SANTOSH GUPTA

STATE BANK OF PATIALA

April 29, 1980

[V. R. KRISHNA !YER AND 0. CH!NNAPPA REnoY JJ.]

Industrial Disputes Act, 1941-Section 2 (00)-"Retrenchment"-Terminafion. ·.· •. ·.for t11lY rea'>'iO!. whatsoever, meaning uf Section 25 FF and Section

25 FFF object of. "

The appellant was employed in the State Bank of Patiala, The Mall, Paliala, from July 13, 1973 till August 21, 1974, when her services were terminated.

Despite some breaks in service for a few days, the appellant had admittedly worked for 240 days in the year preceding August 21, 1974. According to the workman, the termination of her service was "retrenchment" within the meaning of that expression in Section 2(oo) of the Industrial Disputes Act, 1947, 1inco it did not fall within any of the excepted cases mentioned in Section 2(00), Since there was "retrenchment", it was bad for non-compliance with the provi sions of section 25 l' of the Industrial Disputes Act.

On the other hand, the contention of the management was that the termination of services was not due to discharge of surplus labour. It was due to the failure of the workman to pass the test which would have enabled him to be confirmed in the service.

Therefore, it was not retrenchment within the meaning of section 2 ( 00) of the, Industrial Disputes Act. The Presiding Officer, Central Government, Industrial Tribunal-cumLabour Court, accepted the management's contention and decided against the workman appellant. Hence the appeal by special leave.

Allowing the appeal, the Court

HELD : (i) The discharge of the workman on the ground that she did not pass the test which would have enabled him to be confirmed was "retrenchment" within the meaning of section 2(00) and, therefore, the requirements of section 25F had to be complied with. [892 F-GJ

.. ~

(ii) Section 2(00) of the Jndustirial Disputes Act uses a wide language_...~ particularly the words "term.iriation .............. for any reason whatsoever". ' The definition "retrenchment" expressly excludes termination of service as a / .. punishment inflicted by way of disciplinary action". It does not include, voluntary retrenchment of the workman or retrenchmCnt of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous illhealth. The Legislature took special care to mention that these were not included within the meaning of "termination by the employer of the service of a workman for any reason whatsoever".

Th..i8 emphasises the broad interpretation to be given to the expression "retrenchment".

[887 E-H, 888 A]

2. If due weight is given to the words "the termination by the employer of the service of a workman for any: reason whatsoever" and if the words 'for any reason whatsoever" are understood to mean what they plainly say, iti is

difficult to escape the conclusion that the expression 'retrenchment' must include

every termination of the service of a workman by an act of the employer. Tle underlying assumption, of course, is that the undertaking is ru!!D.ing as an under-

SANTOSH GUPTA V, STATE BANK 885

taking and the employer continues Wi an employer but where either on account of transfer of the undertaking or on account of the closure of the undertaking

tlie basic assumption disappears, there can be no question of 'etrenChment' within the meaning of the definition contained in s. 2(00) of the Act.

[888 A-CJ

Hariprasad Shivshankar Shukla v. A. D. Divakar [1957] SCR 121; applied.

By introducing section 25 FF and Section 25 FFF, Parliament treated the B: termination of the service of a work.man on the transfer or closure of an undertaking as "deemed retrenchment". The effect was that every case of termination of service by act of employer even if such termination was a consequence of transfer or closure of the undertaking was to be treated as 'retrenchment' for tho purposes of notice, compensation etc." The expression ''termination of service for any reason whatsoever" now covers every kind of termination of service. except those not expressly included in S. 25F or not expressly provided C' for by ot'her provisions of theAct as 25 FF and 25 FFF. [888 C-F]

4. The manifest object of Section 25 FF and S. 25 FFF is to so compensate the workman for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment. The non-inclusion of 'voluntary retirement of the workmen, retirement of workmen, on reaching the age of superannuation, termination of the service of a workman, on the ground of continued I) ill-health' in the definition of 'retrenchment' clearly indicate and emphasise the true object of 25F, 25 FF and 25 FFF and the nature of the compensation provided by those provisions." [888 F-H]

Indian H111ne Pipe Co. Ltd. v. The Workman [1960] 2 SCR 32; followed.

5. The submission that notwithstanding the comprehensive language of the definition of retrenchment" in section 2(00) the expression continues to retain its original meaning, namely, discharg~ .from service on account of surplus age is not correct. It cannot be assumed that Parliament was undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant. [889 D-EJ

Hariprasad Shivshankar Shukla v. A. D. Dii, akar [1957] SCR 121, Hin- rdustan Steel Ltd. v. 1 lu~ Presiding officer, Labour Court Orissa & Ors. [1977] 1 SCR 585; State Bank of /lldia v. Slzri N. Sundaramoney [1974] 3 SCR 160; f Delhi Clath and General Mills Ltd. v. Slzambunath Mukherjee & Ors. [19781 1 SCR 591; explained and .followed. '

Management of M/s. Willcose Buckwell India Lt<f. v. Jagannath & Ors.

AIR 1974 S.C. 1164; L111ployees in Relation v. Dign1ode11 Colliery v. Tlieir

Wor!111e11 [1965] 3 SCR 4•S; distinguished.

L. Robert D'Souza v. Executive Engineer, Southern Railway and Anr. (1979) KLJ Kerala 211; The Managing Director, Natio11al Garage v.

Gonsalves fl962J KU 56. Good/as Nerolac Paints v. Cl1ief Commissioner, Delhi (1961) 1 LLJ. 545; Rajastlzan State Electricity Board v. Labour Court (1966) I LLJ. 381: over-ruled.

CIVIL APPELLATE JURISDICTION : Civil. Appeal No. 3563 of 1979.

Appeal by special leave from the Award dated 9-7-1978 of the Presiding Officer Central Government. Industrial Tribunal-Cum-

A La'>our ··eourt, New Delhi in f.D0 No. 90 of 1977. published in J!azette of India on )1-8-1979.

-~. M. K. Ramamurthi, and Romes/! C. Pathak for the Appellant.

Dr. Anand Parkash, Aclarsh Kumar, Mrs. Laxmi Anand Parkash, and Jagat Arora for:the Respondent.

The Judgment of the Court was delivered by

CHI~APPA REDDY, J.-Santosh Gupta, the appellant-Workman (a woman), was employed in the State Bank of Patiala, the Mall, Patiala, from July 13, 1973, till August 21, 1974, when her services were terminated. Though there were some breaks in service for a few days, those breaks are not relevant for the purpose of deciding this case though we may have to advert to them in another connection. Despite the breaks, the workman had admittedly worked for 240 days in the year preceding Augnst 21, 1974. According to the workman the termination of her services was 'retrenchment' within the meaning of that expression ins. 2(00) of the Industrial Disputes Act, 1947, since it did not fall within any of the 3 excepted cases mentioned in s. 2(00). Since there was 'retrenchment', it was bad for noncompliance with the provisions of s. 25-F of the Industrial Disputes Act. On the other hand the contention of the management was that the termination of services was not due to discharge of surplus labour. It was due to the failure of the workman to pass the test which would have enabled her to be confirmed in the service. Therefore, it was not retrenchment within the meaning of s. 2(00) of the Industrial Disputes Act.

S. 25-F prescribes that no workman employed in any industry who has been in continuous service for not less than one year shall be retrenched by the employer until-(a) the workman has been given '

one month's notice in writing indicating the reasons for retrench- , ment and the period of notice has expired, or the workman has been • paid in lieu of such notice, wages for the period of the notice; (b) the workman bas been paid at the time of retrenchment, compensation ., which shall be equivalent to fifteen days average pay for every completed year of continuous service or any part thereof in a excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government or any such authority as may be spe- )' cified by the appropriate Government by notification in the official Gazette. There is a proviso to clause (a) which dispenses with the necessity for the notice contemplated by the clause if the retrenchment is under an agreement which specifies the date for the termination of service.

S/.NT05ll:'GIJPTA v. STATE BANK (Chinnappa Reddy,!.) 887

The expression retrenchment is specially defined by s. 2(00) A

--'(

ollf the Act and is as follows:

"2(00) 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include-

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or

(c) termination of the service of a workman on the gtound

of continued ill-health;"

In Hariprasad Shivshankar Shukla v. A. D. Divikar (1.), the 'Supreme Court took the view that the word 'retrenchment' as de- !fined ins. 2(00) did not include termination of services of all werkmen on a bonafide closure of an industry or on change of ownership or Jnanaem•mt. of the industry. In order to provide for the situations which the. Supreme Court held were not covered by the -definition of the expression 'retrenchment', the Parliament added s. 25 FF and s. 25 FFF providing for the payment of compensation to the workmen in case of transfer of undertakings and in case of dosure of undertakings respectively.

