SCA/2699/1985 1/36 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 2699 of 1985 For Approval and Signature: HONOURABLE MS.JUSTICE H.N.DEVANI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= P B ANTANI - Petitioner(s) Versus UNION OF INDIA & 4 - Respondent(s) ========================================================= Appearance : MR PV HATHI for Petitioner MR YN RAVANI for Respondents : 1 - 2 - 3. MS REETA CHANDARANA, AGP for Respondent(s) : 4 - 5 ========================================================= CORAM : HONOURABLE MS.JUSTICE H.N.DEVANI Date : 18/08/2006 ORAL JUDGMENT 1. By this petition under Article 226 of the Constitution of India the petitioner interalia SCA/2699/1985 2/36 JUDGMENT challenges the action of the respondents of not renewing his agency under the Public Provident Fund Scheme, 1968 (hereinafter referred to as the “Scheme”). The petitioner also challenges the action of the respondents in seeking to recover the commission amount paid to the petitioner on the deposits made in the accounts introduced by the petitioner under the Scheme. 2. The facts of the case as emerging from the record are as follows: 2.1 The petitioner is a full time career agent for the Small Savings, Life Insurance Corporation of India, Unit Trust of India as well as for the Public Provident Fund Scheme. Pursuant to an application dated 8th December, 1969 made by the petitioner, the Regional Director, National Savings, vide letter dated 19th December, 1969 informed the petitioner that he was selected as an ‘Authorised Agent’ of the Government of India in Gujarat State for canvassing for accounts and introducing subscribers under the Scheme subject to the terms and conditions stated therein, and if the said terms and conditions were acceptable to the petitioner he may return the form of acceptance of agency duly signed and witnessed. SCA/2699/1985 3/36 JUDGMENT 2.2 By a letter dated 23rd December, 1969, the petitioner expressed his acceptance of the terms and conditions of the Authorised Agents (Public Provident Fund) Agency Scheme. Consequently, under a Certificate of Agency dated 26th December, 1969 the petitioner was appointed as an Authorised Agent under the Scheme to canvass for and introduce accounts under the Scheme. The said certificate was valid till 31st December, 1970. 2.3 The aforesaid certificate of Agency being valid for a period of one year, initially, the same was required to be renewed every year. However with effect from 1975, renewal was to be effected at the end of every third year. It is the case of the petitioner that in December every year, the respondent No.3-Regional Director, National Savings Organisation, used to send the prescribed forms for renewal of agency under the Scheme for being filled in and sent by the petitioner for renewal of agency. That on completion of such formality, the petitioner used to receive his certificate of agency duly renewed for the next year. The renewal was so effected from year to year and lastly renewal was effected in December 1974 for a period of three years i.e. till 31st December 1977. 2.4 It appears that subsequently on account of increase in the number of agents, the SCA/2699/1985 4/36 JUDGMENT procedure of sending prescribed forms to the agents was abandoned and agents were required to apply for renewal of agency before three weeks of the expiry of their agency. It is the case of the petitioner that as he did not receive the prescribed form for renewal of agency as was the usual practice, he prepared applications for renewal of agency on similar lines and sent the same along with that of his father Shri B.U. Antani to the respondent No.3 along with the Certificates of Authority issued in their favour. Pursuant to the said application, renewal was to be effected for a period of three years, i.e., for the period from 1st January 1978 to 31st December 1980. 2.5 It is the case of the petitioner that after forwarding the aforesaid application, the petitioner under the belief that the renewal of his agency was a matter of formality, continued to book business as an agent under the Scheme and was also paid commission on the business booked by him. However, as the Certificate of Authority, duly renewed, were not received back, the petitioner addressed a telegram dated 15th December 1980 to the respondent No.3 in the following terms: “SURPRISED RENEWED AGENCY OF P B ANTANI NO.GUJ/BH/PPF/I B U ANTANI GUJ/BH/PPF/12 NOT RECEIVED NO OTHER AGENCY RENEWAL COMMUNICATION RECEIVED SINCE LONG FROM YOU SALE COMMISSION SCA/2699/1985 5/36 JUDGMENT ALSO NOT RECEIVED SINCE EXPEDITE SENDING UPTO DATE RENEWED LONG AGENCIES AND ALL COMMISSION ARREARS” 2.6 In reply to the aforesaid telegram, the respondent No.3, vide letter dated 17th March, 1981 informed the petitioner that they have not received any application from him for renewal of P.P.F. Agency. The petitioner was asked to let them know the full details thereof and was requested to send the Certificate of Authority for renewal along with the prescribed form enclosed therewith, through the District Savings Officer, Bhavnagar. 