KATRA EDUCATIONAL SOCIETY

STATE OF UITAR PRADESH" ORS.

Janu11ry 17, 1966

[P.B. GAJENDRAGADKAR, C.J., J.C. SHAH, S.M. SIKRI,

V. RAMASWAMI AND P. SATYANARAYANA RAJU JJ.j

Intermediate Educaiion Act ( U.P. 2 of 1921) as amended by Act 35 of 1958-Yalidity of ss. 16A to 161-Sections whether unreaso1uible, ducriminatory-Whetlrer within legislative power of State Legislature.

The appellant-a society registered under the Societies Regislration Act 21 of 1860--<>lnducled an educational institution at Allahabad in Ultar Pradesh.

Management of the affairs of the society was entrusted by the memorandum of association to an Executive Commiuee whose membership was confined to members of the Society.

Under the Intermediate Education Act (U.P. Act 2 of 1921) provision was made for establishing

a Board with powers to regulate High School and Intermediate Education.

This Act was amended by U.P. Act 35 of 1958. By s. 7 of the amending Act which came into force on January 23, 1959, ss. 16A to 161, were incorporated into U.P. Act 2 of 1921.

By leuer dated September 12, 1960, lhe Regional Inspector of Girls Schools called upon lhe Society to submit and get approved a scheme of Adminislration of lhe institution managed by it. The society thereupon presented a petition under Art. 226 of the Cons1i1u1ion for the issue of a wril quashing the orders of the Regional Inspector and requiring the authorities not to enforce the provi. sions of ss. 16A lo 161. The High Court dismissed the petition. In il.9 appeal to this Court it was contended on behalf of the Society that (I) The amending Act of 1958 was inoperative to the exlent to which it sought 10 impose controls upon the management of an educational institution registered under the Societies Registration Act and thereby directly trenched upon legislative power conferred by Entry 44 of List I and Entries

10 and 18 of List Ill. (2) Section 16I was discriminatory inasmuch as it conferred uncontrolled pow.,, r on the Regional Deputy Director of Education. (3) The provisions of s. 168(3) read withs. 16D(3)(a) and

(b) were unreasonable. ( 4) Section 160( 4) invaded the society's right to property guaranteed by Arts. 19 and 31 of the Constitution.

(5) The provisions in question made unlawful dcrimination between private and State institutions.

HELD :

(i) The impugned legislation does not fall under Enlry 44 of List I.

Board of Trustees v. State of Delhi, A.J.R. 1962 S.C. 458, applied.

It cannot also he said that the pith and substance of the impugned Act relates to charities and charitable institutions or to trusts and trustees.

The true nature and character of the Act falls within the express legislative power conferred by Entry 11 of List II and merely because it inci dentally trenches upon or affected a charitable institution or the powers of the trustee. of the institution it will not on that account be beyond the legislative authority of the State.

[333 E-GJ H

(ii) Section 16F(4) is enacted in the interest of the students of the Institution.

Vl'hen the Educational Authorities do not accept the .uitability of a person selected by the management on two successive occa- 328

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to conduct examinations at the end of the High School and Intermediate courses, to recognize institutions for purposes of its examinations, and to do all such other acts and things as may be requisite in order to further the objects of the Board. This Act was amended by the U.P. Act 35 of 1958. By s. 7 of the amending Act which came into force on January 23, 1959, ss. 16A to 161 were incorporated into U.P. Act 2 of 1921. Bys. 8 the State Government was authorised to promulgate Regulations in respect of matters rovered by ss. l 6A to 161.

By letter dated September 12, 1960 the Regional Inspector of Girls Schools, Hird Region, Allahabad called upon the Society to submit and get approved a Scheme of Administration of the institution managed by it. The Society thereupon presented a petition under Art. 226 of the Constitution in the High Court of Judicature at Allahabad for the issue of a writ quashing the orders passed by the Regional Inspector of Girls Schools and requiring the State of U.P., the Director of Education, the Regional Inspector of Girls Schools and the Board of High School and Intermediate Education, who were respectively respondents Nos. 1 to 4, not to enforce the provisions of ss. I 6A to 161 as originally enacted or aa modified by the Removal of Difficulties Orders issued under •· 9 of the amending Act. Jt was submitted by the Society that ss. 16A to 161 were not within the competence of the State Legislature, and also because they infringed the fundamental rights of the Society guaranteed by Arts. 14, 19(1) (c), 19(1) (f) and 31 of the Constitution. It was urged that by the Act unreasonable restrictions were imposed on the management of educational institutioas and the Act conferred unguided and untrammelled powen upon executive authorities, no distinction having been made between "well-managed and badly-managed" institutions. The High Court rejected the contentions raised by the Society. With special leave. the Society has appealed to this Court.

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The effect of ss. 16A to 161 which were added to the U.P. ...

Act 2 of 1921 by the amending Act 35 of 1958 is briefly this. For every institution there shall be a Scheme of Administration which shall amongst other matters provide for the constitution of a Committee of Management vested with authority to manage and conduct the affairs of the institution, and which shall describe the powers, G duties and functions of the Headmaster or the Principal and of the Committee of Management in relation to the institution and that the Headmaster or the Principal of the institution and two teache~ thereof selected by rotation according to seniority shall be exoffici9 members of the Committee with a right to vote : (s. 16A). \..

In the case of an institution recognized at the date of commence- 11 ment of the Intermediate Education (Amendment) Act, 1958, a draft of the Scheme of Administrntion shall be prepared and submitted to the Director for his approYal: (s.16B); and if the Scheme

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JC, B, SOC!BTY v, U. P, STATB (Shah, J.) 331

of Administration is not submitted within the time allowed, the Director shall take action in accordance with cl. (a) or (b) of sub-s.

(3) of s. 16 D: (s. 16C). The Director is authorised to inspect recognized institutions and to remove defects or deficiencies found on inspection or otherwise and if the management fails to comply with any directions the Director may, after considering the explanation or representation, if any, given or made by the management, refer the case to the Board for withdrawal of recognition or recommend to the State Government to proceed against the institution In the manner provided by sub-s. (4) of s. 16. Jf on receipt of a recommendation, the State Government is satisfied that the affairs of the institution are being mismanaged, or the management of the institution has wilfully or persistently failed in the perfor mancc of its duties, or the institution is being conducted otherwise than in accordance with the Scheme of Administration, or the draft of the Scheme of Administration has not been submitted within the time allowed, the State Government may by order provide for exercising control over such institution by an Authorized Controller for such period as may be specified by the Government, and on the making of such order the institution and its management shall, so long as the order continues, in force, be conducted and carried on in accordance with the provisions of the order, and every person having any function of management of such institution shall comply with such directions. Where the manage ment or any person having any function of management does not comply with or refuses to carry out any direction given by the Authori7.ed Controller, that Officer may, with the previous approval of the State Government and for such period as the State Govern ment may fix, take over the management of the institution including management of the land, buildings, funds and other assets belonging to or vested in the institution, to the exclusion of the management or any such person and wherever the Authorized Controller so takes over the management he shall have in relation to the management of the institution all such powers and authority a> the management would have if the institution were not taken over under sub-ss. (4) or (5) : (s. 16D). Qualifications for appointment as Principals, Headmasters and teachers of different subjects shall be prescribed by regulation and there shall be constituted in every recognized institution a Selection Committee for selecting candidates for appointment as teachers in the institution: (s. 16E).

