railway company vs Bezwada Municipality, (1944) 71 I.A. 133 at P. 122; Commissioner of Income Tax, Mysore vs Indo Mercantile Bank Ltd., [1959] Supp. 2 SCR 256 at p. 266. The proviso to Article 368(2) appears to have been introduced with a view to giving effect to the federal principle. In the matter of amendment of provisions specified in clauses (a) to (e) relating to legislative and executive powers of the States vis a vis the Union, the Judiciary, the election of the President and the amending power itself, which have a bearing on the States, the proviso imposes an additional requirement of ratification of the amendment which seeks to effect a change in those provisions before the Bill is presented for the assent of the President. It is salutary that the scope of the proviso is confined to the limits prescribed therein and is not construed so as to take away the power in the main part of Article 368 (2). An amendment which otherwise fulfills the requirements of Article 368(2) and is outside the specified cases which require ratification cannot be denied legitimacy on the ground alone of the company it keeps. The main part of Article 368(2) directs that when a Bill which has been passed by the requisite special majority by both the Houses has received the assent of the President "the Constitution shall stand amended in accordance with the terms of the Bill". The proviso cannot have the effect of interdicting this constitutional declaration and mandate to mean that in a case where the proviso has not been complied even the amendments which do not fall within the ambit of the proviso also become abortive. The words "the amendment shall also require to be ratified by the legislature" indicate that what is required to be ratified by the legislatures of the States is the amendment seeking to make the change in the provisions referred to in clauses (a) to (e) of the proviso. The need for and the requirement of the ratification is confined to that particular amendment alone and not in respect of amendments outside the ambit of the proviso. The proviso can have, therefore, no bearing on the validity of the amendments which do not fall within its ambit. Indeed the following observations of this Court in Sajjan Singh case (supra) are apposite: 751 "In our opinion, the two parts of Art.368 must on a reasonable construction be harmonised with each other in the sense that the scope and effect of either of them should not be allowed to be unduly reduced or enlarged." [P.940] 30. During the arguments reliance was placed on the words "before the Bill making provision for such amendment is presented to the President for assent" to sustain the argument that these words imply that the ratification of the Bill by not less than one half of the States is a condition precedent for the presentation of the Bill for the assent of the President. It is further argued that a Bill which seeks to make a change in the provisions referred to in clauses (a) to (e) of the proviso cannot be presented before the President for his assent without such ratification and if assent is given by the President in the absence of such ratification, the amending Act would be void and ineffective in its entirety. A similar situation can arise in the context of the main part of Article 368(2) which provides: "when the bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the Members of that House present and voting, it shall be presented to the president". Here also a condition is imposed that the Bill shall be presented to the President for his assent only after it has been passed in each House by the prescribed special majority. An amendment in the First and Fourth Schedule referable to Article 4 can be introduced by Parliament by an ordinary law passed by simple majority. There may be a Bill which may contain amendments made in the First and Fourth Schedules as well as amendments in other provisions of the constitution excluding those referred to in the proviso which can be amended only by a special majority under Article 368(2) and the Bill after having been passed only by an ordinary majority instead of a special majority has received the assent of the President. The amendments which are made in the First and Fourth Schedules by the said amendment Act were validly made in view of Article 4 but the amendments in other provisions were in disregard to Article 368(2) which requires a special majority. Is not the doctrine of severability applicable to such an amendment so that amendments made in the First and Fourth Schedules may be upheld while declaring the amendments in the other provisions as ineffective? A contrary 752 view excluding the doctrine of severability would result in elevating a procedural limitation on the amending power to a level higher than the substantive limitations. In Bribery Commissioner vs Pedrick Ranasinghe, ; , the Judicial Committee has had to deal with a somewhat similar situation. This was a case from Ceylon under the Ceylon (Constitution) Order of 1946. Clause (4) of section 29 of the said Order in council contained the amending power in the following terms; "(4)In the exercise of its powers under this section, Parliament may amend or repeal any of the provisions of this Order, or of any other Order of Her Majesty in council in its application to the Island: Provided that no Bill for the amendment or repeal of any of the provisions of this Order shall be presented for the Royal Assent unless it has endorsed on it a certificate under the hand of the speaker that the number of votes cast in favour thereof in the House of Representatives amounted to not less than two thirds of the whole number of members of the House (including those not present). Every certificate of the Speaker under this sub section shall be conclusive for all purposes and shall not be questioned in any court of law. " In that case, it was found that section 41 of the Bribery Amendment Act, 1958 made a provision for appointment of a panel by the Governor General on the advice of the Minister of Justice for selecting members of the Bribery Tribunal while section 55 of the constitution vested the appointment, transfer, dismissal and disciplinary control of judicial officers in the Judicial Service Commission. It was held that the legislature had purported to pass a law which, being in conflict with section 55 of the Order in Council, must be treated, if it is to be valid, as an implied alteration of the Constitutional provisions about the appointment of judicial officers and could only be made by laws which comply with the special legislative procedure laid down in section 29(4). Since there was nothing to show that the Bribery Amendment Act, 1951 was passed by the necessary two thirds majority, it was held that "any Bill which does not comply 753 with the condition precedent of the proviso, is and remains, even though it receives the Royal Assent, invalid and ultra vires". Applying the doctrine of severability the Judicial Committee, however, struck down the offending provision, i.e. section 41 alone. In other words passing of the Bill by special majority was the condition precedent for presentation of the Bill for the assent. Disregard of such a condition precedent for presenting a Bill for assent did not result in the entire enactment being vitiated and the law being declared invalid in its entirety but it only had the effect of invalidation of a particular provision which offended against the limitation on the amending power. A comparison of the language used in clause (4) of section 29 with that of Article 368(2) would show that both the provisions bear a general similarity of purpose and both the provisions require the passing of the Bill by special majority before it was presented for assent. The same principle would, therefore, apply while considering the validity of a composite amendment which makes alterations in the First and Fourth Schedules as well as in other provisions of the Constitution requiring special majority under Article 368(2) and such a law, even though passed by the simple majority and not by special majority, may be upheld in respect of the amendments made in the First and Fourth Schedules. There is really no difference in principle between the condition requiring passing of the Bill by a special majority before its presentation to the President for assent contained in Article 368(2) and the condition for ratification of the amendment by the legislatures of not less than one half of the States before the Bill is presented to the President for assent contained in the proviso. The principle of severability can be equally applied to a composite amendment which contains amendments in provisions which do not require ratification by States as well as amendment in provisions which require such ratification and by application of the doctrine of severability, the amendment can be upheld in respect of the amendments which do not require ratification and which are within the competence of Parliament alone. Only these amendments in provisions which require ratification under the proviso need to be struck down or declared invalid. The test of severability requires the Court to ascertain whether the legislature would at all have enacted the law if the severed part was not the part of the law and whether after severance what survives can stand independently and is workable. If the provisions of the Tenth Schedule are considered in the background of the legislative history, namely, the report of the `Committee on Defections ' as well as the earlier Bills which were 754 moved to curb the evil of defection it would be evident that the main purpose underlying the constitutional amendment and introduction of the Tenth Schedule is to curb the evil of defection which was causing immense mischief in our body politic. The ouster of jurisdiction of Courts under Paragraph 7 was incidental to and to lend strength to the main purpose which was to curb the evil of defection. It cannot be said that the constituent body would not have enacted the other provisions in the Tenth Schedule if it has known that Paragraph 7 was not valid. Nor can it be said that the rest of the provisions of the Tenth Schedule cannot stand on their own even if Paragraph 7 is found to be unconstitutional. The provisions of Paragraph 7 can, therefore, be held to be severable from the rest of the provisions. We accordingly hold on contentions `C ' and `D ': "That there is nothing in the said proviso to Article 368 (2) which detracts from the severability of a provision on account of the inclusion of which the Bill containing the Amendment requires ratification from the rest of the provisions of such Bill which do not attract and require such ratification. Having regard to the mandatory language of Article 368(2) that " thereupon the Constitution shall stand amended" the operation of the proviso should not be extended to constitutional amendments in Bill which can stand by themselves without such ratification. That, accordingly, the Constitution (52nd Amendment) Act, 1985, in so far as it seeks to introduce the Tenth Schedule in the Constitution of India, to the extent of its provisions which are amenable to the legal sovereign of the amending process of the Union Parliament cannot be overborne by the proviso which cannot operate in that area. There is no justification for the view that even the rest of the provisions of the constitution (52nd Amendment) Act, 1985, excluding Paragraph 7 of the Tenth Schedule become constitutionally infirm by reason alone of the fact that one of its severable provisions which attracted and required ratification under the proviso to Article 368(2) was not so ratified. That Paragraph 7 of the Tenth Schedule contains a provision 755 which is independent of, and stands apart from the main provisions of the Tenth Schedule which are intended to provide a remedy for the evil of unprincipled and unethical political defections and, therefore, is a severable part. The remaining provisions of the Tenth Schedule can and do stand independently of Paragraph 7 and are complete in themselves workable and are not truncated by the excision of Paragraph 7. Re: Contentions `E ' and `F ': These two contentions have certain over lapping areas between them and admit of being dealt with together. Paragraph 6(1) of the Tenth Schedule seeks to impart a statutory finality to the decision of the Speaker or the Chairman. The argument is that, this concept of `finality ' by itself, excludes Courts ' jurisdiction. Does the word "final" render the decision of the Speaker immune from Judicial Review? It is now well accepted that a finality clause is not a legislative magical incantation which has that effect of telling of Judicial Review. Statutory finality of a decision presupposes and is subject to its consonance with the statute. On the meaning and effect of such finality clause, Prof. Wade in `Administrative Law ' 6th Edn, at page 720 says: "Many statues provide that some decision shall be final. That provision is a bar to any appeal. But the courts refuse to allow it to hamper the operation of judicial review. As will be seen in this and the following section, there is a firm judicial policy against allowing the rule of law to be undermined by weakening the powers of the court. Statutory restrictions on judicial remedies are given the narrowest possible construction, sometimes even against the plain meaning of the words. This is a sound policy, since otherwise administrative authorities and tribunals would be given uncontrollable power and could violate the law at will. `Finality ' is a good thing but justice is a better." "If a statute says that the decision `shall be final ' or `shall be final and conclusive to all intents and purposes ' this is held to mean merely that there is no appeal: judicial control of legality is unimpaired. "Parliament only gives the impress of finality to 756 the decisions of the tribunal on condition that they are reached in accordance with the law. This has been the consistent doctrine for three hundred years. " Learned Professor further says: "The normal effect of a finality clause is therefore to prevent any appeal. There is no right of appeal in any case unless it is given by statute. But where there is general provision for appeals, for example, from quarter session to the High Court by case stated, a subsequent Act making the decision of quarter session final on some specific matter will prevent an appeal. But in one case the Court of Appeal has deprived a finality clause of part even of this modest content, holding that a question which can be resolved by certiorari or declaration can equally well be the subject of a case stated, since this is only a matter of machinery. This does not open the door to appeals generally, but only to appeals by case stated on matters which could equally well be dealt with by certiorari or declaration, i.e., matter subject to judicial review. "A provision for finality may be important in other contexts, for example when the question is whether the finding of one tribunal may be reopened before another, or whether an interlocutory order is open to appeal. ". [Page 721] Lord Devlin had said "Judicial interference with the executive cannot for long greatly exceed what Whitehall will accept" and said that a decision may be made un reviewable "And that puts the lid on". Commenting on this Prof. Wade says: "But the Anisminic case showed just the opposite, when the House of Lord removed the lid and threw it away." [See: Constitutional Fundamentals, the Hamlyn Lectures, 1989 Edn. p.88] In Durga Shankar Mehta vs Raghuraj Singh, ; the order of the Election Tribunal was made final and conclusive by section 105 of the Representation of the People Act, 1951. The contention was that the finality and conclusiveness clauses barred the jurisdiction of the Supreme Court under Article 136. This contention was repelled. It was observed: ". .but once it is held that it is a judicial tribunal empowered 757 and obliged to deal judicially with disputes arising out of or in connection with election, the overriding power of this Court to grant special leave, in proper cases, would certainly be attracted and this power cannot be excluded by any parliamentary legislation. But once that Tribunal has made any determination or adjudication on the matter, the powers of this Court to interfere by way of special leave can always be exercised. The powers given by Article 136 of the Constitution, however, are in the nature of special or residuary powers which are exercisable outside the purview of ordinary law, in cases where the needs of justice demand interference by the Supreme Court of the land . Section 105 of the Representation of the People Act certainly give finality to the decision of the Election Tribunal so far as that Act is concerned and does not provide for any further appeal but that cannot in any way cut down or effect the overriding powers which this court can exercise in the matter of granting special leave under article 136 of the Constitution. " [p.522] 34. Again, in Union of India vs Jyoti Prakash Mitter, ; a similar finality clause in Articles 217(3) of the Constitution camp up for consideration. This Court said: ". The President acting under Article 217(3) performs a judicial function of grave importance under the scheme of our Constitution. He cannot act on the advice of his Ministers. Notwithstanding the declared finality of the order of the president the Court has jurisdiction in appropriate cases to set aside the order, if it appears that it was passed on collateral considerations or the rules of natural justice were not observed, or that the President 's judgment was coloured by the advice or representation made by the executive or it was founded on no evidence. " (p 505). 758 Referring to the expression "final"occurring in Article 311(3) of the Constitution this Court in Union of India & Anr. vs Tulsiram Patel & Ors. [1985] Supp. 2 SCR 131 at page 274 held: ". The finality given by clause (3) of Article 311 to the disciplinary authority 's decision that it was not reasonably practicable to hold the inquiry is not binding upon the court. The court will also examine the charge of mala fides, if any, made in the writ petition. In examining the relevance of the reasons, the court will consider the situation which according to the disciplinary authority made it come to the conclusion that it was not reasonably practicable to hold the inquiry. If the court finds that the reasons are irrelevant, then the recording of its satisfaction by the disciplinary authority would be an abuse of power conferred upon it by clause (b). ." 35. If the intendment is to exclude the jurisdiction of the superior Courts, the language would quite obviously have been different. Even so, where such exclusion is sought to be effected by an amendment the further question whether such an amendment would be destructive of a basic feature of the Constitution would arise. But comparison of the language in Article 363(1) would bring out in contrast the kind of language that may be necessary to achieve any such purpose. In Brundaban Nayak vs Election Commission of India & Anr., ; , in spite of finality attached by Article 192 to the decision of the Governor in respect of disqualification incurred by a member of a State Legislature subsequent to the election, the matter was examined by this Court on an appeal by special leave under Article 136 of the Constitution against the decision of the High Court dismissing the writ petition filed under Article 226 of the Constitution. Similarly in Union of India vs Jyoti Prakash Mitter, [1971]3 SCR 483, in spite of finality attached to the order of the President with regard to the determination of age of a Judge of the High Court under Article 217 (3) of the Constitution, this Court examined the legality of the order passed by the President during the pendency of an appeal filed under Article 136 of the Constitution. There is authority against the acceptability of the argument that the word "final" occurring in Paragraph 6(1) has the effect of excluding the 759 jurisdiction of the Courts in Articles 136, 226 and 227. 36. The cognate questions are whether a dispute of the kind envisaged by Paragraph 6 of the Tenth Schedule is in a non justiciable area and that, at all events, the fiction in Paragraph 6(2) that all proceedings under Paragraph 6(1) of the Tenth Schedule be deemed to be "proceedings in Parliament" of "Proceedings in the Legislature of a State" attracts immunity from the scrutiny by Courts as under Article 122 or 212, as the case may be. Implicit in the first of these postulates is the premise that questions of disqualification of members of the House are essentially matters pertaining to the Constitution of the House and, therefore, the Legislature is entitled to exert its exclusive power to the exclusion of the judicial power. This assumption is based on certain British legislature practices of the past in an area which is an impalpable congeries of legal rules and conventions peculiar to and characteristic of British Parliamentary traditions. Indeed, the idea appears to have started with the proposition that the Constitution of the House was itself a matter of privilege of the House. Halsbury contains this statement: "1493, Privilege of the House of Commons in relation to its constitution: In addition to possessing a complete control over the regulation of its own proceedings and the conduct of its members, the House of Commons claims the exclusive right of providing, as it may deem fit, for its own proper constitution." (emphasis supplied) (See: Halsbury 's Laws of England, 4th Edn. 34 Pages 603 & 604) But in the Indian constitutional dispensation the power to decide a disputed disqualification of an elected member of the House is not treated as a matter of privilege and the power to resolve such electoral disputes is clearly judicial and not legislative in nature. The fact that election disputes were at some stage decided by the House of Commons itself was not conclusive that even their power was legislative. The controversy, if any, in this area is put at rest by the authoritative earlier pronouncements of this Court. 760 37.In Indira Nehru Gandhi vs Raj Narain, Beg J., referring to the historical background relating to the resolution of electoral disputes by the House of Common said: "I do not think that it is possible to contend, by resorting to some concept of a succession to the powers of the medieval "High Court of Parliament" in England, that a judicial power also devolved upon our Parliament through the constituent Assembly, mentioned in Sec. 8 of the Indian Independence Act of 1947. As already indicated by me, the Constituent assembly was invested with law making and not judicial powers. Whatever judicial power may have been possessed once by English kings sitting in Parliament, constituting the highest Court of the realm in medieval England, have devolved solely on the House of Lords as the final court of appeal in England. "King in Parliament" had ceased to exercise judicial powers in any other way long before 1950. And, the House of Commons had certainly not exercised a judicial power as a successor to the one time jurisdiction of the "King in Parliament" with the possible exception of the power to punish for its contempts. " [p.627 & 628] In the same case, Justice Mathew made these observations as to the imperative judicial nature of the power to resolve disputes. "The concept of democracy as visualised by the Constitution presupposes the representation of the people in Parliament and State Legislatures by the method of election. And, before an election machinery can be brought into operation, there are three requisites which require to be attended to , namely, (1) there should be a set of laws and rules making provisions with respect to all matters relating to, or in connection with, elections, and it should be decided as to how these laws and rules are to be made; (2) there should be an executive charged with the duty of securing the due conduct of elections; and (3) there should be a judicial tribunal to deal with disputes arising out of or in connection with elections. " [p.504] "In whichever body or authority, the jurisdiction is vested, the 761 exercise of the jurisdiction must be judicial in character. This court has held that in adjudicating an election dispute an authority is performing a judicial function and a petition for leave to appeal under Article 136 of the Constitution would lie to this Court against the decision nothwithstanding the provisions of Article 329(b)." (emphasis supplied) [p.506] It is also useful to recall the following observations of Gajendragadkar J., on the scope of Article 194(3) of the Constitution, which is analogous to Article 105(3) in Special Reference No.1 of 1964 ; "This clause requires that the powers, privileges and immunities which are claimed by the House must be shown to have subsisted at the commencement of the Constitution, i.e., on January 26, 1950. it is well known that out of a large number of privileges and powers which the House of commons claimed during the days of its bitter struggle for recognition, some were given up in course of time, and some virtually faded out by desuetude; and so, in every case where a power is claimed, it is necessary to enquire whether it was an existing power at the relevant time. It must also appear that the said power was not only claimed by the House of Commons, but was recognised by the English Courts. It would obviously be idle to contend that if a particular power which is claimed by the House was claimed by the House of Commons but was not recognised by the English Courts, it would still be upheld under the latter part of clause (3) only on the ground that it was in fact claimed by the House of Commons. In other words, the inquiry which is prescribed by this clause is: is the power in question shown or proved to have subsisted in the House of Commons at the relevant time?" (See page 442) This question is answered by Beg, J. in Indira Nehru Gandhi 's case: "I think, at the time our Constitution was framed, the decision 762 of an election dispute had ceased to be a privilege of the House of Commons in England and therefore, under Article 105(3), it could not be a privilege of Parliament in this country." [p.505] 38.Indeed, in dealing with the disqualifications and the resolution of disputes relating to them under Articles 191 and 192 or Article 102 and 103, as the case may be, the Constitution has evinced a clear intention to resolve electoral disputes by resort to the judicial power of the State. Indeed, Justice Khanna in Indira Nehru Gandhi 's case said: "Not much argument is needed to show that unless there be a machinery for resolving an election dispute and for going into the allegations that elections were not free and fair being vitiated by malpractices, the provision that a candidate should not resort to malpractices would be in the nature of a mere pious wish without any legal sanction. It is further plain that if the validity of the election declared to be valid only if we provide a forum for going into those grounds and prescribe a law for adjudicating upon those grounds. ." (See page 468) It is, therefore, inappropriate to claim that the determinative jurisdiction of the Speaker or the Chairman in the Tenth Schedule is not a judicial power and is within the non justiciable legislative area. The classic exposition of Justice Issacs J., in Australian Boot Trade Employees Federation vs Whybrow & Co., at page 317, as to what distinguishes a judicial power from a legislative power was referred to with the approval of this Court in Express Newspaper Ltd. vs Union of India, at 611. Issacs J., stated: "If the dispute is as to the relative rights of parties as they rest on past or present circumstances, the award is in the nature of a judgment, which might have been the decree of an ordinary judicial tribunal acting under the ordinary judicial power. There the law applicable to the case must be observed. If, however, the dispute is as to what shall in the future be the mutual rights and responsibilities of the parties in other words, if no present rights are asserted or denied, but a future rule of conduct is to be prescribed, thus creating new rights and obligations, with 763 sanctions for non conformity then the determination that so prescribes, call it an award, or arbitration, determination, or decision or what you will, is essentially of a legislative character, and limited only by the law which authorises it. If, again, there are neither present rights asserted, nor a future rule of conduct prescribed, but merely a fact ascertained necessary for the practical effectuation of admitted rights, the proceeding, though called an arbitration, is rather in the nature of an appraisement or ministerial act. " In the present case, the power to decide disputed disqualification under Paragraph 6(1) is preeminently of a judicial complexion. The fiction in Paragraph 6(2), indeed, places it in the first clause of Article 122 or 212, as the case may be. The words "proceedings in Parliament" or "proceedings in the legislature of a State" in Paragraph 6(2) have their corresponding expression in Articles 122(1) and 212(1) respectively. This attracts an immunity from mere irregularities of procedures. That apart, even after 1986 when the Tenth Schedule was introduced, the Constitution did not evince any intention to invoke Article 122 or 212 in the conduct of resolution of disputes as to the disqualification of members under Articles 191(1) and 102(1). The very deeming provision implies that the proceedings of disqualification are, in fact, not before the House; but only before the Speaker as a specially designated authority. The decision under paragraph 6(1) is not the decision of the House, nor is it subject to the approval by the House. The decision operates independently of the House. A deeming provision cannot by its creation transcend its own judicial scrutiny of the decision of the Speaker or Chairman exercising power under Paragraph 6(1) of the Tenth Schedule. But then is the Speaker or the Chairman acting under Paragraph 6(1) is a Tribunal? "All tribunals are not courts, though all Courts are Tribunals". The word "Courts" is used to designate those Tribunals which are set up in an organised State for the Administration of Justice. By Administration of justice is meant the exercise of judicial power of the State to maintain and uphold rights and to punish "wrongs". Whenever there is an infringement of a right or an injury, the Courts are there to restore the vinculum juris, which is disturbed. See: Harinagar Sugar Mills 764 Ltd. vs Shyam Sunder Jhunjhunwala & Ors., ; In that case Hidayatullah, J. said: ". By "courts" is meant courts of civil judicature and by "tribunals", those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such controversies. This is undoubtedly one of the attributes of the State and is aptly called the judicial power of the State. In the exercise of this power, a clear division is thus noticeable. Broadly speaking, certain special matters go before tribunals, and the residue goes before the ordinary courts of civil judicature. Their procedures may differ, but the functions are not essentially different. What distinguishes them has never been successfully established. Lord Stamp said that the real distinction is that the courts have "an air of detachment". But this is more a matter of age and tradition and is not of the essence. Many tribunals, in recent years, have acquitted themselves so well and with such detachment as to make this test insufficient. " [p.362] Where there is a lis an affirmation by one party and denial by another and the dispute necessarily involves a decision on the rights and obligations of the parties to it and the authority is called upon to decide it, there is a exercise of judicial power. That authority is called a Tribunal, if it does not have all the trappings of a Court. In Associated Cement Companies Ltd. vs P.N. Sharma and Anr., [1965]2 SCR 366, this Court said: ". . The main and the basic test, however, is whether the adjudicating power which a particular authority is empowered to exercise, has been conferred on it by a statute and can be described as a part of the State 's inherent power exercised in discharging its judicial function. Applying this test, there can be no doubt that the power which the State Government exercises under R.6(5) and R.6(6) is a part of the State 's judicial power. .There is, in that sense, a lis; there is affirmation by one party and denial by another, and the dispute necessarily involves the rights and obligations of the parties to it. The order which the State Government ultimately passes is 765 described as its decision and it is made final and binding. ." [p.386 and 387] By these well known and accepted tests of what constitute a Tribunal, the Speaker or the Chairman, acting under paragraph 6(1) of the Tenth Schedule is a Tribunal. In the operative conclusions we pronounced on 12th November, 1991 we indicated in clauses G and H therein that Judicial review in the area is limited in the manner indicated. If the adjudicatory authority is a tribunal, as indeed we have held it to be, why, then, should its scope be so limited? The finality clause in paragraph 6 does not completely exclude the jurisdiction of the courts under Articles 136, 226 and 227 of the Constitution. But it does have the effect of limiting the scope of the jurisdiction. The principle that is applied by the courts is that in spite of a finality clause it is open to the court to examine whether the action of the authority under challenge is ultra vires the powers conferred on the said authority. Such an action can be ultra vires for the reason that it is in contravention of a mandatory provision of the law conferring on the authority the power to take such an action. It will also be ultra vires the powers conferred on the authority if it is vitiated by mala fides or is colourable exercise of power based on extraneous and irrelevant considerations. While exercising their certiorari jurisdiction, the courts have applied the test whether the impugned action falls within the jurisdiction of the authority taking the action or it falls outside such jurisdiction. An ouster clause confines judicial review in respect of actions falling outside the jurisdiction of the authority taking such action but precludes challenge to such action on the ground of an error committed in the exercise of jurisdiction vested in the authority because such an action cannot be said to be an action without jurisdiction. An ouster clause attaching finality to a determination, therefore, does oust certiorari to some extent and it will be effective in ousting the power of the court to review the decision of an inferior tribunal by certiorari if the inferior tribunal has not acted without jurisdiction and has merely made an error of law which does not affect its jurisdiction and if its decision is not a nullity for some reason such as breach of rule of natural justice. See : Administrative Law by H.W.R. Wade, 6th Edn., pp. 724 726; Anisminic Ltd. vs Foreign Compensation commission; , ; S.E. Asia Fire Bricks vs Non Metallic Products, 766 In Makhan Singh vs State of Punjab, [1964] 4 SCR 797, while considering the scope of judicial review during the operation of an order passed by the President under Article 359(1) suspending the fundamental right guaranteed under Article 21 of the Constitution, it has been held that the said order did not preclude the High Court entertaining a petition under Article 226 of the Constitution where a detenu had been detained in violation of the mandatory provisions of the detention law or where the detention has been ordered mala fide. It was emphasised that the exercise of a power mala fide was wholly outside the scope of the Act conferring the power and can always be successfully challenged. (p. 825) Similarly in State of Rajasthan vs Union of India, ; , decided by a seven judge Bench, high Court was considering the challenge to the validity of a proclamation issued by the President of India under Article 356 of the constitution. At the relevant time under clause (5) of Article 356, the satisfaction of the President mentioned in clause (1) was final and conclusive and it could not be questioned in any court on any ground. All the learned judges have expressed the view that the proclamation could be open to challenge if it is vitiated by mala fides. While taking this view, some of the learned judges have made express reference to the provisions of clause(5). In this context, Bhagwati, J (as the learned Chief Justice then was) speaking for himself and A.C. Gupta, J. has stated: "Of course by reason of cl. (5) of article 356, the satisfaction of the President is final and conclusive and cannot be assailed on any ground but this immunity from attack cannot apply where the challenge is not that the satisfaction is improper or unjustified, but that there is no satisfaction at all. In such a case it is not the satisfaction arrived at by the President which is challenged, but the existence of the satisfaction itself. Take, for example, a case where the President gives the reason for taking action under article 356, cl. (1) and says that he is doing so, because the Chief Minister of the State is below five feet in height and, therefore, in his opinion a situation has arisen where the Government of the State cannot be carried on in accordance with the provisions of the Constitution. Can the so called satisfaction of the President in such a case not be challenged 767 on the ground that it is absurd or perverse or mala fide or based on a wholly extraneous and irrelevant ground and is, therefore, no satisfaction at all. 82 83) Untwalia, J. has held as follows: "I, however, must hasten to add that I cannot persuade myself to subscribe to the view that under no circumstances an order of proclamation made by the President under Article 356 can be challenged in a Court of Law. And, I am saying so notwithstanding the provision contained in clause (5) of the said Article introduced by the Constitution(38th Amendment) Act, 1975."(p. 94) "But then, what did I mean by saying that situation may arise in a given case where the jurisdiction of the Court is not completely ousted? I mean this. If, without entering into the prohibited area, remaining on the fence, almost on the face of the impugned order or the threatened action of the President it is reasonably possible to say that in the eye of law it is no order or action as it is in flagrant violation of the very words of a particular Article, justifying the conclusion that the order is ultra vires, wholly illegal or passed mala fide, in such a situation it will be tantamount in law to be no order at all. Then this Court is not powerless to interfere with such an order and may, rather, must strike it down. "(p. 95) Similarly, Fazal Ali, J. has held : "Even if an issue is not justiciable, if the circumstances relied upon by the executive authority are absolutely extraneous and irrelevant, the Courts have the undoubted power to scrutinise such an e exercise of the executive power. Such a judicial scrutiny is one which comes into operation when the exercise of the executive power is colourable or mala fide and based on extraneous or irrelevant considerations." (p. 116) "It is true that while an order passed by the President under Article 356 is put beyond judicial scrutiny by cl. (5) of Art.356, but this does not mean that the Court possesses no jurisdiction 768 in the matter at all. Even in respect of cl. (5) of article 356, the Courts have a limited sphere of operation in that on the reasons given by the President in his order if the Courts find that they are absolutely extraneous and irrelevant and based on personal and illegal consideration the Courts are not powerless to strike down the order on the ground of mala fide if proved." (p.120) In Union of India vs Jyoti Prakash Mitter (supra), dealing with the decision of the President under Article 217 (3) on the question as to the age of a judge of the High Court, requiring a judicial approach it was held that the field of judicial review was enlarged to cover violation of rules of natural justice as well as an order based on no evidence because such errors are errors of jurisdiction. c In Union of India & Anr. vs Tulsiram Patel & Ors. (supra) this Court was dealing with Article 311 (3) of the constitution which attaches finality to the order of the disciplinary authority on the question whether it was reasonably practicable to hold an inquiry. It was observed that though the `finality ' clause did not bar jurisdiction it did indicate that the jurisdiction is limited to certain grades. In the light of the decisions referred to above and the nature of function that is exercised by the Speaker/Chairman under paragraph 6, the scope of judicial review under Articles 136, 226 and 227 of the Constitution in respect of an order passed by the Speaker/Chairman under paragraph 6 would be confined to jurisdictional errors only viz., infirmities based on violation of constitutional mandate, mala fides, non compliance with rules of natural justice and perversity. In view of the limited scope of judicial review that is available on account of the finality clause in paragraph 6 and also having regard to the constitutional intendment and the status of the repository of the adjudicatory power i.e. Speaker/Chairman, judicial review cannot be available at a stage prior to the making of a decision by the Speaker/Chairman and a quia timet action would not be permissible. Nor would interference be permissible at an interlocutory stage of the proceedings. Exception will, however, have to be made in respect of cases where disqualification or suspension is imposed during the pendency of the proceedings and such disqualification or suspension is likely to have grave, immediate and irreversible repercussions and consequence. 