If the definition of 'retrenchment' is looked at unaided and unhampered by precedent, one. is at once struck by the remarkably wide language employed and particularly by the use of the words '6 "termination ...... for any reason whatsoever". The definition expressly excludes termination of service as a 'punishment inflicted • ' by way of disciplinary action'. The definition does not include, so it expressly says, voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill-health. Voluntary retrenchment of a workman or retrenchment of the workman on reaching the age of superannation ean hardly be described as termination, by the employer, of the service of a workman. Yet, the Legislature took special care to mention that they were not included within the meaning of "termination. by the employer of the serviee of a workman for any reason whatsoever". This, in our opinion, emphasizes the broad interpretation to

(I) [1957j S.C.R. 121.

be given to the expression 'retrenchment'. In our view if due weig~ is given to the words "the termination by the employer o. f the servic of a workman for any reason whatsoever" and if the words 'for an reason whatsoever' are understood to mean what they plainly sa it is difficult to escape the conclusion that the expressi9n 'retrenchf

ment' must include every termination of the service of a workman bt an act of the employer. Tbe underlying assumption, of course~ is that tbe undertaking is running as an undertaking, and the em ployer continues as an employer but where either on account o transfer of the undertaking or on account of the closure of the under1 taking the basic assumption disappears, there can be no question 011 'retrenchment' within the meaning of the definition contained in, I S. 2(00). This came to be realised as a result of the decision of this] Court in Hariprasad Shivshanker Shukla v. A. D. Divikar (supra). I The Parliament then stepped in and introduced 25 FF and 25FFFI by providing that compensation shall be payable to workmen in I case of transfer or undertaking or closure of undertaking as if the work I men had been retrenched. We may rightly say that the termination I

of the service of a workman on the transfer or closure of an under I taking was treated by Parliament as 'deemed retrenchment'. The I

effect was that every case of termination of service by act of employer I

even if such termination involved was a consequence of transfer or I closure of the undertaking was to be treated as 'retrenchment' for the 1

1 purposes of notice, compensation etc. Whatever doubts might I have existed before Parliament enacted 25FF and 25FFF •about I the width of 25F there cannot now be any doubt that the expression I 'termination' of service for any reason whatsoever now covers every I kind of termination of service except those not expressly included" I in S. 25F or not expressly provided for by other provisions of the I

Act such as Ss. 25FF and 25FFF. ~

In interpreting these provisions i.e. 25F, 25FF and 25FFF . ' • one must not ignore their object. The manifest object ofthese provisions is to so compensate the workman for loss of employment as to provide him the wherewithal to subsist until lie finds fresh em-· ployment. The non-inclusion of 'voluntary retirement of the work men, retirement of workmen on reaching the age of superannuation, termination of the service of a workman on the ground of couti11ued ill-health' in the definition of 'retrenchment' clearly indicate a1~<f emphasise what we have said about the true object of 25F, 25FF and" 25FFF and the nature of the compensation provided by those provisions. The nature of retrenchment con )lensation has been explained in Indian Hume Pipe Co. Ltd. V. the Workmen,(') as follows:

(lJ [1960] 2 S.C.R. 32.

~ I

1:.

SANTOSH GUPTA v. STATE BANK (Chinnappa Reddy, /.) 889

"As the expression 'retrenchment compensation' indicates it is compensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigour of hardship which retrenchment inevitably causes. The retrenched workman is, suddenly and without his fault, thrown on the street and has to face the grim problem of unemployment. At the commencement of his employment a workmen naturally expects and looks forward to security of service spread over a long period but retrenchment destroys his hopes and expectations. The object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment".

Once the object of 25F, 25FF and 25FFF is understood and the true nature of the compensation which those provisions provide is realised, it is difficult to make any distinction between termination of service for one reason and termination of service for another.

Df. Anand Prakash wants us to hold that notwithstanding the comprehensive language of the defimtion of "retrenchment" in s. 2 (00) the expression continues to retain its original meaning which was, according to the counsel, discharged from service on account of 'surplusage'. It is impossible to accept his submission.

If the submission is right, there was no need to define the expression 'retrenchment', and in such wide terms. We cannot assume that the Parliament s undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant.

'-, A.

Let us now examine the precedents of this Court to discover whether the true position in law is what has been stated by us in the previous paragraphs. The earliest of the cases of this Court to which our attention was invited was Harprasad Shivashankar

Shukla v. A. D. Divikar (supra). That was a case which was decided before Ss. 25FF and 25FFF were brought on the statute book. In fact it was as a consequence of that decision that the Industrial Disputes Act had to be amended and these two provisions came to be introduced into the Act. The question which arose for decision in that case was stated by the learned judges themselves as follows:

"The question, however, before us is-does this definition merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by 18-463SCl/80

embodying the notion in apt and readily intelligible words or does it go so far bcy,--nd the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bonafide closure or discontinuance of his business by the employer"

The question so stated was answered by the learned judges in the following way :

"In the absence of any compelling words to indicate that the intention was even to include a bonafide closure of the whole business, it would, we think, be divorcing the expression altogether from the context to give it such a wide meaning as is contended for by learned counsel for the respondents ......•• it would be against the entire scheme of the Act to give the definition clause relating to retrenchment t such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself eeases to exist".

It is true that there are some observations which, if not properly understood with referenee to the question at issue, seemingly support the submission of Dr. Anand Prakash that 'termination of serviee for any reason whatsoever' means no more and no less than discharge of a labour force which is a surplus age. The misuuderstanding of the observations and the resulting confusion stem from not appreciating (!)the lead question which was posed and answered by the learned judges and (2) that the reference to 'discharge on account of surplus age' was illustrative and not exhaustive and by way of contrast with discharge on account of transfer or closure of business.

Management of M/s Wi /cox Buckwe!l India Ltd. v. Jagannath and Ors.(1) and Employers in Re a1on to Digwadih Col iery v. Their , Workmen(2) were both cases where the termination of the Workman~ ! from service was on account of "surplusage'' and, therefore, the ···

cases were clear cases of retrenchment. They do not throw any light on the question now at issue.

In State Bank of India v. Shri N. Sundaramoney(3) a Bench of three judges of this Court consisting of C!-candrachud J. (as he then was), Krishna_ Iyer, J., and Gupta , J., considered the question whether s. 25F of the Industrial Disputes Act was attracted to a ca'e where the order of appointment carried an automatic cessation of service,

(I) A.LR. 1974 S.C. 1166.

(2) [1%5] 3 S.C.R. 448.

SANTOSH GUPTA v. STATE BANK (Chirmappa Reddy,!.) 891

the period of employment working itself out by efflux of time and not A by an act of employer, Krishna Iyer, J. who spoke for the Court observed.

'Termination ...... for any reason whatsoever' are the key words. Whatever the reason, every termination spells retrenchment. So the sole question is--has the employee's service been terminated? Verbal apparel apart, the substance is decisive: A termination takes place where a term expires either by the active step of the master of the running out of the stipulated term. To protect the weak against the strong this policy of comprehensive definition has been effectuated. Termination embraces not merely the act of termination by the employer, but the fact of termination howsoever produced. . ....... True, the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract s. 25F and automatic extinguishment'of service be effiuxion of time cannot be sufficient ... Words of multiple import have to be winnowed judicially to suit the social philosophy of the statute So screened We hold that the transitive and intransitive senses are covered in the current context. Moreover, an employer terminates employment not merely by passing an order as the service runs. He can do so by writing a composite order, one giving employment and the other ending or limiting it. A separate, subsequent determination is no.t the sole magnetic pull of the provision. A pre-emptive provision to terminate is struck by the same vice as the post-appointment termination. Dexterity of diction cannot defeat the articulated conscience of the provision".

In ffndustan Steel Ltd. v. the Presiding Officer, Labour Court, )""'"Orissa and Ors.(') the question again arose whether termination of ser-

\_ vice by effil'X of time was termination of service within the definition of retrenchment in s. 2 (00) of the Industrial Disputes Act. Both the earlier decisions of the Court in Hariprasad Shivshartkar Shukla v. A.D. Divikar and State Bank of India v. S. Sundaramoney (supra) were considered. There was also a request that N. Sundaramoney's 'case con1ictcd with the decision in Harprasad Sh,.vshankar Shuk av. 'A. D. D'v kar and therefore required reconsideration. A Bench of • threeiudges of this Court consisting ofChandrachud J (as he then was), "Goswami J and Gupta J held that there was nothing in Huriparsad "Shivshankar Shukla v. A.D. D"vikar which was inconsistent with the

•decision in N. Sundaramoney' s case. They held that the decision in

(1) [1977] I S.C.R. 586.

~ ,,

llarivarsad Shivshankar's case was 1tat !le \101ds "fer any reason whatsoever" used in the definition of retrencnmem would not include a bonafide closure of the wh<.,, o uusmsse because it would be against the entire scheme of the Act. The learned judges then observed that, on the facts before them to give full effect to the words "for any reason whatsoever" would be consistent with the scope and purpose of s. 25 of the Industrial Disputes Act and r.ot contrary to the schen:e of the Act. In Delhi Cloth and General Mills Ltd. v. Shambhunath Mukherjee and Ors.,(1) Goswami, Shinghal and Jaswant Singh JJ, held that striking off the name of a workman from the rolls by the management was termination of the service which was retrenchment within the meaning of s. 2(00) of the Industrial Disputes Act.