2.7 The petitioner, thereafter, made an application for renewal of Agency on 26th March 1981, wherein it was stated that the Certificate of Authority which was to expire in 1977, was sent for renewal but was not received so far in spite of reminders, telegram etc.; and submitted the said application to the District Savings Officer, Bhavnagar. The District Savings Officer, forwarded the same to the respondent No.3 along with a communication dated 28th March, 1981. 2.8 By a communication dated 27/29th April, 1981 addressed to the petitioner and his father, SCA/2699/1985 6/36 JUDGMENT the respondent No.3 informed them that they had not received original Certificate of Authority with their applications dated 26th March, 1981. The petitioner and his father were further informed that they had stated that they had sent their Certificates of Authority to the said office in 1977; however, his office had not received any Certificate of Authority from them. 2.9 In reply to the aforesaid communication, the petitioner vide a letter dated 20th July, 1981 addressed to the respondent No.3, stated that as he does not maintain any inward outward register, he is not in a position to state the exact number and date under which the original Certificate of Authority were sent for renewal in 1977; that the original Certificates of Authority were sent with a request to send application form as they were not received from his office before December 1977; that pursuant to disputes with the Income-tax department the petitioner had to file appeal; that on account of I.T. appeal tension, etc. he could not send reminder to his office and was through out under the impression that the agencies stand renewed after sending to his office some-where in December 1977; that only when the payment of commission was stopped from August 1978, the petitioner paid a visit to the office of the respondent No.3 when they could not meet personally. SCA/2699/1985 7/36 JUDGMENT 2.10 By a communication dated 25th April, 1983, the petitioner forwarded a detailed note on the proposal for renewal of agency under the Scheme beyond 31.12.1977, with a request that on the facts emerging from the said note, arrangement may be made for early renewal of the relative certificates of Authority retrospectively from 31st December, 1977 and settlement of outstanding commission claims. It requires to be noted that in the said note it is interalia stated that though the original Certificates of Authority had not been received for quite some time, the petitioner had presumed that the same was on account of normal delays and that renewal of the authority being a periodical ritual was a foregone conclusion; that commission claims for both the agencies were admitted by the Regional Director till the end of July 1978 and it was only when the commission claims were withheld from August 1978 that the petitioner paid a personal visit to the Regional Director that it was learnt that the same was because the agency certificates had remained un-renewed, although they had not received any written communication from the said authority to that effect. That since the matter remained unattended at the Regional Director’s Office, presumably under heavy pressure of work, the petitioner sent a telegram to the said office on 15.12.1980. SCA/2699/1985 8/36 JUDGMENT 2.11 It appears that there was no response to the aforesaid letter of the petitioner, hence, the petitioner addressed a letter dated 20th September, 1983 to the respondent No.3 reiterating his request for early renewal of the relative certificates of authority retrospectively from 31st December, 1977 and settlement of commission claims outstanding since August-1978. 2.12 In reply to the aforesaid letter, the respondent No.3 vide communication dated 24/26th September, 1983 informed the petitioner that the matter is pending with the National Savings Commissioner, Nagpur; that they have reminded the said authority again and on hearing from him, further communication will follow. Vide a communication dated 15/16th November 1983 the respondent No.3 sent a reminder to the respondent No.1 and endorsed a copy to the petitioner. 2.13 A year thereafter, the petitioner vide letter dated 18th September 1984, requested the respondent No.3 to remind the National Savings Commissioner once again. 