N. S. MEHTA & ORS.

UNION OF INDIA & ORS.

April 20, 1977

[M. H. BEG,.C.J., A. C. '1VPTA AND P. S. KAILASA'.1, JJ.]

Seniority-1-Yliether the decision in Union of India v. M. R"~'i Vermcr &: Ors, etc. (1972) 2 S.C.R. 992 contained an invariable nzechanicc..l rule of seniority applicable to all classes of services so t!tat nothing beyond length o/ sen11ce

in a particular t::rade could determine seniority-Central Secretariat Sen1ice

Rules, 1962, Rule 17-Whether placing those who have passed tht type1vrili11g test lvitlzin t1vo years of the fixed date in separate category for the purpose of pro1notion violates Articles 14 and 16 of the Constitution of India.

Under the scheme which culminated in the promulgation of the Central Secretariat Clerical Service Rules, 1962 (effective from 1-5-1954), it was pro vided that those officers who were otherwise eligible for confirmation in the services at the initial constitution should also pass a typewriting test to be held by the Union Public Service Commission within a period of two years from

1-5-1956.

The names of the petitioners who had not passed the typewriting test did not figure in the gradation list dated 7-2-1972 prepa1ed for making pro~ motions to the next grade of Assistants. The petitioners. challenged the orders on several grounds, namely, (i) The principle of seniority contained in the

IVIinistry of Home Affairs' O.M. dated 22-6-1949 as interpreted by this 0Jurt in 1972 (2) SCR 992 had not been applied to them; (ii) The impugned list was formulated in an arbitrary fashion; (iii) Their seniority must date back to their dates of promotion as Upper Division Clerks; and (iv) Rule 17 of Central Secretariat Clerical Service Rules, 1962 being inconsistent with C~.M. dated 22-6-1949 and 22-2-1959 violates Articles 14 and 16 of the Constitution.

The respondent raised three objections to the petitioners' case in their returns, namely, (i) There was a reasonable criterion for the difference made betreen

the cases of the petitioners and those placed on the itnpugned list of 7-2-1972 who are above the petitioners because they have passed the prescribed ype

writing test so that Articles 14 and 16 of the Constitution could not be saijd to have been violated in this case whatevcrelse may have been infringed; (ii) The petitioners not having assailed the order of confirmation of the scheme: on 1-5-1958 prescribing a reasonable ground for distinction between the clasi1 of cases in which typewriting tests have been passed to which the contes, ting respondents in the impugned list below and the class of the petitioners which had not passed the test. the petitionern could not challenge the impugned scheme of 1972 at all; (iii) A number of persons have been promoted and put above the petitioners since 1962 acting under the scheme providing the typewriting test so that there was inonfinate delay in filing the petition. 11nder Art. 32 of the Constitution.

Dismissing the petition, the Court,

HELD: (1) The alleged violation of the rule of seniority according to; length of service was not decisive even according to the Ministry of Home

Affairs' o.M. dated 22~6-1949. This memorandum shov1s that it \Vas Dnly directory laying down a general rule of seniority which was presumably subject to other exceptional factors which could also be taken into account.

[666 A I

P. C. Sethi & Ors. v. Union of India & Ors. [1975) 3 S.C.R. 21, follo\¥ed.

(2) A rule prescribing a typing test cannot be said to be unconnected with the duties of clerks who desire a promotion to the next grade.

A discrirrtination made on such a ground could not violate ArticJes 14 and 16 of the <:on stitution \Vhateverelse it may be said to, violate.

[668 E]

(3) A violation of statutory or other kind of rule in a particular case cannot amount to a violation of Articles 14 and 16 of the Constitution. There may also be cases in \Vhich a rule made is ultra vires for unreasonablens or

on any other ground and should not be deemed to exist. In such a: case, if the rule is enforced it may on the facts of the particular case amount to a violation of Articles 14 and 16 of the Constitution also.

The petitioners' case is not such a case at all. [668 E-F]

(4) The principles laid down by this Court in Joginder Nath and Ors. v.

Union of India & Ors. [1976] (2) S.C.R. 553 and in Amrit Lal Berry v. Collector of Central Excise [1975] 2 S.C.R. 960, apply to the petitioners' case regarding

~--~~~ B

ORIGINAL JURISDICTION : Writ PetitiQ\n No. 156 of 1972.

(Under Art. 32 of the Constitution of India).

{;. S. Javali, A. K. Srivastava and B. P. Singh, for the petitioner.

G. L. Sanghi, S. P. Mital and Girish Chandra, for respondents Nos. 1 and 3.

B. Datta, for respondent No. 194.

The Judgment of the Court was delivered by

BEG, C.J.-This is a petition under Article 32 of the Constitution praying) for a writ of certiorari, or a writ of Mandamus or, any other D appropriate writ, order or direction for the enfom .• "111ent of the fundamental rights of the petitioners under Article 14 and 16 of the Constitution.

The petitioners have been working as Upper Division Clerks and pray for the quashing of a list, issued with Office Memorandum dated. 7.2.1972, for making promotions to the next grade of Assistants on which the names of respondents 4 to 203 appear but not those of the petitioners.

They claim that the principles of seniority, con- E tained in the Ministry of Home Affairs' O.M. dated 22.6.1949, as interpreted by this Court in UNION OF INDIA v. M. RAVI VERMA & ORS. ETC.,(') had not been applied to them.

The contention seems to be that the last mentioned decision contained an invariable mechanical rule of seniority applicable to all classes of services so that nothing beyond length of service in a particular grade could determine seniority.

It was alleged that the impugned list was formulated in an F arbitrary fashion.

Hence, the petitioners complain of violation of Articles 14 and 16 of the Constitution.

In paragraph 6 of the petition it was stated that even persons appointed nine or ten years after the petitioners had been promoted as long ago as 1969 to the grade of Assistants to which the petitioners put forward their own claims.

It was also stated that a large number G of persons have superseded the petitioners but a few names only have been mentioned from amongst them.

The whole case of the petitioners thus rests on the submission that nothing beyond length of service must determine the place on the list for promotion to the grade of Assistants.

The petitioners allege a common cause of action inasmuch as the impugned list of 17.2.1972 affects all of them.

They claim that all of them should have been governed by the principles contained in ___ ,, ____ . __

(l) [t 9n]2 SCR 992.

A the Memorandum of 22.6.1949.

This Memorandum (Annexure 'C' , to the petition) shows that it was only directory laying down a general rule of seniority which was presumably subject to other exceptional factors which could also be taken into account.

Hence, an alleged violation of the rule of seniority according to length of service was not decisive even according to this Memorandum.

The counter-affidavit filed by Shri P. L. Gupta, Deputy Secretary to the Government of India, gives the long history of a scheme which culminated in the promulgation of the statutory rules framed u.lldec Article 309 of the Constitution of India called the Central Secretariat Clerical Service Rules, 1962 by the President of India. It shows that the scheme of 1949 was given a final shape by the Cabinet in 1954 and became effective from 1.5.1954.

Under the scheme, as finally framed, it was provided that those officers who were otherwise eligible for confirmation in the services at the initial constitution, should also paiis a typewriting test to be held by the Union Public Service Comruission within a period of two years from 1-5-1956. It appears that the confirmation of the initial constitution of the service was delayed until 1958.

Some of the rather ambitious assertions of the petiiloners suggest that their case is that they had been appointed to an Upper Division grade on a regular basis so that their seniority must date back to their date of promotion.

This suggestion was controverted by the respondents who alleged that the petitioners had been only allowed to continue provisionally on a temporary basis in the grade of Upper Division of Clerks.

It was stated, in the counter-affidavit, that as typing test had to be passed within two years of 1st of May 1958, those who did not come within this class came in the class of the petitioners who were serving on an ad hoc or temporary basis.

Hence, it was submitted that those who had passed the typewriting test within two years of the fixed date belong to another category altqgether. The respondents, therefore, submit that there has been no contravention of Articles 14 and 15.

Serious grounds of objection to the petitioner's case are three fold : firstly, that there was a reasonable criterion for the difference made between the cases of the petitioners and those placed on the impugned list of 7.2.1972 who are above the petitioners because they have passed the prescribed typing test so that Articles 14 and 16 of the Constitution could not be said to have been violated in this case whatever else may have been infringed; secondly, that the petitioners, not having assailed the order of confirmation of the scheme on 1.5.1958, prescribing a reasonable ground for distinction between the class of cases in which typing test had been passed, to which the contesting respondents in the impugned list belong and the class of the petitioners, which had not passed this test, the petitioners' could not challenge the impugned scheme of 1972 at all; thirdly, a member of persons had been promoted and put above the petitioners since 1962, acting under the scheme providing the typing test, so that there was inordinate delay in filing the petition under Article 32 of the Constitution on M.4.1972.

., I

N. S. M1'H'lA V. LiNION (Beg, C./.) 667

In their Writ Petition the petitioners have no doubt challenged the validity of rule 17 of the Central Secretariat Clerical Service rules for inconsistency with the Memoranda of 22.6.1949 and 22.12.1959 and alleged that this also constitntes a violation of Articles 14 and 16 of the Constitution.