Dr. Anand Prakash, cited before us the decision of a Full Bench of the Kerala High Court in L. Robert D'Souza v. Executive Engineer, Southern Railway and Anr.(2) and some other cases decided by other High Courts purporting to follow the decision of this Court in llariparsad Shivshankar Shukla v.

A. D. Divikar's case, Shuk!a's case, we have explained. The ratio of Shukla' s case in fact, has already been explained in Hindustan Steel, Ltd., v. the Presiding Officer, Labour Court Orissa

and Ors. The decisions in Hindustan Steel Ltd. v. the Presiding Officer, Labour Court Orissa and Ors., and State Bank of India v. N.Sundara money have, in our view, properly explained Shuk/a'scase and have laid down the correct! aw. The decision of the Kerala High Court in L. Robert D'Souza v. Executive Engineer Southern Railway & Anr.,(2) and the other decisions of the other High Courts to similar effect viz. The'.Managing Director, National Garages v. J. Gonsalvel3) Good/as Nerolac Paints v. Chief Commissioner, Delhi(4) and Rajasthan State Electricity Board. v. Labour Court,(') are, therefore, over-ruled. We hold, as a resul(of our discussion, that the discharge of the workman on the ground-she did not pass the test which would have enabled \ her' to be confirmed was 'retrenchment' within the meaning of s. 2(00) " and, therefore, the requirements of s. 2SF had to be complied with. The order of the Presiding Officer, Central Govt. Industrial Tribunal-cum- , Labour Court, new Delhi, is set aside and the appellant is directed to be reinstated with full back wages.

The appellant is entitled to her costs.

S. R.

(2) [19791 1 L.L.J. 211.

(3) [1962) 1 L.L.J. 56.

(4) [1967] 1 L-L-J. 545.

(5) [1966] 1 L.L.J. 381.

Appeal allowed.

SANTOSH GUPTA

April 29, 1980

Industrial Disputes Act, 1941

Section 2

Section 25

Section

25

the State Bank of Patiala

Section 2(oo)

Industrial Disputes Act, 1947

Section 2(00)

section 25

Industrial Disputes Act

section 2

Industrial Disputes Act

section 2(00)

section 25F

Section 2(00)

s. 2(00)

section 25

Section 25

Parliament

S. 25F

Section 25

S. 25

[1960] 2 SCR 32

section 2(00)

[1977] 1 SCR 585

[1974] 3 SCR 160

[1965] 3 SCR 4

M. K. Ramamurthi

Romes/! C. Pathak

Anand Parkash

Aclarsh Kumar

Laxmi Anand Parkash

Jagat Arora

CHI~APPA REDDY

J.-Santosh Gupta

Augnst 21, 1974

Industrial Disputes Act, 1947

s. 2(00)

s. 25

Industrial Disputes Act

s. 2(00)

Industrial Disputes Act

S. 25

s. 2(00)

Supreme Court

s. 25

s. 25

S. 2(00)

S. 25F

Ss. 25F

[1960] 2 S.C.R. 32

Anand Prakash

s. 2

Ss. 25F

Industrial Disputes Act

C!-candrachud J.

Krishna_ Iyer

Gupta

s. 25F

Industrial Disputes Act

Krishna Iyer

s. 25F

s. 2

Industrial Disputes Act

N. Sundaramoney

ofChandrachud

Goswami

llarivarsad Shivshankar

s. 25

Industrial Disputes Act

Shinghal

Jaswant Singh

s. 2(00)

Industrial Disputes Act

Kerala High Court

Shuk!a

Shukla

Shuk

s. 2(00)

s. 2S


... .(

UNION OF INDIA

J. K. GAS PLANT

April 29, 1980

[S. MURTAZA FAZ.AL ALI AND A. D. KosHAL, JJ.J

Contract Act, Section 10, Scope of-Conditions to be applied-Government <Jf lndia Act, 1935, Section 175(3), applicability of-Defence of India Act, Section 17(2), scope of.

The appellant had supplied some steel to the respondent plaintiff Company for manufacturing gas plants at Rampur. Only a part of the steel so supplied C was utilised for the intended purpose and with regard to the rest, the Regional Deputy Iron & Steel Controiler, U.P. Circle, Kanpur directed the respondents through a letter dated 8th/10th of November, 1944 to deliver the same to the U.P. Registered Stock Holders Associations and to send to the Kanpur office, the bill of costs of the material, handling charges etc. made in the name of Iron & Steel Controller, Calcutta. Since the order contained in that letter could not be implemented on account of lack of transport facilities, the Kanpur Con- D troller, directed the respondent .company to deliver the surplus steel to MfS

G. Brothers Ltd., Rampur and to this extent the order dated 8th/10th November 1944 stood modified.

Though the surplns material was delivered to Govan Brothers between 11th April 1945• and 30th of April, 1945, the price therefor to the tune of Rs. 43,728-6-6 remained unpaid inspite of repeated demands made by the E respondent. Ultimately, the Iron & Steel Controller informed the respondent to take up the matter with Govan Brothers.

As the price of the steel remained unpaid by the Union of India as well as G. Brothers the plaintiff company filed its suit for Rs. 46,652-14-6 which was inclusive of interest on the principal price calculated at the rate of 6 per cent per annum from April, 1945, upto the date of the institution of the suit, after F Y' serving the defendant with the requisite notice under section 80 of the Code of

' Civil Procedure. \

The trial Court decreed the claim of the plaintiff company in full and also directed that it would be entitled to the costs of the suit as also interest at the rate of 3 per cent per annum from the date of the institution of the suit to the date of payment. The trial Court held that the Kanpur Controller had undertaken the liability to pay the price of the goods to the plaintiff company even in respect of the delivery to G. Brothers and that the defendant could not escape liability by reason of the contents of section 65 of the Indian Contract Act even though the provisions of section 175(3) of the Government of India Act, 1935, had not been complied with. The contention raised by the defendant to the effect that section 17(2) of the Defence of India Act was a bar to the suit was negatived.

In appeal, the High Court agreed that Se<:tion 17(2) of the Defence of India Act would be a complete bar to the suit if it was one for damages. or

894 SUPREME COURl' REPORTS

[1980] 3 S.C.R.

~ compensation but held that the suit was not of that nature and, on the other hand, it was for recovery of the price of the goods supplied to G. Brothers as was also found by the trial Court.

It further held that even though the provisions of section 17 5 ( 3) of tbe Government of India Act were not complied with the agreement resulting from the correspondence which took place between the plaintiff company and the officers of the detendant '\Vas good.

Relying on Section 70 of the Indian Contract Act and on the basis thereof, it held the B plaintiff company to be entitled to recover the price of the goods from the defendant even if it was assumed that the provisions of section 175(3) were a bar to the recognition of the contract envisaged by the correspondence bt:tween the parties. The High Court dismissed the appeal, but granted a certificate under Article 133(1) (a) of the Constitution to the appellant.

Dismissing the appeal, the Court

HELD : 1. The suit is not one for Compensation or damages etc. as contemplated by Section 17 (2) of the Defence of India Act and hence is not barred by .oat section [898 Al.

2. The legality of the matter under which the respondent company transferred its stock to G. Brothers cannot be allowed to be questioned at the appellate stage.

The question whether the requirements of clause (5) of the Indian Iron and Steel Control Order, 1941 which postulates only a written direction for disposal of surplus stocks were satisfied or not is a mixed question of fact and law which was never raised in the Courts below. Further tbe plea taken in paragraph ( 4) of the written statements filed by th'e appellant wais categorically to the effect that "the fresh instructions issued to the plaintiff are contained in the letter in the possession of the plaintiff" runs counter to the factual part of the argument. Besides another question would arise whether the word "vrritten" in clause (5) aforesaid is di.rectory or mandatory.

[898 C-D1

3. Three conditions must be satisfied before Section 70 of the Indian Contract Act can be invoked : first, a person should lawfully do something for another person or deliver something to him; second, in doing the said thing or delivering the said thing he must not intend to act gratuitously; and third, the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. [898 H, 899 A] \

In the instant case, the appellant had enjoyed the full benefit of the delivery • or the gooJs to G. Bros. and not merely an. indirect benefit thereof.

[901 B]

State of West Bengal v. M/s. B. K. Monda/ [1962] 2 Suppl.

S.C.R. 876; .. reiterated,

S. I. Indian Rly. Co. v. Madura Municipality, A.LR. 1964 l\1adras 427; distinguished.

CIVIL APPfl.LA TE

JURISDICTION Civil Appeal No. 1273/70.

H Appeal by Special leave from the Judgment and Decree dated 28·1-1966 of the Allahabad High Court in First Appeal No. 431 of 1957.

UNION v . .) . K. GAS PLANT (Kasha/, J.) 895

P. P. Rao, Subodh Markendeya, R. Venkataramani and Miss A.

A Subhashini for the Appellant.

So/i. J. Sorabjee and Ramesh war Nath for the Respondent.

