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• ROHTAS INDUSTRIES LTD. &, ANR. ETC.

v •

. THE CHAIRMAN; BIHAR-STATE ELECTRICITY

' .

BOARD AND OTHERS -

March 2, 1984

- [D. A. DESAI AND V. BALAKRISHNA ERADi, JJ]

,, Efectricity (SU]Jply) Ac1,-·-194a2s. -49-Electricity .Board divided corisume; s into various cateiories-_CosunzerS of only those cafliories ~/ready enjoying conces-- sion in general tari..tr as incentive to esrab/is/;·; ndl; Strjes in the State asked io pay fuel surchatge-;-Whether classification of consun1ers and levy_ of fuel suchar; e o, n -

some consumers only qrbitrary and violqtive of Art . . 14 of the Constittion. ,

Section 49 of tlie. Electricity (Supply) Act, 1948 provided for the .sale of" electricity by the electricity. Board lto anypefson not being a

liceflsee and to fr.ime. uniform. tariffs . for the purposes of such . supply " having. egafd~ .. inter alia to - the_': ii.atre of the.··. supply,. ·. the purPose1.for which the. supply_ is required and other_. relevant factprs, In exercise ofthc po_wef-s conferrCd

0 by s. 49.'.'ofthe Act, "the responden~ Bihar State ElcciriCity Board bad classified the Consumers irito ten categoics and had . ,_been, from timt;. to time, issuing notifiC.ltiOns :fixing the tariff 'and the tefms and

conditions for the uppJy of-- electricity) .rothose consulners. With a vieW to -encouraging the tstblishment of industrieS in the State, the general tariff r3:te f applicable in respeCt of high tension supply to industries and factories had been fixed at rates which were muc; h lower ~'hen comparea: to thoSe applicable to other . __ -tyPes of consumers. On 6.4. 1979 the_ respop.d_en_t Board, in. sui)ers_ession of ts

earlier notification fixing the tariff, isSUed a notifiCation revising the tariff for all categories of consumers served by it. Para 16.7 of the .-said Tariff Notification provided that the consumers of low tension indu-stiial service~ high tetision ser vice, eXtra high tension service, and. railway traction Service shall be liable to pay , fuel surcharge'. at a rate to be determined.every year J~ acCordance with lthc fc;:>r• -. mula set out in sub-para 2 of that paragraph. The appelJants who had entei-ed into agreements with the respondent Board for the supply of high tension electric . current fcrr their factories. arid \vere admittedly nOt lice"nsees, filed writ petitions

in the High Cou;'.t thaIIenging the levy. of fuel surchafge on the grouned that it \ ; was arbitrary and devoid of legal sanction.· A Division Bench of the High Court

.di!missed' the writ petitions. '-Hence these, appCals -and- special leaVe petitions.· : The appCnanucharge of discrimination was_ based On the_groulld that only . nsumers of low tension industrial service high tension service~ extra high ten-·

~ s1on serviCe, and railway traction service had been singled out for being subjected

':to a Jevy of surcharge, '?'.'bile consumers of -elec-tricity for. dome'stic, commercial -- and irrigation purposes were left unaffected by any such burden:

 .... 'Dismissing the appeals.and special leave petitions,.- .. _ - . - . - - . - . -

HELD; It Is ;, ell-established tba; where a corporation is an . instr;,,;, eniallty H . or an agecy of Government it would, in the exorcise of Its powers and function,

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60 . SUPREME COURT JlFPORrS

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R. [1984] 3 s.c .. •

be subject to the same c.Onstitutlonal or public law &Hmittioa~ as apply -to the Government and the principle of law inhibitin& arbitrary Action by Government would apply equally where such a corporation is dealing with the public, Whether by way of giving jobs or entering into relationship with any person in any manner.it likes according to its sv.1eet will. The acts of such a. coiporation must be in conformity with soe principle which ineets the test of reaso.nableness and relevence. (71 F-H]

- ' ·

-The-contention that the imposition or fuel surcharge under paragraph :16.7 of the 1979 tariff notification is arbirary and violative of Art. 14 of the Cons ti tu~

- tion has no fofce. -The BOard was Perfectly within its rightsin deciding to ---r.estrici _the levy of fuel suriJiai&-e to those categories of consumers who were enjoying the-benefit of.a concession in the general rate and ill sparing Smaller \type of consumers such as tile agricultural irrigation and commercial consumers

frdm being subjected to that burdny in view of the fact that they were already . being subjected to a basic _levy at.s-Obstantially higher rates. The true consequence /

of the action taken by the Board is only to effect a reduction in the quantum of concessionthat was being enjoyed by the consumers b'elonging to the industrial - -and railway tractiqn categories. The appeltantS: had no case that any illegality , was involved in treating the industrial consumers, as a separate cla:Ss 'and grant .. ·

ing them the benefit of a preferential treatment for -the purpose of fiXing the , basic rate of levy for supply of electricityJ _ A classification. which is legally . ·-valid and permissible for the grant of a concession in the basic rates will equally

~-bold good for the purpose of a subsequent scheme of distribution of the. burden

in the forrri of fuel surcharge. A-clasification of "these bulk . consumers has a ·-rational nexus with the_ object and purposes of the levy of surcharge.

[65 G, '67 B-D, 66-G, 67 DF]

. .

The arg\lment that" levy of fuel surcharge can only be" for the purpose of ·:recouping the" amounts actually aid by the Board by way of 'fuel surcharge• to the D.V.C. and the U.P. S_tate Electricity Board for the quantities of energy •purchased by the Board fro~ these sources and the extra cost that the Board had

actually to incur on fuel consumed in those - two generating stations at Patratli 'a.Iid Barauni has Ilo force. From the counter affidavit filed on behalf of the :-Board, it is sceii that in respe_ct of the. increase in the Cost of production of :eleCtricity in the two generating _stations of the Boards the fuel surcharge has

taken intoaccount only that part of the increase in cost which is relatable to.'the 1tiCieased price of the coal and oil i.e. fuel aloD.e. In rspect of the energies

pUrchased by the Board from outside sources, narr.ely, ¢.e Damodar Valle}'

~COti}oration and .the U.P. State Electricity" Board, the increase in cost per unit

'incurred by the' Board has been included in the contPutation of the fuel surcharge. ·.Though the nomenclature giv, en to the levy is "fuel surcharse 0 it is really. a

~ufcharge levied to meet the increased cost of genetatiOn 3.nd purchase of electri

'city and this is made absolutely clearly in the formula given in para 16.7.2. ·• . ' . [67 H," 68 A-Fj

There is no forc.e in the cOntention that the words "lncreise in the average unit rate of purchase of energy•' used in Ct below paragraph 16. 1.i should be

i"tefpreted as 'taking.their colour froin the cOntents of parapraph 16.7.3. From

- , a_ reading of these proviSions it is abundantly clear that the entire increase in

costs incurred in the purchase of energy. froin the D.V.C. an.d the U.P. State : \,... -

'I ', ..

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I •

ROITTAS INDUSTRiES v. BiHAR sr. ELEC. BOAAD 6J

El.ectricity Board has ._-to go into the computation of the surcharge leviable under A paragraph 16.7. Thece is no ambiguity whatever in thf: , words used in Cl so as ·-to require the court __ to. take_ light from par3graph .16.7.3 for the purposeo~ understanding their scope and meaning. [69 B-D] .. .... .

The contention that the financil capacity of individual industrial COnsumers. bad not been taken into account while fixing the revised tariff is devoid of forCe. - It is not contemplated by section 49 or. any of the other p.rovisions of the Act: that as amongst consumers talling within' a specified category.different rates are to be charged depending upon the financial capacity of the paticular consumer to!·

Pay~ On the other band, the.very core of the .scheme of section _49 is that the _tariff should be uniform in r:espect of each class or Categor~. {70 H,,7~ A~B] ,

- It is found.i-hat notwithsta.nding the mandaio!y provision contained in s.59 of the Act obliging the Board to carry its operations and adjust its tariffs in such a; w, iy as to nsure that the total revenues e3!ned in an,, year of amount shaU, after mting all expenses properly chargeable to revenue leave. such surplus as. the State Government may,- frOm time to time, specify. the Board has-been selling-. ener&y at rates which are lower than the actual post insurred by it per unit of production. Such being the factual situation, there is absolutely -no basis fof . . the contention that the tariff fuaion .effected by the .Board sUffers from the vice

of arbitrariness and is liable to be jnterfered with by the Court on that ground. .. ' . .. . , (73 B,.72 AC, '73 q •

:_ CiVIL APPELLATE JURISDICTION : Civil Appeals Nos .. 2855-56: of 1982. ·

Appeals by special leave from the Judgment and Order dated ' the 9th April, 1982 ofthePatna High Court in C.W.J.C. No; 3503/" 81 & 504 "of 1982. - · •

WITH . ; Civil Appeals Nos; 2857-58 & 2859-60 ?f 1982

Appeals by Special leave from the.Judgment and .Order dated the 9th/10th February, 1982 of the Patna High Court in C.W.J. c.,

Nos. 1026/82; 1855/81, 1516/81 (R), 1355/81 (R)., . , . .

~ . , . .

AND ,

' Special Leave Petition (Civil) No. 2904. of 1982. ·

From the. Judgment and Ordr: dated the'8th• December,1981 ··· of the Patna High Court in Civil Writ . Jurisdiction Case No .. 1237 of 1981.

Dr. Shankar Ghosh, Parveen Kumar, Padam Khaitan, C.A. . Vaidyanarhan' N.R: Khaitan for the Appellants in. C.A. 28?$-

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SUPREME COURT REPORTS [1984) 3 s.c.R.

A.K. Sen, Padam Khaitan, Parveen Kumar and N.R. Khaitan for the Appellants in C.A. Nos. 2857~58/82,

C.S. Vaidyanathan, Anil Kumar Sharma, and Mr.. Parvee11 Kumar for the Appellants in CA. Nos. 2859-60/82. ·

K.K. Venugopal, C.S. Vaidyanathan fof the Petitioner in SLP Nos. 2904/82.

L.N. ?inha, Att. General, Rqm Balak Mehto, Pramod Swaru"' and P.P. Singh for the Respondents in all the appeals & SLP.

The Judgment of the Court was delivered by

BALAKRISHNA ERADJ, J. These appeals (by special leave) and the Special Leave Petition involve common questions concerning the . validity. of the supplementary bills issued to the appellants by the ·

!st respondent-Bihar State Electricity Board-r "fuel suichllrge" as per the revised tariff dated 1st April, 1979, and hence they were heard together. Having regard to the fact that by reason of interlocutqry orders passed by this Court, the realisation of large amounts demanded from the appellants by the respondent by way of charges for electric energy supplied by it stood stayed and the consequent urgency in passing final orders in these cases, as soon as the hearing was completed we. passed the ollowing order announcing the conclusion reached by us :

"All these Civil Appeals and Special Leave Petition are dismissed wfth costs in each case. All interim orders made in each of these matters at various staj!es ar~ vacated.

