7. At this stage it would be convenient to examine the language of Clause 10, as the point to be determined would depend upon the construction to be placed upon it. Clause 10 is as follows:
 "It will be competent for the auctioning officer, i.e., in the Districts the Collector, and in the cities of Hyderabad and Secunderabad and Hyderabad District, the Deputy Commissioner of Excise, to approve the third call. However, the Excise Commissioner has the power within one month from the date of the approval of the auction to suspend or revoke the approval of the auction of any group or shops whether the auctionee has been given possession or not and can order its re-auction or make such other arrangements. In this particular, the decision of the Excise Commissioner shall be final. No appeal shall tie against this order of the Excise Commissioner. If the Excise Commissioner does not pass orders suspending or cancelling the approval of the auction within one month of the approval of the auction, the auction shall become final."
 8. It is contended by the learned advocate for the appellant on the strength, particularly of the last portion, of this clause that the approval of the Deputy Commissioner of the third bid is provisional till the period of one month prescribed under that clause for the cancellation or suspension of the contract by the Excise Commissioner is over, and as such a person can withdraw his offer till the auction has become final.


Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962

Learned Government Pleader, on the other hand, submits that the clause relating to the cancellation or suspension by the Excise Commissioner is a condition subsequent and has nothing to do with and does not affect the contract which has become final between the parties. He also refers to the other clauses of the proclamation of sales viz., Clauses 15 and 16, where under the person whose third bid has been accepted has to forthwith deposit the earnest money within the period prescribed failing which, under Clause 16, if the advance money or surety bond or solvency certificate is not paid or filed within the prescribed period, the earnest money and other amounts deposited shall be forfeited and the lease shall be put up for auction again or some other arrangement made, in which event any loss incurred by the Government is liable to be recovered from the person in whose favour the auction has been concluded. But on the other hand, by reason of reauction or other arrangement, if there is any increase, he will not be entitled to that increase. Learned Government Pleader contends that these clauses indicate definitely that when once the third bid is approved, there is a concluded contract and the bidder cannot resile from it. In our view, the consideration of these rival contentions would depend upon the principles governing offer and acceptance and the point of time at which the contract is said to have been concluded and binding between the parties.


9. It is a well-established principle of law that only when an offer is accepted that the contract is concluded and binds the parties. It is equally well settled that before an offer is accepted, the offerer can withdraw his offer, but if the acceptance is conditional or is not final, men there is no concluded contract. Section 5 of the Indian Contract Act states that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards, Similarly, an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.
 Generally, in a sale by auction, the auctioneer is the agent of the person whose property or rights are being auctioned. The agent invites offers and every bid is an offer and it is only binding on either side when it is assented to, that is, when the hammer falls at the third bid. Sometimes the owner reserves a right as part of the conditions of auction and even though the bid is the highest it need not necessarily conclude the agreement.


Before the final acceptance of the bid or before the hammer falls, it is always open to the bidder to withdraw his bid and the condition to the contrary in auction that the bid shall not be retracted has been held to be invalid. Following the English rule, in Agra Bank v. Hamlin, 1LR 14 Mad. 235 it was held by a Bench consisting of Muttusami Ayyar and Best, JJ. that it was competent for a bidder at a Court auction to withdraw his bid. Two estates by name 'Chembali' and 'Burnside' being the properties of the judgment debtor, were put up for sale by Court auction. At the sale, one person acting on behalf of the plaintiff made a bid for both the properties, but later intimated to the Nazir that he wished to withdraw these bids and also informed the court the next day of his wish to withdraw. A reference was made to the High Court as to whether it was permissible for bidders at court sales to withdraw their bids.
 Muttusami Ayyar, J. answered the question in the affirmative and pointed out that until the lot is knocked down and the sate is concluded, the court may, in its discretion, adjourn the sale. He observed:
 "It is clear then that until the lot is knocked down, the court has a loeus penitentiae and it follows, in the absence of some specific provision to the contrary, that bidders are intended to be placed in a similar position."
 Best, J. concurred and said:
 "An offer to buy or sell may be retracted at any time before it is unconditionally and completely accepted, by words or conduct . . . . "


Later Leach, C. J., delivering the judgment of the bench in Somasundaram Pillai v. provincial Government of Madras, AIR 1947 Mad 366, referred 1o the dictum of Muttusami Ayyar, J. -- Particularly to the observations, "It appears that, in the case under reference, it was not one of the conditions of sale that bidders were not at liberty to with draw their bids" and said at page 368, that they do noy regard this statement as a definite acceptance of the proposition that where there is such a condition a bid cannot be withdrawn, and expressed dissent if Muttusami Ayyar intended to hold so.


In Somasundaram Pillai's case, AIR 1947 Mad 365, the appellant was the highest bidder for four shops and his bids were provisionally accepted by the Sub-Collector, but the Collector accepted only two of them. He refused to confirm the bids made by the appellant for the other two licences and directed that the sale should be continued under the conditions of sale. Pursuant to this the Tansn-dar informed the appellant that his bids for the two shops had not been accepted and that the Collector had ordered that the auction sale should be continued from the bids already made by him. The appellant, however, presented a petition to the Tahsildar on the day fixed for the continuance of the auction, in which he stated that he did not require the two shops and asked that the amount of his deposit should be returned to him. This petition was rejected forthwith and subsequently his pleader wrote on his behalf pointing out that his bids had not been accepted by the Government and that he was entitled to withdraw them. The Collector, after referring to the rule that bids could not be withdrawn, rejected this contention and accepted his bid, but the appellant refused to take out licences, which resulted in a loss to the Government of Rupees 1148/-.


The Advocate General on behalf of the State conceded that the publication of the conditions of sale did not amount to a notification under Section 69 of the Madras Abkari Act and said that they were merely rules drawn up by the Board for the conduct of sales of liquor licences and had no statutory force. It was consequently held that the lower court was wrong in holding that the conditions of sale had the force of law. The learned Judges referred to the case in Joravarmull Champalal v. Jeygopal das Ghanshamdas, ILR 45 Mad 799 : (AIR 1922 Mad 488 and the cases considered by that Bench in Payne v. Cave, (1789) 3 TR 148 : 100 ER 502 and Cooke v. Oxley, (1790) 3 TR 653: 100 ER 785, approving the dictum in both the cases, particularly of Lord Kenyon in the latter case that nothing could be clearer than that at the time of entering into the contract, the engagement was all on one side and that the other party was not bound and therefore it was a nudum pactum.
 Leach, C. J., observed at page 367 as follows: "To have an enforceable contract there must be an offer and an unconditional acceptance. A person who makes an offer has the right of withdrawing it before acceptance, in the absence of condition to the contrary supported by consideration. Does the fact that there has been a provisional acceptance, make any difference? We can see no reason why it should. A provisional acceptance cannot itself make a binding contract. There must be a definite acceptance or the fulfilment of the condition on which provisional acceptance is based."
 In the result it was decided that the appellant was entiti-


In the result it was decided that the appellant was entiti-
ed to withdraw his bids, because a prohibition against withdrawal has no force of law. This case is sought to be distinguished by the learned Government Pleader on the ground that under Rule 10, the acceptance was final and not provisional and the condition of cancellation or sus pension by the Excise Commissioner within thirty days It only a condition subsequent. In support of this argument he relied on the judgment of Safyanarayana Rao, J., sitting singly in Rajanagaram Village Co-operative Society v. Veera-
sami Mudaly, and the passage in Pollock and Mulla -- 8th Edition -- | pages 44-45. Satyanarayana Rao, J. in Rajanagaram case, tries to distin guish the Bench decision in Somasundaram Pillai's case, AIR 1947 Mad 366 on the ground that there is a difference between a provisional acceptance and a conditional ac ceptance. In the former case the officer accepting the offer provisionally has no authority to accept the bid. As such the offeror can withdraw, while in the latter case the offeror cannot withdraw. In his view Somasundaram Pillai's case, AIR 1947 Mad 36B is one where the auctioning authority had only power to accept the bid provisionally and pass it on to the Collector for his confirmation.
 At page 488 (of Mad LJ): (at pp. 324-325 of AIR) he observed:


"Under the terms of the sale    which were approved by the Board of Revenue, he could only signify a kind of provisional acceptance     whatever   that     expression   might mean; but the final and actual acceptance rested with the Collector.    The   appellant who   was  the   highest bidder   in that case did not    thereby acquire any rights under the sale as there was no concluded contract in his favour."


The learned Judge then proceeds to observe that an absolute acceptance is where the sale officer, or the auctioneer as the case may be, is given full authority to accept a bid    unconditionally   and   that   a   provisional   acceptance   means    that the auctioneer had only a right to receive the bids and    pass them on to his superior who Is the final authority to    confirm and conclude the contract, while a conditional acceptance has the effect of binding the highest bidder to the contract If finally there Is the approval or confirmation by the superior person indicated in the terms of sale. As such he cannot resile from the contract, nor is it open to him to withdraw the offer.


