Prompt:
iminal Appeal No.112 of 1965.
Appeal by special leave from the jurisdiction and order dated April 29, 1965 of the Allahabad High Court in Criminal Misc. 'Contempt Case No. 43 of 1965.
A. section R. Chari, M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu, for the appellants.
O. P. Rana, for respondent No. 1.
J. P. Goyal, V. C. Prasar and section P. Singh for respondent No. 2.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court adjudging the five appellants guilty of contempt of court and sentencing each of them to pay a fine of Rs. 1,000/ and further ordering that in case of default they shall undergo simple imprisonment for two weeks.
The High Court held that the five appellants had disobeyed an order of stay passed by it staying proceedings pending before the Nyaya Panchayat, Jokha Khas, District Deoria.
The relevant facts are these.
On September 2, 1963, Yashoda, son of Raj Kumar, filed a complaint before the Nyaya Panchayat, Jokha Khas, against Jagdeo, Mahabir and Laxmi alleging that he had been abused and be laboured and his property worth Rs. 40/ damaged.
On September 10, 1963, the Nyaya Panchayat assembled and evidence was led before it.
The case was adjourned to December 25, 1963.
On October 11, 1963, Mahabir, accused, made an application under section 85 of the U.P. Panchayat Raj Act, 1947, to S.D.M., Deoria, to transfer the proceedings on the ground that the complainant Yashoda was father of Bunna Prasad, Sarpanch of Nyaya Panchayat, Jokha Khas.
On November 28, 1963, the S.D.M. rejected this application.
On December 13, 1963, a notice was issued to the five members of the Panchayat to assemble on December 25, 1963, and hear the case.
On December 20, 1963, Mahabir moved an application under article 227 of the Constitution challenging the order of the S.D.M., dated November 28, 1963, and on the same day the High Court admitted the application and stayed further proceedings before the Nyaya Panchayat.
An urgent copy of the order was applied for and obtained on that very day and the counsel sent a telegram in the following words "Allahabad He 20 Baldeopd cashier Trust Sdr GR Mahabir application admitted stay granted Banwarilal.
" 117 It is alleged on the side of the applicant, Mahabir, that immediately after the receipt of the telegram an application accompanied by an affidavit and the telegram of his counsel in the High Court was presented before the Nyaya Panchayat with the prayer to stay further proceedings but the Sarpanch refused to take it.
This fact was denied and the High Court seems not to have relied on this fact in its judgment.
It seems to us that it is not proved on the evidence here that any such application was made before the Nyaya Panchayat.
No application dated December 21, 1963, which was not accepted by the Nyaya Panchayat, has been produced.
On December 23, 1963, Mahabir submitted an application in the Court of Shri R. Singh, S.D.M., Deoria, alleging that "writ petition has been admitted and a stay order has been issued.
But notwithstanding my informing the Panchayat Adalat of that, I am not getting any hearing there, and when an application is made there, it is not entertained." He prayed that the Panchayat Adalat be directed to postpone proceedings pending the receipt of the stay order.
He produced the telegram received from the Advocate before the S.D.M.
In the affidavit accompanying the application, however, no mention was made about Mahabir having informed the Panchayat Adalat of the stay order or the fact that the order and the application was not being entertained by the Adalat.
It happened that the S.D.M. was absent on December 23, 1963, and papers were put up before Shri section K. Srivas tava, Additional Sub Divisional Magistrate, who issued the order "Put up with records".
Apparently he did not take any further action till December 26, 1963.
But as the notice against Shri Srivastava has been discharged by the High Court, we need not give any further details about his various orders, On December 25, 1963, the Nyaya Panchayat met and proceeded to hear the case.
The order sheet reads thus : "Put up today the 25th December, 1963.
The complainant and the accused are present.
The statements of the complainant and his witnesses, Bhabhuti and Damri, are recorded.
The accused refused to make statements and put down their signatures.
Today, the 25th December, 1963, Mahabir has made an applica tion to the Court and signed it before it.
Hence judgment shall be given on 25 12 63.
" This order was signed by three Panchas, Phagu Parsad, Jagat Dubey and Badri Yadav.
On the same day a final order was made holding the accused guilty and imposing a fine of Rs. 3/ each on accused Nos. 1 and 3, and Rs. 9/ on accused No. 2.
The application of Mahabir, referred to in the order, reads thus: 118 .lm15
Sir, It is submitted that I have filed a writ petition in the above case, in the High Court.
It has been admitted by the High Court which has stayed proceedings also in this case.
It is, therefore, prayed that the proceedings in this case may be stayed." A document purporting to be an affidavit was also attached, in which it was stated "I make oath and say that in the above case I have filed a writ petition in the High Court, that it has been admitted, and that proceedings in the case have been stayed by the High Court.
" We looked at this so called affidavit and found.
that it has not been sworn to before any person authorised to administer oaths.
On May 21, 1964, Mahabir filed an application under sections 4 and 5 of the , against the five appellants and section K. Srivastava, A.S.D.M.
The main allegation, apart from reciting the facts which we have already detailed above, was that "in spite of the knowledge of the interim stay dated 20 12 63 passed by the Hon 'ble High Court the Sarpanch, the Opposite Party No. 1 and the members of the Bench, Opposite Parties Nos. 2 to 5 disobeyed the order of the Hon 'ble High Court and disposed of the case on 25 12 63 and thus they committed contempt of the Hon 'ble High Court.
" Affidavits were filed in the High Court by Baldeo Prasad, pairokar of Mahabir, Burma Prasad, the Sarpanch, and Mahabir, and statements of Phagu Prasad and Bunna Prasad were recorded on oath.
Bunna Prasad, in his affidavit, stated that as the Nyaya Panchayat was not satisfied for want of evidence by way of proper affidavit etc.
, the Nyaya Panchayats proceeded with the case.
Phagu Prasad.
in his statement, stated "As the paper of Mahabir 's application and affidavit was not good, we had asked him to get them written on a proper paper obtained from the Tehsil.
We had also told him to get the affidavit verified before some Tehsil authority.
We had told Mahabir as above before we had read the application and affidavit presented before the Nyaya Panchayat.
Mahabir told us that he is not prepared to go to Tehsil, but is presenting before the Panchayat whatever he has got in his possession." Phagu Prasad further stated that "no other affidavit had ever been filed before us, but we knew that in the law courts the 119 affidavits,which are filed, are verified by some authority."He further added that "the reason why we did not believe theaffidavit of Mahabir was that it did not contain any date of theHigh Court 's stay order." Bunna Prasad, in his statement, stated that he had told Mahabir to bring the affidavit on a good quality paper of full size, and Mahabir thereupon told him that he would present whatever he had.
According to him, the Panchas did not tell Mahabir that his affidavit was not proper; they, however, told him to get it verified in Tehsil and that it should be duly sealed.
The High Court, on examination of the evidence, came to the conclusion that it was the Sarpanch who bad initially declared that the affidavit of the applicant was not proper and that the matter should file a proper affidavit in support of his allegations, though the Sarpanch had admitted in his deposition that he had to authority to tell Mahabir that his affidavit was not proper.
It appeared to the High Court that "the Sarpanch first wanted to avoid the petitioner 's affidavit being brought on the record by declaring that it was not proper because it did not fully evidence the fact that the High Court had passed an order staying proceedings before the Nyaya Panchayat." The High Court further held that "the Nyaya Panchas faithfully accepted the objections raised by the Sarpanch and dittoed him about the impropriety of the petitioner 's affidavit and inadequacy of the evidence contained therein regarding the stay order alleged to have been.
passed by the High Court.
" The High Court disbelieved the explanation of the Panchas given before it because no mention of these was made in the order sheet dated December 25, 1963.
The High Court held : "There was no reasonable ground for the Panchas to have doubted the averments made in the application and affidavit of Mahabir that the High Court had stayed further proceedings before the Panchayat, nor is there any thing in the order sheet to show that the Panchas did not believe the contents of the application, and affidavit of Mahabir.
However, if they wanted to ascertain the matter, they should have at best stayed the proceedings for a short while and should have asked the applicant to produce a certified copy of the stay order.
In the alternative, they should have verified from the Sub Divi sional Magistrate whether Mahabir had really filed an application and affidavit before him along with the original telegram received from his counsel at Allahabad saying that the High Court had already stayed the proceedings before the Nyaya Panchayat.
But the Panchas did nothing of the kind.
The action of the Nyaya Panchas in not doing so was obviously not bona fide and 120 amounts to wilful disobedience of the High Court 's order.
The learned counsel for the appellants, Mr. Chari, says that no contempt of court has been established because a Court is entitled not to act on an application which is not accompanied by an affidavit properly sworn to or a certified copy of the order He urges that the Nyaya Panchayats exercised judicial powers and, even if the Panchas erred in not staying proceedings, before finding them guilty of contempt of court it should be definitely proved that the order was passed deliberately to by pass the order of the High Court.