This rule was among rules notified on 28-9-1962.

It lays down as follows :-

"17. Seniority(!) The relative seniority of members of B the Service appointed to any Grade before the appointed day shall be regulated by their relative seniority as determined before that day.

Provided that if the seniority of any such officer had not been specifically determined before the appointed day it shall be as uetermmed by the Department of Personnel in the Cabinet Secretariat.

MHA No. 612167-CS-II dated 20.12.67.

Provided further that the seniorty of an officer referred to in the proviso to clause (a) of rule 2 shall be determined by the Department of Personnel in the Cabinet Secretariat by taking into account the continuous length of regular service rendered before the appointment day by such officer in the grade of lower Division or in any higher grade_ in the offices of the Central Government.

(2) All permanent officers included in the initial constitntion of a Grade under rule 7 shall rank senior to all persons substantively appointed to that Grade with effect from a date after the appointed day, and all temporary officers included in the initial constitution of a Grade under that rule shall rank senior to all temporary officers appointed to that Grade after the appointed day.

(3) Except as provided in sub-rules ( 4) and (5), the seniority of persons appointed to the two grades of the service after the appointed day shall be determined in the following manner, namely :

I. UPPER DIVISION GRADE

(i) Permanent Of]icers.-Thc seniority inter se of G officers substantively appointed to the Grade after the appointed day shall be regulated by the order in which they are so appointed to the Grade.

(ii) Temvorary Offlcers.-The seniority inter se of temporary officers appointed to the Grade after the appointed day shall be regulated as follows, namely : H

(a) Persons included in the Select List for a Grade shall nmk: senior en bloc to those not included in the Select list.

A '

(b) The seniority inter se o( person included in the Select List shall be in the order in which their names are included in the Select List.

(c) The seniority in'.er se of persons not included in the Select List shall be regulated by the order in which they are approved for long term appointment to the Grade.

Rule 7 provides as follows :

"7. Initial Constitution of each cadre.-The permanent and temporary officers of each Grade in each cadre on the appointed day shall be as determined by the Dept!. of Personnel in the Cabinet Secretariat."

We find that, acting under Rule 7 set out above, the Government of India had issued an order on 12-11-1962 allotting permanent and temporary officers of the Upper Division grade to the Central Secretariat Clerical Service.

Apparently, that allotment also determined the order of seniority.

In other words, the rule relating to the passing of a typing test had been followed for a long period and had actually been given effect to under the statutory rules in promotions made and lists drawn up.

This explains the petitioners' challenge to the validity of Rule 17.

We are unable to see how a rule prescribing a typing test is unconnected with the duties of Clerks who desire a promotion to the next grade.

We do not find that a discrimination made on such a ground could violate Articles 14 or 16 of the Constitution whatever also it may be said to violate. It is not necessary for us to hold that a vfolation of a statutory or other kind of rule in a particular case cannot amount to a violation of Articles 14 and 16 of the Constitution.

There may also be cases in which a rule made is ultra vires for unreasonableness or on any other ground and should not be deemed to exist.

In such a case, if the rule is enforced, it may, on the facts of the particular case, amount to a violation of Articles 14 and 16 of the Constitution also.

The case before us does not appear to be such a case at all.

It seems to be covered by what this Court said in P. C. Sethi & Ors. v. Union of India & Ors., (') with regard to the

Office Memorandum of 22.6.1949 (at pp. 207-208) :

" .... tha Office Memorandum of June 22, 1949, is no bar to the Government in making separate provisions for the mode Qf constitution and future maintenance of the service of Assistants.

There is, therefore, no obligation under the aforesaid Office Memorandum on the part of the Government to enforce a rule of bald length of continuous service irrespective of other considerations than the service was sought to be reorganised and reinforced. As noticed earlier the service had to be reconstituted and the temporary Assis-

(!) [1975] 3 SCR 20.

!ants proprly observed keeping in view the question of quality and e_fficieucy as well as at the same where regard being had to accommodate as large number as possible to gradual absorption. In doing so we are unable to hold that the Government has violated the. provisions of articles 14 or 16 -0f the Constitution.

The classification under the instruction for the constitution of regular temporary establishment in the manner done cannot be characterised as unreasonable in view of the object for which these had to be introduced in reconstituting the service to ensure. security of temporary employees assistant with efficieHcy .in the Service.

There is no discrimination.whatsoever amongst the equals as such nor any arbitrary exercise of power by the Government."

This Court has also explained in Joginder Nath & Ors. v. Union of India & Ors.(') and Amrit Lal Berry v. Collector of Central Excise, New Delhi & Ors.( 2 ) the principles on which this Coure will interfere under Article 32 of the Constitution for an alleged violation.of Articles 14 and 16 of the Constitution. It is also explained, there how delay in invoking the jurisdiction of the Court, which may create equitable rights of otl1ers, may give retional grounds for discrimination so that it would cease to be a case of any violation of Articles 14 and 16 at all. We think that the principles laid down in. the cases mentioned above apply here.

Consequently, we dismiss this Writ Petition, but, in the circumstances of the case, the parties will bear their own costs.

S.R.

Petition dismissed.

{1)

A ,

N. S. MEHTA & ORS

UNION OF INDIA & ORS

April 20, 1977

M. H. BEG

(1972) 2 S.C.R. 992

Articles 14 and 16

Constitution of India

Union Public Service Commission

Articles 14 and 16

Articles 14 and 16

Art. 32

Ministry of Home

Affairs

[1975) 3 S.C.R. 21

Articles 14 and 16

Articles 14 and 16

Joginder Nath

[1975] 2 S.C.R. 960

Art. 32

Constitution of India

S. Javali

A. K. Srivastava

B. P. Singh

G. L. Sanghi

S. P. Mital

Girish Chandra

B. Datta

BEG

Article 32

Article 14 and 16

Articles 14 and 16

P. L. Gupta

Article 309

Union Public Service Comruission

1st of May 1958

Articles 14 and 15

Articles 14 and 16

Article 32

Articles 14 and 16

Central Government

Government of India

Articles 14

Articles 14 and 16

Articles 14 and 16

[1975] 3 SCR 20

articles 14

Article 32

Articles 14 and 16

Articles 14 and 16


LINKS ADVERTISERS & BUSINESS PROMOTERS

COMMISSIONER, CORPORATION OF THE CITY OF

BANGALORE

April 21, 1977

[P. K. GOSWAMI AND S. MURTAZA FAZAL ALI, JJ.J

City of Bangalore Municipal Corporation Act, 1949-S. 136, third proviso,

cl. (e)-;; Scope. ot-Advrtisement fronting a street put up lVithin railtvay premises Fronting' meaning of.

Words and Phrases-"fronting" meaning o/.

. Section 136 of the City of Bangalore Municipal Corporation Act, 1949 provtdes that every person who erects, exhibits etc., over any land or structure any advertisement or \Vho displays any advertisement to public view in any place, whether public or private, shall pay on every advertisement a tax levied by the Corporation.

Clause (e) of the third proviso to the section enacts that no such tax shall be levied on any advertisement which is exhibited within any railay station or upon any wall or other property of a railway, except any portion of the surface of such wall or property fronting any street.

An advertisement facing a public street was put up by the appellant adjacent to the compound fencing of a railway station but within the railway pr, emise!I:.

The Municipal authorities levied tax on the advertisement. The apnellant's writ petition challenging the levy was dismissed by a single judge of the High Court and this decision was upheld by a division bench.

On appeal to this Court it was contended that the expression "frontlng any street" occurring in the proviso qualified the railway property and not the advertisement.

Dismissing the appeal,

HELD : 1. (a) Since the advertisements were fronting public street and were exposd to public view, were not covered by the exemption contemplated by the proviso and were, therefore exigible to tax. [677 D] ·

(b) The word "fronting" qualifies not the wall or property mentioned in the latter part of the proviso but "advertisement". The test laid down by the proviso is that the Court has to see if the advertisemnt affixed whether inside the compound of the railway or not fronts the street. If it fronts the street or faces the street, even if it is within the railway premises it will be exigible to tax. [674 D & Fl

(c) The word "fronting" has been used in the proviso not in any legal Otl technical sense but it ordinary parlance. It is not a term of art but one that signifies its meaning according to common notions. [675 D]

The Corporation of Madras v. Messrs The Oriental Mercantile Company Ltd., Madras, [1966] 2 M.L.J. 440 and Ware Urban District Council v. Gaunt & Others. [1960] 3 All E.R. 778, 787 distinguished.

2. The view of the single Judge that since the public street to which the advertisements were facing, ran along the railings with no other obstcle between the advertisement and the public view, it could reasonably be said. that they were fronting public street is correct.

On the other hand .. the view of the Division Bench that the proviso would only apply to advertisements of such hoardings whose ownership lav with the railway or whih .. elone-ed !O the railway is not borne out. by cl. (e).

Th~ que<; tton of e~1gib1htv to tax ts relata.ble not to the ownership of the hoardmgs but their Situs. [676 G-H]

LINKS ADVERTISEllS \'. COMMR. (Fazal Ali, J.) 671

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 325/1976.