Reasons wlll follow".

We now proceed to state the f' reasons in support of the said conclusion .

.The Bihar State Electricity Board hereinafter called 'the Board') is incorporated under Section 12 of the Electricity (Supply) Mt 1948 (hereinafter referred to as 'the Act'). The general powers and duties of.the Board are set out in Sec•iou 18. Thereunder the Board has the duty, inter alia, to arrange for the supply of electricity that may be required within the State and for the transmission and dfstribution of the same in the most efficient and economic manner, with particular reference to those areas which are not, for the time being, supplied or adequately supplied with electricity.

Se91ion 49 of the Act makes provision for the sale of electricity by the Board to peI&onl!J_()the~ than the licen&ees an\! to fra!lle unif9rm ,

ROIITA.S iNDUSTRiES v. BIHAR ST. ELEC. BOARD (B. Eradi, J.)

triffs for the purposes of such supply. That section is in the follow Al Ing a terms:

"49. .(!) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon 'iiuch terins 'and conditions as the Board thinks fit, and.may for the purposes of such supply flame uniform tariffs.

(2) In fixing the uniform tariffs, the Board shaU have

regard to all or any of the following factors, namely:-

(a) the natufe of the supply and the purposes for which it is required ;

(b) the co-ordinated development of the supply and distribution ortelectricity within the State in the most, efficient and economical manner, with particular reference to such development . in areas not for the time being served or adequately served by the licensee ;

(c) the simplification and standardisation of methods and rates of charges for such supplies ;

(d) the extension and cheapening of supplies or electricity to sparsely developed ateas.

(3) Nothing in the foregoing provisions of this section shall derogate from the power-of the Board, . if it considers it necessary or . {lXpedient to fix different tariffs for the supply of electricity to any person not belng a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which such supply is required and any other relevant factors.

(~) In fixing the tariff and terms and cciditlons for the supply of electricity, the Board shall not show undue prefe1ence to any person."

In exercise of the powep conferred by the above section, the D9afd ~S been, ffO!ll 'ime to tjrne, jssUin¥ UOtifiations jixing the

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SUPREME COURT REPORTS [1J84j :f S\C.R.

tariff and the terms and conditions for the supply of electricity _to: the various classes of consumers. In supersession of the tariff rates till then obtaining under -an earlier notification, tJ:te Board by its

"tariff notification 1979" published in the Bihar Gazette Extraordi nary No. 3'$11 dated 6.4.1979, iSsued a revised tariff for all categories of consumers served by it. The said tariff was to take effect from

1st April, 1979.

The appellants are companies having factories in different parts of the State to Bihar and they have entered into agreemepts with the Board for supply of high tension electric current. The agree

ment~ so executed are in a standard forl'.1 containing substantially Identical terms. Annexnre I in the Writ Petition C.W.J.C. No. 1855/ 81 out of which -C.A. 28 58/82 arises in a copy of the agreement entered into by M/s Usha Martin Black (Wire Rods)- Ltd. with the Board on 18.8:1961. In clause 4 of _th¥gteement, it is _stipulated that the consumers shall pay to the supplier (Board for) the energy supplied and registered by the meters "at the rates from time to time in force and paid-by similar consumers". It has been further provided in clause 11 .that the agreement should be read and construed as subject in all respects to the provisions of the Indian Electricity Act 1910 and the rules for the time being in force thereunder. After the introduction of the revised tariffs, 1979, all the appellants continued io draw and consume high tension electric energy in their factories.

Para 16.7 of the Tariff Notification, 1979, provides that the consumers of low tensfon indutrial service, high tension service, extra high tensioh service, and railway traction service shall be liable to pay 'fuel surcharge' at a rate to be determined every year in accordance with the formula set ,_out iµ sub-para (2) of the said paragraph (16.7.2). This levy of fuel surcharge was in addition to the other charges specifiecl in the tariff schedule. J?uring the

cour~ of the year 1979, fuel surcharge a a provisional rate of one paise per unit was initially levied and that was_ subsequently increased to three paise per unit, again on a provisional ba~'s. In the final bills issued for the financial year 1979-80 the fuel surcharge was levied at 6.242 paise per unit. Along with the -finaJ bill of fuel

surcharge for .the year 1979-80, a provisional Qjll of fuel surcharge for the year 1980-81 was also issued to theappellant companies !icmanding paymeqt Qf qrcharge at the vate of ei$ht -paise per unit

...

ROITTAs iNDusrRiEs v. BIHAR sr. ELEC. soARD (B. Eradi, J.)

• thereupon the appellants filed Writ Petitions in the High Court of Patna contending that the provision contained in Paragraph

16. 7 in the Tariff Notification of 1979 for the levy fuel surcharge is devoid of legal sanction and is arbitrary and void. The charge of arbitrariqess leveUed against the .imposition of fuel surcharge was based on the ground that only consumers of low tension industrial service, high tension service, extra high tension service, and railway traction service had been singled out for being subjected to a levy of surcharge, while consumers of e\eccity for domestic, commercial and irrigation purposes were left unaffected by any. such burden.

A futher contention was also ralse.d that the bills issued to the. peti• . tioners were not even' in accordance. with the provisions of the

tariff notification and the demands made against thei!ppellants were, in excess of what was warranted even by the impugned notification.

Eight writ petitions, of which C.W.J.C. 1237 of 1981, filed by M/s.

Shriram Bearings Ltd., Ranchi (Petitioner in SLP No: 2904/1982) was apparently treated by. common con.sent as the main case, and were heard together as one single batch by a Division Bench of the High Court. By a detailed and well-considered judgment, the Division Bench rejected all the contentions ra.ised by the petitioners and dismissed the Writ Petitions after recording an undertaking given by the poard that certain small amounts which were found to have been charged in the bi Us In excess of what was payable by the appellantspn a correct computation of the surcharge would be adjusted in the next bills to be issued to them. Writ. Petitions subsequently filed in the High Court by the appellants in the other appeals were lafer dismissed in limine by separate' short judgments, following the decision of the Divisional Bench in C.W.J.C. 1237 of

1981. Hence these appeals and special leave petitions by the appellant companies.

At the outset, we may dispose of the contention urged on behalf of some of the appellants that the.levy of fuel surcharge under the impugned tariff notification (parapraph 16.7) is discriminatory . and hence violative of Articl~ 14 of the Col).stitution. Sub-section 3 of Section 49 xpressly authorises the Board to fix different tariffs for the supply of electricity to any "petson not being a licensee, having regard, inter alia, to the nature of the.supply, the purpose for . which the supply is requfred and other relevant factors. The power to classify. the c<>nsumers into di!l'erent categories and to fix diffren-

SUPREME COURT REPORTS

[I 984] 3 S.C.R,

tial tariffs has thus been conferred on the Board by the Section itself. The Constitutional -validity of this Section has been upheld by this Court in Maharashtra State Electricity Board v. Kalyan Borough Municipality & Another(').

The expression "licensee" means a person licensed under Part II of the Indian Electricity Act, 1910, to supply energy or a person who has obtained licence under Section 28-of that Act to engage in the business. of supplying eitergy through definition in Section 2 (6).

Admittedly, the appellants before us are not licensees. They are c_O'!lsumers receiving high tension supply to their factories. For the purpose of tariff fixation, the Board hrrs classified the consumers into 10 categories, viz., "domestic", "commercial (i)", commercial (ii)", "street light", "irrigation",- "light tension industrial" (small scale industrial upto 100 h.p.), "11 k.v. h.t:s.", "33 k.v.h.t.s.", "132 k.v. h.t.s." and "railway tractiol) (25 k.v.)". It is seen from the materials on record for us that the industries between themselves consume nearly 65% of the total quantity of energy supplie<l by the Board. Apparently with a view to encouraging the establishment of industries in the State, the generl tariff rate applicable in respect of high tension supply to industries and factories has been fixed at rates _which are much lpwer when compared to those applicable to other types of consumers. While the general rate applicable for supply of high tension electric energy for industries of the class to which the appellants belong was 22 paise per unit, consumers belonging to "commercial" categories were charged at rates ranging bet ween 48 paise to 58 pais_e per unit, "agricultural" consumers at 29 paise per unit, "low tension" consumers at 34 to 38 paise per unit and "domestic" consumers at rates ranging between 38 to 43 paise per unit. Thus, in the fixation of th~ general tariff rate, a substantial concession has been shown in favour of .industria 1 low tension and high tension consumers. The appellants have no case that any illegality was involved in treating the industrial consumers, as a separate class and granting them the benefit of a preferential treatment for the p1irpose of fixing the basic rate of levy for supply of . electricity. The stand taken by the Board is that it was found absolutely neessary at the time of the revised traiff fixation effected in 1979 to augment its revenue by levying of the additional fuel surcharge in order to offset the heavy increase in expen<liture and after taking into account all relevant facts and circumstances, it wasdecided to distribute that burden amongst the privile$ed class of

(I) l1968]}_S C.R.. 137.

ROTHAS iNDUSTRiES. v. BiHAR ST. ELEC. BOARD (B. Eradi, J.) 67

consumers; namely those belonging to categories of low tension industrial service, high tension service, extra high tension service and railway traction service. Even after taking into account the fuel s.urcharge so levied under 1979 tariff, the rates applicable to 'high tension consumers like the petitioners range between 40.31 paise al), d 58.80 paise per unit only, while the coi; imercial (ii) consnmer has to pay 71.33 paise per unit and even the domestic coil.sumer has to pay

48pise per unit. The position that obtains under the 1981 tariff which also has been challenged by some of the appe!lants is substantially similar. In our opinion, the Board was perfectly within its rights in deciding to. restrict the levy of fuel surcharge to those categories of consumers.who were enjoying the benefit of a concession in the general rate and in sparing smaller type of consumers such as the agricultural, irrigation and commercial consumers from being subjected to that burden, in view of the fact that they were already being subjected to a basic levy at substantially higher rates.

The true consequence of the action so taken by the Board is only to effect a reduction in the quantum of concession that was being enjoyed by the consumers belonging to the industrial an.d railway traction. categories. A classification which is legally valid and permissible for the grant' of a concession in the basic rates wBI

equally hold good for the purpose of a subsequent scheme of distribution of the burden in.the form of fuel surcharge. In this context, .it is also relevant to remember that thdevy of surcharge was necessitated by reason of the extra expenditure which the Board had to incur in the generation of electricity in the two power stations run by the Board and in the. purchase of power from the two outside sources, namely, the D.V.C. and the U.P. State Electricity Board and 65% of the total quantity of energy supplied by the Boatd is consumed by the industrial and railway traction consumers. A classification, of these bulk consumers has a rational nexus with the object and purposes of the levy of surcharge. Having regard to all these facts and circumstances, we find 'no substance in the contentfon adanced by some of the appellants that the imposition of fuel surchargt under paragraph 16.7 of the 1979 tariff is arbitrry and violative of.Art. 14 of the Constitution.