This Court quoted with approval the following passage from Oswald 's Contempt of Court, in Hoshiar Singh vs Gurbachan.
Singh(1): "The judgment or order should be served on the party personally, except in the following cases : (1) prohibitive orders, the drawing up of which is not completed;. .
In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been served upon the party against whom it has been granted, if it be proved that he had notice of the order aliunde, as by telegram, or newspaper report, or otherwise, and knew that it was intended to be enforced, or if he consented to the order, or if he was present in Court when the order Was pronounced, or *hen the motion was made, although he left before the order was pronounced.
" We need not consider whether it makes any differnce in law if the order has been drawn up.
We will for the purpose of this case assume that it does not make any difference.
It is also clear that in such matters those who assert that a person had knowledge of the order must prove this fact beyond all reasonable doubt.
If there is any doubt, the benefit ought to be given to the person charged with contempt of court.
If a person bona fide comes to the conclusion on the material placed before him that the source of information is not authentic he cannot be held guilty of contempt of court for disobeying the order.
The question then arises whether the Sarpanch and the Pan chas had knowledge of the existence of the order of the High Court dated December 20, 1963.
The only material before them was the application dated December 25, 1963, which was not supported by any affidavit sworn to before a person authorised to (1) [1962] Supp. 3 S.C.R. 127,138.
121 administer oaths.
Further, the application did not contain the .date of the order; even a copy of the telegram was not attached to the application; and the application seems to have been made after the proceedings on that date had commenced and evidence taken.
We are unable to appreciate how on this material the bona fides of the Panchas can be doubted if they refused to accept the mere statement of the party that the High Court had stayed proceedings before them.
It seems to us that the High Court did not appreciate that the so called affidavit which was filed before the Panchas was in fact not an affidavit at all.
it had not been sworn to before any person authorised to administer oaths.
It was no part of the duty of the Panchas to enquire from the S.D.M. about the filing of the application before him.
At any rate, he has apparently no jurisdiction to stay proceedings before the Nyaya Panchayats when no Proceeding is pending before him.
It is true that in certain cases proceedings can be adjourned to enable the parties to file better proof, but a judicial officer is not bound to do so and, if he bona fide does not in his discretion adjourn proceedings, it cannot be said that he has committed contempt of court.
It must also be borne in mind that Panchas are not well versed in law and procedure and the records maintained by them should not be judged in the same manner as that of ordinary courts.
With respect, the High Court should not have drawn an adverse inference from the fact that the reasons for not accepting the prayer for stay were not recorded.
Contempt of court is a serious matter and a High Court should be chary of finding a judicial officer guilty of contempt of court for disobeying its orders unless there is unimpeachable evidence that the judicial officer had knowledge of the order of the High Court.
In our opinion, there is no such evidence in this case.
The learned counsel for the State contends that we should not reappreciate the facts, but, with respects, it seems to us that the High Court, while dealing with the evidence, has not kept in mind the principles which we have mentioned above.
In the result we allow the appeal and set aside the judgment and order of the High Court.
R.K.P.S. Appeal allowed.

Response:
M, an accused person in certain proceedings pending before the Nyaya Panchayat filed a petition under article 227 in the High Court and obtained a stay of the proceedings on December 20, 1963 .
Thereafter when the Panchayat met to proceed with the matter, he made an application supported by a document purporting to be an affidavit stating that the High Court had admitted his writ petition and had stayed further proceedings before the Panchayat; and that therefore nothing further should be done in the matter.
However, the, Panchayat did not allow his application and proceeded (to hold M and others guilty and imposing fines on them.
M, thereafter filed an application under sections 4 and 5 of the , alleging contempt of the High Court by the Panchayat.
An affidavit filed before the High Court by the Sarpanch stated that the document filed by M, by way of an affidavit in support of his application had not been verified by any proper authority and for this and other reasons the Panchayat did not believe that the High Court had stayed the proceedings.
The High Court held the members of the Panchayat guilty of contempt and observed that if they wanted to ascertain the matter, they should have at best stayed the proceedings for a short while and asked the applicant to produce a certified copy of the stay order; in not doing so, the Panchas had obviously not acted bona fide and their action amounted to, wilful disobedience of the High Court 's order.
On appeal to this Court, HELD : The appeal must be allowed and the judgment and order of the High Court set aside.
The only material before the Panchayat was the application dated December 25.
1963, which was not supported by 'any affidavit sworn to before a person authorised to administer oaths.
Further, the application did not contain the date of the order; even a copy of the telegram stated to have been sent by M 's advocate in the High Court was not attached to the application.
On this material the bona fides of the Panchas could not be doubted if they refused to accept the mere statement of the party that the High Court had stayed the proceedings before them.
In such matters those who assert that a person had knowledge of the order must prove this fact beyond all reasonable doubt.
If there is any doubt.
the benefit, ought to be given to the person charged with contempt of court.[120 F H; 121 A B] It is true that in certain cases proceedings can be adjourned to enable the parties to file better proof, but a judicial officer is not bound (to do so and, if the bona fide does not in his discretion adjourn proceedings, it cannot be said that he has committed contempt of court.
[121 C D]


Prompt:
Appeal No. 390 of 1966.
Appeal by special leave from the Award, dated January 11, 13, 1964 of the Industrial Tribunal, Orissa, Cuttack in Industrial Dispute Case No. 8 of 1962.
D.L. Sengupta, Janardan Sharma, Anil Das Chowdhury and S.K. Nandy, for the appellants.
H.R. Gokhale, K. Gobind Das, N.C. Shah, Krishna Sen and R. Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
The. workmen of Orient Paper Mills Ltd., Brajrajnagar, have come up in this appeal by special leave against an award of the Industrial Tribunal, Orissa.
An industrial dispute between these workmen and the management of Orient Paper Mills Ltd. (hereinafter referred to as "the Company") was referred by the State Government under section 10(1) (d) of the Industrial Disputes Act (hereinafter referred to as "the Act") for adjudication by the Tribunal enumerating 30 different items of dispute.
The Tribunal gave its award on all the thirty items.
The special leave in this Court was sought and granted in respect of two matters covering some of these items.
The first matter related to fixation of wages, including minimum wages, and this was covered by items Nos. 1, 3, 4, 22 and 26 in the Schedule attached to the Order of Reference.
The second matter in the appeal related to bonus covered by item No. 2 of that Schedule.
In the course of the hearing of the appeal, learned counsel appearing on behalf of the workmen further gave up some of the points which were the subject matter of the items mentioned above, so that in this judgment we need deal with only those points which were argued by him in support of the appeal.
The first and the main point argued with regard to wages was that the Tribunal, after holding that there was no identical industry in this region comparable with the Company, came to.
the view that there were other industries in the region in which minimum wages were higher than the minimum wages paid by the Company, but failed to fix the minimum wages in the award in accordance with the minimum wages being paid in those industries.
Instead, what the Tribunal did was to work out the minimum wages, which should be paid, on an entirely different basis.
It was also urged in the alternative that, even in adopting the latter course, the Tribunal committed an error inasmuch as, in making the calculation, the Tribunal only tried to neutralise about 36 per cent of the cost of living 9n the basis of the rise in Price Index instead 669 of permitting neutralisation to the extent of at least 90%, which could have been done when fixing the minimum wages for the owest, class of workmen.
The principle for fixation of minimum wages that should ordinarily be adopted was laid down by this Court in the case of French Motor Car Co. Limited.
vs Workmen(1) where it was held : "It is now well settled that the principle of industry cum region has to be applied by an Industrial Court, when it proceeds to consider questions like wage structure, dearness allowance and similar conditions of service.
In applying that principle, industrial courts have to compare wage scales prevailing in sinular concerns in the region with which it is dealing, and generally speaking similar concerns would be those in the same line of business as the concern with respect to which the dispute is under consideration.
Further, even in the same line of business, it would not be proper to compare (for example) a small struggling concern with a large flourishing concern.
" The Tribunal, in giving its decision, kept this principle in view, but came to the finding of fact that there were no other concerns in the same line of business as the Company in the region which could be compared with the Company.
The Tribunal found that there are only two other paper mills in the region.
They are Titaghur Paper Mill No. 3 situated at Chaudwar, and the J.K. Paper Mills at Rayagada.
The Tribunal found that the Company is an old established business carrying on manufacture of paper on a very large scale.
The Titaghur Paper Mill No. 3 started production only in April, 1960, while the J.K. Paper Mills at Rayagada started production in 1961 62.
These two Paper Mills were, therefore, both of very recent origin compared with the Company.
The strength of their labour force and the annual production were also very mueh lower.
Even the profits earned were much smaller.
On these facts, the Tribunal held that it would not be proper to compare the wage structure for these Paper Mills with that of the Company.