With great respect, we fail to appreciate this distinction. In our view, where the offer and acceptance culminating in a concluded contract are themselves subject to conditions and are not final, there is no contract at all till these conditions are fulfilled and an offer before the fulfilment of these conditions can be withdrawn. The distinction between a condition and an ordinary term of the agreement must not be confused, for, the non-performance of a term would give rise to a right to an action for the breach of the contract while the failure of a condition acts as a release of the corresponding duty. Such a condition is one where the promisor's obligation becomes effective only if some state of facts exists or if and when some future event happens. In other words, it is said to be a condition precedent. Learned editors of Pollock and Mulla's Indian Contract Act classify both these cases and another case of Chittibobu Adenna v. Garimalla, AIR 1916 Mad 75, as cases of a condition precedent where the didder could have retracted his offer before the final acceptance, as in Sundaram Pillai's case, AIR 1947 Mad 366. It was further submitted by them that the two cases, viz., Chittibobu's case, AIR 1916 Mad 75 and Rajanagaram case, 1950-2 Mad LI 436: (AIR 1351 Mad 322) were wrongly decided. In the first case, it is said that the Court misunderstood the nature of a condition subsequent. With respect to tne second case, it is observed that the acceptance is either absolute or conditional and there is no half-way house between the two. If an acceptance is conditional, the offeror can withdraw at any moment until absolute acceptance has taken place.


In that case before Salyanarayanarao, J. the terms of the auction sale were that the sale will be knocked down in favour of the highest bidder subject to the approval or the Mahasabha and the District Bank. The plaintiff had become the highest bidder in the auction and deposited the necessary price money and later on the bank took up the matter for consideration and accepied the bid, but before it could be communicated to the plaintiff, the Bank rescinded it and ordered re-sale. The question was whether there was a concluded contract. There can be little doubt that where the acceptance is conditional, as in this case, there is no concluded contract and the offreor can withdraw. A condition precedent is a condition which must happen before either party becomes bound by the contract and since there was in fact no approval, there can be no concluded contract and the Bank was justified in ordering the resale. The decision of the single bench of the Madras High Court, was, in our view, not warranted either on principle or on the authority of the Bench decisions which preceded it.
 An examination of Chittibobu's case, AIR 1916 Mad 75 would show that the decision of the Bench was based on there being a condition precedent and not a condition subsequent. A condition subsequent is one which arises only on there being a concluded contract. A condition subsequent is one, which follows the performance of the contract, and operates to defeat and annul it, upon the subsequent failure of either party to comply with the condition. It goes to the discharge of the obligations under the contract. The statement of Poilock and Mulla at pages 44-45 dealing with Chittibobu's case, AIR 1916 Mad 75 which has been relied upon by the learned Government pleader, is in the following terms:


". . . . It is a resolutive condition, as distinct from a suspensive condition or condition precedent, which prevents the existence of any obligation until the condition is satisfied. Yet the Court clearly decided that there was no binding agreement at any rate until V, the special agent, approved. In other words, their Lordships held that the condition was a condition precedent, for had the condition been a condition subsequent, there would have been a binding contract the moment D's bid was accepted, name-to be defeated by V's failure to approve. Appropriate wording to impose a condition subsequent would have been to the effect that the bid was accepted, but if V should not approve the contract was to be at an end."


10. Even at the risk of repetition, it is necessary to point out that the important thing to note in a condition subsequent is that the promisor's duty is perfect in its inception, but later events, according to express or unexpressed terms of the agreement, may absolve him from performance wholly or in part.
 11. Applying these principles to the facts of this case, the question is whether there has been a concluded contract and whether the Excise Commissioner's power to suspend or cancel the contract within one month is a condition subsequent or a condition precedent. The answer to this question would necessarily depend upon the view we take of the terms of Clause 10. It is not denied by the learned advocates that this condition is not a statutory condition. There is nothing in the Abkari Act which reserves a power such as that in Clause 10 to the Excise Commissioner. The learned Government pleader had at one stage referred us to Section 4 in his attempt to spell out that the condition in Clause 10 is a statutory condition, but on examination of Section 4, he was unable to sustain it. In our view, his initial contention is not justified on a reading of the section which is as follows:
 (4) Subject to such conditions as may deem fit, the Government may grant, for a fixed period to any person at any place, (1) a lease jointly or severally for the supply, manu facture or sale of any inebriating or intoxicating drug or mohwa flower.
 Explanation: A lease shall not take effect until the Collector or any other competent officer has issued a licence in the prescribed form.
 (2) The Government may confer on any officer tne power mentioned in Sub-section (1).


What this section is dealing with is a condition relating to the grant of a lease to any person at any place and for a fixed period, which are in fact the terms of the contract whereby the lease is granted and not to reservation of powers relating to the very grant of the fease which relate to the promisee's and promisor's obligations. Clause 10 must, therefore, be considered as relating to the formalities requisite for the conclusion of the contract and must be governed by the general law of contracts. A perusal of Clause 10 would make it evident that the auction is not final until the expiration of one month, because within that period, the Excise Commissioner can suspend or revoke the auction. The Deputy Excise Commissioner has no doubt the power to accept the bid, but that bid is not final till after the expiry of one month, during which period the Excise Commissioner has the power of revocation. We are unable to see any difference between acceptance of a bid subject to approval and the acceptance of the bid subject to its rejection or suspension. The one is in the positive form and the other is in the negative form in either case, we are not persuaded by the argument of the teamed Government pleader that it is a condition subsequent, nor can the last sentence of the passage tram Mulla cited above, be of any assistance to him, because, there what is envisaged is the condition following the conclusion of the contract. The language of Rule 10 throughout meticulously used the words approval of the auction and the rejection by the Excise Commissioner within the period specified of the approval of the auction, The clue to the intention of that clause is, in our view, found in the last stipulation where thee auction is said to become final only after the expiration of one month, if during that period the Excise Commissioner has not cancelled or suspended the auction. If the approval of the auction is not binding on the Government, within that period, it is certainly not binding


approval of the auction is not binding on the Government, within that period, it is certainly not binding on the bidder also.


In the language of Pollock and Mulla, there can be I no halfway house between the two, nor can it be said that the offer is unconditionally and completely accepted. The other conditions relating to the deposit of money, payment of advance rentals, this execution of security bond etc. immediately alter the bid is approved by the Deputy Excise Commissioner are tentative and subject to the auction becoming final, if the Excise Commissioner does not finally approve the approval of the auction and directs suspension or revocation, it cannot be contended that the amounts paid are not returnable. The payment in such circumstances of these amounts immediately on the Bid being approved by the Deputy Excise Commissioner does not affect the legal position that the auction is only final on the expiry of one month. That the auction is not final is also evident from the fact that even where the successful bidder is put in possession, he can be ousted, if the auction is not finally approved, and it is reauctioned or suspended. Such a unilateral reservation of power makes the acceptance a provisional one. In this view, the appellant can certainly withdraw his offer before the expiration of that period. The Excise Commissioner had in fact cancelled the toddy auctions in exercise of the powers vested in him under Clause 10 and had ordered their reauction, which was the reason for the appellant' to withdraw his hid before the expiration of one month, as he considered that the auction on the part of the Excise Commissioner had prejudiced his interests.
 12. The only other question which has been strenuously urged by the [earned Government Pleader is of limitation based on Section 41 of the Abkari Act, which is in the following terms:--


41 (1) No action for damages shall he entertained by a Civil Court against Government or against any Abkari officer for any act done or ordered to he done in good faith and in accordance with this Act (2) All actions against any Abkarj Officer and all actions which may be lawfully brought against Government or against any Abkari Officer on account of any act or thing alleged to have been done in accordance with this Act, shall not be entertained after six months from the date of doing the act or the thing.
 (3) If, in a suit for compensation for damages it is proved that adequate compensation was being tendered before the institution of the suit, it shall be lawful for the Court in its judgment to disallow costs to the plaintiff and lay on him the costs of the defendant.


It would appear that Sub-section (1) bars suits for damages against Government or against Abkari officers for acts done in good faith, while Sub-section (2) prescribes a period of limitation of six months for all actions which may be lawfully brought against Government or against Abkari officers. Learned advocate for the appellant, shri Raghuvir, sought to contend that this is confined to suits for damages, but later recognised the force of the contention of the learned Government Pleader that all suits which can be lawfully brought, whether for damages or otherwise, are governed by the limitation prescribed therein. There is in our view no ' difficulty in the applicability of this section to the present suit inasmuch as it arises out of the action of the Excise Commissioner and the Excise Department in claiming loss incurred by the Government as a result of the purported breach of contract by the appellant. In order to determine whether the suit is in time and whether the period spent in agitating the matter before the Minister for Excise could be taken into account in computing the period of six months, it would be protitable to note the several dates relating to this transaction.


As we have already stated, on 24-8-1954 the bid of the appellant was accepted by the Deputy Commissioner. On 4-9-1954 the Excise Commissioner revoked the sendhi auctions and directed their reauction. On 7-9-1954 the appellant filed a petition for revision of the rentals, failing which he stated that he was withdrawing his offer. On 15-3-1954 the Excise Commissioner rejected the petition and a demand for payment was made on 13-10-1954 which reached the appellant on 17-11-1954. The alleged demand itself is not before us, but these dates and facts are not disputed. On the same date, the appellant filed a petition before the Minister for excise and the petition was dismissed by the Minister on 23-8-1956. On 16-11-1955, the suit was filed. If the period of six months is to be reckoned as from the date of the rejection of the petition on 15-9-1954. or even for that matter if it is t be reckoned from the date of the receipt of the demand viz., 17-11-1954, the suit is beyond six months. But if the period spent in agitating the matter before the Minister is to be taken into account, and in this case it has been noticed that the Minister has specifically given three months.' time to file a suit and obtain stay orders from the Civil Court -- then the suit will be within six months whether from the date of the, rejection of the petition, or the date of the receipt of the demand for payment.