The next atgument advanced ori behalf of the appellants wag that even if the Board is legally entitled to levy the fuel surcharge, that can only be for the purp()se of recouping the amounts actuaily

paid by the Board by Way of 'fuel surcltarge' to the Damodar Valley n Corporation and the U.P. State Electricity Board for the quantities of energy purchased by the Board from these sources and the_ el\tra cost

63 SVJ>REMn COURT°RllfORTS

[1984] 3 S.C.R.

that the Board had actually to incur on fuel consumed i~ those two generating stations at Patratu and Barauni. From the counter affidavit filed on behalf of the Board, it is seen that in respect of the increase lnthe cost of productfon of electricity in the two generating statiOJ)S of the Board, the fuel surcharge has taken into account only that part of the increase in cost which is relatable to the increased price of the coal and oil i.e. fuel alone. The increase Jn expenditure

refemble to the enhancement in cost of the energy generated on other accounts such as wages, maintenance, etc. has not been taken into account in the foe! surcharge. Such increase iii. cost of production on account of those other factors has been offset by a revision of the basic general tariff by 16.5. per cent payable. not on!~ by the industries but by all classes except the agriculturist class. In respect of the energies purchased by the Board from outside sources, namely, the Damodar Valley Corporation and the U.P. State Electricity Board, the increase in cost per unit incurred by the Board has .been included in the computation of the fuel surcharge. We see no substance whatsoever in the contention advanced by the appellants that o.nly such amounts, if any, as might have been paid by the Board to the D.V.C. and the U.P. State Electricity Board as and by way. of fuel surcharge ca:n go into the computation of the fuel surcharged levied by iM Board under paragraph 16.1 of the 1979 tariff. Though the nomenclature given to the levy is "fuel surcharge" it is really a surcharge levied to meet the increased cost of genera•ion and purchase of electri city anq this is made absolutely clear in the formula given in para 16.7.2.

The formula for deterinining the fuel. surcharge set out in

pataraph 16. 7. 2 reads :

[Al XA3+Bl XB3+Cl XC3+Dl X D3+El xE3

"S=

 [A2+B2+C2+D2+E2]". • This is followed by detailed explanation as to what the di!!- . erent alphabets used in the numerator and denominate or signify ..

The explanation given in respect of Cl is "Increase in the average unit rate of. purchase of energy from D.V.C. during the year for which the surcharge is to be ca1culated. The said increase to be calculated with respect to the base year 1977-78." C3 stands for "units purchased from D.V.C. duriµg the year". Likewise, El and IP hav<; beeµ explaiµe4 a, s "lµcrease ill: h~ avera~? wii! rate 9f

itoHfAS INIJUSTRES v. Bl!!AR, St. ELEC. BOARD (B.:Eradi, J,) 69

purchase of energy from Uttar Pradesh State Electricity Board during the Year for which surcharge is to be calculated, the. said in'crease, to be calculated with respect to the'base Year 1977-78" and "units

purchased from Uttar Pradesh State Electricity Board" re'spectively.

We see no force in the i; ontention put forward on behalf of some of the appellants that the words" increase in the •average unit rate or'purchase of energy" used iu Cl below paragraph 16.7.2 should be interpreted as taking their _colour from the contents of paragraph 16.7.3. From a reading of these provisions it is abundantly clear that the entire increase in cost incurred in the purchase of energy from the D.V.C. a:nd the U.P. State Electricity Board has to go into the computation of the sui:charge leviable under paragraph 16.7.

The contention to the contrary advanced by the appellants is there

fore, onty'to be rejected. There is no am, biguity whatever in the words used in Ct so as to require us to take light from paragraph

f6.7 .1 for the purpose of under.standing their scope and meaning.

It was strongly urged on behalf of the appellants that tlfe provision in Cl for increase in the average rate of price of energy from the D.V.C. to be calculated with respect to the. base year 1977-78 is arbitrary.in as much as in fixing the basic tariff as per ihe 'impugned notification' of 1919, the <lifference in cost between Year 1977-78 and the current.year 1979-80 ohas already been -taken foto account. From the counter -affidavit and the statements filed in the High Court on behalf of the respondent Board which form part of the record before us in these appeals, it is seen that only· the fuel surcharge accrued duringthe Year 1977-78 had been merged while fixing the revised rates for energy and it wµs specifically mentioned in paragraph J.5 of the resolution of the Boai:d containing the proposals for the tariff revision, 1979, which the Board forwarded to the State Government that only the fuel surcharge that had accrued

uring 1977-78 ':as being merged in the rev\sed tariff rates and that

. the subsequent increase or decrease in the. cost of fuel or ihe cost of

'll!Prted energy will, therefor~, reflect in the fuel surcharge hereafter".

Similar is the position with respect to the tariff revision effected in J981. Hence th_ere is rto factual foundation for the argument. that there has ben a double neutralisation of the incre.ase in the fuel s_urc?arge_ m respect of.the energy purchased by the Board from outside sources. ~

Paragraph 16.7.4 of the tariff notification states that the fuel Surcharge for a financial year shall be calculated by the Board after

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[19S4] 3 S.C.R.

the expiry ot the financial year and until such calculation is actually made, fuel surcharge may be levied during each financial year at a rate provisionally calculated on monthly or quarterly or half-yarly basis as decided by the Board, and .in case of short or excess realisation, the sameis to be adjusted in the next bill to be served on the 0 consumer. Based on these provis'ioris, it was falntly argued on behalf of some of the appellants that the Board was under an obligation to issue provisional bills in respect of fuel surcharge 'during the course of.each financial Year and on account of its failure. to do.so, the appellants w.ere unable to include the saiq elemenf in their price structure in respect of ceme.n~, paper and vanaspati produced in the factories of some of theappellants, This contention has to be rejected for two reasons : firstly, the provision contained in the afore said pargraph of the notification is purely an enabling one and it dose not cast any mandatory obligation on the Board to issue any • provisional bills for fuel surcharge, monthly, quarterly, or half-yearly during the course of each financial yeor; secondly apart from merely

putting forward such a plea in the course of arguments before us the appellants have not furnished any'factual data as to how arid in what manner .they had fixed the prfce structure for the different pro.' ducts produced in.ihe appellants' factories .

• Yet another point urged on behalf.of the appellants was that under Section 49 of the Act, while exercising the power of framing uniform tariffs, the Board was under a duty to apply its mind to all relevant factors but there had been an omission to discharge the said mandatory duty inasmuch as the capacity of the concerned industry to pay for the energy at the rate proposed . to be fixed, which is a highly relevant .factor, had not beeen taken into account at all.

Clauses (a) to (d) of sub-section 2 of Section 49 enumerated the various matters whfoh the Board shall have regard to in fixing the uuiform tariffs and the capacity of any particular mdustry to bear the energy charge at the proposed rate of levy is not included in the said enumeration. Under the scheme of the tariff flxation incorporated in the section, the tariff is to be uniform subject to the classification of consumers into different <:ategories. . Under sub-section 3 of the said section, the classification of the consumers into such different cattegories<>is1to he made only with reference to the nature of the supply, the purpose {or which supply is required the geographical . position of any area and other like relevant factors. It is not contemplated by the said

ection or any ot:. the other provisions of the Act that as amongst

"j •

R.OltTAS INDUSTRIES v. BIHAR ST. ELEC. BOARD (B. Eradi, J.) 71

consumers fallin5 within a specified category. different rtes are to be charged depending upon the financial capacity of the particular consumer to pay. \:)n the other hand, the very core of the scheme of Section 49 is that the tariff should be uniform in respect of each class or category. Hence the attack levelled against the tariff fixation on ihe aforesaid ground, that a. relevant factor, namely, that

the financial capacity of individual industrial consumers had not been taken into account, is devoid of force.

The appellants in some of the appeals have challenged the sub sequent tariff fixation of 1981 also on gro11nds that are substantially the same as those which we have dealt with above. For the reasons

already indicated by us, none of those grounds can be accepted as C correct or tenable.

It was urged on behalf of the appellants that the supply of electricity being a monopoly service conducted by an agency of the State, namely, the Board, it must be carried out reasonably and not arbitrarily, that such reasonableness should be reflected in the price fixation and if the prices fixed are .arbitraty, they are liable to be called in qu.es!ion before the Courts o"n lhe said ground. In support of the above contention, reliance was placed by counsel for the ap. pellants on the decisions of this Court in Akadasi Padhan v. State ofOrissa(1), f.ashbihari Panda,. etc. v: State of Orissa,(') Vraj/al Mani/al & Co. & Ors. v. State of Madhya Pradesh & Ors.,(') Ramana Dayaram Shetty v. The international Airport Authroity of India and Ors.('). It is wellestablished that where a corporation is an instrumantality or an agency of Government it would, in the . exercise of its powers and function, e subject to the same Constitutional or Public Law .limitations as apply to the Government and the principle of law inhibiting arbitrary action.by. Government would apply equally where such a corporation is dealing with the public, whether by way of giving jobs or entering into ontracts or otherwise and it cannot act arbitraily and enter into relationship with any person in any manner it likes according to its sweet will.

The aets of such a corporation must be in conformity with some principle which meets the test of reasonableness and relevance. In the case before us, the appellants have totally faiied to establish that the rates specified in the impugned tariff notifications of 1979 and 1981 are arbitrary and unreasonable.

(I) [1963] Supp. 2 s.<;.R. 691

(2) [1969) 3 S.C.R. 374 ··

(3) [1970] l S, C.R. 400

(;/

72 SUPREME toU!lt R.EPOJ!.TS [1984] 3 s.c.Ji..

l Sec.ti on 59 of the Act as it now stands after the amendment of 1978 is in t'he following terms :

"59. (I) The Board shall, after taking credit for any subvention. from the State Government under section 63, carry on its operations urtder this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting ~II expenses properly chargeable to reve . nues including operating, maintenance and management expenses, taxes (if any) on income and 'profits, . depreciation and interest payable on all debentures, bonds and loans, leave . such surplus, as 'i:he State Government may, from time to .

time, specify.

(2) In specifying the surplus undersub-section (1), the State Government shall have due regarding to the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave;

,,. (a). reasonable sum to contribute towards the cost of capital works; and

(b) where in respect or the Board, a notification has been issued under sub-section (1) or section 12A, a reasonable sum by way of return on the capital provided by the State Government under Sub-section (3) of that section and the amount of the loans (if' any) converted b, y tlte State Govern-' ment into capital under sub-section (I) of section 66A,." Under the above provision, the Board is under a statutory obligation to carry on its operations and adjust its tariffs in such a way-as to ensure that the total revenues earned in any year of 'account shall, after neet1ng all expenses poperly chargeable to revenue; leave such surplus as the State Government may, from time to time, specify.