TIffs is a finding of fact recorded by the Tribunal and nothing has been shown by learned counsel for the Company which would induce us to interfere with this finding of fact.
In fact, learned counsel was unable to urge that this finding of fact suffered from any error at all.
On this finding, it is clear that the region cure industry principle laid down in the ease of French Motor Car Co. Ltd. (1) could not have been applied by the Tribunal when fixing the wages in the Company.
(1) [1963] Supp. 670 This Court in the same case of the French Motor Car Co. (x) further indicated what principles should be adopted in such a situation where there is no concern in the same industry in the region comparable with the concern in which wages have to be fixed.
That situation was envisaged as occurring whenever the particular concern in question happens to be already paying the; highest wages in its particular line of business.
It was held that such a case: "there should be greater emphasis on the region part of the industry cum region principle, though it would be the duty of the industrial court to see that for purposes of comparison such other industries in the region are taken into account as are as nearly similar to the concern before it as possible.
Though, therefore, in a case where a particular concern is already paying the highest wages in its own line of business, the industrial courts would be justified in looking at wages paid in that region in other lines of business, it should take care to see that the concerns from other lines of business taken into account are such as are as nearly similar as possible, to the line of business carried on by the concern before it.
It should also take care to see that such concerns are not so disproportionately large as to afford no proper basis for comparison.
" In the light of these views which were brought to the notice of the Tribunal, the Tribunal proceeded to consider the minimum wages paid by three Collieries, Orient Colliery, Ibe Colliery and Himgiri Rampur Colliery, the Rourkela Steel Plant, the Cement Factory at Rajgangpur and the Indian Aluminum Company, Hirakud which the Tribunal found were situated not very far away from the place where the Company had its factory.
The Tribunal mentioned that, according to the Coal Award, the minimum wage in the Collieries at the then existing Price Index was Rs. 93 7 0; in the Cement Factory Rs. 96.88; in the Steel Plant Rs. 95.00 and in the Aluminium Company Rs. 97.84 nP. The Tribunal then also took into account the minimum wages being paid by other Paper Mills situated outside the region and thereafter recorded its own decision in the following words : "The conclusion that flows from these figures is that the lowest paid worker in the Paper Mill at Brajrajnagar gets more than what is paid as minimum wage in the other two Paper Mills of Orissa, but it is less than what is paid to the lowest paid worker in some of the Paper Mills outside the State.
In other industries, which are comparatively close to the paper industry at (1) [1963] Supp.
671 Brajrajnagar, the minimum wage is above Rs. 90 in almost all the cases.
" On the basis of this finding of fact, the Tribunal held that, if the minimum wage in the Company is to be fixed more on the basis of the minimum wage prevailing in other industries in that region which, in its opinion, would be appropriate under the circumstances of the case, then, a revision was really necessary.
We think that the criticism of learned counsel for the workmen that the Tribunal committed an error at this stage in merely holding that the facts found by it justified a revision and in not proceeding to fix minimum wages on the basis of the other industries in the region, is fully justified.
It is to be noted that there is no mention in the award of the Tribunal that the Company at any stage put forward the case that the Collieries, the Steel Plant, the Cement Factory, and the Aluminjure Company were concerns which were not comparable with the Company.
In fact, in the course of arguments before us, we asked learned counsel for the Company to point out whether such a plea was taken at any stage by the Company and whether evidence was led to show that these concerns were not comparable with the Company.
Learned counsel had to admit that no specific plea was taken by the Company in this behalf and at least no evidence at all was led to show that these concerns are not comparable with the Company.
The workmen in their written statement had relied on the wage structure in these concerns obviously on the basis that they were comparable.
Since the Company never took the plea that they were not comparable, no occasion arose for the workmen to give evidence of the concerns being comparable.
In fact, the Tribunal also accepted them as being comparable 'and that is why, in its conclusion, the Tribunal held that, in its opinion, it would be appropriate under the circumstances of the case to fix the minimum wage in the Company on the basis of the minimum wage prevailing in other industries in that region.
By the expression "other industries in the region" the Tribunal was obviously referring to these concerns.
Having come to this view, it is clear that, to give full effect to the principle laid down by this Court the case of French Motor Car Co.(1), the Tribunal should have proceeded to fix the minimum wage in the Company on the basis of the average minimum wage prevailing in these concerns.
We have already quoted the figures of the minimum wage prevailing these concerns.
On their basis, it appears to us that there will be full justification for fixing the minimum wage in the Company at Rs. 95 per mensum which is about the average of the wages prevailing in all those concerns.
In this connection, we may take notice of the fact that, in the written statement of the workmen, the minimum wages prevailing in these concerns were (1) [1963] Supp. 672 shown at figures lower than those mentioned by the Tribunal; but it appears that those lower figures were given, because the, wages mentioned in the written statement were based on a lower Price Index.
The Tribunal considered the minimum wages in these concerns on the basis of the prevailing Price Index of 441 a ' Sambalpur taking 100 as the basic Price Index for the year 1939 Even when fixing the minimum wage ,for the Company on the basis of the alternative calculation made by the Tribunal, the Tribunal has proceeded on the assumption that the minimum wage is being fixed for the Price Index No. 441 prevailing at the time of the award taking 100 as the basic index for the year 1939 In these circumstances, we think that the minimum wage in the Company should have been fixed by the Tribunalmensera, following the principle laid down by this Court in the case of French Motor Car Co.(1).
The Tribunal should not have proceeded to make the alternative calculation on some other basis so as to arrive at a lower figure of Rs. 73 p.m. as the wage covering the basic wage and the dearness allowance, in addition to Rs. 11 p.to.
payable as production bonus.
Learned counsel for the Company urged before us that the principle of fixation of wages on the basis of Comparison in the region laid down in the French Motor Car Co. 's case(1) is not rigid and, it is not.
necessary that the minimum wage.
in the Company must be fixed at the average level of 'wages in the other comparable industries in the region.
According to him, note should be taken of the fact that, at least . in the paper industry in this.
area, the other concerns are paying much lower wages.
This point has to be 'rejected straightaway in view of the finding that.
those concerns are very small and not comparable with the Company.
It was also urged that, in fixing the minimum wage, the wages payable in the paper industry in other.
parts of the country.
should also be kept in view.
We do.
not think that such a consideration should be taken.
into account.
when applying the principle of fixing the minimum wage primarily on the basis of comparison.
between.
different industries.
in the same region.
Finally, it was argued that other amenities being provided by the Company should also be taken into account when fixing the minimum wage.
In this case, however, there is nothing to show that the Company is providing any such amenities which are different from the amenities that are being provided by those concerns in the region which.
are being.compared with the Company for the purpose of fixation of the minimum wage Consequently, we do not think that there is any justification for departing from the figure of Rs.95 which is the average minimum wage payable by those industries (1) [1963] Supp.
673 We may, at this stage, take notice of the fact that, in con sidering the question of minimum wage, the Tribunal had in view the total wage packet to be received by each workman and, in the opinion of the Tribunal, it consisted of three elements.
These elements are basic wage, dearness allowance and production bonus.
The Tribunal, in its award, held that the minimum wage in so far as it consists of basic wage and dearness allowance,, should be fixed at Rs. 73 and there should be paid, in addition, production bonus to the extent of Rs. 11 in each case.
Thus, the total minimum wage packet which a workman should be entitled to receive was fixed by the Tribunal at Rs. 84.
It is for this figure of Rs. 84 that we think the Tribunal should have substituted the figure of Rs. 95.
From the facts noted in the Award or appearing on the record, it appears that production bonus, in addition to the minimum wage, is payable in the case of Aluminium Company, Hirakud; but there does not appear to be any, production bonus payable in the three Collieties, in the Steel Plant and in the Cement Factory.
In the majority of the industries, which are being compared with the Company in the region, consequently, the minimum wage is the total wage packet receivable by the workman and there is no extra amount received as production bonus.
There is only an exception in the case of Indian Aluminium Company.
That particular Company, it appears, has some special features which have been brought out in the evidence of the Management 's witness, B.B. Panda.
He has stated that the Alumihium Factory at Hirakud carries on its work with the help of highly automatic machines and is ' supplied electricity by the Government at subsidised rates.
The nature of work is such that the total number of workmen employed does not exceed 125 which is a very small number as compared ' with the number of workmen employed by the Company.
It is clear that, in the Aluminium Factory, the number of workmen, who have to be paid production bonus is very small and almost insignificant as compared with the number in the Company 'In these circumstances, it would be more appropriate to compare the total wage packet of the Company with the wage packet received by the workmen of other industries in the region, viz., the three Collieries, the Rourkela Steel Plant, and the Cement Factory at Rajgangour.
Comparing with them, there is justification for fixing the total wage packet of the workmen in the Company 'at Rs. 95 which would include production bonus.