The Jnc1grr.ent of the C0 urt wos delivered by

KOSHAL, J. This appeal by certificate granted under article 133(1)(a) of the Constitution of India by the Allahabad High Court B is directed against its judgment dated the 28th of January, 1966, confirming on appeal a decree passed by the Civil Judge, Kanpur, for the ,; recovery of Rs. 46,652-14-6 with interest at the rate of 3 per cent per annum from the date of the institution of the suit till payment in ,.. favour of Mis. J.K. Gas Plant Manufacturing Company Limited

' '

against the sole defendant, namely, the Union ofindia.

2. The case of the plaintiff company may be briefly stated thus.

The Government of India had supplied some steel to the plaintiff company for manufacturing gas plants at Rampur. Only a part of the steel so supplied was utilized for the intended purpose and with regard to the rest the Regional Deputy Iron and Steel Controller, U.P. Circle, Kanpur (hereinafter reterred to as the Kanpur Controller) directed D the plaintiff company through a letter dated the 8th/10th of November, 1944 (exhibit 16) to deliver the same to the U.P. Registered Stock Holders Association Kanpur (for short the Association). Jn relation to the recovery of price of the material the letter statec' :

"Your bill for cost of the material supported by original receipts from suppliers should be made out in the name ofiron and Steel Controller, Calcutta, and submitted to this office.

Please make out a separate bill for handling, storage expenses, etc., and send to this 0ffice supported with original freight and payee's receipt." The order contained in letter exhibit 16 could not be implemented on ace .i•nt' flack of transport facilities. The Kanpur Controller therefore directed the plaintiff company to deliver the surplus tee! to M/s.

Govan Brothers Ltd., , Rampur (hereinafter referred to as G. Brothers) and to this extent the order contained in letter exhibit 16 stood modified.

The plaintiff company delivered to G. Brothers the surplus material G lying with it between the I Ith April, 1945 and 30th of April, 1945.

The deliveries totalled 135 tons, 6 cwts., 1 quarter and 1 pound, the price whereof amonted to Rs. 43,728-6-6 which remained unpaid inspite of repeated demands made by the plaintiff company through letters addressed to the Kanpur Controller to whom the bills bad been forwarded as desired. Ultimately th~ plaintiff company was informed H by the Accounts Officer attached to the Iron and Steel Controller, Calcutta, that it should take up the matter with G. Brothers. ·

A As the price of the steel remained unpaid by the Union of India

as well as G. Brothers the plaintiff company filed its suit for Rs. 46,652-14-6 which was inclusive of interest on the principal price calculated at the rate of 6 per cent per annum from April, 1945, up to the date of the institution of the suit, after serving the defendant with the requisite notice under section 80 of the Code of Civil Procedure.

3. In its written:statement the Union of India admitted the correctness of the order contained in letter exhibit 16. It pleaded however that that order was cancelled in toto and not merely in regard to the party to whom the plaintiff company had to make over the surplus steel. It was specifically denied that the disputed goods had been delivered to G. Brothers at the risk and responsibility of the defendant and that the defendant was liable to pay the price thereof.

It was asserted that the defendant was merely controlling the supply and distribution of iron and steel and that the liability to pay the price of any goods dealt with by it in the exercise of its powers of control rested upon the party receiving the goods. Another plea taken was that the suit was not maintainable in view of the provisions of section 175(3) of the Government of India!Act, 1935, lwhich enjoins that a contract between the Government oflndia and a third party has to be in writing and in a particular form.

It was emphasized that G. Brothers alone were liable for the payment demanded by the plaintiff company.

4. The trial courtiheld that the Kanpur Controller had undertaken the liability to' pay the price of the goods to the plaintiff company even in respect of the delivery to G. Brothers and that the defendant could

nofescapeliability bY'.reason of the contents of section 65 of the Indian Contract Act even though the provisions of section 175(3) of the Government of India Act, 1935, had not been complied with. The contention raised by the defendant to the effect that section 17(2) of the Defence oflndia Act was a bar to the suit was negatived by the trial court. Some other findings were also arrived at which are not relevant for the purposes of this appeal.

The trial court therefore decreed the claimlof the plaintiff company in full and also directed that it would be entitled to the costs of the suit as also interest at the rate of 3 per cent per annum from the date of the institution of the suit to the date of payment.

5. When the[first appeal came np for hearing before the High Court the contention based on the provisions of section 17(2) of the Defence of India Act was reiterated on the ground that the suit was one for damages or compensation. Section 17(2) states :

"Save as otherwise expressly provided under this Act, no suit or other legal proceeding shall lie against the Crown for

any damage caused or likely to be caused by anything in good A faith done or intended to be done in pursuance of this_Act or any rules made thereunder or any order issued under any such rule."

The High Court agreed with the learned counsel for the defendant that this section would be a complete bar to the suit if it was one for damages or compensation but held that the suit was not of that nature and, on the other hand, it was for recovery of the price of the goods supplied to G. Brothers as was also found by the trial court. The contention was therefore rejected as untenable. The High Court then proceeded to examine the true nature of the transaction culminating in the delivery of steel to G. Brothers and held that the defendant had failed to establish that the direction regarding preparation and submission of bills contained in letter exhibit 16 had been cancelled when the plaintiff company was required to deliver the goods to G. Brothers. It was further held that even though the provisions of section 175(3) of the Government of India Act were not complied with the agreement resulting from the correspondence which took place between the plaintiff company and the officers of the defendant was good. In this connection reliance was placed on Debi Prasad Srikrishna PrasadJLtd. V- Secretary of State(I). The sheet anchor of the judgment of the High Court however was its reliance on section 70

of the Indian Contract Act and on the basis thereof it held the plaintiff company to be entitled to recover the price of the goods from the defendant even if it was assumed that the provisions of section 175(3) were a bar to the recognition of the contract envisaged by the correspondence between the parties. In this connection reference was made to New Marine Coal Co. (Bengai) Private Ltd. v. Union of Jndia(2).

It was argued before the High Court that the conditions requisite for the applicability of section 70 of the Indian Contract Act were not available in the present case in as much as the defendant had not been shown to have enjoyed the benefit of the transaction which accrued only to G. Brothers. The High Court however took a contrary view with the observation:

"The benefit or advantage that has been derived by the defendants lies in the fact that it has been able to distribute the stock to persons of its choice according to the rules and regulations framed by it."

It was in these premises that the High Court dismissed the defendant's appeal with costs.

(1) A I. R. 1941 All. 377.

(2) A. I. R. 1964 S. C. 152.

6. The argument based on section 17(2) of the Defence oflndia Act has been reiterated before us but it has merely to be noticed to be rejected. We are clearly. of the opinion that the suit is not for damages, etc., such as are contemplated by that section. ·

7. It was seriously argued on behalf of the defendant that throughout the period during which the Kanpur Controller dealt with the matter in dispute he was exercising the powers conferred on him under the Iron and Steel Control Order,1941, that under clause 5 of that order the plaintiff company could dispose of its stock of steel only in pursuance of a written direction from the Kanpur Controller and that the mandate issued by the Kanpur Controller to the plaintiff company requiring the latter to deliver the goods to G. Brothers having been found to be an oral one, the whole transaction fell outside the ambit of the law so that the Union of India could not be bound by it. The argument as it stands does not lack plausibility although it would be a question whether the word 'written' occurring in clause

(5) of the Indian Iron and Steel Control order is directory or mandatory.

However we refuse to allow the argument to be raised and

tha~ for two reasons. Firstly, it is a mixed question of fact and law which was never raised in the courts below. Secondly, the plea taken in paragraph 4 of the written statement filed by the defendant was categorically to the effect that "the fresh instructions issued to the plaintiff are contained in the letter in the possession of the plain

tiff", which plea runs counter to the factual part of the argument. In this view <f the matter the legality of the order under which the plaintiff company transferred its stock to G. Brothers cannot be allowed to be questioned at this a stage.

8. The only other ground put forward in support of the appeal was that the provisions of section 70 of the Indian Contract Act were not applicable to the facts of the present case. That section reads:

"Where a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."

As pointed out in State of West Bengal v. Mis. B.K. Moftdal(1), three conditions must be satisfied before this section can be invoked:

"The first condition is that a person should lawfully do some

thing for another Person or deliver something to him. The second condition is that in doing the said thing or delivering, the said

(I) [1962] I Supp. S. C. R. 876

• (

"·--t

thing he must not intend to act gratuitously; and the third is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof.

When these conditions are satisfied section 70 imposes upon the latter person, the liability to make compensation to the former in respect of or to restore. the thing so done or delivered."