The tariff fixation has, therefore, to be so made as to raise sufficient revenue which will not mer, ely avoid any net loss being incurred during the financial year but will.ensure a profit being earned, the rate of minimum profit to be earned being such as may be specified by the State Government. The learned Attorney General appearing on behalf of the Board has placed before us tabulatedstateml'nts showing the workingresults (financial) of the Board in the years subsequent to 1977-78. Jt is found therefrom that the net

": ..

... >

ROiiTAS INDUSTRiES "iliHAR 'sT. U.EC. BOARD(B. Eradi, J.J . 73 ·

result"fthe Board; s working ir. each of the year .1978-79 to 1981- 82 was a substantial deficit or ioss. The deficit in 1978-79 was Rs: 15.31 crores, in 1979-80 Rs. 10.27 crores, in 1980-81 Rs. 32.69 crores and in 198i-82 Rs. 18.60 rores. The statemen_t. also shows that th~ reucnue earned per unit of electric energy sold was much lower than the actual cost of production incurred by the Board per . unit. The cost. of prodµction. per unit in the four . years afore~ . mentioned was 51.IO p., 65.10 p., 73.86 p., and 87.16 p. respectively,. whereas the revenue .per unit was only 38.48 p., 47.17 p., 53.07 p., and 66.39 p. respectively:It is thus found that notwithstanding has the mandatory provision contained in Section 69 the Act, the Board . been selling energy at rates which are lower than of the actual cost . incurred by it per unit of.production. Such being the factual .siimi-

. tion, there is absolutely no basis for the. contention urged on behalf. of the appellants that the tariff fixation effected by the Board si.iffers from the voice of arbitrariness and is liable to be interfered with by,

the Court on the. ground .. , As . pointed. out by this Court. in Prag Ice & Oil Mills and another v. Union of India,' in the ultimate '. D analysis, the mechanics of price fixation -is . necessarily. to be left to the judgment of the executive and unless it is patent that there is . hostile discrimination agairist a class of persons, the processual basis of price fixation is to be accepted in the generality of cases as valid. ·, .,· . . some of the appellants have en.deavoured to persuade us to go into the minutest 'details of the mechanism of the tariff fixation effected.by the Board in an endeavour to demonstrate in relation thereto that a factor here or a' factr th'Cre which_ , ought to - have p_een taken into account has been ignored. .We have declind to go into thos~ factors which are really in the nature of matters of price fixation policy and the Court will be exceeding its jurisdction if it to embark pon a scrutiny of matters of this kind which are

essentially in the. domain of the executive to determine, subject, of. course, to the Constitutional limitations. ,

. . The conchisi.on that.emerges from the foregoing discussion is that the High Court was perfectly right in upholding the validity of the impugned tariff notifications of 1979 and 1981, and these appe'ats . and the S.L.P, have only to be dismissed. · . ,,- ~- - -

H.S.K. Petition's & Appeal.J Disn:lssed. ·

(1) 1197) 3 SCR 293. . .

,!', \ ll J•

. .

ROHTAS INDUSTRIES LTD. &, ANR. ETC

THE CHAIRMAN BIHAR STATE ELECTRICITY BOARD AND OTHERS

D. A. DESAI

V. BALAKRISHNA ERADi, JJ

Section 49

s. 49

6.4. 1979

Art. 14

D.V.C.

U.P. S_tate Electricity Board

Patratli

Barauni

U.P. State Electricity" Board

El.ectricity Board

BOAAD 6J

El.ectricity Board has .-to go into the computation of the surcharge leviable under A paragraph 16.7.

section 49

Shankar Ghosh

Parveen Kumar

Padam Khaitan

C.A. . Vaidyanarhan

A.K. Sen

N.R. Khaitan

C.S. Vaidyanathan

Anil Kumar Sharma

Parvee11 Kumar

K.K. Venugopal

L.N. ?inha

Pramod Swaru

P.P. Singh

BALAKRISHNA ERADJ

Bihar State Electricity Board

Bihar State Electricity Board

Section 12

B. Eradi

1st April, 1979

Bihar

Usha Martin Black (Wire Rods)- Ltd.

clause 4

clause 11

Indian Electricity Act 1910

High Court of Patna

Shriram Bearings Ltd.

section 3

Section 49

Section 28

Section 2

U.P. State Electricity Board

Art. 14

Damodar Valley n Corporation

Patratu

Damodar Valley Corporation

Uttar Pradesh State Electricity Board

Section 49

section 2

Section 49

section 3

Section 49

[1969) 3 S.C.R. 374

section 63

section 12A

section 66A

Section 69

H.S.K.


.......

EX. CAPT. K.C. ARORA AND ANOTHER

STATE OF HARYANA AND. OTHERS

April 26, 1984

6Z3

[0. CHINNAPPA REDDY; E.S, VENKATARAMIAll AND R.B. MISRA, JJ.]

. The Punjab Government Nationai Emergency (Concessions) Rules 1965 Rules 2, and J(ii), as amended by the Haryana Government Gazette Notification No . . GSR 77/Const/AFt 309/Am.end/(1)/76 dated August 9, 1976 amending the definition of the experession "Mifitar ::, ervice'' in Rule 2, Constitutional Validity-The vested accrued right of a Government Servant cannot be taken away by making. amendments of the rules with retrospective effect.

In 1962 an emergency was imposed by the Government of India on account of_tbe external aggression by the Chine; e forces 'in the Indian

Trritory. The Government was in great need of youogmen to join the military service at the risk of their lives to serve the nation to cope with the

emergc:ncy needs of the Government-of India. The Government of India as well as the State Governments decided to give certain benefits to encourage

the young energetic youths to join military service at the critical juncture o~ national emergency and therefore issued different circulars and advertisements on radio and tbe'.press promising certain benets to youngmen who join tho mi!ifary service at the critical junCture.

Later on, on the instructions of the Central Government concessions as were promised through circulas and by 'other. means were incorporated in. the rules framed by the joint Punjab Government under Article 309 of the Constitution, titled as. "The Punjab National EmergencY (Concessions) Rules. 1965."

Keeping' in view the needs of the country and assurances and .concessions contained in conditions of service in executive instructions, the petitioners and appellants and many others like them joined the army during-· the emergency as commissioned office.rs in 19.63-64 and had rendered more than five years of service reckoned from 26.10.1982 i. e. date of proclamation of emergency and after their release froni the Army they were _entitled to benefits vested' in them undez the conditions of service.

The petitioners and appellants and a number of others similar to the

petitioner~; joined the Haryana Government as Assistant Engineers. conse- quent upon their appointments against tlie vacancies reserved for ex-army Officers, they became entitled to get their seniority fixed giviog them the benefit or their military service; but the gradation list prepared however did not include their miltary service for the purposes o( . fixation of their

seniorit~. The State of Haryana just to deprive the petitioners and others similarly situated, of mil]tary service, amended the Jules with retrospectiveeffect from November 1,1966 vide Haryana Government Gazette Notification No. GSR 77/Const/Art 309/Amendj(l)/76 dated March 22,1976

illtroclucing a proviso to rule 4 (ij) qf the 1965 Rules and vide Haryana' l 9pvcrnment Ga~tte N otication No G~R 182/Const/ Art ~09/ Ar:nend/(2)/. J

SUPREME COU"R T REPORTS (1984] 3 s.c.R.

76 dated 'August 9,1976. amending Rule 2 of the 1965 Rules.

These notifications restricted the benefits of military service upto January 10, 19(i8 the date on which the firt emergency , a; lifted with the result that the vested rights which accrued to the petitioners io l969, 1970 and 1971 have

been taken away.

The two writ pe itions Nos. WP 2065/1976and WP 2065/1976 an<:l WP 1088/1980 challenging the same were dismissed by the Punjab and Haryana High Court and hence their appeals Nos. CA 3095 and 3096/1980 by way of special leave. Some others directly filed petitions in the Supreme .Court under Art 32 and they are WPs 6437 and 6436 of 198'0.

Allowing the appeals and the Petitions, tc Court

HELD.: 1:1. The Parliament as also the State; Legislature have plenary powers to legislate within the field of legislation committed to them and subject to certain constitutional restrictions they can legislate pros p'ect.ively as well as retrospectively. [63ZC-D] .

1:2. It is, however, a cardinal principle of construcrioo that every statute is prima facie prospective unless it is expre>sly or by necessary implication made to have retrospective effect, But tho rule in general is applicable where the objct of the statute is to affect the vested rights or to impose new burden or to impair existing obligations; Up less there are words in the statute sufficient to show the intention ()f the legislature to effect existing rights, it is deemed to be prospcc!ive only. Provisions whiclt

touch a r.ight in existence at t.he passing of the statute are not lo be applied retrospectively in the absence of express enactmeot or necssary intendment. 'The Governor cim also exercise fhe S3me powers under Art. 309 of the Constitution and ther, e is not the slightest doubt that the impugned amendment brought in has been made retrospective.

The impugned amendments in the_ instant case by necessar~ implication have uodoubtedlda retrospective effect. [6 32Df]

Harbhajan Singh v. Stare o/Punjab [1977} 2 S.L.R. 180; Ex. Major. N.C F Singhal v.. Director General Armed Fors Medical Service: A.I.R. 1972 S.C. 628; State of Mysore v. M.N. Krishna Murty & Ors.~ [19731 2 S.C.R. 575; Raj Kumar

 v. Union of llidia & Ors., [1975]3 S.C.R. 963; Wing Commander!. Kumar v.

Union of India & Ors. [1982]'1 S.C.C. 116; B.S. Vadera v. Union of India & Ors., [1968] 3 S.C.R. 575 ; discussed. . ·

1:3. The Haryana Government cannot take away tbe accrued rights of the petitioners and' the appellants by making amendment of the rules with retrospective effect. The_ impugned rule 4 (ii) of the Punjab qovernment National Emergency (Concessions) Rule, 1965, as amende() by the Haryana Government Gazette Notification No. GSR. 77/Const./Art. 309/Amend/ (1)/76 dated 22nd March, 1976 .and the Notifica!ion No. G.S.R. 182/ Const/Art/309/ Amebd. (2)/76 dated 9th"" August, 1976 amending the definition of the t; Xpresio~ 'military service'. in rule 2, are ultra .vires the Constitution, in so far'as they e, ffect pfejudicially persons who bad acquired rights. (639B~C-D-E) .

State of Gujarat v. aman Ita/ l{eshav La! Soni, [1983]2 S.c.c; 33 ;

roUQw~.

l ' ·

K.C. AR?RA Y. HARYAYA (Jfisra, J.) . 625

Ol!fGJIIAL ]UIUSDICTI0:-1: Writ Petitions Nos. 6436)? of 1980

(Under .Article 32 of the Constitution of India]·

AND

Civil Appeals Nos. 3095-96 of 1980

: . f\ppcal by Spccialleav!! from the Judgment and Order dated

1 the lOth October, 1980. of the Punjab and Haryana High Court in c. ! . Writ Petition No. 2065 of 1976 & 1088 of 1980)

i '

I ,. f

P.C. Blwrtari for the Appellant.