So far as annual profit bonus is concerned, it is payable in the Company also as in those other concerns.
Consequently, in varying the award of the Tribunal we would direct that the 'total minimum wage packet of a workman in the Company shall be fixed ,at Rs. 95 consisting of ' the three elements of basic wage; dearness allowance and production bonus.
The break up of this wage into the three 'elements is of some importance in this case because of the principle on which the 674 profit bonus is paid by tiffs Company.
The profit bonus that is paid is three months ' basic wage and does not take into account the dearness allowance and the production bonus elements of the total wage.
The Company has always treated the total wage of a workman as consisting of these three elements in the proportion of 3:3: 1.
On behalf of the workmen, it was urged before the Tribunal that the proportion should be 3: 1: 1, so that the production bonus and the dearness allowance would both be equal and 1/3rd of the basic wage.
This plea of the workmen was rejected by the Tribunal primarily on the ground that the other break up urged on behalf of the Company was the break up which had been accepted by mutual consent between the workmen and the Company in an earlier settlement which had been arrived at in the year 1959.
We are unable to hold that the Tribunal committed any error in arriving at this decision and, consequently, the total minimum wage fixed by us must also be deemed to have the same break up.
As a result, it would have to be held that the total minimum wage of Rs. 95 will consist of Rs. 41 as basic wage, Rs. 41 as dearness allowance and Rs. 13 as production bonus.
In connection with the fixation of minimum wage, one point vehemently argued by learned counsel for the workmen was that at least the dearness allowance element of the wage should have been made variable with the Price Index, so that the labour could automatically be compensated for further rise in the cost of living subsequent to the making of the award.
Learned counsel was, however, unable to show to us that this Court or any other Tribunal has ever laid down the principle that, where the dearness allowance forms a part of the consolidated wage fixed, there should be such linking so as to bring in continuous variation of the wage, depending on the variation in the Price Index.
It appears to us that an Industrial Tribunal has the discretion, in appropriate cases, of making a direction linking the dearness allowance element of a wage to the Price Index; but, at the same time, the Tribunal is entitled to choose the alternative course of fixing the wage at the prevailing Price Index and leaving the labour to raise a fresh demand and, if necessary, a fresh industrial dispute for further rise in wages, in case there is marked variation in the Price Index and the wage fixed in the award becomes out dated.
Reference in this connection may be made to the decision of this Court in Hydro (Engineers) Pvt. Ltd. vs The Workmen,(x) where also the Court did not hold that it was compulsory to link minimum wage with the cost of living index and only envisaged that such linking may be permissible by holding that : "It is thus clear that the concept of minimum wage, does take in the factor of the prevailing cost of essen (1) ; 675 tial commodities whenever such minimum wage is to be fixed.
The idea of fixing such wage in the light of cost of living at a particular juncture of time and of neutralising the rising prices of essential commodities by linking up scales of minimum wages with the cost of living index cannot, therefore, be said to be alien to the concept of a minimum wage.
" In the present case, the Tribunal chose the course of leaving it to the workmen to ask for increase in minimum wage on any further rise in Price Index and did not consider it advisable to link the wages with it.
In fact, from the Award, it appears that, so far as the Tribunal was concerned, the workmen did not press for such linking when the award was being given.
Consequently, we are unable to hold that the Tribunal has committed any error and that, in this respect, any interference by us is called for.
The only 'other point argued before us in respect of wages by learned counsel was that casual workers should also be paid minimum wages on the same basis as the permanent workers for whom the minimum wage was fixed by the Tribunal which is being varied by us by increasing it to a total wage packet of Rs. 95.
It appears that the Tribunal did not accept this demand primarily on the ground that the distinction between casual workers and ' the permanent workers was recognised by both the parties in the agreement of 1959.
It may be noticed that, by the very nature of employment being casual, it can be presumed that a casual worker is on a lower footing and cannot expect the same wagesas a permanent employee.
Therefore, the decision by the Tribunal not to equate the casual workers with the permanent employees.
cannot be held to be incorrect and must be upheld.
The Tribunal had directed that the increase of Rs. 12 p.m. in the total minimum wage packet allowed by it will enure to the benefit of the lowest paid female, badIi and permanent dailyrated workers also.
This principle will remain effective with the modification that these workers will be entitled to the increase of Rs. 23 p.m. substituted by us for the increase of Rs. 12 allowed by the Tribunal.
Learned counsel appearing for the Company drew our attention to the fact that the revised wages are payable with effect from 13th December, 1962 and, by this time, a period of 5 to 6 years has elapsed, so that the Company will have to pay arrears of wages for this long period.
It was urged that this would cast a very heavy burden on the Company.
We do not think that this reason advanced on behalf of the Company will justify our making a direction that the increase in wages should be effective from some later date.
The previous agreement of 1959 was binding only up to 12th December, 1962 and we think that the Tribunal 213 Sup.
C.I./68 12 676 was right in directing that the revised wages must take effect from 13th December, 1962.
Even though arrears will have to be paid for about 6 years, it has to be kept in view that, since then, there has been a very considerable rise in the Price index and the labour has not so far raised a fresh dispute for a further revision of wages over and above the wages fixed by the Tribunal which are being now refixed by us.
In all these circumstances, we think that the revised wages should take effect from 13th December, 1962.
The only other dispute raised in this appeal related to the bonus for the year 1962 63.
Initially, the workmen had challenged the decision of the Tribunal with regard to, bonus for all five years from 1959 60 to 1963 64, but, in the course.
of arguments at the last stage before us, learned counsel for the workmen confined his arguments to the bonus for the year 1962 63 only.
The main point urged by learned counsel was that, in giving the decision with regard to bonus for this year, the Tribunal committed the error of not making calculation of surplus available on the basis of the Full Bench Formula approved by this Court in the case of The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka vs Its Workmen and Another.(x) The Company is paying profit bonus equivalent to three months ' basic wage of each workman.
The demand made by the workmen was for bonus equivalent to six months ' wages, and the argument was that, if the Tribunal had worked out the surplus available on the correct basis, that surplus would have certainly justified grant of profit bonus at the rate of six months ' wages.
This argument fails, because it appears to us that the demand, as put forward before the Tribunal for bonus equivalent to six months ' wages, was, in fact, never made by the workmen on the basis that the surplus calculated under the Full Bench Formula would justify bonus being granted at that rate.
The 'tribunal, in this connection, has quoted the pleading of the workmen in their written statement before it.
The pleading makes it clear that the claim for six months ' wages was not based on the Full Bench Formula, but on the ground that certain clerical staff was being paid bonus which, in effect, amounted to about six months ' basic wages, because the bonus was calculated ;in their case by taking into account the consolidated wages, including dearness allowance, while in the case of the workmen, the dearness allowance element of the wages was being ignored and bonus was calculated only by taking into account basic wages.
We agree with this interpretation of the pleadings of the workmen.
Further, there is one very significant circumstance, viz. that this dispute was raised by the workmen 'before the expiry of the year 1962 63.
Initially, there was an attempt that the dispute be referred to the Industrial (1)[1959] S.C.R. 925.
677 Tribunal under section 10(2) of the Act on the basis of an agreed enumeration of subjects of dispute drawn up by the workmen and the Company together.
That reference under section 10(2) of the Act, however, failed due to some technical defect.
The reference was ultimately made by the Government under section 10(1) of the Act, but it was made in the same form in which the parties had agreed to.
refer it.
The reference was made by the Government on the 4th October, 1962.
At that time, the year 1962 63 was still running and the accounts for that year could not possibly have been closed and made available.
The balance sheet and the profit and loss.
account of that year could only be prepared after the closure of the year on 31st March, 1963.
In fact, the reference included a dispute even for the year 1963 64 which year had not even started running.
On the face of it, at the time of the reference, there could be no question of applying the Full Bench Formula for calculation of surplus, because there were no completed accounts for the two years 1962 63 and 1963 64.
This circumstance makes it clear that the claim for higher bonus could not, at the time of reference, have been based on the availability of surplus according to the Full Bench Formula.
The Tribunal was, therefore, quite correct in not trying to work out the surplus according to the Full Bench Formula and in awarding bonus on that basis.
In this connection, learned counsel for the workmen urged that, at least by the time when the Award was given, the completed accounts for the year 1962 63 were available; but it seems to us that this circumstance is of no assistance.
The award had to cover the year 1963 64 also and at least for that year the accounts could not possibly have been completed, as that year was still running when the award was given by the Tribunal on the 11 th January, 1964.
Further, the Tribunal was expected to decide the dispute only as referred to it and, at the time of reference at least, there was not and there could possibly not be a claim for higher bonus on the basis of the application of the Full Bench Formula.