It may, however, be stated that the relief sought for in the suit is a perpetual injunction and recovery of the deposit. In so far as the first relief is concerned, the appellant's cause of action would be a continuing one as long as the threat to recover the amount continues. It is admitted that no steps have so far been taken to recover this amount by the revenue officers as required by Sections 116 to 123 of the Land Revenue Act. The only step taken in pursuance of the demand for payment is that the Excise Superintendent of Mahboobnagar has addressed a letter to the Tahsildar intimating to him that there is demand of the Excise Department against the appellant. But the Tahsildar has to give a notice as required by Section 118 of the Land Revenue Act, which has not been done. In any case, the appellant has clearly averred in paragraph 16 of his plaint that the cause of action arose on 23-8-1955 when the Honourable Minister for Revenue directed him to obtain necessary orders from a civil court. The question is whether this could be taken as the point of time from which the period of six months limitation could be reckoned.


The lower Court allowed the period spent in agitating the matter before the Minister under the Suits Against Government Act V of 1320 F. This Act has, however, been repealed by Act V of 1955 on 29-4-1955 and consequently the contention of the learned Government Pleader, Shri N. S. Raghavan is that when the suit was not filed in accordance with that Act, the provisions of that Act would not apply. There is force in this contention nor could it be said that this was a pending proceeding, because under that Act, the application to file a suit against the Government duly verified as required by the Code of Civil Procedure should be filed before the Legal Adviser to the Government and it such an application had been filed, then certainly Sub-clause (2) of Section 2 of the repealing Act V of 1955 saving pending proceedings would come to the rescue of the appellant, but an application to a Minister is not an application under the Suits Against Government Act. In the circumstances, the judgment of the lower court on this point cannot be sustained.


It is then contended by the learned advocate for the appellant that the application before the Minister would be deemed to have been disposed of under the powers vested in the Government in accordance with the rules framed under Clause (0) of Sub-section (2) of Section 3 of the Abkari Act which came into force on the 14th April 1955. It is further contended that though the Minister had powers of revision as from the 14th of April, 1955, he could can for the record and rectify the orders passed before that date. In support of this contention, he refers to the case of Indira Sohanlal v. Custodian of Evacuee Property, (S) . But an examination of the facts of that case would show that this contention cannot be sustained. It appears that originally under Section 5-B of the East Punjab Act 14 of 1947, any original order passed by the Custodian or Additional Custodian is not subject to appeal or revision and it was specifically declared to be final and conclusive. Under Section 30(1) (b) of the Central Ordinance No. 12 of 1949, though an appeal to the High Court was provided, there was no provision for revision against an order of the Custodian or Addl. Custodian or authorised Deputy Custodian. Subsequently, under Section 24 of the Central Ordinance No. 27 of 1949, it was, provided inter alia that any person aggrieved by an order made under Section 38 which corresponds to the previous Section 5-A of the East Punjab Act 14 of 1947, may prefer an appeal in such manner and within such time as may be prescribed to the Custodian General where the original order has been passed by the Custodian, Addl. Custodian or an Authorised Deputy Custodian.


Section 27 provided for revisional powers of the custodian General, but it was specifically confined to appellate orders and there was no power given thereunder for revision by the Custodian General of an ordinal order passed by me Custodian. This however, was changed under the Central Act 31 of 1950 which repealed and replaced the Central Ordinance 27 of 1949. Though the provision for appeal was virtually the same as under Section 24 the Act provided by Section 27 for general revisional powers of the Custodian General to call tor and examine the records either on his own motion or on an application made to him in this behalf for the purposes of satisfying himself as to the legality or propriety of any such order and to pass such order in relation thereto as 1m thinks fit. An application for confirmation was pending on the date of this Ordinance and the confirmation was only made on 20-3-1952. It was this confirmation order that was revised by the Custodian General on 20-5-1953, which order was disputed before the Supreme Court. It cannot, therefore, be said that this case is an authority for the proposition that acts prior to the conferment of the revisional powers could be revised on the subsequent conferment of such powers.


13. It would, however, appear to us on a reading or Section 3(1) (a) of the Abkari Act which empowers the Government to appoint a Commissioner and other officers of the Abkari Department, that the Commissioner who is appointed under the Act is to function under the control and subject to the orders of the Government. In other words, his acts are to be controlled and supervised by the Government. In this view, the appellant could certainly move the Government to revise the order of the Commissioner disallowing his application withdrawing his offer. Consequently, tne appellant would be entitled to file a suit within six months from that order of the Government which confirmed the order of the Commissioner and directed collection of the amount of loss from the appellant alleged to have been incurred by the Government. Section 41 also envisages suits against acts of the Government. In this view the suit is within time. In any view the claim for refund of earnest money deposited is not governed by Section 41 of the Abkari Act. The general law of limitation will be applicable thereto under which a suit could be brought within 3 years. We accordingly confirm the finding of the lower court holding the suit to be within time, but for different reasons.
 14. In the result, the appeal is allowed with costs and the suit of the appellant for perpetual injunction and for recovery of the deposit amount paid by him is decreed with costs. The amount will bear interest at 4% from the date of the suit to the date of recovery.


Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975

JUDGMENT Jayachandra Reddy, J.
 1. This Writ Petition is for the issuance of a writ of mandamus or any other writ or direction declaring the sale of the petition-schedule properties by the Andhra Pradesh State Financial Corporation, i.e., the 2nd respondent, under Section 29 of the State Financial Corporation Act, 1951 in favour of the 4th Respondent, as unconstitutional, illegal and void, and the same came up for hearing before one of us (Sambasiva Rao, J., as he then was). During the course of the arguments, the learned counsel for the petitioner questioned the constitutional validity of the Section 29 of the State Financial Corporation Act, 1951, hereinafter referred to as "the Act", and as the same has to be heard by a Division Bench, the writ petition was directed to be posted before a Bench and accordingly it has come up before us.


2. The essential facts for appreciating the contentions on behalf of the petitioner, may briefly be stated. The writ petition schedule properties consisting of both movable and immovable properties, which are necessary for the purpose of maintaining the Khandasi Sugar factory situated at Narasmhunipeta, Bobbili Taluk, belonged to Sri Venugopal Khandasari Sugars of which the 5th respondent was the Managing Partner. The 5th respondent approached the 2nd respondent for a loan of Rs. 1,50,000. It was sanctioned upon the terms and conditions and against the security mentioned in the mortgage deed executed and registered on 26-11-1963 by the 5th respondent in favour of the 2nd respondent. The loan was subsequently reduced to Rs. 1,24,000 and the same had to be repaid by instalments. On 11-2-1966 the first instalment was paid. On 23-10-1967 the petitioner wrote a letter to the 2nd respondent stating that the petition-schedule property was sold to them and that they will be responsible for the repayment of the loan amount by instalments due to the 2nd respondent. The petitioner having thus come into possession of the property become liable to repay the loan amount, but failed to pay off the arrears. In this regard and in regard to the transfer of assets by executing the necessary documents correspondence commenced from 28-11-1967 onwards the details of which will be given later. The 2nd respondent ultimately filed O.P. No. 47 of 1972 on 10-8-1972 in the Court of the District Judge, Srikakulam for the sale of the schedule properties under the provisions of Section 31 (1) (a) of the Act and for other necessary reliefs. During the pendency of this O.P. several interlocutory applications


for other necessary reliefs. During the pendency of this O.P. several interlocutory applications for appointment of a Receiver and other reliefs, were filed from time to time. Ultimately an Advocate-Receiver was appointed for the management of the properties. During the pendency of the O.P. the 2nd respondent-Corporation advertised in the Indian Express dated 28-7-1973 and in Andhra Patrika dated 30-7-1973 inviting tenders for purchase of the Khandasari Unit and among the tenders received the tenders of the 4th respondent was fund to be in order as it satisfied the necessary conditions. While that being so, the 2nd respondent filed I.A. No. 503 of 1973 with a request to advance O.P. No. 47 of 1971, and the permission to withdraw the O.P. The hearing of O.P. was advanced and on 27-8-1973, the O.P. was dismissed as withdrawn. On 28-8-1973 the 2nd respondent exercising its power under Section 29 of the Act executed a sale deed in favour of the 4th respondent.