769 42. In the result, we hold on contentions E and F : That the Tenth Schedule does not, in providing for an additional grant for disqualification and for adjudication of disputed disqualifications, seek to create a nonjusticiable constitutional area. The power to resolve such disputes vested in the Speaker or chairman is a judicial power. That Paragraph 6(1) of the Tenth Schedule, to the extent it seeks to impart finality to the decision of the Speakers/Chairmen is valid. But the concept of statutory finality embodied in Paragraph 6(1) does not detract from or abrogate judicial review under Articles 136, 226 and 227 of the Constitution in so far as infirmities based on violations of constitutional mandates, mala fides, non compliance with Rules of Natural Justice and perversity, are concerned. That the deeming provision in Paragraph 6(2) of the Tenth Schedule attracts an immunity analogous to that in Articles 122(1) and 212(1) of the Constitution as understood and explained in Keshav Singh 's Case Spl. No. 1; , , to protect the validity of proceedings from mere irregularities of procedure. The deeming provision, having regard to the words "be deemed to be proceedings in Parliament" or "proceedings in the Legislature of a State" confines the scope of the fiction accordingly. The Speaker/Chairmen while exercising powers and discharging functions under the Tenth Schedule act as Tribunal adjudicating rights and obligations under the Tenth Schedule and their decisions in that capacity are amenable to judicial review. However, having regard to the Constitutional Schedule in the Tenth Schedule, judicial review should not cover any stage prior to the making of a decision by the Speakers/Chairman. Having regard to the constitutional intendment and the status of the repository of the adjudicatory power, no quia timet actions are permissible, the only exception for any interlocutory interference being cases of interlocutory disqualifications or suspensions which may have grave, immediate and irreversible 770 repurcussions and consequence. Re : Contention(G): The argument is that an independant adjudicatory machinery for resolution of electrol disputes is an essential incident of democracy, which is a basic feature of Indian consitutionalism. It is urged that investiture of the power of resolving such disputes in the Speaker or the Chairman does not answer this test of an independent, impartial quality of the adjudicatory machinery. It is, therefore, urged that Paragraph 6(1) of the Tenth Schedule is violative of a basic feature. It is also urged that a Speaker, under the Indian Parliamentary tradition is not required to resign his membership of the political party on whose strength he gets elected and that inevitably the decision of the Speaker is not free tugs and pulls of political polarisations. It is urged that the Speaker who has not resigned his membership of the political party cannot be impartial and, at all events, his functioning will not be free from reasonable likelihood of bias. The Tenth Schedule breaks away from the constitutional pattern for resolution of disqualifications envisaged in Articles 103 and 192 of the Constitution which vest jurisdiction in this behalf in the President or the Governor acting according to the opinion of Election Commission. The disqualifications for defection could very well have been included in Article 102(1) or 191(1) as a ground, additional to the already existing grounds under clauses (a) to (e) in which event, the same dispute resolution machinery would have dealt with the disqualifications for defections also. But the Tenth Schedule, apparently. attempted a different experiment in respect of this particular ground of disqualification. 45.The question is, whether the investiture of the determinative jurisdiction in the Speaker would by itself stand vitiated as denying the idea of an independent adjudicatory authority. We are afraid the criticism that the provision incurs the vice of unconstitutionality ignores the high status and importance of the office of the Speaker in a Parliamentary democracy. The office of the speaker is held in the highest respect and esteem in Parliamentary traditions. The evolution of the institution of Parliamentary democracy has as its pivot the institution of the Speaker. `The Speaker holds a high, important and ceremonial office. All questions of the well being of the House 771 are matters of Speaker 's concern '. The Speaker is said to be the very embodiment of propriety and impartiality. He performs wide ranging functions including the performance of important functions of a judicial character. Mavalankar, who was himself a distinguished occupant of that high office, says : "In parliamentary democracy, the office of the Speaker is held in very high esteem and respect. There are many reasons for this. Some of them are purely historical and some are inherent in the concept of parliamentary democracy and the powers and duties of the Speaker. Once a person is elected Speaker, he is expected to be above parties, above politics. In other words, he belongs to all the members or belongs to none. He holds the scales of justice evenly irrespective of party or person, though no one expects that he will do absolute justice in all matters; because, as a human being he has his human drawbacks and shortcomings. However, everybody knows that he will intentionally do no injustice or show partiality. "Such a person is naturally held in respect by all." [See : G. V. Mavalankar : The Office of Speaker, Journal of Parliamentary Information, April 1956, Vol. 2, No. 1, p.33] Pundit Nehru referring to the office of the Speaker said : ". The speaker represents the House. He represents the dignity of the House, the freedom of the House and because the House represents the nation, in a particular way, the Speaker becomes the symbol of the nation 's freedom and liberty. Therefore, it is right that that should be an honoured position, a free position and should be occupied always by men of outstanding ability and impartiality. [See : HOP. IX (1954), CC 3447 48] Referring to the Speaker, Erskine may says : "The Chief characteristics attaching to the office of Speaker in the House of Commons are authority and impartiality. As a symbol of his authority he is accompanied by the Royal Mace 772 which is borne before him when entering and leaving the chamber and upon state occasions by the Sergeant at Arms attending the House of commons, and is placed upon the table when he is in the chair. In debate all speeches are addressed to him and he calls upon Members to speak a choice which is not open to dispute. When he rises to preserve order or to give a ruling on a doubtful point he must always be heard in silence and no Member may stand when the Speaker is on his feet. Reflections upon the character or actions of the Speaker may be punished as breaches of privilege. His action cannot be criticized incidentally in debate or upon any form of proceeding except a substantive motion. His authority in the chair is fortified by many special powers which are referred to below. Confidence in the impartiality of the Speaker is an indispensable condition of the successful working of procedure, and many conventions exist which have as their object not only to ensure the impartiality of the Speaker but also to ensure that his impartiality is generally recognised. ." [See : Erskine May Parliamentary Practice 20th edition p. 234 and 235] M.N. Kaul and S.L. Shakdher in `Practice and procedure of Parliament ' 4th Edition, say : "The all important conventional and ceremonial head of Lok Sabha is the Speaker. Within the walls of the House his authority is supreme. This authority is based on the Speaker 's absolute and unvarying impartiality the main feature of the office, the law of its life. The obligation of impartiality appears in the constitutional provision which ordains that the Speaker is entitled to vote only in the case of equality of votes. Moreover, his impartiality within the House is secured by the fact that he remains above all considerations of party or political career, and to that effect he may also resign from the party to which he belonged." [p. 104] 46. It would, indeed, be unfair to the high traditions of that great 773 office to say that the investiture, in it of this Jurisdiction would be vitiated for violation of a basic feature of democracy. It is inappropriate to express distrust in the High office of the Speaker, merely because some of the Speakers are alleged, or even found, to have discharged their functions not in keeping with the great traditions of that high office. The Robes of the Speaker to change and elevate the man inside. Accordingly, the contention that the vesting of adjudicatory functions in the Speakers/Chairmen would by itself vitiate the provision on the ground of likelihood of political bias is unsound and is rejected. The Speakers/Chairmen hold a pivotal position in the scheme of Parliamentary democracy and are guardians of the rights and privileges of the House. They are expected to and to take far reaching decisions in the functioning of Parliamentary democracy. Vestiture of power of adjudicate questions under the Tenth Schedule in such a constitutional functionaries should not be considered exceptionable. 48.Re : Contention H : In the view we take of the validity of paragraph 7 it is unnecessary to pronounce on the contention whether judicial review is a basic feature of the Constitution and paragraph 7 of the Tenth Schedule violates such basic structure. We may now notice one other contention as to the construction of the expression `any direction ' occurring in paragraph 2(1)(b). It is argued that if the expression really attracts within its sweep every direction or whip of any kind whatsoever it might be unduly restrictive of the freedom of speech and the right of dissent and that, therefore, should be given a meaning limited to the objects and purposes of the Tenth Schedule. Learned counsel relied upon and commended to us the view taken by the minority in the Full Bench decision of Punjab and Haryana High Court in Parkash Singh Badal & Ors. vs Union of India & Ors. , [AIR 1987 Punjab and Haryana 263] where such a restricted sense was approved. Tewatia J. said : "If the expression : "any direction" is to be literally construed then it would make the people 's representative a wholly political party 's representative, which decidedly he is not. The Member would virtually lose his identity and would become a rubber 774 stamp in the hands of his political party. Such interpretation of this provision would cost it, its constitutionality, for in that sense it would become destructive of democracy/parliamentary democracy, which is the basic feature of the Constitution. Where giving of narrow meaning and reading down of the provision can save it from the vice of unconstitutionality the Court should read it down particularly when it brings the provision in line with the avowed legislative intent. ." ". . the purpose of enacting paragraph 2 could be no other than to insure stability of the democratic system, which in the context of Cabinet/Parliamentary form of Government on the one hand means that a political party or a coalition of political parties which has been voted to power, is entitled to govern till the next election, and on the other, that opposition has a right to censure the functioning of the Government and even overthrow it by voting it out of power if it had lost the confidence of the people, then voting or abstaining from voting by a Member contrary to any direction issued by his party would by necessary implication envisage voting or abstaining from voting in regard to a motion or proposal, which if failed, as a result of lack or requisite support in the House, would result in voting the Government out of power, which consequence necessarily follows due to well established constitutional convention only when either a motion of no confidence is passed by the House or it approves a cut motion in budgetary grants. Former because of the implications of Article 75(3) of the Constitution and latter because no Government can function without money and when Parliament declines to sanction money, then it amounts to an expression of lack of confidence in the Government. When so interpreted the clause (b) of sub paragraph (1) of paragraph 2 would leave the Members free to vote according to their views in the House in regard to any other matter that comes up before it." [p.313 & 314] The reasoning of the learned judge that a wider meaning of the words "any direction" would `cost it its constitutionality ' does not commend to us. 775 But we approve the conclusion that these words require to be construed harmoniously with the other provisions and appropriately confined to the objects and purposes of the Tenth Schedule. Those objects and purposes define and limit the contours of its meaning. The assignment of a limited meaning is not to read it down to promote its constitutionality but because such a construction is a harmonious construction in the context. There is no justification to give the words the wider meaning. While construing Paragraph 2(1)(b) it cannot be ignored that under the Constitution members of Parliament as well as of the State legislature enjoy freedom of speech in the House though this freedom is subject to the provisions of the constitution and the rules and standing orders regulating the Procedure of the House [Art, 105(1) and art.194(1)]. The disqualification imposed by Paragraph 2(1) (b) must be so construed as not to unduly impinge on the said freedom of speech of a member. This would be possible if Paragraph 2(1)(b) is confined in its scope by keeping in view the object underlying the amendments contained in the Tenth Schedule, namely, to curb the evil or mischief of political defections motivated by the lure of office or other similar considerations. The said object would be achieved if the disqualification incurred on the ground of voting or abstaining from voting by a member is confined to cases where a change of Government is likely to be brought about or is prevented, as the case may be, as a result of such voting or abstinence or when such voting or abstinence is on a matter which was a major policy and programme on which the political party to which the member belongs went to the polls. For this purpose the direction given by the political party to a member belonging to it, the violation of which may entail disqualification under paragraph 2(1)(b), would have to be limited to a vote on motion of confidence or no confidence in the Government or where the motion under consideration relates to a matter which was an integral policy and programme of the political party on the basis of which it approached the elaborate. The voting or abstinence from voting by a member against the direction by the political party on such a motion would amount to disapproval of the programme of the basis of which he went before the electorate and got himself elected and such voting or abstinence would amount to a breach of the trust reposed in him by the electorate. Keeping in view the consequences of the disqualification i.e., termination of the membership of a House; it would be appropriate that the 776 direction or whip which results in such disqualification under Paragraph 2(1)(b) is so worded as to clearly indicate that voting or abstaining from voting contrary to the said direction would result in incurring the disqualification under Paragraph 2(1)(b) of the Tenth Schedule so that the member concerned has fore knowledge of the consequences flowing from his conduct in voting or abstaining from voting contrary to such a direction. There are some submissions as to the exact import of a "split whether it is to be understood an instantaneous, one time event or whether a "split" can be said to occur over a period of time. The hypothetical poser was that if one third of the members of a political party in the legislature broke away from it on a particular day and a few more members joined the spliter group a couple of days later, would the latter also be a part of the "split" group. This question of construction cannot be in vaccuo. In the present cases, we have dealt principally with constitutional issues. The meaning to be given to "split" must necessarily be examined in a case in which the question arises in the context of its particular facts. No hypothetical predications can or need be made. We, accordingly,, leave this question open to be decided in an appropriate case. Before parting with the case, we should advert to one other circumstance. During the interlocutory stage, the constitution bench was persuaded to make certain interlocutory orders which, addressed as they were to the Speaker of the House, (though, in a different capacity as an adjudicatory forum under the Tenth Schedule) engendered complaints of disobedience culminating in the filing of petitions for initiation of proceedings of contempt against the Speaker. It was submitted that when the very question of jurisdiction of the Court to deal with the matter was raised and even before the constitutionality of Paragraph 7 had been pronounced upon, self restraint required that no interlocutory orders in a sensitive area of the relationship between the legislature and the Courts should been made. The purpose of interlocutory orders is to preserve in status quo the rights of the parties, so that, the proceedings do not become infructuous by any unilateral overt acts by one side or the other during its pendency. One of the contentions urged was as to the invalidity of the amendment for non compliance with the proviso to Article 368(2) of the Constitution. It has now been unanimously held that Paragraph 7 attracted the proviso to article 368(2). The interlocutory orders in this case were necessarily 777 justified so that, no land slide changes were allowed to occur rendering proceedings ineffective and infructuous. With the finding and observations as aforesaid W.P.No. 17 of 1991 is dismissed. Writ petition in Rule No. 2421 of 1990 in the High Court of Gauhati is remitted back to the High Court for disposal in accordance with law and not inconsistent with the findings and observations contained in this order. VERMA, J. : This matter relating to disqualification on the ground of defection of some members of the Negaland legislative Assembly under the Tenth Schedule inserted by the Constitution (Fifty Second Amendment) Act, 1985, was heard along with some other similar matters relating to several Legislative Assemblies including those of Manipur, Meghalaya, Madhya Pradesh, Gujarat and Goa, since all of them involved the decision of certain constitutional questions relating to the constitutional validity of para 7 of the Tenth Schedule and consequently the validity of the Constitution (Fifty Second Amendment) Act, 1985 itself. At the hearing, several learned counsel addressed us on account of which the hearing obviously took some time. Even during the course of the hearing, the actions of some Speakers tended to alter the status quo, in some cases resulting in irreversible consequences which could not be corrected in the event of para 7 of the Tenth Schedule being held invalid or the impugned orders of the Speakers being found justiciable and, on merits illegal and, therefore, the urgency increased of deciding the questions debated before us at the earliest. For this reason, we indicated during the course of the hearing that we would pronounce our operative conclusions soon after conclusion of the hearing with reasons therefor to follow. Accordingly, on conclusion of the hearing on November 1, 1991, we indicated that the operative conclusions would be pronounced by us at the next sitting of the Bench when it assembled on November 12, 1991 after the Diwali Vacation. The operative conclusions of the majority (Venkatachaliah, Reddy and Agrawal, JJ.) as well as of the miority (Lalit Mohan Sharma and J.S.Verma,JJ.)were thus pronounced on November 12, 1991. We are now indicating herein our reasons for the operative conclusions of the minority view. The unanimous opinion according to the majority as well as the minority is that para 7 of the tenth Schedule enacts a provision for complete exclusion of judicial review including the jurisdiction of the 778 Supreme Court under Article 136 and of the High Courts under Articles 226 and 227 of the Constitution and, therefore, it makes in terms and in effect a change in Articles 136, 226 and 227 of the Constitution which attracts the proviso to clause (2) of Article 368 of the Constitution; and therefore, ratification by the specified number of State Legislatures before the Bill was presented to the President for his assent was necessary, in accordance therewith. The majority view is that in the absence of such ratification by the State legislatures, it is para 7 alone of the Tenth Schedule which is unconstitutional; and it being severable from the remaining part of the Tenth Schedule, para 7 alone is liable to be struck down rendering the speakers 'decision under para 6 that of a judicial tribunal amenable to judicial review by the Supreme court and the High courts under Article 136, 226 and 227. The minority opinion is that the effect of invalidity of para 7 of the Tenth Schedule is to invalidate the entire Constitution (Fifty Second Amendment) Act, 1985 which inserted the Tenth Schedule since the President 's assent to the bill without prior ratification by the State Legislatures is non est. The minority view also is that para 7 is not severable from the remaining part of the Tenth Schedule and the Speaker not being an independent adjudicatory authority for this purpose as contemplated by a basic feature of democracy, the remaining part of the Tenth Schedule is in excess of the amending powers being violative of a basic feature of the Constitution. In the minority opinion, we have held that the entire constitution (Fifty Second Amendment) Act, 1985 is unconstitutional and an abortive attempt to make the constitutional Amendment indicated therein. Before proceeding to give our detailed reasons, we reproduce the operative conclusions pronounced by us on November 12, 1991 in the minority opinion (Lalit Mohan Sharma and J.S. Verma, JJ.) as under : "For the reasons to be given in our detailed judgment to follow, our operative conclusions in the minority opinion on the various constitutional issues are as follows : 1.Pare 7 of the Tenth Schedule, in clear terms and in effect, excludes the jurisdiction of all courts, including the Supreme Court under Article 136 and the High Courts under Articles 226 and 227 to entertain any challenge to the decision under para 6 on any ground even of illegality or perversity, not only 779 at an interim stage but also after the final decision on the question of disqualification on the ground of defection. Para 7 of the Tenth Schedule, therefore, in terms and in effect, makes a change in Article 136 in Chapter IV of Part V; and Articles 226 and 227 in Chapter V of Part VI of the Constitution attracting the proviso to clause (2) of Article 368. In view of para 7 in the Bill resulting in the constitution (Fifty Second Amendment) Act, 1985, it was required to be ratified by the Legislature of not less than one half of the States as a condition precedent before the Bill could be presented to the President for assent, in accordance with the mandatory special procedure prescribed in the proviso to clause (2) of Article 368 for exercise of the constituent power. Without ratification by the specified number of State Legislatures, the stage for presenting the Bill for assent of the President did not reach and, therefore, the so called assent of the President was non est and did not result in the constitution standing amended in accordance with the terms of the Bill. In the absence of ratification by the specified number of State Legislatures before presentation of the Bill to the President for his assent, as required by the proviso to clause (2) of Article 368, it is not merely para 7 but, the entire Constitution (Fifty Second Amendment) Act, 1985 which is rendered unconstitutional, since the constituent power was not exercised as prescribed in Article 368, and therefore, the Constitution did not stand amended in accordance with the terms of the Bill providing for the amendment. 5.Doctrine of Severability cannot be applied to a Bill making a constitutional amendment where any part thereof attracts the proviso to clause (2) of Article 368. Doctrine of Severability is not applicable to permit striking down para 7 alone saving the remaining provisions of the Bill making the Constitutional Amendment on the ground that para 7 alone attracts the proviso to clause (2) of Article 368. 780 7. Even otherwise, having regard to the provisions of the Tenth Schedule of the Constitution inserted by the Constitution (Fifty Second Amendment) Act, 1985, the Doctrine of Severability does not apply to it. Democracy is a part of the basic structure of the Constitution and free and fair elections with provision for resolution of disputes relating to the same as also for adjudication of those relating to subsequent disqualification by an independent body outside the House are essential features of the democratic system in our Constitution. Accordingly, an independent adjudicatory machinery for resolving disputes relating to the competence of Members of the House is envisaged as a attribute of this basic feature. The tenure of the Speaker who is the authority in the Tenth Schedule to decide this dispute is dependent on the continuous support of the majority in the House and, therefore, he (the Speaker) does not satisfy the requirement of such an independent adjudicatory authority; and his choice as the sole arbiter in the matter violates an essential attribute of the basic feature. 9.Consequently, the entire Constitution (Fifty Second Amendment) Act, 1985 which inserted the Tenth Schedule together with clause (2) in Articles 102 and 191, must be declared unconstitutional or an abortive attempt to so amend the Constitution. 10.It follows that all decisions rendered by the several Speakers under the Tenth Schedule must also be declared nullity and liable to be ignored. On the above conclusions, it does not appear necessary or appropriate to decide the remaining questions urged. " it is unnecessary in this judgment to detail the facts giving rise to the debate on the constitutional issues relating to the validity of the Tenth Schedule, more particularly para 7 therein, introduced by the Constitution (Fifty second Amendment) Act, 1985. Suffice it to say that these matters arise out of certain actions of the Speakers of several Legislative Assemblies under the Tenth Schedule. Arguments on these questions were 781 addressed to us by several learned counsel, namely, the learned Attorney General, S/Shri A.K. Sen, Shanti Bhushan, M.C. Bhandare, F.S. Nariman, Soli J. Sorabjee, R.K. Garg, Kapil Sibal, M.R. Sharma, Ram Jethmalani, N.S. Hegde, O.P. Sharma, Bhim Singh and R.F. Nariman. It may be mentioned that some learned counsel modified their initial stand to some extent as the hearing progressed by advancing alternative arguments as well. Accordingly, the several facets of each constitutional issue debated before us were fully focused during the hearing. The main debate, however, was on the construction of paras 6 and 7 of the Tenth Schedule and the validity of the Constitutional Amendment. Arguments were also addressed on the question of violation, if any,of any basic feature of the Constitution by the provisions of the Tenth Schedule. The points involved in the decision of the constitutional issues for the purpose of our opinion may be summarised broadly as under : (A) Construction of para 6 of the Tenth Schedule. Its effect and the extent of exclusion of judicial review thereby. (B) Construction of para 7 of the Tenth Schedule. Its effect and the extent of exclusion of judicial review thereby. (C) In case of total exclusion of judicial review including the jurisdiction of Supreme Court under Article 136 and the High Courts under Articles 226 and 227 of the Constitution by the Tenth Schedule, does para 7 make a change in these Articles attracting the proviso to clause (2) of Article 368 of the Constitution ? (D) The effect of absence of prior ratification by the State Legislatures before the Bill making provisions for such amendment was presented to the President for assent, on the constitutional validity of the Tenth Schedule. (E) Severability of para 7 from the remaining part of the Tenth Schedule and its effect on the question of constitutional validity of the Tenth Schedule. (F) Violation of basic feature of the Constitution, if any, by the Tenth Schedule as a whole or any part thereof and its effect on the constitutionality for this reason. 782 (G) Validity of the Tenth Schedule with reference to the right of dissent of members with particular reference to Article 105. As indicated by us in our operative conclusions pronounced earlier, we need not express our concluded opinion on the points argued before us which are not necessary for supporting the conclusion reached by us that the entire Tenth Schedule and consequently the Constitution (Fifty Second Amendment) Act, 1985 is unconstitutional on the view we have taken on the other points. We are, therefore, giving our reasons only in respect of the points decided by us leading to the conclusion we have reached. At this stage, it would be appropriate to mention the specific stand of the Speakers taken at the hearing. The learned counsel who appeared for the several Speakers clearly stated that they were instructed to apprise us that the Speakers did not accept the jurisdiction of this Court to entertain these matters in view of the complete bar on jurisdiction of the courts enacted in para 7 read with para 6 of the Tenth Schedule. Accordingly, they abstained from addressing us on the merits of the impugned orders which led to these matters being brought in this Court in spite of our repeated invitation to them to also address us on merits in each case, which all the other learned counsel did. No doubt, this Court 's jurisdiction to decide the constitutional validity of the Tenth Schedule was conceded, but no more. It is in these extra ordinary circumstances that we had to hear these matters. We need not refer herein to the details of any particular case since the merits of each case are dealt separately in the order of that case. Suffice it to say that the unanimous view of the Bench is that the Speakers ' decision disqualifying a member under the Tenth Schedule is not immune from judicial scrutiny. According to the majority it is subject to judicial scrutiny on the ground of illegality or perversity which in the minority view, it is a nullity liable to be so declared and ignored. We consider it apposite in this context to recall the duty of the Court in such delicate situations. This is best done by quoting Chief Justice Marshall in Cohens vs Virginia; , , 404, 5 L.Ed.257, 291 [1821], wherein he said : 783 "It is most true, that this Court will not take Jurisdiction if it should not : but it is equally true that it must take jurisdiction if it should. The judiciary cannot, as the legislature may, avoid a measure because it approaches the confines of the constitution. We cannot pass it by because it is doubtful. With whatever doubts, with whatever difficulties, a case may be attended, we must decide it if it be brought before us. We have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given. The one or the other would be treason to the constitution. Questions may occur which we would gladly avoid, but we cannot avoid them. All we can do, is to exercise our best judgment, and conscientiously to perform our duty. In doing this, on the present occasion, we find this tribunal invested with appellate jurisdiction in all cases arising under the constitution and laws of the United States. We find no exception to this grant, and we cannot insert one. XXX XXX XXX . If the question cannot be brought in a court, then there is no case in law or equity, and no jurisdiction is given by the words of the article. But if, in any controversy depending in a court, the cause should depend on the validity of such a law, that would be a case arising under the constitution, to which the judicial power of the United States would extend. ." (emphasis supplied) More recently, Patanjali Sastri, CJ., while comparing the role of this Court in the constitutional scheme with that of the U.S. Supreme Court, pointed out in the State of Madras vs V.G. Row ; that the duty of this Court flows from express provisions in our Constitution while such power in the U.S. Supreme Court has been assumed by the interpretative process giving a wide meaning to the "due process" clause. Sastri, CJ., at p.605, spoke thus: "Before proceeding to consider this question, we think it right to point out, what is sometimes overlooked, that our constitution contains express provisions for judicial review of legislation as to its conformity with the Constitution, unlike as in America where the Supreme Court has assumed extensive powers of 784 reviewing legislative acts under cover of the widely interpreted `due process ' clause in the Fifth and Fourteenth Amendments. If,then, the, courts in this country face up to such important and none too easy task, it is not out of any desire to tilt at legislative authority in a crusader 's spirit, but in discharge of a duty plainly laid upon them by the Constitution. This is especially true as regards the `fundamental rights ', as to which this court has been assigned the role of a sentinel on the qui vive. While the Court naturally attaches great weight to the legislative judgment, it cannot desert its own duty to determine finally the constitutionality of an impugned statute. We have ventured on these obvious remarks because it appears to have been suggested in some quarters that the courts in the new set up are out to seek clashes with legislatures in the country." (emphasis supplied) We are in respectful agreement with the above statement of Sastri, CJ, and wish to add that even though such an obvious statement may have been necessary soon after the Constitution came into force and may not be a necessary reminder four decades later at this juncture, yet it appears apposite in the present context to clear the lingering doubts in some minds. We have no hesitation in adding further that while we have no desire to clutch at jurisdiction, at the same time we would not be deterred in the performance of this constitutional duty whenever the need arises. We would also like to observe the unlike England, where there is no written Constitution and Parliament is supreme, in our country there is a written Constitution delineating the spheres of jurisdiction of the legislature and the judiciary whereunder the power to construe the meaning of the provisions in the Constitution and the laws is entrusted to the judiciary with finality attached to the decision of this Court inter alia by Article 141 about the true meaning of any enacted provision and Article 144 obliges all authorities in the country to act in aid of this Court. It is, therefore, not permissible in our constitutional scheme for any other authority to claim that power in exclusivity, or in supersession of this Court 's verdict. Whatever be the controversy prior to this Court entertaining such a matter, it must end when the court is seized of the matter for pronouncing its verdict and it is the constitutional obligation of every person and authority to accept its binding effect when the decision is rendered by this Court. It is also to be remembered that in our constitutional scheme based on 785 democratic principles which include governance by rule of law, every one has to act and perform his obligations according to the law of the land and it is the constitutional obligation of this Court to finally say what the law is. We have no doubt that the Speakers and all others sharing their views are alive to this constitutional scheme, which is as much the source of their jurisdiction as it is of this Court and also conscious that the power given to each wing is for the performance of a public duty as a constitutional obligation and not for self aggrandisement. Once this perception is clear to all, there can be no room for any conflict. The Tenth Schedule was inserted in the Constitution of India by the Constitution (Fifty Second Amendment) Act, 1985 which came into force with effect from 1.3.1985 and is popularly known as the Anti Defection Law. The Statement of Objects and Reasons says that this amendment in the Constitution was made to combat the evil of political defections which has become a matter of national concern and unless combated, is likely to undermine the very foundations of our democratic system and the principles which sustained it. This amendment is, therefore, for outlawing defection to sustain our democratic principles. The Tenth Schedule contains eight paras. Para 1 is the interpretation clause defining `House ' to mean either House of Parliament or the legislative Assembly or, as the case may be, either House of the Legislature of a State. The expressions `legislature party ' and `original political party ' which are used in the remaining paras are also defined. Para 2 provides for disqualification on ground of defection. Para 3 provides that disqualification on ground of defection is not to apply in case of split indicating therein the meaning of `split. Para 4 provides that disqualification on ground of defection is not to apply in case of merger. Para 5 provides exemption for the Speaker or the Deputy speaker of the House of the People or of the Legislative Assembly of the State, the Deputy Chairman of the Council of States or the Chairman or the Deputy Chairman of the Legislative Council of a State from the applicability of the provisions of the Tenth Schedule. Para 8 contains the rule making power of the Chairman or the Speaker. For the purpose of deciding the jurisdiction of this Court and the justiciability of the cause, it is paras 6 and 7 which are material and they read as under: "6. Decision on questions as to disqualification of ground of defection. 786 1. If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final : Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final. All proceedings under sub paragraph (1) of this paragraph in relation to any question as to disqualification of a member of a House under this Schedule shall be deemed to be proceedings in Parliament within the meaning of Article 122 or, as the case may be, proceedings in the Legislature, of a State within the meaning of Article 212. Bar of Jurisdiction on courts. Notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a member of a House under this Schedule. " We shall now deal with the points involved enumerated earlier. Points `A ' & `B ' Paras 6 & 7 of Tenth Schedule In support of the objection raised to the jurisdiction of this Court and the justiciability of the Speaker 's decision relating to disqualification of a member, it has been urged that sub paragraph (1) of para 6 clearly lays down that the decision of the Chairman or, as the case may be, the Speaker of such House shall be final and sub paragraph (2) proceeds to say that all proceedings under sub paragraph (1) 'shall be deemed to the proceedings in Parliament . or, . . proceedings in the Legislature of a State ' within the meaning of Article 122 or Article 212, as the case may be. It was urged that the clear provision in para 6 that the decision of the 787 Chairman/Speaker on the subject of disqualification under this Schedule shall be final and the further provision that all such proceedings `shall be deemed to be proceedings in Parliament . or, . proceedings in the Legislature of as State ', within the meaning of Article 122 or Article 212, as the case may be, clearly manifests the intention that the jurisdiction of all courts including the Supreme Court is ousted in such matters and the decision on this question is not justiciable. Further argument is that para 7 in clear words thereafter reiterates that position by saying that `notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a member of a House under this Schedule. In other words, the argument is that para 6 by itself provides for ouster of the jurisdiction of all courts including the Supreme Court and para 7 is a remanifestation of that clear intent in case of any doubt arising from para 6 alone. On this basis it was urged that the issue raised before us is not justiciable and the Speaker or the Chairman, as the case may be, not being `Tribunal ' within the meaning of that expression used in Article 136 of the Constitution, their decision is not open to judicial review. In reply, it was urged that finality Clause in sub paragraph (1) of para 6 does not exclude the jurisdiction of the high Courts under Articles 226 and 227 and of this Court under Article 136. Deeming provision in sub paragraph (2) of Para 6, it was urged, has the only effect of making it a `proceedings in Parliament ' or `proceedings in the Legislature of a State ' to bring it within the ambit of clause (1) of Articles 122 or 212 but not within clause (2) of these Articles. The expression `proceedings in Parliament ' and `proceedings in the Legislature of a State ' are used only in clause (1) of Articles 122 and 212 but not in clause (2) of either of these Articles, on account of which the scope of the fiction cannot be extended beyond the limitation implicit in the specific words used in the legal fiction. This being so, it was argued that immunity extended only to `irregularity of procedure ' but not to illegality as held in Keshav Singh [1965] 1 SCR 413. In respect of para 7, the reply is that the expression `no court ' therein must be similarly construed to refer only to the courts of ordinary jurisdiction but not the extra ordinary jurisdiction of the High Courts under Article 226 & 227 and the Plenary jurisdiction of Supreme Court under Article 136. It was also argued that the Speaker/Chairman while deciding the question of disqualification of member under para 6 exercises a judicial function of the State which otherwise would be vested in the courts and, 788 therefore, in this capacity he acts as `Tribunal amenable to the jurisdiction under Articles 136, 226 and 227 of the Constitution. Shri Sibal also contended that the bar in para 7 operates only at the interim stage, like other election disputes, and not after the final decision under para 6. The finality clause in sub paragraph (1) of para 6 which says that the decision of the Chairman or, as the case may be, the Speaker of such House shall be final is not decisive. It is settled that such a finality clause in a statute by itself is not sufficient to exclude the jurisdiction of the High Courts under Articles 226 and 227 and the Supreme Court under Article 136 of the Constitution, the finality being for the statute alone. This is apart from the decision being vulnerable on the ground of nullity. Accordingly, sub paragraph (1) alone is insufficient to exclude the extra ordinary jurisdiction of the High Courts and the plenary jurisdiction of this Court. The legal fiction in sub paragraph (2) of para 6 can only bring the proceedings under sub paragraph (1) thereof within the ambit of clause (1) of Article 122 or clause (1) 212, as the case may be since the expressions used in sub paragraph (2) of para 6 of the tenth Schedule are `shall be deemed to be proceedings in Parliament ' or `proceedings in the Legislature of a State ' and such expressions find place both in Articles 122 and 212 only in clause (1) and not clause (2) thereof. The ambit of the legal function must be confined to the limitation implicit in the words used for creating the fiction and it cannot be given an extended meaning to include therein something in addition. It is also settled that a matter falling within the ambit of clause (1) of either of these two Article is justiciable on the ground of illegality or perversity in spite of the immunity it enjoys to a challenge on the ground of `irregularity of procedures '. To overcome this result, it was argued that such matter would fall within the ambit of Clause (2) of both Articles 122 and 212 because the consequence of the order of disqualification by the Speaker/Chairman would relate to the conduct of business of the House. In the first place, the two separate clauses in Articles 122 and 212 clearly imply that the meaning and scope of the two cannot be identical even assuming there be some overlapping area between them. What is to be seen is the direct impact of the action and its true nature and not the further consequences flowing therefrom. it cannot be doubted in view of the clear language of sub paragraph (2) of para 6 that it relates to clause (1) of both Articles 122 and 212 and the legal fiction cannot, therefore, be extended beyond the limits 789 of the express words used in the fiction. In construing the fiction it is not to be extended beyond the language of the Section by which it is created and its meaning must be restricted by the plain words used. It cannot also be extended by importing another fiction. The fiction in para 6(2) is a limited one which serves its purpose by confining it to clause (1) alone of Articles 122 and 212 and, therefore,, there is no occasion to enlarge its scope by reading into it words which are not there and extending it also to clause (2) of these Articles. See Commissioner of Income tax vs Ajax Products Ltd., ; Moreover, it does appear to us that the decision relating to disqualification of a member does not relate to regulating procedure or the conduct of business of the House provided for in clause (2) of Articles 122 and 212 and taking that view would amount to extending the fiction beyond its language and importing another fiction for this purpose which is not permissible. That being so, the matter falls within the ambit of Clause (1) only of Articles 122 and 212 as a result of which it would be vulnerable on the ground of illegality and perversity and, therefore, justiciable to that extent. It is, therefore, not possible to uphold the objection of jurisdiction on the finality clause or the legal fiction created in para 6 of the Tenth Schedule when justiciability of the clause is based on a ground of illegality or perversity (see Keshav Singh ; This in our view is the true construction and effect of para 6 of Tenth Schedule. We shall now deal with para 7 of the Tenth Schedule. The words in para 7 of the Tenth Schedule are undoubtedly very wide and ordinarily mean that this provision supersedes any other provision in the Constitution. This is clear from the use of the non obstinate clause `notwithstanding anything in this Constitution ' as the opening words of para 7. The non obstinate clause followed by the expression `no court shall have any jurisdiction 'leave no doubt that the bar of jurisdiction of courts contained in para 7 is complete excluding also the jurisdiction of the Supreme court under Article 136 and that of the High Courts under Articles 226 and 227 of the Constitution relating to matters covered by para 7. The question, therefore, is of the scope of para 7. The scope of para 7 for this purpose is to be determined by the expression `in respect of any matter connected with disqualification of a member of a House under this Schedule '. 