Qualifications which the Principal or Headmaster or teacher shall possess, and the procedure for appointment of selected candidates to the office of Principal or Headmaster or teacher are also to be prescribed : (s. 16F). Every person employed in a recognised institution shall be governed by such conditions of service as may be prescribed by Regulations and any agreement between the mana gement and such employee insofar as it is inconsistent with the provisions of the Act or with the Regulations shall be void: the

332 SUPREME COURT llEPOllTS

 [1966] 3 S.C.R.

Regulatior_i~ shall inter a/ia _Provide for the period of probation, the coadU10ns of confirmation and the procedure and conditions for promotion and punishment, scales of pay and payment of salaries, transfer of service from one rccogni7.ed institution to another, grant of leave and Provident Fund and other benefits and maintenance of record of work and service etc. The Committee of Management may not remove or dismiss from service or reduce in rank or reduce the emoluments of any Principal, Headmaster or teacher except with the prior approval in writing of the Inspector: (s. 16G). Bys. 16H the provisions of ss. 16A, 16B, 16C, sub-ss. (2) to (7) of s. 16 D and ss. 16E, 16F and 16G are not to apply to recognized institutions maintained by the State Government or the Central Government and in the case of recognized institutions maintained by a local body, the State Government may declare that all or any of those provisions shall not apply or shall apply subject to such alterations, modifications or additions as it may make. The Director may by notification in the Official Gazette delegate all or any of the powers which he exercises under the Act except certain powers: s. l 6I.

Some of these provisions have been amended from time to time by orders issued under s. 9 of the amending Act. For reasons which we will presently set out, we do not propose in this appeal to enter upon the question whether the amendments were validly made. We have referred to the act as it was originally enacted.

Counsel for the Society contends that the amending Act insofar as it incorporates ss. 16A to 161 in the U.P. Act 2 of 1921 is beyond the legislative competence of the State Legislature, because in substance it seeks to supersede the provisions of the Societies

Registration Act, 1860-a field of legislation which is exclusively within the competence of the Parliament-and in any event because the Act insofar as it affects the powers of trustees of charitable institutions cannot be enacted without conforming to the requirements of Art. 254.

Management of the affairs of the Society was entrusted by Its memorandum of association to the Executive Committee, but the Society is required bys. 16A to submit a Scheme of Administration providing for the constitution of a Committee of Management G invested with authority to manage and conduct the affairs of the

Society, and of this Committee of Management the Headmaster or the Principal and two teachers selected by rotation are ex officio members. The Director has the power to inspect the School and to interfeit with the management calling upon them to remove any defect or deficiency found on inspection, and the State Government H is empowered to appoint an Authorized Controller to exercise with respect to the institution and its management such functions or control as may be specified in the order of the State Government.

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In the matter of appointment and removal of the Principal or the Headmaster, and teachers the authority of the Executive Conimittteeof the Society is restricted. Management of the affairs since the enactment of the amending Act ha_s therefore to be carried on not in accordance with the memorandum of association of tile Society, but in accordance with and subject to the provisions of ss.

16A to 161 as added by the amending Act.

Power of the State Legislature to legislate under the head "education including Universities" in Entry 11 of List II of the 7th Schedule would prima facie include the power to impose restrictions on the management of educational institutions in matters relating to education. The pith and substance of the impugned legislation being in regard to the field of education within the competence of the State Legislature, authority to legislate in respect of the maintenance of control over educational institutions imparting higher secondary education and for that purpose to make provisions for proper administration of the educational institutions was not denied. But it was said that the impugned Act is inoperative to the extent to which it seeks to impose controls upon the management of an educational institution registered under the Societies Registration Act and managed through trustees, and thereby directly trenches upon legislative power conferred by Entry 44 of List I and Entries 10 & 18 of List III. This argument has no substance. This Court has in Board of Trwtu1 v.

State of Delhi oi held that legislation which deprives the Board of Management of a Society registered under the Societies Registration Act of the power of management and creates a new Board does not fall within Entry 44 of List I, but falls under Entry 32 of List II, for by registration under the Societies Registration Act the Society does not acquire a corporate status. It cannot also be said that the pith and substance of the Act relates to charities or charitable institutions, or to trusts or trustees. If the true nature and character of the Act falls within the express legislative power conferred by Entry 11 of List II, merely because it incidentally trenches upon or affects a charitable institution, or the powers of trustees of the institution, it will not on that account be beyond the legislative authority of the State. The impact of the Act upon the rights of the trustees or the management of a charitable institution is purely incidental, the true object of the legislation being to provide for rontrol over educational institutions. The amending Act was therefore within the competence of the State Legislature and the fact that it incidentally affected the powers of the trustees or the management in respect of educational institutions which may be regarded as charitable, could not detract from the validity of the exercise of that power.

(1) AJ.R. 1962 S. C. 4S8.

The plea that certain specific provisions were invalid as infringing Aris. 19, 31 and 14 may now be considered. Section

16F (4) was challenged as conferring an uncontrolled power upon the Regional Deputy Director of Education.

By that provision. whco a recommendation for appointment of a teacher or a Principal or Headmaster made by the management has been rejecied and another selection made is again disapproved after representation of the management ii; considered, the Regional Deputy Director of Education in case of a teacher, and the Director in case of a

Principal or Headmaster, may appoint any qualified person out of the list of candidates applying for the vacancies and such appointment is made final.

It is clear that the selection of teachers and principals or headmasters is in the first instance left to the Committee of Management. But the exercise of the power is subject to approval of the Education Authorities. The Educational Authorities may reject the selection after considering the repr=ntation of the management. The Selection Committee would then have power to make another recommendation. If that second recommendation alio be not accepted after considering the representation made by the management, power is conferred upon the Educational Authoritie1 to make appointments of qualified persons out of the list of candidates applying for the vacancies.

But the person to be so appointed must possess the prescribed qualifications, and his name must be included in the list of candidates applying for the vacancy. The provision is enacted in the interest of the students of the institution.

Where the Educational Authorities do not accept the suitability of a person selected by the management on two successive occasions in respect of the same vacancy, the Educational Authorities have been given the power to fill up the vacancy. It is implicit in the provision that the power has to be e11ercised by the Educational Authority in the interest of the institution and for serving the cause of education, and it cannot be said that the power conferred is uncontrolled.

It was then urged that the provisions of s. 16B(3) read with s. 16(d) (3) (a) & (b) are unreasonable provisions. Bys. 16 D power is given to the Director to inspect recognized institutions and to direct removal of defects. If the management fails to comply with the directions made by the Director, that Officer may after considering the explanation or representation, if any, given or made by the management, refer the case to the Board for withdrawal of recognition or recommend to the State Government to proceed against the institution under sub-s.

(4) and the powers which the State Government may exercise after being satisfied that the affairs of the intitution are being mismanaged or that the management has wilfully or persistently failed in the performance of its duties, include the power to appoint an Authorised Controller to anage the affairs of the institution for such period as may he specified by

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the Government. The provision is disciplinary and enacted for

ecuring the best interests of the students. The State in a democratic set-up is vitally interested in securing a healthy system of imparting education for its coming generation of citizens, and if the m1magement is recalcitrant and declines to afford facilities for enforcement of the provisions enacted in the interests of the students,

11 provision authorising the State Government to enter upon the management through its Authorized Controller cannot be regarded ns unreasonable.