Dr. Y.S. Clzlta/e and M.G. Ramachandran for Respondents .in Writ Petitions.

V.C •. '!falzajan; J.S. Goel and R.N. Poddar for Respondent.

 The Judgment of the Court wa~ delivered by

MISRA, J. The present writ petitions under Article 32 of the Constitution and the civil appeals by special leave aising out of . petitions under Article 226 of the Constitution. raise common ··· questions of law and are, therefore, bing-dispo~d of by II common judgment. ·

The patte; n of fncts i~ the present group of case~ is the same and. therefore, it is not necessnry to give the facts of each case kparatcly. In onler to bring out the points for consideration in these

~ . cases we would like to give the facts of writ petition No . . 6436 of ' 1980. . . . .

In 1952 un emergency was imposed by the Government of India on ?ccount of the external nggrcssiQn by the Chinese forces on the

ln~, an territory. The! Govcrnmdnt was in great need of youngmen 10 JOin the military service at the risk of their lives to srve the nation ~Cope With the emergency needs of the Go, ernmcnt of India.' The .ovcrnrncnt of Indiol as well as the St:tt~: Govcriuncnts qccided to i•vc c · 1 t • • . . ertam benefits to encourage the young energetiC yout.IS o JOID , ~'htary service at the critical juncture Qf national emergency . . The

a ~crnrncnt in the Stat.:s nnd the Centre issued difi'cr-en~ circulars . ,: b adertisements on radio and the press promisin~ ccrtam bc~fits iunu~cn t.o yougmcn who join the military srv1ce at the cn~1cal

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626 SUPRHIE COURT REPrJRTS . . fl984JJ S, c~

Jn .July 1963 a circular was issued by the Financial Com :i:. t sioner, Punjab wit~ :cgard ~the conessions _to civi, lian cmplo:: . and others who Jomed m1htary serv1e, wlncli will account t

increments, seniority and pension in civil employment.· Later 0r on the instructions of the C'enfral Government concessions as wcr~. promises through circulars and by other means were incorporated in the rules framed by the joint Punjab Government under Article 309 of the Constitution.. ·

Keeping in' view the needs of the. country and assurances l contained in conditions of service iil executive instructions the . petitioners and th.c appellants and many others like them joined the. ,

1 army during the .~:mergcncy . mf C'om missined Officers in 1963-64 .. ' They were commissioned officers in tbc Indian Army for more . r .. than five years and after their release from the Army they were

~ entitled to benefits vested in them u.nder the conditions of service.

The Haryana Government in tile year 1969 advertised 16 pQsls of temporary Assistant Engineers in P. W.D.,· B & R Branch. At the t:me of the advertisemeat on 28th of January, 1969 8 posts'out . of the total of 16 were reserved for e~-emergency commission~ 'officers and servicemen. Although the advertisement was for 16 ·

posts but at the time of selection s 5 appointment were. made, 'out of . which 20 posts were reserved for ex-emergency . C.:Jmrnissioncd • o1Icers. Out of this quota of 10 po-.u only 7 aptXJintril.ents from :-

amont the ex-em.eT~ O:, mmiM1on.:rl oi= .. -as ~= I!IJ.Ik. ' . .Rcqunite qaaiifi..cations f.:>r n:-ema~ roned ofun allJ

ic.tmen w-ere as fo~ :

.. I. Diploma in ci, il engineering from a reCQg:nised institu-

.tioo. ·

2, Five 1ears ntinuous service with distinguished record.

. . .

. A:goati:n:eiFoq::Nto:vuke:m:b:erc.:glfe97:0:u:318:~:po s.fitvs. •oyfcaterms'pocroaryntinAusosuisstant ··~ scr:vice; the pcr!od commencing from 26.10."1962 will only be . taken into consideration. •· '

Engtncers wc; re advertised out of 18 posts were reserved .. for es . ' emergency commissioned officers. At the time of making appaint- } ments, however, 9~ persons were appointed and out of these 99 pasts ,. ~

- ~-....,., •• -- ~J .. ,~ ... •• j __ ', . ...

•. t.

. K.C. ARORA v, HARYANA (Misra, J.) • 627

90 posts were declared eserved for ex-emergency commissioned officers. But agai~ only 7 ex-emergency commissioned officers were A appointed in' response to te advertisement.

Petitioner No. 1 on selection had joined service. on 17th of August, 1971. The second advertisement also contained the same qualifications as were in the first advertisement. Thus the two petitioners in writ petition Nos. 6436-37 served the Indian Army.for more than five years and thereafter those petitioners were-appointed in the service of the Haryana Government as temporary Assistant Engineers against the posts reserved for the ex-emergecy commis~

sioned officers. There were a number of other persons similar t!) the petitioners who were !llso appointed against the vacancies reserved for ex~Aimy officers.

The Government ofPuJijab prior to the formation of Haryana made statutory rules under Article 309 of the Constitution w.hich are called 'The Punjab National Emergency (Concession) Rules, 1965 .. The relevant rules 2, 3, 4, and 5 of these rules are as uder:

"2 .. Definition.:-: For the purpose of these rules, the . . expression 'military service' means enrolled or commissioned service in any of the three wings ofthe Indian Armed Forces

(including service as a Warrant Officer) rendered by a person during the period of operation of the proclamation of' emergency made by the President under ArtiCle 352 of the Constitution of India on. the 26th October, 196.2 or such other service as.may hereafter be declared as military service .

for the purposes of these rules. Any period of miiitary train- . ing followed by military service shall also be rckoned as Military Service. ·

' ... '

3. Maximum agelimit and minimum qualification :

i) The maximum age-limit , prescribed.for appointment to ,

any service o~ . post . shall be relaxed in, favour of a persop who bas.rendered military ~rvice tq:the extent Of his military Service, provided he pruces a certificate from the competent . .authority that he .hild rendred continuout military service for' a . period of not less . than six months and was discharged because of demo~ bilisation or reduction not more than three year.s prior

to tht: da~~ t;>f i~ reistration at an employment

H ·

. ,

( .. • 628 SUPREME COuRT REPORTS [1984] 3 s.c.R.

exchange or tlle date of his application for employment under the Government.

1i) A person who has become disabled while in military

s'ervice sha11 also" be entitled to exlude from his' age the period from the date he was disabled up to the date of his application for appointment to any service or post under the Government, or till the end of the present emergency, whichever is shorter.

iii) In case a person who has rendered military service does not possess the minimum qualification prescribed . for an~ service or post, he' shall be deeed to possess these qualifications if the appointing authority certifies that such a person has acquired by experience or other~ . wise qualification equivalent to those prescribed for that service or post .

Increment.s, seniority and pension : period of military service shall count for increments, seniority and pension as under:- ·

. (i) Increments : The peridd spent by a person on military service, after' attaining the minimum age, prescribed ' for appointment to any service or post, to which he is appointed, shall count for increments. Where no such minimum age is prescribed the minimum age shall be as laid down in rules 3.9, 3~10 and 3'11 of the Punjab Civit'Services Rules Volume II. Tbis" concession shall, however, be admissible ori)y. on first appointment.

(ii) Seniority : The period of military service mentioned in clause .(1) shall be'taken into consideration for the purppse .of determining th~ seniority of a person who !:)as ren~ dered military service. • .. .. .

(iii) Pension: The period of military serv"ice mentioned in clause (i) shall count towards pension only in the case of appointments to . permanent services or posts under the Government subject to the following conitions : ·

 (1) The person concerned should have earned a pension under. military rules in respect. of 'the military service in

question.

l .

- -~

• +

K.C. ARORA v. HARYANA-(Misra, J.) 629

(2) Any bonus. or gratuity paid in respect of military service by the defence authorities sl; all have to be. refunded to A the State Government.

(3) The period, if any, between the date of discharge from military service and the date of •appointment to any service or post under the Government shall count for pension, provided su.ch period does not exceed one year. Any period exceeding one year but not ex .. eediog three years may also be allowed to count for penion in exceptional cases . . under the orders of the Gl>v-:rnment.

5: Seniority, promotion, increment, pesion andleave of Government employees :-The p~!riod spent on military ser- · vice by a Government employe~ shall-.eout}t for. seniority promotion, icrement and pension in the service or post held by himimmediately before his joining military service. A

permannt 'Government employee wlio renders military service, shall earn leave during, such service according to the leave rules applicable to him immediately before his joining· military service; A emporary Government employees shall duririg military service, be governed by the mihtary rules in . all respects. The employee concerned shall be entitled to

proforma promotion in his parent department under the 'next below; rule and also to seniority in higher posts to which he would otherwise have been entitled if he had not joined militat'y service.

According to these rule, s and the previous assurances given by the Government the petitioners were to be given seniority by countng period of military service for the purpose of determining . seniority, increments and pension etc, Immediately on appointment of the petitioners as temporary Assistant Engineers they became entitled to get their seniority fixed giving them the benefit . ' of their military service but the gradation list prepared, owever, did n, ot include the military service of the pe, titioners for the purpose of fixation of-their seniority. The State of Haryana just to deprive-the petitioi?-ers, and others similarly situated, of military service amended the rules with retrospective effect from lst November, 1966 vide Haryarla Government Gazette Notification .No. G.S.R. 77/Const/Ait. 309/Amend/(1)/76 dated 22nd March . . '

1976. The Amendment was Iilade in the rule 4(ii) by adding a proviso, which is in the following terms ;

. F .

B .

' •

. SUPREME COURT REPORtS. . ti984] 3 s.c.R.

"Provided. that a person. who has availed of concession under sub-rule (3) of rule L(3) shall not be entitled to the concession under this clause."

. The Government also issued a notification No. G.S.R. 182/ Const/Art/. 309/Amed/(2)/76 dated 9th Augut, 1976 making amendment in the definition of the expression 'military service' in • • rule 2 just to .retreat from their previous commitments. , It reads :

.j . , : "Fo( the purpos"e of these ruleli the expression 'military service' means the service rendered by a person, who had ben enrolled .or commissioned during the period of pperation of the proclamation of emrgency made by the President under Article 352 of the Constitution of India on '26th October~ 1962 .in any of the three wings of the Indi'an

Arm.ed Forces (including the service as a Warrant Officer) du; ing the period of the said emergency or such other" service as may hereafter. be declared as military ser.vice for the

.'~ purpose of these rules. . An~ period of military training

followed by military service shall also be eckoned as military . s.ervice."

This notification has ben issued with retr.ospective effect

...,-

E from Ist cif November, 1966 and restricted the benefits of military service upto lOth of January, 1968, the date on which . the ·.first emergency was lifted with the result that the vested rights which · . .1-....~ accrued to the petitioners in 1969, l97~ and .l971 hve beeli taken

away. '

some of the ex-milit; uy officers challenged the impugned amendment and the consequent gradatioJ?. list by filing two peti- .tions, writ petition No.:l088 of 19SO and writ petition No. 2065 of 1976 in the High Court of Punjab and Haryana under Article 226 of the Constitution. Both these wri~ petitions were dismissed by the High court and they gave rise to civil appeal Nos. 3096 and 3095 f 1980 -respectively. Some of the ex-military officers have filed writ petitions directly before this Court under Article 32 of the• Constitution and they ar.e writ petition Nos. 6436 nd 6437 of . 1980.