790 One of the constructions suggested at the hearing was that this expression covers only the intermediate stage of the proceedings relating to disqualification under para 6 and not the end stage when the final order is made under para 6 on the question of disqualification. It was suggested that this construction would be in line with the construction made by this Court in its several decisions relating to exclusion of Courts ' jurisdiction in election disputes at the intermediate state under Article 329 of the Constitution. This construction suggested of para 7 does not commend to us since it is contrary to the clear and unambiguous language of the provision. The expression `in respect of any matter connected with the disqualification of a member of a House under this Schedule ' is wide enough to include not merely the intermediate stage of the proceedings relating to disqualification but also the final order on the question of disqualification made under para 6 which is undoubtedly such a matter. There is thus express exclusion of all courts ' jurisdiction even in respect of the final order. As earlier indicated by virtue of the finality clause and the deeming provision in para 6, there is exclusion of all courts ' jurisdiction to a considerable extent leaving out only the area of justiciability on the ground of illegality or perversity which obviously is relatable only to the final order under para 6. This being so, enactment of para 7 was necessarily made to bar the jurisdiction of courts also in respect of matters falling outside the purview of the exclusion made by para 6. para 7 by itself and more so when read along with para 6 of the Tenth Schedule, leaves no doubt that exclusion of all courts ' jurisdiction by para 7 is total leaving no area within the purview, even of the Supreme Court or the High Courts under Articles 136 , 226 and 227. The language of para 7 being explicit, no other aid to construction is needed. Moreover, the speech of the Law Minister who piloted the Bill in the Lok Sabha and that of the Prime Minister in the Rajya Sabha as well as the debate on this subject clearly show that these provisions were enacted to keep the entire matter relating to disqualification including the Speakers ' final decision under para 6 on the question of disqualification, wholly outside the purview of of all courts including the Supreme Court and the High Courts. The legislative history of the absence of such a provision excluding the courts ' jurisdiction in the two earlier Bills which lapsed also re inforces the conclusion that enactment of para 7 was clearly to provide for total ouster of all courts ' jurisdiction. 791 In the face of this clear language, there is no rule of construction which permits the reading of para 7 in any different manner since there is no ambiguity in the language which is capable of only one construction, namely, total exclusion of the Jurisdiction of all courts including that of the Supreme Court and the High Courts under Articles 136, 226 and 227 of the Constitution in respect of every matter connected with the disqualification of a member of a House under the Tenth Schedule including the final decision rendered by the Speaker/Chairman, as the case may be. Para 7 must, therefore, be read in this manner alone. The question now is of the effect of enacting such a provision in the Tenth Schedule and the applicability of the proviso to clause (2) of Article 368 of the Constitution. Point `C ' Applicability of Article 368(2) Proviso The above construction of para 7 of the Tenth Schedule gives rise to the question whether it thereby makes a change in Article 136 which is in Chapter IV of part V and Articles 226 and 227 which are in Chapter V of Part VI of the Constitution. If the effect of para 7 is to make such a change in these provisions so that the proviso to clause (2) of Article 368 is attracted, then the further question which arises is of the effect on the Tenth Schedule of the absence of ratification by the specified number of State Legislatures, it being admitted that no such ratification of the Bill was made by any of the State Legislatures. Prima facie it would appear that para 7 does seek to make a change in Articles 136 , 226 and 227 of the Constitution inasmuch as without para 7 in the Tenth Schedule a decision of the Speaker/ Chairman would be amenable to the jurisdiction of the Supreme Court under Article 136 and of the high Courts under Articles 226 and 227 as in the case of decisions as to other disqualifications provided in clauses (1) of Article 102 or 191 by the President/Governor under Article 103 or 192 in accordance with the opinion of the Election Commission which was the Scheme under the two earlier Bills which lapsed. However, some learned counsel contended placing reliance on Sri Sankari Prasad Singh Deo vs Union of India and State of Bihar, ; and Sajjan Singh vs State of Rajasthan, ; that the effect of such total exclusion of the jurisdiction of the Supreme Court and the High Courts does not make a change in Articles 136, 226 and 227. A close reading of these decisions indicates that instead 792 of supporting this contention, they do infact negative it. In Sankari Prasad, the challenge was to Articles 31A and 31B inserted in the Constitution by the Constitution (First Amendment) Act, 1951. One of the objections was based on absence of ratification under Article 368. While rejecting this argument, the Constitution Bench held as under: "It will be seen that these Articles do not either in terms or in effect seek to make any change in article 226 or in articles 132 and 136. Article 31A aims at saving laws providing for the compulsory acquisition by the State of a certain kind of property from the operation of article 13 read with other relevant articles in Part III, while article 31B purports to validate certain specified Acts and Regulations already passed, which, but for such a provision, would be liable to be impugned under article 13. It is not correct to say that the powers of the High Court under article 226 to issue writs "for the enforcement of any of the rights conferred by Part III" or of this Court under articles 132 and 136 to entertain appeals from orders issuing or refusing such writs are in any way affected. They remain just the same as they were before : only a certain class of case has been excluded from the purview of Part III and the courts could no longer interfere, not because their powers were curtailed in any manner or to any extend, but because there would be no occasion hereafter for the exercise of their powers in such cases. " [emphasis supplied] The test applied was whether the impugned provisions inserted by the Constitutional Amendment did `either in terms or in effect seek to make any change in Article 226 or in Articles 132 and 136 '. Thus the change may be either in terms i.e. explicit or in effect in these Articles to require ratification. The ground for rejection of the argument therein was that the remedy in the courts remained unimpaired and unaffected by the change and the change was really by extinction of the right to seek the remedy. In other words, the change was in the right and not the remedy of approaching the court since there was no occasion to invoke the remedy, the right itself being taken away. To the same effect is the decision in Sajjan Singh, wherein Sankari Prasad was followed stating clearly that there was 793 no justification for reconsidering Sankari Prasad. Distinction has to be drawn between the abridgement or extinction of a right and restriction of the remedy for enforcement of the right. If there is an abridgement or extinction of the right which results in the disappearance of the cause of action which enables invoking the remedy and in the absence of which there is no occasion to make a grievance and invoke the subsisting remedy, then the change brought about is in the right and not the remedy. To this situation, Sankari Prasad and Sajjan Singh apply. On the other hand, if the right remains untouched so that a grievance based thereon can arise and, therefore, the cause of action subsists, but the remedy is curtailed or extinguished so that the cause of action cannot be enforced for want of that remedy, then the change made is in the remedy and not in the subsisting right. To this latter category, Sankari Prasad and Sajjan Singh have no application. This is clear from the above quoted passage in Sankari Prasad which clearly brings out this distinction between a change in the right and a change in the remedy. The present case, in unequivocal terms, is that of destroying the remedy by enacting para 7 in the Tenth Schedule making a total exclusion of judicial review including that by the Supreme Court under Article 136 and the High Courts under Articles 226 and 227 of the Constitution. But for para 7 which deals with the remedy and not the right, the jurisdiction of the Supreme Court under Article 136 and that of the High Courts under Articles 226 and 227 would remain unimpaired to challenge the decision under para 6, as in the case of decisions relating to other disqualifications specified in clause (1) of Articles 102 and 191, which remedy continues to subsist. Thus, this extinction of the remedy alone without curtailing the right, since the question of disqualification of a member on the ground of defection under the Tenth Schedule does required adjudication on enacted principles, results in making a change in Article 136 in Chapter IV in Part V and Articles 226 and 227 in Chapter V in Part VI of the Constitution. On this conclusion, it is undisputed that the proviso to clause (2) of Article 368 is attracted requiring ratification by the specified number of State Legislatures before presentation of the Bill seeking to make the constitutional amendment to the President for his assent. Point `D ' Effect of absence of ratification 794 The material part of Article 368 is as under : "368. Power of Parliament to amend the Constitution and Procedure therefore. (1) Notwithstanding anything in this Constitution, Parliament may in exercise of its constituent Power amend by way of addition, variation or repeal any provision of this Constitution in accordance with the procedure laid down in this article. (2) An amendment of this Constitution may be initiated only by the introduction of a Bill, for the purpose in either House of parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two thirds of the members of that House present and voting, it shall be presented to the President who shall give his assent to the Bill and thereupon the Constitution shall stand amended in accordance with the terms of the Bill : Provided that if such amendment seeks to make any change in (a) Article 54, Article 55, Article 73, Article 162 or Article 241, or (b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part XI, or (c) any of the Lists in the Seventh Schedule, or (d) the representation of States in Parliament, or (e) the provisions of this article, the amendment shall also require to be ratified by the Legislature of not less than one half of the States by resolutions to that effect passed by those legislatures before the Bill making provision for such amendment is presented to the President for assent." (emphasis supplied) it is clause (2) with its proviso which is material. The main part of clause (2) prescribes that a constitutional amendment can be initiated only by the introduction of a Bill for the purpose and when the Bill is passed 795 by each House by a majority of the total membership of that House and by a majority of not less than tow thirds of the members of that House present and voting, it shall be presented to the President who shall give his assent to the Bill and thereupon the Constitution shall stand amended in accordance with the terms of the Bill. In short, the Bill not being passed by the required majority is presented to the President for his assent to the Bill and on giving of the assent, the Constitution stands amended accordingly. Then comes, the proviso which says that `if such an amendment seeks to make any change ' in the specified provisions of the Constitution, the amendment shall also require to be ratified by the Legislature of not less than one half of the States by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent. In other words, the proviso contains a constitutional limitation on the amending power; and prescribes as a part of the special procedure, prior assent of the State legislatures before Presentation of the Bill to the President for his assent in the case of such Bills. This is a condition interposed by the proviso in between the passing of the Bill by the requisite majority in each House and presentation of the Bill to the President for his assent, which assent results in the Constitution automatically standing amended in accordance with terms of the Bill. Thus, the Bills governed by the proviso cannot be presented to the President for his assent without the prior ratification by the specified number of State Legislatures or in other words, such ratification is a part of the special procedure or a condition precedent to presentation of the Bill governed by the proviso to the President for his assent. It logically follows that the consequence of the Constitution standing amended in accordance with the terms of the Bill on assent by the President, which is the substantive part of Article 368, results only when the Bill has been presented to the President for his assent in conformity with the special procedure after performance of the conditions precedent, namely, passing of the Bill by each House by the requisite majority in the case of all Bills; and in the case of Bills governed by the proviso, after the Bill has been passed by the requisite majority in each House and it has also been ratified by the legislature of not less than one half of the States. The constituent power for amending the Constitution conferred by Article 368 also prescribes the mandatory procedure in clause (2) including its proviso, for its exercise. The constituent power cannot, therefore, be exercised in any other manner and non compliance of the special procedure 796 so prescribed in Article 368 (2) cannot bring about the result of the Constitution standing amended in accordance with the terms of the Bill since that result ensues only at the end of the prescribed mandatory procedure and not otherwise. The substantive part of Article 368 which provides for the resultant amendment is the consequence of strict compliance of the mandatory special procedure prescribed for exercise of the constituent power and that result does not ensue except in the manner prescribed. The true nature and import of the amending power and procedure under Article 368 as distinguished from the ordinary legislative procedure was indicated in Kesavananda Bhartim[1973] Supp. SCR 1 at pp. 561, 563 & 565 : ". Under Article 368 However, a different and special procedure is provided for amending the constitution. A Bill has to be introduced in either House of Parliament and must be passed by each House separately by a special majority. It should be passed not only by 2/3rds majority of the members present and voting but also by a majority of the total strength of the House. No joint sitting of the two Houses is permissible. In the case of certain provisions of the Constitution which directly or indirectly affect interstate relations, the proposed amendment is required to be ratified by the Legislatures which is not a legislative process of not less than one half of the States before the Bill proposing the amendment is presented to the President for his assent. The procedure is special in the sense that it is different and more exacting or restrictive than the one by which ordinary laws are made by Parliament. Secondly in certain matters the State Legislatures are involved in the process of making the amendment. Such partnership between the Parliament and the State Legislatures in making their own laws by the ordinary procedure is not recognised by the Constitution. It follows from the special provision made in Article 368 for the amendment of the Constitution that our Constitution is a `rigid ' or `controlled 'constitution because the Constituent Assembly has "left a special direction as to how the constitution is to be changed. In view of Article 368, when the special procedure is successfully followed, the proposed amendment automatically becomes a part of the 797 constitution or, in other words, it writes itself into the constitution." XXX XXX XXX ". But when it comes to the amendment of the Constitution, a special procedure has been prescribed in Article 368, Since the result of following the special procedure under the Article is the amendment of the constitution the process which brings about the result is known as the exercise of constituent power by the bodies associated in the task of the amending the constitution. It is, therefore, obvious, that when the Parliament and the State Legislatures function in accordance with Article 368 with a view to amend the constitution, they exercise constituent power as distinct from their ordinary legislative power under Articles 245 to 248. Article 368 is not entirely procedural. Undoubtedly part of it is procedural. But there is a clear mandate that on the procedure being followed the `proposed amendment shall become part of the constitution, which is the substantive part of Article 368. Therefore, the peculiar or special power to amend the constitution is to be sought in Article 368 only and not elsewhere." XXX XXX XXX ". The true position is that the alchemy of the special procedure prescribed in Article 368 produces the constituent power which transport the proposed amendment into the constitution and gives it equal status with the other parts of the constitution." (emphasis supplied) Apart from the unequivocal language of clause (2) including the proviso therein indicating the above result of prior ratification being a part of the special procedure or condition precedent for valid assent of the President, the same result is reached even by another route. The ordinary role of a proviso is to carve out an exception from the general rule in the main enacting part. The main enacting part of clause (2) lays down that on a Bill for a constitutional amendment being passed in each House by a requisite majority, it shall be presented to the President for his assent and on the assent being given , the Constitution shall stand amended in accordance 798 with the terms of the Bill. The proviso then carves out the exception in case of Bills seeking to make any change in the specified Articles of the Constitution prescribing that in the case of those Bills, prior ratification by the Legislatures of not less than one half of the States is also required before the Bill is presented to the President for assent. This means that a Bill falling within the ambit of the proviso is carved out of the main enactment in clause (2) as an exception on account of which it cannot result in amendment of the Constitution on the President 's assent without prior ratification by the specified number of State Legislatures. The proviso in clause (2) is enacted for and performs the function of a true proviso by qualifying the generality of the main enactment in clause (2) in providing an exception and taking out of the main enactment in clause (2) such Bills which but for the proviso would fall within the main part. Not only the language of the main enactment in clause (2) and the proviso thereunder is unequivocal to give this clear indication but the true role of a proviso, the form in which the requirement of prior ratification if such a Bill by the State Legislatures is enacted in Article 368 lend further assurance that this is the only construction of clause (2) with its proviso which can be legitimately made. If this be the correct constructions of Article 368 (2) with the proviso as we think it is, then there is no escape from the logical conclusion that a Bill to which the proviso applies does not result in amending the Constitution in accordance with its terms on assent of the President if it was presented to the President for his assent and the President gave his assent to the Bill without prior ratification by the specified number of the State Legislatures. This is the situation in the present case. Thus the requirement of prior ratification by the State Legislatures is not only a condition precedent forming part of the special mandatory procedure for exercise of the constituent power and a constitutional limitation thereon but also a requirement carving out an exception to the general rule of automatic amendment of the Constitution on the President 's assent to the Bill. In other words, clause (2) with the proviso therein itself lays down that President 's assent does not result in automatic amendment of the Constitution in case of such a Bill it was not duly ratified before presentation to the President for his assent. Nothing more is needed to show that not only para 7 of the Tenth Schedule but the entire Constitution (Fifty 799 Second Amendment) Act, 1985 is still born or an abortive attempt to amend the Constitution for want of prior ratification by the State Legislatures of the Bill before its presentation to the President for his assent. The result achieved in each case is the same irrespective of the route taken. If the route chosen is for construing the language of clause (2) with the proviso merely a part of it, the requirement or prior ratification is a condition precedent forming part of the special mandatory procedure providing that the constituent power in case of such a Bill can be exercised in this manner alone, the mode prescribed for other Bills being forbidden. If the route taken is of treating the proviso as carving out an exception from the general rule which is the normal role of a proviso, then the result is that the consequence of the Constitution standing amended in terms of the provisions of the Bill on the President 's assent as laid down in the main part of clause (2) does not ensue without prior ratification in case of a Bill to which the proviso applies. There can thus be no doubt that para 7 of the Tenth Schedule which seeks to make a change in Article 136 which is a part of Chapter IV of Part V and Articles 226 and 227 which form part of Chapter V of Part VI of the Constitution, has not been enacted by incorporation in a Bill seeking to make the constitutional Amendment in the manner prescribed by clause (2) read with the proviso therein of Article 368. Para 7 of the Tenth Schedule is, therefore, unconstitutional and to that extent at least the Constitution does not stand amended in accordance with the Bill seeking to make the Constitutional Amendment. The further question now is: its effect on the validity of the remaining part of the Tenth Schedule and consequently the Constitution (Fifty Second Amendment) Act, 1985 itself. Point `E ' Severability of para 7 of Tenth Schedule The effect of absence of ratification indicated above suggests inapplicability of the Doctrine of Severability. In our opinion, it is not para 7 alone but the entire Tenth Schedule may the Constitution (Fifty Second Amendment) Act, 1985 itself which is rendered unconstitutional being an abortive attempt to so amend the Constitution. It is the entire Bill and not merely rely para 7 of the Tenth Schedule therein which required prior ratification by the State Legislatures before its presentation to the President for his assent, it being a joint exercise by the Parliament and State Legislatures. The stage for presentation of Bill to the President for his assent not having 800 reached, the President 's assent was non est and it could not be result in amendment of the Constitution in accordance with the terms of the Bill for the reasons given earlier. Severance of para 7 of the Tenth Schedule could not be made for the purpose of ratification or the President 's assent and, therefore, no such severance can be made even for the ensuing result. If the President 's assent cannot validate para 7 in the absence of prior ratification, the same assent cannot be accepted to bring about a difference result with regard to the remaining part of the Bill. On this view, the question of applying the Doctrine of Severability to strike down para 7 alone retaining the remaining part of Tenth Schedule does not arise since it presupposes that the Constitution stood so amended on the President 's assent. The Doctrine does not apply to a still born legislation. The Doctrine of Severability applies in a case where an otherwise validly enacted legislation contains a provision suffering from a defect of lack of legislative competence and the invalid provision is severable leaving the remaining valid provisions a valid provisions a viable whole. This doctrine has no application where the legislation is not validly enacted due to non compliance of the mandatory legislative procedure such as the mandatory special procedure prescribed for exercise of the constituent power. It is not possible to infuse life in a still born by any miracle of deft surgery even though it may be possible to continue life by removing a Congenitally defective part by surgical skill. Even the highest degree of surgical skill can help only to continue life but it cannot infuse life in the case of still birth. With respect, the contrary view does not give due weight to the effect of a condition precedent forming part of the special procedure and the role of a proviso and results in rewriting the proviso to mean that ratification is not a condition precedent but merely an additional requirement of such a Bill to make that part effective. This also fouls with the expression `Constitution shall stand amended. . ' on the assent of President which is after the stage when the amendment has been made and ratified by the State Legislatures as provided. The historical background of drafting the proviso also indicates the significance attached to prior ratification as a condition precedent for valid exercise of the constituent power. We are unable to read the Privy Council decision in The Bribery Commissioner V. Pedrick Ranasinghe ; as an authority to 801 support applicability of the Doctrine of Severability in the Present case. In Kesavananda Bharati, the substance of that decision was indicated by Mathew, J., at p. 778 of S.C.R., thus: ". that though Ceylon Parliament has plenary power of ordinary legislation, in the exercise of its constitution power it was subject to the special procedure laid down in s, 29 (4). ." While section 29(4) of Ceylon (Constitution) Order was entirely procedural with no substantive part therein, Article 368 of the Indian Constitution has also a substantive part as pointed out in Kesavananda Bharati. This distinction also has to be borne in mind. The challenge in Ranasinghe was only to the legality of a conviction made under the Bribery Act, 1954 as amended by the Bribery Amendment Act, 1958 on the ground that the Tribunal which had made the conviction was constituted under section 41 of the Amending Act which was invalid being in conflict with section 55 of the Constitution and not being enacted by exercise of constituent power in accordance with section 29(4) of the Ceylon (Constitution) Order. Supreme Court of Ceylon quashed the conviction holding section 41 of the Amending Act to be invalid for this reason. The Privy Council affirmed that view and in this context held that section 41 could be severed from rest of the Amending Act. Ranasinghe was not a case of a Bill passed in exercise of the constituent power without following the special procedure of section 29(4) but of a Bill passed in exercise of the ordinary legislative power containing other provisions which could be so enacted, and including therein section 41 which could be made only in accordance with the special procedure of section 29(4) of the Constitution. The Privy Council made a clear distinction between legislative and constituent powers and reiterated the principles thus: ". The effect of section 5 of the Colonial Laws Validity Act, which is framed in a manner somewhat similar to section 29(4) of the Ceylon Constitution was that where a legislative power is given subject to certain manner and form, that power does not exist unless and until the manner and form is complied with Lord Sankey L.C. said : "A Bill, within the scope of sub section (6) of section 7A, which received the Royal Assent without having been approved by 802 the electors in accordance with that section, would not be a valid act of the legislature. It would be ultra vires section 5 of the Act of 1865. " The Bribery Amendment Act, 1958, in Ranasinghe, was enacted in exercise of the ordinary legislative power and therein was inserted section 41 which could be made only in exercise of the constituent power according to the special procedure prescribed in section 29(4) of the Ceylon (Constitutions) Order. In this situation, only section 41 of the Amending Act was held to be invalid and severed because the special procedure for the constituent power was required only for that provision and not the rest. In the instant case the entire Tenth Schedule is enacted in exercise of the Constituent power under Article 368, not merely para 7 therein, and this has been done without following the mandatory special procedure prescribed. It is, therefore, not a case of severing the invalid constituent part from the remaining ordinary legislation. Ranasinghe could have application if in an ordinary legislation outside the ambit of Article 368, a provision which could be made only in exercise of the constituent power according to Article 368 had been inserted without following the special procedure, and severance of the invalid constituent part alone was the question. Ranasinghe is, therefore, distinguishable. Apart from inapplicability of the Doctrine of Severability to a Bill to which the proviso to clause (2) of Article 368 applies, for the reasons given, it does not apply in the present case to strike down para 7 alone retaining the remaining part of the Tenth Schedule. In the first place, the discipline for exercise of the constituent power was consciously and deliberately adopted instead of resorting to the mode of ordinary legislation in accordance with sub clause (e) of clause (1) of Articles 102 and 191, which would render the decision on the question of disqualification on the ground of defection also amenable to judicial review as in the case of decision on questions relating to other disqualifications. Moreover, even the test applicable for applying the Doctrine of Severability to ordinary legislation as summarised in R.M.D. Chamarbaughwalla vs The Union of India, ; , indicates that para 7 alone is not severable to permit retention of the remaining part of the Tenth Schedule as valid legislation. The settled test whether the enactment would have been made without para 7 indicates that the legislative intent was to make the enactment only with para 7 therein and not without it. This intention is manifest throughout and 803 evident from the fact that but for para 7 the enactment did not require the discipline of Article 368 and exercise of the constituent power. Para 7 follows para 6 the contents of which indicate the importance given to para 7 while enacting the Tenth Schedule. The entire exercise, as reiterated time and again in the debates, particularly the Speech of the Law Minister while piloting the Bill in the Lok Sabha and that of the Prime Minister in the Rajya Sabha, was to emphasise that total exclusion of judicial review of the Speaker 's decision by all courts including the Supreme Court, was the prime object of enacting the Tenth Schedule. The entire legislative history shows this. How can the Doctrine of Severability be applied in such a situation to retain the Tenth Schedule striking down para 7 alone ? This is further reason for inapplicability of this doctrine. Point `F ' Violation of basic features The provisions in the Tenth Schedule minus para 7, assuming para 7 to be severable as held in the majority opinion, can be sustained only if they do not violate the basic structure of the Constitution or damage any of its basic features. This is settled by Kesavananda Bharti [1973] Supp. S.C.R. 1. The question, therefore, is whether there is violation of any of the basic features of the Constitution by the remaining part of the Tenth Schedule, even assuming the absence of ratification in accordance with the proviso to clause (2) of Article 368 results in invalidation of para 7 alone. Democracy is a part of the basic structure of our Constitution; and rule of law, and free and fair elections are basic features of democracy. One of the Postulates of free and fair elections is provision for resolution of election disputes as also adjudication of disputes relating to subsequent disqualifications by an independent authority. It is only by a fair adjudication of such disputes relating to validity of electrons and subsequent disqualifications of members that true reflection of the electoral mandate and governance by rule of law essential for democracy can be ensured. In the democratic pattern adopted in our Constitution, not only the resolution of election dispute is entrusted to a judicial tribunal, but even the decision on questions as to disqualification of members under Articles 103 and 192 is by the President/Governor in accordance with the opinion of the Election Commission. The constitutional scheme, therefore, for decision on questions as to disqualification of members after being duly elected, contemplates adjudication of such disputes by an independent authority out 804 side the House, namely, President/Governor in accordance with the opinion of the Election Commission, all of whom are high constitutional functionaries with security of tenure independent of the will of the House. Sub clause (e) of clause (1) in Articles 102 and 191 which provides for enactment of any law by the Parliament to prescribe any disqualification other than those prescribed in the earlier sub clauses of clause (1), clearly indicates that all disqualifications of members were contemplated within the scope of Articles 102 and 191. Accordingly, all disqualifications including disqualification on the ground of defection, in our constitutional scheme, are different species of the same genus, namely, disqualification, and the constitutional scheme does not contemplate any difference in their basic traits and treatment. It is undisputed that the disqualification on the ground of defection could as well have been prescribed by an ordinary law made by the Parliament under Articles 102 (1) (e) and 191 (1) (e) instead of by resort to the constituent power of enacting the Tenth Schedule. This itself indicates that all disqualifications of members according to the constitutional scheme were meant to be decided by an independent authority outside the House such as the President/Governor, in accordance with the opinion of another similar independent constitutional functionary,, the Election Commission of India, who enjoys the security of tenure of tenure of a Supreme Court judge with the same terms and conditions of office. Thus, for the purpose of entrusting the decision of the question of disqualification of a member, the constitutional scheme envisages an independent authority outside the House and not within it, which may be dependent on the pleasure of the Majority in the House for its tenure. The Speaker 's office is undoubtedly high and has considerable aura with the attribute of impartiality. This aura of the office was even greater when the Constitution was framed and yet the farmers of the Constitution did not choose to vest the authority of adjudicating disputes as to disqualification of members to the Speaker; and provision was made in Articles 103 and 192 for decision of such disputes by the President/Governor in accordance with the opinion of the Election Commission. To reason is not far to seek. The Speaker being an authority within the House and his tenure being dependent on the will of the majority therein, likelihood of suspicion of bias could not be ruled out. The question as to disqualification of a member has adjudicatory disposition and, therefore, requires the decision 805 to be rendered in consonance with the scheme for adjudication of disputes. Rule of law has in it firmly entrenched, natural justice, of which, rule against Bias is a necessary concomitant; and basic postulates of Rule against Bias are; Nemo judex in causa sua `A Judge is disqualified from determining any case in which he may be, or may fairly be suspected to be, biased '; and `it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done. ' This appears to be the underlying principle adopted by the framers of the Constitution in not designating the Speaker as the authority to decide election disputes and questions as to disqualification of members under Articles 103, 192 and 329 and opting for an independent authority outside the House. The framers of the Constitution had in this manner kept the office of the Speaker away from this controversy. There is nothing unusual in this scheme if we bear in mind that the final authority for removal of a Judge of the Supreme Court and High Court its outside the judiciary in the Parliament under Article 124(4). On the same principle the authority to decide the question of disqualification of a member of legislature is outside the House as envisaged by Articles 103 and 192. In the Tenth Schedule, the Speaker is made not only the sole but the final arbiter of such dispute with no provision for any appeal or revision against the Speaker 's decision to any independent outside authority. This departure in the Tenth Schedule is a reverse trend and violates a basic feature of the Constitution since the speaker cannot be treated as an authority contemplated for being entrusted with this function by the basic postulates of the Constitution, notwithstanding the great dignity attaching to that office with the attribute of impartiality. It is the Vice President of India who is ex officio chairman of the Rajya Sabha and his position, being akin to that of the President of India, is different from that of the Speaker. Nothing said herein relating to the office of the Speaker applies to the Chairman of the Rajya Sabha, that is, the Vice President of India. However, the only authority named for the Lok Sabha and the Legislative Assemblies is the Speaker of the House and entrustment of this adjudicatory function fouls with the constitutional scheme and, therefore, violates a basic feature of the Constitution. Remaining part of the Tenth Schedule also is rendered invalid notwithstanding the fact that this defect would not apply to the Rajya Sabha alone whose Chairman is the Vice President of India, since the Tenth Schedule becomes 806 unworkable for the Lok Sabha and the State Legislatures. The Statutory exception of Doctrine of Necessity has no application since designation of authority in the Tenth Schedule is made by choice while enacting the legislation instead of adopting the other available options. Since the conferment of authority is on the Speaker and that provision cannot be sustained for the reason given, even without para 7, the entire Tenth Schedule is rendered invalid in the absence of any valid authority for decision of the dispute. Thus, even if the entire Tenth Schedule cannot be held unconstitutional merely on the ground of absence of ratification of the Bill, assuming it is permissible to strike down para 7 alone, the remaining part of the Tenth Schedule is rendered unconstitutional also on account of violation of the aforesaid basic feature. Irrespective of the view on the question of effect of absence of ratification, the entire Tenth Schedule must be struck down as unconstitutionally. Point `G ' Other contentions We have reached the conclusion that para 7 of the Tenth Schedule is unconstitutional; that the entire Tenth Schedule is constitutionally invalid in the absence of prior ratification in accordance with the proviso to clause (2) of Article 368; that the Doctrine of Severability does not apply in the present case of a constitutional amendment which suffers from the defect of absence of ratification as required by the proviso to clause (2) of Article 368; that the remaining part of the Tenth Schedule minus para 7 is also unconstitutional for violation of a basic feature of the Constitution; and that the entire Tenth Schedule is, therefore, constitutionally invalid rendering the Constitution (Fifty Second Amendment) Act, 1985 still born and an abortive attempt to amend the constitution. In view of this conclusion, it is not necessary for us to express our concluded opinion on the other grounds of challenge to the constitutional validity of the entire Tenth Schedule urged at the hearing on the basis of alleged violation of certain other basic features of the Constitution including the right of members based on Article 105 of the Constitution. These are our detailed reasons for the operative conclusions pronounced by us earlier on November 12, 1991.