Section 16B (3) authorises the State Government to take action under s. 160 (3) in the event of the Scheme of Administration not being submitted. The basis of an effective exercise of the controls envisaged by the amending provisions is the Scheme of Administration for educational institutions. If with a view to prevent enforcement of the provisions of the Act the management seeks to nullify the control envisaged by the provisions of the Act by the State Government, a provision whereby compliance with the requirements of the statute may be secured cannot also be regarded as unreasonable.

It was then urged that property of the Society is taken away under s. 160 ( 4) if the Scheme of Administration is not submitted within the time allowed, and the Authorized Controller is appointed by the Government pursuant to a recommendation made under sub-s. (3) of s. 160. But on a plain reading of the terms of s.

160 (4) it is clear that the powers contemplated to be entrusted to the Authorized Controller are merely of management. Management of the institution in respect of which an Authorized Controller has been appointed has to be conducted and carried on in accordance with the directions given by the Authorized Controller.

The property continues to remain the property of the institution: only the right of management of the recalcitrant managers is taken away temporarily to secure compliance with the provisions of the Act. Temporary deprivation of management to secure compliance with the provisions of the Education Act does not amount to deprivation of property of the educational institution which may attract the protection guaranteed by Art. 19 or Art. 31 of the Constitution.

It was the• urged that unlawful discrimination is made between educational institutions maintained. by private citizens and institutions maintained by the State Government or the Central Government or local bodies. On that part of the case it may be noticed that the petition filed by the Society is singularly defective: it is baldly averred in the petition that the provisions of s. 16H are ultra vires of the U.P. Legislature as they are discriminatory and infringe the guarantee of the fundamental freedom under Art. 14 of the Constitution. Section 16H exempts all recognized educa.

tional institutions maintained by the State Government and the Central Government from the operation of certain specified provisions of the Act and in the case of recognized institutions maintained by a local body the State Government may declare that all or any of those provisions shall not apply or shall apply subject to such alterations, modifications or additions as it may make.

Prima facie, there is a justifiable classification between the privately managed educational institutions and those maintained by the State Government, the Central Government and local bodies.

To claim the protection of Art. 14 it must be shown that persons differently treated are similarly situated and discrimination is made with an uneven hand. In the petition, no particulars are furnished as to why the classification made is not based on a rational basis having relation to the objects sought to be achieved thereby. In the affidavit which has been filed on behalf of the State by the Deputy Director of Education it is stated that since the termination of the Second World War there was a marked increase in the number of private schools imparting higher secondary education and there were many complaints against the management of those schools, and discontentment among the teachers was rife. A Committee appointed by the State Government to enquire into the conditions of the private institutions was of the view that the managing committees of the private schools as then constituted were unsatisfactory as many of them were ridden by factions and they had failed to give a sense of security to teachers, that it was necessary that teachers should have a right of representation on such managing committees, and that the Government should have power to supersede any managing committee for persistent and serious dereliction of duty.

Another Committee appointed by the Government of U.P. to examine the progress of the scheme of reorganisation of secondary education recommended that in the interest of better management of non-Government institutions the head of the institution and representatives of the teachers of the institution should be included in the managing committee of each aided institution to support and safeguard the legitimate interests of the teachers. The Government had also received representations from time to time from associatioll! interested in education that the service conditions of teachers should be ameliorated and high handedness on the part of the management of the recognized institutions should be checked. From the statistics collected by the Director it appeared that a situation had arisen which required effective measures to be adopted for reasonably rci; tricting the activities of the managing bodies of the recognized institutions in the interest of the students and the teachers with a view to harmonise the relationship between the teachers and the management so as to bring about an atmosphere conducive to efficient imparting of education.

A table was incorporall:d in paragraph-16 of the affidavit showing the number of recognized educational institutions imparting higher secondary education.

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From an analysis of that table it is apparent that between the years 1956-57 and 1959-60 the number of State Government institutio11s was less than 9% of the total number of the institutions, and the number of Central Government institutions was Jess than 0 5 % and that of local bodies' institutions approximately 2 5 %· The institutions run by the State Government, Central Government and local bodies were governed by definite rules laying down the conditions of service of teachers and the institutions were run through official agencies under conditions which were entirely different from the conditions prevailing in the privately managed institutions. Another table showed that there was year after year great disparity between the percentages of successful candidates trained in the Government and local body institutions, and non- Government institutions. The materials placed on the record by the State, viewed in the light of complete absence of any details furnished by the Society, are sufficient to indicate that the plea of unlawful discrimination has no basis.

It was then urged that the State had accorded to the Society and others similarly situated, as against the Anglo-Indian Schools which are privately managed institutions, a discriminatory treatment to the detriment of the former. But there is no specific allegation in the petition in this behalf. From the table submitted in paragraph-18 of the affidavit of the Director of Education it appears that the number of students appearing from the Anglo-Indian Schools is very small, that no adverse reports were received against the management of such institutions, and that there is a separate Code of Regulations for the Anglo-Indian Schools in the State of U.P. laying down the necessary conditions with regard to all the important aspects of their educational activities and such institutions are not governed by the U.P. Educational Code of 1958 which applies to other recognized institutions. A plea of unlawful discrimination cannot be adjudged unless the petition contains a full averment of the grounds on which equality is claimed, and the denial of equality is pleaded as not based on a rational relation to the object sought to be achieved by the statute which makes a classification. We therefore do not propose to deal with this question in this appeal.

There only remains to be considered the challenge to the validity of s. 9 of the amending Act. By that section the State Government has been authorized for the purpose of removing any difficulties in relation to the enforcement of the Act to direct that the Act shall take effect subject to such adaptations, whether by way of modification, addition or omission as it may deem necessary or expedient and may make such other temporary provision for the purpose of removing any such difficulty as it may deem to be necessary or expedient. The High Court was of the view that the legislative policy has been laid down in the amending Act and by

s. 9 power has been conferred on the State Government for the purpose of removing any difficulties in relation to the enforcement of the Act, and since this may be done only within a period of twelve months from the date of the commencement of the Act and the adaptations whether by way of modification, addition or omission may only be made for the purpose of removing any difficulties in relation to the enforcement of the Act, no legislative power was conferred thereby on the State Government, and on that account the provisions are not invalid. The High Court also observed that the period in respect of which various orders were passed had expired and it was therefore immaterial for the purpose of the petition to consider whether s. 9 of the impugned Act is invalid. In our opinion, on the averments made in the petition and the materials brought before this Court, it is unnecessary to enter upon the question as to the validity of s. 9 and the orders issued thereunder.

No specific Removal of Difficulties Order affecting the rights of the Society has been brought to our notice. But we may state -that nothing in this judgment may be understood as according approval to the views expressed by the High Court on the validity -of s. 9 or the ordes issued thereunder. We leave that question open .to be canvassed when a suitable occasion arises.

The appeal fails and is dismissed with cost~

Appeal dismissed.

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KATRA EDUCATIONAL SOCIETY

STATE OF UITAR PRADESH" ORS

Janu11ry 17, 1966

P.B. GAJENDRAGADKAR, C.J.