3. In this writ petition, which is filed questioning the above said sale by the 2nd respondent to the 4th respondent, it is mainly contended that Section 29 of the Act is violative of Article 14 of the Constitution of India. This plea was not originally taken, but subsequently the petitioner was permitted to raise the same and a petition seeking for the amendment to this effect is also allowed. Sri Challa Seetharamaiah, the learned counsel for the petitioner contends before us that firstly Section 29 of the Act is violative of Article 14 of the Constitution, secondly that the 2nd respondent having initiated proceedings under Section 31 of the Act cannot have recourse to Section 29 of the Act, and thirdly that the action of the 2nd respondent taken under Section 29 is opposed to principles of natural justice. To put it in other words the sum and substance of these contentions is that Section 29 of the Act is violative of Art. 14 of the Constitution and if Section 29 is to be struck down on this score, then the action of the 2nd respondent under Section 29 in selling the Khandasai unit to the 4th respondent is illegal and void. The principal grounds of attack against the validity of Section 29 of the Act are that the special procedure thereunder is more drastic and prejudicial than the procedure contemplated under Section 31, and though both these procedures cover the same filed there are no guidelines provided as to when the procedure under Section 29 can be resorted to, thereby permitting discrimination among the industrial concerns to whom the State Financial Corporation has given financial aid. The vice of discrimination, according to the learned counsel, lies in the unguided and unbridled power of singling out some industrial concerns amongst the same class of industrial concerns for being subjected to the special procedure under Section 29 which is more drastic and arbitrary.


4. To appreciate the contention of the learned counsel it is necessary to refer to the provisions of Sections 29 and 31 of the Act. Section 29 is in the following terms :
 "29. Rights of Financial Corporation in case of default :
 (1) Where any industrial concern which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management of the industrial concern, as well as the right to transfer byway of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation.
 (2) Any transfer of property made by the Financial Corporation, in exercise of the power under sub-section (1), shall vest in the transferee all rights in or to the property transferred as if the transfer had been made by the owner of the property.
 (3) The Financial Corporation shall have the same rights and powers with respect to good manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods.


(4) Where the management of an industrial concern is taken over by the Financial Corporation or any property is transferred and realised by it under provisions of sub-section (10, all costs, charges and expenses which in the opinion of the Financial Corporation have been properly incurred by it as incidental to such management, or transfer and realisation shall be recoverable from the industrial concern and the money which is received by it from such management or transfer and realisation shall, in the absence of any contract to the contrary, be held by it in trust to the applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto.
 (5) Where the Financial Corporation takes over the management of an industrial concern under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of the concern."
 Under this section the Financial Corporation can straightway take over the management of the defaulting industrial concern as well as the right to transfer by way of lease or sale with the necessary incidental and consequential rights and liabilities. Section 31 of the Act is as follows:


"31. Special provisions for enforcement of claims by Financial Corporation : (1) Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Financial Corporation requires an industrial concern to make immediate repayment of any loan or advance under Section 30 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of Section 29 of this Act and of Section 69 of the Transfer of Property Act, 1882 any officer of the Financial Corporation, generally or specially authorized by the Board in this behalf, may apply to the District Judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs, namely :
 (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation: or


(b) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plaint or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended.
 (2) An application, under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed."


5. It is to be noted that under Section 31 also the Financial Corporation may apply to the District Judge for several reliefs mentioned therein which include the transfer of the management, the sale of the property pledged etc. Under this section also the District Judge can grant interim relief which are incidental and consequential. Section 32 of the Act lays down the procedure of the District Judge in respect of the applications under Section 31 of the Act. The several provisions under this section contemplate an adjudication of the rights and liabilities the Financial Corporation as well as the defaulting industrial concern. Sub-section (9) of Section 32 provides for an appeal to the High Court against the orders of the District Judge. It is needless to say that this procedure contemplated under Sections 31 and 32 is more or less the same as is found n the ordinary civil procedure and more beneficial to the defaulting industrial concern. Compared to this, the procedure under Section 29 does not give so much of protection to the defaulting industrial concern. The Financial Corporation can, under the circumstances mentioned in Section 29, take over the management of the defaulting industrial concern and sell the property pledged. So a plain reading of sections 29 and 31 of the Act clearly indicates that the procedures under both these sections operate in the same field and it goes without saying that the procedure under Section 29 is more drastic in the sense that the Financial Corporation can take over the management of the defaulting industrial concern and sell the property pledged without the intervention of the Court. But the real question is whether the mere existence of two remedies one more drastic than the order by itself amount to infringement of equality guaranteed under Art. 14 of the Constitution, or something more is necessary.


6. It is well settled that where a statute provides for a more drastic procedure different from the ordinary procedure without giving any guideline in any form and when both of them operate in the same field, such a provision providing for drastic procedure will be hit by Article 14 of the Constitution, as the same suffers from the vice of discrimination. In State of West Bengal v. Anwar Ali Sarkar, the Supreme Court, while considering the constitutional validity of the West Bengal Special Courts Act, observed as follows:
 "A rule of procedure laid down by law comes as much within the purview of Art. 14 as any rule of substantive law and it is necessary that all litigants, who are similarly situated, are able to avail themselves of the same procedural rights for relief and for defence with like protection and without discrimination.
 If a legislation is discriminatory and discriminates one person or class of persons against others similarly situated and denies to the former the privileges that are enjoyed by the latter, it cannot but be regarded as "hostile" in the sense that it affects injuriously the interests of that person or class."
 In Kathi Raning v. State of Saurashtra, , the Supreme Court, while considering the constitutional validity of the Saurashtra State Public Safety Measures (Third Amendment) Ordinance, 1949 pointed that the claims of equal protection under Art.. 14 are to be examined with the presumption that the state action is reasonable and justified. It is profitable to refer to some of the observations made by Mukherjea, J., in that case, His Lordships observed :


"A legislature for the purpose of dealing with the complex problems that arise out of an infinite variety of human relations, cannot but proceed upon some sort of selection or classification of persons upon whom the legislation is to operate. The consequence of such classification would undoubtedly be to differentiate the persons belonging to that class from others, but that by itself would not make the legislation obnoxious to the equal protection clause.
 Xx xx xx If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the State upon a body of administrators or officers to make selective application of law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective indicated in the statute. The discretion that is conferred on official agencies in such circumstances is not an unguided discretion, it has to be exercised in conformity with the policy, to effectuate which the direction is given and it is in relation to that objective that the propriety of the classification would have to be tested. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal protection clause. On the other hand if the statute itself does not disclose a definite policy or objective and it confers authority in another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied."
 Further in this case their Lordships indicted that the necessary guidance for the administrative body can as well be obtained or gathered form the policy and purpose of the enactment and from the objects sought to be achieved by the enactment.


7. The Supreme Court in Kedar Nath Bajoria v. State of West Bengal, , after referring to the above two decisions, observed :
 "There are cases where the legislature itself makes a complete classification of persons or things and applies to them the law which it enacts, and others where the legislature merely lays down the law to be applied to persons or things answering to a given description or exhibiting certain common characteristics, but being unable to make a precise and complete classification, leaves it to an administrative authority to make a selective application of the law to persons or things within the defined group, while laying down the standards or at least indicting in clear terms and underlying policy and purpose, in accordance with, and in fulfilment of, which the administrative authority is expected to select the persons or things to be brought under the operation of the law.
 Whether an enactment providing for special procedure for the trial of certain offences is or is not discriminatory, and violative of Art. 14 must be determined in each case as it arises, for, no general rule applicable to all cases can safely be laid down.
 In the case of such a statute it could make no difference in principle whether the discretion which is entrusted to the executive Government is to make a selection of individual cases or of offences, classes of offences or classes of cases. For, in either case, the discretion to make the selection is guided and controlled discretion and not an absolute or unfettered one and is equally liable to be abused, but as has been pointed out, if it be shown in any given case that the discretion has been exercised in disregard of the standard or contrary to the declared policy and object of the legislation, such exercise could be challenged and annulled under Art. 14 which includes within its purview both executive and legislative acts."


In Ram Krishna Dalmia v. Justice Tendolkar, , their Lordships of the Supreme Court summarized the earlier decisions and observed as follows :
 "A statute may itself indicate the persons or things to whom its provisions are intended to apply and the basis of the classification of such persons or things may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the Court.
 A statute may not make any classification of the persons or things for the purpose of applying its provision but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification.
 A statute may not make a classification of the persons or things for the purpose of applying its provisions and, may leave it to the discretion of the Government to select and classify the persons or things to whom its provisions are to apply but may at the same time lay down a policy or principle for the guidance of the exercise of discretion by the Government in the matter of such selection or classification; the Court will uphold the law as constitutional.
 A statute may not make a classification of the persons or things to whom their provisions are intended to apply and leave it to the discretion of the Government to select or classify the persons or things for applying these provisions according to the policy or the principle laid down by the statute itself for guidance of the exercise of discretion by the Government in the matter of such selection or classification."
 Their Lordships further observed :


Their Lordships further observed :
 "In the tempo of the prevailing conditions in modern society events occur which were never foreseen and it is impossible for Parliament or any legislature to anticipate all events or to provide for all eventualities and, therefore, it must leave the duty of taking the necessary action to the appropriate Government."
 8. The learned counsel for the petitioner not only referred to the above mentioned decisions but also relied on Jyoti Pershad v. Union Territory of Delhi, , and contended that where there are two procedures, one being more drastic, operating in the same field the provision providing for such a drastic procedure should be struck down, particularly when there are no guidelines. In the above mentioned decision their Lordships, after referring to Ram Krishna Dalmia v. Justice Tendolkar, pointed out that :
 "It is manifest that the above rule would not apply to cases where the legislature lays down the policy and indicates the rule or the line of action which should serve as a guidance to the authority. Where such guidance is expressed in the statutory provision conferring the power, no question of violation of Art. 14 could arise, unless it be that the rules themselves or the policy indicated lay down different rules to be applied to persons or things similarly situated. Even where such is not the case, there might be a transgression by the authority of the limits laid down or an abuse of power, but the actual order would be to set aside in appropriate proceedings not so much on the ground of a violation of Art. 14 but as really being beyond the power."
 It is not, however, essential for the legislation to comply with the rule as to equal protection that the rules for the guidance of the designated authority, which is to exercise the power or which is vested with the discretion, should be laid down in express terms in the statutory provision itself.