By the Constitution (Fifty Second Amendment) Act, 1985 (popularly known as the Anti defection law) the Tenth Schedule was inserted in the constitution of India providing for disqualification of a Member of either House of Parliament or of a State Legislature found to have defected from continuing as a Member of the House. Paragraph 2 of the Tenth Schedule states that a Member of a House would incur disqualification if he voluntarily gives up his membership of the party by which he was set up as a candidate at the election, or if he without obtaining prior permission of the political party to which he belongs votes or abstains from voting in the House contrary to "any direction" issued by such political party and such voting or abstention has not been condoned by such political party within 15 days from the date of such voting or abstention; or if a Member elected otherwise than as a candidate set up by any political party joins a political party after the 688 election; or, if a nominated Member joins any political party after expiry of six months from the date he took his seat. Paragraph 6(1) states that the question of disqualification shall be referred for decision of the chairmen/Speaker of the House and his decision shall be final. It further provides that such question in respect of Chairman/Speaker shall be referred for decision of such Member of the House as the House may elect in this behalf. according to Paragraph 6(2) all proceedings under para 6(1) shall be deemed to be proceedings in Parliament/Legislature of a House within the meaning of Article 122/212. Paragraph 7 states that no court shall have jurisdiction in respect of any matter connected with the disqualification of a Member of a House. A large number of petitions were filed before various High Courts as well as this Court challenging the constitutionality of the Amendment. This Court transferred to itself the petitions pending before the High Courts and heard all the matters together. The challenge was mainly on the grounds that Paragraph 7 of the Tenth Schedule, in terms and ineffect sought to make a change in chapter IV of Part V and Chapter V of Part VI of the Constitution as it takes away the jurisdiction of the Supreme court under Article 136 and that of the High Courts under Articles 226 and 227 of the constitution, and,therefore,the Bill before presentation to the President for assent would require to be ratified by the legislatures of not less than one half of the States by resolution to that effect as envisaged by the proviso to Article 368(2); that in the absence of such a ratification the whole Amendment Bill was an abortive attempt to bring about the amendment indicated therein; that even assuming that the amendment does not attract the proviso to Article 368(2), Paragraph 7 of the Schedule is liable to be struck down as it takes away the power of judicial review; that the very concept of disqualification for defection is violative of the fundamental values and principles under lying parliamentary democracy and violates an elective representative 's freedom of speech, right to dissent and freedom of conscience and is destructive of a basic feature of the Constitution; that the investiture of power to adjudicate disputed defections in the Chairmen/Speakers, who being nominees of political parties are not obliged to resign their party affiliations, does not stand the test of an independent and impartial adjudicatory machinery and is, therefore, violative of the basic feature of 689 the constitution. It was also contended that the expression "any direction" in Paragraph 2(1)(b) of the Schedule might be unduly restrictive of the freedom of speech, and the right of dissent which may itself be obnoxious to and violative of constitutional ideals and values. The respondents contended that the Tenth Schedule created a nonjusticiable constitutional area dealing with certain complex political issues which have no strict adjudicatory disposition and the exclusion of this area is constitutionally preserved by imparting a finality to the decision of the Speakers/Chairmen by deeming whole proceedings as those within Parliament/House of legislature envisaged in Articles 122 and 212 and further excluding the Court 's Jurisdiction under Paragraph 7; that no question of ouster of judicial review would at all arise inasmuch as the Speaker/chairman exercising power under Paragraph 6(1) of the Tenth Schedule function not as a statutory tribunal but as a part of state 's Legislative department; and that having regard to the political issues, the subject matter is itself not amenable to judicial power but pertains to the constitution of the House and the legislature is entitled to deal with it exclusively. The Court on 12.11.1991 gave its operative conclusions, indicating reasons to follow and by its judgment dated 18.2.1992 gave the reasons. On the questions whether: (1) the Tenth Schedule to the constitution inserted by the constitution (Fifty Second Amendment) Act, 1985, seeking to penalise and disqualify elected representatives is violative of the fundamental principles of Parliamentary democracy and is, therefor, destructive of the basic feature of the Constitution; (2) Paragraph 7 of the Tenth Schedule in terms and in effect brings about a change in operation and effect of Articles 136,226 and 227 of the Constitution and, therefore, the Bill introducing the amendment would require ratification as envisaged by the proviso to Article 368(2); (3) the non compliance with the proviso to Article 368(2) would render the entire Bill vitiated and an abortive attempt to bring about a valid amendment or would Paragraph 7 alone be invalidated with the application of the doctrine of severability; (4) the Tenth Schedule created a new and non justiciable constitutional area not amenable to curial adjudicative process; and whether Paragraph 6(1) in imparting a constitutional `finality 'to the decisions of Chairmen/Speakers, and paragraph 6(2) in the event of attracting immunity under Articles 122 690 and 212, bar judicial review; (5) the Chairmen/Speakers satisfy the requirements of an independent adjudicatory machinery or whether the investiture of the determinative and adjudicative jurisdiction in them under the Tenth Schedule would vitiate the provision on the ground of reasonable likelihood of bias. Dismissing Writ Petition No.17 of 1991 and remitting Writ Petition Rule No.2421 of 1990 (subject matter of TP No. 40/91) to the High Court of Guwahati, this Court HELD: (By the Court) (i) Paragraph 7 of the Tenth Schedule to the Constitution in terms and in effect excludes the jurisdiction of all Courts including the Supreme Court and High courts, and brings about a change in the operation and effect of Articles 136, 226 and 227 of the constitution of India, and therefore, the amendment would require ratification in accordance with the proviso to Articles 368(2) of the constitution of India. [pp. 711F G;714G] (ii) The finality clause in Para 6(1) of the Tenth Schedule to the Constitution is not decisive. Such finality,being for the statute alone, does not exclude extraordinary jurisdiction of the Supreme Court under Article 136 and of the High Courts under Articles 226 and 227 of the Constitution. [713E F; 788B C] (iii) The legal fiction in para 6(2) of the Tenth Schedule brings a proceeding under para 6(1) within the ambit of clause (1) of Article 122/212 of the Constitution, and, therefore, makes it justiciable on the ground of illegality or perversity inspite of the immunity it enjoys to a challenge on the ground of "irregularity of procedure." [713G; 788E F] Per Majority (M.N. Venkatachaliah. K. Jayachandra Reddy (i) Paragraph 7 of the Tenth Schedule contains a provision which is independent of, and stands apart from, the main provisions of the Tenth Schedule which are intended to provide a remedy for the evil of unprincipled and unethical political defection and, therefore, is a severable part. The remaining provisions of the Tenth Schedule can and do stand independently of Paragraph 7 and are complete in themselves workable and are not truncated by the excision of Paragraph 7. [p.712E F] 691 (ii) There is nothing in the proviso to Article 368(2) which detracts from the severability of a provision on account of the inclusion of which the Bill containing the amendment requires ratification from the rest of the provisions of such Bill which do not attract and require such ratification. Having regard to the mandatory language of Article 368(2) that "thereupon the Constitution shall stand amended" the operation of the proviso should not be extended to constitutional amendments in a bill which can stand by themselves without such ratification. [711G H; 712 A B] (iii) The Constitution (Fifty Second Amendment) Act, 1985 in so far as it seeks to introduce the Tenth Schedule in the Constitution of India, to the extent of its provision which are amenable to the legal sovereign of the amending process of the Union Parliament cannot be over borne by the proviso to Article 368(2) which cannot operate in that area. [712B C] (iv) Paragraph 2 of the Tenth schedule to the constitution is valid. Its provisions do not suffer from the vice of subverting democratic rights of elected Members of Parliament and the legislatures of the States. It does not violate their freedom of speech, freedom of vote and conscience; nor does it violate any rights or freedom under Article 105 and 194 of the Constitution. [712F H] The provisions are salutory and are intended to strengthen the fabric of Indian Parliamentary democracy by curbing unprincipled and unethical political defections. [712H, 713A] (v) The Tenth Schedule does not, in providing for an additional ground for disqualification and for adjudication of disputed disqualifications, seek to create a non justiciable constitutional area. [p. 769A B] (vi) The Speakers/Chairmen while functioning under the Tenth Schedule exercise judicial power and act as Tribunal adjudicating rights and obligations under the Tenth schedule, and their decisions in that capacity are amenable to judicial review. [713C] (vii) Paragraph 6(1) of the Tenth Schedule, to the extent it seeks to impart finality to the decision of the Speakers/Chairman is valid. But the concept of statutory finality embodied therein does not detract from or abrogate judicial review under Articles 136, 226 and 227 of the Constitution in so far as infirmities based on violations of constitutional mandates, 692 male fides, non compliance with Rules of Natural Justice and perversity are concerned. [713E F] (viii) The deeming provision in Paragraph 6(2) of the Tenth Schedule attracts an immunity analogous to that in Article 122(1) and 212(1) of the constitution to protect the validity of proceedings from mere irregularities of procedure and confines the scope of the fiction accordingly. [713G H, 714A] Spl. No.1 of 1964 (Keshav Singh 's case) ; ,referred to. (ix) Having regard to the constitutional scheme in the Tenth Schedule,judicial review should not cover any stage prior to the making of a decision by the Speakers/Chairmen; and no quia timet actions are permissible, the only exception for any interlocutory interference being cases of interlocutory disqualifications or suspensions which may have grave, immediate and irreversible repercussions and consequence. [713D E] (x) The Speakers/Chairmen hold a pivotal position in the scheme of Parliamentary democracy and are guardians of the rights and privileges of the House. They are expected to and do take far reaching decisions in the Parliamentary democracy. Vestiture of power to adjudicate questions under the Tenth Schedule in them should not be considered exceptionable. [714B C] Per Lalit Mohan Sharma and J.S. Verma, JJ. contra (i) Without ratification, as required by the mandatory special provision prescribed in the proviso to Article 368(2) of the Constitution the stage of presenting the Constitution (Fifty Second) Amendment Bill for assent of the President did not reach and, therefore, the so called assent of the President was non est.[715B C] (ii) In the absence of ratification it is not merely paragraph 7 but the entire Constitution (Fifty Second Amendment) Act, 1985 which is rendered unconstitutional, since the constitutional power was not exercised as prescribed in Article 368, and, therefore, the Constitution did not stand amended in accordance with the terms of the Bill providing for amendment. [715D E] 693 (iii) Doctrine of severability cannot be applied to a Bill making a constitutional amendment where any part thereof attracts the proviso to clause (2) of Article 368. [715F] (iv) Doctrine of severability is not applicable to permit striking down para 7 alone saving the remaining provisions of the Bill making the Constitutional Amendment on the ground that Para 7 alone attracts the proviso the Article 368(2). [715G] (v) The Speaker 's decision disqualifying a Member of a House under paragraph 6(1) of the Tenth Schedule is not immune from judicial scrutiny. It is a nullity liable to be so declared and ignored. [782G] (vi) An independent adjudicatory machinery for resolving disputes relating to the competence of Members of the House is envisaged as an attribute of the democratic system which is a basic feature of our Constitution. The tenure of the Speaker, who is the authority in the Tenth schedule to decide this dispute, is dependent on the continuous support of the majority in the House and, therefore, he does not satisfy the requirement of such an independent adjudicatory authority; and his choice as the sole arbiter in the matter violates an essential attribute of the basic feature. [716B C] (vii) Consequently, the entire Constitution (Fifty Second Amendment) Act, 1985 which inserted the Tenth Schedule together with clause (2) in Articles 102 and 191, must be declared unconstitutional. [716C D] (viii) Accordingly, all decisions rendered by several Speakers under the Tenth Schedule must also be declared nullity and liable to be ignored. [p.716D] Per Venkatachaliah : J.1.1.A constitutional document outlines only broad and general principles meant to endure and be capable of flexible application to changing circumstances a distinction which differentiates a statute from a Charter under which all statutes are made. [726G H] Cooley on "Constitutional Limitation" 8th Edn. I p.129, referred to. 1.2. In considering the validity of a constitutional amendment the changing and the changed circumstances that compelled the amendment 694 are important criteria. [727B] U.S.Supreme Court in Maxwell vs Dow 44 Lawyer 's Edition 597 at p. 605, referred to. The Tenth Schedule is a part of the Constitution and attracts the same canons of construction as are applicable to the expounding of the fundamental law. One constitutional power is necessarily conditioned by the other as the Constitution is one "coherent document". In expounding the process of the fundamental law the Constitution must be treated as a logical whole. [726D E] 1.4. The distinction between what is constitutionally permissible and what is outside it is marked by a `hazy gray line 'and it is the Court 's duty to identify, "darken and deepen" the demarcating line of constitutionality a task in which some element of Judges ' own perceptions of the constitutional ideals inevitably participate. There is no single litmus test of constitutionality. Any suggested sure decisive test, might after all furnish a "transitory delusion of certitude" where the "complexities of the strands in the web of constitutionality which the Judge must alone disentangle" do not lend themselves to easy and sure formulations one way or the other. It is here that it becomes difficult to refute the inevitable legislative element in all constitutional adjudications. [730D F] "Theory of Torts" American Law Review 7[1873]; Justice Oliver Wendel Holmes Free Speech and the Living Constitution by H.L. Pohlman 1991 Edn. p.223, referred to. Amalgamated Society of Railway Servants vs Osborne, , referred to. A political party functions on the strength of shared beliefs. Any freedom of its Members to vote as they please independently of the political party 's declared policies will not only embarrass its public image and popularity but also undermine public confidence in it which, in the ultimate analysis, is its source of sustenance nay, indeed, its very survival. Paragraph 2(1)(b) of the Tenth Schedule gives effect to this principle and sentiment by imposing a disqualification on a Member who votes or abstains from voting contrary to "any directions" issued by the political 695 party. The provision, however, recognising two exceptions: one when the Member obtains from the political party prior permission to vote or abstain from voting and the other when the Member has voted without obtaining such permission. his action has been condoned by the political party. This provision itself accommodates the possibility that there may be occasions when a Member may vote or abstain from voting contrary to the direction of the party to which he belongs.[734D E; 735B C] Griffith and Ryle on "Parliament, Functions, Practice & Procedure" 1989 Edn. page 119, referred to. In a sense anti defection law is a statutory variant of its moral principle and justification underlying the power of recall. What might justify a provision for recall would justify a provision for disqualification for defection. Unprincipled defection is a political and social evil. It is perceived as such by the legislature. The anti defection law seeks to recognise the practical need to place the proprieties of political and personal conduct whose awkward erosion and grotesque manifestations have been the bane of the times above certain theoretical assumptions which in reality have fallen into a morass of personal and political degradation. This legislative wisdom and perception should be deferred to. The choices in constitutional adjudications quite clearly indicate the need for such deference.[739D G] `Constitutional Reform, Reshaping the British Political System, by Rodney Brazier. 1991 Edn.pp.48 53, referred to. 1.7.The Tenth Schedule does not impinge upon the rights or immunities under Article 105(2) of the Constitution. The freedom of speech of a Member is not an `absolute freedom. That apart, the provisions of the Tenth Schedule do not purport to make a Member of a House liable in any "Court" for anything said or any vote given by him in Parliament.[732H; 733C] Jyoti Basu & Ors. Debi Ghosal & Ors., ; , referred to. A provision which seeks to exclude the jurisdiction of Courts is strictly construed. [742E] H.H. Maharajadhiraja Madhav Rao Jiwaji Rao Scindia Bahadur & Ors. vs Union of India, [1971] 1 SSC 85, referred to. 696 Mask & Co.v. Secretary of State, AIR 1940 P.C. 105, referred to. 2.2 The rules of construction are attracted where two or more reasonably possible constructions are open on the language of the statute. [742F] 2.3. As regards Paragraph 7 to the Tenth Schedule, both on its language and having regard to the legislative evolution of the provision, the legislative intent is plain and manifest. The words "no Courts shall have any jurisdiction in respect of any matter connected with the disqualification of a member" are of wide import and leave no constructional options. This is reinforced by the legislative history of the anti defection law. The Constitution (Fifty Second Amendment) Bill for the first time envisaged the investitute of the power to decide disputes on the Speakers or the Chairmen whereas the two similar Constitution (32nd and 48th amendment) Bills, (which had lapsed) did not contain any clause ousting the jurisdiction of the Courts. The purpose of the enactment of Paragraph 7, as the debates in the House indicate, was to bar the jurisdiction of the Courts under Articles 136, 226 and 227 of the Constitution. {742F G, H, 743B] 2.4. The changes in Chapter IV of Part V and Chapter V of the Part VI of the constitution envisaged by the proviso to Article 368(2) need not be direct. The change could be either "in terms of or in effect". It is not necessary to change the language of Articles 136 and 226 of the Constitution to attract the proviso. If in effect these Articles are rendered ineffective and made inapplicable where these articles could otherwise have been invoked or would, but for Paragraph 7, have operated there is `in effect 'a change in those provisions attracting the proviso. [p. 745C D] 2.5. Though the Amendment does not bring in any change directly in the language of Articles 136,226 and 227 of the constitution,, however, in effect Paragraph 7 curtails the operation of those Articles respecting matter falling under the Tenth Schedule. There is a change in the effect in Articles 136, 226 and 227 within the meaning of clause (b) of the proviso to Article 368 (2). Paragraph 7, therefore, attracts the proviso and ratification was necessary. [745F] Sri Sankari Prasad Singh Deo vs Union of India & State of Bihar, ; Sajjan Singh vs State of Rajasthan, ; , referred to. 697 3.1 The criterion for determining the constitutional validity of a law is the competence of the law making authority (which would depend on the ambit of the Legislative power and the limitations imposed thereon as also on mode of exercise of the power). While examining the constitutional validity of laws the doctrine of severability is applied which envisages that if it is possible to construe a statute so that its validity can be sustained against a constitutional attack it should be so construed and that when part of a statute is valid and part is void, the valid part must be separated from the invalid part. [746C; 747D] Cooley 's constitutional Limitations; 8th Edn. Vol. 1, p. 359 360, referred to. R.M.D. Chamarbaughwalla vs Union of India, ; ; Shri Kesavananda Bharti Sripadagalavaru vs State of Kerala, [1973] Supp. 1 SCR; Minerva Mills Ltd. & Ors. vs Union of India & Ors. , ; and Sambhamurthy & Ors. etc.v. State of Andhra Pradesh & Anr., ; , referred to. Though the amending power in a constitution is in the nature of a constituent power and differs in content from the Legislative power, the limitations imposed on the constituent power may be substantive as well as procedural. Substantive limitations are those which restrict the field of exercise of the amending power and exclude some areas from its ambit. Procedural limitations are those which impose restrictions with regard to the mode of exercise of the amending power, e.g. the limitation requiring a special majority under Article 368(2) of the constitution is a procedural one. Both these limitations, however, touch and affect the constituent power itself, and impose a fetter on the competence of Parliament to amend the Constitution and any amendment made in disregard of these limitations would go beyond the amending power and would invalidate its exercise. [746C E, 747C] 3.3. Although there is no specific enumerated substantive limitation on the power in Article 368, but as arising from very limitation in the word `amend ', a substantive limitation is inherent on the amending power so that the amendment does not alter the basic structure or destroy the basic features of the Constitution. [747A B] 3.4. The proviso to Article 368(2) was introduced with a view to giving 698 effect to the federal principle. Its scope is confined to the limits prescribed therein and is not construed so as to take away the power in the main part of Article 368(2). [750C D] Madras & Southern Mahratta railway company vs Bazwada Municipality, (1944) 71 I.A. 113 and Commissioner of Income Tax, Mysore vs Indo Mercantile Bank Ltd.(1959), Supp. 2 SCR 256, referred to. An amendment which otherwise fulfils the requirements of Article 368(2) and is outside the specified cases which require ratification cannot be denied legitimacy on the ground alone of the company it keeps. [750E] 3.6. The words "the amendment shall also require to be ratified by the legislature" occurring in the proviso to Article 368(2) indicate that what is required to be ratified by the legislatures of the States is the amendment seeking to make the change in the provisions referred to in clauses (a) to (e) of the proviso. The need for and the requirement of the ratification is confined to that particular amendment alone and not in respect of amendments outside the ambit of the proviso. The proviso can have, therefore, no bearing on the validity of the amendments which do not fall within its ambit. [750G H] 3.7. A composite amendment which makes alterations in the First and Fourth schedules as well as in other provisions of the Constitution requiring special majority under Article 368(2), even though passed by the simple majority and not by special majority, may be upheld in respect of the amendments made in the First and Fourth schedules. [755D] Bribery Commissioner vs Pedrick Ranasinghe, 1965A.C.172, referred to. There is really no difference in principle between the condition requiring passing of the Bill by a special majority before its presentation to the President for assent contained in Article 368(2) and the condition for ratification of the amendment by the legislatures of not less than one half of the States before the Bill is presented to the President for assent contained in the proviso. [753D E] 3.9. The principle of severability can be equally applied to a composite amendment which contains amendment in provisions which do not require ratification by States as well as amendment in provisions which require such ratification and by application of the doctrine of severability, 699 the amendment can be upheld in respect of the amendments which do not require ratification and which are within the competence of Parliament alone. Only these amendments in provisions which require ratification under the proviso need to be struck down or declared invalid. [753E F] 3.10. The test of severability requires the Court to ascertain whether the legislature would at all have enacted the law if the severed part was not the part of the law and whether after severance what survives can stand independently and is workable. [753G] 3.11. The main purpose underlying the Constitutional (Fifty Second Amendment) Act and introduction of the Tenth Schedule is to curb the evil of defection which was causing immense mischief in our body politic. The ouster of jurisdiction of Courts under Paragraph 7 was incidental to and to lend strength to the main purpose which was to curb the evil of defection. It cannot be said that the constituent body would not have enacted the other provisions in the Tenth Schedule if it had known that Paragraph 7 was not valid, Nor can it be said that the rest of the provisions of the Tenth schedule cannot stand on their own even if Paragraph 7 is found to be unconstitutional. The provisions of Paragraph 7 is therefore, severable from the rest of the provisions. [pp.754A C] 4.1. Democracy is a basic feature of the Constitution. Whether any particular brand or system of Government by itself, has this attribute of a basic feature, as long as the essential characteristics that entitle a system of government to be called democratic are otherwise satisfied is not necessary to be gone into. Election conducted at regular, prescribed intervals is essential to the democratic system envisaged in the Constitution. So is the need to protect and sustain the purity of the electoral process. That may take within it the quality, efficacy and adequacy of the machinery for resolution of electoral disputes. [p.733F G] 4.2. In the Indian constitutional dispensation the power to decide a disputed disqualification of an elected Member of the House is not treated as a matter of privilege and the power to resolve such electoral dispute is clearly judicial and not legislative in nature. The power to decide disputed disqualification under Paragraph 6(1) is pre eminantly of a judicial complexion. [pp.759G.763C] Indira Nehru Gandhi vs Raj Narain, ; Special Reference 700 No. 1 of 1964; , & Express Newspaper Ltd. vs Union of India, ,, referred to. Australian Boot Trade Employees Federation vs Whybrow & Co., ; , referred to. The word "Courts" is used to designate those Tribunals which are set up in an organised State for the administration of justice. By Administration of Justice is meant the exercise of judicial power of the State to maintain and uphold rights and to punish "wrongs". Whenever there is an infringement of a right or an injury, the Courts are there to restore the vinculum juris, which is disturbed. Where there is a lis an affirmation by one party and denial by another and the dispute necessarily involves a decision on the rights and obligations of the parties to it and the authority is called upon to decide it, there is an exercise of judicial power. That authority is called a Tribunal, if it does not have all the trappings of a court. Thus, the Speaker or the Chairman, acting under Paragraph 6(1) of the Tenth Schedule is a Tribunal.[763G H, 764E F, 766B] Associated Cement companies Ltd. vs P.N. Sharma and Anr., ; and Harinagar Sugar Mills Ltd. vs Shyam Sunder Jhunjhunwala & Ors., ; , referred to. A finality clause is not a legislative magical incantation which has the effect of telling off Judicial Review. Statutory finality of a decision presupposes and is subject to its consonance with the statute. The principle that is applied by the courts is that in spite of a finality clause it is open to the court to examine whether the action of the authority under challenge is ultra vires the powers conferred on the said authority. An action can be ultra vires for the reason that it is in contravention of a mandatory provision of the law conferring on the authority the power to take such an action. It will also be ultra vires the powers conferred on the authority if it is vitiated by mala fides or is colourable exercise of power based on extraneous and irrelevant consideration. [pp. 755D,765D E] `Administrative Law ' 6th Edn. at p. 720 & Constitutional Fundamentals, the Harmlyn Lectures, 1989 Edn., p.88, referred to. The finality clause with the word "final" in paragraph 6(1) of the Tenth schedule does not completely exclude the jurisdiction of the 701 Courts under Articles 136, 226 and 227 of the Constitution. But it does have the effect of limiting the scope of the jurisdiction. If the intendment is to exclude the jurisdiction of the superior Courts, the language would quite obviously have been different. [758H, 759A,765C,758A] Brundaban Nayak vs Election Commission of India & Anr., ; ; Union of India vs Jyoti Prakash Mitter, ; ; Durga. Shankar Mehra vs Reghuraj Singh, ; and Union of India & Anr. vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131, referred to. An ouster clause confines judicial review in respect of actions falling outside the jurisdiction of the authority taking such action but precludes challenge to such action on the ground of an error committed in the exercise of jurisdiction vested in the authority because such an action cannot be said to be an action without jurisdiction. [765F] Anisminic Ltd. vs Foreign commission; , ; S.E. Asia Fire Bricks vs Non Metallic Products, 1981 A.C. 363, referred to. The fiction in Paragraph 6(2) attracts an immunity from mere irregularities of procedures. The very deeming provision implies that the proceedings of disqualification are, in fact,. not before the House; but only before the Speaker a specially designated authority. The decision under Paragraph 6(1) is not the decision of the House, nor is it subject to the approval by the House. The decision operates independently of the House. A deeming provision cannot by its creation transcend its own power. There is, therefore, no immunity under Articles 122 and 212 from judicial scrutiny of the decision of the Speaker or Chairman exercising power under Paragraph 6(1) of the Tenth Schedule. [763D F] 7. The scope of judicial review under Articles 136, 226 and 227 of the Constitution in respect of an order passed by the Speaker/Chairman under Paragraph 6 would be confined to jurisdictional errors only, viz., infirmities based on violation of constitutional mandate, mala fides, non compliance with rules of natural justice and perversity. But Judicial review cannot be available at a stage prior to the making of a decision by the Speaker/Chairman and a quia timet action would not be permissible. Nor would interference be permissible at an interlocutory stage of the proceedings. Exceptions will, however,, have to be made in respect of cases where disqualification of suspension is imposed during the pendency of the 702 proceedings and such disqualification or suspension is likely to have grave,immediate and irreversible repercussions and consequence.[768E H] Makhan Singh vs State of Punjab, [1964] 4 SCR 797;State of Rajasthan vs Union of India; , ; Union of India vs Jyoti Prakash Mitter, (supra) and Union of India & Anr. vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131, referred to. The office of the Speaker is held in the highest respect and esteem in Parliamentary traditions. The evolution of the institution of Parliamentary democracy has as its pivot the institution of the Speaker. He is said to be the very embodiment of propriety and impartiality. He performs wide ranging functions including the performance of important functions of a judicial character. It would, indeed be unfair to the high traditions of that great office to say that the investiture in it of this jurisdiction would be vitiated for violation of a basic feature . of democracy. It is inappropriate to express distrust in the high office of the speaker, merely because some of the speakers are alleged, or even found, to have discharged their functions not in keeping with the great traditions of that high office. The Robes of the Speaker do change and elevate the man inside. [770G H, 771A, 772A, 773A B] G.V. Mavalankar ; The Office of Speaker, Journal of Parliamentary Information, April 1956, Vol. No. 1 p.33; HOP, Deb. IX (1954), CC 3447 48 and Erskine May Parliamentary Practice 20th edition p. 234 and M.N. Kaul and S.L. Shakdher in `Practice and Procedure of Parliament ' 4th Edition, referred to. The words "any direction" occurring in Paragraph 2(1)(b) of the Tenth Schedule require to be construed harmoniously with the other provisions and appropriately confined to the objects and purposes of the Schedule. Those objects and purposes define and limit the contours of its meaning. The assignment of a limited meaning is not to read it down to promote its constitutionality but because such a construction is a harmonious construction in the context. There is no justification to give the words the wider meaning. [774H, 775A B] Parkash Singh Badal & Ors. vs Union of India & Ors., AIR 1987 Punjab & Haryana 263, referred to. While construing Paragraph 2(1)(b) it cannot be ignored that 703 under the Constitution members of Parliament as well as of the State Legislature enjoy freedom of speech in the House though this freedom is subject to the provisions of the Constitution and the rules and standing orders regulating the Procedure of the House. The disqualification imposed by Paragraph 2(1)(b) must be so construed as not to unduly impinge on the said freedom of speech of a member. This would be possible if Paragraph 2(1)(b) is confined in its scope by keeping in view the object underlying the amendments contained in the Tenth Schedule namely, to curb the evil or mischief of political defections motivated by the lure of office or other similar considerations. [p. 775C D] 9.3. In view of the consequences of the disqualification, i.e., termination of the membership of a House, it would be appropriate that the direction or whip which results in such disqualification under Paragraph 2(1)(b) of the Tenth Schedule is so worded as to clearly indicate that voting or abstaining from voting contrary to the said direction would result in incurring the disqualification under Paragraph 2(1)(b), so that the member concerned has fore knowledge of the consequences flowing from his conduct in voting or abstaining from voting contrary to such a direction. [775H, 776A B] 10.1 The purpose of interlocutory orders is to preserve in status quo the rights of the parties, so that, the proceedings do not become infructuous by any unilateral overt acts by one side or the other during its pendency. [776G] 10.2. The interlocutory orders in the instant case were necessarily justified so that, no land slide changes were allowed to occur rendering the proceedings ineffective and infructuous.