 The petitioners in the vrit petitions undet: Article 226 of the Constitution before the High Court challenged the amndment of the Punjab Government National Emergency (Concession) Rules

A. -.

. +

! .

k.C. ARORA V. HARYANA (Misra, J.)

1965 with retrospective effect as violative of Arts. 14, 16, 19,31 and 311 of the Constitution 'and prayed fo~ the following relief :

1. 'lhe Punjab Government National Emergency (Concession) Ha'ryana First Amendment Rules, 1976. pe .declared ultra vlres Article l6 of the Constitution of India.

A writ'in the ature of ceftiorqri quashing the seniority list . of Haryana Service of Engineers, PWD (B & R

Branch), Class II be issued.

A writ in 'the nature of mandamus directing respondents

1 and 2. to declare the pe!itioners senior to respondets. C ...

 The High Court came to the conclusion that the petitioners have availed of the concesion un.dcr sub-rule (3) of rule 3 of 1965.

Rules inasmuch as the educational qualifications in the case of the petitioners had been relaxed 1n terms ofsub-rule (3) of rule 3 and they had wailed of these concessions at the time of their recruitment as te[)lporary Assistant Engineers. Now by the impugned amendment the concession of doubte benefit has been withdrawn by . adding the proviso to cl. (ii) of rule 4 introduced, in 1976. previo~

sly an ex-servicemen could avail of the concession of . relaxation in the educational qualification at the time of recruitment on the basis of his military seryice. Under rule 4 he could count military . service towards seniority. The proviso has taken. away the second " benefit. The ex-se, rviceman who has been recruited after availling

ofthe cqncession in academic qualifications cannot count his military service towards sepiorlty in the civil post . held by him.

This concession has been withdrawn by the Governor in exercise of

his powers under proviso to 'Art. 309 of. the Constitution and the amendment having been made in exercise of the le, gislative powers conferred on the (}Qverhor by the Constitution are valid and suffer fro in no infirmity. The High Court also took the view' th!lt there is no estoppel agains~ tne Government in tlie xercise of its legislative soVereign or executi'#e powers. The State could am.end the 1965 Rules and take away the benefits bestowed on the petitioners. , It also held that the. rules can be f[aiped with retrospective effect

an'd they can take away even vested rights. In the opinion of the High Court the diplqmaholdrs i~ engineering on the basis of their educational qualification formed one class separate from other ex-emergency commissioned officers .who are degree holders in engineering and that classification i~ the service can be made on

632 SUPREME COuRT REPORTS

. the basis of educatioal qualifications and such a classification is not bad.

The appellants in the appeals against this judgment of the High Court reiterated the same contentions before this Court. In the two petitions _under Art. 32 of Constitution also similar points have been raised. The main contention on behalf of the appellants

.. ,.. ..

as well as on behalf of the petitioners is that the rules could not be + • amended with retrospective effect to deprive them of the vested rights and if the appellants and the petitioners are entitled to the benefits of military service perforce t, hey would be much more senior to o.thers and the gradation list .prepared in complete ignorance of the military service will not be according to law.

I It may be pointed out at the very outset that the Parliament as . also the Sate Legislature have plenary powers to legistate within the field of legislation committed to them and subject to certain con- -· stitutional restrictions they can legislate prospectively as well as f

I? r.et_rospectively. It is, however, a cardinal principle of consttuctution

. that every statute is prima facie prospective unless it is expressely or by necessary implicatiqn made to have retrospective effect. But the

le in general is applicable wher.e the object of the statute is to.· . affect the vested rights or to impose new burden or to impair existing obligations; Unless there are word's in the statute su.fficjent to show the .intention of the legislature to effect existing rigQ.ts, it is deemed t'o be prospective only. Provisions which touch a right in existence at the passing of the statute are not to he applied ietros• pectively .. in the absence of express enactment or necessary interidment~· The Governor can also exrcise the same powers under Art.

F 309 of tile Constitution and thereis not the slightest doqbt that the _impugned amendment brought in has been made. retrospective. The impugned amendment in the instant case by necessary implication have undoubtedly a retrospective effect.

. For the petitioners jt was contended that the benefits acquired could not be taken aw\y by an amendmept with retrospective effect. .

It was further contended 'that tl!.e amennient was discriminatoJ,"y . and that the retrospectivity given to the provisions ofthe Amending Act could not cure the discrimination introduced by the Act and sought to be plrpetuated bY"it. In support ofthis contention reliance was placed upon flarbhfljan Singh v. The State of Pujab(l),

(I) [1977] 2 S.L.R .. l80.

...

; .

K.C. ~RORA v. HARYA]'IA (Misra, J.) 633

In that case te question that fell for consideration before the Con-,· stitution Bench of the P'unjab and Haryana High Court was regarding the intrprtation of rule 3(iii)(cc)(ii)(b) ofthe Demobilised Indian Armed Forces Personnel (Reservation of Vacancies) in

Punjab Civil Service. (Judi&l Branch) (First-Amendment) Rules,

1976. The Demobllised Indian Armed Forces Persopnel (Reservation of Vacancies) iri the Punjab Civil Service (Judicial Branch) Rules, i969, liad been repealed and the Demobilised Indian Armed Forces Personnel (Reservation of Vacancies) in the Punjab Civil Service (Judicial Branch) Rules; 1975, as amended, were in force and these . exCluded from the category of released Armed Forces Personnel, persons who had joined a civil service :or the Union or a State or a civil post under the Union or a State•after their release from the Armed Forces of the Union. The COl, Jrt dealing with the question '

• I

observed : ...,_ '

"Now the rule-making.authority mu"st have been aware that a competitive examination for appointment to the servic;:e

had been held under the old rules and appointments were yet . in the offing. Surely, the rule-making authority did not intend to exclude from appointment candidates who were eligible under the old rules but became ineligible by reason of an amendment of the rules made after t)le process of selection had almost reached a finnl stage. The amendment did not in any manner touch the qualifications of the candidates.

Had the amended rule been in force fron;1:the beginning, persons in the tosition of the "petitioner might not bil.Ve accepted any eploy_nient and preferred to wait for selection and appointment to the Punjab Civil Service (judicial Brancl\). Are they to be penalised "by barring their entry into the Punjab Civil Service (Judicial. Braach) because they_ accepted employment at a time when acCeptance of such employment was not a bar to appointment to the service ?

We do not tbinklhat we wiil be justified in attributing such an unreasonable intention to the rule-making authority. In

QUI view, the only reasonable interpretation of the amended rule, consistent with the prevail'ing; situatiou, is to hold that

only th_ose prsons who having joined, the service of the

Union or the State or a pst underthe Union or the State previously continued to hold the post on the date of the com

ing into force of the rule, are excluded from appointment to the Punjab Civil Service (Judicial Branch). he eJ~.pression 'joined

~ c

. SUPREME COURT REPORTS,

(1984) 3 S.C.R

or joins' must be_ given a reasonable interpretation in the ·

context of tl¢ situation and we think .that our interpretation. does not strain the .language o.r attributes unreasonableness to the rule-making authority. In that View, the petitipner cannot be said to be ineligible for appoi_ntment." . .

Next reliance was placed upon Ex-Major N.C. Singhal v. : Director Ge!leral, Armed Forces Medical Service.<1) ln that case the conditions of service of the appellant were.governe~ by paragraph 13 of the Army Instruction No. 1/S of 1954 and his previousfull py · commissioned service shout<! have been taken in the matter, of 'antedate' for the purpose of his pay. The conditions of service were, -however, sought to be altered by Army Instruction No. 176 of 1965 .

to tlie prejudice of tlie ppetlant. Tliis Court held that the condi- . tions . cif service in this regard were not liable to_ e altered or modified to the prejudice of the appellant by a subsequent administrative (Army?) instruction which was gi'.!en retrospective effect from 26th October, 1962.

Reliance was also plac, ed upon Sta_te of Mysore v.' M.N.

Kirshna Murthy &Ors.(z) In that case also the rules_ of 1959 had been amended which sought to disintegrate the service which had been

integrate~: This Court held that such amendment made (or the

purpos~ .:flustifying the illegal promotion made, in the teeth of-the

protection conferred by Articles 14 and:16(1) of the Constitution of ..

India upon Indian citizens in Government service, could not be up- . held.. The power of making rules relating to recruitment and conditions of service under the proviso to Article 309 could not be ued to validate unconstitutional discrimintion in promotional_ chances of Government .. servants who belonged to the same category . ..,..

 Shri Mahajan appearing for respondent No. 1 in reply on the other hand contended that the rules made under the proviso to Article 309 of the Constitution are legislative in character and, therefore, can be given: effect retrospectively:. In support of his submission he counted upon Raj Kumar v.· Union~~ India & Or~.(3J

He also relied oil Wing Cpmmander J. Kumar v. Union of India & Ofs.C'> In that case a ontention was raised that the impugn_ed rule ,, .

(1) A.I.R. [J9?,2] SC 628.

(3) [19 sJ 3. s.c.R. 963 ( 4) [1982] 2 s.c.R: 116 ·

k.c. ARORA v. HARYANA (Misra, J.) 635

not having been specifically declared to be retrospective in operation, its provisions cannot be applied to the appellan! inasmuch as be had been inducted into the R & D cadr~ long prior to the promulgation of the new rules. This Court dealing with th'e point observed :

"We have aheady found that, as a matter of fact the practice geneially foitowed ·"in the R. & D Organi.sation even . prior to .the prom!lgation o_f the impugned rules, was to reckon seniority with reference to the date of attainment of the rarik of su6stantive major/equivalent. Even otherwise, when a statutory rule governing seniority is issued in respect of a service, the said ru1e would govern the personnel in the service with effect from the date of its promulgation and in so giving effect to the rul~ -in future, there is no element of retroactivity involved; Of course,. the rules will not operate

.· to deprive any person of promotions already earned in the past, but, forpurposes of future promotions anp seniority in the department, the :principles !slid down in the impugned rule will necessarily govern ~II the personnel alike."

This case instea'd ofsupporting the contention of Shri Mahajan goes to strengthen the contention raised on behalf of the appellant and the petitioners. ..