Such guidance may thus be obtained from or afforded by the preamble read in the light of the surrounding circumstances which necessitated the legislation taken in conjunction with well-known facts of which the Court might take judicial notice or of which it is appraised by evidence before it in the form of affidavits."
 9. In all the abovementioned cases it will be noted that the Supreme Court did not hold that merely because two procedures are in existence, one more drastic than the other, that by itself is a circumstance to condemn the provision providing for such procedure as unconstitutional. On the other hand, it is very much pointed out that even in cases where the power is vested in the executive authority for the selection of a particular person and where certain guidance is available to him to so choose, the provision, does not suffer from the vice of discrimination. The learned counsel however particularly relied on State of Orissa v. Dhuirendranath Das, AIR 1961 SC 1715 wherein it is observed :
 "If against two public servants similarly circumstanced enquiries may be directed according to procedure substantially different at the discretion of the executive authority, exercise were of is not governed by any principles having any rational relation to the purpose to be achieved by the enquiry, the order selecting a prejudicial procedure, out of the two open for selection, is hit by Art. 14 of the Constitution."
 Again in paragraph 5 of the judgment it is observed :
 "If the two sets of rules were in operation at the material time when the enquiry was directed against the respondent and by order of the Governor, the enquiry was directed under the Tribunal Rules which are "more drastic" and prejudicial to the interests of the respondent, a clear case of discrimination arises and the order directing enquiry against the respondent and the subsequent proceedings are liable to be struck down."


It may be noticed that their Lordships were referring to a case of clear discrimination resorted to without any reasonable basis. The learned counsel for the petitioner also relied on Northern India Caterers (Pvt) Ltd., v. State of Punjab, . The majority in that case took the view that :
 "If the ordinary law of the land and the special law provide two different and alternative procedures one more prejudicial than the other, discrimination must result if it is left to the will of the authority to exercise the more prejudicial against some and not against the rest."
 10. But the decision is examined and scrutinised in the light of many other decisions by the Supreme Court, in M. Chhagganlal v. Greater Bombay Municipality, and ultimately the Supreme Court disagreed with the view of the majority in Northern India Caterers (Pvt.) Ltd., v. State of Punjab, . So this judgment of the Supreme Court by itself is of no help to the petitioner.
 11. In m. Chhagganlal v. Greater Bombay Municipality, the Supreme Court reviewed and summarized all the earlier decisions and held :


"Where a statute providing for a more drastic procedure different from the ordinary procedure covers the whole field covered by the ordinary procedure, as in Anwar Ali Sarkar's case Suraj Mall Mohta's case without any guidelines as to the class of cases in which either procedure is to be resorted to, the statute will be hit by Article 14. Even there, as mentioned in Suraj Mall Mohta's case, a provision for appeal may cure the defect. Further, in such cases if from the preamble and surrounding circumstances, as well as the provisions of statute themselves explained and amplified by affidavits, necessary guidelines could be inferred in Saurashtra case and Jyoti Pershad's case statute will not be hit by Article 14. Then again where the statute itself covers only a class of cases as in Haldar's case and Bajoria's case the statute will not be bad. The fact that in such cases the executive will choose which cases are to be tried under the special procedure will not affect the validity of the statute. Therefore, the contention that the mere availability of two procedures will vitiate one of them, that is the special procedure, is not supported by reason of authority.


The statute itself in the two classes of cases before us clearly lays down the purpose behind them, that is that premises belonging to the Corporation and the Government premises belonging to the Corporation and the matter of evicting unauthorised persons occupying them. This is a sufficient guidance for the authorities on whom the power has been conferred. With such an indication clearly given in the statutes one expects the officers concerned to avail themselves of the procedures prescribed by the Acts and not resort to the dilatory procedure of the ordinary Civil Court. Even normally one cannot imagine an officer having the choice of two procedures, one which enables him to get possession of the property quickly and the other which would be prolonged one, to resort to that latter. Administrative officers, no less that the courts, do not function in a vacuum. It would be extremely unreal to hold that an administrative officer would in taking proceedings for eviction of unauthorised occupants of Government property or Municipal property resort to the procedure prescribed by the two Acts in one case and to the ordinary Civil Court in the other. The provisions of these two Acts cannot be struck down on the fanciful theory that power would be exercised in such an unrealistic fashion. In considering whether the officers would be discriminating between one set of persons and another, one has got to take into account normal human behaviour and not behaviour which is abnormal. It is not every fancied possibility of discrimination but the real risk of discrimination that we must take into account. This is not one of those cases where discrimination is writ large on the face of the statute. Discrimination may be possible but is very improbable. And if there is discrimination in actual practice this Court is not powerless. Furthermore, the fact that the Legislature considered that the ordinary procedure is insufficient or ineffective in evicting and Corporation property and provided a special speedy procedure therefore is a clear guidance for the authorities charged with the duty of evicting unauthorised occupants. We therefore, find ourselves unable to agree with the majority in the Northern India


unauthorised occupants. We therefore, find ourselves unable to agree with the majority in the Northern India Caterers' case "


12. In the same case Bhagwati, J., speaking for himself and for Justice Krishna Iyer, in a separate judgment observed :
 "The view of discrimination, it was argued, consists in the unguided and unrestricted power of singling out for being subject to the special procedure some amongst a class of persons, namely, occupiers of Government or Municipal premises, all of whom are similarly situate and circumstanced, leaving others to be dealt with according to the ordinary procedure. The argument was sought to be supported by the majority decision of this Court in . We do not think this argument is sound. The majority decision is has no application in the present case, and din any event, we are of the view that that decision does not represent the correct law."
 13. It is opposite to refer to another judgment of the Supreme Court in Pandia Nadar v. State of Tamil Nadu, . The Bench which heard this case, after referring to M. Chhgganlal v. Greater Bombay Municipality, and following the same, unanimously held that the fact that in some cases the Executive will have the power of selection of the drastic procedure will not affect the validity of the statute, and rejected the contention that the mere availability of two procedures will invalidate the said provision of law. So it is necessary that various principles laid down in the aforesaid judgments of the Supreme Court and mainly in Chhagganlal v. Greater Bombay Municipality, , have to be borne in mind in resolving the question in this writ petition.


14. From an examination of the aforesaid authorities of the Supreme Court, it is clear that every statute providing for two different procedures covering the same filed and making one of them drastic, does not ipso facto become violative of Article 14 of the Constitution of India. The guidelines as to when and under what circumstances the administrative authority can resort to a drastic procedure may sometimes be incorporated specifically in the statute itself. But in the tempo of the prevailing conditions in the modern society it is impossible for any legislature to anticipate all events or to provide for all eventualities. So the legislature can validly leave it to the discretion of the Executive Body to select a particular procedure. The discretion conferred on official agencies in such circumstances cannot be condemned outright as an unguided discretion if the statute indicates the guidance for the Executive for exercising such a discretion. Such guidance, although it is not there in the statute in the form of specific provisions, can as well be inferred from the preamble, surrounding circumstances and the provisions of the statute themselves explained and amplified by affidavits. It is only in such cases where there are no guidelines specifically in the statute and where the necessary guidance cannot also be gathered from an examination of the aforesaid aspects, the power conferred on the administrative body to choose one procedure or the other, can be condemned in an unguided one and the provision of law providing for such an unguided power suffers from the view of discrimination. But a statute which satisfied these tests cannot suffer from the vice of unconstitutionality. Further, as pointed out by the Supreme Court in Matalag Dobey v. H.C. Bhari, "a discretionary power is not necessarily a discriminatory power is not necessarily a discriminatory power and that abuse of power is not to be easily assumed where the discretion is vested in the Government and not in a minor official". When the necessary guidance is inferable from the statute, it cannot be fancied that the authorities vested with the power of selecting the


from the statute, it cannot be fancied that the authorities vested with the power of selecting the procedure will act arbitrarily and in an unrealistic fashion. If in a given case the authority acts arbitrarily and in unrelated (unrealistic?) manner to the objective of the statute, its action can certainly be annulled by the Court. But that may not be a ground for declaring the statute as unconstitutional.