A I

(From the Judgment and Order dated the 3.12.1975 of the Karnataka H:gh Court in Writ Appeal No. 284/74).

V. S. Desai, Sanjev Aggarwal and R. B. Datar, for the appellant.

S. S. Java/i, Jagannath Shetty and B. P. Singh for resp. No. 1.

S. N. Prasad and Girish Chandra, for the Intervener Union of B

India.

Nemo for respondent No. 2.

The Judgment of the Court was delivered by

FAZAL ALI, J.-Whether hoardings containing advertisements C fixed in the premises of a railway station fronting a public street are exigible to tax under the provisions of s. 136 of the City of Bangalore Municipal Corporation Act, 1949 (Act No. LXIX of 1949)- hereinafter referred to as 'the Act'-is the substantial question of law involved in this appeal by certificate.

The facts of the case lie within a narrow compass and the point D raised by counsel for the appellant is one of first impression and undoubtedly requires serious consideration.

The appellant is a firm of advertising commercial goods and other items by putting up hoardings containing advertisements on properties taken on lease or licence from various owners.

The appellant also has been putting up hoardings on railway lands in the compound of the Bangalore Railway Station.

In the instant case, we are only concerned with the hoard- E ings containing advertisements put up adjacent to the railway compound fencing but within the railway premises by being placed on girders affixed to the earth.

The fencing of the railway compound is adjacent to and faces a public street.

It is also not disputed by the parties that the advertisements are put up at sufficient height so as to be clearly visible to and attract the attention of the members of the general public passing through the public street.

The appellant has F produced photographs of some of the hoardings which demonstrate these facts.

, The Municipal Corporation of the City of Bangalore being of the opinion that the hoardings containing advertisements put up by the appellant were exigible to tax issued a demand notice dated March 7 1973 calling upon the appellant to pay a sum of Rs. 5871-83 as th~ G

advertise~nt tax inc!uding arrears.

The !1ppellant !epresented to the Mun1c1pal authonties that as the hoardmgs contalning advertisements were situate within the railway premises they squarely fell within clause (e) of the third proviso to s. 136l of the Act. The Municipal Corporation did not accept the contention of the appellants and pressed for paying up the tax.

The appellant then filed a writ petition before the High Court H of Karnataka praying that the order of the Corporation demanding payment of tax be quashed, because the advertisements were clearly

exempt from tax by virtue of the aforeaid proviso. The writ peti- tion was in the first instance heard by a single Judge who by his order dated April 4, 1974 overruled the contention of the appellant and dismissed the petition.

Thereupon the appellant filed an appeal under the Letters Patent before a Division Bench which also affirmed the order of the single Judge, though on different grounds.

The Division Bench later on being approached under Art. 133 of the Constitution granted a certificate of fitness and hence this appeal before us.

The only point that has been raised before us i.s that the boardings containing advertisements squarely fall within the exemption contained in the third proviso to s. 13 6 of the Act and, therefore, they are not exigible to tax.

The High Court found that as the advertisements did not belong to the Railway nor for the purpose of the Railway, the proviso in question did not apply and the Single Judge was right in holding that the advertisements were exigible to tax.

The single Judge had, however, found that as the advertisements were much abme the railings _which faced the public street, the proviso had no application.

Before examining the view of the High Court, it may be necessary to extract the relevant portions of the tatute which we are called . upon to interpret. The relevant part of s. 136 of the Act runs. tbus :

"Every person who erects, exhibits, fixes or retains upon or over any land, building, wall, hoarding or structure any advertisement or wh.o displays any advertisement to public ,-iew in any manner whatsoever, in any place whether public or private, shall pay on every advertisement which is so erected, exhibited, fixed, retained or displayed to public view, a tax calculated at such rates and in such manner and subject to such exemptions, as the corporation may, with the

- approval of the Government, by resolution determipe :

~ x x x x "Provided further that no such tax shall be levied on F any advertisement which is not a sky-sign and whichx x x x ( e) is exhibited within any railway station or upon any wall or other property of a railway except any portion of the surface of such wall or property fronting any street.

Exp/a11atio11 1.-The word 'structure' in this section shall include any movable board on wheels used as an advertisement or an advertisement medium." (Eniphasis supplied)

Section 136 of the Act which is the charging section clearly shows that the intention of the statute was to tax certain types of advertisements. The pith and substance of the entire sction, therefore, is the taxation of advertisements fixed; erected or exh!b1ted on any land, building. wall, hoarding, structure etc.

Thus it is manifest, that s. 136 contemplates tax on advertisements and not tax on premises or

.. '

building'.

This clear distinction has to be kept in mind in construing the third proviso to s. 136 of the Act which falls for determination in this case, particularly in view of some of the autl1orities relied upon by the appellant which deal with tax on premises rather than tax on advertisements.

The essential conditions necessary for the applicatio1i of s. l 36 of the Act are- B

( i) that a person should erect .. exhibit, fix or retain any advertisement upon any land, building, wall, hoarding or structure or display any advertisement in any manner;

(ii) that erection. exhibition. fixation or retention or display of that advertisement must be exposed to public view; and

(iii l that the advertisement must be exhibited in any place

public or private.

The sine qua 11011 for the application of this s.ection is, therefore, tltat the advertisements displayed by any person must be to public view in any manner whatsoever.

Once these conditions are satisfied, the person who exhibits the advertisements is liable to pay tax on such advertisements As, however, the Act was merely to regulate the

premises falling within the Bangalore Municipal Corporation, it is obvious that the premises which did not fall within the Corporation or which belonged to other autonomous authorities could not be exigibl.e to tax: unless expressly so provided.

Furthermore, it appears that the object of the Municipal Corporation in charging tax was to keep the public premises clean and water-tight and protect adverti9elllenlq

which may amount to nuisance, because the Act lays down a proce.- dure which has to be followed before the adve1tisem.ents could be exhibited.

Consistent \\ith this object, therefore, the third proviso to s. 136 of the Act grants an exemption from tax on any adverti9ement which is exhibited in any railway station or upon any wall or other

property of a railway.

Here also an exception is canoed out which is tha! if such an advertisement, even though on any portion of the railway property, faces any street it will not earn the exemption.

The central argument put forward before us by Mr. V. S. Desai couusel for the appellant is that the expression "fronting any street" appearing in cl. (e) of the third proviso to s. 136 qualifies the railway property and not the advertisement so that the fact that the advertisement fronting the street or which is exposed to public view or is visible to the public from the public street wm not make the advertisement exigible to tax, if the advertisement is within the railway premises or is adiacent to the compound wall or any other property wl1ich itself is fronting the street.

In other words, the contention was that having regard to the terminology of the word "fronting" it j5 not possible to conceive that two portion~ 0f the pronerty can front a street at one and the same time, unless they are in the same

•. line.

From the photographs produced before us, as also before the High Court, it appears that the hoardings containing the advertisements are no doubt fixoed just 2 or 3 feet behind the compound fencing of the railway station premises.

Mr. Desai, therefore, contended that once the compound wall which is in front of the girders on which the advertisements are fixed faces the street, there is no question of the advertisement facing the street. Secondly, it was contended that the rest of fronting the street as contained in the third proviso is that what is fronting the street is not the advertisement but the property of the railway.

In other words, it was argued that as in the instant case the compound wall already fronted the street, the hoardings containing the advertisements being behind the compound wall, though adjacent to it, cannot be said to front the street, because two properties cannot front the street at the same time.

We have given anxious consideration to the arguments advanced by the learned counsel for the appellant, but on a proper interpretation of the proviso we are unable to accept the same.

To begin with, if the proviso is read with referenre to the context, then it is absolutely clear that the verb "fronting" qualifies not the wall or the property but the advertisement.

The central subject-matter of s. 136 as also of the proviso is not a place or building but advertisement which alone attracted tax.

If we read the third proviso in the following manner, then the intention of the statute re. comes absolutely clear :

"Provided further that no such tax shall be levied on any advertisement ( e) which is exhibited within any railway station or upon any wall oc other property of a railway except any portion of the surface of such wall or property fronting any street.'' (Emphasis supplied) The verb "fronting'', therefore, does not qualify wall or property mentioned in the latter part of the proviso but the noun advertisement. The test, therefore, laid down by this proviso is that the Court has to see whether the advertisement affixed whether inside the compound of the railway or not fronts the street.

If the advertisement fronts the sueet or faces the street even if it is within the railway premises, it will be exigible to tax.

For instance if the hoardings containing the advertisements were affixed just behind the compound wall and the advertisements did not face the street at all but faced the other side of the railway station their back being to the street, then the advertisements will certainly be exempt from tax and the proviso would clearly apply.

This seems to us to be the natural interpretation of the proviso having regard to the context in which it is placed.

Mr. Desai learned counsel for the appellant relied on the definition of the word "fronting" as used in Stroud's Judicial Dictionary, 4th End., at p. 1121, where the learned author while defining "fronting" observed thus :

"Fronting.