The claim was, in fact, based on the circumstances that, according to the workmen, the bonus in their case was being calculated as equivalent to three months ' basic wages, while, the case of some clerical staff, the calculation was made on the basis of their consolidated wages consisting of basic wages and dearness allowance.
The argument is incorrect.
In the case of even the lowest paid clerical staff, to whom dearness allowance is separately payable, the bonus is only calculated on the basis of basic wages, and the dearness allowance is ignored.
There is some clerical staff which does not get any dearness allowance at all and it is only in those cases.
that the bonus is worked out on the basis of the total wages paid.
In such cases, the calculation is still on the basis of basic wage, because it cannot be assumed that their wage is a consolidated wage consisting of the two 678 elements of basic wage and dearness allowance lumped together.
In fact, the principle which is being applied is the simple one of calculating the bonus payable at the rate of three months ' basic wage in each case and in no case is the dearness allowance taken into account.
There is, therefore, no discrimination or inequality as urged on behalf of the workmen.
Finally it was urged that even the casual and badIi workers should be allowed bonus on the same basis as the permanent workers.
The Tribunal rejected this demand on the ground that, under the Agreement of 1959, the workmen and the Company had agreed specifically to exclude these classes of workers in regard to payment of bonus.
We are unable to hold that the Tribunal committed any error of law, requiring interference by us, in basing its decision on the principle contained in the earlier Agreement of the parties and in holding that there was no justification to introduce a new element of payment of bonus to casual and badIi workers at this stage.
The claim in this respect also fails.
As a result, the appeal is only partly allowed inasmuch as the minimum wage fixed by the Tribunal in the Award is carried as indicated by us above.
The rest of the Award of the Tribunal is upheld.
Since, in this appeal, the principal dispute related to the fixation of minimum wage of the workmen and we are allowing the appeal of the workmen in that respect, we direct that the workmen will be entitled to their costs of this appeal from the Company.
V.P.S. Appeal allowed in part.

Response:
An industrial dispute regarding fixation of wages and bonus, between the respondent paper mills and its workmen, the appellants, was referred to the Industrial Tribunal in October, 1962, and the reference included a dispute about bonus payable for the years 1962 63 and 1963 64.
The Tribunal held: (1 ) that there were in the region no ' other concerns in the same line of business which could be compared with the respondent but that there were three collieries, a steel plant, a cement factory and an aluminum company in the region which were comparable with the resportdent, that as the minimum wage in those industries which was about Rs. 95 was above that of the respondent, a revision of the minimum wage in the respondent mills was justified.
that such minimum wage should be fixed for the price index prevailing at the time of the award taking 100 as the basic index for the year 1939, and that on that basis, the basic wage and dearness allowance should be Pa. 73, and that Pa. 11 was payable as production bonus; (2) that the dearness allowance element need not be linked to the price index, but that wage should be fixed at the prevailing price index leaving it to the workmen to ask for increase in minimum wage on any further rise in price index; (3 ) that the revised wages were payable with effect from 13th December, 1962; (4) that the three elements of basic wage, dearness allowance, and production bonus which make up the total minimum wage packet of Rs. 84 (Rs. 73 + Pa. 11) should be in the proportion of 3: 3: 1, and that profit bonus was payable at three months ' basic wage.
The proportion of 3:3: 1 was fixed by the Tribunal, because, under an agreement of 1959 the management and workmen accepted that proportion by mutual consent.
On the basis of that agreement, the Tribunal also held that; (5) casual workers should not be equated to permanent workers for purpose of minimum wages, and that casual and radii workers should not be allowed bonus on the same basis as the permanent workers; (6) The appellants also claimed before the Tribunal 6 months ' basic wage instead of 3 months ' basic wage, which was being paid by the respondent, on the assumption that certain before staff were being paid as bonus 3 months ' consolidated wage consisting of basic wage and dearness allowance; but the Tribunal rejected the claim.
In appeal to this Court.
HELD: (1) This Court laid down in French Motor Car Co. Ltd. vs Its Workmen, [1963] Supp.
that where there is no concern in the same industry in the region comparable with the concern in which wages have to be fixed, greater emphasis should be laid on the region part of the industry cum region principle.
To give full effect to this rule the Tribunal should have proceeded to fix the minimum wage in the respondent mills on the basis of the average minimum wage prevailing 667 in the other industries in that region.
The respondent was not providing any amenities which should be taken into account in fixing the minimum wage, different from the amenities provided by those concerns in the region which were being compared.
Therefore, the Tribunal should have fixed the minimum wage packet at Rs. 95 per mensem which was the average wage prevailing in all those concerns and should not have fixed the wages on an entirely different basis.
[671 F H; 672 G H] (2) The Industrial, Tribunal has the discretion, in appropriate cases, of making a direction linking the dearness allowance element of a wage to the price index, or to fix the wage at the prevailing price index leaving the labour to raise a fresh demand and, if necessary, a fresh industrial dispute for further rise in wages, in case there is marked variation in price index and the wage fixed becomes outdated; and therefore.
the Tribunal was not wrong in choosing the latter alternative.
[674 F G; 675 B] Hydra (Engineers), vs The Workmen, ; , referred (3) This direction ' was objected to by respondents, on the ground that the respondent may have to pay arrears for 5 or 6 years which would be a heavy burden.
But the previous agreement of 1959 was binding only upto 12th December, 1962.
So, the Tribunal was right in directing that the revised wages should take effect from 13th December, 1962, in view of the considerable rise in the price index and the fact that the labour had not raised a fresh dispute for a further revision of wages since the date of the award.
[675 G H] (4) No error was committed by the Tribunal in the break up of the wages into the 3 elements of basic wage, dearness allowance and production bonus in the proportion of 3: 3: 1.
The contention of the workmen that the proportion should be 3:1: 1: so as to increase the basic wage element and consequently the profit bonus.
was rightly rejected by the Tribunal, because.
the proportion of 3:3:1 was accepted by mutual consent.
[674 B C] (5) The distinction between casual workers and permanent workers for purpose of minimum wage, and casual and badli workers on the hand and permanent workers on the other for purpose of bonus, was recognised by the parties themselves in the agreement of 1959, and therefore, the Tribunal was right in keeping up the distinction in its award.
[675 D E; 678 B C] (6) The allegation that some clerical staff was receiving what amounted to 6 months ' basic wage as bonus was incorrect.
There was some clerical staff which did not get any dearness allowance and the bonus in their case was worked out on the basis of their wages which was only the basic wage.
The appellants were wrong in assuming that the wage of such clerical staff was a consolidated wage consisting of the 2 elements of basic wage and dearness allowance.
Therefore, the appellants could not claim 3 months ' consolidated wages as bonus which would amount to 6 months ' basic wage.
[677 G H; 678 A B] It could not be urged by the appellants that calculation of available.
surplus for purposes of bonus should have been on the basis of the Full Bench formula approved by this Court in Associated Cement Companies Ltd. vs Its Workmen, , for justifying 6 months ' basic wages as bonus, because, that was not the basis of the claim before the Tribunal.
Further, the Tribunal was expected to decide the dispute only as referred to it, and at the time of the reference the accounts for the years 1962 63 and 1963 64 could not have been available, and therefore, 668 there could not possibly be a claim for higher bonus on the basis of the application of the Full Bench Formula.
[676 D F; 677 C D]


Prompt:
Appeal No. 647 of 1966.
Appeal by special leave from the judgment and decree dated June 19, 24, 1963 of the Gujarat High Court in Appeal No. 704 of 1960 from Appellate Decree.
P. K. Chatterjee and section P. Nayar, for the appellant.
I. N. Shroff, for respondent No. 1.
section K. Dholakia and Vineet Kumar, for respondent No. 2.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave arises out of the suit filed by Bhaishankar Avalram Joshi, hereinafter referred to as the plaintiff, for a declaration that the order of dismissal, dated February 2/4, 1955, passed by the Inspector General of Prisons, Saurashtra, was illegal and void on the ground that it contravened the provisions of article 311 (2) of the Constitution.
The plaintiff also prayed for a decree for Rs. 2,690 being arrears of his pay from April 1, 1954 to May 7, 1956.
The plaintiff failed before the Civil Judge, Rajkot, but on appeal succeeded before the District Judge, Central Saurashtra, inasmuch as he declared order dated February 2/4, 1955, illegal and void.
The plaintiff appealed to the High Court claiming arrears of salary and the State of Bombay filed cross objections praying that the suit be dismissed.
The second appeal was heard by the High Court of Gujarat (Miabhoy, J.) who directed that the decree passed by the lower appellate court "be varied so as to show that the appellant (plaintiff) continued to be in Government service till the date of the suit only and there will be a decree for Rs. 2,690 919 being arrears of pay due to the appellant (plaintiff) upto the date of the suit.