15. In the light of the aforesaid principles the constitutionality of Sec. 29 of the Act has to be examined. The State Financial Corporation Act, 1951 was enacted in order to provide immediate and long term credit to industrial undertakings which fall outside the normal activities of the commercial banks, etc. As such from the Statement of Objects and Reasons, the intention is that the State Corporations will finance medium and small scale industries. One of the main feature of the Bill was that the Corporation will be managed by a Board consisting of Directors nominated by the Government, Reserve Bank and the industrial Financial Corporation of India. It is also mentioned that the Corporation will have SPECIAL PRIVILEGES IN THE MATTER OF ENFORCEMENT OF ITS CLAIMS AGAINST BORROWERS Sen 3 of the Act deals with the establishment of State Financial Corporations. Sub-section (2) of Sec. 3 is in the following terms :--
 "(2) The Financial Corporation shall be a body corporate by the name notified under sub-section (1), having perpetual succession and a common seal, with power, subject to provisions of this Act, to acquire, hold and dispose of property and shall by the said name sue and be sued."


From the Objects and Reasons and Section 3 (2) of the Act it is clear that the Financial Corporation is a responsible body vested with the power to discharge various functions under the Act. Section 9 deals with 'management of Financial Corporations' and lays down that the general superintendence, direction and management of the affairs and business of the Financial Corporation shall vest in the Board of Directors and shall be assisted by an Executive Committee and the Managing Director. As we find in Sen. 10, very responsible and highly placed persons will be the Directors of the Board. Section 24 days with the 'general duty of the Board' and lays down that the Board is discharging its functions under the Act shall act on business principles, due regard being had by it to the interests of industry, commerce and the general public. Again under Section 25 it is the Corporation as managed by the Board, that is empowered to grant loans or advances to the industrial concern, repayable within a period not exceeding 20 years. Section 27 empowers the Financial Corporation to impose such conditions as it may think necessary or expedient for protecting the interests of the Financial Corporation and securing that the accommodation granted by it is put to the best use by the industrial concern. Now having regard to the scheme of the Act and these general provisions, Sections 29 and 31 are incorporated for safeguarding the interests of the Corporation. As already mentioned the two procedures mentioned in Sections 29 and 31 are different and there are no provisions by way of guidelines in these two sections as to when a particular procedure can be resorted to. The choice is left to the Corporation. It may also be noted that under Section 29 the Financial Corporation shall have the right to take over the management of the defaulting industrial concern as well as the right to transfer by way of lease or sale. Normally one would expect a responsible body like the Financial Corporation, to take action under this section when it becomes necessary depending on


a responsible body like the Financial Corporation, to take action under this section when it becomes necessary depending on the circumstances. From a combined reading of the Objects and Reasons and Sections 8, 9, 10, 24, 25 and 27, the requisite guidance can be inferred and a very responsible authority is vested with the power of selecting either of the procedures under Sections 29 and 31 respectively. So the statute itself discloses a definite policy and objective and it confers authority on the Corporation to make selection of the procedure. When that is so, a responsible body like the Financial Corporation will act in a realistic manner keeping in view the interests of the Corporation, industry, commerce and the general public. For these reasons, we are of the opinion that there is a guiding policy and principle available from the statute for the Corporation to act in this regard and accordingly we hold that Section 29 is not violative of Article 14 of the Constitution. Further, we are also of the view that in this case the Corporation acted with due care and caution and that it did not act arbitrarily or capriciously, and we will be considering this aspect in detail at a later stage.


16. Now it remains to be seen whether there is any substance in the second contention, viz., that the Financial Corporation, having proceeded under Section 31, cannot again resort to Section 29. We have already held that Section 29 is a valid provision of law. When the Corporation has the choice, which is not unguided, to resort to either of the procedures, and if the Corporation in a given case, having withdrawn its application under Section 31, proceeds under Section 29, it cannot be said that such an action is illegal. As pointed out by the Supreme Court in T.K. Mudaliar v. Venkatachalam, "it is to be presumed, unless contrary were shown, that the administration of a particular law would be done "not with an evil eye and unequal hand" and the selection made by the Government of the cases of persons to be preferred for investigation by the Commission would not be discriminatory". However, the petitioner has no right to say that the Corporation should have no choice of proceedings when such a course is not barred from withdrawing its own application filed under Section 31 of the Act. As long as Section 29 is a valid piece of legislation, the Corporation has every right to proceed under Section 29, unless it is shown that it has acted arbitrarily or maliciously. Having held that Section 29 of the Act is not violative of Article 14 of the Constitution, now it remains to be seen whether in the instant case the Corporation has acted arbitrarily.


17. As already mentioned, the petitioner wrote a letter to the 2nd respondent on 23-10-1967 mentioning that they have agreed to purchase the Khandasari unit from the 5th respondent and they are agreeable to pay the amount due to the 2nd respondent in instalments. On 28-11-1967 the 2nd respondent wrote to the petitioner complaining that the petitioner did not furnish their said partnership deed and other records to enable the 2nd respondent to take further action and also requested the petitioner to take immediate action, so that the affairs could be regularised. Again on 16-12-1967 the 2nd respondent reminded the petitioner and it is pointed out in that letter as follows :---
 "We invite your attention to our letter No. VKS/67/7579, dated 29th November, 1967 and regret very much to note your indifference in the matter Kindly note that if you do not furnish all the documents and information and complete the transfer before the 2nd of this month, we shall be forced to treat you as an unauthorised person in relation to properties mortgaged to us and proceed against the proprietor and the mortgaged properties.
 Please treat this as specially urgent.
 Sd/- xx MANAGING DIRECTOR."
 Again by letter dated 5-1-1968 the 2nd respondent wrote to the petitioner that finally the petitioner is called upon to take immediate action to regularise the matter, failing which the 2nd respondent has no other alternative except to proceed against the owners and the mortgaged properties of the defaulting concern. On 14-8-1968 the 2nd respondent addressed another letter to the petitioner which reads thus :


Please note that if the mortgage agreement is not immediately taken up and finalised and the arrears cleared on or before 26-8-1968, we will be compelled to proceed against you and the owners of the above unit and the mortgaged properties
  xx       xx     xx


To this ultimately the petitioner cared to reply on 23-8-1968 stating that he would come in the first week and would take necessary steps for registering the deed. On 19-11-1968 the 2nd respondent again wrote to the petitioner that the season was fast approaching and that the petitioner should expedite the things to regularise the affairs, and again reiterated that the proceedings for the sale of the entire unit for recovering the outstanding loans would be launched. Some ore correspondence passed between the 2nd respondent and the petitioner. Then on 15-7-1970 a registered notice was issued by the 2nd respondent to the petitioner to the effect that if the petitioner failed to pay the 2nd respondent the sums due by way arrears, necessary steps would be taken to recover the entire loan amount. Similar notices were issued on 4-12-1970 and 15-12-70 and being unsuccessful the 2nd respondent was compelled to file O.P. No. 47 of 1972 on 10-8-1972. As already mentioned, during the pendency of the O.P. also the attempts of the 2nd respondent to safeguard the interests of the Corporation were not fruitful. The petitioner, in spite of being in possession and running the unit failed to make the payment of the arrears due and thus committed wilful default. The proceedings in O.P. 47 of 1972 disclose that the matter dragged on till 27-8-1973. During the pendency of the O.P. the 2nd respondent-Corporation being anxious to safeguard its own interests, brought the matter before the Board of Directors at a meeting held on 27-7-1973 and the Board after considering the facts and circumstances authorised the Managing Director to take action under Section 29. A true copy of the resolution attested by the Managing Director is placed before us and the resolution is numbered as


copy of the resolution attested by the Managing Director is placed before us and the resolution is numbered as 25 (e) which reads as follows:


"25 (e) SRI VENUGOPALA KHANDASAI SUGARS NARASIMHUNIPETA, BIBBILI TALUK PROCEEDINGS FILED UNDER SECTION 31 OF THE STATE FINANCIAL CORPORATIONS ACT -- PENDING THIRD PARTIES INTERESTED IN PURCHASE OF THE UNIT -- UNDER SECTION 29 OF THE STATE FINANCIAL CORPORATION ACT AND SELL THE SAME SOUGHT.
 ---------------------
 Read Managing Director's Memorandum.
 The Managing Director further brought to the notice of the Board that as the matter for the sale of the unit under Section 31 is being delayed for on reason or other in the Court and as the unit may not fetch any price once we lose the sugarcane crushing season, it is desirable that the Corporation should, if necessary withdraw the application from the court and proceed under Section 29 of the State Financial Corporation Act.
 The Board agreed with the opinion and authorised the Managing Director to take action under Section 29 of the State Financial Corporation Act and in that behalf authorised the Secretary Sri M.S.Varadachary or the Additional Secretary Sri K. Narayana Rao or the Law Officer Sri K. Chalapati Rao or any other officer to do such acts as necessary for realising the money due to the Corporation and to do such acts like selling the properties by tenders or by negotiation and execution of deeds for and on behalf of the Corporation that are necessary and incidental thereto."


It is only after this resolution the 2nd respondent advertised in the newspapers on 28-7-1973 and 30-7-1973 calling for tenders. The petitioner was also aware of these advertisements as is admitted in the writ petition. Even then he did not take immediate steps to clear off the arrears showing his bona fides. Now he contends in a futile manner that it was not known to him that the 2nd respondent was going to exercise the rights under Section 29. No weight can be given to such a plea. Having regard to all these circumstances we are of the view that the 2nd respondent justified in taking recourse to Section 29 of the Act and did not act arbitrarily in doing so.