[776H, 777A] Per VERMA, J. : 1.Under the Constitution of India which delineates the spheres of jurisdiction of the legislature and the judiciary,the power to construe the meaning of the provisions in the Constitution and the laws is entrusted to the judiciary with finality attached to the decision of this Court inter alia by Article 141 about the true meaning of any enacted provision, and Article 144 obliges all authorities in the country to act in aid of this Court. It is, therefore, not permissible in our constitutional scheme for any other authority to claim that power in exclusivity, or in supersession of this Court 's verdict. Whatever be the controversy prior to this Court entertaining such a matter, it must end when the Court is seized of the matter for pronouncing its verdict and it is the constitutional 704 obligation of every person and authority to accept its binding effect when the decision is rendered by this Court. [p. 784F H] Cohens vs Virginia, ; , 404; , , 291 (1821) and State of madras vs V.G. row; , , referred to. The finality clause in Para 6(1) of the Tenth Schedule to the Constitution which says that the decision of the Chairman or as the case may be, the speaker of the House shall be final is not decisive. Such a finality clause in a statute by itself is not sufficient to exclude the jurisdiction of the High courts under Articles 226 and 227 and the Supreme Court under Article 136 of the Constitution, the finality being for the statute alone. This is apart from the decision being vulnerable on the ground of nullity. Sub paragraph (1)alone is, therefore, insufficient to exclude the extra ordinary jurisdiction of the High Courts and the plenary jurisdiction of this Court. [788B C] 2.2. The ambit of a legal fiction must be confined to the limitation implicit in the words used for creating the fiction and it cannot be given an extended meaning to include therein something in addition. In construing the fiction it is not to be extended beyond the language of the Section by which it is created and its meaning must be restricted by the plain words used. It cannot also be extended by importing another fiction. [788E, 789A] 2.3. The legal fiction in sub paragraph (2) of para 6 of the Tenth Schedule serves a limited purpose and brings the proceedings under sub paragraph (1) thereof within the ambit of clause (1) of Article 122 or Clause (1) of Article 212, and, therefore, there is no occasion to enlarge its scope by reading into it words which are not there and extending it also to clause (2) of these Articles. [788C, 789B] Commissioner of Income tax vs Ajax Products Ltd., ; , referred to. A matter falling within the ambit of clause (1) of either of the two Article 122 or 212 is justiciable on the ground of illegality or perversity in spite of the immunity it enjoys to a challenge on the ground of "irregularity of procedure". [788E F] 2.5. The decision relating to disqualification of a member does not relate to regulating procedure or the conduct of business of the House 705 provided for in clause (2) of Articles 122 and 212 and taking that view would amount to extending the fiction beyond its language and importing another fiction for this purpose which is not permissible. That being so, the matter falls within the ambit of clause (1) only of Article 122 and 212 as a result of which it would be vulnerable on the ground of illegality and perversity and therefore, justiciable to that extent. [789C D] Spl. No. 1 of 1964 (Keshav Singh 's case) ; , 3.1. The words in Paragraph 7 of the Tenth Schedule with its non obstante clause `notwithstanding anything in this Constitution ' followed by expression `no court shall have any jurisdiction ', are very wide and ordinarily mean that this provision supersedes any other provision in the Constitution, and leave no doubt that the bar of jurisdiction of Courts is complete excluding also the jurisdiction of the supreme court and the High courts under Articles 136, 226 and 227 of the Constitution respectively. Further, the expression `in respect of any matter connected with the disqualification of a Member of a House under this Schedule ' is wide enough to include not merely the intermediate stage of the proceedings relating to disqualification but also the final order on the question of disqualification made under paragraph 6. This conclusion is reinforced by the finality clause and deeming provision in para 6 of the Tenth Schedule and by the legislative history of the absence of such a provision excluding the Court 's jurisdiction in the earlier two Bills which had lapsed. [pp. 789F G, 790C, H] 3.2. Para 7 of the Tenth Schedule is, therefore, unconstitutional and to that extent at least the Constitution does not stand amended in accordance with the Bill seeking to make the constitutional amendment. [799E] 4.1. Distinction has to be drawn between the abridgment or extinction of a right and restriction of the remedy for enforcement of the right. If there is an abridgment of extinction of the right which results in the disappearance of the cause of action which enables invoking the remedy and in the absence of which there is no occasion to make a grievance and invoke the subsisting remedy, then the change brought about is in the right and not the remedy. On the other hand, if the right remains untouched so that a grievance based thereon can arise and, therefore, the cause of action subsists, but the remedy is curtailed or extinguished so that cause of 706 action cannot be enforced for want of that remedy, then the change made is in the remedy and not in the subsisting rights. [793A C] Sri sankari Prasad Singh Deo vs Union of India & State of Bihar, ; and Sajjan Singh vs State of Rajasthan, ; , explained 4.2. The instant case in unequivocal terms, is that of destroying the remedy by enacting para 7 of the Tenth Schedule making a total exclusion of judicial review including that by the Supreme Court under Article 136 and the High Courts under Articles 226 and 227 of the Constitution. But for para 7 which deals with the remedy and not the right, the jurisdiction of the Supreme Court under Article 136 and that of the High Courts under Article 226 and 227 would remain unimpaired to challenge the decision under para 6, as in the case of decisions relating to other disqualification specified in clause (1) of Articles 102 and 191, which remedy continues to subsist. [793D F] 4.3. The extinction of the remedy alone without curtailing the right, since the question of disqualification of a member on the ground of defection under the Tenth Schedule does require adjudication on enacted principles, results in making a change in Article 136 in Chapter IV in Part V and Articles 226 and 227 in Chapter V in Part VI of the Constitution. [793F] 4.4. The Constitution (Fifty Second Amendment) Bill, therefore, attracted the proviso to Article 368(2) requiring ratification by the specified number of State legislatures before its presentation to the President for his assent. [793G] 5.1 The proviso to Article 368(2) of the Constitution contains a constitutional limitation on the amending power; and prescribes as a part of the special procedure, prior assent of the State Legislatures before presentation of the Bill to the President for his assent in the case of the relevant Bills. This is a condition interposed by the proviso in between the passing of the Bill by the requisite majority in each House and presentation of the Bill to the President for the assent, which assent results in the Constitution automatically standing amended in accordance with the terms of the Bill. The Bills governed by the proviso, therefore, cannot be presented to the President for his assent without the prior ratification by the specified number of State legislatures. [795C E] 707 5.2. The consequence of the Constitution standing amended in accordance with the terms of the Bill on assent by the President, which is the substantive part of Article 368, results only when the Bill has been presented to the President for his assent in conformity with the special procedure after performance of the conditions precedent, namely, passing of the Bill by each House by the requisite majority in the case of all Bills; and in the case of Bills governed by the proviso, after the Bill has been passed by the requisite majority in each House and it has also been ratified by the legislature by not less than one half of the States. Non compliance of the special procedure prescribed in Article 368(2) cannot bring about the result of the Constitution standing amended in accordance with the terms of the Bill. [795F G, H,796A] Kesavananda Bharati vs State of Kerala, [1973] Supp.1 SCR, relied on. The ordinary role of a proviso is to carve out an exception from the general rule in the main enacting part. A Bill falling within the ambit of the proviso to cl.(2) of Article 368 is carved out of the main enactment in clause (2) as an exception on account of which it cannot result in amendment of the constitution on the President 's assent without prior ratification by the specified number of State legislature. [797G H, 798A B] 5.4. The entire Tenth Schedule is enacted in exercise of the constituent power under Article 368, not merely para 7 therein, and this has been done without following the mandatory special procedure prescribed. It is, therefore, the entire Constitution (Fifty Second) Amendment Bill and not merely para 7 of the Tenth Schedule which required prior ratification by the State of legislatures before its presentation to the President for his assent, it being a joint exercise by the parliament and the State Legislatures. The stage of presentation of the Bill to the President for his assent not having reached, the President 's assent was non est and it could not result in amendment of the Constitution in accordance with the terms of the Bill. It is not a case of severing the invalid constituent part from the remaining ordinary legislation. [799G H, 800A; 802C] 6.1. The doctrine of severability applies in a case where an otherwise validly enacted legislation contains a provision suffering from a defect of lack of legislative competence and the invalid provision is severable leaving the remaining valid provisions a viable whole. this doctrine has no application where the legislation is not validly enacted due to non compliance 708 of the mandatory legislative procedure such as the mandatory special procedure prescribed for exercise of the constituent power. The doctrine does not apply to a still born legislation. It is not possible to infuse life in a still born by any miracle and deft surgery even though it may be possible to continue life by removing a congenitally defective part by surgical skill. [800D E] The Bribery Commissioner vs Pedrick Ranasinghe, ; , referred to. Severance of para 7 of the Tenth Schedule could not be made for the purpose of ratification or the President 's assent and, therefore, not such severance can be made even for the ensuing result. If the President 's assent cannot validate para 7 in the absence of prior ratification, the same assent cannot be accepted to bring about a different result with regard to the remaining part of the Bill. [800A B] 7. The test whether the enactment would have been made without para 7 indicates that the legislative intent was to make the enactment only with para 7 therein and not without it, otherwise the enactment did not require the discipline of Article 368and exercise of the constituent power and mode of ordinary legislation could have been resorted to in accordance with sub clause (e) of clause (1) of Article 102 and 191, which would render the decision on the question of disqualification on the ground of defection also amenable to judicial review as in the case of decision on questions relating to other disqualification. [802F H, 803A] R.M.D. Chamarbaughwalla vs The Union of India, ; , relied on. Democracy is a part of the basic structure of our Constitution, and rule of law; and free and fair elections are basic features of democracy, One of the postulates of free and fair elections is provision for resolution of election disputes as also adjudication of disputes relating to subsequent disqualifications by an independent authority. It is only by a fair adjudication of such disputes relating to validity of elections and subsequent disqualifications of members that true reflection of the electoral mandate and governance by rule of law essential for democracy can be ensured. [803E G] 709 8.2. In the democratic pattern adopted by our Constitution, not only the resolution of election dispute is entrusted to a judicial tribunal, but even the decision on questions as to disqualification of members under Articles 103 and 192 is contemplated by an independent authority outside the house, namely, President/Governor in accordance with the opinion of the Election commission,, all of whom are high constitutional functionaries with security of tenure, independent of the will of the House. [803G H, 804A] 8.3. Sub clause (e) of clause (1) in Articles 102 and 191 which provide for enactment of any law by the Parliament to prescribe any disqualification other than those prescribed in the earlier sub clauses of clause (1), clearly indicates that all disqualifications of Members were contemplated within the scope of Articles 102 and 191. All disqualification including disqualification on the ground of defection, in our constitutional scheme, are, therefore, different species of the same genus, namely, disqualification, and the constitutional scheme does not contemplate any difference in their basic traits and treatment; and were meant to be decided by an independent authority outside the House such as the President/Governor, in accordance with the opinion of another similar independent constitutional functionary, the Election commission of India, who enjoys the security of tenure of a Supreme Court Judge with the same terms and conditions of office. [804B E] 8.4. The Speaker 's office is undoubtedly high and has considerable aura with the attribute of impartiality. This aura of the office was even greater when the Constitution was framed and yet the framed and yet the farmers of the Constitution did not choose to vest the authority of adjudicating disputes as to disqualification of Members to the Speaker; and provision was made in Article 103 and 192 for decision of disputes by the President/Governor in accordance with the opinion of the Election commission. In the Tenth Schedule, the Speaker is made not only the sole but the final arbiter of such dispute with no provision for any appeal or revision against the Speaker 's decision to any independent outside authority. This departure in the Tenth Schedule is a reverse trend and violates a basic feature of the Constitution.[804 G, 805E] 8.5. The Speaker being an authority within the House and his tenure being dependent on the will of majority therein, likelihood of suspicion of 710 bias could not be ruled out. The question as to disqualification of a member has adjudicatory disposition and, therefore, requires the decision to be rendered in consonance with the scheme for adjudication of disputes Rule of law has in it firmly entrenched natural justice, of which, Rule against Bias is a necessary concomitant; and basic postulates of Rule against Bias are : Nemo judex in cause sua `A Judge is disqualified from determining any case in which he may be,or may fairly be suspected to be, biased '; and `it is of fundamental importance that justice should not only be done but should manifestly and undoubtedly be seen to be done '.

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Appeal No. 869 of 1987. From the Judgment and Order dated 22.12.1981 of the Orissa High Court in Original Judicature Case No. 412 of 1976. WITH CA No. 870 of 1987 R.K. Garg and A.K. Panda for the Appellants. C.S. Srinivasa Rao for the Respondent. The Judgment of the Court was delivered by B.P. JEEVAN REDDY,J. 1. These appeals raise the question whether it is permissible to the government to order compulsory retirement of a government servant on the basis of material which includes uncommunicated adverse remarks. While the appellants (government servants, compulsory retired) rely upon the decisions of this court in Brij Mohan Singh Chopra, and Baidyanath Mahapatra; , , in support of their contention that it is not permissible, the respondent government relies upon the decision in M.E. Reddy. ; to contend that it is permissible to the government to take into consideration uncommunicated adverse remarks also while taking a decision to retire a government servant compulsorily. The appellants in both the appeals have been compulsorily retired by the government of Orissa in exercise of the power conferred upon it by the first proviso to Rule 71 (a) of the Orissa Service Code. Since the relevant facts in both the appeals are similar, it would be sufficient if we set out the facts in Civil Appeal No. 869 of 1987. 841 3. The appellant, Sri Baikuntha Nath Das was appointed as a Pharmacist (then designated as Compounder) by the Civil Surgeon, Mayurbhanj on 15.3.1951. By an order dated 13.2.1976 the government of Orissa retired him compulsorily under the first proviso to sub rule of Rule 71 of the Orissa Service Code. The order reads as follows: ``In exercise of the powers conferred under the first proviso to sub rule (a) of rule 71 of Orissa Service Code, the Government of Orissa is pleased to order the retirement of Sri Baikunthanath Das, Pharmacist now working under the Chief District Medical Officer, Mayurbhanj on the expiry of three months from the date of service of this order on him. By order of the Governor. ' ' 4. The petitioner challenged the same in the High Court of Orissa by way of a writ petition, being O.J.C.No. 412 of 1976. His case was that the order was based on no material and that it was the result of ill will and malice the Chief District Medical Officer bore towards him. The petitioner was transferred by the said officer from place to place and was also placed under suspension at one stage. He submitted that his entire service has been spot less and that at no time were any adverse entries in his confidential character rolls communicated to him. In the counter affidavit filed on behalf of the government, it was submitted that the decision to retire the petitioner compulsorily was taken by the Review Committee and not by the Chief Medical Officer. It was submitted that besides the remarks made in the confidential character rolls, other material was also taken into consideration by the Review Committee and that it arrived at its decision bonafide and in public interest which decision was accepted and approved by the government. The allegation of malafides was denied. The High Court looked into the proceedings of the Review Committee and the confidential character rolls of the petitioner and dismissed the writ petition on the following reasoning: An order of compulsory retirement after putting in the prescribed qualifying period of service does not amount to punishment as has been repeatedly held by this court. The order in question was passed by the State Government and not by the Chief Medical Officer. It is true that the confidential character roll of the petitioner contained several remarks adverse to him which were, no doubt, not communicated to him, but the decision of this court in Union of India 842 vs M.E.Reddy; , , holds that uncommunicated adverse remarks can also be relied upon while passing an order of compulsory retirement. The said adverse remarks have been made by successive Civil Surgeons and not by the particular Chief District Medical Officer against whom the petitioner has alleged malafides. It is unlikely that all the Chief District Medical Officers were prejudiced against the petitioner. In particular, the court observed, "the materials placed before us do not justify a conclusion that the remarks in the confidential character rolls had not duly and properly been recorded." The decision to retire has been taken by the Review Committee on proper material and there are no grounds to interfere with its decision, it opined. 6. The adverse remarks made against the petitioner in the words of the High Court are to the following effect: ". most insincere, irregular in habits and negligent and besides being a person of doubtful integrity, he had been quarrelsome with his colleagues and superior officers and had been creating problems for the administration. Rule 71 (a) alongwith the first proviso appended thereto which alone is relevant for our purpose reads thus: "71. (a) Except as otherwise provided in the other clauses of this rule the date of compulsory retirement of a Government servant, except a ministerial servant who was in Government service on the 31st March, 1939 and Class IV Government servant, is the date on which he or she attains the age of 58 years subject to the condition that a review shall be conducted in respect of the Government servant in the 55th year of age in order to determine whether he/she should be allowed to remain in service upto the date of the completion of the age of 58 years or retired on completing the age of 55 years in the public interest: Provided that a Government servant may retire from service any time after completing thirty years qualifying service or on attaining the age of fifty years, by giving a notice in writing to the appropriate authority at least three months before the date on which he wishes to retire or by giving the said notice to the 843 said authority before such shorter period as Government may allow in any case. It shall be open to the appropriate authority to withhold permission to a Government servant who seeks to retire under this rule, if he is under suspension or if inquires against him are in progress. The appropriate authority may also require any officer to retire in public interest any time after he has completed thirty years qualifying service or attained the age of fifty years, by giving a notice in writing to the Government servant at least three months before the date on which he is required to retire or by giving three months pay and allowances in lieu of such notice. xx xx xx" 8. It is evident that the latter half of the proviso which empowers the government to retire a government servant in public interest after he completes 30 years of qualifying service or after attaining the age of 50 years is in pari materia with the Fundamental Rule 56(j). The Government of Orissa had issued certain instructions in this behalf. According to these instructions, the Review Committee, if it is of the opinion that a particular government servant should be retired compulsorily, must make a proposal recording its full reasons therefor. The administrative department controlling the services to which the particular government servant belongs, will then process the proposal and put it up to the government for final orders. In Shyam Lal vs State of Uttar Pradesh, ; , a Constitution Bench of this court held that an order of compulsory retirement is not a punishment nor is there any stigma attached to it. It said: "There is no such element of charge or imputation in the case of compulsory retirement. The two requirements for compulsory retirement are that the officer has completed twenty five years ' service and that it is in the public interest to dispense with his further services. It is true that this power of compulsory retirement may be used when the authority exercising this power cannot substantiate the misconduct which may be the real cause for taking the action but what is important to note is that the directions in the last sentence of Note 1 to Article 465 A make it abundantly clear that an imputation or charge is not in terms made a condition for the exercise of the power. 844 In other words, a compulsory retirement has no stigma or implication of misbehaviour or incapacity. In Shivacharana vs State of Mysore, A.I.R. 1965 S.C. 280, another Constitution Bench reaffirmed the said principle and held that "Whether or not the petitioner 's retirement was in the public interest, is a matter for the State Government to consider and as to the plea that the order is arbitrary and illegal, it is impossible to hold on the material placed by the petitioner before us that the said order suffers from the vice of malafides. As far back as 1970, a Division Bench of this court comprising J.C. Shah and K.S. Hegde, JJ. held in Union of India vs J.N Sinha, [1971] 1 S.C.R. 791, that an order of compulsory retirement made under F.R. 56 (j) does not involve any civil consequences, that the employee retired thereunder does not lose any of the rights acquired by him before retirement and that the said rule is not intended for taking any penal action against the government servant. It was pointed out that the said rule embodies one of the facets of the pleasure doctrine embodied in Article 310 of the Constitution and that the rule holds the balance between the rights of the individual Government servant and the interest of the public. The rule is intended it was explained, to enable the Government to energise its machinery and to make it efficient by compulsory retiring those who in its opinion should not be there in public interest. It was also held that rules of natural justice are not attracted in such a case. If the appropriate authority forms the requisite opinion bonafide, it was held, its opinion cannot be challenged before the courts though it is open to an aggrieved party to contend that the requisite opinion has not been formed or that it is based on collateral grounds or that it is an arbitrary decision. It is significant to notice that this decision was rendered after the decisions of this court in State of Orissa vs Dr. Binapani Devi; , and A.K.Kraipak vs Union of India, A.I.R. 1970 S.C. 150.Indeed, the said decisions were relied upon to contend that even in such a case the principles of natural justice required an opportunity to be given to the government servant to show cause against the proposed action. The contention, was not accepted as stated above. The principles enunciated in the decision have been accepted and followed in many a later decision. There has never been a dissent not until 1987. In R.L. Butial vs Union of India, relied upon by the appellant 's 845 counsel, the Constitution Bench considered a case where the government servant was denied the promotion and later retired compulsorily under F.R. 56(j) on the basis of adverse entries in his confidential records. The appellant, an electrical engineer, entered the service of Simla Electricity Board in 1934. In 1940, he was transferred to Central Electricity Commission later designated as Central Water and Power Commission (Power Wing). In 1955 he was promoted to the post of Director wherein he was confirmed in the year 1960. In his confidential reports relating to the years 1964 and 1965, certain adverse remarks were made. They were communicated to him. He made a representation asking for specific instances on the basis of which the said adverse remarks were made. These representations were rejected. Meanwhile, a vacancy arose in the higher post. The appellant was overlooked both in the year 1964 as well as in 1965 by the Departmental Promotion Committee and the U.P.S.C. On August 15, 1967, on his completing 55 years of age, he was compulsorily retired under F.R. 56(j). Thereupon he filed three writ petitions in the High Court challenging the said adverse entries as also the order of compulsory retirement. The writ petitions were dismissed whereupon the matters were brought to this court on the basis of a certificate. The Constitution Bench enunciated the following propositions: 1. The rules framed by the Central Water and Power Commission on the subject of maintenance of confidential reports show that a confidential report is intended to be a general assessment of work performed by the government servant and that the said reports are maintained to serve as a data of operative merit when question of promotion, confirmation etc. arose. Ordinarily, they are not to contain specific instances except where a specific instance has led to a censure or a warning. In such situation alone, a reasonable opportunity has to be afforded to the government servant to present his case. No opportunity need be given before the entries are made. Making of an adverse entry does not amount to inflicting a penalty. When the petitioner was overlooked for promotion his representations against the adverse remarks were still pending. But inasmuch as the said representations were rejected later there was no occasion for reviewing the decision not to promote the appellant. Withholding a promotion is not a penalty under the Central Service Rules. Hence, no enquiry was required to be held before deciding not to promote the 846 appellant more so, when the promotion was on the basis of selection and not on the basis of seniority alone. So far as the order of compulsory retirement was concerned, it was based upon a consideration of his entire service record including his confidential reports. The adverse remarks in such reports, were communicated from time to time and the representations made by the appellant were rejected. It is only thereafter that the decision to retire him compulsorily was taken and, therefore, there was no ground to interfere with the said order. It is evident that in this case, the question arising for our consideration viz, whether uncommunicated adverse remarks can be taken into consideration alongwith other material for compulsorily retiring a government servant did not arise for consideration. That question arose directly in Union of India vs M.E.Reddy. 15. The respondent, M.E. Reddy belonged to Indian Police Services. He was retired compulsorily under Rule 16 (3) of All India Service (Death cum Retirement Rules) 1958 corresponding to F.R. 56 (j). The contention of the respondent was that the order was passed on non existing material inasmuch as at no time were any adverse remarks communicated to him. His contention was that had there been any adverse entries they ought to have been communicated to him under the rules. The said contention was dealt with in the following words: ". This argument, in our opinion, appears to be based on a serious misconception. In the first place, under the various rules on the subject it is not every adverse entry or remarks that has to be communicated to the officer concerned. The superior officer may make certain remarks while assessing the work and conduct of subordinate officer based on his personal supervision or contract. Some of these remarks may be purely innocuous, or may be connected with general reputation of honesty or integrity that a particular officer enjoys. It will indeed be difficult if not impossible to prove by positive evidence that a particular officer is dishonest but those who have had the opportunity to watch the performance of the said officer from close quarters are in a position to know the nature and character not only of his performance but also of the 847 reputation that he enjoys". The Learned Judges referred to the decisions in R.L.Butail,J.N.Sinha and several other decisions of this court and held that the confidential reports, even though not communicated to the officer concerned, can certainly be considered by the appointing authority while passing the order of compulsory retirement. in this connection, they relied upon the principle in J.N. Sinha that principles of natural justices are not attracted in the case of compulsory retirement since it is neither a punishment nor does it involve any civil consequences. the principle of the above decision was followed in Dr. N.V.Puttabhatta vs State of Mysore; , , a decision rendered by A.N.Grover and G.K.Mitter , J.J. Indeed, the contention of the appellant in this case was that since an order of compulsory retirement has adverse effects upon the career and prospects of the government servant, the order must be passed in accordance with principles of natural justice. It was contended that before passing the order, a notice to show cause against the order proposed must be given to the government servant . Reliance was placed upon the decisions in Binapani Devi and Kraipak. This contention was negatived following the decision in J.N.Sinha. It was also pointed out, applying the principles of Shivacharana that an order of compulsory retirement is not a punishment nor does it involve any stigma or implication or misbehaviour. Another contention urged in this case was that the order of compulsory retirement was based upon uncommunicated adverse remarks and that the appellant was also not afforded an opportunity to make a representation against the same. At the relevant time, no appeal lay against the orders passed upon the representation. Dealing with the said contention, the court observed: "as the confidential reports rules stood at the relevant time, the appellant could not have appealed against the adverse remarks and if the opinion of the government to retire him compulsorily was based primarily on the said report, he could only challange the order if he was in a position to show that the remarks were arbitrary and malafide." 