Much emphasis was _laid by Shri Mahajan on the case of B.S. Vadera v. Union of India.~ Ors.(l) In t-hat case the ptitioners, , who were woking as Assistants, were reverted as Upper Divisiop

Clerk in 1967 by the operation of the Railway Board's Secretariat Clerical Servic~ (Reorganisation) Scheme. The said scheme was framed on February 5, -1957 but was brought into effect from December I, 19-54. Certain modifications to the scheme relating to the manner of filing up f permanent and temporary vac; ancies in Grade I of the Service were , made in 1963. The petitioners challeng ed the orders of reversion as illegal inasmuch as their promotion as Upper D.vision Clerks and later as Assistants had been on a permanent basis and could not be :disturbed .and that the scheme as

well as the. various orders passed by the respondents were violat.ive of Articles 14 and 16 of the Constitution, that the Railway Board hadno power in law to .frame either. th~ scheme or to modify the · scheme so. as to have retrospective effect from December 1, 1954 ..

This Cout held ihat the ranking given to the petitioners as a resu)t

(1) [1968] 3 SCR 575.

.,.

' I . ! .

. I i ! ' ,.,

i~ 1.::

; .

. .

636 '"""'"""" wom U984Jh.,, J of which the ipugncd orders of r~ersion were passed was in .

ccordance with the scheme as modtfied. m_I963, and once it is held

that the p-etitioners did not satisfy the requirement of the scherne for being retained as Assistants, there was no quetlon of aoy discrimi 'nation under Article .14 or violation of At1~1c 16, and that tbe Indian Railway Establishment Code had becir Issue~ by the President in exercise of lhc powers vested in him by the proviso to Article 3()9 of the Constitution.

Rule !57 of the Cod!! giv<; s the Railway Board full powers 1o .make rules <;>f gcnerl application to non-gettcd

r'aiJw; y servants under their control. ad th.~ power to make rules .l with rctrospelivc effect cannot be-denied to the Railway Board... . l Accordingly, the schcm~ framed by tbe said Board i_n 1957 could be made rctrosiicetivcly' clfcctive fro'm December 1, 1954, This c'ase I undoubtdcly supporli Shri Mahaj:m in his contention that the rules can be made with retro-spective elfcct and there is nothing wrong in such a rule. This case, however, did not dal witll the point specifically raised in the prcscn't csc.

The question, however, has been pointedly considered 'recntly by a Constitution Bench of this Court . in Sra!<? of Gujarai v. Ramon Lal K<'rhm• La! Soni.(1) Iri that case the Gujarat Panehayats Service . was initully constitued soon after the. passing of the Gujarat

Panchayat~ Act. :There were three cdres :the district cadre, the taluqa cadre and the Iocalcadrc. Secretaries. 00\eers and servants of the olu village panchayats unJcr the llomb:ty Villag~ Panchayats Act, 1958 bcamc secretaries, officers and servants of the new _gram panchayats under s.325(2)(x) of the Gujarat Panchayats Ac!, 1961.

Talatis aud kotwuls, who were governml!nt scrvallts wcrl! secretaries and olllc.:rs of the oiJ villag.: panchayats .und.:r the Bomb.1y Village . . Panchayats Act :nJ so they became sccrctarks and officers of the

new gram panchayats unda the Guj;1rat Panchayats Act. 1961.

Svmc munidp<tlitics conslitut.:d for municipal districts and municipal boroughs under the 13omba.y District Municipal Act and lotte Bombay Municipal lloroughs Act, as appli<:d to areas in tlic Stale of Gujarat. were converted into Gram anJ Nugar Panchynts under section 307 of the Gujarat Panchayats Act anu all olficcrs and servants io the cmrh>y of such municip:1litics bcc:1mo: officers nnd scrvnts of interim _l'anchayals and alll)cat..:J t~> the pinchayat scvice. Thus,

ccrctanes und olliccrs of dissolved municipalities also became secretaries nnd olllc~:rs of Gram and Nagar pimchayats. District

~~> [I<JKlJ 2 sec JJ •

- ~

' -t

'•) - '

ICC. ARORA v. HARYANA (Misra, J.) 637

Local Boards con'Stituted under the Bombay Local Boards Act stood dissolved on the passing of the Gujarat Panchayats Act and all officers and servants in tl:te employment of the Board were deemed to be transferred to the service of the successor District Panchayat

under section 326 of the Gujarat Pailchayats Act. Also allocated to the panchayat service were those government servants who are transferred to the panchayat under section 157 and such other officers and servants employed in the state service as wer~ necessary. All these secretaries, officers and servants became p1embers of a service under the State as soon , as they were allocated to the panchayat service. But, by the Amending Act, secretaries, offiers and.servants of Gram and Nagar Panchayat who were allocated to the panchayat service from the ranks of tl1e ex-municipal employees were. sought to be meted out .differwtial treatmnt ·.from the other members of the panchayat service, more particularly the secretaries, officer and serVants of Gram and Nagar Pnchayats who were drawn from the, ranks of secretaries, officer and servants of old village panchayats, that is, the Talatis and Kotwals. Their status as members of a service under the state was to go with no option to them. Rtrospectivity was sought to be given to the AmendingAct so that they could not claim that they were ever' government servants' and so could not be made to cease to be government. servants and so that they could not claim that they were singled out for differential treatment for if the~ were never in the panchayat service they could not complain of being . taken out of the panchayat service. Brother 0. Chinnappa Reddy speaking for the Court emphatically observed:-

Now in 1978 before the Amending Act.was passed

. thanks to the provisions of the principle Act of 1961 the exmunicipal employees who had been allocated to the panchayat service as Secretaries Officer and servants of Gram and Nagar. Panchayats, had achieved the status of gov.ernment servants. Their status as government servants' could not be . extingu.ished so long as the posts were not abolished and their services were not terminated in accordance with the provisions of Article 311 of the Constitution. Nor was it permissible to single them out for differential treatment. That would offend Article 14 of the Constitution. An attempt was made to . justify the purported differentiation'on the basis of history and ancestry as it were. It was said . that Talatis. and Kotwals who became secretaries, officers and servants of Gram and

' .

Nagar Panchayats were government servants, even .to start

• ' w ' I ' • •

.c

SUPREME COURT REPORTS

- with, wbile municipal employees who became such secretaries, officers nnd servants of Gram and Nagar -Panchayats were_ not. Each carried the mark or the 'brand' of his origin and a classification on the . basis of the source from which.· they came into the service~ it was claimed, was permissible.

We .are-cle.ar that it is not. Once they had joined the common . stream of service to perform the same duties; it is clearly not

pemissible to make any classification on the basis of their origin. Such a classification would be unreasonable and entirely .irrelevant to the object sought to be achieved. It is to navigate around these two obstacles of Article 311 and Article 14 that the Amending Act is sought to be made retrospective, to bring about. an artificial sitation as if the erstwhile muitici.pal employees never became members of a service under the State. Can a lw be made to destroy today's accrued constitutional rights by artificially reverting to a situation which existed 17 years ago ? No.

The legislation iS pure and simple self-deceptive if we may use such an expres<>i9n with reference to a legislaturemade law. The legislature is .. undoubtedly competent to legislate with retrospective effect to take away or impair any vested right acquired under existing laws but since the laws are made under a written Constitution and have to conform to the dos and don'ts of the Constitution, neither prospective nor retrospective laws can be niade s~ to contravene fundamental rights .... The law inust satisfy the requirements of the Constitution today taking into account the accrued or

acquire~ rights of the parties today. The law cannot say 29 years ago the parties had_no rights, tfierefore, the require-. ments of the Constitution will be satisfied if the law is dated back by 20 years. w~ are concerned with today's rights and not yel)terday's. A hgislatur~ cannot legislate today with reference to a situation'that obtained 20 years ago and ignore the march of events and the constitutional rights accrued in the course of the 20 years. That would be most arbitrary, unreasonable and a negation. of history .. .. _ .. ....... Today's . equals cannot be made unequal by saying that they were unequal 20 years ago and we will restore that position by making a law 'today and making it retrospective. Constitutil)nal rights, constitutional obligations and constituti.onal consequences •

nncit be tampeed with that way. A law which if made toc}ay . .

1;- '

-t'

...

• it

• K.C. ARORA v. HARYANA (Misra, J.)

639 , '

would e plainly invalid as offcll4iing constitutional provisions in the context of the existing situation cannot become val, id by being made retrospective. Past virtue (constitutional) cannot.

be made to wipe out prese1,1t vice (constitutional) by making retrospective laws. We are, therefore, firmly of the view that the Gujarat Panchayafs ·(Third Amendment) Act 1978 i~ . um,; onstitutiorial as it offends Articles 311 and 14 and is arbitrary and unreasonable."

In view of this late.st pronoun-cement by the. ConstitQtion Bench of this Court, the law appears to be well settled and the Haryana Government cannot take away the accrued rights of the petitioners and the appellants by making amendment of tbe rules

with retrospective effect.

For. the foregoing discussion the writ petitions as well as the appeals are allowed and the ordrs of the High Court dated October

10, 1980 are quashed and the impugned rule 4(ii) of the Punjab

Government National Emergency (Concessions) Rules 1965 as-a'lrlen- D ded by the Haryana Government Gazette Notification No.GSR 77/ Const/Art. 309/Amendj(l)/76 dated 22nd f\farch 1976 and the Noti- -~ fication No. GSR. 182/Const/Art. 309/A'rnend/(2)/76 dated '9 August 1976 amending the definition orthe expression 'military service' in . -rule 2 are declared to be ultra vires tlie Constitution in so far as they affect prejud\cially persons who had acquired rights as stated E above. A writ in the Qature of mandamus is issued directing , respondents Nos. 1 and 2 to prepare the S!!n1ority list afresh in the light of the decision of this Court taking into' consideration the military service rendered by the petitioners as well as the appellants.

In the circumstances of the case however there will be no order as to costs. F

S.R.

Appeals & Pet, tions allowed . .

! .,

EX. CAPT. K.C. ARORA AND ANOTHER

STATE OF HARYANA AND. OTHERS

0. CHINNAPPA REDDY

R.B. MISRA, JJ.

Government of India

Chine

Government-of India

Central Government

Punjab Government

Article 309

Haryana Government

State of Haryana

Art 309

Punjab and Haryana High Court

Supreme .Court under

Art 32

Parliament

Art. 309

[1968] 3 S.C.R. 575

Art. 309

Jfisra

Article 32

Constitution of India

P.C. Blwrtari

Y.S. Clzlta

M.G. Ramachandran

J.S. Goel

R.N. Poddar

MISRA

Article 32

Article 226

Article 309

s 5

17th of August, 1971

Government ofPuJijab

Article 309

Constitution of India

Article 352

Constitution of India

High Court of Punjab and Haryana

Article 226

Article 32

Article 226

k.C. ARORA V. HARYANA

Arts. 14, 16, 19

First Amendment Rules, 1976

Constitution of India

Art. 309

Art. 32

Articles 14

Article 309

Mahajan

Article 309

Misra

Articles 14 and 16

[1968] 3 SCR 575

Indian Railway Establishment Code

Article 3()

Panchayats Act, 1958

section 307

section 326

section 157

Chinnappa Reddy

Article 311

Article 14

Article 311

Article 14

Articles 311 and 14

Art. 309

Art. 309


640 •

- • •

RAMESH KUMAR

RAM KUMAR & O, RS.