C. SHAH

S.M. SIKRI

V. RAMASWAMI

P. SATYANARAYANA RAJU JJ

Intermediate Educaiion Act

ss. 16A to 161

s. 7

January 23, 1959

ss. 16A to 161

September 12, 1960

Art. 226

ss. 16A

Societies Registration Act

Section 16I

s. 168(3)

Section 160( 4)

Arts. 19 and 31

Section 16F(4)

s. 7

ss. 16A to 161

Allahabad

Art. 226

High Court of Judicature at Allahabad

State of U.P.

ss. 16A to 161

Arts. 14, 19(1)

ss. 16A to 161

s. 16A

s. 16

s. 16C

s. 16

s. 16D

s. 16E

s. 16F

s. 16G

ss. 16A, 16B, 16C

s. 16

ss. 16E, 16F and 16G

Central Government

s. 9

ss. 16A to 161

Registration Act, 1860

Parliament

Art. 254

ss.

16A to 161

Societies Registration Act

Societies Registration Act

Societies Registration Act

Section

16F

s. 16B(3)

s. 16(d)

Section 16B

s. 160

s. 160

s. 160

s.

160

Art. 19

Art. 31

s. 16H

U.P. Legislature

Art. 14

Section 16H

Art. 14

Government of U.P.

U.P.

s. 9

s. 9

s. 9

s. 9

s. 9


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GULAM YASIN KHAN

SURI SAHEBRAO YESHWANTRAO WALASKAR & ORS.

January, 17, 1966

[P. B. GAJENDRAGADKAR, C.J., J. C. SHAH AND S. M. SIKRI,

V. RAMASWAMI AND P. SATYANARAYANA RAJU, JJ.]

' Central Provinees Jc Berar Mu11icipa/itl<S Act, 1922 (C.P. Berar Act 2: of 1922), ' 15(1)--Candidate's son employed by Municipality-Whetlier dl•qualification,

The appellant and respondent No. I were candidates for election os members ID the Municipal Committee, Malkapur.

Respondent No. I objected, at the time of scrutiny, to the candidature. of the appellant on. the ground that the appellant had an interest in the Municipal Committee because his son was employed by the Committee and so, be w.. di!- qualified from standing for election under s. IS (1) of the Central Provinces & Bernr Municipalities Act, 1922.

The appellant disputed the validity of the objection by sayin,'l that his son was not staying with him aad had no connection with him whatsoever. The appellant and bia sons. were living in the same house, but each one lived in the portion allotted to him, and messed oeparately, Though tho ration-card w.. in the name of the appellant for the whole family and the income shown therein .. the income of the family Wlli only that of the appellant, the earnings of thit sons were not utilized for purposes of the family. The Supervising Officor overruled the objection. Thereupon, respondent No. 1 filed a writ petition in the High Court, in which the objection was upheld. In appeal to this Court,

HELD : The mere relationship of a person with an employee of the Municipal Committee does not justify the mferenco that 1uch a person has interest direct or indirect in his employment under the Municipal Committee.

The interest to which s. 15 (1 ) of the Act refers cannot mem mere sentimental or friendly interest; it must mean interest which is pecuniary, or material, or of a similar nature. Hence the enquiry should' be not whether the appellant is interested in his son but whether the appellant is interested m the employment of his son.

In the circumstances of this case. all that was proved was the mere relationship between the appellant and his son who was the employee of the Municipal Committee. Therefore, the conclusion of the High Court,. based on that relationship, was erroneous.

[341 H; 342 E-F; 343 F)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 936of1965.

Appeal by special leave from the judgment and order dated April 17, 1964 of the Bombay High Court (Nagpur Bench) at Nagpur in Special Civil Application No. 173 of 1964.

M. C. Setalvad and A. G. Ratnaparkhl, for the appellant.

K. L. Gauba, D. D. Verma, S. S. Khanduja and Ganpat Ral, ,4 for the respondents.

H The Judgment of the Court was delivered by Gajendragadkar, C. J. The appellant, Gulam Yasin Khan, and respondent No. !, Sahebrao Yeshwantrao Walaskar, were candi-

SUPREME COURT REPORTS

[1966) 3 S.C.R.

dates for election as members to the Municipal Committee, Malkapur, District Buldana, from Ward No. 17. The date fixed for filing the nomination papers was 16th March, 1964, and the date for scrutiny was 18th March, 1964. Both the appellant and respondent No. I had filed their nomination papers as required by the relevant Rules.

When the stage of scrutiny arrived, respondent No. I objected to the validity of the candidature of the appellant.

He alleged that the appellant's son Khalildad Khan was a Moharir on Octroi Naka employed by the Municipal Committee; as such, he was a servant of the Committee. According to respondent No. I. the employment of the appellant's son by the Municipal Committee showed that the appellant had an interest in the Municipal Commiltee; and so, he was disqualified from standing for election under section 15(1) of the Central Provinces and Berar Municipalitica Act, 1922 (No. II of 1922) (hereinafter called 'the Act'). The appellant disputed the validity of this objection.

He alleged that his son was not staying with him and had no connection with him whatsoever.

On the 18th March, 1964, the Supervising Officer over-ruled D the objection raised by respondent No. I. He held that on the facts brought to his notice, s. 15( I) of the Act was inapplicable.

Aggrieved by this order, respondent No. I filed a Special Civil Application No. 173 of 1964 under Articles 226 and 227 of the Constitution before the Bombay High Court (Nagpur Bench) on the 3rd April, 1964.

By his petition, respondent No. I urged that the decision of the Supervising Offioer over-ruling his objection to the candidature of the appellant was patently invalid in law; and so, he asked for a writ, order or direction of an appropriate nature setting aside the impugned order of the Supervising Officer and prohibiting him from holding the election from Ward No. 17 as scheduled on the 19th April, 1964.

This writ petition was resisted by the appellant on the same grounds which he had urged before the Supervising Officer. The High Court, however, upheld the objection raised by respondent No. I, set aside the order passed by the Supervising Officer, and held that the appellant was disqualified from standing for election under s.15(1) of the Act. In consequence, it directed that the nomination paper filed by the appellant should be rejected. It appears that from Ward No. 17, only two nomination papers had been filed-one of the appellant and the other or respondent No. I.

In view of the fact that after the rejection of the nomination paper of the appellant, respondent No. I was the only candidate who had offered for election on behalf of Ward No. 17, the High Court declared that respondent No. I had been duly elected from the said Ward. It is against this decision that the appellant has come to this Court by special leave: and the short question which has

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YAtlN KHAN l'. WALASKAR (Gajt.tldragadkar, C./.) 341

been argued before us by Mr .. Setalvad on bahalf of the appellant is that the High Court erred in law in holding that on the facts proved in this case, the appellant was disqualified for being nominated as member of the Municipal Committee under s. 15(1) of the Act.

Before dealing with this point, it is relevant to refer to the facts which have either been found or admitted in the present proceedings. It appears that the appellant has three adult sons, including Khalildad Khan who has been employed by the Municipal Committee. The three sons and the father live in the same house, but mess separately. They have no share in each other's income. The earnings of the sons and the father are not put into the common hotch-pot. There are separate living arrangements in the house, and each one lives in a portion of the house allotted to him. It is true that the ration card is in the name of the appellant for the whole family, but it is admitted that the income of Rs. 2,000 which is shown in the ration card as the income of the family is the income of the appellant himself; it does not include the incbtne earned by his sons, and it is plain that the salary earned by Khalildad Khan is used by himself for the maintenance of his own family. There is no doubt that the appellant and his sons being Mcihammedans, cannot be said to be members of an undivided family in the sense in which that expression is used in regard to Hindus. It is in the light of these facts that we have to decide the question as to whether the High Court was right in holding that the appellant was disqualified under s. 15(1) of the Act.