On behalf of the defendant the objection raised to the applicability of this section to the transaction in dispute is two-fold. The first contention in this behalf is that the delivery to G. Brothers was unlawful-a contention which we have already turned down. Secondly it is said that no benefit at all was derived from the transaction by the Union of India and that its sole beneficiaries were G. Brothers. This objection has not only been overruled by the High Court but appears to us also to be without substance. In this connection reference may be made to some documentary and oral evidence. To begin with, letter exhibit 16 which directed the plaintiff company to deliver the

goods to the Association specificirlly required that the plaintiff com- D pany would make the bills in the name of the Iron and Steel Controller, Calcutta, and send them for payment to the Kanpur Controller, The inference which may reasonably be drawn from the contents of the letter is that the Kanpur Controller was dealing with the goods as if they belonged to the Government of India whose duty it was to pay for them when they changed hands. and that the idrnti; y cf the party to E whom the goods were to be delivered by the plaintill cc111pany under the orders of the Kanpur Contrcllcr was immaterial. Secondly, the Kanpur Controller (Mr.R.R. Chari) in his dcpcsiticn dnt<d the 24th of June, 1946 made before the Second Special, Tribunal, Lahore (Camp Bombay) in Criminal Case No. 3 of 1946, stated thus:

"In September. 1944, J.K. Gas Plant Manufacturing Co., Rampur, Ltd., handed over 137 tons of iron and.steel to Messrs .

Govan Brothers, Rampur, under instructions from our Dcpa1tment. Messrs Govan Brothers thus held the, materials on behalf of the Government."

It has been urged by learned counsel for the defendant that this statement is not admissible in evidence as it was not made at the trial of the case in hand. ButJit is toollate in the day for such an objection to be entertained. The statement was admitted in evidence as exhibit 15 at the trial presumably, without1.objectioRand cannot now be thrown out. According to it G. Brothers held the supply of steel made to them by the plaintiff company not for themselves but on behalf of the Government. Besides, a letter (exhibit 51) which was issued by the

A .Kanpur Controller to Mr. Siddiq Ali Khan of the Department of Industries and Commerce, Rampur, also states:

"In thiS:connection I may mention that the steel is virtually the property of the Government of India, War Transport Department and under no circumstances can the Government loose B money in the bargain. I am obtaining the actual cost of the materials plus all incidental charges and I will let you know the amount to be paid by each party alongwith written orders regularising the issue of these materials to the various parties.

I have to hold you and you in turn Messrs. Govan Bros. (Rampur) Ltd., responsible for the recovery of the cost of the C materials when intimated to you."

There is no reason for us to hold, in view of this statement that the steel supplied by the plaintiff company to G. Brothers was not being held by the latter on behalf of the Government of India and if that be so, the Government must be held to have reaped full bene- ' . fit of the delivery to G. Brothers and it is immaterial how the steel supplied to the latter was dealt with later on.

9. Learned counsel for the defendant cited S. I. Railway Co.

v. Madura Municipa,'ity (') for the proposition that the benefit to the defendant was in any case an indirect one which would not faUwithin the ambit of the third condition envisaged by the provisions of section 70 of the Indian Contract Act. In that case the South Indian Railway had widened a culvert in compliance with an order passed by the Provincial Government under certain provisions of the Railways Act,

1890. The work was done primarily for the benefit of the private owners of property in the neighbourhood. The Railway Company however sued the Municipal Committee within the territorial limits of whose jurisdiction the culvert lay for the cost of widening it on the ground that the Municipal Committee received a benefit because it recovered taxes from the owners or occupiers of the property. In turning down the claim of the South Indian Raihvay Company Leach.

C. J., who delivered the judgment of the division Bench consisting of himself and Lakshmana Rao, J., stated:

"This is a very indirect benefit, and section 70 can in our opinion only have application where there is direct benefit to the person for whom the work is done.

The persons who are eajoying the benefit o! this work are the owners and occupiers of the buildings in the locality. Tt would be doing violence to

(!) A. I. R. 1945 Madras 427.

the section to say that in these circumstances the work was done A, for the benefit of the municipality."

The judgment of the Division Bench was upheld by their Lord - ships of the Privy Council in Governor-General In Council, Represented by the General Manager, South Indian Railway v. Municipal Council, Madura, Through its Commissioner along with the reasons on which it was based. But then the case is of no help to the defendant

who had enjoyed"the fullbenefitof the delivery"of goods to G. Brothers and not merely an indirect benefit thereof.

10. For the reasons stated the appeal fails and is dismissed with costs.

S. R.

Appeal dismissed

UNION OF INDIA

J. K. GAS PLANT

April 29, 1980

S. MURTAZA FAZ.AL ALI

A. D. KosHAL, JJ

Section 10

Jf lndia Act, 1935

Section 175(3)

Defence of India Act

Section 17(2)

8th/10th of November, 1944

Kanpur

Calcutta

Rampur

8th/10th November 1944

Govan Brothers

11th April 1945•

30th of April, 1945

Union of India

section 80

Kanpur Controller

section 65

Indian Contract Act

section 175(3)

Government of India Act, 1935

section 17(2)

section 17

Government of India Act

Section 70

Indian Contract Act

section 175(3)

Article 133(1)

Section 17

G. Brothers

Section 70

Indian Contract Act

UNION

K. GAS PLANT

P. P. Rao

Subodh Markendeya

R. Venkataramani

A.

A Subhashini

J. Sorabjee

Ramesh war Nath

KOSHAL

article 133(1)(a)

Constitution of India

Union ofindia

Government of India

Govan Brothers Ltd.

section 80

the Code of Civil Procedure

section 175(3)

Government oflndia

section 65

Indian Contract Act

section 175(3)

Government of India Act, 1935

section 17(2)

section 17(2)

Section 17(2)

section 175(3)

section 70

Indian Contract Act

section 175(3)

section 70

Indian Contract Act

section 17(2)

clause 5

section 70

Indian Contract Act

section 70

Kanpur Contrcllcr

R.R. Chari

24th of June,

Govan Brothers, Rampur

A .Kanpur

Siddiq Ali Khan

Govan Bros. (Rampur) Ltd.

section 70

Indian Contract Act

South Indian Railway

Railways Act

South Indian Raihvay Company Leach

Lakshmana Rao

section 70


DR. J. P. KULSHRESHTHA AND ORS.

CHANCELLOR, ALLAHABAD UNIVERS11'Y,

RAJ BHAWAN AND ORS.

April 30, 1980

IV. R. KRISHNA IYER. A. D. KosHAL """ 0. 011NNAPPA

REDDY, JJ.]

Ordinance 9(2) of the University of Allahabad issued under section 32(2) (/) of the Allahabad University Act, 1921-Whether striCt compliance regarding the qualifications etc. prescribed for appolntment of teachers is necessary- Wflether non-compliance vitiates the selection.

Six posts of Readers in the English Department of the University fell vacant and applications were invited by advertisement. The appellants and respondent<; 5 to 10, among others were applicants and they were all serving as lecturers in the U n!versity at that time.

Sin Ce section 29 of the Allahabad University Act, 1921 stipulates that teachers of the University shll be appointed by the Executive Council on the recommendations of the Selection Committee. a Selection Committee was constituted.

The selection committee has to do the statutory exercise of choosing the best among the applicants in conformity with the minimum qualifications prescribed under Ordinance 9(2) of the University.

But the committee chose to interview the candidates who were otherwise eligible for consideration. 13 applicants turned up for interview. Respondent 9, Dr.

Rhattacharya and appellant Skand Gupta resented the viva voce test as unautho rised and did not care to appear for the interview.

However Dr. Bhattacharya. on being persuaded, did later turn up, was intervi'ewed and eventually included in the Select List.

Skand Gupta did not enjoy the benefit of a second pursuation to present himself for interview, did not appear befor'e the Selection Committee a.nd missed the bus.

Respondentc; 5 to 10 were chooen and on the recommendation, the Executive Council made their appointment. The appellants thereupon moved the Chancellor under section 42 of the Act requesting him to cancel the appointments of respondents 5 to 10.

But by an order dated November 22, 1973 he upheld the selection and appointment. The appellants, therefore, moved the High Court under Article 226 of the Constitution and impugned the selection process and the appointments on various grounds. The. teamed single judge considered the merits of the contentions c.nd concluded that the selections and the consequent iappointments were bad in law except in regard to respondents 7 and 10 and directed the University to make fresh selection and fill up the vacancies.

Respondents 5 to 6 and 8 and 9 went in appeal to the Division Bench which accepted their appeals and reversed the judgment of the

single judge in; its entirety and hence the appeal by special Ie:ive.

Allowing the appeal the Court,

HEID: 1. Any Administrative or quasi-judicial body clothed with pawers and left unfettered by procedures is free to device its own pragmatic, flexible and functiona11y viable processes of transacting business subj'ect. of course, to the basics of natural justice, fadr play in acCon, reasonableness in collecting dcci~ sional materials, avoidance of arbitrariness and etraneous considerations a.nd

...

,..

J. P. KULSHRESHTHA v. ALLAHABAD UNIVERSITY 903

otherwise keeping within the leading strings of the law. Though there is no flaw in the methodology of interviews, certainly, (:ases arise where the art of interviewing .candidates deteriorates from strategy to strategem and undetectable

rnanipultion of results is achieved by remote control tactics masked as viva voce tests.

This, if allO\\'ed is surely a s:.ibotage of the purity or proceedings, a subterfuge whreby legal means to reach il!egal ends is achieved.