April 26, 1984

[0. CHINNAPPA REDDY, A.P. SEN AND E.S. VENKATARAMIAH, JJ.)

-· Indian Penal Code-S. 302 read with S. 34 _ _.:.Acc14sed convicted and stntimced u/s; 302/34-Accused made gift of land to widow .for loss of fife of her burbmd-1/igh Court acquirted one accused and converted conviction of other to one und r s. 304.

High Court Judgment-Whether cotreci- Held no.

The two 'respoitdeilts were convicted under s. -~02 read with s. 34 of the Indian Peri31 Code .and sentenced to life imprisonment by the Sessions Judge.

On appeal, the High Court was informed that -both the parties." were closely relatd and they bad come to some sort of •rrana:ement under which one accused had made a gift' of some land to the widoW as compen .. • sation -for the loss of-1ife of her husband.

The Hi'gh Court acquitted one of the Jccused and converted the onviction of the- Other from one under

S• 302 to one under s. 304 and reduced _the sentence to)two years.

The so called arrangement between. the partieS was the only reason for. what tile High Court did. ·

E Setting aside tho judgment of the High Court and remanding. tho

luatter for rehearing~ thi!f Court,

HELD : The entire system of admiilistration of CriminaJ ju_stiCt,-is rsduced to a mockery by the judgment of the High Court. If it is uphel~, it is as if a person who can afford to make gifts of land or money to the heirs of the.victim may get away eVen with a charge of murder.

Courts are to dispense j0:stice, not to dispense with justice.

And, jutice to be dispensed is not p8.lm-tree justice or idiosyncratic justice.

The judgment of the mgh Court cannot .stand a second's scrutiqy. [641 H; 642 A-BJ.

CRIMIN,\L APPELLATE JURISDICTION : Criminal Appeal Nos. 1012 of 1984.

(Appeals by Special leave from the Judgment and Order dated the !st September, 1983 of the Punjab and Haryana High Court in Cr!. Appeal No. 291 DB of 1983, 511 ))B of 1983 & Cr!. Rev.

No. 627 of !983.)

Gopa/ S1.1bram1mium and S.K._S(lbarwal for the Appellant.

'1- .•

RAMESH KUMAR v. RAM KUMAR (Chinnappa Reddy, J.)

, Kawa/jit Kochar and J.D. Jain for the Respondet No. 1.

Miss Lily Thomas, for Respondent No. 2.

The Judgment of the Court was delivered by . . ' .

CaiNNAPPA REDDY, J.

We are very unhappy about the judg- 'ment of the High Court. Both the respondents were convicted by the learned First. Additional Sessions Judge of.KurukShetra under s. 302 read witk s. 34 of the I_ndia11 Penal Code and 'each of them was

lrentened to. undergo imprisonment for life. On appeal, for very_

strange reasons, the High Court acquitted the first respondent and converted _the conviction of the second respondent to one under 1 304-A l. P. c: and reduced the sentence. to two years' rigorous

imprisonmet. What the High Court said speaks for itself. This is what the High CourtJsaid:

. "However, we are told by the learned counsel for the parpes that they being closely related some members of the village have.· intervened and have brought about some sort of arrangement under. which Ram Kumar

appellnt has already made a gift of three-acres . of land in favonr of Smt. Maya Devi widow of Chander Shekhar .·. as compensation on account of the loss of life of.her

husbaad. 1 ho1,1gh this is not a matter which can be taken notice of by' thi~ Court, yet it has always been our desire to see that-enmity between close relations should be encoura- . ged to come to an end. Since the father of Ramesh Kumar

(P. W. 6) had lost h_is life, he could possibly have indulged in some exaggeration to magnify the nature of the offence.

In the circumstances, we give• benefit of doubt to Ram Kumar appellant and acquit him. We convert the convition of RatRa appellant from one under section 302 to one under - section 304~A, Indian Penal Code and Sentence him to undergo to years rigorous imprisonment Ram Kumar appel !ant is m bait His bail bond shall siand charged."

We can only say that the judgment.of the High Court has left us shocked and P?rplexed.

We are at a total loss to understand it. The entire system o~ administration of Criminal justice is reduced to mocke_ry, If the Judgment o( the ffigh Court is upheld, lt is as .1fa person. woc1n afford to make gifts of land or money to t_he )!en's of the v1cttm may get away even with a charge_ of murder;

• "

SUPREME COURT REPORTS (1984] 3 S.C.ll.

Courts are to dispense justice, not to dispense with justice. And, justice to be dispensed is not palm-tree justice o.r idiosyncratic justice. The judgment. can not stand a second's scrutiny. It is accordingly set aside and the matter is remancled to the 'High Court so that the Criminal appeals and revision may he reheard. On

behalf of the accused a very curious request was made, that the land gifted" by the father of ihe accused to the widow of the

decesed may be.directed to be returned to the father of the accused.

We. take no notice.of the gift and we reject the request.

H.S.K.

Appeals allowed.

• • ,

RAMESH KUMAR

0. CHINNAPPA REDDY

A.P. SEN

E.S. VENKATARAMIAH, JJ.

Indian Penal Code

S. 302

S. 34

s. 304

s. 34

s. 304

Gopa/

RAMESH KUMAR

RAM KUMAR

Chinnappa Reddy

Kawa/jit Kochar

J.D. Jain

Lily Thomas

CaiNNAPPA REDDY

s. 302

s. 34

Penal Code

Ram Kumar

Maya Devi

Chander Shekhar

Ramesh Kumar

RatRa appellant

section 302

section 304

Indian Penal Code


LIFE INSURANCE CORPORATION OF INDIA, ETC.

ESCORTS LTD. & OTHERS, ETC ..

April 30, [984

(S. '.°MURTAZA FAZAL A.LI, AMARENDRA NATH SEN AND v.

BALAKRiSlfNA BRAD!, JJ;)

\. Companies Act 1956 ss. 166 and 284 Annual general meeting ho/ding of notice:' seeking remov"al of direttOrs of company-:-High Court granting s.tay

in/u!Jti?!l i~ writ petitioii-interference bf Supreme Court.. ·

- ., . . . , The appellants in their appeals to this Cour.t challenged the order of a Single Judge of the High Courl; admitting the writ petition of tho firsl respondent cOmpany_ and staying of the notice seeking removal of certain Directors. of the company.

HELD: ! .. There will be an order vacating the order of stay/injunc• tion P, aSsed by the Single Judge of the. High Court, prohibiting any action being taken on the basis of the requisition put in by L.I.C.

[644E)

2:; AIL app_ropriate -prQceedings will be.· ta.ken n accordance with law ·. on the basis of th_e requisition. However", no effect._ should be _-givfn to any

resoJutiotl the con1pany may pass at_ the extraordinafygeneral meeting to Qe held in conseqtience of the requ'isition without obtaining priOr . dirCctions - from thii Court. • [644F•G] . ·

~ 3-. T6e pendency Of q1ese cases in thiS Court Will nofstand in the w'ay of'.bolding the-annual general i; neeting of th"e cojilpanY in t_he normai course. {644G)

- ·'CIVIL APPELLATE JURISDICTION.: Civil Appeal No. 2317 of 1984 ..

. , From: the Judgment and O, rder dated 14/15.3.1984 of the High Gourt Of Bombay in w.P. No. 3063/1983 .

• And

Civil Appeal No. 2318 of 1984. i'i

From. the Judgment a)id. order dated 14/15.3.1983 of the jlombay High Cou.rt iµ W, P. )"9. 3063/1983, . . . . ' ' .·

• A

• D

.:.~:

SUPREME COURT REPORTS (1984] 3 s.c.R. • . With Transfer Petition (Civil) No. 190 of 1984. - .

For the P;:titioner/Appellant .:

K. Parasan, Attorney General, Milan K. BanerJee, Addi.

Solicitor General, s.A. Shroff, .Mfss A Subhashifli and Dr. V. Gori Shanker, • For the Respondents :

N .. A. Palkhlvala, Soli J. SorabJee, P. R. Mridul, A. B.

Divan, Dr." L.M. Singh-Vi, KK. Venugopal, J.B. Dadachanji, iiajinder Narain, Harish Salve, B.S. Bantia,. X.S. Cooper, liedabratta Barua, R .. Nariman, T.M. Ansari, P.X. Rµm, Mrs. A.K. Verma and D.N.

Mishra; - The Order of the Court was delivered by

FAZAL ALI, J~ .

.In SU' (C) Nos. 5392/84 & 5412~4.

We have heard learned Attorney General ..for the petitioriors and Mr. Palkhivala, learned counsel for respqndents at length.

Special leave granted. There will be. an order vacating the . order of stay/injunction passed by the Single Ju.\lge of the High

Co11rt, .prohibiting any action being taken on . the basis of the requisitio.n put in by L.I.C. We direct that all appropriate proceedings will be taken in accordance with Jaw on the basis of tho requisition. .However, no effect should be given to.any resol.ution t:be company may pass at the extra:orginary general meeting to -be

held in consequence of the requisition without obtaining prior directions from this Court. The pendency of these cases in this Court will no\. stand in the way of holding the annl general meeting of the . company in the norinal course. These appeals are disposed of except that they will be kept pending for the limited purpoil'e to enable counsel to move this Court for directions as indicated above. In computing the time for taking steps pursuant to the requisititon, the periOd from the.date of requisition till this day wHI be excluded in view of interim stay/injunction granted by the High Court.

Th.e prayer for amendment of the cause title is allowed, .

t- '

i. I. c.. v. ESC, ORTS <Fazal Ali, J)

Transfer Petition (C) No t90 of 1984.

Mr. Palkhivala, learned counsel on behalf of the respondents stltes that matter is being liste.d before' the High Court. for final hearing on 11th June, 1984 and he assures this Court that his clients will . fully coqperate so that the case can he heard and fin.ally disposed of in the High Court by the end ofJune, 1984. We request the High. Court to.dipose of the matter finally as expeditiously as possible. In view of this, the learned Attorney General does not pNss the Transfer Petition fo~ the present which is accordingly dismissed.

N.V.K.

Writ Petition allowed. . .

Transfer Petition dismissed .

• •

ESCORTS LTD. & OTHERS, ETC

AMARENDRA NATH SEN

Companies Act 1956

ss. 166 and 284

K. Parasan

Milan K. BanerJee

s.A. Shroff

A Subhashifli

V. Gori Shanker

N .. A. Palkhlvala

Soli J. SorabJee

P. R. Mridul

A. B.

Divan

L.M. Singh-Vi

KK. Venugopal

J.B. Dadachanji

iiajinder Narain

Harish Salve

B.S. Bantia

X.S. Cooper

R .. Nariman

T.M. Ansari

P.X. Rµm

A.K. Verma

D.N.

Mishra

FAZAL ALI

Palkhivala

Fazal Ali

Palkhivala