The Act was passed in 1923 to make better provision for the organisation and administration of municipalities in Madhya Pradesh. It contains provisions which are true to the pattern of municipal legislation of this type. Naturally, one of its sections deals with the question of disqualification of candidates as in all municipal Acts; it is section 15. Section 15 by clause (J) provides that no person shall be eligible for election, selection or nomination as a member of a Committee, if such person had directly or indirectly any share or interest in any contract with, by or on behalf of the Committee, while owning such share or interest.

The question which we have to consider is whether by virtue of his relationship with Khalildad Khan, the appellant can be said to have any indirect share or interest in the employment of Khalildad Khan with the Muncipal Committee. We are assuming for the purpose of dealing with this point that the contract to which clause

(1) refers, includes employment, though unlike other similar statutes, the word "employment" is not specifically mentioned in the said clause. In order to incur disqualification, what the clause requires is "interest or share in any contract"; it may either be a share or an interest; and if it is an interest, the interest may be direct or

SUPREME COURT

RF.PORTS

 [196,] 3 S.C.R.

indirect. But it is plain that the interest to which the clause refers, cannot mean mere sentimental or friendly interests; it must mean interest which is pecuniary, or material or of a similar nature.

If the interest is of this latter category, it would suffice to incur disqualification even if it is indirect. But it is noticeable that the clause also requires that the person who incurs disqualification by such interest must "own such share or interest". It is not easy to determine the scope of the limitation introduced by this last sub-clause.

Mr. Gauba for respondent No. I urged that the clause "owning such share or interest" is tautologous when it refers to direct interest or share, and is meaningless when it refers to indirect share or interest. Prima facie, there is some force in this contention; but whatever may be the exact denotation of this clause, it does serve the purpose of limiting the character of the share or interest which incurs disqualification prescribed by the clause, and it would not be easy to ignore the existence of the last portion of the calusc altogether. ll is quite true that the purpose and the object of prescribing the several disqualifications enumerated in clauses (a) to (I) ofs. 15 of the Act is to ensure the purity of the administration of municipal Committees, and in that sense, it may be permissible to hold that the different clauses enumerated in section 15 should not receive an unduly narrow or restricted construction. But even if we were to adopt a liberal construction of s. 15(1), we cannot escape the conclusion that the interest or share has to be in the contract itself. When we are enquiring as to whether the appellant is interested directly or indirectly in the employment of his son we cannot overlook the fact that the enquiry is not as to whether the appellant is interested in the son, but the enquiry is whether the appellant is interested in the employment of the son. The distinction between the two enquiries may appear to be subtle, but, nevertheless, for the purpose of construing the clause, it is very relevant.

Considered from this point of view, on the facts proved in this case, we find it difficult to hold that by mere relationship with his son, the appellant can be said to be either directly or indirectly interested in his employment.

Incidentally, we may point out that clause (k) of s. 15 refer~ to the disqualification resulting from the fact that the person concerned holds :my office of profit under the Committee. In other words, it deals with a case where the person offering for election himself holds any office of profit under the Committee; and naturally that constitutes a disqualification. Having referred to the case 'or a person holding an office of profit under the Committee, clause (1) does not refer to employment i11 terms, though, as we will presently point out, similar provisions in other municipal Acts refer to employment in this context. But quite apart from this co1111ideration, it is not easy to hold that the appellant owns any

H -

' ..

YASIN KHAN v. WALASKAR (Gajendragadkar, C.J.) 343

kind of interest in the employment of his son or even otherwise is directly or indirectly interested in the said employment. . _..;..--:- ,,...

This question has, in a sense, become academic, because the Act has been repealed by Maharashtra Act 40 of 1965. Section 16(1) (i) of this repealing Act deals with the question covered by s. 15(1) of the Act. Section 16(1) (i) provides that no person shall be qualified to become a Councillor wheather by election, co-

-~ ' "

B option or nomination, who, save as hereinafter provided, has directly or indirectly, by himself or his partner, any share or interest • in any work done by order of a Council or in any contract with or under or by or on behalf of a Council. There are several other clauses of section 16{1), but it is unnecessary to refer to them. c

As we have already indicated, corresponding provisions dealing with disqualifications contained in similar municipal Acts refer to 'employment' in terms. By wa'] of illustration, we may refer to section 12(2) (b) of the Bombay Municipal Boroughs Act, 1925 (No. 18 of 1925); it provides that no person who, save as hereinafter provided, has directly or indirectly, by himself or his partner, any share or interest in any work done by order of a Municipality or in any contract or employment with or under or by or on behalf of a Municipality, may be a Councillor of such Municipality, Similarly, the Bombay Provincial Municipal Corporations Act, 1949 (No. 59 of 1949) provides by section 10(1) (f) that a person shall be disqualified for being elected and for being a Councillor if such person has directly or indirectly, by himself or his partner, any share or interest in any contract or employment with, by or on behalf of the Corporation.

It would, we think, be unreasonable to hold that mere relationship of a person with an employee of the Municipal Committee justifies the inference that such a person has interest, direct or indirect, in the employment under the Municipal Commitee.

In the circumstances of this case, what is proved is the mere relationship between the appellant and his son who is the employee of the Municipal Committee; and on that relationship the High Court has based its conclusion that the appellant is disqualified under s. 15(1) of the Act. We are satisfied that this conclusion is erroneous in law. --

The result is, the appeal is allowed, the order passed by the High Court is set aside, and the declaration granted by the High Court that respondent No. 1 is duly elected from Ward No. 17 is reversed. Respondent No. 1 should pay the costs of the appellant throughout.

' -'.

H Appealallo wed.

M10Sup.CIJ66-9

F

GULAM YASIN KHAN

P. B. GAJENDRAGADKAR, C.J.

C. SHAH

S. M. SIKRI

V. RAMASWAMI

P. SATYANARAYANA RAJU, JJ.

Bernr Municipalities Act, 1922

s. 15

M. C. Setalvad

A. G. Ratnaparkhl

K. L. Gauba

D. D. Verma

S. S. Khanduja

Ganpat Ral

Gajendragadkar

Gulam Yasin Khan

Sahebrao Yeshwantrao Walaskar

Khalildad Khan

section 15(1)

18th March, 1964

s. 15( I)

Articles 226 and 227

Bombay High Court (Nagpur Bench)

3rd April, 1964

YAtlN KHAN l'. WALASKAR

Setalvad

s. 15(1)

s. 15(1)

Madhya Pradesh

section 15

Section 15

Gauba

section 15

s. 15(1)

s. 15

Section 16(1)

s. 15(1)

Section 16(1)

section 16

section 12(2)

Bombay Municipal Boroughs Act, 1925

section 10(1)

s. 15(1)

Appealallo


TIIE STATE OF BIHAR

RAMBALAK SINGH AND OTHERS

January 17, 1966

[P.B. GAJF.NDRAGADKAR, C. J., J. C. SnAH, S. M. S1KRI,

V. RAMASWAMI AND P. SATYANARAYANA RAJU, JJ.]

Constitu1ion of India, Art. 226,-Habeas Corpus proceedingr-wliether Jligh l'our1 has jurisdiction to grant interim bail where detention is under R. 30. Defence of India Rules, 1962.