There will be a further provision in the decree that the liability arising out of the declaration that the appellant is in Government service is the liability of the State of Gujarat and that the liability for the payment of the arrears of pay is the liability of the State of Maharashtra".
The State of Maharashtra filed as application for leave to appeal under the Letters Patent but this ' was dismissed.
The appeal is now before us.
The learned counsel for the appellant the state of Maharashtra , contends ,first, that the High Court erred in holding that there had been a breach of article 311(2) of the Constitution, as, according to him, there was no duty to supply a copy of the report of the enquiry held against the plaintiff.
Secondly, he contends that the High Court erred in fastening the liability in respect of the arrears of pay on the State of Maharashtra.
Before we deal with the above points we may give a few facts.
The plaintiff entered service in the Gondal State in 1927 as a jailor.
The Gondal State merged with the United States of Saurashtra.
On March 6, 1953, the plaintiff was appointed senior jailor, Surendranagar District Jail.
On March 25, 1954, he was suspended, and at that time he was acting as Accountant at Rajkot Central Jail.
On March 7, 1954, he was served with a charge sheet.
In substance the charges were that while he was serving at Surendranagar he had committed certain acts of mis appropriation of food stuffs meant for prisoners, maltreatment of prisoners and acceptance of illegal gratification from them.
The plaintiff filed a written statement on September 4, 1954, and an enquiry was held by Mr. Gangopadhyay.
The plaintiff appeared before that officer and cross examined witnesses.
He also examined himself and some witnesses.
He was also allowed to appear through an Advocate in the enquiry proceedings.
The Enquiry Officer made a report and on or about January 7, 1955, the following notice was issued to him calling upon him to show cause why he should not be dismissed from service "To Shri Bhaishanker A. Joshi, Accountant, Rajkot Central Prison (Under suspension) Charges framed against you under this office No. C/ 14 dated 27 3 54 and in particular the charges of having accepted illegal gratification from prisoner Ratilal Jivan have been established to the satisfaction of Government.
You are hereby asked to show cause why the punishment of dismissal from service should not be inflicted upon You.
920 You should please submit your reply to this office, through the Superintendent, Rajkot Central Prison,, within a week from the date of receipt of this letter without fail.
Sd/ M. J. BHATT Inspector General of Prisons, Government of Saurashtra.
" The plaintiff filed a written statement.
He was dismissed by the Inspector General of Prisons by his order dated February 2/4, 1955.
This order was amended on February 9, 1955, in which it was stated that "the aforesaid order should be read so as to show that the plaintiff was dismissed from service on account of charge of accepting, illegal gratification from prisoner Ratilal Jivan having been conclusively proved against him in the departmental inquiries conducted against him by the Government".
In the plaint the plaintiff alleged that copy of the enquiry report was never supplied to him, and consequently he had not been given reasonable opportunity within the meaning of article 311 of the Constitution.
The State of Bombay admitted that the plaintiff was not supplied with a copy of the report of the Enquiry Officer, but pleaded that the plaintiff had not asked for copy of the report and had not been prejudiced by the non supply of the copy of the report.
The High Court held that the failure on the part of the competent authority to provide the plaintiff with a copy of the report of the Enquiry Officer amounted to denial of reasonable opportunity contemplated by article 311(2) of the Constitution.
It seems to us that the High Court came to a correct conclu sion.
The plaintiff was not aware whether the Enquiry Officer reported in his favour or against him.
If the report was in his favour, in his representation to the Government he would have utilised its reasoning to dissuade the Inspector General from coming to a contrary conclusion, and if the report was against him he would have put such arguments or material as he could to dissuade the Inspector General from accepting the report of the Enquiry Officer.
Moreover, as pointed out by the High Court, the Inspector General of Prisons had the report before him and the tentative conclusions arrived at by the Enquiry Officer were bound to influence him, and in depriving the plaintiff of a copy of the report he was handicapped is not knowing what material was influencing the Inspector General of Prisons.
921 As observed by Gajendragadkar, J., as he then was, in Union of lndia vs H. C. Goel(1), "the enquiry report along with the evidence recorded constitute the material on which the Government has ultimately to act.
That is the only purpose of the enquiry held by competent officer and the report he makes as a result of the said enquiry".
It is true that the question whether reasonable opportunity has or has not been afforded to the Government servant must depend on the facts of each case, but it would be in very rare cases indeed in which it could be said that the Government servant is not prejudiced by the non supply of the report of the Enquiry Officer.
In the result we must over rule the first contention urged on behalf of the appellant, the State of Maharashtra.
The plaintiff is not concerned with the second contention but it is a dispute between the State of Maharashtra and the State of Gujarat.
As is well known, the State of Bombay was reorganised into the above two States and the Bombay Reorganisation Act, 1960, contained various provisions for the apportionment of assets and liabilities between the two States.
We are here concerned with sections 60 and 61 of the Bombay Reorganisation 1960, which read thus : "60.
(1) Where, before the appointed day, the State of Bombay has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power, ( a) if such purposes are, as from that day, exclusively purposes of either the State of Maharashtra or the State of Gujarat, of that State; and (b) in any other case, of the State of Maharashtra; and all rights and liabilities which have accrued, or may accrue, under any such contract shall, to the extent to which they would have been rights or liabilities of the State of Bombay, be rights or liabilities of the State of Maharashtra or the State of Gujarat, as the case may be; Provided that in any such case as is referred to in clause (b), the initial allocation of 'rights and liabilities made by this sub section shall be subject to such financial adjustment as may be agreed upon between the State (1) ; ,728.
922 of Maharashtra and the State of Gujarat, or, in default of such agreement, as the Central Government may by order direct.
(2) For the purposes of this section there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract (a)any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and (b any liability in respect of expenses incurred in or in connection with any such proceedings.
(3)This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligations; and bank balances and securities shall, notwithstanding that they partake of the nature of contractual rights, be dealt with under those provisions.
Where, immediately before the appointed day, the State of Bombay is subject to any liability in respect of any actionable wrong other than breach of contract, that liability shall, (a) if the cause of action arose wholly within the territories which, as from that day, are the territories of the State of Maharashtra or the State of Gujarat, be a liability of that State; and (b) in any other case, be initially a liability of the State of Maharashtra but subject to such financial adjustment as may be agreed upon between the States of Maharashtra and Gujarat or, in default of such agreement, as the Central Government may by order direct." The learned counsel for the State of Maharashtra contends that the liability to pay arrears of pay was not a liability arising out of a contract but was a liability in respect of an actionable wrong other than a. breach of contract.
This Court in State of Bihar vs Abdul Majid(1) held "that the rule of English Law that a civil servant cannot maintain a suit against the Crown for the recovery of arrears of salary does not prevail in India and it has been negatived by the provisions of the statute law in India".
Mahajan, C.J., speaking for the Court, observed at p. 802: "As regard torts of its servants in exercise of sovereign powers, the company was not, and the Crown in (1) ; 923 India was not, liable unless the act has been ordered or ratified by it.
Be that as it may, that rule has no application to the case of arrears of salary earned by a public servant for the period that he was actually in office.
The present claim is not based on tort but is based on quantum meruit or contract and the court is entitled to give relief to him.
" It may be that these observations are not conclusive on the point under consideration.
It seems to us, however, that some elements of relationship between a public servant and Government are based on contract within the meaning of section 60 of the Bombay Reorganisation Act, 1960.
In particular, the liability to pay salary, when it has been fixed, arises out of a contract to pay salary.
Authority is not lacking even in England where a special relationship exists between the Crown and its public servants.
In Owner or section section Raphael v, Brandy(1) the head note reads A stoker on board a merchant ship, who was en titled to wages from the shipowners, and also as a stoker in the Royal Naval Reserve to 6 pound a year as a retainer, was injured by an accident on the ship which disabled him from continuing to serve in the Royal Naval Reserve Held, that the stoker was entitled under the Workmen 's Compensation Act, 1906, to compensation from the shipowners not only in respect of his wages but also of the retainer, which must be taken into account as earnings under a concurrent contract of service.
" The Lord Chancellor in the course of the speech observed "A point was made before your Lordships which does not appear to have been made in the Court below, that there was no contract with the Crown at all here.
The authorities cited_go no further than to say that when there is an engagement between the Crown and a military or naval officer the Crown is always entitled to determine it at pleasure, and that no obligation contrary to that would be recognized or valid in law.
It was then said that there were not here concurrent contracts.
I agree with Fletcher Moulton L.J. that this is almost a typical case of concurrent contracts, because the workman was being paid wages for his services on board a merchant ship, and at the same time he was earning his 6 pound a year by virtue of his engagement with the Crown; and he was giving an equivalent for that, (1) 924 because he was keeping himself fit and doing the work which he stipulated to do.