(1) Premises "fronting, adjoining, or abutting" on a STREET, and as such chargeable with expense

, )'

of road-making under Public Health Act 1875 (c. 55), s. 150, did not need to be absolutely contiguous."

In the first place the author defines the word "fronting" within the meaning of the Public Health Act, 1875, which levied tax on premises.

The author was not at all concerned with tax on advertisement as in the instant case.

In the case referred to in the book, the Court was called upon to judge the expenses on road-making under the Public Health Act. It is, therefore, manifest that these considerations would not apply to the facts of the present case.

On the other hand in Webster's Third New International Dictionary Vol. I, the word "front" used as a verb is defined thus :

A ,

"something that confronts or faces forward: as ( l) : a c bee of a building; esp. the face that contains the principal entrance. . ......................... put a facing upon (e.g. the building with brick) 5 : to face or look forward have the front toward, opposite, or over against the houses the street)."

According to the aforesaid dictionary meaning "fronting" merely means that the article should face or have its front toward, opposite or over against the house or the street.

In our opinion the word "front- , ing" has been used in the proviso not in any Iegal or technical sense but as used in ordinary parlance.

It is not a term of art but one that signifies its meaning according lo common notions.

For these reasons, therefore, we are clearly of the opinion that as the advertisements upon the hoardings in the instant case were undoubtedly facing or fronting the, street they were exigible to tax and the fact that they were affixed on the earth which formed the compound of the railway premises would make no difference in view of the plain and unambiguous language of the proviso. ,

Learned counsel for the appellants relied on a decision of the Madras High Court in The Corporation of Madras v. Messrs The Oriental Mercantile Company Ltd., Madras.(') This authority, however, can have no application to the facts of the present case, because to begin with, there is nothing to show that the hoardings containing the advertisements were in any way fronting or facing the street.

On the other hand, the advertisements were merely on the outside wall within the railway compound.

In these circumstances, therefore, this case does not appear to be of any assistance to the appellant.

Reliance was then placed on a decision of the Queen's Bench Division in Ware Urban District Council v. Gaunt and Others(") and particularly on the observations of Ashworth, J., where the Judge observed as follows : ·

"The remaining issue is, in a sense, the most troublesome <; f all, namely, whether it is open to the appellants to apportion part of the expense on premises situate on the westerly

(I)

[1965] 2 M.L.J. 440, (2) [l96J] 3 All E. R. 778, 787.

4-707SCI/77

A '

side of Walton Road but separated from it by the public footpath.

This issue involves as an ancillary problem the question whether part of the expense should in any event be apportioned on the public footpath.

Section 6 of the Act of 1892 provides, inter alia, that

" .... the expenses incurred by the urban authority in executing private street works shall be apportioned (subject as in this Ac_t mentioned) on the premises fronting, adjoining, or abutting on such street or part of a strret." "

The observations extracted above will show that there also the Court was dealing not with a tax on advertisements but a tax on premises, and the question of the frontage was interpreted having regard to the place where the premises were situate.

In the same judgment, the learned Judge observed as follows :

"In each case, as it seems to me, regard must be paid to the context in which the words appear and, quite apart from any decided cases, I am inclined to think that the context in the present case points to an enlarged rather than a restricted meaning of the word "adjoin". "

(Emphasis ours)

It is, therefore, clear that the meaning of the words used in a particular statute has to be construed with reference to the context and not in isoiation, nor is it possible to lay down any rule of universal application in a matter like this.

For these reasons, therefore, this authority also does not appear to be apposite so far as the present case is concerned.

The Single Judge of the High Court, while interpreting the proviso, observed as follows :

"These advertisements in question are displayed on the hoardings standing close to the cement fencing at the .outer mark of the railway property. The cement railings are hardly about 3 feet in height and the advertisement boards are very much above the railings.

The Public street to which the advertisements are facing runs along the cement railings, with no other obstacle between the advertisement boards and the public view.

Therefore, it can reasonably, be said that they are fronting the Public Street."

We find ourselves in complete agreement with the view taken by the Single Judge.

The Division Bench of the High Court, however, while upholding the judgment of the Sine Judge, observed as follows :

"In the instant case, we are not faced with any situation as the one envisaged in the second part of the exemption clause relative to advertisement on a wall or other property

uf the railway 'frontage by street'.

We are concerned herein with the case of a hoarding put up by and belonging to the appellant and not the railway.

Hence, it is plain that no exemption on that score could be claimed on behalf of the appellant."

The High Court does not appear to have interpreted the proviso correctly.

The view of the High Court that the proviso would only apply B to advertisements of such ho<1rdings whose ownership lies with the Railway or which belong to the Railway is not borne out by cl. (e) of the third proviso to s. 136.

In other words the question of exigibility to tax is relatable not to the ownership of the hoarding but its situs.

Even if the hoarding does not belong to the Railway but to some private party, if it does not front the street and is situated within the Railway premises1 or within the compound of the railway C premises it is clearly exempt.

We, therefore, do not approve of the line of reasoning adopted by the Division Bench.

On a close and careful interpretation, therefore, of cl. (e) of the third proviso to s. 136 of the Act we are clearly of the opinion that on the facts proved in the present case as the hoardings containing the advertisements were fronting the public street and we.re clearly expos- I) ed to public ·, iew and the members of the public passing through the street, they are not covered by the exemption contemplated by the proviso and are, therefore, exigible to tax.

The demand notice, therefore, served on the appellant by the Municipal Corporation for payment of tax is not legally erroneous.

The result is that the appeal is dismissed with costs.

P.B.R.

Appeal dismissed.

LINKS ADVERTISERS & BUSINESS PROMOTERS

April 21, 1977

P. K. GOSWAMI

S. MURTAZA FAZAL ALI, JJ

S. 136

Section 136

Fazal Ali

V. S. Desai

Sanjev Aggarwal

R. B. Datar

S. S. Java

Jagannath Shetty

B. P. Singh

S. N. Prasad

Girish Chandra

FAZAL ALI

s. 136

March 7 1973

s. 136

High Court H of Karnataka

April 4, 1974

Art. 133

s. 13

s. 136

Section 136

s. 136

s. 136

Bangalore Municipal Corporation

s. 136

V. S. Desai couusel

s. 136

Desai

s. 136

Stroud

Public Health Act 1875

s. 150

Public Health Act, 1875

Madras High Court

Ashworth

Section 6

s. 136

s. 136


SUPERINTENDENT OF POST OFFICES ETC. ETC.

P. K. RAJAMMA ETC. ETC.

April 22, 1977

[M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM, JJ.J

Constitution of India, Art. 311(2)-Whelher the post of extra Departmental Branch Postmasters/ Sub Post-Masters/ Delivery agents a "Civil Post" within 1he nleaning of Art. 311(2)-Posts and Telegraphs Extra-Departmental Agenis (Conduct and Service) Rules, 1964--Rule 2(b).

The respondents in all these appeals are "extra departmental agents" within the meaning of Rule 2(b) of the Posts and Telegraphs Extra Departmental Agents (Conduct of Service) Rules, 1964 issued under the authority of the Government of India. They were either dismissed or removed from service during the period between January 1, 1966 and June 18, 1974, admittedly without complying with the provisions of Art. 311(2) of the Constitution. The question in each case is whether the respondent held a "civil , post" as contemplated in Art. 311 (2) of the Constitution. The High Court of Kerala, Andhra Pradesh & Orissa held that the respondents held a civil post under the Union of India and the orders terminating their services in violation of Art. 31.1(2) of the Constitution were invalid.

Dismissing the appeals the Court,

HELD : ( 1) An "extra departmental agent" held a "civil post" and his dismissal or removal would be invalid, if there was non-compliance with Art. 311(2) of the Constitution. f680 B-C. 682 El

(2) An extra departmental agent is not a casual worker, but he holds a post under the administrative control of the State. It is apparent from the 1964 Rules that the employment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular time.

Though such a post is outside the regular civil service, there is no doubt it is a post under the State. [681 E-F] State of Assam & Ors. v. Kanak Chandra Dutta [1967] I SCR 679 @ 682

applied.

(3) The 1964 rules make it clear that these extra-departmental agents work under the direct control and supervision of the authority who obviously have the right to control the manner in which they must carry out their duties.

There can be no doubt, therefore, that the relationship between the Postal Authoritits and the extra-departmental agents are of master and S<>rvant.

(662 C-EJ

VenkaJaswanzy v. Superintendent, Post Offices, AIR 1957 Orissa

112; V.

Subbaravalu v. Superintendent of Post Offices, AIR 1961 Madras 166, l1el<l inapplicable.

C!vIL APPELLATE JURISDICTION: c. As Nos. 1172, 1354, 1355 1and 1751 of 1972.

(Appeals by Special Leave from the Judgment and Order dated the 27.9.1971 of the Kerala High Court in O.P. No. 1339/70, W.A.No.

H 8/70, W.A. No. 420/69 and O.P. No. 862 of 1969 respectively.)

AND Civil Appehl No. 2275 of 1972

SUPDT. POST OFFICES v. P. K. RA.TAMMA (Gupta, J.) 679

(Appeal by Special Leave from the Judgment and Order dated the 18.11.1971 of the Andhra Pradesh High Court in Writ Petition No. 5662/70).