18. Yet another contention which is relevant to the present case is this : the retirement of the appellant therein was ordered under Rule 235 of Mysore Civil Services Rules. The language of the said rule corresponded to 848 F.R.56(j) but it did not contain the word "absolute" as is found in F.R.56(j). An argument was sought to be built up on the said difference in language but the same was rejected holding that even in the absence of the word "absolute" the position remains the same. We are refering to the said aspect in as much as the proviso to Rule 71 (a) of the Orissa Service Code, concerned in the appeals before us, also does not contain the word "absolute". In (A.I.R.1980 S.C.1894) Gian Singh Mann vs Punjab and Haryana High Court, a Bench consisting of Krishna Iyer and Pathak, JJ. reiterated the principle that an order of compulsory retirement does not amount to punishment and that no stigma or implication of misbehaviour is intended or attached to such an order. In O.N.G.C vs Iskandar Ali, a probationer was terminated on the basis of adverse remarks made in his assessment roll. A Bench comprising three learned Judges (Fazal Ali, A.C. Gupta and Kailasam, JJ.) held that the order of termination in that case was an order of termination simpliciter without involving any stigma or any civil consequences. Since the respondent was a probationer, he had no right to the post. The remarks in his assessment roll disclosed that the respondent was not found suitable for being retained in service and even though some sort of enquiry was commenced, it was not proceeded with. The appointing authority considered it expedient to terminate the service of the respondent in the circumstances and such an order was beyond challenge on the ground of violation of Article 311. This court has taken the view in certain cases that while taking a decision to retire a government servant under Rule 56(j), more importance should be attached to the confidential records of the later years and that much importance should not be attached to the record relating to earlier years or to the early years of service. In Brij Bihari Lal Agarwal vs High Court of Madhya Pradesh, , upon which strong reliance is placed by the appellant 's counsel a Bench comprising Pathak and Chinappa Reddy,JJ. observed thus: ". .What we would like to add is that when considering the question of compulsory retirement, while it is not doubt desirable to make an overall assessment of the Government servant 's record, more than ordinary value should be attached to the confidential reports pertaining to the years immediately 849 preceding such consideration. It is possible that a Government servant may possess a somewhat erratic record in the early years of service, but with the passage of time he may have so greatly improved that it would be of advantage to continue him in service up to the statutory age of superannuation. Whatever value the confidential reports of earlier years may possess, those pertaining to the later years are not only of direct relevance but also of utmost importance. We may mention that the order of compulsory retirement in the above case is dated 28th September, 1979. The High Court took into account the confidential reports relating to the period prior to 1966 which were also not communicated to the concerned officer. However, the decision is based not upon the non communication of adverse remarks but on the ground that they were too far in the past. It was observed that reliance on such record has the effect of denying an opportunity of improvement to the officer concerned. The decision in Baldev Raj Chaddha vs Union of India, ; , is to the same effect. In J.D. Srivastava vs State of Madhya Pradesh, ; , it was held by a Bench of three learned Judges that adverse reports prior to the promotion of the officer cannot reasonably form a basis for forming an opinion to retire him. The reports relied upon for retiring the appellant were more than 20 years old and there was no other material upon which the said decision could be based. It was held that reliance on such stale entries cannot be placed for retiring a person compulsorily, particularly when the officer concerned was promoted subsequent to such entries. We now come to the decision in Brij Mohan Singh Chopra vs State of Punjab, relied upon by the learned counsel for the petitioner. In this case, there were no adverse entries in the confidential records of the appellant for a period of five years prior to the impugned order. Within five years, there were two adverse entries. In neither of them, however, was his integrity doubted. These adverse remarks were not communicated to him. The Bench consisting of E.S. Venkataramiah and K.N. Singh JJ. quashed it on two grounds viz., 1. It would not be reasonable and just to consider adverse entries of remote past and to ignore good entries of recent past. If entries for a period of more than 10 years past are taken into account it would be an act of 850 digging out past to get some material to make an order against the employee. In Gurdyal Singh Fiji vs State of Punjab, and Amarkant Chaudhary vs State of Bihar, ; , it was held that unless an adverse report is communicated and representation, if any, made by the employee is considered, it may not be acted upon to deny the promotion. The same consideration applies where the adverse entries are taken into account in retiring an employee pre maturely from service. K.N. Singh, J. speaking for the Bench observed: "it would be unjust and unfair and contrary to principles of natural justice to retire pre maturely a government employee on the basis of adverse entries which are either not communicated to him or if communicated, representations made against those entries are not considered and disposed of". This is the first case in which the principles of natural justice were imported in the case of compulsory retirement even though it was held expressly in J.N. Sinha that the said principles are not attracted. This view was reiterated by K.N. Singh, J. again in ; Baidyanath Mahapatra vs State of Orissa, (Bench comprising of K.N. Singh and M.H. Kania, JJ.). In this case, the Review Committee took into account the entire service record of the employee including the adverse remarks relating to the year 1969 to 1982 (barring certain intervening years for which no adverse remarks were made). The employee had joined the Orissa Government service as an Assistant Engineer in 1955. In 1961 he was promoted to the post of Executive Engineer and in 1976 to the post of Superintending Engineer. In 1979 he was allowed to cross the efficiency bar with effect from 1.1.1979. He was compulsorily retired by an order dated 10.11.1983. The Bench held in the first instance that the adverse entries for the period prior to his promotion as Superintending Engineer cannot be taken into account. It was held that if the officer was promoted to a higher post, and that too a selection post, notwithstanding such adverse entries, it must be presumed that the said entries lost their significance and cannot be revived to retire the officer compulsorily. Regarding the adverse entries for the subsequent years and in particular relating to the years 1981 82 and 1982 83 it was found that though the said adverse remarks were communicated, the period prescribed for making a representation had not expired. The Bench observed: ". .These facts make it amply clear that the appellant 's 851 representation against the aforesaid adverse remarks for the years 1981 82 and 1982 83 was pending and the same had not been considered or disposed of on the date of impugned order was issued. It is settled view that it is not permissible to prematurely retire a government servant on the basis of adverse entries, representations against which are not considered and disposed of. See Brij Mohan Singh Chopra vs State of Punjab. On the above basis, it was held that the Review Committee ought to have waited till the expiry of the period prescribed for making representation against the said remarks and if any representation was made it should have been considered and disposed of before they could be taken into consideration for forming the requisite opinion. In other words, it was held that it was not open to the Review Committee and the government to rely upon the said adverse entries relating to the years 1981 82 and 1982 83, in the circumstances. Unfortunately, the decision in J.N. Sinha was not brought to the notice of the learned Judges when deciding the above two cases. The basis of the decisions in Brij Mohan Singh Chopra and Baidyanath Mahapatra, it appears, is that while passing an order of compulsory retirement, the authority must act consistent with the principles of natural justice. It is said to expressly in Brij Mohan Singh Chopra. This premise, if carried to its logical end, would also mean affording an opportunity to the concerned government servant to show cause against the action proposed and all that it involves. It is true that these decisions do not go to that extent but limit their holding to only one facet of the rule viz., `acting upon undisclosed material to the prejudice of a man is a violation of the principle of natural justice. ' This holding is in direct conflict with the decision in J.N.Sinha which excludes application of principles of natural justice. As pointed out above, J.N. Sinha was decided after, and expressly refers to the decisions in, Binapani Devi and Kraipak and yet holds that principles of natural justice are not attracted in a case of compulsory retirement. The question is which of the two views is the correct one. While answering this question, it is necessary to keep the following factors in mind: (a) Compulsory retirement provided by F.R. 56 (j) or other corresponding rules, is not a punishment. It does not involve any stigma nor any implication of misbehaviour or incapacity. Three Constitution Benches have said so vide Shyam Lal Shivacharana and R.L. 852 Butail. (b) F.R. 56 (j) as also the first proviso to Rule 71(a) of the Orissa Service Code, empower the government to order compulsory retirement of a government servant if in their "opinion", it is in the public interest so to do. This means that the action has to be taken on the subjective satisfaction of the government. In R.L. Butail, the Constitution Bench observed: ". In Union of India vs Col J.N. Sinha this Court stated that F.R. 56(j) in express terms confers on the appropriate authority an absolute right to retire a Government servant on his attaining the age of 55 years if such authority is of the opinion that it is in public interest so to do. The decision further states: "If that authority, bona fide forms that opinion, the correctness of that opinion cannot be challenged before courts. It is open to an aggrieved party to contend that the requisite opinion has not been formed or the decision is based on collateral grounds or that it is an arbitrary decision. The law on the subjective satisfaction has been dealt with elaborately in Barium Chemicals vs Company Law Board, ; At page 323, Shelat, J., after referring to several decisions dealing with action taken on subjective satisfaction, observed thus: "Bearing in mind these principles the provisions of section 237 (b) may now be examined. The clause empowers the Central Government and by reason of delegation of its powers the Board to appoint inspectors to investigate the affairs of the company, if "in the opinion of the Central Government" (now the Board) there are circumstances "suggesting" what is stated in the three sub clauses. The power is executive and the opinion requisite before an order can be made is of the Central Government or the Board as the case may be and not of a Court. Therefore, the Court cannot substitute its own opinion for the opinion of the authority. But the question is, whether the entire action under the section is subjective?" 27. The learned Judges then referred to certain other decisions including the decision in Vallukunnel vs Reserve Bank of India, ; and concluded as follows: 853 "Therefore, the words, "reason to believe" or "in the opinion of"do not always lead to the construction that the process of entertaining "reason to believe" or "the opinion" is an altogether subjective process not lending itself even to a limited scrutiny by the court that such "reason to believe" or "opinion" was not formed on relevant facts or within the limits or as Lord Radcliffe and Lord Reid called the restraints of the statute as an alternative safeguard to rule of natural justice where the function is administrative. The blurring of the dividing line between a quasi judicial order and an administrative order, pointed out in Kraipak has no effect upon the above position, more so when compulsory retirement is not a punishment nor does it imply any stigma. Kraipak or for that matter, Maneka Gandhi cannot be understood as doing away with the concept of subjective satisfaction. On the above premises, it follows, in our respectful opinion that the view taken in J.N. Sinha is the correct one viz., principles of natural justice are not attracted in a case of compulsory retirement under F.R. 56(j) or a rule corresponding to it. In this context, we may point out a practical difficulty arising from the simultaneous operation of two rules enunciated in Brij Mohan Singh Chopra. On one hand, it is stated that only the entries of last ten years should be seen and on the other hand, it is stated that if there are any adverse remarks therein, they must not only be communicated but the representations made against them should be considered and disposed of before they can be taken into consideration. Where do we draw the line in the matter of disposal of representation. Does it mean, disposal by the appropriate authority alone or does it include appeal as well. Even if the appeal is dismissed, the government servant may file a revision or make a representation to a still higher authority. He may also approach a court or Tribunal for expunging those remarks. Should the government wait until all these stages are over. All that would naturally take a long time by which time, these reports would also have become stale. A government servant so minded can adopt one or the other proceeding to keep the matter alive. This is an additional reason for holding that the principle of M.E. Reddy should be preferred over Brij Mohan Singh Chopra and Baidyanath Mahapatra, on the question of taking into consideration uncommunicated adverse remarks. 854 30. Another factor to be borne in mind is this: most often, the authority which made the adverse remarks and the authority competent to retire him compulsorily are not the same. There is no reason to presume that the authority competent to retire him will not act bonafide or will not consider the entire record dispassionately. As the decided cases show, very often, a Review Committee consisting of more than one responsible official is constituted to examine the cases and make their recommendation to the government. The Review Committee, or the government, would not naturally be swayed by one or two remarks, favourable or adverse. They would form an opinion on a totality of consideration of the entire record including representations, if any, made by the government servant against the above remarks of course attaching more importance to later period of his service. Another circumstance to be borne in mind is the unlikelihood of succession of officers making unfounded remarks against a government servant. We may not be understood as saying either that adverse remarks need not be communicated or that the representations, if any, submitted by the government servant (against such remarks) need not be considered or disposed of. The adverse remarks ought to be communicated in the normal course, as required by the Rules/orders in that behalf. Any representations made against them would and should also be dealt with in the normal course, with reasonable promptitude. All that we are saying is that the action under F.R.56(j) (or the Rule corresponding to it) need not await the disposal or final disposal of such representation or representations, as the case may be. In some cases, it may happen that some adverse remarks of the recent years are not communicated or if communicated, the representation received in that behalf are pending consideration. On this account alone, the action under F.R.56(j) need not be held back. There is reason to presume that the Review Committee or the government, if it chooses to take into consideration such uncommunicated remarks, would not be conscious or cognizant of the fact that they are not communicated to the government servant and that he was not given an opportunity to explain or rebut the same. Similarly, if any representation made by the government servant is there, it shall also be taken into consideration. We may reiterate that not only the Review Committee is generally composed of high and responsible officers, the power is vested in government alone and not in a minor official. It is unlikely that adverse remarks over a number of years remain uncommunicated and yet they are made the primary basis of action. Such an unlikely situation if indeed present, may be indicative of malice in law. We may 855 mention in this connection that the remedy provided by Article 226 of the Constitution is no less an important safeguard. Even with its well known constraints, the remedy is an effective check against mala fide, perverse or arbitrary action. At this stage, we think it appropriate to append a note of clarification. What is normally required to be communicated is adverse remarks not every remark, comment or observation made in the confidential rolls. There may be any number of remarks, observations and comments, which do not constitute adverse remarks, but are yet relevant for the purpose of F.R. 56(j) or a Rule corresponding to it. The object and purposes for which this power is to be exercised are well stated in J.N. Sinha and other decisions referred supra. The following principles emerge from the above discussion: (i) An order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour. (ii) The order has to be passed by the government on forming the opinion that it is in the public interest to retire a government servant compulsorily. The order is passed on the subjective satisfaction of the government. (iii) Principles of natural justice have no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny is excluded altogether. While the High Court or this Court would not examine the matter as an appellate court, they may interfere if they are satisfied that the order is passed (a) mala fide or (b) that it is based on no evidence or (c) that it is arbitrary in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be perverse order. (iv) The government (or the Review Committee, as the case may be) shall have to consider the entire record of service before taking a decision in the matter of course attaching more importance to record of and performance during the later years. The record to be so considered would naturally include the entries in the confidential records/character rolls, both favourable and adverse. If a government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their 856 sting, more so, if the promotion is based upon merit (selection) and not upon seniority. (v) An order of compulsory retirement is not liable to be quashed by a Court merely on the showing that while passing it uncommunicated adverse remarks were also taken into consideration. That circumstance by itself cannot be a basis for interfere. Interference is permissible only on the grounds mentioned in (iii) above. This aspect has been discussed in paras 29 to 31 above. Before parting with the case, we must refer to an argument urged by Sri R.K. Garg. He stressed what is called, the new concept of Article 14 as adumberated in Maneka Gandhi (A.I.R. 1978 S.C. 579) and submitted on that basis that any and every arbitrary action is open to judicial scrutiny. The general principle evolved in the said decision is not in issue here. We are concerned mainly with the question whether a facet of principle of natural justice audi alteram partem is attracted in the case of compulsory retirement. In other words, the question is whether acting upon undisclosed material is a ground for quashing the order of compulsory retirement. Since we have held that the nature of the function is not quasi judicial in nature and because the action has to be taken on the subjective satisfaction of the Government, there is no room for importing the said facet of natural justice in such a case, more particularly when an order of compulsory retirement is not a punishment nor does it involve any stigma. So far as the appeals before us are concerned, the High Court which has looked into the relevant record and confidential records has opined that the order of compulsory retirement was based not merely upon the said adverse remarks but other material as well. Secondly, it has also found that the material placed before them does not justify the conclusion that the said remarks were not recorded duly or properly. In the circumstances, it cannot be said that the order of compulsory retirement suffers from mala fides or that it is based on no evidence or that it is arbitrary. For the above reason, both the appeals are dismissed but in circumstances of the case, we make no order as to costs. V.P.R. Appeals dismissed.

C.A.No.869 of 1987 On 15.3.1951, the appellant was appointed as a Pharmacist, which was then designated as compounder. On 13.2.1976 he was retired compulsorily by the Government under the first proviso to Sub rule of Rule 71 of the Orissa Service Code. The appellant challenged the order by way of a writ petition in the High Court contending that the order was the result of ill will and malice the Chief District Medical Officer bore towards him; that his entire service was spot less and that at no time were any adverse entries in his confidential character rolls communicated to him. The respondent Government submitted that the decision to retire 837 the petitioner compulsorily was taken by the Review Committee and not by the Chief Medical Officer; that besides the remarks made in the confidential character rolls, other material was also taken into consideration by the Review Committee that it arrived at its decision bonafide and in public interest which decision was accepted and approved by the Government. The allegation of malafides was denied. The High Court looked into the proceedings of the Review Committee and the confidential character rolls of the appellant and dismissed the writ petition on the reasoning, that an order of compulsory retirement after putting in the prescribed qualifying period of service did not amount to punishment; that the order was passed by the state Government and not by the Chief Medical Officer and that the petitioner has failed to establish that remarks in the confidential character rolls were not duly and properly recorded. It held that the adverse remarks though not communicated, can yet be relied upon. Accordingly it held that the decision to retire was taken by the Review Committee on proper material and there were no grounds to interfere with its decision. The present appeal by special leave was filed by the government servant against the decision of the High Court on the question, whether acting upon undisclosed material was a ground for quashing the order of compulsory retirement C.A. No. 870 of 1987 was also filed on similar facts. It was contended by the appellant that since an order of compulsory retirement had adverse effects upon the career and prospects of the government servant, the order should be passed in accordance with principles of natural justice; that before passing the order, a notice to show cause against the order proposed should be given to the government servant; that the order of compulsory retirement was based upon uncommunicated adverse remarks and that the appellant was also not afforded an opportunity to make a representation against the same; and that as per the new concept of Article 14 adumbrated Maneka Gandhi case, AIR 1978 SC 579, any and every arbitrary action was open to judicial scrutiny. Dismissing the appeals, this Court, HELD: 1.01. What is normally required to be communicated is adverse remarks not every remark, comment or observation made in the confidential rolls. There may be any number of remarks, observations and 838 comments, which do not constitute adverse remarks, but are yet relevant for the purpose of F.R. 56(j) or a Rule corresponding to it. [855B C] 1.02. The adverse remarks ought to be communicated in the normal course, as required by the Rules/ orders in that behalf. Any representations made against them would and should also be dealt with in the normal course, with reasonable promptitude. [854D E] 1.03. The action under F.R.56(j) (or the Rule corresponding to it) need not await the disposal or final disposal of such representation or representations, as the case may be. In some cases, it may happen that some adverse remarks of the recent years are not communicated or if communicated, the representation received in that behalf are pending consideration. On this account alone, the action under F.R.56(j) need not be held back. [854E F] 1.04. There is no reason to presume that the Review Committee or the government, if it chooses to take into consideration such uncommunicated remarks, would not be conscious or cognizant of the fact that they are not communicated to the government servant and that he was not given an opportunity to explain or rebut the same. Similarly, if any representation made by the government servant is there, it shall also be taken into consideration. [854F G] 1.05. Not only the Review Committee is generally composed of high and responsible officers, the power is vested in government alone and not in a minor official. It is unlikely that adverse remarks over a number of years remain uncommunicated and yet they are made the primary basis of action. Such an unlikely situation, if indeed present, may be indicative of malice in law. [854G H] 2.01. An order of compulsory retirement is not a punishment. It implies no stigma nor any suggestion of misbehaviour. [855D] 2.02. The order has to be passed by the government on forming the opinion that it is in the public interest to retire a government servant compulsorily. The order is passed on the subjective satisfaction of the government. [855D E] 2.03. Principles of natural justice have no place in the context of an order of compulsory retirement. This does not mean that judicial scrutiny 839 is excluded altogether. While the High Court or this Court would not examine the matter as an appellate court, they may interfere if they are satisfied that the order is passed (a) mala fide or (b) that it is based on no evidence or (c) that it is arbitrary in the sense that no reasonable person would form the requisite opinion on the given material; in short, if it is found to be a perverse order. [855E F] 2.04. The remedy provided by Article 226 of the Constitution is no less an important safeguard. Even with its well known constraints, the remedy is an effective check against mala fide, perverse or arbitrary action. [855A] 2.05. An order of compulsory retirement is not liable to be quashed by a court merely on the showing that while passing it, uncommunicated adverse remarks were also taken into consideration. That circumstance by itself cannot be a basis for interference. [856B] 2.06. The government (or the Review Committee, as the case may be) shall have to consider the entire record of service before taking a decision in the matter, of course, attaching more importance to the record of and performance during the later years. The record to be so considered would naturally include the entries in the confidential records/character rolls, both favourable and adverse. If a government servant is promoted to a higher post notwithstanding the adverse remarks, such remarks lose their sting, more so, if the promotion is based upon merit (selection) and not upon seniority. [855G 856A] 2.07. The nature of the function is not quasi judicial in nature and because the action has to be taken on the subjective satisfaction of the Government, there is no room for importing any facet of natural justice particularly because an order of compulsory retirement is not a punishment nor does it involve any stigma. [856E] Union Of India vs M.E.Reddy, ; ; Union of India vs J.N.Sinha, [1971] 1 SCR 791, Applied. Shyam Lal vs State of Uttar Pradesh, ; ; Shivacharana vs State of Mysore, AIR (1965) SC 280; State of Orissa vs Dr. Binapani Devi, ; ; A.K. kraipak vs Union of India, AIR 1970 SC 150; R.L. Butail vs Union of India, ; Dr. N.V. Puttabhatta vs State of Mysore; , ; Gian Singh Mann vs Punjab and Haryana 840 High Court; , ; O.N.G.C. vs Iskandar Ali, Brij Bihari Lal Agarwal vs High Court Of Madhya Pradesh, ; Baldev Raj Chaddha vs Union Of India, ; ; J.D. Srivastava vs State of Madhya Pradesh, ; ; Brij Mohan Singh Chopra vs State of Punjab, ; Gurdyal Singh Fiji vs State of Punjab, ;m Amarkant Chaudhary vs State of Bihar, ; ; Baidyanath Mahapatra vs State of Orissa, ; ; Barium Chemicals vs Company Law Board, ; ; Vallukunnel vs Reserve Bank of India, ; ; Maneka Gandhi 's case, AIR 1978 SC 579, Referred to.

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Civil Appeal No.655 of 1986. From the Judgment and Order dated 23.4.1984 of the Delhi High Court in Letters Patent Appeal No.25 of 1984. M.K.Ramamurthy, Ms section Pappuh, B.P.Singh, Rishi Kesh, Raj Birbal, Sanjeev Sabharwal, B.R.Sabharwal and M.M. Kashyap for the appearing parties. S.S.Harlakha appeared in person. S.S.Onkarmal appeared in person for the Intervener. The Judgment of the Court was Delivered by K. Ramaswamy, J. In this appeal by special leave, by way of additional grounds with leave, the appellant impugnes Rule 5 of the Orissa Insurance Co operative Society Ltd. Service Rules (for short "the Rules") as unconstitutional and void offending Article 14 of the Constitution of India. The material facts relevant to the point are that while the appellant was working as Divisional Manager at Delhi, the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance (Emergency Provisions) Ordinance, 1971 replaced by Act 57 of 1972 (for short "the Act") and vested in the custodian of the New India Assurance Co. Ltd., the management of Orissa Insurance Co operative Society Ltd. By operation of s.7 of the Act, the services of the appellant and others stood transferred and vested with the custodian. Under the Act, the Board of Directors was empowered to terminate the service of the officer/employee of the insurer. The appellant was kept under suspension from August 9,1973 pending investigation into the embezzlement, Explanation was called for on October 16, 1973. in response thereto the appellant submitted his reply on december 7, 1974. While dropping the 223 proceeding, the appellant was served with termination order dated April 17,1975 issued by the respondent. The appellant challenged it in a writ petition in Delhi High Court which was dismissed by a learned Single Judge on November 11, 1983 and was confirmed by the Division Bench in Letter Patent Appeal No.351/1984 dated April 23, 1984. Section 7 of the Act provides that every whole time officer or other employee of an existing insurer employed in connection with his General Insurance business, immediately before the appointed day, shall become an officer/employee of the Indian Insurance Co. in which the undertaking of the insurer to which the service of the officer relates has vested and would hold his office 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 unless and until his appointment is terminated. Section 16(1) in Chapter V provides that if the Central Govt. is of the opinion that for the more efficient carrying on of General Insurance business, it is necessary to do so, it may by notification, frame one or more schemes providing for all or any of the following matter; (e) the rationalisation or revision of pay scales and other terms and conditions of service of officers and other employees wherever necessary. Pursuant thereto, the central Govt. framed the New India Assurance Co. Ltd Merger Scheme, 1973 with effect from December 31, 1973. Thereunder by Rule 3, the undertaking was transferred to the respondent; under Rule 5 the existing whole time officer etc. became the officer of the transferee company (New Indian Assurance Co. Ltd) and could hold his office on the same terms and conditions as would have been admissible to him if there had been no such transfer, as referred to in paragraph 3. He shall continue to remain an officer unless and until his employment, in the transferee company is terminated or the terms and conditions are duly altered by any other scheme framed under the Act. By notification dated April 29, 1976 the Central Govt. also framed the scheme called the General Insurance (Rationalisation of pay scales and other Conditions of Service of Development Step) Scheme, 1976 which came into force on May 1, 1976, the details of which are not material for the reason that service of the appellant was terminated , in terms of the existing rule 5 of the Rules. Suffice to state that pursuant to the nationalisation under the Act and Scheme, the appellant became the officer of the respondent. Rule 5 read thus: Termination of Service: 224 "An employee whether permanent or temporary shall not leave or discontinue his service in the Society without first giving 30 days notice in writing of his intention to do so, to the Principal Officer, Failure to do so will entail forfeiture of the pay of the month. In the event of the Society not having any further need of any employee 's service whether permanent or temporary, which shall be decided by the Board, the Principal Officer shall give 30 days ' notice in writing for termination of his service or in lieu thereof pay such employee a sum equivalent to his one month pay including allowance upto the termination of the period of notice by way of compensation provided that nothing in these rules shall affect the rights of the society to dismiss an employee under Rule 8 for misconduct etc. without any notice or salary in lieu of notice, in the manner prescribed in these rules. An employee shall ordinarily retire from the Society 's services on completion of his 55th year unless the Board reserves to continue him in office of such period as may be determined from time to time. " It is thus manifest that an employee, whether permanent or temporary, has an option to leave or discontinue by giving 30 days ' notice in writing of his intention to do so. His failure thereof shall entail forfeiture of the pay of the month. The employee ordinarily would be superannuated on completion of his 55th year unless the Board continues him for an extended period as may be determined from time to time. Equally in the event of the Society not having any further need of the employee 's service, whether permanent or temporary, which should be decided by the Board, the Principal Officer shall give 30 days ' notice in writing for termination of his service or in lieu thereof, pay one month 's salary including allowances upto the period of termination. The respondent also has the right to dismiss an employee, under Rule 8, for misconduct in the manner prescribed in the Rules. Admittedly, though action was initiated against the appellant for the charges of embezzlement etc. which are misconduct, the charges were dropped. Taking aid of Rule 5 and without conducting an enquiry or giving an opportunity, the appellant 's service was terminated by tendering one month 's salary in lieu of notice and also a direction to pay all the allowances upto that date including the period of his suspension. It is not necessary to go into the grounds taken in the High Court assailing the invalidity of the termination order as they are not pressed before us. Sri Ramamurthy, the learned Senior counsel for the appellant placing reliance on the ratio of the majority view in D.T.C. vs D.T.C Mazdoor Congress & Ors., 225 Judgment today contended that Rule 5 is ultra vires of Article 14 of the Constitution. Shyamala Pappu, the learned Senior counsel for the respondent contended that unlike Rule 9 in D.T.C 's case Rule 5 provides guidelines. The Board of Directors have to take a decision, whether the need to continue the employee 's service subsists which would be based on the relevant material. Thereby, there would be objective consideration before taking a decision, not only regarding the need to continue the post but also the services of the officer or the employee. Though the rule does not provide for prior notice, post decisional opportunity would be read into the rule. If so read, the rule is not ultra vires Article 14. In our view the ratio in D.T.C. 's case has no application. Rule 9 of the rules of Delhi Transport Corporation Service Regulation gives naked power to terminate the services of a permanent employee by giving one month 's notice or pay in lieu thereof. It was not the contention therein, that the rule was capable of two constructions. It is settled law that there is a presumption of constitutionality of the rule. The court ought not to interpret the statutory provisions, unless compelled by their language, in such a manner as would involve its unconstitutionality, Since the legislature of the rule making authority is presumed to enact a law which does not contravene or violate the constitutional provisions. Therefore, there is a presumption in favour of constitutionality of a legislation or statutory rule unless ex facie it violates the fundamental rights guaranteed under Part III of the constitution. If the provisions of law or the rule is construed in such a way as would make it consistent with the constitution and another interpretation would render the provision or the rule unconstitutional, the court would lean in favour of the former construction. In view of this settled legal position, the question emerges whether the language in Rule 5 would be capable to be construed consistent with the fundamental rights in Part III. As stated earlier, the phrase "in the event of the Society not having any further need of any employee 's service whether permanent or temporary which shall be decided by the Board" is susceptible of two interpretations. The one interpretation put up by Sri Ramamurty is that the Board may unilaterally and arbitrarily decide that there is no need for the services of a particular employee, in given facts and circumstances, though the post which the employee is occupying may continue and would be put to an end by giving one month 's notice or pay in lieu thereof. In that event the rule per se is arbitrary offending Article 14. The other view capable to be construed from the language employed would be that the Board of Management may form an objective opinion, on the basis of the material, that the post which the officer or the employee is occupying no longer is in need. Thereby, the post would be abolished. This would be a policy decision depending on the exigencies. In consequences the service of the employee also would become 226 redundant or surplus. In that event his service would no longer be needed. The officer or employee may be permanent or temporary but the absence of the need for the continuance of the post would necessitate to terminate the service of an employee or officer. It must not be a pretext or a rouse to get rid of the service of an inconvenient officer or of an employee. If that be so. it would become colourable exercise of power and would be liable to be quashed as offending Article 14. Once the Board reaches a decision to abolish the post, in consequence the service of the officer/ employee occupying couched in Rule 5 also is capable of that interpretation. In that light we are of the opinion that Rule 5 does not become arbitrary. unreasonable or void offending Article 14. Accordingly, we hold that the rule is valid. But from the facts, it is clear that the Board of Management did not abolish the post but put an end to the service of the appellant. Obviously due to loss of confidence as his honesty and integrity became suspicious and his continuance in service was felt inexpedient and not in the interest of the business of the respondents. But Rule 8 was available for taking action for misconduct but was not availed. Therefore, the impugned order terminating the services of the appellant is illegal. What would be the consequence? Normally the appellant is entitled to reinstatement but in our view the ends of justice would be met by directing the respondent to pay him Rs. 1,00,000 as compensation, instead of reinstatement and further continuance in service. The compensation awarded would be staggered between the year 1973 till date for the purpose of income tax and given the appropriate relief. In this view it is not necessary to deal with other contentions or decisions cited across the bar. Before parting with the case it is necessary to mention that march of service jurisprudence necessitates the respondent to recast the rules in tune with the constitution and the law. The appeal is allowed but without cost. The intervention application filed by Sri S.S. Onkarmal Harlalka is dismissed. S.B. Appeal allowed.