" It is true that Lord Goddard, C.J., in Inland Revenue Commissioners vs
Hambrook(1) observed : "If I may be bold enough to express a conclusion on a matter on which the Judicial Committee hesitated in Reilly vs R (2) , it is that an established civil servant is appointed to an office and is a public officer, remune rated by moneys provided by Parliament, so that his employment depends not on a contract with the Crown but on appointment by the Crown, though there may be as indicated in Reilly vs R. (2) exceptional cases, as for instance an engagement for a definite period where there is a contractual element in or collateral to his employment." But in the Court of Appeal nothing was said about these observations.
It will be remembered that the Privy Council had said in Reilly vs R(2) that "their Lordships are not prepared to accede to this view of the contract, if contract there be.
If the terms of the appointment definitely prescribe a term and expressly provide for a power to determine "for cause" it appears necessarily to follow that any implication of a power to dismiss at pleasure is excluded.
" Even Lord Goddard, C.J., in Terrell vs Secretary of State for the Colonies(3) observed that "the case (Reilly vs R.) (2) shows that there may be contractual rights existing before determination of a contract at will which are not inconsistent with a power to determine," and he stuck to this in Hambrook 's case(1) by stating : "Although it is clear that no action for wrongful dismissal can 'be brought by a discharged civil servant, I may be allowed to say that I adhere to the opinion which I expressed in Terrell vs Secretary of State for the Colonies(1) that he could recover his salary for the time during which he has served.
He would claim on a quantum mersuit and I am fortified in this view by Reilly vs R. (2), by R. vs Doultre(4) and by Bushe vs R(5) referred to in Robertson 's book at p, 338." (1)[1956] 1 All E.R. 807, 811 12.
(2) ; 179.
(3) [1953] 2Q.B.482,499.
(4) (5) (May 29, We are here concerned with a choice between section 60 and section 61, which lay down two broad categories.
It seems to us that the decree of the High Court decreeing payment of arrears of salary is truly a liability in proceedings relating to a contract within section 60(2)(a) of the Act.
It is true, as held by this Court in the State of Tripura vs The Province of East Bengal(1), that the words ,actionable wrong other than breach of contract ' in this context are wide words and include something more than torts, but even so where a suit is brought by a Government servant for arrears of salary, the decree more properly falls under section 60 of the Act rather than under section 61.
In the result the appeal fails and is dismissed with costs to the respondent, Baishankar Avalram Joshi.
The State ' of Gujarat will bear its own costs in this appeal.
R.K.P.S. Appeal dismissed.

Response:
The first respondent while he was holding the post of a Senior Jailor in March, 1954, was suspended on the allegations that he had committed certain acts of misappropriation and maltreatment of prisoners.
After January, 1955.
A show cause notice was then issued to him to which he replied by a written statement.
The respondent was dismissed by an order of Inspector General of Prisons in February, 1955.
The respondent filed a suit for a declaration that enquiry report was never supplied to him and consequently he had not been given reasonable opportunity within the meaning of article 311 of the Constitution.
He also prayed for a decree for arrears of pay from April, 1954 to May, 1960.
His suit was dismissed by the trial court but he succeeded in the first appeal where the order of dismissal was declared illegal and void.
An appeal by the respondent to the High Court claiming arrears of salary was allowed.
As the State of Bombay had, in the meantime, been reorganised, the High Court also directed that the liability for arrears of salary upto the date of suit would be that of the State of Maharashtra and the liability arising out of the declaration that the appellant was in Government service would be the liability of the State of Gujarat.
A Letters Patent appeal filed by the State of Maharashtra was dismissed.
In appeal to this Court, it was contended, inter alia, on behalf of the appellant that the liability to pay arrears of pay was not a liability arising out of a contract within the meaning of section 60 of the Bombay Reorganisation Act of 1960 but it was a liability in respect of an actionable wrong other than a breach of contract within the meaning of section 61 of the Act.
HELD: (1) The High Court had rightly found that the failure on the part of the competent authority to provide the respondent with a copy of the report of the Enquiry Officer amounted to denial of reasonable opportunity contemplated by article 311(2) of the Constitution.
The Inspector General of Prisons had the report before him and the tentative conclusions arrived at by the Enquiry Officer were bound to influence him and in depriving the plaintiff of a copy of the report he was handicapped in not knowing what material was influencing the Inspector General of Prisons.
[920 F] Union of India vs H. C. Goel, ; , 728, referred to.
It is true that the question whether reasonable opportunity has or has not been ' afforded to the Government servant must depend on the facts 918 of each case, but it would be in very rare cases indeed in which it could be said that the Government servant is not prejudiced by the non supply of the report of the Enquiry officer.
[921 B] (2) The decree of the High Court decreeing payment of arrears of salary is truly a liability in proceedings relating to a contract within section 60(2) (a) of the Act.
Although the words 'actionable wrong ' other than breach of contract in this context are wide words and include something more than torts, but even so where a suit is brought by a Government servant for arrears of salary the decree more properly falls under section 60 of the Act rather than under a. 61.
[925 B] State of Tripura vs The Province of East Bengal, ; , 44, State of Bihar vs Abdul Majid, [1954] S.C.R. 786, Owner of section section Raphael vs Brandy, , Inland Revenue Commissioner vs Hambrook, [1956] 1 AR E.R. 807, 811 12, Reilly vs R., , 179; Terrell vs Secretary of State for the Colonies, , 499; R. vs Doultre, and Bushe vs R., (May 29, 1869, The Times), considered.


Prompt:
No. 65 of 1969.
Petition under article 32 of the Constitution of India for enforcement of fundamental rights.
section V. Gupte, P. A. Choudhury and K. Rajendra Chaudhuri, for the petitioners.
M. C. Setalvad, P. Ramachandra, Rao, Advocate General, Andhra Pradesh, A. Raghubir and A. V. Rangam, for respondent No. 1.
M. C. Setalvad and R. N. Sachthey, for respondent No. 2.
R. V. Pillai, H. section Gururai Rao and Subodh Markandeya, for respondents Nos. 3 to 45.
Sardar Ali Khan, P. N. Duda and J. B. Dadachanji, for res pondent No. 46.
P. A. Choudhury, K. Rajendra Chaudhuri and C. section Sreenivasa Rao, for the interveners.
The Judgment of the Court was delivered by Hidayatullah, C.J.
The petitioners are persons employed in the ministerial services of the Andhra Pradesh Government.
All of them were working in various offices located in the cities of Hyderabad and Secunderabad.
On January 19, 1969, leaders, of all political parties in the Legislature of the Andhra Pradesh State appeared to have met and reached the decision that to Implement what are called Telengana Safeguards ', the following measures should be taken : "All non domicile persons, who have been appointed either directly, by promotion or by transfer to posts reserved under the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959 for domiciles of Telengana region will be immediately relieved from service.
The posts so rendered vacant will be filled by qualified candidates possessing domicile qualifications and in cases where such candidates are not available the posts shall be left unfilled till qualified domicile candidates become available Action on the above lines will be taken immediately.
All non domicile employees so relieved shall be provided employment in the Andhra region without break in service and by creating supernumerary posts, if necessary.
" 117 The Government of Andhra Pradesh then passed an order (G.O.Ms. 36, G.A. (SR) Dept.) on January 21, 1969 relieving before February 28, 1969 all non domicile persons appointed on or after November 1, 1956 to certain categories of posts reserved for domiciles of Telengana under the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959.
Names of such incumbents were to be shown in a proforma and they were to be employed in the Andhra region without break in service by creating supernumerary posts, if necessary.
These supernumerary posts were to be treated as temporary addition to the strength of the office concerned and were to be adjusted against future vacancies in corresponding posts as they arose.
The action was based upon section 3 of the Public Employment (Requirement as to Residence Act, 1957 (44 of 1957) which was an Act of Parliament made in pursuance of cl.
(3) of article 16 of the Constitution making special provision for requirement as to residence and brought into force on March 21, 1959.
Section 3 of the Act gave the power to make Rules in respect of certain classes of employment in certain areas.
It provided: "3.
Power to make rules in respect of certain classes of public employment in certain areas. (1)The Central Government may, by notification in the Official Gazette, make rules prescribing, in regard to appointments to (a)any subordinate service or post under the State Government of Andhra Pradesh, or any requirement as to residence within the Telengana area or the said Union territory as the case may be, prior to such appointment.
(2) In this section, (a). . . . . (b)"Telengana area" comprises all the territories specified in sub section (1) of section 3 of the ." Under section 4, the Rules had to be laid before each House of Parliament for a period of not less than 30 d s and Parliament could make such alterations as it liked.
Under section 5 the Rules had a life of 5 years but by subsequent legislation the period was extended to 10 years.
It is said that the period 118 is to be extended by another 5 years.
The Rules were made on March 21, 1959.
They are called the Andhra Pradesh Public Employment (Requirement as to Residence) Rules, 1959.
Rule 3 provides : "3.