So, it is that Courts insist on recording of' ma.rks at interviews and oth'er fair checks like guidelines for murks a.nd remarks, about candidates and the like. If the Court is skeptioal, the record of the Selection proceedings., including the notes regarding the interviews, may have to be made available. Interviews, as such, are not bad but polluting it to attain illegitimate ends is bad [908 H, 909 A-CJ

2. Social scientists and educational avant garde may find pitfalls in our system of education and condemn the unscientific aspects of marks as the measure of merit, things as they now stand. But, however imperfect a.nd obtuse th'e current sYstem and however urgent the modernisation of our courses cul~

minating in examinations may be: the fact remains that the Court has to go by what is extent and cannot explore on its own or ignore the measure of merit adopted by universities. Judges must not rush in where even educationists fear to tread.

So the criterion of marks and class, the Allahabad University has laid down is sound, although to swear religiously by class and grade may be exaggerated reverence ood false scales if strictly scrutinised by progressive criteria. [909, E-Gl

3. The prescription of a high second class in Ordinance 9 is a mandatory nnrumum.

A glance at the relevant portion of Ordinance 9 reveals t:OOt wherever relaxation of qualifications is intended, the Ordina.nce specifically spells it out and by necessary implication, where it has not said so, the possession of such qualification is imperative. The ordinance has a purpose when it prescribes at least a high second class for a. R'eader's post. It is obligatory.

[909 H. 910 A, C-DJ

4. ''High" is the antithesis of "low" and a high second' class is, therefore, a contrast to a low second class. When the range of a second class marks is wide, of the candidate who gets that cle6S with marks within the lower half bracket it C&llnot be said that he gets a high second c]ass. If he manages to get 48 marks he barely gets a second class not a high second class. An<l commonsense, which is not an enemy of Courtsense, points clearly to the meaning 1 of hi!:h "second class as one where the marks fall a little short of first class marks and

1"- be narrowly misses first class. In the context of Ordinance 9 and its purpose and the co!locution of words used viz. 'first class or a high second cJ.ass', the interpreta.tion will misfire if the Court diregard the intent and effect of the adjective 1 'high' and indifferently read it to mean merely the minimum marks needed to bring the candidate within the second class.

High is high and a sup'erior second class denotes marks somewhere near first class mark<;.

Even by relaxing, diluting and liberalising the rigour clearly imported bv the rlraftsman by using the expression "high second class", still it is impermissible to render the \Vord 'high' nugatory or make, by construction, that inten'li"e adjective redundant.

Nor did the University has all these years treat ri hinh .;;:cond class to mean a mere second class and English has not lost its potrncy in he Allahabad University so oo to include low in high. The utmost construction would be : Draw a line at midpo1nt, and marks .above and below that tine will be high and low second' class respectiv'ely.

Jn the instant case, the mid-line

A being 54 those who have not secured above 54 cannot claim to ha.ve obtaioed a higi1 second class and are ineligible. [910 D"H, 911 A, DJ

S. It is true that the Selection Committee is an expert body.

But their ex- " pertise is not in law, but in other branches of learning and the final interpreta .-_ tion of an Ordinance is a legal skill outside the academic orbit. .£911 EF]

6. While there is no absolute ban, it is a rul'e of prudence that courts should hesitate to dislodge decisions of academic bodies.

But university organs, for that matter any authority in our system, is bound by the rule of law and cannot be a. law unto itself.

If the Chancellor or any oth'er authority lesser in level decides an academic matter or an educational question, the court keeps its hands off; but where a provision of law has to be read and understood, it is not fair to keep th'e court out. To respect an authority is not to worship it unquestioningly since the bhakti cult is inept in the critical field of law. In short. while dealing with legal affairs which have an impact on academic bodies, the views of educational experts are entitl'ed to great consideration but not to exclusive wisdom. [911 G-H, 912 B-Dl

The University of Mysare and Anr. v. C. D. Govinda and Anr .• [1964] 4 SCR 515 @ 586; followed.

7. An, illegal act cannot be deemed to be legal by reading a legislative funetion into ian executive action.

Were this dubious doctrine applied to gave~ mental affairs and confusion between executive and legislative fuiictions jurisprudentially sanctioned, the consequences could well be disastrous to the basics of our democracy. Small gains in som'e case should not justify the urging of propositions which are subversive of our constitution. [912 E-Fl

ClVIL

APPELLATE

JURISDICTION 1524 of 1977.

Civil Appeal No.

Appeal by Special Leave from the Judgment and order dated 21-9-1976 of the Allahabad High Court in S.A.Nos.26,66 and 37/76.

S. P. Gupta and Pramod Swaroop for the Appellants.

Yogeshwar Prasad and Mrs. Rani Chhabra for the Respondents ~. 5and6. )

U. R. La/it and Manoj Swarup, Miss La/it Koh.'i for the Respondent (University.)

"The Judgment of the Court was delivered by

KRISHNA IYER J.-The core controversy in this appeal by special leave rages round the legality of the selection of Readers by the AIJahabad'University. The fortunes of the litigation, pending for seven years have been fluctuating from court to court. The fine line of distinction between internal autonomy for educational bodies and insulation of their operations from judicial interference on the one hand and the constitutional obligation of the court to examine the legality of academic

J.P. IWLSHRBSHTHA v. ALLAHABAD UNIVERSITY (Krishna l?er, I.) 9o5

actions and correct clear injustices on the other is jurisprudentially real and the present appeal illustrates the demarcation between the two positions. While legal shibboleths like "hand-off universities" and metivulous forensic invigilation of educational organs may both be wrong, a balanced approach of leaving universities in their internal functioning well alone to a large extent, but striking at illegalities and injustices, if committed by however high an authority, educational or other, will resolve the problem raised.by counsel before us in this . appeal from a judgment of the Division Bench of the High Court.

Once we recognise the basic yet simple proposition that no islands of insubordination to the rule of law exist in our Republic and tha~ discretion to disobey the 111andate of the law does not belong even to university organs or other authoritieS, the retreat of the Court at the sight of an academic body, as has happened here, cannot be approved. On the facts and features of this case such a balanced exercis., of jurisdiction will, if We may anticipate our utltimate conclusion, result in the reversal of the appellate judgment and the restoration, in substantial measure, of the learned single Judge's judgment quashing the selections made by the University bodies for the posts of Readers in English way back in 1973.

A perception in pe.rspective of the facts which are brief and the law which is clear, persuades us to narrate the circumstances which have led a number of lecturers of the Allahabad University to fighting forensic battles over the selection of some as Readers in English by the selection Committee and their opportunity by the Executive Council.

Nearly a decade ago, six posts of Readers in the English Depart- Iljent of the University fell vacant and applications were invited by advertisement.

The petitioners and respondents 5 to JO, among , others'. Wee applicants.These parties .were all srving as lecturers in

. the un1venty at that lime. A select10n committee was constituted as contemplated by the statutes and ordinances framed under the Allahabad University Act, 1921 (for short, hereinafter called the Act.)

Section 29 of the Act, stipulates that teachers of the university shall be appointed by the executive council on the recommendations of the 'selection committee. There are sttutory provisions regulating the functions of the selection committee section 32(2)(f) of the Act. provides for the issuance of ordinances prescribing qualifications for appointment of teachers. ordinance 9(2) lays down the qualifications fod1lachers in the various fa, culties. We are conerned with Ordinance 9 wMh special reference to the pre&cription of qualifications for R<W!e1s and it runs thus;

I 9-463SCI/80

9. Tne following qu1litiations are prescribei for the appoint

mentofteacher> in the Faculties of Arts, Scienee, Com111arce

and Law

(2) For Reaiers : (i) First or High S•cona Class M1ster's

d>gree in the subject concrnei ani go:>d academic record. ,

~(ii) Established reputation for sound scholarship and be compe

tent to teach upto Master's degree and guide research.

L(iii) A doctor's degree, or eqnivalent published work.

(iv) At least 5 years' teaching experience of the subject con

cernd in plst-grafaate classes in a University recJgnised by law, or research e1'perience in a Research Institute recog niSed by the University or the State, or the Central Govern. ment.

Provided that the selection Comnittee may relax the quali

fications contained in clause (iii) for the post of Readers in the case of candidates whose total length of service a11 tea

chers in this Universty is not less than the period required to teach the maximum of the Lecturer's grade and who shall have established a reputation as teachers.

Provided further that 'in the case of women teacher11 of this (i.e. Atlahabad University), in place of qualification tNo. (IV) requiring 5 years' teaching experience in pet , graduate classes , a minimum of 5 years teaching experience of the subject in the graduate classes in this University may also be considered adequate for the post of Readers.

The statutory exercise of choosing the best among the applicants in clnformity with the minimm qualifications is done by the selection

co~'lllttee .which re:omn,.nh. to the .eecutive ouncil its panel. \' While there is no specific legtslative prov!Slon regardmg the procedure '-

to be adopted by the selection committee there is no doubt that arbi " trariness is anathema, violation of natural justice vitiates and subject to this, self-created rules, flexible and pragmatic, fair and functionally viable, may well be fashioned by the selection committee.

In this case the committee chose to interview the candidates who were other

wise eligible for consideration. 13 applicants turned up for i)lterview. But respondent No, 9, Dr.