The respondent, who was ordered to be detained under Rule 30 of the Defence of India Rules, 1962, filed a petition in the High Court for a writ of habeas corpus. The High Court passed an order releasing the respondent on interim bail.

In the appeal to this Court against the said order, it was contended, Inter a/la, on behalf of the appellant slate that although ordinarily tho High Court may have juri•diction to graat interim bail in habeas corpus proceediDgi, this was not so in cases where a detenu is detained under R. 30; the policy underlying the enactment of the Defonce of hldia Act and the Rules and the object intended to be achieved by the detention which i• authorised under R. 30, clearly indicated that there were other valid considerations of paramount importance which di')tinguished the detention made under R. 30 and th•! altered the character of the proceedings initiated by or on behalf of the delenu under Art. 226; that ill sm:h proceedings the Court could not ignore the fact that the detention is purported to have been made in order to safeguard the Defence of India and Civil Defence, Public Safety, clc.; that the very object of making an order of detention against a c:tizen is to put an end to his prejudicial activities which are likely to affect one or the other of tho mallers of grave public importance specified by R. 30 and it would the'refore be illogical to hold that even before the Court comes to any decision as to the merits of the grounds on which the order of detention is challenged, it would be open to the Court to pass an interim order of bail; that furthermore any order of bail pa.<sed in such proceedings would not be interim but would be final and this also distinguished cases of this character from other habeas corpus proceedings.

HELD : In dealing with habea.r corpus petitions under Art. 226 where orders of detention passed under R. 30 are challenged the High Conn has jurisdiction to grant bail, but the exercise of the said jurisdiction is inevi1ably circumc; crihed by the considerations which are special to such proceedings and which have relevctnce to the object which ia intended to be served by orders of detention properly and validly passed under the said Rules. (351 DJ

Special Reference No. I of 1964 (1965] I S.C.R. 413; S1a1e of Ori.r.ra

v. Madan Gopa/ Rung/a and others, (1952] S.C.R. 28; referred to.

If on proof of certain conditions or grounds it is oocn to the High Court to set aside the order of detention made under R. 30 and direct the release of the detenu. then it cannot be held that in a proper case II the Hieh Court has no iurkdiction to make an interim order f?ivin'! the detenu the relief which the High C.curt would be entitled to give him at the end of the proceedings. [348 CJ

"')',_.

• _..

B!HAR v. RAMBALAK (Gajendraxadkar, C.J.) 345

It cannot also be said that the jurisdiction of the High Court to pass interim auxiliary orders under Art. 226 is taken away by necessary implication when the High Court is dealing with habeas corpus petitions in relation to orders of detention passed under R. 30. [348 G] It is only when the High Court is satisfied that prima facie thore is something patently illegal in the order of detention that an order for bail would be passed.

The jurisdiction of the High Court to pass an interim order does not depend upon the nature of the order but its authority to give interim relief to a party which is auxiliary to the main relief to which the party would be enhtled if he succeeds in his petition. [349 E]

The jurisdiction of the High Court to grant relief to tho detenu in such proceedings is very narrow and very limited and that being so, if the Court takes the view that prima facie the allegations in a petition disclose a serious defect in the order of detention which would justify the release of the detenu, the wiser and the more sensible and reasonable course to adopt would invariably be to expedite the hearing of the writ petition and deal with the merits without any delay. [350 A-Bl If an order of bail is made by the High Court without a full trial of the issues involved merely on prima facie opinion formed by it, tho said order would be open to the challenge that is the result of improper exercise of jurisdiction.

It is essential to bear in mind the distinction between the existence of jurisdiction and its proper exercise.

Improper exercise of jurisdiction in such matters must necessarily be avoided by the courts in dealing with applications of this character.

[351 CJ

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 200 of 1965.

Appeal by special leave from the judgment and order dated November 24, 1965 of the Patna High Court in Criminal W.J.C. No. 126 of 1965.

Lal Narain Sinha, Advocate-General, Bihar, Bajarang Sahai, and S. P. Varma, for the appellant.

D. Goburdhan and G. N. Sinha, for respondent No. l.

C. K. Daphtary, Attorney-General, and B. R. G. K. Achar for intervener.

The Judgment of the Court was delivered by

Gajendragadkar, C. J, This appeal by special leave is directed against the order passed by the Patna High Court ordering that the detenu Rambalak Singh be released on bail of Rs. 500 with two sureties of Rs. 250 each to the satisfaction of the Registrar of the High Court. The order further mentions that Mr. Girish Nandan Sinha who appeared for the detenu had given an undertaking to the Court that during the pendency of the proceedings when the petitioner is on bail, the petitioner will not indulge in any prejudicial activity or commit any prejudicial act. Mr. Lal Narain Sinha, the Advocate-General of Bihar, has urged on behalf of the appellant, the State of Bihar, that the order under appeal is without

SUPRBMI! COURT

REPORTS

[1966] 3 S.C.R.

.1urisdiction, and that raises an important question of Jaw as to whether while entertaining a habeas corpus petition under Art. 226 of the Constitution filed on behalf of a detenu who has been detained under Rule 30 of the Defence of India Rules (hereinafter called the "Rules"), the High Court has jurisdiction to release the detenu on bail pending the final disposal of the said habeas corpus petition.

The learned Advocate-General stated at the outset that the appellant was not keen on obtaining the reversal of the order of bail which is under appeal; he urgued that the appellant wanted the point of Jaw to be decided, because it is necessary that the true legal position in this matter should not be in doubt. That is why we do not propose to deal with the facts leading to the habeas corpus petition on behalf of Rambalak Singh and will not consider the propriety, or the reasonableness of the order under appeal.

It is true, as the learned Advocate-General contends, that one rarely comes across a case where the High Court has purported to exercise its jurisdiction under Art. 226 and released a detenu on bail where the order of detention has been passed under R. 30 of the Rules; but that by itself, can afford no assistance in dealing with the question of jurisdiction raised by the present appeal.

The learned Advoatc-General has fairly invited our attention to the observations recently made by this Court in Special Reference No. 1 of 1964Ct>, which are relevant for the purpose of dealing with the present appeal.

In that case, the Legislative Assembly of the State of Uttar Pradesh had committed Keshav Singh, who was not one of its members, to prison for its contempt. Keshav Singh had then moved the Allahabad High Court, Lucknow Bench, under Art. 226 of the Constitution ands. 491 of the Code of Criminal Procedure, challenging his committal as being in breach of his fundamental rights.

He had also prayed for interim bail. The learned Judges who entertained his petition admitted him to bail; and one of the points which arose for decision before this Court in the Special Reference was whether the order passed by the High Court admitting Keshav Singh to bail was without jurisdiction.

Mr. Seervai, who had appeared for the U.P. Assembly, had strenuously contended that the order passed by the High Court admitting Keshav Singh to bail was without jurisdiction, and in support of his contention, he had relied upon the English practice which seems to recognise that in regard to habeas corpus proceedings commenced against orders of commitment passed by the House of Commons on the ground of its contempt, bail is not granted by courts. This argument, however, was rejected by this Court, because this Court took the view that "if Art. 226 confers jurisdiction on the Court to deal with the validity of the order of commit-

(!) (1965] I S.C.R. 413.