2.14 In reply to the aforesaid letter the respondent No.3 vide the impugned communication dated 6/14th December, 1984, SCA/2699/1985 9/36 JUDGMENT informed the petitioner that the National Savings Commissioner, Nagpur has now informed that the case has been considered carefully and it has been decided that the petitioner’s P.P.F. Agency issued Certificate of Authority No.GUJ/BH/PPF/1 dated 26.12.69 cannot be renewed with retrospective effect. As such the petitioner’s Agency stands terminated with effect from 1.1.1978. It is also stated that it has further been decided by the National Savings Commissioner that no commission shall be payable to the petitioner for the period during which the agency was not valid due to failure in getting the agency renewed in time. The petitioner was also called upon to send the amount of Rs.16,800.25 paid to him by way of P.P.F. Commission from 1.1.1978 to 1.1.1980 by demand draft in favour of respondent No.3. 2.15 Again, by a communication/demand notice dated 5th February, 1985, the petitioner was called upon to repay the aforesaid amount. 2.16 Being aggrieved by the aforesaid communications/orders dated 6/14th December, 1984 and 5th February, 1985 the petitioner has challenged the same by invoking the writ jurisdiction of this Court. 3. Heard Mr. P.V. Hathi, learned Advocate for the petitioner, Mr.Y.N. Ravani, learned Additional SCA/2699/1985 10/36 JUDGMENT Standing Counsel for the Central Government for the respondents No.1 to 3 and Mrs. Reeta Chandarana, learned Assistant Government Pleader for the respondents No.4 and 5. 4. Learned Advocate, Mr. Hathi submitted that the impugned orders were not in consonance with the provisions of the Scheme and as such were illegal and arbitrary. Referring to the impugned order dated 6/14th December, 1984 it was submitted that a bare reading of the said order makes it clear that by virtue of the said order the existing agency of the petitioner has been terminated with retrospective effect. It was submitted that the renewal of agency of the petitioner as PPF Agent could not have been refused as under the terms and conditions of such agency the Government was bound to renew the agency there being implied condition that as long as the performance of the agent remains satisfactory, such renewal of agency would be a mere formality. Referring to the terms and conditions of Agency set out in the appointment order dated 19th December, 1969, with emphasis on clause (xi) thereof, it was submitted that the said terms and conditions envisage the termination of appointment before the agreed period only if the agent is found guilty of violation of the terms and conditions of his appointment. The learned Advocate for the petitioner also referred to SCA/2699/1985 11/36 JUDGMENT the Authorised Agents (Public Provident Fund) Scheme Procedure for Agency, and more particularly to the last paragraph thereof which provides that “If the performance of an agent is not satisfactory of which the Regional Director, National Savings shall be the sole judge, the agency is liable to be terminated” to submit that in view of the aforesaid provisions, renewal of agency can be refused on the sole ground that the performance of the applicant was unsatisfactory and on no other grounds. It was submitted that the termination of the petitioner’s agency by the impugned order is on grounds extraneous to the very scheme under which the agency was granted and as such is bad in law, as being de hors the Scheme. 4.1 Drawing attention to clauses 14 and 15 of the “Authorised Agents (P.P.F.) Scheme, Terms and Conditions Of Agency For Canvassing Public Provident Fund” it was pointed out that the power to terminate the appointment of an agent was vested in the appointing authority i.e., the respondent No.3, Regional Director of National Savings. It was contended that vide the impugned communication, the In-charge Regional Director had merely informed the petitioner of the decision of the higher authority, namely the National Savings Commissioner, Nagpur. That broadly speaking there was no order of the appointing authority SCA/2699/1985 12/36 JUDGMENT terminating the petitioner’s agency. It was submitted that the Regional Director, National Savings was the Appointing Authority and it was only the said authority who was empowered to terminate the agency, hence, the termination of the petitioner’s agency vide the impugned order, which was a decision of the National Savings Commissioner was without authority of law. It was also submitted that there was no occasion for the respondents to terminate the agency of the petitioner; which even according to them continued till 1980. It was pointed out that though the agency had been renewed upto December, 1977 the respondents vide their action of paying commission in respect of bookings made by the petitioner subsequent thereto, had recognized the petitioner as an agent till January 1980. 