Requirement as to residence Prior to Appointment : A person shall not be eligible for appointment to a post within the Telengana area under the State Government of Andhra Pradesh or to a post under a local authority (other than a cantonment board) in the said area unless (i)he has been continuously residing within the said area for a period of not less than fifteen years immediately preceeding the prescribed date; and (ii)he produces before the appointing authority ,concerned, if so required by it, a certificate of eligibility granted under these rules; Provided that in relation to posts in the Secretariat Departments and the Offices of the Heads of Departments of the State Government of Andhra Pradesh situated in the cities of Hyderabad and Secunderabad, the requirement as to residence laid down in this rule shall apply to the filling of only the second vacancy in every unit of three vacancies which are to be filled by direct requirement; Provided further that any period of temporary absence from Telengana area for the purpose of prosecuting his studies or for undergoing medical treatment or any period of such temporary absence not exceeding three months for any other reason shall not be deemed to constitute a break in the continuity of such residence, but for purpose of calculating the said period of fifteen years any such period of temporary absence shall be excluded.
" The petitioners were appointed between December 27, 1956 and July 4, 1968.
They challenge the Act, the Rules and the proposed action as ultra vires the Constitution.
Their case is that article 16(3) under which the Act and the Rules purport to be made has been misunderstood as conferring a power to make, a law prescribing requirement as to residence in a part of a State.
For this reason section 3 of the Act is challenged as ultra vires the Constitution.
119 Article 16 on which the Act, the Rules and the present action are all based, reads : "16.
Equality of opportunity in matters of public employment.
(1)There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
(2) No citizen shall, on ground only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated 'against in respect of, any employment or office under the State.
(3)Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory prior to such employment or appointment.
(4). . . . (5). . . .
The question is one of construction of this article, particularly of the first three clauses, to find out the ambit of the law taking power of Parliament.
The first clause emphasises that ware shall be in India equality of opportunity for all citizens in matters of employment or appointment to any office under the late.
The word 'State ' here is to be understood in the extended use given to it by the definition of that word article 12.
The second clause then specifies a prohibition against discrimination only on the grounds of religion, race, sex, descent, place of birth, residence or any of them.
The intention here is make every office or employment open and available to every citizen, and inter alia to make offices or employment in one part India open to citizens in all other parts of India.
The third pause then makes an exception.
This clause was amended by the Constitution (Seventh Amendment) Act, 1956.
For the original words of the clause 'under any State specified in the First schedule or any local or other authority within its territory any requirement as to residence within that State ', the present words from 'under the Government ' to 'Union territory ' have been substituted.
Nothing turns upon the amendment which seeks to apply of the exception in the clause to Union territory and to remove ambiguity in language.
120 The clause thus enables Parliament to make a law in a special case prescribing any requirement As to residence within a State or Union territory prior to appointment, as a condition of employment in the State or Union territory.
Under article 35(a) this power is conferred upon Parliament but is denied to the Legislatures of the States, notwithstanding anything in the Constitution, and under (b) any law in force immediately before the commencement of the Constitution in respect to the matter shall subject to the terms thereof and subject to such adaptations that may be made under article 372 is to continue in force until altered or repealed or amended by Parliament.
The legislative power to create residential qualification for employment is thus exclusively conferred on Parliament.
Parliament can make any law which prescribes.
any requirement as to residence within the State or Union territory prior to employment or appointment to an office in that State or Union territory.
Two questions arise here.
Firstly, whether Parliament ', while prescribing the requirement, may prescribe the requirement of residence in a particular part of the State and, secondly, whether Par liament can delegate this function by making a declaration and leaving the details to be filled in by the rule making power of the Central or State Governments.
Mr. section V. Gupte, for the petitioners, points out that the ;Constitution is speaking of State and Union territory.
It has already made a declaration that no person shall be disqualified for any office in the territory of India because of his residence in any particular part of India.
The exception, therefore, must be viewed narrowly and not carried to excess by interpretation.
The article speaks of residence in a State and means only that.
If it chose to speak of residence in parts of State such as Districts, talauqas, cities, towns etc.
more appropriate and specific language could have been used such as 'any requirement as to residence within that State or Union territory or part of that State or Union territory '.
Having used the word State, the unit State is only meant and not any part thereof.
Reference is made to the history of the drafting of the Article and the debates in the Constituent Assembly which bear out this contention.
On the other hand, Mr. Setalvad bases his argument on two things.
He contends that the power is given to Parliament to make any law and, therefore, Parliament is supreme and can make any law on the subject as the article says.
He very ingeniously shifts the emphasis to the words 'any requirement ' and contends that the requirement may be also as to residence in the State or any particular part of state.
121 The claim for supremacy of Parliament is misconceived.
Par liament in this, as in other matters, is supreme only in so far as the Constitution makes it.
Where the Constitution does not concede supremacy, Parliament must, act within its appointed functions and not transgress them.
What the Constitution says is a matter for,construction of the language of the Constitution.
Which is the proper construction of the two suggested? By the first clause equality of opportunity in employment or appointment to an office is guaranteed.
By the second clause, there can be no discrimination, among other things, on the ground of residence.
Realising, however, that sometimes local sentiments may have to be respected or sometimes an inroad from more advance States into less developed States may have to be prevented, and a residential qualification may, therefore, have to be prescribed, the exception in clause (3) was made.
Even so,, that clause spoke of residence within the State.
The claim of Mr. Setalvad that Parliament can make a provision regarding residence in any particular part of a State would render the general prohibition lose all its meaning.
The words 'any requirement ' cannot be read to warrant something which could have been said more specifically.
These words bear upon the kind of residence or its duration rather than its location within the State.
We accept the argument of Mr. Gupte that the Constitution, as it stands, speaks of a whole State as the venue for residential qualification and it is impossible to think that the Constituent Assembly was thinking of residence in Districts, Taluqas, cities, towns or villages.
The fact that this clause is an exception and came as an amendment must dictate that a narrow construction upon the exception should be placed as indeed the debates in the Constituent Assembly also seem to indicate.
We accordingly reject the contention of Mr. Setalvad seeking to put a very wide and liberal construction upon the words 'any law ' and 'any requirement '.
These words are obviously controlled by the words 'residence within the State or Union territory ' which words mean what they say, neither more nor less.
It follows, therefore, that section 3 of the Public Employment (Requirement as to Residence) Act, 1957, in so far as it relates to Telengana (and we say nothing about the other parts) and Rule 3 of the Rules under it are ultra vires the Constitution.
In view of our conclusion on this point it is not necessary to express any opinion whether delegation to the Central and/or State Governments to provide by rules for the further implementing of the law made by Parliament is valid or not.
It was argued that the Mulki Rules existing in the former Hyderabad State must continue to operate by virtue of article 35(b) in this area.
This point is not raised by the petitions under consideration and no expression of opinion by us 'is desirable.
L12 Sup Cl/69 9 122 For the reasons given above we quash the orders passed and declare section 3 of the Public Employment (Requirement as to Residence) Act, 1957 as also Rule 3 of the Rules ultra vires the Constitution.
The petitions shall be allowed but there shall be no order about costs.
Y. P. Petitions allowed.

Response:
The Parliament enacted the Public Employment (Requirement as to Residence) Act, 1957 in pursuance of cl.
(3) of article 16 of the Constitution of India making special provision for requirement as to residence in public employment.
Section 3 of the Act gave the power to make rules in respect of certain classes of employment in certain areas, and accord ingly the Andhra Pradesh Public Employment (Requirement as to Residence) Rules were made prescribing the requirement , as to residence prior to appointment to certain posts, within the Telengana area of the State.
The petitioners who were non domicile persons appointed to the posts reserved for the domiciles of Telengana under the rules, were by an order relieved from their posts and employed in the other 'region of the State.
The petitioners, filed a petition under article 32 of the Constitution challenging the Act, the Rules and the order as ultra vires the Constitution.
Quashing the order, this Court, HELD : Section 3 of the Public Employment (Requirement as to Residence) Act, 1957 in so far as it related to, Telengana and Rule 3 of other Rules under it were ultra vires the Constitution.
[122 A] Clause (3) of article 16 of the Constitution enables Parliament to make a law in a special case prescribing any requirement as to residence within a State or Union Territory prior to appointment, in the State or Union Territory.
The provision speaks of a whole State as the venue for residential qualification and it is impossible to think that the Constituent Assembly was thinking of residence in Districts, Talukas, cities, towns or villages.
The fact that the clause is an exception and came as an amendment must dictate that a narrow construction upon the exception should be placed as indeed the debates in the Constituent Assembly also seem to, indicate.
The words 'any law ' and 'any requirement ' cannot be given wide and liberal construction.
These words are controlled by the words .
residence within the State or Union Territory ' which words mean what they say neither more or less.
[121 D G] 116