18. It is lastly contended that the action of the 2nd respondent affects the principles of natural justice. We have already held that Section 29 of the Act is a valid provision of law. In entering into an agreement with the 2nd respondent, the petitioner's predecessors viz., the 5th respondent, agreed for all the conditions mentioned in the agreement. Under Clause VI (23) of the agreement a condition is there that the loan secured by the mortgagee shall be subject to the terms and conditions of the sanction accepted by the mortgagor and the powers, provisions and conditions contained in the State Financial Corporation Act including any amendments thereof made from time to time. Clause VII (6) authorises the Corporation to take all the actions permissible including taking over the management as well as the right to sell. The language of the said clause is in substance the same basis found in Section 29. When the parties by way of an agreement, have agreed for such a course which is permissible under Section 29, a valid provision of law, the petitioner who got into the shoes of the 5th respondent who was a party to this agreement cannot complain that he was not given notice of the proposed action under Section 29. As already mentioned, the Corporation under the statute can choose either of the procedures and having regard to the language of Section 29 and clauses VI (23) and VII (6) of the agreement, the question of putting the petitioner on notice does not arise.


19. But in this case we are satisfied that the petitioner in fact was informed and he had knowledge of the likelihood of the Corporation proceeding under Section 29. In A.K. Kraipak v. Union of India, it was held that "The concept of natural justice has undergone a great deal of change in recent years. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case the frame work of the law under which the enquiry is held and the constitution of the Tribunal or the body of persons appointed for that purpose."
 The history of the case, ever since the petitioner came into picture i.e., from 23-10-67, till 28-3-1973, speaks for itself that petitioner was adopting delaying tactics. The letters dated 16-12-1967, 5-1-1968 and 14-8-1968 and the subsequent letters by the 2nd respondent to the petitioner fully show that the petitioner was intimated that the Corporation would be proceeding against him under law. The mere fact that in the first instance, instead of proceeding under Section 20, the Corporation proceeded under Section 31 is by itself not a ground to contend that there was no notice to the petitioner abut the proposed action under Section 29. A perusal of some of the letters would indicate the proposed action by the Corporation under Section 29 also. So, from the facts and circumstances, we are of the view that the petitioner had in fact known that the Corporation would be proceeding against him under Section 29 also, when situation warrant. As already mentioned, even during the pendency of the O.P. advertisements were made in the newspapers calling for tenders, about which the petitioner was aware. For all those reasons, we hold that the Corporation acted in good faith and its action under Section 29 was not done arbitrarily.


20. Sri Sivarama Sastry, the learned counsel for the 2nd respondent contended that the Corporation is at liberty to take over the management of the industrial concern and sell on the basis of the terms of the agreement alone without having recourse to Section 29 of the Act. We have already held that Section 29 is a valid provision and the action taken under the same is legal and valid. So, it is not necessary to consider this contention raised on behalf of the 2nd respondent.
 21. No other points are urged before us.
 22. This writ petition, therefore, fails and is dismissed with costs. Advocate's fees Rs. 100.
 23. Petition dismissed.


Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988

JUDGMENT K. Bhaskaran, C.J.
 1. This is one of the extraordinary cases without any parallel., not a lis of the mundane orthodox pattern. but a unique public interest litigation which seeks to explore the realm of accountability of the executive to the people through the judiciary, hence it assumes great significance and has naturally attracted considerable attention of the public.


2. The petitioner, Sri Dronamrajii Satyanarayana, a public worker and the Organising Secretary of the Coastal Districts Congress-1 Committee of Andhra Pradesh filed four writ petitions :124ZS/87,124261/87. 12427/87 and 12805/87 in this Court on 24-8- 1987 alleging various violations of laws and constitutional provisions by Shri N. T. Rama Rao, the first respondent-Chief Minister, and the State Government, the second respondent. A common affidavit running into 193 pages was filed in support of the reliefs sought. He sought a writ of quo warranto in W.P. No. 12425/87 against the first respondent declaring that he was an usurper o f t he office of the Chief Minister of the State of Andhra Pradesh, and for a consequential direction for his removal therefrom. In Writ Petition No. 12426/87 he sought a writ of mandamus directing the central Government to appoint a judicial Commission under the Commissions of Inquiry Act, 1952 for enquiring into the misdeeds of "Corruption and abuse of authority by the first respondent." In respect of the alleged fiscalerimes committed by the first respondent, the relief sought by the writ petitioner in W.P. No. 12805/87 is a direction to the Central Government by way of writ of mandamus to take approriate penal action including prosecution" against the first respondent. In W.P. No. 12427/87, the petitioner sought a writ of mandamus directing the Central Government to exercise its Constitutional power discharge its Constitution; duty under Articles 355,, 356 and 357 of the Constitution of India decide whether the conditions contemplated in the aforesaid provisions are existing in the State of Andhra Pradesh: and if so to initiate constitutional action for imposing President's Rule in the State,


3. A Division Bench of this Court in view of the importance and the gamut of the questions of public law raised in the writ petitions, ordered notice on September 8 1987 to the respondents to show cause who the writ petitions should not be admitted notice was also issued to the Attorney-General of India requesting him to appear and assist the Court. A Full Bench of this Court after hearing Sri K. Parasaran, the learned Attorney-General, the learned counsel for the parties and interveners, including Sri N. A. Palkhivala, a noted Jurist, who appeared for the first respondent. dismissed the writ petitions W.P. No. 12425/87(Writ of Quo- Warranto); and W.P. No. 12427/87 (Writ of mandamus for imposition of President's Rule) by the judgment dated November 2. 1987. The other two writ petitions - W.P. No. 12426/87 (Writ of Mandamus for appointment of Commission of Inquiry) and W.P. No. 1280-5/87 (Writ of Mandamus for direction to the Central Government to prosecute the first respondent for fiscal offences) were admitted on the same day. In view of the importance of the complex questions of law raised this larger Bench of five Judges was constituted. This common judgment will dispose of both the writ petitions since the question for decision in both the writ petitions are interlinked.


4. The allegations and the averments contained in the bulky affidavit are divided into seven parts by the petitioners presumably for the sake of convenience and easy reference. Allegations concerning fiscal crimes and breaches of fiscal laws by the first respondent are covered by Part-A. Acts of Arsonal corruption and dishonesty attributed to the first respondents are adverted to in Part-B. Averments pertaining to alleged political patronage, favouritism, misappropriation of public funds are set out in Part-C. Alleged breakdown of constitutional machinery and the resulting state of anarchy are dealt with in Part-D. Alleged extermination of extremists in fake encounters. and deaths in police Lockups and related atrocities are averred to in Part-E. Decisions of Courts - the Supreme Court and the High Court -- alleged to contain severe strictures against the first respondent and the State Government in respect of violations of law commtted by them are mentioned in Part-F. The extant situation obtaining in the State of Andhra Pradesh. the various prayers, and the several reliefs sought from this court by the petitioner. are set out in Part-P. Although the averments and allegations are particularised into seven parts, the petitioner avers inPara- G. 12of his affidavit : "They have to be read as a whole with specific reference to the particular type of allegations and reliefs sought for."


5. The first respondent in compliance with the notice issued on 8-9-1987 prior to the admission of the writ petitions had filed t brief counter-affidavit contesting mainly the locus standi of the petitioner to maintain the writ petitions and the jurisdiction of this Court to grant the reliefs prayed therein. In that counter-affidavit, the first respondent did not deny specifically the various accusations levelled against him by the petitioner. After the admission of the present two writ petitions, the first respondent, however, filed a comparatively lengthy counter running into fifty six pages on 4-12-1987. On the same day, on behalf of the second respondent, the State Government, a counter affidavit sworn to by, the Chief Secretary. running into 195 pages, vas filed. As the State Government is not a party-respondent in W.P. No. 12805/87 we have to presume that the counter-affidavit filed by the Chief Secretary is confined to writ Petition No.' 12426/87. The Chief Secretary's counter-affidavit was based on he assumption that the State Government is party-respondent in both the writ petitions. have also been filed on behalf of the Chairman, Central Board of Direct Taxes, the Reserve Bank of India, and he Commissioner of Income-tax, Hyderabad, who are respondents in the writ petition.


6. Apart from denying specific accusations levelled by the petitioner, the main thrust in the counters filed by the first respondent and the Chief Secretary, on behalf of the State Government is that the two writ petitions are solely adversorial in nature and the motive is to settle political scores after the petitioner was defeated in the elections to the Andhra Pradesh State Legislative Assembly and the Office of Mayor of Visakhapatnam; and on his own showing the petitioner being a politician and Congress-1 leader, this Court should not go into justiciability or otherwise of the issues raised by' converting the adversorial litigation into public interest litigation.