4.2 Learned Advocate for the petitioner further submitted that the petitioner had duly made an application for renewal of agency in December 1977 and had sent the same by post; however, the respondents have denied receipt of the same. It was submitted that the denial of receipt of application was a bald statement, which cannot be believed considering the conduct of the respondents, in that, even while filing their counter to the petition, the respondents had not placed the telegram sent by the petitioner which was received by them on 15th December, 1980 on the record and SCA/2699/1985 13/36 JUDGMENT that it was only when they were called upon to do so in the present proceeding that the same was produced. It was contended that the respondents through out had not produced the best possible evidence. 4.3 It was next contended that the action of the respondents was required to be declared as void and ineffective as the same was barred by the law of limitation for the reason that the respondent No.3, who was the competent authority, regularly paid commission to the petitioner for the business booked by him from 1st January 1978 till January 1980, thereby creating an impression that the petitioner’s agency was renewed and continued by the department. It was submitted that relying upon such representation on the part of the respondents, the petitioner had continued to work as an authorized agent. Therefore, the petitioner could not have been told four years thereafter, on 6/14th December, 1984, that his agency cannot be renewed. It was contended that the said action was taken beyond reasonable time. 4.4 Referring to the correspondence that had ensued between the parties, it was submitted that at every stage the authority had created an impression that the matter of renewal of the petitioner’s agency was under consideration. However, thereafter, all of a SCA/2699/1985 14/36 JUDGMENT sudden, without giving the petitioner any opportunity of representing his case, by virtue of the impugned order the petitioner’s agency was terminated with retrospective effect from 1st January 1978. Hence, the said action of the respondents was against the principles of natural justice as no opportunity was given to the petitioner before adverse decision was taken, which resulted into innumerable civil consequences. 4.5 Learned Advocate for the petitioner submitted that the Public Provident Fund Scheme, 1968 is a statutory scheme framed under the provisions of the Public Provident Fund Act, 1968. It was contended that the Scheme being a statutory scheme, the relationship between the petitioner and the respondents did not arise out of a mere contract. 4.6 It was submitted that the action of the respondents was barred by the principle of promissory estoppel, in that, the petitioner was regularly paid commission for the business booked by him from 1st January, 1978 till January, 1980 by the respondent No.3 who was the competent authority, thereby creating an impression that the petitioner’s agency was renewed and continued by the department. That, relying on such impression the petitioner had continued to work as an authorized agent, hence, the respondents cannot now be permitted SCA/2699/1985 15/36 JUDGMENT to turn around and say that the petitioner was not authorized to work for the said period and seek to recover the commission paid to the petitioner. 4.7 It was submitted that the impugned order was unreasonable and unjustified inasmuch as the petitioner would have to suffer the following consequences: (i) The petitioner cannot act as an authorized agent of the National Savings Scheme also, in view of the fact that he has ceased to be a PPF Agent. (ii) The petitioner will not be paid commission at 1% payable to him on all PPF accounts opened through his agency from 1969 to January 1980, which commission was payable to him till those accounts subsisted under the Scheme. (iii) The petitioner cannot now make nomination of his successor which provision is now introduced in 1987 which facility will be available to the petitioner on declaration that the impugned order is void and ineffective. SCA/2699/1985 16/36 JUDGMENT (iv) The petitioner is denied the incentive prizes given by the State Government. 