While the appellant was working as Divisional Manager at Delhi, the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance (Emergency Provisions) Ordinance, 1971 which was replaced by Act 57 of 1972 and vested in the Custodian of the New India Assurance Co. Ltd. the management of Orissa Insurance Co operative Society Ltd. By operation of Section 7 of the Act the services of the appellant and others stood transferred and vested with the custodian. The appellant was kept under suspension from August 9,1973 pending investigation into charges of embezzlement. Explanation was called for on October 16,1973 and the appellant submitted his reply on December 7, 1974, While dropping the proceeding, the appellant was served with a termination order dated april 17, 1975 issued by the respondent. The appellant challenged the aforesaid termination order in a writ petition in Delhi High Court which was dismissed by a Single Judge on November 11,1983 and this judgment was confirmed by the division Bench in a Letter Patent Appeal. In the appeal to this Court it was contended on behalf of the 221 appellant placing reliance on the majority view in D.T.C vs D.T.C Mazdoor Congress & Ors. judgment Today 1990(3) SC 725 that Rule 5 of the Orissa Insurance Co operative Ltd. services Rules is ultra vires of Article 14 of the Constitution. On behalf of the respondent it was contended that unlike Rule 9 involved in D.T.C 's case, Rule 5 in the instant case provided guidelines, and that the Board of Directors had to take a decision, whether the need to continue the employee 's service subsists which would be based on relevant material and thus there would be objective consideration before taking a decision, not only regarding the need to continue the post but also the services of the Officer or the employee, and if so construed the rule is not ultra vires of article 14. Allowing the appeal, this Court, HELD: Rule 5 of the Orissa Insurance Co operative Society Ltd. is capable of the interpretation that the Board of management may form an objective opinion, on the basis of material, that the post which the officer or the employee is occupying is no longer in need and that the post would be abolished. This would be a policy decision depending on the exigencies. Once the Board reaches such a decision to abolish the post, in consequence the service of the officer/employee occupying the post could be terminated. Viewed in that light the said rule does not become arbitrary, unreasonable or void offending Article 14 and therefore the rule is valid. [225G 226 B] There is a presumption in favour of constitutionality of a legislation or statutory rule unless ex facie it violates the fundamental rights guaranteed under Part III of the constitution. If the provisions of a law or the rule is construed in such a way as would make it consistent with the Constitution and another interpretation would render the provision or the rule unconstitutional, the Court would lean in favour of the former construction. [225 E] It is clear in the instant case, that the Board of Management did not abolish the post but put an end to the service of the appellant, obviously due to loss of confidence as his honesty and integrity became suspicious and his continuance in service was felt inexpedient and not in the interest of the business of the respondents. But rule 8 was available for taking action for misconduct but was not availed. Therefore, the order terminating the services of the appellant is illegal. [226 C] 222 Normally the appellant is entitled to reinstatement but the ends of justice would be met by directing the respondents to pay him Rs. 1,00,000 as compensation, instead of reinstatement and further continuance in service. The compensation awarded would be staggered between the year 1973 till date for the purpose of income tax and given the appropriate relief. [226D E] March of service jurisprudence necessitates that the respondent recast Rule 5 in tune with the Constitution and the law. [226 E]

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Special Leave Petition Nos. 16066. 16065 & 16451 of 1991. From the Judgment and Order dated 28.8.1991,30.8.1991 & 9.10.1991 of the Punjab and Haryana High Court in C.W.P.Nos. 12644, 12485 and 14606 of 1991 respectively. Kapil Sibal, Ranjit Kumar, J.D. Jain, Mrs. Kawaljit Kocher, Dr. Balram Gupta, Ms. Yasmin Tarapore, J. Lal Kai lash Vasdev, Ms Nandini Sawhney, R.K. Kapoor, A.A. Khan and Anil Verma for the appearing parties. The following Order of the Court was delivered: In the Union Territory of Chandigarh, 5% of the seats are reserved in favour of sons/daughters/spouses of Mili tary/Para Military personnel. Orders in this behalf are issued by the Administration in its memo dated 19th May, 1982 which were later modified in memo dated 6.9.1990. In accordance with the said orders, Punjab Engineering College (a College run by the Chandigarh Administration and affili ated to Punjab University) reserved 15 seats in favour of sons/daughters/spouses of Military/ParaMilitary Personnel. The College published a prospectus for the session 1991 92. It contains inter alia the rules governing the admission of stu 326 dents to the said college. So far as the reservation in favour of children and spouses of Military/Para Military Personnel is concerned, the rule, (printed at pages 23 and 24 of the Prospectus) reads as follows: "Sons/Daughters/Spouses of Military/Para military Personnel etc. : 3 The Admission of the candidates against the reserved seats under this category will be made on the basis of merit list prepared according to the priorities given below in the descending order: 1. Sons/Daughters/Spouses of defence personnel who are awardees of gallantry decorations of Paramvir/Mahavir/Vir Chakra in person or posthumously. OR Sons/daughters/spouses of defence personnel and para military personnel like CRPF, BSF etc. who are killed or are total incapacitated in action while in service and were wholly dependent on them. Sons/daughters/spouses of defence person nel and para military personnel like CRPF/BSF etc. who die while in service and were wholly dependent on them; 3. Sons/daughters/spouses of defence per sonnel and para military personnel like CRPF/BSF incapacitated while in service and were wholly dependent on them; 4. Sons/daughters/spouses of exservicemen (military and para military personnel like CRPF/BSF who are wholly dependent on them; 5. Sons/daughters/spouses of serving de fence personnel and paramilitary personnel like CRPF/BSF who are wholly dependent on them: The candidates claiming admissions under the category 1 above are required to submit the photo copy of citation for the gallantry award, failing which the application will not be considered in this category, The candidates claiming admission under category I are required to submit a certificate from the respective Head quarters regarding death/total incapacitation in action while in service. The candidates claiming admission under category 2 and 3 are required to submit a certificate from the respective Headquarters regarding death/total incapacitation.while in service. 327 The candidates claiming admission under category 4 are required to submit discharge certificate from sevice and certificate of dependence from the District Magistrate of the district concerned. The candidates claiming admission under category 5 are required to submit the certificate of dependence from the unit in which parent/spouse is serving. The candidates who apply for admission against this category will also be considered for admission against the seats allocated for Chandigarh/ General Pool to which they may belong as per their merit. " A perusal of the rule shows that the five categories are mentioned in the order of priority in the descending order. There is no allocation of seats as between these five cate gories. It means that in the first instance, all the quali fied and eligible candidates falling in category 1 will be given admission and if any seats are left unfilled, quali fied candidates failing in category 2 will be admitted. If there are any seats still left unfilled, qualified candi dates falling in category 3 will be given admission and so on. In a given year, it may well happen that all the avail able seats reserved for children/spouses of defence person nel are taken away by the candidates in the first or first and second categories. As a matter of fact, for the year 1990 91, only 6 candidates belonging to sub category 4 out of 90 candidates could be admitted and not the others and category 5 'went unprovided altogether. It is stated that all candidates obtaining the specified minimum marks in the common entrance test were treated as qualified for being considered for admission. S.L.P. 16066/91: The first respondent in the S.L.P. applied for admission to Punjab Engineering College under this quota. He appeared in the common Entrance Test along with other applicants. The College Authorities considered his case placing him in category 4 since his father was an Ex serviceman. He could not, however, be given the admission because the 15 seats reserved for children and spouses of Military/ParaMilitary Personnel in this College were allo cated in the following manner: a. There were three candidates falling in category 1 (i.e., children of Defence Person nel who are awardees of gallantry decoration, Paramvir Chakra/Mahavir Chakra, in person or posthumously). All the three were given admis sion. b. There were 5 candidates falling in catego ry 2. They were admitted. 328 c. Only one candidate falling in category 3 appeared and was given the seat; d. There were 90 candidates failing in category 4. But only 6 seats were available (nine seats having been taken away by sub categories a to c). These six seats were allotted on the basis of inter se merit among the candidates failing in this category. The first respondent being at a fairly lower position in this merit list could not be given the admission. No seats were left for being allotted to candidates failing in category 5. Finding that he has not been given admission in this Col lege, the first respondent filed a writ petition in the High Court of Punjab and Haryana being C.W.P. No.12644 of 1991. His contention was that his father Major Kuldip Singh Malik was awarded Shaurya Chakra for acts of gallantry, that Shaurya Chakra is equivalent to Vir Chakra, in all respects and, therefore, his case ought to have been considered in category 1 and not in category 4. He submitted that along with his application for admission he had enclosed a copy of the citation awarded by the President of India to his father showing that his father Major Kuldip Singh Malik was awarded Shaurya Chakra for displaying exemplary courage and leader ship in the course of his duties in the Mizo Hills. He complained that two of the candidates admitted under catego ry 1 have received less marks than he. The High Court has allowed the Writ Petition on the following reasoning: "According to Regulation 695 of the Defence Services Regulations relating to the Army, issued by the Ministry of Defence, Government of India, Shaurya Chakra is awardable for gallantry and comes after Ashoka Chakra and Kirti Chakra. Further, according to Regulation 717, in order of precedence, this award of Shaurya Chakra is at number thirteen. that is immediately below Vir Chakra and Param Vir Chakra is at number two and Maha Vir Chakra is at number seven. Despite all this, the re spondents, while considering the candidature of the petitioner, did not grant him admission to the Bachelor of Engineering Course in the current session even though he was higher in academic merit as compared to respondent Nos. 3 and 4 who have been granted such admission. In reply, the respondents have pleaded that no doubt the father of the petitioner was deco rated with Shaurya Chakra award in 329 1969, but it is gallantry award and is not strictly covered by the rules, regulations and the prospectus of the College, though it is admitted that both respondents Nos.3 and 4, who have been granted admission, were lower in merit than the petitioner, so far as the academic record is concerned. After hearing the learned counsel for the parties, we find that the approach of the respondents in rejecting the candidature of the petitioner is neither legally correct nor just and fair. However, as respondent Nos.3 and 4 who are lower in academic merit than the petitioner, happen to be the sons of the awardees of Vir Chakra and Maha Vir Chakra respectively, it would be unfair if the admis sion already granted to them by the Chandigarh Administration and the Punjab Engineering College, Chandigarh, is set aside. Resultantly, we allow this petition and issue a direction to respondent Nos. 1 and 2 to admit the petitioner against the category of sons/daughters of awardees of gallantry deco rations, without disturbing the admission of respondents Nos.3 and 4. In case no such seat is available for the petitioner, the respond ents shall create a seat for the purpose forthwith. This shall also be deemed to be a direction to the Punjab University for accord ing necessary approval for the creation of the additional seat. There shall be no order as to costs. " The decision of the High Court was rendered on 28th August, 1991. The present S.L.P. was filed in this court on 7th October, 1991. In fact, it appears that having waited for one month and not having been admitted in the college in pursuance of the Judgment, the first respondent took pro ceedings for Contempt against the College Authorities. The first respondent, was admitted in the college on 28th Octo ber, 1991. It is now stated by his counsel that the first respondent has given up his seat in another college (Jamia Millia), on being admitted to this College. The writ peti tion came up for final hearing before us on 15.11.1991. We disposed of the SLPs on that day stating that reasons for our orders will be given today. S.L.P. No. 16065/91 Respondents 1 and 2 in this S.L.P. also applied for admission to Punjab Engineering College as children of serving Defence Personnel. They too appeared for the common Entrance Test along with other applicants. Since the parents of the two respondents were serving Defence Personnel, their case was considered under category 5, As stated herein 330 before, no seats were left for being allocated to candidates falling in category 5. Respondents I and 2 were, therefore, not given admission in this College whereupon they ap proached the Punjab and Haryana High Court by way of a writ petition being C.W.P. No. 12485 of 1991. Their case was that the categorisation of Defence Personnel was unjust and unreasonable in as much as while the children and spouses of serving Defence Personnel are placed in category 5, children and spouses of Exserviceman are placed above them in catego ry 4. According to the respondents. children of serving Defence Personnel must be preferred over the children of Exservicemen. In a short order, the High Court allowed the writ petition and directed 'that category 5 should be treated as category 4 and category 4 should be treated as category 5. The Court directed that admissions for the current year (1991 1992) shall be made accordingly. The order of High court is a short one and may be set out in its entirity: "After hearing the learned counsel for the parties and having gone through their plead ings, we are of the considered view that sub categories No. 1, 2 and 3 deserve to be re tained at their appropriate present places. So far as sub categories No.4 and 5 i.e. relating to the sons, daughters and spouses of the exservice personnel ,as well as the sons, daughters and spouses of service Defence personnel are concerned, we find that the ends of justice would be adequately met and the object for which the reservation has been provided would be achieved if the sons, daugh ters and spouses of serving Defence personnel are placed at sub category No.4 i.e. above the category of Exservicemen. This conclusion has been arrived at by us after considering the circumstances that the wards and spouses of serving Defence personnel are at a disadvan tage in the absence of their guardians serving at far off/distant places defending the coun try vis a vis who have retired from the mili tary and are now living with their wards. Keeping these considerations in view, we dispose of this writ petition by issuing a direction to the respondent Union Territory Chandigarh and Principal, Punjab Engineering College, to go ahead with the admission of this reserved category. Therefore, so far as such categories 1,2 and 3 are concerned, there shall not be any change. However, we direct that so far as sub category No.4 is concerned, persons covered in this shall be considered at No. 5 and those covered in sub category 5 are concerned, shall be considered at No. 4. The admission, which are going to be finalised tomorrow, shall not be made in accordance with these directions. A copy of the order be supplied Dasti also to the learned counsel for the parties. " 331 This order was made on 30th August, 1991 whereas the present SLP was filed in this Court on 7th October, 1991. These respondents too took proceedings for contempt against the college for not implementing the direction of the High Court. They were admitted on 28th October, 1991. These respondents also say that on being admitted to this college they have given up their admission in other colleges. This SLP was heard alongwith SLP. No.16066 of 1991 on 15.11.91. S.L.P. No. 16451 of 1991 This petition for Special Leave is directed against the order dated 9th October, 1991 passed by a Division Bench of the Punjab ,and Haryana High Court dismissing the writ petition filed by the petitioner. The petitioner (writ petitioner) applied for admission to the Punjab Engineering College for the year 1991 92 under category 4 being the son of an Exserviceman. By virtue of the directions given by the High Court in its order dated 30.8.1991 in C .W.P. No. 12485 of 1991, category 4 became category 5 and category 5 became category 4 and admissions were being made on that basis. The petitioner who fell in category 4 (,as per the prospectus of the College) and which was now converted to category 5 by virtue of the decision of the High Court aforesaid applied to the High Court to consider his case in category 4 itself and grant him admission. His writ petition was dismissed by the High Court on 9th October, 1991 under a short order which reads thus: "Admissions are being done as per the direc tions issued in Civil Writ Petition No.12485 of 1991, decided by the Division Bench on August 30. 1991. In view of the said decision, we do not find any merit in the contentions raised by the learned counsel for the peti tioner. The Writ petitions dismissed. A copy of this order be given dasti. " The petitioner is in fact questioning the correctness of the directions given by the High Court in C.W.P.No.12485 of 1991 disposed of on August 30, 91. Counsel for Chandigarh Administration and the College (petitioners in SLP 's 16066 and 16065 of 1991) contended that the High Court has exceeded its jurisdiction in grant ing the impugned directions. He submitted that High Court, while exercising the writ jurisdiction conferred upon by Article 226 of the Constitution of India, does not sit as an Appellate Authority over the rule making authority nor can it re write the rules. If the rule or any portion of it was found to be bad, the High Court could have struck it down and directed the rule making authority to re frame the 332 rule and make admissions on that basis but the High Court could not have either switched the categories or directed that Shaurya Chakra should be treated as equivalent to Vir Chakra By its directions, the High Court has completely upset the course of admissions under this reserved quota and has gravely affected the chances of candidates failing in category 4 by down grading them as category 5 without even hearing them. These are good reasons for the categorisation done by the Administration which was adopted by the College. He submitted that while Paramvir Chakra, Mahavir Chakra and Vir Chakra are awarded for gallantry in war, Ashok Chakra, Kirti Chakra and Shaurya Chakra are awarded for gallantry otherwise than in war. Shaurya Chakra was awarded to the father of the first respondent in SLP.No. 16066 of 1991 for his gallant conduct in counter insurgency operations in Mizo Hills. It was not a war. He placed, before us, the true extract of order of precedence of awardees. It reads thus: "TRUE EXTRACT OF ORDER OF PRECEDENCE OF AWARDS. Order of Precedence of Awards The order of precedence of various awards is as follows: Bharat Ratna Param Vir Chakra Ashoka Chakra Padma Vibhushan Padma Bhushan Param Vishisht Seva Medal Maha Vir Chakra Kirti Chakra Padma Shri Sarvottam Jeevan Raksha Padak Ati Vishisht Seva Medal Vir Chakra Shaurya Chakra The President 's police and Fire Service Medal for gallantry. Sena/Nao Sena/Vayu Sena Medal Vishisht Seva Medal The Police Medal for gallantry Uttam Jeevan Raksha Padak Wound Medal The General Service Medal 1947. Samar Seva Star 1965 Poorvi Star Paschimi Star Raksha Medal 2965." 333 Counsel says that by its directions contained in the two orders impugned herein, the High Court has exercised a jurisdiction, which really did not belong to it. We are inclined to agree with him. Counsel for the petitioner in S.L.P.No. 16451 of 1991 supported the aforesaid arguments. On the other hand, the counsel for respondents (writ petitioners in the High Court) in the first two SLPs. sup iported the order of the High Court and submitted further that since the said respondents have given up their seats in other colleges and have been admitted in the Punjab Engi neering College any order throwing them out from the Punjab Engineering College, at this juncture would cause them irreparable prejudice. They submitted that the Chandigarh Administration and the College authorities have been sleep ing over the matter until a contempt petition was filed and that they moved this Court only after they were summoned in the Contempt proceedings. They should be held dis entitled to any relief on account of laches, submitted the counsel. We are of the considered opinion that the orders of High Court are wholly unsustainable. We shall consider both the directions separately. Let us first consider SLP 16066 of 1991, arising from C.W.P. 12644/91. The rule as framed by the Chandigarh Administration and as published by the College in its prospectus in the year 1991 92 placed in category I children and spouses of only those Defence Personnel who were awardees of gallantry decorations of Paramvir Chakra, Mahavir Chakra or Vir Chakra in person or posthumously. It did not include Ashok Chakra, Kirti Chakra or Shaurya Chakra. The validity of the rule was not expressly questioned before the High Court. Assuming that it was so questioned and assuming that the High Court was satisfied that the rule was discriminatory and bad for the reason of not including Ashok Chakra etc., the only course open to it was to strike down the offending rule. It could also have directed the authorities to reframe the rule and to make admissiions accordingly. High Court however did not choose to do so. It merely directed that since Shaurya Chakra is immediately below Vir Chakra in the order of precedence and since respondents 3 and 4 in the writ peti tion admitted under sub category I have obtained lesser marks than the writ petitioner, he should be given admission without disturbing the admission given to respondents 2 and 3 in that writ petition. The entire reasoning of the High Court has been extracted by us herein above. It shows that absolutely no reason is assigned for granting the said direction. All that it says is that since Shaurya Chakra is also awardable for gallantry and is placed imme 334 diately below Vir Chakra, the writ petitioner should be granted admission. If really the High Court was of the opinion that Shaurya Chakra is equivalent to Vir Chakra and should be treated on the same par as Vir Chakra then it should spelt out the position also of Ashok Chakra and Kirti Chakra. which are above Shaurya Chakra. According to the Rules notified children/spouses of Ashok Chakra, Kirti Chakra & Shaurya Chakra awardees did not fall under category 1 nor under categories 2 or 3. They would fail under catego ry 4 or category 5, as the case may be, depending upon whether their parent/spouse was an ex service person or a serving person. There may have been other candidates who are the children/spouses of Shaurya Chakra awardees and for that matter, Ashok chakra and Kirti Chakra awardees who may have obtained more marks than the writ petitioner (first respond ent in SLP 16066 of 1991) but who did not claim a seat under category 1 nor were considered as such. They may not have stated the fact of their parent/spouse being a Ashok chakra/Kirli Chakra Shaurya Chakra awardee, nor filed the relevant citation, since it was not relevant as per the published Rules. Had the proper course been followed, all of them could have applied properly and could have been consid ered. By saying this we do not mean to say that the Rule is bad. We do not mean to say so at all. There may be good reasons for the Rule as published or there may not be. That is not the issue. What we are saying is that if the High Court was of the opinion that all the gallantry awar dees (including Ashok, Kirti and Shaurya Chakra) should be placed in category 1, it should have said so, struck down the category and, may be, directed reframing of rule and admissions made on that basis. Coming to SLP 16065 of 1991, the position appears to been even worse. Without assigning any reason the High Court has directed that category 4 should be made category 5 and category 5 should be made category 4. In short, it has switched these two categories. Again, we must say that if the High Court thought that this categorisation was discrim inatory and bad it ought to have struck down the categorisa tion to that extent and directed the authority to ' re frame the rule. It would then have been open to the rule making authority either to merge these two categories or delete one or both of them, depending upon/he opinion they would have formed on a review of the situation. We must make it clear again that we express no opinion on the question of validity or otherwise of the rule. We are only saying that the High Court should not have indulged in the exercise of 'switch ing ' the categories, and that too without giving any reasons thereafter. Thereby. it has practicably assumed the rule of rulemaking authority, or. at any rate, assumed the role of an Appellate Authority. That is clearly not the function of the High Court acting under Article 226 of the Constitution of India. Now, let us notice the implications and consequences of the said 'switching '. 335 By directing that category 4 should be treated as category 5 and conversely category 5 should be treated as category 4, the High Court has prejudicially affected the rights of candidates falling under category 4 without even hearing them. It must be remembered that these categories are mentioned in the order of priority as emphasised herein before. A rulemaking authority need not observe the rule of hearing, but the High Court exercising its judicial power cannot dispense with the requirement and that is precisely the grievance of the petitioner in S.L.P. 16451/91 arising from V.W.P. 14606 of 1991. He was entitled to be considered under category 4 (as per the prospectus) whereas by virtue of the High Court 's order his category has become category 5, the result of which is that no seat may be left for his category, whereas the said category was entitled to some seats at least according to the Rules as framed and pub lished by the Administration and College. Suffice is to say that the giving the said direction, while the admission were in progress, the situation has been confounded beyond re call. Article 226 of the Constitution of India empowers the High Court to issue to any person or authority (including the government) directions, orders or writs including writs in the nature of Habeas Corpus, mandamus, Prohibition, quo warrants and certiorari, or any of them for the enforcement of any of the rights conferred by Part III and for any other purpose. Though the Article itself does not contain any restric tive words, the Courts have, ever the years, evolved certain self constraints though, we are not bound by the procedural technicalities governing these high prorogative writs in English law. As observed by a Constitution Bench in Bassappa vs Nagappa ; at 256: "In view of the express provisions in our Constitution we need not now look back to the early history or the procedural technicalities of these writs in English law, nor feel op pressed by any difference or change of opin ion, expressed in particular cases of English Judges. We can make an order or issue a writ in the nature of certiorari in all appropriate cases and in appropriate manner, so long as we keep to the broad and fundamental princi ples that regulate the exercise of jurisdic tion in the matter of granting such writ in English law. " While this is not the place to delve into or detail the self constraints to be observed by the Courts while exercis ing the jurisdiction under Article 226, one of them, which is relevant herein, is beyond dispute viz. while acting under Article 226, the High Court does not sit and/or act as an Appellate Authority over the orders/actions of the Subor dinate Authori 336 ties/Tribunals. Its ' jurisdiction is supervisory in nature. One of the main objectives of this jurisdiction is to keep the government and several other authorities and Tribunals within the bounds of their respective jurisdiction. The High Court must ensure that while performing this function it does not overstep the well recognized bounds of its own jurisdiction. Though we are satisfied that the orders and directions made by the High Court are totally unsupportable in law, the subsequent developments dissuade us from allowing these SLPs. As stated above, the three respondents writ petition ers (first respondent in SLP. 16066/91 and respondents I and 2 in SLP. 16065/91) have been admitted into this college (Punjab Engineering College) on 28th October, 1991, where upon they have given up the seats which they had obtained in other colleges. This statement of theirs is not disputed either by the Chandigarh Administration or the college authorities. Depriving the said respondents of their admis sion in this college at this stage would result in grave and irreparable prejudice to them. We think that the Administra tion and College authorities ought to have acted with more alacrity and approached this Court earlier than they did. By the time, these SLPs were taken up by us and stay granted, the said respondents were already admitted into the College and, they say, they had given up their seats in the other colleges. On this score alone, we decline to interfere with the orders in C.W .P. 12644/91 and 12485/91. Now coming to SLP 16451 of 1991, the situation is this: By virtue of the orders of the High Court, three students who were not entitled to admission according to rules have been given admission against the three vacancies which had arisen since the finalization of the admissions. The college authorities say that but for the orders of the High Court, these three vacancies would have gone to the first three candidates in the waiting list. The petitioner in SLP 16451 of 1991 says that he is one such person in the waiting list and he would have obtained admission but for the admission given to the three candidates in pursuance of the High Court orders. We do not know whether the petitioner 's case is true. All the same, we think it appropriate to make the following direction: the college authorities shall create three more seats in the said course and admit the first three available students in the waiting list against those seats. The Chandigarh Administration shall pass the neces sary orders in this behalf. Action in terms of this direc tion shall be taken forthwith by the Chandigarh Administra tion and the college authorities. Before we part with this case we wish to make an obser vation. In matters of this nature where the High court directs students to be admitted in Educational Institutions. it would be advisable if the High Court stays 337 the operation of its order for a period of about 3 to 4 weeks, if a request therefor is made by the Educational Institution or the State, as the case may be. SLPs disposed of accordingly. R.P. Petitions disposed of.