AND Civil Appeals Nos. 1015173, 1865/74 and CA No. 506/76.

(From the Judgments and Orders dated the 7-9-72, 22-7-74, and B 30-10.1975 of the Andhra Pradesh High Court in Writ Petitions Nos. 4717171, 3914/74 and 4213/75 respectively).

AND CA No. 1866 of 1973 and 1867 /73.

(Appeais by Special Leave from the Judgment and Order dt. the 15.2.1972 of the Andhra Pradesh High Court in Writ Petition No. c

2933 and 3385/71 respectively.)

AND Civil Appeal No. 1234 of 1974.

(Appeal by Special Leave from the Judgment and Order dated the 18.10.1973 of the Andhra Pradesh High Court in S.A. No. 360 of D 1972).

AND Civil Appeal Nos. 1300 and 1393 of 197 6.

(From the Judgment and Order dated the 5-12-1975 of the Kerala High Court in Writ Appeals Nos. 414 & 415 of 1975).

AND Civil Appeal No. 1313 of 1976.

(Appeal by Special Leave from the Judgment and Order dated the 10.3.1976 of the Orissa High Court in O.J. C. No. 531/74).

 Niren De, Attorney General of India in CAs 1171, 1354-1355; V. ('. Raman, Addi. Sol. General in CAs 2275 and 1313 with B. Datta in CAs 1172, 1355 and 2275 and Girish Chandra, for the appellants in all the appeals.

Vepa Sarathi, N. Sudhakaran and P. K. Pillai for respondents in

CA 1172/72.

G Vepa Sarathi (1354) K. M. K. Nair and Mrs. B. Krishnan for respondents in CAs 1354, 1751/72 and 1300 and 1393 of 1976.

Mrs. S. Gopalakrishnan, for respondent in CA 1355.

K. layaram and K. Ram Kumar for respondents in CAs 1866-67, 1015/73 and 1865 of 1974 and 506/76.

Mrs. Veena Devi Khanna, for respondent in CA 2275/72.

C. S. S Rao, for respondent in CA 1313/76.

A The Judgment of the Court was delivered by

GUPTA, S.-The respondents in all these fourteen appeals, some of which are on certificate and some by special leave, are extra-departmental agents connected with the postal departioont.

Six of these appeals are from the Kerala High Court, seven from the Andhra Pradesh High Court and one from the Orissa High Court.

These res- B pondents were either dismissed or removed from service during the period between January !, 1966 and June 18, 1974, and admittedly the order of dismissal or removal was passed without complying with the provisions of Article 311 (2) of the Constitution.

The question in each case is whether the respondent held a civil post as contemplated in Article 311 of the Constitution; if he did the dismissal or removal, as the case may be, would be unquestionably invalid for non-compli- C ance with Article 311 ( 2) . ·

The conditions of service of the respondents arc governed by a body of rnles called the Posts and Telegraphs Extra Departmental Agents (Conduct and Service) Rules, 1964 (herc:nafter called the mies) issued under the authority of the Government of India. Rule D 2 (b) of the rnles defining "Extra Departmental Agent" includes within the category, among others, Extra Departmental Sub Postmastern.

Extra Departmental Branch Postmasters, Extra Departmental Delivery Agents, and several sections of class IV employees.

Eleven of the respondents arc extra departmental branch postmasters, one is an extra depai tmental delivery agent, and two are class IV extra departmental

employees. In all these casesl the High Courts have found that the respondents held civil posts under the Union of India and the orders terminating their services in violation of Article 311 (2) of the Constitution were invalid.

This Court in State of Assam and others v.

Kanak Chandra Dutta(') has explained what a civil post is.

In that case the respondent who was a Mauzadar in the Assam Valley was dismissed from se1vice in disregard of the provisions of Article 311 (2).

It was held

tat "having regard to the existing system of his recruitment, employment and functions", he was "a servant and a holder of a civil post under the State", and therefore entitled to 'the protection of Article 311 ( 2) .

This Court observed :

". . . . a civil post means a post not connected with defence and outside the regular civil servioes.

A post is a service or employment. ...... There is a relationship of master and servant between the State and a person holding a post under it.

The existence of this relationship is indicated by the State's right to select and appoint the holder of the post, its right to suspend and dismiss him, its right to control the manner and method of his doing the work and the payment by it of his wages or remuneratiqu."

(tl [I967J l s.c.~. 679 (682).

SUPDT. POST OFFICES v. P. K. RAJAMMA (Gupta, J.) 681

A post, it was explained, exists apart from the holder of the post. "A post may be created before the appointment or simultaneously with it.

A post is an employment, but every employment is not a post.

A casual labourer is not the holder of a post.

A post under the State means a post under the administrati¥e control of the State.

The State may create or abolish the post and may regulate the conditions of service of persons appointed to the post." Turning now to the. rules by which the respondents were admittedly governed, it appears that they contain elaborate provisions controlling the appointment, leave, termination of services, nature of penalties, procedure for imposing penalties and other matters relating to the conduct and service of these extra departmental agents.

There is a schedule annexed to the rules naming the appointing authorities in respect of each category of employees.

Rule 5 states that the employees governed by these rules shall be entitled to such leave as may be detemiined by the Government from time to time and provides that if an employee fails to resume duty on the expiry of the maximum period of leave admissible and granted to him or if an employee who is granted leave is absent from duty for any period exceeding the limit upto which he could have boon granted leave he shall be removed from the service unless the Government decides otherwise in the exceptional circumstances of any particular case.

The services of employees who had not put in more than , three years' continuous service are liable to be terminated at any time under rule 6 for unsatisfactory work or for any administrative reason. ' The rules also indicate the nature of penalties which may be imposed on an employee and the procedure for imposing them.

A right of appeal is provided against an order imposing anY. of the penalties on the employee.

Various other conditions of service are also provided in these rules,

It is thus clear that an extra departmental agent is not a , casual worker but he holds a post under the administrative control of the State.

It is apparent from the rules that the employment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular time. Though such a post 1s outside the regular civil services, there is no doubt it is a post under the State.

The tests of a civil post laid down by this Court in Kanak Chandra Dutta's case (supra) are clearly satisfied in the case of the extra departmental agents.

For the appellants it is contended that the relationship between the postal authorities and the extra departmental agents is not of master and servant, but really of principal and agent.

The difference between the relations of master and servant and principal and agent was pointed out by this Court in Lakshminaraya11 Ram Gopal and Son Ltd. v.

The Government of Hyderabad.(') On page 401 of the report the followmg lines from Halsbury's Laws of England (Hailsham edition) Volume 1, at page 193, article 345, were quoted with approval in explaining the difference :

(I) [l955J l S, CR. 393.

A •

"An agent is to be distinguished on the one hand from a servant, and on the other from an independent contractor .

A servant acts under the direct control and supervision of his

master, and is bound to conform to all reasonable orders given him in the course of 11is work, an independent contractor, on the other hand, is entirely independent of any control or interference and merely undertakes to produce a specified result, employing his own means to produce that result. An agent, thougb bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the drrect control or supervision of the principal. An agent, as such is not a servant, but a servant is generally for some purposes his master's implied agent, the extent of the agency depending upon the duties or position of the s-ervant."

The rules make it clear that these extra departmental agents work under the direct control and supervision of the authorities who obviously have the right to control the manner in which they must carry out tlmr

duties.

There can be no doubt therefore that the relationship between the postal authorities and the extra departmental agents is one D of master and servant. Reliance was placed on behalf of the appellants on two decisions, one of the Orissa High Conrt Venkata Swamy

v. Superintendent, Post Offices(') and the other of the Madras High Court V. Subbaravalu v. Superintendent of Post Offices. (2) The judgment in these cases were rendered before the elaborate rules governing the conduct and service of these extra departmental agents were brought into operation in 1964. We do not therefore think an E examination of these two decisions will be relevant or useful for disposing of the appeals before us. .i...

The appeals arc accordingly dismissed with costs : one set of hearing fee in respect of all the appeals except' C.A. 1172 of 1972 C.A. 1751 of 1972 and C.A. 2275 of 1972 in which separate orders as to costs was made earlier.

S.R.

(!) AIR 1957 Orissa 112 ..

(2) AIR 1961 Madras 166-

Appeals dismissed

SUPERINTENDENT OF POST OFFICES ETC. ETC

P. K. RAJAMMA ETC. ETC

April 22, 1977

M. H. BEG, C.J.

A. C. GUPTA

P. S. KAILASAM, JJ

Constitution of India

Art. 311(2)

Art. 311(2)

Government of India

January 1, 1966

June 18, 1974

Art. 311(2)

Art. 311

Art. 31

Art. 311(2)

SUPDT. POST OFFICES

P. K. RA.TAMMA

Niren De

B. Datta

Girish Chandra

Vepa Sarathi

N. Sudhakaran

P. K. Pillai

G Vepa Sarathi

K. M. K. Nair

B. Krishnan

S. Gopalakrishnan

K. layaram

K. Ram Kumar

Veena Devi Khanna

C. S. S Rao

GUPTA

Kerala High Court

Andhra Pradesh High Court

Orissa High Court

January !, 1966

Article 311

Article 311

Article 311

Article 311

Assam Valley

Article 311

Article 311

Gupta

Kanak Chandra Dutta

article 345

Madras High Court


LJFE INSURANCE CORPORATION OF !NOIA

KOTA RAMABRAHMAM AND ORS.