4.8 In support of his contentions the learned Advocate for the petitioner placed reliance on the following decisions: (i) The decision of this Court in the case of Ambalal Nanalal Patel vs. State Government, 1996 (3) GCD 48(Guj) was cited for the proposition that an order at the behest of or under the order of any superior authority is no order in the eyes of law. It was submitted that in the instant case the impugned order had been made by the respondent No.3 under the order of the superior authority, i.e., the National Savings Commissioner, hence, the same was no order in the eyes of law. (ii) The decision of this Court in the case of Rajkot Municipal Corporation v. Nirambhai Danabhai, 2001 (3) GLH (UJ) 12 was cited for the proposition that where a statutory duty is to be performed by a duly appointed designated office of certain rank, such statutory duties are to be performed by such officer alone. It was contended SCA/2699/1985 17/36 JUDGMENT that in the instant case the statutory duty of termination of agency was vested in the respondent No.3, whereas the impugned order of terminating the agency was passed at the instance of the higher officer, viz. the National Savings Commissioner, hence, considering the ratio of the aforesaid decision, such exercise of powers by an officer not statutorily authorized to do so was unlawful. (iii) The decision of the Apex Court in the case of Bank of India v. O.P. Swarnakar, (2003) 2 SCC 721 was cited wherein the Apex Court has in the facts of the said case held that it was not possible to accept the contention that as the writ petitions involved enforcement of contract qua contract, they were not maintainable. The Court noted that the writ petitioners had filed writ petitions, inter alia, questioning the validity of the SBI Voluntary Retirement Scheme, hence the questions raised by them could be raised in a proceeding under Article 226 of the Constitution of India. (iv) Reliance was placed upon the decision of the Apex Court in the case of LIC and another v. Consumer Education & SCA/2699/1985 18/36 JUDGMENT Research Centre and others, (1995) 5 SCC 482 wherein it has been held that in the sphere of contractual relations the State, its instrumentality, public authorities whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner that is fair, just and equitable. That actions of such authorities are amenable to judicial review and the validity of such action would be tested on the anvil of Article 14. It was further held that if it shown that the exercise of power is arbitrary, unjust and unfair, it should be no answer for the State and such authorities to say that their actions are in the field of private law and they are free to prescribe any conditions and limitations in their actions as private citizens, simpliciter do in the filed of private law. Its action must be based on some rational and relevant principles. (v) The decision in the case of Kasinka Trading v. Union of India, (1995)1 SCC 274 was cited wherein it has been held that the basis of the doctrine of promissory estoppel is that where any party has by his word or conduct made to the other party an unequivocal SCA/2699/1985 19/36 JUDGMENT promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance or promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties. 4.9 The learned Advocate for the petitioner took the Court through the entire written submissions submitted by the petitioner, however, with a view to avoid prolixity only the principal contentions are noted hereinabove. 4.10 It may be pertinent to note that by way of amendment, the petitioner has also challenged the introduction of system of triplicate challans for P.P.F. deposits introduced from 1983, however, the same being a totally different cause of action, the petitioner was not permitted to challenge the same in the SCA/2699/1985 20/36 JUDGMENT present petition. 4.11 Lastly, placing reliance upon the decision of this Court in the case of B.U. Antani v. Union of India rendered on 30th August, 1996 in Special Civil Application No.2700 of 1985, wherein it was held that though the agency could not be validly renewed, the deceased petitioner had in fact actually worked for the said period and when amounts collected by him during the said period came to be accepted under the Scheme, it would be unjustifiable, if, now the heirs of the deceased petitioner are called upon to pay back the amount in question; it was submitted that in any case the respondents cannot be permitted to recover the amount paid to the petitioner towards commission for the period January 1978 to January 1980. It may be noted that the said writ petition was a cognate petition, filed by the father of the petitioner in an identical set of facts. 5. Mr. Ravani, learned Additional Standing Counsel for the respondents vehemently opposed the petition. Mr. Ravani refuted the contentions