The Union Territory of Chandigarh, by its Memo dated 19.5.1982 as modifited by another Memo dated 6.9.1990, reserved 5% of seats for children/spouses of military/pars military personnel. Pursuant thereto the Punjab Engineering College, reserved 15 seats for such candidates. For the purpose of admission the college categorised in its prospec tus these candidates into 5 sub categories. These belonging to the respective categories and obtaining qualifying marks in the entrance examination were to be admitted meritwise in the order of priority in descending order: sub category 1 consisted of children/spouses of defence personnel who were awardees of gallantry decorations of Paramvir/Mahavir/Vir Chakra in person or posthumously, or, dependent children/spouses of defence/pars military personnel who were killed or totally incapacitated in action while in service. Dependent childern/spouses of defence/pars military person nel who died in service were put in sub category 2. Subcate gory 3 comprised the dependent children/spouses of defence/pars military personnel incapacitated while in service, Dependent children/spouses of Ex servicemen (mili tary and pars military) were 323 placed in sub category 4; and those of serving defence/pars military personnel found place in sub category 5. For the academic year 1991 92 out of the 15 seats, 9 seats went to all the 9 qualified candidates belonging to sub categories 1 to 3, and remaining seats were allotted to 6 candidates meritwise out of 90 qualified candidates be longing to sub category 4. Sub category 5 went unprovided. Respondent no.1 in SLP No.16066/91, who appeared in the entrance examination for the academic year 1991 92 but did not get admission, filed a writ petition before the High Court contending that his father was an awardee of 'Shaurya Chakra ' which was equivalent to Vir Chakra and therefore his case ought to have been considered in sub category 1. On behalf of the College it was stated that 'Shaurya Chakra ' award was not covered under the rules and regulations and, therefore, respondent no.1, being the son of an Exservice man, could be considered only in sub category 4. Respondents no.1 and 2 in SLP No.16065/91, the sons of the serving defence personnel, filed another writ petition before the High Court challenging the categorization of defence personnel as unreasonable and contended that chil dren of serving defence personnel should have been preferred over the children of Exserviceman. The High Court allowed both the writ petitions and directed the College to admit all the three petitioners. It ordered that subcategory 5 should be treated as sub category 4 and sub categery 4 should be treated as sub category 5, and the admissions should be made accordingly. The petitioner in SLP No.16451/91, being the son of an serviceman, was initially entitled to be considered under sub category 4 which by the order of the High Court was converted into sub category 5. He challenged the said con version of categories by yet another writ petition which was dismissed by the High Court. The Chandigarh Administration and the College filed SLPs No.16066 and 16065 of 1991 against the orders of the High Court allowing the two writ petitions, whereas SLP No. 16451 of 1991 was filed by the petitioner in the third writ peti tion which was dismissed by the High Court. 324 It was contended on behalf of Chandigarh Administration and the College that the High Court exceeded its jurisdic tion in granting the impugned order in as much as in writ jurisdiction the High Court does not sit as an appellate authority over the rule making body nor can it re write the rules. On 15.11.1991 the three Special Leave Petitions were dis posed of. Giving reasons in support of its order dated 15.11.1991 this Court, HELD: 1. While acting under Article 226 of the Constitu tion, the High Court does not sit and/or act as an appellate authority over the orders/actions of the subordinate author ities/tribunals. Its jurisdiction is supervisory in nature. [pp. 335 H; 336 A] One of the main objectives of this jurisdiction is to keep the government and several other authorities and tribu nals within the bounds of their respective jurisdiction. The High Court must ensure that while performing this function it does not overstep the wellrecognised bounds of its own jurisdiction. [p. 336 A] 2.1 In the instant case, the High Court should not have indulged in the exercise of 'switching ' the categories and that too without giving any reasons therefor. Thereby, it has practicably assumed the role of rule making authority, or, at any rate, assumed the role of an appellate authority. That is clearly not the function of the High Court acting under Article 226 of the Constitution of India. 334 G H1 2.2 If the High Court was satisfied that the rule was discriminatory and bad, the only course open to it was to strike down the offending rule. It could also have directed the authorities to reframe the rule and make admissions accordingly. [p. 333 F] By directing that category 4 should be treated as cate gory 5 and conversely category 5 should be treated as cate gory 4, the High Court has prejudicially affected the rights of candidates falling under category 4 without even hearing.them, particularly when these categories were men tioned in the order of priority. [p. 335 A] 3. A rule making authority need not observe the rule of hear 325 ing, but the High Court exercising its judicial power cannot dispense with the requirement. [p. 335 AB] 4. Although the orders and directions made by the High Court were totally unsupportable in law, yet, in view of the subsequent developments, the Special Leave Petitions could not be allowed. By the time the SLPs were taken up and stay granted, the respondents were already admitted in the Col lege and they gave up their seats which they had obtained in other colleges. Depriving them of their admission in the College at such a late stage would result in grave and irreparable prejudice to them. The Administration and the College authorities ought to have acted with more alacrity and approached this court earlier than they did. [p. 336 B D] 5. In matters where the High Court directs the students to be admitted in educational institutions it would be advisable if the High Court stays the operation of its order for a period of about 3 to 4 weeks if a request therefor is made by the educational institution or the State as the case may be. [pp. 336 GH; 337 A]

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Civil Appeal No. 350 of 1974. Appeal by Certificate from the Judgment and Order dated 29/30 8 1973 of the Gujarat High Court in Special Civil Application No. 163 of 1973. M.H.Baig, Rajiv Shakdhar, R.Sasi Prabhu (for M/s S.A. Shroff & Co.) for the Appellants. P.S. Poti, Bimal Roy Jad. Anip Sachthey and Ms. Rashmi Dhariwal for the Respondents. The Judgment of the Court was delivered by MOHAN, J. This is an appeal by certificate granted by the High Court of Gujarat at Ahmedabad under articles 132(1) and 133 (1)(a) of the Constitution of India. It is directed against the judgment dated 29/30th August, 1973 in special Civil Application No. 163 of 1973. The facts leading to this appeal are briefly as under: The Appellant is a company registered under Indian . It is engaged in the business of manufacturing resins, chemicals, sodium carboxy methyl, cellulose and certain other chemicals. Industrial alcohol is one of the raw materials used by the appellant company. Though, till the year 1969, the appellant was purchasing industrial alcohol from the market, it installed its own distillery from may 1970 at Bilimora, within the State of gujarat. This was for the purpose of manufacturing industrial alcohol from molasses. On July 3rd, 1969 the second respondent, the Director of Prohibition and excise, Gujarat State, Ahmedabad issued a licence to the appellant for manufacturing spirit. In accordance with the conditions No. 2 and 3 of the licence, the 2nd respondent appointed a staff of 9 persons. The said staff consisted of one Inspector, one Sub Inspector, one Nayak, one jamadar and five constables to supervise the manufacture of spirit in the 678 appellant 's distillery plant. The appellant was also required to provide residential accommodation to the supervisory staff within the factory premises. On July 3rd, 1969 the 2nd respondent asked the appellant to deposit the supervisory charges. From time to time, these supervisory charges were also deposited in accordance with the directions of 2nd respondent. It requires to be stated at this stage that the levy of supervisory charges, is traceable to section 58(A) of Bombay Prohibition Act of 1949. The Section says: "Sec.58(A) : The State government may be general or special order direct that the manufacture, import, export, transport, storage, sale, purchase, use collection or cultivation of any intoxicant, denatured spirituous preparation, hemp, mhowra flowers, or molasses shall be under the supervision of such Prohibition and Excise or Police Staff as it may deem proper to appoint, and that the cost of such staff shall be paid to the State Government by person manufacturing, importing,exporting,transporting, storing,selling, purchasing, using, collecting or cultivating the intoxicant, denatured spirituous preparation hemp, mhowra flowers or molasses: Provided that the State Government may exempt any class of persons or institution from paying the whole or any part of the cost of such staff." Section 143 of the said Act confers power for making rules. Rules have been framed called Bombay Prohibition (Manufacture of Spirit) (Gujarat)Rules, 1963. These rules inter alia regulate the working of distilleries, manufacturing spirit. Rule 2 provides for the licence. Condition Nos.2 and 3 of the licence require payment of the supervisory staff and for provision of quarters for the residential accommodation of the staff respectively. The appellant filled Civil Application No. 163 of 1973 in the High court of Gujarat challenging the constitutional validity of Section 58(A) of the Act. By the impugned judgment,, the said petition was dismissed. Hence, the present civil appeal. 679 The arguments of the appellant briefly stated will boil down to this. It has been categorically laid down in Synthetics & Chemicals Ltd. vs State of U.P. & Ors., [1989] Supp. 1 SCR 623 that in respect of industrial alcohol, the states have no power to impose the impost as is sought to be done in the instant case. The theory of privilege as adumbrated by the High court can no longer be sustained in view of the judgement. Even otherwise, there is no quid pro quo. In countering the submissions, it is argued on behalf of the State that Synthetics and Chemicals Ltd. etc. (supra) dealt merely with the vend fees. That is not the case here. The maintenance of the Staff contemplated under Section 58(A) of the Act is primarily for the purpose of ensuring that while dealing with industrial alcohol, no attempt shall be made to divert nonpotable alcohol. Therefore, by regulatory measures, the States sees to it that industrial alcohol is not diverted for the use as potable alcohol. Such a regulatory measure is perfectly valid as seen from Southern Pharmaceuticals & Chemicals vs State of Kerala, ; This decision was noted with approval in Synthetics & Chemicals Ltd. Etc. (Supra). However, such a power was sustained though not on police power but as a regulatory measure. As regards the services rendered, the appellants are precluded from contending that the services did not make the impost, since the High Court has noted that it was not contended before it that there was not sufficient quid pro quo between the quantum of impost and the services rendered to the manufacturer or businessman. We are relieved of the necessity of deciding the correctness of these submissions by a detailed judgment, since identical points were raised in Civil Appeal No. 503 of 1974 (Sh. Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. vs The State of Gujarat & Anr.) to which one of us (Mohan, J.) was a party. The said Civil Appeal has been dismissed considering these aspects and upholding the validity of Section 58(A). The said judgment will squarely cover this case as well. We fully concur with the reasons contained therein. In Synthetics & Chemicals Ltd. etc. (supra) concerning the power to make regulations in order that non potable alcohol may not be diverted for use as potable alcohol, the following observations are found at page 681: 680 "The position with regard to the control of alcohol industry has undergone material and significant change after the amendment of 1956 to the IDR Act. After the amendment, the state is left with only the following powers to legislate in respect of alcohol: (a) it may pass any legislation in the nature of prohibition of potable liquor referable to entry 6 of list II and regulating powers. (b) it may lay down regulations to ensure that non potable alcohol is not diverted and misused as a substitute for potable alcohol. (c) the State may charge excise duty on potable alcohol and sales tax under entry 52 of list II, However, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (price Control) Orders, sales tax cannot be charged by the State on industrial alcohol. (d) however, in case State is rendering any service, as distinct from its claim of so called grant of privilege, it may charge fees based on quid pro quo. " In this connection, we may also usefully refer to southern Pharmaceuticals & Chemicals (supra). This case related to the constitutional validity of Sections 12 A, 12 B,14(e) & (f), 68 A of Kerala Abkari Act (1 of 1077) and Rules 13 and 16 of the Kerala Rectified Spirit Rules, 1972. One of the contentions raised was that the provision contained under Section 14 (e) of the Act for the collection of supervisory charges was clearly invalid inasmuch as: (a) They are in conflict of Rule 45 of Central Excise Rules and, (b) They could not be sustained as fee as there was no quid pro quo. In the said judgment at page 1875, para.27 Southern Pharmaceuticals & Chemicals (supra) reads as under: " A fee may be charged for the privilege or benefit conferred, 681 or service rendered or to meet the expenses connected there with. A fee my be, levied to meet the cost of supervision and may be, something more. It is in consideration for the privilege, licence or service". Again in para 29, it was stated thus: "There is a broad co relationship between the fee collected and the cost of the establishment under Section 14(e) of the Act it is provided that the commissioner, with the previous approval of the Government may prescribe the size and nature of the establishment necessary for supervision of a manufactory and the cost of the establishment and other incidental charges in connection with such supervision be realised from the licensee. There can be no doubt that the supervisory staff is deployed in a bonded manufactory by the Government for its own protection to prevent the leakage of revenue, but there is no denying the fact that a licensee undoubtedly receives a service in return. The cost of the establishment levied under Section 14(e) of the Act is to be collected from the licensee in the manner provided by Rule 16(4) of the Kerala Rectified Spirit Rules, 1972,relevant part of which reads: "(4) All the transactions in the spirit store shall be conducted only in the presence of an Excise Officer not below the rank of an Excise Inspector. Such officer shall be assisted by at least two Excise Guards. The cost of establishment of such officer and the guards shall be payable by the licensee in advance in the first week of every month as per counter signed challan to be obtained from such officer. The rate at which the cost of establishment is to be paid by the licensee shall be fixed by the Commissioner from time to time and intimated to the licensee in writing. ." There is admittedly no provision made in the Central Rules for the recovery of supervisory charges, perhaps because as the Court observed in the Hyderabad Chemicals and Pharmaceutical 's case ; (supra) it was felt that the duty on medicinal and toilet preparations containing alcohol 682 would be sufficient to defray the cost of such supervision. But the absence of such a provision in the Central Rules, as we have already indicated, does not deprive the State from making a provision in that behalf. It is true that the supervisory charges are in the nature of a compulsory exaction from a licensee and the collections are not credited to a separate fund, but are taken to the consolidated fund of the State and are not separately appropriated towards the expenditure incurred in redering the service. However, as observed in Government of Madras vs Zenith Lamp & Electricals Ltd., ; 1973 SC 724) followed in State of Rajasthan vs Sajjanlal Panjawat,[1974] 2 SCR 741; (AIR that by itself is not decisive, by reason of ART. 266 of the Constitution. It is equally true that normally a fee is uniform and no account is taken of the paying capacity of the recipient of the service, but absence of uniformity will not make it a tax if co relationship is established [see Commissioner H.R.E., Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt and Government of Madras vs Zenith Lamp and Electricals Ltd., ; and ; (supra)]. The cost of supervision would necessarily vary with the nature and extent of the business carried on by a licensee. Therefore, the supervisory charges can be sustained even if they are regarded as a fee for services rendered by the State or its instrumentalities. " In dealing with Synthetics Chemical case (supra) the following observations were made: "Learned Advocates General for the States of Gujarat and Kerala have also made their submissions, and referred to several decision and the concept of police power, and contented that imposition of a fee would be the most effective method of regulating intoxicating liquor other than alcohol. According to the Advocate General of Kerala, that would be justified as the reasonable measure in regard to intoxicating liquor. According to him, it has been accepted by courts all along that the 'police power ' of the State enables regulations to be made regarding manufacture, transport, possession 683 and sale of intoxicating liquor. Such police power could be exercised as to impose reasonable restriction as to effectuate the power. He referred to the observations of this Court in Cooverjee B.Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors., ; which quoted the passage from Crowley vs Christensen,(1890) 24 Lawyers ' Edn. 620. Reference was also made to Hari Shanker 's case (supra). Where this Court quoted Vol. 38 of the American Jurisprudence where it was stated that the higher the fee is imposed for a licence, better is the regulation. Reliance was also placed on P. N. Kaushal 's case (supra). It was contended that it has been accepted by this Court that the police power is excercisable for regulation of an activity of a legislature within the permissible field or impost as regulatory measure. It may be valid though it may neither be fee nor a tax in the limited sense of the term. See the observations of this court in Southern Pharmaceuticals & Chemicals. Trichur & Ors., etc. vs State of Kerala & Ors. ,etc.[1982] 1 SCR 519 at 537 . Regarding regulatory measures in connection with medicinal preparations containing alcohol it was observed by this Court that the impugned provisions had to be enacted to ensure that the Rectified spirit is not misused under the pretext of being used for toilet and medicinal preparations containing alcohol. Such a regulation is a necessary concomitant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. The American doctrine of police power is not perhaps applicable as such in India, but power of sovereignty to regulate as part of the power of the competent legislature to effectuate its aim are there. It is true that that in the State of West Bengal vs Subodh Gopal Bose & Ors., [1954]V SCR 587 at 601 604 and Kameshwar Prasad & Ors., vs The State of Bihar & Anr., ; the concept of police power was accepted as such, but this doctrine was not accepted in India as an independent power but was recognised as part of the power of the State to legislate with respect to the matters enumerated in the State and Concurrent Lists, subject to constitutional limitations. It 684 was that the American jurisprudence of police power as distinguished from specific legislative power is not recognised in our Constitution and is, therefore, contrary to the scheme of the Constitution. In interpreting the provisions of our Constitution, we should go by the plain words used by the Constitution makers and the importing of expression like 'police power ', which is a term of variable and indefinite connotation can only make the task of interpretation more difficult. It was contended that in enacting a law with respect to intoxicating liquor as part of the legislative power measures of social control and regulation of private rights are permissible and as such may even amount to prohibition. We are of the opinion that we need not detain ourselves on the question whether the States have the police power or not. We must accept the position that the States have the power to regulate the use of alcohol and that power must include power to make provisions to prevent and or check industrial alcohol being used as intoxicating or drinkable alcohol. The question is whether in the grab of regulations a legislation which is in pith and substance, as we look upon the instant legislation, fee or levy which has no connection with the cost or expenses administering the regulation, can be imposed purely as regulatory measure. Judges by the pith and substance of the impugned legislation, we are definitely of the opinion that these levies cannot be treated as part of regulatory measures. in this view of the matter we do not detain ourselves with examining the numerous American decisions to which our attention was drawn by learned counsel very elaborately and thoroughly. " This is an added reasoning to uphold the validity of Section 58(A). Turning to the second argument about the absence of quid pro quo, we need only extract the following from the judgment of the High Court: "Section 58(A) of the Bombay Prohibition Act creates a statutory duty of supervision and incidentally provides for recovering from a manufacturer or a businessman the cost of supervision which is primarily necessitated by the manufacturer 685 or businessman having been permitted under a licence to carry on lawfully a business or industrial activity which would otherwise have been unlawful. We need not go into the details of this aspect because it has not been contended before us that if the levy under Section 58A is held to be a fee, there is no sufficient quid pro quo between the quantum of the impost and the services rendered to the manufacturer or businessman. " In the result, the appeal fails and is dismissed with cost. V.P.R. Appeal dismissed.

The appellant, a company registered under the Indian , was using industrial alcohol as one of the raw materials for manufacturing resins, chemicals, sodium carboxy methyl, cellulose and certain other chemicals. In May, 1970, the company installed its own distillery for the purpose of manufacturing industrial alcohol from mollasses. The respondent No.2 on 3.7.1969 issued a licence to the company for manufacturing spirit. In accordance with the conditions No. 2 and No. 3, the respondent No. 2 appointed a 9 member supervisory staff consisting of one Inspector, one Sub Inspector, one Nayak, one Jamadar and five constables, to supervise the manufacture of the spirit in the company 's distillery plant. The appellant company was required to provide residential accommodation to the supervisory staff within its factory premises and to deposit supervisory charges from time to time. The company complied the requirements. In 1973 the appellant company filed a Civil Application in the High Court challenging the constitutional validity of the Section 58(A) of the Bombay Prohibition Act, 1949. The High Court dismissed the petition, hence this appeal by certificate granted by the High Court under Articles 132(1)133(1)(a) of the Constitution. The appellant company contended that this Court in Synthetics and Chemicals Ltd. case, [1989] Supp.1 SCR 623 held that in respect of 676 industrial alcohol, the States had no power to impose the impost;that in view of the judgment of this Court, the theory of privilege as adumbrated by the High Court could not be sustained, and that there was no quid pro quo. The respondent State submitted that the Synthetics and Chemicals Ltd. case dealt merely with the vend fees, and not about supervisory charges. Dismissing the appeal, this Court HELD: 1.01. The States have the power to regulate the use of alcohol and that power must include power to make provisions to prevent and/or check industrial alcohol being used as intoxicating or drinkable alcohol. This is an added reasoning to uphold the validity of Section 58(A). [684D, F G] Synthetics & Chemicals Ltd.v. State of U.P. and Ors., [1989] Supp.1 SCR 623 Followed. 1.02.Section 58(A) of the Bombay Prohibition Act creates a statutory duty of supervision and incidentally provides for recovering from a manufacturer or a businessman having been permitted under a licence to carry on lawfully a business or industrial activity which would otherwise have been unlawful. [684G 685A] 1.03.The maintenance of the staff contemplated under Section 58(A) of the Act is primarily for the purpose of ensuring that while dealing with industrial alcohol, no attempt shall be made to divert non potable alcohol. Therefore, by regulatory measures, the State sees to it that industrial alcohol is not diverted for the use as potable alcohol. Such a regulatory measure is perfectly valid. However, such a power was sustained though not on police power but as a regulatory measure. [679C D] Southern Pharmaceuticals & Chemicals vs State of Kerala, ; ; Sh. Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. vs The State of Gujarat & Anr., C.A. No. 503 of 1974 Followed. The appellants are precluded from contending that the services did not make the impost, since the High Court has noted that it was not contended before it that there was not sufficient quid pro quo between the 677 quantum of impost and the services rendered to the manufacturer or businessman. [679E F]

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on (Civil) No. 860 of 1991. (Under Article 32 of the Constitution of India). Petitioner in person G. Ramaswamy, Altar Ahmad, Anil Katiyar, A.M. Khanwilkar and M.P. Sarawala for the Respondents. The following Order of the Court was delivered: This application is in public interest and has been filed by a practising advocate of this Court who has consistently been taking interestin matters relating to environment and pollution. The reliefs claimed in this application under Article 32 of the Constitution are for issuing appropriate directions to cinema exhibition halls to exhibit slides containing information and messages on environment free of cost: directions for spread of infor mation relating to environment in national and regional languages and for broadcast thereof on the All India Radio and exposure thereof on the television in regular and short term programmes with a view to educating the people of India about their social obligation in the matter of the upkeep of up the environment in proper shape and making them alive to their obligation not to act as polluting agencies or fac tors. " There is also a prayer that environment should be made a compulsory subject in schools and colleges in a graded system so that there would be a general growth of awareness. We had issued notice to the Union of India on the petition and the Central Government has immediately responded. Until 1972, general awareness of mankind to the impor tance of environment for the well being of mankind had not been appropriately appreciated though over the years for more than a century there was a growing realisation that mankind had to live in tune with nature if life was to be peaceful, happy and satisfied. In the name of scientific development, man started distancing himself from Nature and even developed an urge to conquer nature. Our ancestors had known that nature was not subduable and, therefore. had made it an obligation for man to surrender to nature and live in tune with it. Our Constitution underwent an amendment in 381 1976 by incorporating an article (51A) with the heading "Fundamental Duties". Clause (g) thereof requires every citizen to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures. Soon after the internation al conference on environment the Water Pollution Control Act of 1974 came on the statute book; the Air Pollution Control Act came in 1981 and finally came the Environment Protection Act of 1986. Law is a regulator of human conduct as the professors of jurisprudence say, but no law can indeed effectively work unless there is an element of acceptance by the people in society. No law works out smoothly unless the interaction is voluntary. In order that human conduct ,nay be m accordance with the prescription of law it is necessary that there should be appropriate awareness about what the law requires and there is an element of acceptance that the requirement of law is grounded upon a philosophy which should be fol lowed. This would be possible only when steps are taken in an adequate measure to make people aware of the indispens able necessity of their conduct being oriented in accordance with the requirements of law. There has been an explosion of human population over the last 50 years. Life has become competitive. Sense of ideal ism in the living process has systematically eroded. As a consequence of this the age old norms of good living are no longer followed. The anxiety to do good to the needy or for the society in general has died out, today oblivious of the repercussions of one 's actions on society, everyone is prepared to do whatever is easy and convenient for his own purpose. In this backdrop if the laws are to be enforced and the malaise of pollution has to be kept under control and the environment has to be protected in an unpolluted state it is necessary that people are aware of the vice of pollution and its evil consequences. We are in a democratic polity where dissemination of information is the foundation of the system. Keeping the citizens informed is an obligation of the Government. It is equally the responsibility of society to adequately educate every component of it so that the social level is kept up. We therefore, accept on principle the prayers made by the petitioner. We are happy to find that the learned Attorney General who appeare for the Union of India has also appreci ated the stand of the petitioner and has even cooperated to work out the procedure by which some of the prayers could be granted. We dispose of this writ petition with the following direc tions 382 (1) Respondents 1, 2, & 3 shall issue appropriate direc tions to the State Governments and Union Territories to invariably enforce as a condition of license of all cinema hails, touring cinemas and video parlours to exhibit free of cost atleast two slides/messages on environment in each show undertaken by them. The Ministry of Environmental should within two months from now come out with appropriate slide material which would be brief out efficiently carry the message home on various aspects of environment and pollu tion. This material should be circulated directly to the Collectors who are the licensing authorities for the cinema exhibition halls under the respective slate laws for compli ance without any further direction and helping the cinema halls and video parlours to comply with the requirements of our order. Failure to comply with our order should be treat ed as a ground for cancellation of the licence by the appro priate authorities. The material for the slides should be such that it would at once be impressive, striking and leave as impact on every one who sees the slide. (2) The Ministry of Information and Broadcasting of the Government of India should without delay start producing information films of short duration as is being done now on various aspects of environment and pollution bringing out the benefits for society on the environment being protected and the hazards involved in the environment being polluted. Mind catching aspects should be made the central theme of such short films. One such film should be shown, as far as practicable. in one show every day by the cinema hails and the Central Government and the State Government are directed to ensure compliance of this condition from February 1, 1992. (3) Realising the importance of the matter of environ ment and the necessity of protecting it in an unpolluted for as we had suggested to learned Attorney General to have a dialogue with the Ministry of Information and Broadcasting as to the manner the All India Radio and Doordarshan can assist this process of education. We are happy to indicate that, learned Attorney General has told us that five to seven minutes can be devoted every day and there could be, once a week, a longer programme. We do not want to project an impression that we are authorities on the subject, but we would suggest to the programme controlling authorities of the Doordarshan and the All India Radio to take proper steps to make interesting programmes and broadcast the same on the radio and exhibit the same on the television. The national network as also the State Doordarshan Centres should immedi ately take steps to implement this direction so that from February 1, 1992, regular compliance can be made. 383 (4) We accept on principle that through the medium of education awareness of the environment and its problems related to pollution should be taught as a compulsory sub ject. Learned Attorney General pointed out to us that the Central Government is associated with education at the higher levels and the University Grants Commission can monitor only the under graduate and post graduate studies. The rest of it, according to him, is a State subject. He has agreed that the University Grants Commission will take appropriate steps immediately to give effect to what we have said, i.e., requiring the Universities to prescribe a course on environment. They would consider the feasibility of making this a compulsory subject at every level in college education. So for as education up to the college level is concerned, we would require every State Government and every Education Board connected with education up to the matricu lation or stage even intermediate colleges to immediately take steps to enforce compulsory education on environment in a graded way. this should be so done that in the next aca demic year there would be compliance of this requirement. We have not considered it necessary to hear the State Governments and the other interested groups as by now there is a general acceptance through out the world as also in our country that protection of environment and keeping it free of pollution is an indispensable necessity for life to survive on earth. If that be the situation, every one must 'turn his immediate attention to the proper care to sustain environment in a decent way. We dispose of the matter with the aforesaid direction but give liberty to Mr. Mehta to apply to the Court from time to time for further directions, if necessary. S.B. Petition dis posed of.

This application is in public interest seeking relief for issuing appropriate directions of this Court to Cinema, exhibition hails to exhibit slides containing information and messages on environment free of cost. Further directions for spread of information relating to environment in nation al and regional languages vide broadcast thereof on the All India Radio, exposure thereof on television in regular and short term programmes with a view to educating the people of India about their social obligation in the matter of the upkeep of the environment in proper shape and making them alive to their obligation not to act as polluting agencies or factors. It is further prayed that environment should be made a compulsory subject in schools and colleges in a graded system so that there would be a general growth of awareness. Till 1972 general awareness of mankind to the environ ment for the well being of mankind had not been appropriate ly appreciated. In 1975 the Constitution underwent an amend ment by incorporating an Article 51A with the heading "Fundamental Duties" Clause (g) thereof requires every citizen to protect and improve the natural environment including forests, lakes, rivers and wild life and to have compassion for every living creature. In 1974 Water Pollu tion Central Act came on the statues book. In 1981 Air Pollution (Central Act) and finally in 1986 the Environment Protection Act were enacted. Law is a regulator of human conduct but no law can indeed effectively work unless there is an element of ac ceptance by the people in society. 379 There has been an explosion of human population, over the last 50 years. Life has become competitive so the age old norms of good living are no longer followed. It has therefore, become necessary that people be made aware of vice of pollution and its level of consequenceS. Keepingg the citizen informed is an obligation of the Government as well as the responsibility of society to adequately educate every component of it so that social level is kept up. Disposing of the matter, the Court, HELD The principle on which the praayer is made is accepted and the following directions are issued 1. That the Cenaral Governmeent, the State Government and Union Tcrritories should invariably enforce as a condi tion of license of all cinema halls, touring Cinemas and video parlours to exhibit. free of cost at feast two slidcs/messages on environment in each show undertaken by them. The Ministry of Environment should within two months from. now come out with appropriate slide material on var ious aspect of environment and pollution. This material should be circulated to the collectors who arc the licensing authori ties for compliance without any further directions and failure to comply with the Court order should be treated as a ground for. cancellation of the licence by the appro priate authorities. [382 A C] 2. The Ministry of Information and Broadcasting of the Government of India should without delay start pronouncing information films of short duration on various aspects of environment and pollution bringing out the benefits for society on the environment protection and hazardous involved in environment pollution. [382 D] 3. The national network, the State Door Darshan Cen tres, All India Radio, Television should take proper steps to exhibit such films and interesting programmes on the subject. There should be regular compliance of these direc tions be followed from February 1, 1992. [382 G H] 4. The principle that through the medium of educational awareness of the environment and its pollution problems should be taught as a compulsory subject at every level of education. University Grants Commission should prescribe a course on environment in a graded manner as a compulsory subject in college education. The compliance of this re quirement be done in the next academic year. [383 A C] 380 Since there is a general acceptance throughout the world as also in our country that protection of environment keeping free of pollution is an indispensable necessity of life to survive on earth so everyone must turn his immediate attention to the proper care to sustain environment in a decent way.

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