- l. ,

.......

• '

BllJAR v. RAMBALAK (Gajendragadkar, C.J.) 347

ment even though the commitment has been ordered by the House, how can it be said that the Court has no jurisdiction to make an interim order in such proceedings?" (p. 498). Reference was also made to an earlier decision of this Court in the State of Orissa

v. Madan Gopal Rungta and Othersf.IJ, where it was ruled that an interim relief can be granted only in aid of, and as auxiliary to, the main relief which may be available to the party on final deternunation of his rights in a suit or proceeding.

It is clear that-this view proceeded on the well-recognised principle that if jurisdiction is conferred by a statute upon a Court, the conferment of jurisdiction implies the conferment of the power of doing all such acts, or employing such means, as are essentially necessary to its execution<2J.

Having thus rejected the contention raised by Mr. Seervai, this Court took the precaution of adding that it was not concerned to enquire whether the order admitting Keshav Singh to bail was proper and reasonable or not; all that this court was then concerned to consider was whether the said order was without jurisdiction, and on this point the opinion expressed by this Court was that in passing the order of interim bail, the High Court cannot be said to have exceeded its jurisdiction.

The learned Advocate-General does not dispute the correctness of these observations. He, however, argues that this principle cannot be invoked in cases where a detenu is detained under R. 30 of the Rules. The policy underlying the enactment of the Defence of India Act and the Rules, and the object intended to be achieved by the detention which is authorised under R. 30, clearly indicate that there are other valid considerations of paramount importance which distinguish the detention made under R. 30 and that alters the character of the proceedings initiated by or on behalf of the detenu under Art. 226. It is conceded that even in regard to orders of detention passed under R. 30, it would be competent to the High Court to order release of the detenu if the High Court is satisfied that the impugned order has been passed ma/a fide.

There is also no doubt that the order of detention can be set aside if it appears to the High Court that on the face of it, it i:; invalid, as for instance, when it appears to the High Court that the face of the order shows that it has been passed by an authority not empowered to pass it.

But the argument is that in dealing with the question as to whether the High Court can grant interim bail to a detenu in habeas corpus proceedings commenced on his behalf under Art. 226, the Court cannot ignore the fact that the detention purports to have been made in order to safeguard the defence of India and civil defence, public safety, maintenance of public order, India's relations with foreign powers, maintenance of peaceful conditions in any part of India, efficient conduct of military operations or the maintenance of

(I) [1952] S.C.R. 28.

(2) Muwell OD Interpretation or Statute• 11th ed., p. 350.

SUPREME COURT

REPORTS

( 1966] 3 S.C.R.

supplies and services essential to the life of the community. The very object of making an order of detention against a citizen is to put an end to his prejudicial activities which are likely to affect one or the other of the matters of grave public importance specified by R. 30, and so, it would be illogical to hold that even before the Court comes to any decision as to the merits of the grounds on which the order of detention is challenged, it would be open to the Court to pass an interim order of bail; and that, it is urged, distinguishes habeas corpus proceedings in relation to orders of detention passed under R. 30 of the Rules.

We arc not impressed by this argument. If on proof of certain conditions or grounds it is open to the High Court to set aside the order of detention made under R. 30 of the Rules, and direct the release of the detcnu, we do not sec how it would be possible to hold that in a proper case, the High Court has no jurisdiction to

make an interim order giving the detrnu the relief which the High Court would be entitled to give him at the end of the proceedings.

The general principle on which the obser, ations of this C our! were based in the Special Reference would apply as much to the habeas rorpus proceedings commenced on behalf of a detenu detained under R. 30 of the Rules as to any other habeas corpus proceedings.

If the Court has jurisdiction to give the main relief to the deteu at the end of the proceedings, on principle and in theory, it is not easy to understand why the Court cannot give interim relief to the detenu pending the final disposal of his writ petition. The interim relief which can be granted in habeas corpus proceedings must no doubt be in aid of, and auxiliary to, the main relief. It cannot be urged that releasing a detenu on bail is not in aid of, or auxiliary to the main relief for which a claim is made on his behalf in the writ petition.

It is true that in dealing with the question as to whether interim bail should be granted to the detenu, the Court would naturally take into account the special objects which are intended to be achieved by orders of detention passed under R. 30.

But we are dealing with the bare question of jurisdiction and arc not concerned with the propriety or the reasonableness of any given order. Considering the 4ucstion as a hare question of jurisdiction, we arc reluctant to hold that the jurisdiction of the High Court to pass interim auxiliary orders under Art. 226 of the Constitution can be said to have been taken away by necessary implication when the High Court is dealing with habeas corpus petitions in relation to orders of detention passed under R. 30 of the Rules.

-;-~ It is, however, urged by the learned Advocate-General that the order of bail in the present proceedings and indeed any order of bail passed in such proceedings would not be interim but would be final; and that, it is pointed out, distinguishes cases of this character from other cases of ha/:eas corpus petitions. The argument is 1hat if a person is convicted and he seeks to challenge the legality

• It '

- 1 ,

BIHAR v. RAMBALAK (Gajendragadkar, C.J.) 349

of the conviction by habeas corpus proceedings under Art. 226, the interim bail would be interim in the sense that if the proceedings fail, the person concerned will have to return to jail and run out the sentence imposed on him.

Reverting to the case of Keshav Singh, it was urged that if the writ petition filed by Keshav Singh had failed, he would have been compelled to return to jail and run out the sentence pronounced on him by the U.P. Legislative Assembly.

The cases in regard to detention effected by R. 30, however, stand on a different footing. There is no period imposed by the orders of detention:; they can be renewed from time to time as authorised by the respective relevant Rules, and the object of making C the order is to prevent the commission of prejudicial acts of the detenu. In such a case, if the writ petition ultimately fails, it may be that the detenu returns to jails; but his return to jail under such circumstances is not comparable to the return to jail of the detenu who was convicted and who was allowed interim bail in proceedings by which he challenged the legality of his conviction.

This argument also is not well-founded. It is obvious that when the High Court releases a detenu on bail pending the final disposal of his habeas corpus petition, the High Court will no doubt take all the relevant facts into account and it is only if and when the High Court is satisfied that prima facie, there is something patently illegal in the order of detention that an order for bail would be passed. The jurisdiction of the High Court to pass an interim order does not depend upon the nature of the order, but upon its authority to give interim relief to a party which is auxiliary to the main relief to which the party would be entitled if it succeeds in its petition. Therefore, considered as a mere proposition of law, we see no reason to accept the argument of the learned Advocate-General that the principle enunciated by this Court in the Special Reference has no application to habeas corpus petitions filed under Art. 226 in relation to orders of detention passed under R. 30 of the Rules.