April 22, 1977

(M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM, JJJ

Life Insurance Corporation Act, 1956-S. 9(1)-Madras Agriculturi'sts Relief Act, 1938 scaled down certain debts of agriculturists-Act saved debts due to a Corporation formed under special Indian Law-Loans given by Inswance Companies to agriculturists-If could be deemed tC# have been entered into by the Corporation after it took ol'er business of l11surance Con1panies.

The respDndents, who were agriculturists, took loans fron1 two insurance companies 1n 1950 and 1952. In suits for the recovery of the debts, filed by the Life Insurance Corporation after it had taken over the insurance companies, the respondents claimed that the debts should be scaled down in accordance with s. 4(e) of the Madras Agriculturists Relief Act, 1938. Section 4(e) 'kept certain debts and liabilities of agriculturists out of the reach of the Act, including any debt due to any Corporation formed in pursuance of any "Special Indian Law''. The Corporation's contention that the debts would not be affected by s. 4(e) was rejected by the trial court as well as the High Court which held that because of the genesis of the debts~ s. 4(e) was attracted.

On arpeal to this Court it was contended thats. 9(1) of the Life Insurance Corporation Act created a legal fiction that contracts to which an insurer was a party shall be deemed to have been entered into or issued in favour of the Cor poration and that being so, the debt<; in question should be taken as due to the Corporation from the beginning and, therefore, outsides. 4(e) of the 1938Act.

Dismissing the appeals,

HELD: Section 9(1) of the Life Insurance Corporation Act, 1956 does not create any legal fiction.

It seeks to provide that the contracts and other instru ments subsisting immediately before the vesting may be enforced and acted upon by the Corporation after vesting. Under s. 9(2) any pending proceeding on the appointed day by or against an insurer may be continued by or against the Corporation. Section 7 ( 1 ) provides that all the assets and liabilities of the insurers relating to their 1ife insurance business vest in the Corporation. Under s. 7(2) the liabilities include obligations of whatever kind existing on the appointed day. The debl'i due to the insurers in these two cases were liable to be scaled down in accordance \vith the provisions of the 1938Act which was a liability or obligation appertaining to the debts on the appointed day, that is, September 1, 1956. This liability or obligation annexed to the debts must be held to have been transferred to and vested in the Corporation along with the assets of the insurers under s. 7 and the Corporation in seeking to recover the debts cannot ignore the obligations of the insurers in respect of the transactions. [685 G; 686 Al

CIVIL APPELLATE JURISDICTION : c. A. Noo. 1959 & 1960 of 1970 .

(Appeals by Special Leave from the Judgment and Order dated the 10-10-1969 of the Andhra Pradesh High Court in

LP.A.

No. 165/67 and A.S. No. 233/67 respectively).

A. K. Somnath Iyer, K. L. Hat/ii, P. C. Kapoor, for the appellant

in both the appeals.

G. Vmkatnrama Sastrr, B. Partlwsarthi. for respondents in CA 1959/70.

A •

A. Subba Rao, for respondents in CA 1969/70.

The Judgment of the Court was delivered by

(1977] 3 S.C.R.

GUPTA'. J .-Thse are two appeals by the Life Insurance Corporation of India (hereinafter referred to as the Corporation) with special leave obtained from this Court against a common Judgment of the Andhra Pradesh High Court disposing of two appeals preferred by the Corporation.

The appeals before the High Court arose out of two suits instituted by the Corporation.

For the question that arises !or determination, which we will presently state, it is not necessary to 5et out the facts in any great detail.

One of the suits was brought in I% I for recovery of a sum of about Rs. 17,000/-, after giving credit to the payments made by the defendants, due on a mqrtgage executed by the defendants in 1950 in favour of the Andhra Insurance Company ot Masulipatnam.

The other suit was filed in 1962 for recovery of about Rs. 45,555/- also due on a mortgage which was executed in 1952 by the defendants of this suit in favour of the Nr Pioneer Insurance Company Ltd., Bombay.

Thus in both cases the loans were incurred long before the Corporation was established on September l, 19~6 under the Life Insurance Corporation Act, 1956.

In both suits tlrc mortgagors claimed that the debt should be scaled down in accordance with the provisions of the Madras Agriculturists Relief Act (Madras Act IV of 1938) (hereinafter referred to as the Madras Act]. It 1s not disputed in either case that the mortgagors are agriculturists.

The trial court upheld their claim, scaled down the debts and deerced the suits accordingly.

The High Conrt on appeal affirmed the decision.

The claim was resisted by the Corporation relying on the provisions of section 4 ( e) of the Madras Act which is as follows :

"4. Nothing in this Act shall affect debts and . liabilities of an agriculturist falling under the following heads :

x x x

( e) any liability in respect of any suin due to any cooperative Society, including a land mortgage bank, registered or deemed to be registered under the Madras Co-operat!ve Societies Act, 1932 or any debt due o any Corpora~1on formed in pursuance of an Act of Parliament (of the Uruted Kingdom) or of any special Indian Law or Royal Charter or Letters Patent."

The question arising for decision in the appeals is whether, in resp.::cl of the debts sought to be recovered, the application of the Madras Act is barred by section 4(e) of that Act.

Section 4 of the Madras Act keeps certain debts and liabilities out of the reach of the Act including any debt due to any corpo!atlon formed in pursuance of "any special Indian law".

There is no d1sp_ute that the Corporation established under the Li!e Jnsu.rance Corporatmn Act 1956 is a corporation as contemplated m section 4(e). It is cO'ltended on behalf of the appellant that the debts in question in these cases would not therefore be affected by anything contained in the

...

L. I. c. v. KOTA RAMABRAHMAM (Gupta,: J.) 685

Madras Act.

This contention was not accepted either by the tnal court or the High Court who held that the debts were due originally not to the corporation but to the insurers whose life insurance business was taken over by the corporation and because of the genesis of the debts, section 4(e) of the Madras 'Act was not attracted.

It will be necessary at this stage to refer to certain provisions ot !he Life Insurance Corporation Act, 1956. It is an Act "to provide for the nationalisation of life insuran~ business in India by transferring

all such business to a corporation established for the purpose and to provide for the regulation and control of the business of the corporation and for matters connected therewith or incidental thereto".

Sub-section ( 1) of section 7 of the Act provides that on the appointed day all the assets and liabilities appertaining to the life insurance business of all insurers shall be transferred to and vei>ted in the corporation. 'Appointed day' has been defined in section 2(1) as the date on which the corporation is established, which is September 1, 1950 .

Sub-section (2) of section 7 states inter alia, that the liabilities mentioned in sub-section ( 1) "sha; l be deemed to include all debts, liabilities and obligations of whatever kind" existing on the appointed day and relating to the life insurance business of the insurer.

Section Y describes the general effect of vesting of the insurers' business in the corporation.

Sub-section ( 1) of the section states that unless otherwise expressly provided by the Act, all contracts, agreements and other instruments subsisting immediately before the appointed day to which the insurer whose business has vei>!ed was a party or which are m favour of such insurer shall "be of as ru:1 force and effect against or in favour of the corporation, as the case may be, and may be enforced or acted upon as fully and effectually as if, instead of the insurer, the corporation had been a party thereto or as if they had been entered into or itssued in favour of the corporation".

Sub-section (2) of this section says that if on the appointed day any suit, appeal or other legal proceeding was pending by or against an insurer relating to his life insurance business, it will not be prejudicially affected by reason of the transfer to the Corporation of the business of the insurer but may be continued by or against the corporation.

Mr. Somnath Iyer appearing for the appellants in both the appeals contends that sub-section ( 1) of section 9 creates a legal fiction that the contracts or instruments to which the insurer was a party shall be deemed to have been entered into or issued in favour of the corporation. That being so, the argument proceeds, the debts in question G should be taken as due to the corporation from the beginning, and, therefore, outside the scope and ambit of the Madras Act in view ol section 4(e) of that Act.

We do not however think that sub-section

(1) of section 9 creates any legal fiction of that kind.

This subsection seeks to provide that the contracts and other instruments subsisting immediately before the vesting may be enforced and acted upon by the Corporation after vesting.

This is made clear by sub-section H

(2) of section 9 which states that any pending proceeding on the appointed day by or against an insurer may be continued by or against the corporation.

Under sub"Section (l) of section 7 all the assets

A •

and liabilities of the insurers relatini: to their life insurance business vest in the corporation on the appomted date.

Sub-section

(2) ot section 7 states that the liabilities include obligations of whatever kin<l existing on the appointed day.