7. Sri Ram Jeth Malani, the learned counsel for the 1st respondent, very strenuously urged that by treating the present litigation as public interest litigation this Court should not disregard the rules relating to the pleadings, the 1st and 2nd respondents should be put on notice of what the actual case they had to meet if Court was to scrutinise any specific instances alleged by the petitioner in his voluminous affidavit., for this purpose unless the petitioner was directed to put his house in order by properly amending the affidavit and seeking appropriate relief, this Court should not proceed any further in the matter. If pleadings are properly amended, the learned counsel said, the 1st respondent would be in a position to meet them. He submitted that in the process of correcting executive errors the Court should not enter into political arena on policy decisions which are, by the Constitution, exclusively vested in the executive. The Court must guard itself against interfering in respect of executive and statutory orders without affording opportunity to the parties likely to be affected, the prescribed principles of natural justice should not be allowed to be breached. In t written submissions filed on behalf of the first-respondent it was specifically stated . "The true public interest litigation is one in which a selfless citizen having no personal motive of any kind except either compassion for this and disabled or deep concern of stopping serious public injury approaches the Court for either of the following purposes :
(i)Enforcement of fundamental rights of those who genuinely do not have adequate means of access to the judicial system or statutory provisions incorporating the directive principles of State Policy for amelioration of their condition,


(ii) Preventing or annulling executive acts and omissions violative of Constitution or law resulting in substantial injury to public interest."
Personal rights could not be enforced in the garb of public interest litigation., a public spirited organisation or individual might espouse the specific causes of person, or groups, who were unable to approach this Court and such causes alone should be taken up by the Courts as public interest litigation. In support of these contentions, reliance was placed on the rulings of the Supreme Court reported in Bandhu Mukthi Morcha v. Union of India, , Prabodh Ve;ma v. State of U.P., , Shivaji Rao Nilangekar v. Mahesh N4adhav Gosavi, , Lakshmi Kant v. Union of India, , R. L. & E. Kendray. State of U.P. , State of H.P. v. Students Parent, Medical College, , Laxmi Kant Pandey v. Union of India, , Olga Telhsv. Bombay Municipal Corpn., , Chaitanya Kumarv. State of Karnataka, , D. C. Wadhwa v. State of Bihar, , Sheo Nandan Paswan v. State of Bihar, , Sachidanand Pandey v. State of W.B., AIR 1987 SC 1109 at p. 1134, Union of India v. Cynamide India Ltd., , Joint Woman's Programme v. State of Rajasthan, , Fertilizer Corporation, Kamagar Union v. Unionof India, AIR 1981 SC 344, 5. P. Gupta v. Union of India, AIR 1982 S C 140, People's Union for Democratic Rights v. State of Bihar, and Laxmi Kant Pandey v. Union of India, .


8. Towards the end of the argurnents on December 29, 1987 Shri Jeth Malani submitted that the 1st respondent was opposed to any inquiry being conducted by a Commission appointed by or at the behest of the Central Government. He added that , on the other hand, the 1st respondent was prepared and willing to subject himself to an enquiry to be conducted by a Judge or a panel of Judges of this Court nominated by the Chief Justice into the specific charges chosen by the learned Attorney-General. At the conclusion of the arguments by Shri Jeth Malani, the next day (30-12-1987) the Court desired to know from him whether, as stated by him the previous day, he would put in writing about the willingness on the part of the First respondent to have an enquiry conducted by a Judge or panel of Judges of this Court selected by the Chief Justice. In response to this he had put in a statement then and there and it forms part of the records of the case. To facilitate easy reference wt. would extract it below :
 "It is the contention of R-1 that the present petition disposes no cause of action, its pleadings and averments are vague, prolix, rolled up. scandalous and false. The petition is a perplexing misjoinder of desperate complaints, grievances and alleged causes of action. The reliefs and allegations cannot be correlated. It raises disputed' questions of fact which cannot be disposed of on the affidavits filed except to dismiss the petition. On the other hand R-1 has nothing to hide or be ashamed of. He does not wish to avoid or shirk enquiry into any responsible allegations supported by prima facie evidence selected by the Attorney-General.


On proper petitions being filed making out a precise case and claimed precise relief, R-1 will waive issue of a formal notice or rule nisi and participate in judicial investigation by any Judge or Judges of this Honorable Court.
R-1 makes it clear that the petitioner's allegations are false and he is not entitled to any relief whatsoever.-


9. Shri K. Parasaran, the learned Attorney-General, who appeared to assist the Court in deference to the notice issued, expressed his opinion on the constitutional aspects and the administrative law having a bearing on the issues involved in these writ petitions with his usual fairness, frankness and an absolute sense of detachment. The highlight of his address could be stated as follows : In a public interest litigation the jurisdiction of this Court is not adversorial, but inquisitorial. No particular form of pleading is required. What is required is the necessary factual material. Even if better material is not forthcoming in the first instance, the Court can issue commissions or call upon the Government to produce the records, and it is the duty of the Government or the Officers to produce all the relevant records, on production thereof, it was the duty of the court to carefully and with circumspection scrutinise the evidence, on consideration thereof if the Court comes to the conclusion that there is an infraction of the constitutional rights; or public injury is suffered by breach of any public duly, the Court cannot close its eyes and persuade itself to uphold publicly mischievous executive actions, which have been so exposed. The present case is unique in the sense that is seeks to explore the realms of accountability of the executive to the judiciary through persons professedly actiong pro bono publico; and the case involves an act of delicate balance. In this case the Court should adjudicate upon those issues which are clearly and specifically formulated in a pointed .manner for consideration and in that sense the issues must be legal, not merely with legal flavour. He projected the case essentially from the point of view of administrative law stressing that ' 'a careful and critical examination of the legality and propriety of the issues was called for. That apart, according to him, the case involves an area of choice, namely one between traditional approach which reiterates theoretical inquiries and another where moral deliberations inter- twined with the extension


approach which reiterates theoretical inquiries and another where moral deliberations inter- twined with the extension of locus standi in the context of the Court's duty to ensure the supremacy of the rule of law. Summing up his address the learned Attorney-General submitted that on a consideration of the evidence if the Court comes to the conclusion that there was violation of the constitutional rights; or public injury was suffered; or there was breach of public duty, then Court could give a declaration to that effect. In the course of his scholarly exposition of law he quoted profusely from the decisions of the Supreme Court as also from some decisions of the English Courts, which threw fight on the subject.


10. Sri S. Ramachandra Rao, the learned counsel for the petitioner. wanted us to look at the problem from a realistic point of view without being obsessed by procedural technicalities and wrangles. The substance of his argument is : The law relating to procedure is intended to advance substantive justice. In the name of adhering to the procedure, the Court should not allow justice to be stiffled. Wages of procedural sin should not culminate in the mortality of justice. The common man's sense of justice, which sustains democracy, should not be allowed to be shattered by placing primacy on procedural aspects ignoring the substantive questions that cry for adjudication. About 200 allegations are levelled by the petitioner and in respect of most of them he was able to collect material facing very adverse circumstances and place them before this Court with the fervent plea that the constitutional values and supremacy of rule of law should be safeguarded by exercise of the power of judicial review. The petitioner is not seeking any personal gain for himself. His interest is confined to exposing the tyranny, despotism, and several acts of nepotism, favouritism and corruption on the part of the first respondent. In a case of this magnitude to expect the petitioner to strictly conform to the rules of procedure would amount to subverting the cause of justice, and abdication of the constitutional duties enjoined upon this Court. This Court is not merely a forum for adjudication of civil and criminal matters, but is a constitutional Court charged with higher responsibilities. The normal considerations in regard to procedural requirements that weigh with the court in deciding private litigation should not be extended to the present case in all their rigidity'. Shri Ramachandra Rao also contended that it was not open to the 1st respondent to contend that there were no reasonable grounds for inquiry into the charges levelled against him in these two writ petitions after he had, out of pricks of conscience, subjected himself to the probe by the


writ petitions after he had, out of pricks of conscience, subjected himself to the probe by the three-man Agarwal Commission ordered by his very Government as per G.O.Nos. 587 General Administration (Sc. E) Department dated November 28, 1987. According to him the only question now remains for the consideration of this Court is whether a mandamus would go from this Court to the Central Government for instituting a Commission under Section 3 of the Commissions of Enquiry Act, 1952 or, on the facts disclosed and established in the case, the relief to be granted is to be moulded in some other suitable form. With respect to the offer made by Shri Jeth Malani on 29-12-1987 and the statement given by him in Court on 30-12-1987, Shri Ramchandra Rao submitted that it was a clever move and a 'legal trap' conceived by the 1st respondent to delay and defeat the due process for law. He contended that the offer, as found its expression in the statement of Shri Jeth Malani on 30-12-1987, betrayed absolute lack of bona fides. According to him it was terribly belated and was nothing but a procrastinating tactics, and that the, Court had no power to accept any offer which had no legal basis whatsoever. He did not want the High Court Judge(s) to be reduced into a Commission whose finding was not binding on any one and which could be challenged in a Court of law. He pointed out that the 1st respondent himself had till the previous day resisted the appointment of any Commission on the plea that he had no faith in the efficacy of such Commission, and that it was a mystery that there was a sudden transformation of his attitude for obvious reasons that after all the arguments had been heard, documents perused, and pleadings considered by the five Judges of this Court during the course of the


documents perused, and pleadings considered by the five Judges of this Court during the course of the lengthy proceedings, 'he did not want a decision from this Court.


11. What the specific allegations levelled by the petitioner are and how they are traversed by the respondents, and the relevancy and the extent of credibility to be accorded to the allegations, we shall deal with later.