Bhattacharya, and peti tioner No. 2, Skand Gupta, apparently resented the viva voce test as unauthorised and did not care to appear for the interview. How

ever, Dr. Bhattacharya (R. 9), on being persuaded, !did later turn up, was interviewed and eventually included in the 'select list'. The •

J. P. KULSHRESHTHA v. ALLAHABAD UNIVERSITY (Krishna Iyer,!.) 901

Second petititioner did not enjoy the benefit of a second persuasion to persent himself for interview, did not appear before the Selection Committee and missed the bus.

The Committee, which consisted of academic experts, prepared a panel and forwarded it to the Executive Council. As is inevitable in situations of over supply, many are called but few are chosen and Respondents 5 to 10 (Dr. Mrs. Hem Lata Joshi, R-5, Shri H. S Saxena, R-6 Dr. R.R. Dutt, R-7, Shri I. N.

Agarwal, R-8, Dr.

A. N. Bhattacharyya, R-9, and Dr. L. M. Upadhayaya, R-10) were lucky to be chosen while the petitioners were luckleSs and .lost. Petitioner No. 2 represented against the propriety of the selection to the executive council, but the latter overruled the abjeGtion and accepted the recommendation. Respondents 5 to 10 were thus appointed Readers. The Petitioners thereupon moved the chaneellor uader s.42 of the Act and urged, in their petition, that the selection was illegal, but were disappointed because the chancellor, by this order of November 22, 1973, upheld the selection and the appointments.

The last refuge of those with lost causes is the writ jurisdiction of the High Court. The petititoners invoked Art. 226 of the1 Constitution and impugned the legality of the selection process and the appointments on various grounds.The learned single Judge considered the merits of the contentions and concluded that the selections and the consequent appointments were bad in law except in regard to respondents 7 and JO and directed the university, in January 1976, to hold fresh selections for filling the vacancies of long years ago.

Inevitably, the vanquished respondents rushed to the appellate Bench of the High Court where success greeted them; for, the appeals were allowed in reversal of the sini:le Judge's reasoning and the writ petition was dismissed in entirety. The final sanctuary of those who fancy that they are victims of judicial injustiee of other forms of iniquity is the Supreme Court in its misleadh1gly immense and Self defeatingly multiform jurisdiction under Art. 136, The appellants are here hopefully invoking our power to heal their alleged injury.

With this backdrop, it will be easy to appreciate the few submissions urged by the appellants in substantiation of their case that although the selection committee was legally constituted, the process of selection and the criteria for selection were illegal. If the selecion were uinvalidated by any lethal vi.Ce the '.council's action in accepting the commendees cannot survive.

Nor can the chancellor's dismissal of the objections of the appellants lend life to what otherwise is non est. Thull, the crucial issue is whether the grounds of attack levelled against the selection have substance.

908 SUPREME COUJl.f REPORTS

[1980] 3 S.C.R.

A few basic facts must be remembered before we discuss tbe merits.

All tbe parties with whom we are concerned as candidates, have acquired their master's degree from tbe Allahabad University. In tune with tbe hierarchical ethos of Indian society which does not spare tbe academia, tbere is a pyramidal structure with lecturers at tbe bottom, Readers above tbem aud professors at the top, speaking simplistically.

Our concern in this appeal is with Readers; and tbe eligibility qualifications mentioned in Ordinance 9 are tbe minimum, not tbe maximum. We may straight get into the meat of tbe matter. The [substantial contention urged by tbe appellant with success before tbe single Judge and failure before tbe Division Benchjis tha(tbe contesting respondents are not even qualified for consideration because they do not have a first class or a high second class in tbeMaster's degree. It is common ground that none of them has a first class. It is undisputed that the Allahabad Universicy awards first class to those who obtain 60 % and above and second class to those who secure anything between 48 % to 59 %.

For the nonce, we are not concerned with the other qualifications itemised in Ordinance 9. The marks obtained by the appellants show that they are recipients of first class or high second class. The controversy is not about their eligibility but that of the contesting respondents.

Dr. Mrs. Joshi (R. 5) has secured 52 • 2 mar ks; Shri Saxena (R. 6) has scraped through with 49 3 marks; Dr. Dutt (R. 7) has, however, obtained a first class while Shri Agarwal (RS) is slightly below the middle line in the second class range having got only 53 8, marks; Dr. Bhattacharya (R9.) 'has fared a little better with 54 5 marks. Dr. Upadhyaya (R. 10) also has a better performance record in the Master's degree examination since he has 55 l marks to his credit.

From these figures it is obvious that Dr. Dutt (R.7) has the :rustitien of being the holder of a first class. It is beyond one's comprehension how his selection can be challenged on the score of ineligibility.

Indeed, the appellants have accepted the findings of the learned single Judge who has disallowed the writ petition vis-a-vis R. 7 and R. 10. , ,.

We agree. Even in regard to the conclusion arrived at so far as R. 10, Dr. Upadhyaya, is concerned who has secured marks above the middle line in the range between 48 % and 59 %, we are not disposed to disagree with the single Judge. Thus, the appointments of R. 7 and R.10 do not call for any interference. The rest will, right now, be exposed to the actinic light oflegal scrutiny.

We may dispel two mystiques before we debate the real issues.

Did the selection committee act illegally in resorting to the interview process to pi ck outthe best ? We think not. Any administrative or quasi-judicial body clothed with powers and left unfettered

J. P. KULSH'RESHTHA v. ALLAHABAD UNIVERSITY (Krishna lr, 1.) 909

by procedures is free to devise its own pragmatic, fieXible and functional

ly viable processes of transacting business subject, of course to the basics of natural justice fairplay in action, reasonableness in collecting decisional materials, avoidance of arbitrariness and extraneous considerations and otherwise keeping with in the leading strings of the law.

We find no flaw in the methodology of 'interviews.'Certainaly, cases arise where the art of interviewing candidates deteriorates from strategy to strategem and undetectable manipulation of results is achieved by remote control tactics masked as viva v9ce tests. This, if allowed; is surely a sabotage of the purity of proceedings, a subterfuge whereby legal means to reach illegal ends is achieved. So it is that courts insist, as the learned single Judge has, in this very case,

uggested on recording of marks at interviews and other fair checks 'like guidelines for marks and remarks about candidates and the like.

If the court is skeptical, the record of the Selection proceedings, including the notes regarding the interviews, may have to be made available.

Interviews, as such, ll're not bad but polluting it to attain illegitimate .ends is bad. Dr. Martin Luther King Jr. was right when be wrote{')

"So I have tried to make it clear that it is wrong to use immoral means to attain moral ends.

But now I must affirm that it is just as wrong, or even more, to use moral means to preserye immoral ends."

The second obscurantism we must remove is the blind veueration .of marks at examination as the main measure of merit. Social

scientists and educational avant garde may find pitfalls in our system of education and condemn the unscientific aspects of marks as the measure of merit, things as they now stand. But, however imperfect and obtuse the current system and however urgent the modernisation of -0ur courses culminating in examinations may be, the fact remains that the court has to go by what is extent and cannot explore on its .own or ignore the measure of merit adopted by universities. Judges must not rush in where even educationists fear to tread. So, we see no purpose in belittling the criterion of marks and class the Allahabad University has laid down, although to swear religiously by class and grade may be exaggerated reverence and false scales if strictly scrutinised by progressive criteria.

We have stated earlier that the prescription of first class or high second class is part of the Ordinance as a qualification for a Reader's post. Is this condition mandatory or directory ? The High Court at the two tiers has taken contrary views. But we are inclined to

(I) The Negro is your Brother by Martin Luther King Jr. published in "119

years of the Atlantic" ed. by Louise Desaulniers, p. 515.

hold that a high second class is a mandatory minimum. A glance at the relevant portion of Ordinance 9 reveals that wherever relaxation of qualifications is intended, the Ordinance specifically spells it out and by , necessary implication, where it has not said so, the possession of such qualification is imperative. We must remember that a Reader is but next to a Professor and holds high responsibility in giving academie guidance to post-graduate students. He has to be a creative scholar himself capable of stimulating in his students a spirit of enquiry and challenge, intellectual ferment and thirst for research. If the teacher is innocent of academic excellence, the student, in tum, will be passive, mechanical, negative and memorising where he should be innovative, imaginative and inventive. The inference is irresistible that a Reader who guides the students. and raises his faculties into creative heights is one who himself has had attainments to his credit. Putting aside for a moment the value of examinations and marks as indicators of the student's potential, we must agree that the ordinance has a purpose when it prescribes atleast a high second class for a Reader's post.

It is obligatory.