The debts due to the insurers in thes~ two cases were liable to be scaled down in accordance with the provisions of the Madras Act which was a liability or obligation appertaining to the debts on September 1, ~Q56. the appointed day.

This liability or obligation annexed to the debts must be held to have been transferred to and vested in the corporation along with the assets ot the insurers under section 7 of the Act, and the corporation in seeking to recover the mortgage dues cannot ignore the obligations of the

insurers in respect of the transactions.

In our opinion the view taken by the High Court was therefore correct.

The appeals arc accordingly dismissed with costs.

One hearing fee.

P.B.R.

Appeals dis111issed.

LJFE INSURANCE CORPORATION OF !NOIA

KOTA RAMABRAHMAM AND ORS

April 22, 1977

April 22, 1977

(M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM, JJJ

Life Insurance Corporation Act, 1956-S. 9(1)-Madras Agriculturi'sts Relief Act, 1938 scaled down certain debts of agriculturists-Act saved debts due to a Corporation formed under special Indian Law-Loans given by Inswance Companies to agriculturists-If could be deemed tChave been entered into by the Corporation after it took ol'er business of l11surance Con1panies.

M. H. BEG, C.J.

A. C. GUPTA

P. S. KAILASAM

Life Insurance Corporation Act, 1956

S. 9(1)

Relief Act, 1938

s. 4(e)

Madras Agriculturists Relief Act, 1938

Section 4(e)

s. 4(e)

s. 4(e)

Life Insurance Corporation Act

Section 9(1)

Life Insurance Corporation Act, 1956

s. 9(2)

Section 7

s. 7(2)

September 1, 1956

s. 7

CIVIL APPELLATE JURISDICTION

A. K. Somnath Iyer

K. L. Hat

P. C. Kapoor

G. Vmkatnrama Sastrr

B. Partlwsarthi

A. Subba Rao

Life Insurance Corporation of India

Andhra Pradesh High Court

September l, 19~6 under

Life Insurance Corporation Act, 1956

Madras Act IV of 1938

section 4

Societies Act, 1932

section 4(e)

Section 4

Corporatmn Act 1956

section 4(e)

section 4(e)

Life Insurance Corporation Act, 1956

India

section 7

section 2(1)

September 1, 1950

section 7

Somnath Iyer

section 9

section 4(e)

section 9

section 9

section 7

section 7

section 7


P. CHITHARANJA MENON & ORS.

A. BALAKRISHNAN & ORS

April 25, 1977

[M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM JJJ

(i8 7

Service n1atter-Pron1otions 1nade in J 962--1¥rit pctitiu11s filed in 1972-Jf could be entertained.

On May 15, 1961 the State Government passed orders (Ex. Pl) that all Panchayat Officers functioning under the Travancore Cochin Panchayats Act, 1950 and Panchayat Executive Officers functioning under the Madras Vilhi.ge Panchayats Act, 1951 as on December 31, 1961 who con.tinue to hold their appointments \Vhen the Kerala Panchayat Act, 1960 came into force would be C absorbed as Panchayat Executive Officers under the new Panchayats. The order also provided that the stalf of the Malabar District Board shall be absorbed as Pancbayat Executive Officers in suitable grades.

On the recommendation of the State Public Service Commission the State Government appointed 17 Panchayat Officers in a higher grade by an order dated December 28, 1961 (Ex. P8) and the officer joined their posts between December 30, 1961 and January 2, 1962. To fill up the resulting vacancies 17 of this Panchayat Executive Officers who were in Grade II (respondents 3 to 18) D were appointed. The appel1ants were appointed as Executive Officers on the Grade I, as and from January l, 1962.

The respondents' representation to the Government that they Should be appointed with effect from December 28, 1961, that is, the date on which the Public Service Commission communicated their appointment was rejected by the State Government (Ex. PIO) on the ground that the vacancies arose only on the

1!a; a~~ l~6a.:nrt; t cfu~;:hit!~~1l; ~ce~r b~O~~i~ a~~~~~~ wi~ E the vacancies. In a petition under Art. 226 of the Constitution the High Court directed that fresh lists be prepared.

Allowing the appeal,

HEI.D : The respondents are not entitled to the reliefs prayed for by them in the writ petitions. [691 Fl

The appellants were promoted to a higher post before the respondents were F integrated into the Government service on January l, 1962. Throughout the appellants have been treated as occupying a higher post and respondents' much lower post. Though the promoion of the appellants was before January 1, 1962 and was confirmed by vanous orders of the Government the respondents did not choose to challenge the orders till 1972. [689 G]

There is no ground fo: challenging Ex. PIO order. It refers to the G.O. of February 13, 1962 by which 16 respondents in the writ petition were promoted as Executive Officers Grade I on the adYice of the State Public Service Commis- G sion. Their promotion having been ordered on February 13, 1962 without chaUenging that order a subsequent order which determined the date' of their conuilencement of service cannot be challenged.

[689 E-FJ

There is no merit in the respondents' contention that if the vacancies in which the appellants and other Panchayat Executive Officers were absorbed arose after January J, 1962 the _respondents would be entitled to be integrated along with the Panchayat Executive Officers and since they were drawing the H sam~ pay they ought to have been given an equal ranking. The apoointrnents of_ the appellants and other Panchayat Executive Officers were made before D_ecember 31, 1961 and as the integration was to take effect from January 1,

~ "" .... 1962 they. cannot have any grievance.

Further, the respondents were not equatt:d with the appellants . and other Panchayat Executive Officers when they were integrated from the Distnct Board Service.

[690 F-G]

CivIL APPELLATE JURISDICTION : C. A. No. 1547 Of 1975.

(Appeal by Special Leave from the Judgment and Order dated the 24-1-1974 of the Kerala High Court in O.P. No. 5566/72).

Y. S. Chitale, A. S. Nambiar, for the appellant.

K. T. Harindranath, K. R. Nambiar, for respondents Nos. 1, 3 and 4.

T. S. Krishnamoorthy Iyer, N. Sudhakaran, for respondents Nos. 5 & 6.

C The Judgment of the Court was delivered by

KAILASAM, J.-This appeal is by special leave granted by this Court against the judgment of the High Court of Kerala in 0.P. No. 5566 of 1972 by respondents 4 to 8 and 13 before the High Court.

The respondents herein filed the writ petition for the issue of the Writ of Certiorari calling for records relating to Ex. P-10, GO Kt.

No. 3386/69/DD dated 23rd October, 1969, Ex. P!2 and Ex. Pl5 and quash the same and to issue a writ of mandamus directing the respondents 1 and 2 who are the State of Kerala represented by the Chief Secretary, Government of Kerala, and the Director of Panchayats to forbear the implementation of Ex. P12 and further direct them to implement Ex. P-8 grading-3 list or in the alternative to issue a writ of mandamus directing the State of Kerala to consider and dispose of Ex. Pl3 and similar representations by respondents 3 and 4 on merits.

It was also prayed that a writ of certiorari quashing bx.

Pl 7 in so far as it related to the petitioners and reseondents 3 to 18 in the writ petition be issued and also to issue a writ of mandamus compelling the respondents 1 and 2, State of Kerala and the Director of Panchayats, to assign the writ petitioners the appropriate ranJ>s in the cadre of Executive Officers in the Panchayat Services. The High Court allowed the writ petition and set aside the list Ex. P 17, the order Ex. Pl2 and the order Ex. PIS dismissing the appeal petition Ex. 1'14 and directed that a fresh list be prepared in accordance with tho principles laid down in Ex. P16 in the light of the judgment of the High Court.

Aggrieved by the decision of the High Court the appellants have preferred this appeal.

The writ petition was contested by 18 respondents.

Respondents 3 to 10 were Panchayat executive officers of the Malabar area functioning under the Madras Village Panchayat Act, 1951, on 3Ist December, 1961. Respondents 11 to 18 were Panchayat Officers functioning as such on 31st December, 1961 under the Travancore-

Cochin Panchayats Act, 1950.

The Kerala Panchayats Act, 1960, Act 32 of 1960 received the assent of the Governor on 8th December,

1960 and was published in Kerala Gazette Extraordinary No. 119 dated 9th December, 1960. It is common ground that the respondents became Government servants on and from 1st January, 1962.

--"

On 15th May, 1961, under Ex. Pl the Government passed an order that a;! Panchayat Officers/ executive officers who continue to hold their appointments at the time when the Act came into force will be absorbed as Panchayat executive officers in the new Panchayats.

The rome order provided that the staff of the Malabar District Board shall be absorbed as Panchayat executive officers in suitable grades according to their qualifications, grades and suitability.

In December, 1961, 17 Panchayat officers were to be appointed R on a scale of pay higher than the scale applicable to the Panchayat executive officers.

The Public Service Commission selected 17 Panchayat executive officers who were on the scale of pay Rs. 80-IJO

and drew up a list on 27th December, 1961. They were appointed as Panchayat Inspectors under Ex. P8 on 28th December, 1961.

To fill up these vacancies 17 of th~ Panchayat executive officers who were in Grade II on the scale of pay Rs. 40-120, the respondents 3 to rn C were appointed.