Now we come to close grips with the principal point debated before us. When is a second class high, going by marks? For any layman the meaning is clear. For any purpose-oriented interpretation the decoding is simple. High is the antithesis of low and a high second class is, therefore, a contrast to a low second class. When the range of second class marks is wide, of the candidate who gets that class with marks within the lower half bracket you cauuot say he gets a high second class. If he manages to get 48 marks he barely gets a second class-not a high second class. And commonsense which is not an enemy of court sense, points clearly to the meaning of .high seconcf clas!l as one where the marks fall a little short of first class marks and he narrowly misses first class. In the context of Ordinance 9 and its purpose and the collocution of words used viz. 'first class or a high second class', the interpretation will misfire if we disregard the intent and effect of the adjective 'high' and indifferently read it to mean merely the minimum marks needed to bring the candidate within the second class.· High is high and a superior second class denotes marks some where near first class marks. Assuming we relax, dilute and liberalise the rigour clearly imported by the draftsman by using the expression 'high second class', still it is impermissible to render the word 'high' nugatory or make, by construction, that intensive adjective redundant. Nor are we impressed with theJstrange submission that the

University has all these years treated a high second class to mean a mere second class, and, therefore English has lost its potency in the Allahabad University and high includes low. Such bathetic semantics .

. '

J. P. KULSHRESHTHA v. ALLAHABAD UNIVERSITY (Krishna Iyer,!.) 911

must be rejected since continuing ccmmission cf w1crg does not A right it.

The utmost we may reluctantly accept is the construction that the learned single Judge has adopted. Draw a line at mid-point, and marks above and below that line wiJI be high and low second class respectively.

It was urged that marks for the second-class grade vary frcm university to university and start sometimes with 40 % and so, even 4~ must be regarded as high second class for Allahabad University.-Here r--· we are e.ncerned only with holdrrs lilf second class from the Allahabad

Unive111ity and so the complication of other universities does not rise.

Even &therwise, with reference to any particular university, the marks for second class may be from X to Y and 'high' with reference to that university will be the superior half between X and Y. Lexically, logically, legally, teleologically, we find the conclusion the same. We regretfully but respectfully disagree with the Division Bench and uphold the sense of high second class attributed by the learned single Judge. The midline takes us to 54 and although it is unpalatable to be mechanical and mathematical, we have to hold that those iwho have not secured above 54 marks cannot claim to have obtained a high second class and are ineligible. In the instant case, Dr. Mrs.

Joshi, Shri Saxena and Shri Agarwal do not fill the biJI, their marks being below 54 in the Master's degree examination.

We have earlier held that the power to relax, as the Ordii; iance now runs,'hilso far as high second class is concerned, does not exist. Inevitably, the appointment of the 3 respondents violate the Ordinance and are therefore, illegal. It is true, as counsel for the respondent urged, that he Selection Committee is an expert body. But their expertise is not

' in laV1, but in other branches oflearning and the:final interpretation of an ordinance is a legal skiJI outside the academic orbit.

Rulings of this Court were cited before us to hammer home the point that the Court should not substitute its judgment for that of academicians when the dispute relates to educational affairs. While there is no absolqte ban, it is a rule of prudence that courts should hesitate to dislodge decisions of academic bodies.

But university organs, for that matter any authority in our system, is bound by the rule of law and cannot be a law unto itself. If the Chancellor or any other authority lesser in level decides an academic matter or an educational question, the Court keeps its hands off; but where a provision oflaw has to be read and understood, it is not fair to keep the Court

out. In Govinda Rao's case (I) Gajendragadkar, J (as he then was) struck the right note:

"What the High Court should have considered is whether the appointment made by the Chancellor had contravened any statutory or binding rule or ordinance, and in doing so, the

High Court should have shown due regard to the opinions expressed by the Board and its recommendations on wbieh the Chancellor has acted."

(Emphasis added)

The later decisions cited before us broadly conform to the rule of caution sounded in Govinda Rao.

But to respect an authority is not to worship it unquestioningly sinee the bhakti cult is inept in the critical field of law. In short, wfille dealing with legal affairs which have an impact on academic bodies, the views of educational experts are entitled to great consideration but not to exclusive wisdom.

Moreover, the present case is so simple that profound doctrines about academic autonomy have no plaee here.

A strange submission was mildly made that the Executive Council has also the power to make ordinanees and so, by aceepting a low second class has equal to a High second class in the case of the three respondents, the Council must be deemed to have amended the Ordinanee and implicitly re-written it to delete the adjective 'high' before ~- 'second class'. This argument means that an illegal act must be deemed to be legal by reading a legislative function inio an eXeCUtive action. W e(e this dubious doctrine applied to governmental affairs and confusion between executive and legislative functions jurisprudentially sanctioned, the consequences could well be disastrous to the basics of our democracy. We mention this facet of the argument"'. not only to reject it but to emphasise that small gain in some case -'l should not justify the urging of propositions which are subversive of ' our Constitution Be that as it may, We are satisfied that respondents 5, 6 and 8 do not possess a high second class in their Master's if degree.

The second condition suceessfully urged before the single Jud11e of the High Court relates to Dr.

Bhattacharya (R. 9). The point is that R. 9 and petitioner No. 2 for selection the second petitioner Jost hs chance of being consired because he did not appear fOt' the interview and Dr. Bhattachafya averted that fate because he was sent for a second time. The equivocal version of Dr. Bltattacharya

(1) The University of Mysor1;, and Anr. v. C.D. Govinda Rao an6 .Anr.

- (

.J.P. KULSHllESHTHA v. ALLAHABAD UNIVERSITY (Krishna Iyer, 1.) 913

has not been accepted by the learned single Judge ai1f1 we are nnhappy that an academic has been pnt to the necessity of this dubiety which suggests that taking liberties with truth for getting a temporary advantage is a tendency which does not spare highly educated and gifted persons. In this connection, even the terminological inexactitude

indlged iu by Dr. Hem Lata Joshi (R. 5) is not complimentary, when she says that in her application she gave 54 marks as against the actual figure of 52 2 and when challenged, she excused herself by saying that her memory, working in a hurry, let her down. We are satisfied that if the Selection Committee had chosen to give an opportunity to the 2nd petitioner, even as they did to R. 9, he might well have turned up and having regard to his high marks, might also have stood a good chance of being selected. The criticism is not that the Selection Committee's action was mala-fide or biassed, but that there has been unequal treatment between equals.

For this reason, th;;' selection of R. 9 deServes to be struck down as violative of Art. 14.

Other minor points which have been urged and countered do not deierve serious consideration and we decline to deal with them. The .conclusion we reach is that the selection and appointments of respondents 7 and 10 are good; but the selection and appointment of respondents 5, 6, 8 and 9 are bad in law.

The tragic sequel cannot be dismissed as none of our coneern because the Court, by its process, must, as far as possible, act constructively, minimising the injury and maximising the benefit. Indifferenee to consequences upon institutions and individuals has an imperial flavour and we wish to make it clear that the fact that since 1973 the respondents 5, 6, 8 and 9 have been functioning as Readers without blemish is a factor which distresses us when we demolish their appointments. They have gained experience of several years in the Reader's post. They are otherwise well qualified on the academic side. The short-fall in the matter of a high second class, while some of them have Deen doctorates, should not have such disastrous consequences as t" throw out the appointees 7 years after. We think that these special .circumstances may well justify the appropriate authority in the University resorting to alternatives which may mitigate their misfortune.

We have been informed by counsel Mr. Manoj Swamp that the University is inclined to take an accommodative attitude to mitigate the hardship that may flow from the adjudication. Of course, they are free to take such steps as they deem just and necessary.

We do not think there was anything wrong in Dr. Bhattacharya having been jpersuaded to come to the interview, but we regard it as improper that

1!uch a facility was not extended to the 2nd petitioner.

A In conclusion, we allow the appeal and direct a fresh selection from

among those candidates who are qualified for Readership in the light of our interpretation of Ordinanee 9. We make it clear that the appointments of respondents 7 and 10 sustained by the High Coart, will remain untouched.

The appeal is allowed subject lo the observations made above.

S.R.

Appeal allowed.

J. P. KULSHRESHTHA AND ORS

CHANCELLOR, ALLAHABAD UNIVERSITY, RAJ BHAWAN AND ORS

IV. R. KRISHNA IYER. A. D. KosHAL

REDDY, JJ.

section 32(2)

Allahabad University Act, 1921

section 29

Allahabad University Act, 1921

Bhattacharya

section 42

November 22, 1973

Article 226

Allahabad University

[1964] 4 SCR 515

Allahabad High Court

S. P. Gupta

Pramod Swaroop

Yogeshwar Prasad

Rani Chhabra

U. R. La

Manoj Swarup

La/it Koh.

KRISHNA IYER

Krishna l?er, I.) 9o5

Allahabad University Act, 1921

Section 29

section 32(2)(f)

Bhattacharya

Skand Gupta

Bhattacharya

Hem Lata Joshi

H. S Saxena

R.R. Dutt

I. N.

Agarwal

A. N. Bhattacharyya

L. M. Upadhayaya

Art. 226

Supreme Court

Art. 136

Allahabad Universicy

Joshi

Saxena

Dutt

Agarwal

Upadhyaya

Upadhyaya

Martin Luther King

Louise Desaulniers

Allahabad University.-Here

Joshi

Saxena

Agarwal

Govinda Rao

Gajendragadkar

Jost

Bhattachafya

Bltattacharya

C.D. Govinda Rao

Hem Lata Joshi

Art. 14

Manoj Swamp