The 5 appellants before us were appointed as executive officers on the grade I Rs. 80-150 as and from I st January, I 962.

The respondents who were the petitioners in the writ petition were integrated in the service.

The Government passed orders laying down the principles of integration of the District Board employees and the J>anchayat executive oftlcers and Panchayat Officers.

The impugned D orders under the writ petition are Ex. PlO, Ex. Pl2 and Ex.

Pl 5.

It is also prayed that Ex. Pl 7 may be quashed.

The Government in Ex. PlO came to the conclusion that the vacancies on the advice ol the Public Service Commission and the appointment of those that had been advised on 28th December, 1961" arose only on the dates enumerated in the order Ex. PIO commencing from 30th December, J 961, and ending with 2nd January, l 962 and that the appointment E can only be on occurrence of the vacancies. We do not sec on what basis Ex. PlO could be challenged.

Ex. PIO refers to

G. 0.

MS No. 93/62 dated 13th February, 1962. By the G.O. of 1962, 16 respondents in the writ petition were promoted as executive otlicers Grade I on the advice of the Public Service Commission.

The promotion of the respondents in the writ petition having been ordered as early as 13th February, 1962, without challenging that order a subse- F quent order which detennined the date of their commencement of service carrnot be challenged. In fact, the respondents were appointed to the higher posts on 28th December, 1961, and they took charge on 30th December, 1961, 31st December, 1961, 1st January, 1962 amt 2nd January, 1962.

The respondents in this petition were integrated into the service only on 1st January, 1962. Their position in the service was to be determined by the Government later. If the respon- G denm were aggrieved at the posting to the higher post of the present appellants and others they ought to have even challenged promotion which was made on 1st January, 1962.

Not having questioned the legality of the promotion or the G. 0. of 1962 it is too late for them to question the validity of the G.O. of 1969 filing a writ petition in the year 1972.

Apart from this insurmountable objection even on merits the respondents have no claim. The Government passed Ex. Rl dated 31st January, 1965, laying down the principles of integration of the District

Board employees and the Panchayat executing oftkers and Panchayat Officers.

It provided that the integration must be based on functional parity.

Ex. P12 is a G. 0. dated 5th May, 1970. The G. O. refers to the earlier G. Os dated 13th February, 1962, and 24th June, 1969, and states that the names of the 17 executive officers the appellants and others, are given rank under executive officers Grde I as on 6th January, 19_62.

The grada_tion list is P-17 dated 22nd July, 1972.

After refernng to the earlier G. Os the Director of Panchayals approved a final gradation list of Executive Officers of Panchayats as on 6th January, 1962.

The appellants are ranked as 58, 59, 60, 61, 62 etc.

The respondents made representations against Ex. Pl2 but these representations were not accepted and a list Ex. P8 was drawn up.

The respondents again objected to the list and subsequently Ex. P12 was prepared. Objections (P14) were raised to Ex. P12 but they were rejected by order Ex. P15 and final list Ex. Pl 7 was published in accordance with the suggestions made in Ex. Pl2.

The contention on behalf of the respondents is that the order under Ex. P12 is against the position taken by the Govermnent in Ex. l'lU and PlO(a) and the Director had no authority to prepare a list Ill contravention of Bxs. PIO and PlO(a). Ex. Pl2 was challenged on the ground that it is not in accordance with Ex. P-16 which settled the principles to govern the integration. It was therefore submitted that Ex. P12 and Pl 7 must be quashed.

Strong reliance Was placed on the order of the Government dated 15th May, 1961, which while it provided that Panchayat Officers Executive Officers who .continue to hold their appointments at the time when the Act comes into force will be absorbed as Panchayat Executive Officers . in the new Panchayats, secured the right of the staff of the District Board by providing that the staff of the Malabar District Board shall be absorbed as Panchayat Executive Officers in suitable Grades according to their qualifications,

gradend suitability.

On the basis of the principle of integration above cited it was submitted that if the vacancies in which the appellants and other Panchayat Executive Officers were absorbed arose after 1st January, 1962, the respondents would be entitled to be integrated along with the Panchayat Executive Officers and as they were drawing the same pay they ought to have been given an equal ranking.

We have already pointed out that these appointments were made before 31st December, 1961, and as such the respondents cannot have any claim.

The appointments of the appellants and other Panchayat Executive Officers were made before 31st December, 1961, and as the integration was to take effect from 1st January, 1962, they cannot have any grievance.

Further, it will be seen from G.O. MS.97 /67 /A & RDD dated 18th March, 1967, which refers to absorption of various categories of staff of the defunct Malabar District Board in the Department of Local Bodies, it is stated in Paragraph 3 that while 9 U. IJ.

Clerks will be equated to the posts of Panchayat Executive Officers, 2nd Grade, 21 Lower Division Clerks and 8 Revenue Inspectors and 4 clerical attenders will be equated to the posts of the Panchayat Executive Officers 3rd grade. It is stated that responde1; Jts 1 to 4 come under this category and are only 3rd Grade Execuuve Officers.

Lt will thus be seen that the respondents were not equated with the appellants and other ?a1:1chayat Execuive Officers when tht?' were integrated from the District Board service.

_ The persons similarly situated as the respondents herein who were rntegrated from the District Board services filed writ petitions before the. High Cort.impleading the present appellants challenging the gra- <lallon and fa!lcdin their attempt.

The earliest petition is in O.P. No. 1431 of 1970.

Justice Isaac who heard the petition observed that the petitioners catne in the integrated service as 3rd Grade Executive Officers and were promoted to 2nd Grade with effect i'rom 6th

February, 1968, while respondents 3 to 10 (some of whom are appellants before us) have been promoted as early as 16th February, I 962,

as 1st grade officers.

The learned Judge further observed, . "Even ignoring this, respondents 3 to I 0 were I Grade Executive Officers from 16-2-1962, while the Petitioner has become even JI Grade Executive Offic'r only with effect from 6-2-1966." As the petitioner before the learned Judge was holding a post much inferior to the posts held by respondents 3 to 10 from 1st February, 1962, onwards, he dismissed the petition being devoid of any merit on 24th May, I YTL.

Another writ petition No. O.P. No. 6423 filed by one of the persons integrated from the District Board Services, against tho present appellants and others was also dismissed by Justice Isaac on 27th June, 1973.

A writ appeal filed against the order of Justice Isaac ill O. l'.

No. 1431 of 1970 was summarily dismissed by the Bench of the Kera!a High Court.

While the earlier judgment.s were all decided against the respondents, the Kerala High Court in the judgment under appeal took a different view.

The decision under appeal proceeds on the basis that a regrettable mistake crept into the judgment in 0. P. No. 1431 ol 1970 and the earlier decision proceeded on the basis that there was a III Grade mentioned in G. 0. 814 dated 17th November, 1962, The High Court was of the view that there was a III Grade under the U.O above referred to the earlier decision missed the fact that these Grades were not applicable on !st January, 1962. Though G.O. 814 of 1962 was not placed before us we arc not sure whether there was any mistake in the earlier judgment for the G.O. MS 97 /67 dated l&th March, 1967, refers to persons being l!"ansferred from the Malabar D1stnct Board as Panchayat Executive Officers III Grade.

Be that as it may we are satisfied that the respondents arc not entitled to the reltefs prayed for by them in the writ petitions.

As the appellants were promoted to a higher post before the respondents were integrated into the Government service on 1st January, 1962.

Further throughout the appellants have been treated as occupying a higher post and respondents much lower post.

Though the promotion of the appellants was before 1st January, 1962, and was confirmed by various orders of the G Government the respondents herein did not choose to challenge the orders till the year, 1974.

In the circumstances, we are satisfied tht the order of the Kerala High Court has to be set aside and the appeal is

allowed with costs.

P.B.R.

Appeal allowed.

5-707SCI/77

P. CHITHARANJA MENON & ORS

A. BALAKRISHNAN & ORS

April 25, 1977

M. H. BEG, C.J.

A. C. GUPTA

P. S. KAILASAM

May 15, 1961

Panchayats Act, 1951

Vhen the Kerala Panchayat Act, 1960

Malabar District Board

December 28, 1961

December 30, 1961

January 2, 1962

Art. 226

February 13, 1962

January 1,

~ "" .... 1962

The apoointrnents of the appellants and other Panchayat Executive Officers were made before D_ecember 31, 1961 and as the integration was to take effect from January 1,

~ "" .... 1962 they.

Y. S. Chitale

A. S. Nambiar

K. T. Harindranath

K. R. Nambiar

T. S. Krishnamoorthy Iyer

N. Sudhakaran

KAILASAM

High Court of Kerala

State of Kerala

Cochin Panchayats Act, 1950

Kerala Panchayats Act, 1960

8th December,

1960

1st January, 1962

15th May, 1961

Public Service Commission

27th December, 1961

28th December, 1961

2nd January, 1962

6th January, 19_62.

22nd July, 1972

6th January, 1962

31st December, 1961

18th March, 1967

Isaac

1st February, 1962

24th May, I YTL

27th June, 1973

Kera!a High Court

Kerala High Court

Malabar D1stnct Board