Having thus rejected the main argument urged by the learned Advocate-General, we must hasten to emphasise the fact that though we have no hesitation in affirming the jurisdiction of the High Court in granting interim relief by way of bail to a detenu who has been detained under R. 30 of the Rules, there are certain inexorable considerations which are relevant to proceedings of this character and which inevitably circnmscribe the exercise of the jurisdiction of the High Court to pass interim orders granting bail to the detenu. There is not doubt that the facts on which the subjective satisfaction of the detaining authority is based, are not justiciable, and so, it is not open to the High Court to enquire whether the impugned order of detention is justified on facts or

SUPREME OOURT REPORTS

(1966] 3 S.C.R.

not. The jurisdiction of the High Court to grant relief to the detenu in such proceedings is very narrow and very limited. That being so, if the High Court takes the view that prima facie, the allegations made in the writ petition disclose a serious defect in the order of detention which would justify the release of the detenu, the wiser and the more sensible and reasonable course to adopt would invariably be to expedite the hearing of the writ petition and deal with the merits without any delay. Take the case where ma/a jides are alleged in respect of an order of detention. It is difficult, if not impossible, for the Court to come to any conclusion, even prima facie, about the ma/a jides alleged, unless a return is filed by the

State. Just as it is not unlikely that the High Courts may come across cases where orders of detention are passed ma/a fide, it is also not unlikely that allegations . of ma/a fides arc made light heartedly or without justification; and so, judicial approach necessarily postulates that no conclusion can be reached, even prima facie, as to ma/a jides unless the State is given a chance to file its return and state its case in respect of the said allegations; and this emphasises the fact that even in regard to a challenge to the validity of an order of detention on the ground that it is passed ma/a.fide, It would not be safe, sound or reasonable to make an interim order on the prima facie provisional conclusion that there may be some substance in the allegations of ma/a jides. What is true about ma/a fides is equally true about other infirmities on which an order of detention may be challenged by the detenu. That is why the limitation on the jurisdiction of the Court to grant relief to the detenus who have been detained under R. 30 of the Rules, inevitably introduce a corresponding limitation on the power of the Court to grant interim bail.

In dealing with writ petitions of this character, the Court has naturally to bear in mind the object which is intended to be served by the orders of detention. It is no doubt true that a detenu is detained without a trial; and so, the courts woutd inevitably be anxious to protect the individual liberty of the citizen on grounds which are justiciable and within the limits of their jurisdition. But in upholding the claim for individual liberty within the limits permitted by law, it would be unwise to ignore the object which the orders of detention arc intended to serve. An unwise decision granting bail to a party may lead to consequences which are prejudicial to the interests of the community at large; and that is a factor which must be duly weighed by the High Court before it decides to grant bail to a detcnu in such proceedings. We are free to confess that we have not come across cases where bail has been granted in habeas corpU3 proceedings directed against orders of detention under R. 30 of the Rules, and we apprehend that the reluctance of the courts to pass orders of bail in such proccedinp is obviously based on the fact that they are fully conscious of the

A -

B!HAR v. RAMBALAK (Gajendragadkar, C.J.) 351

difficulties-legal and constitutional, and of the other risks involved in making such orders. Attempts are always made by the courts to deal with such applications expeditiously; and in actual practice, it would be very difficult to come across a case where without a full enquiry and trial of the ground on which the order of detention is challenged by the detenu, it would be reasonably possible or permissible to the Court to grant bail on prima facie conclusion reached by it at an earlier stage of the proceedings.

If an order of bail is made by the Court without a full trial of the issues involved merely on prima facie opinion formed by the High Court, the said order would be open to the challenge that it is the result of improper exercise of jurisdiction. It is essential to bear in mind the distinction between the existence of jurisdiction and its proper exercise. Improper exercise of jurisdiction in such matters must necessarily be avoided by the courts in dealing with applications of this character. Therefore, on the point raised by the learned Advocate-General in the present appeal, our conclusion is that in dealing with habeas c.orpus petitions under Art. 226 of the Constitution where orders of detention passed under R. 30 of tho Rules are challenged, the High Court has jurisdiction to grant bail, but the exercise of the said jurisdiction is inevitably circumscribed by the considerations which are special to such proceedings and which have relevance to the object which is intended to be served by orders of detention properly and validly passed under the said Rules.

We have already indicated that the learned Advocate-General has fairly stated that the appellant has brought the present appeal to this Court not for the purpose of challenging the correctness, propriety or reasonableness of the order under appeal, but for the purpose of getting a decision from this Court on the important question of jurisdiction raised by the said order. We do not, therefore propose to consider the question as to whether the order under appeal is proper, reasonable or valid.

The result is, the appeal fails and is dismissed.

Appeal dismissed.

TIIE STATE OF BIHAR

RAMBALAK SINGH AND OTHERS

January 17, 1966

V. RAMASWAMI

P. SATYANARAYANA RAJU, JJ.

Art. 226

Defence of India Rules, 1962

Defence of India Rules, 1962

Art. 226

Art. 226

Art. 226

Lal Narain Sinha

Bajarang Sahai

S. P. Varma

D. Goburdhan

G. N. Sinha

C. K. Daphtary

B. R. G. K. Achar

Gajendragadkar

Patna High Court

Rambalak Singh

Girish Nandan Sinha

Lal Narain Sinha

Bihar

State of Bihar

Art. 226

Art. 226

Keshav Singh

Allahabad High Court, Lucknow Bench

Art. 226

Code of Criminal Procedure

Seervai

U.P. Assembly

Art. 226

Art. 226

Art. 226

India

Art. 226

Art. 226

U.P. Legislative Assembly

Art. 226

Art. 226


K. G. KHOSLA & CO.

I'.

DEPUTY COMMISSIONER o•· COMMERCIAL TAXES

January 18, 1966

[P. B. GAJENDRAGADKAR, c. J., J. c. SHAH, s. M. SIKRI

V. RAMASWAMI AND SATYASARAYA1'A RAJU, JJ.)

Central Sc.In Ta.t Act, 1956 (64 of 1956), s. 5(2)-Sai<r in tlu courSI of i1nport 1"1t•a11in~ of.

The ap_pellant enlered into a contract wj1h the Direclor-General ot Civil Suphe"· New Delhi far the supply of .xle bodies manufactured by 1t5 pnnc1pals 1n Belgium. -rhc goods 1,1, crc in:; pectctl on behalf of the

buyer~ in Beliun1 but under the contract they were liable to rejection after further in,; pe...:tion in India. In pur5uance of the contract the appellant supplied axlebodie• to the Southern Railway at Perambur and Mysore. 'fhe Joint Comn1l!rcial Tax ~)nicer Madras rejectt.-d the con. tention of the appellant th;, i, t the salel ere in the coure of import.

He held that the said sales \Vere intra-State sales because the seller wa-; thlJ consignee of the good:; and the buyer h41.d reserved the right to reject the goods even afler their arriv; i( in lndi:i.

He made ;, in assessment under the Madras General Sale-; Tax Act in respect of 1he -; upplics at Pcr<unbur and another assmcnt under ihc- Central Sales rax Ac1 in respect of the supplies at Myo; orc. rhe ; ippellant tiled ;1ppealo; against the as.; e-; menl! but the Appellant Assitant Comn1bsioner rejected them. 'fhe Tribunal held that part of' the gooJ_, , ere sold in the course of import.

Againt the Tribunal's orders both parties file<l tv•o reviion:; each in the High Court.

The High Court allO\\ed the petitioni filed by the State and rejcc; eJ thoe

filed hy the asses, ee. It held that '"before a sale c:in he s<iid to h;1\'e occasioned the import it is nece .. -; ary that the S<1le c; hould have prcccc.led tho import" and as the sale had not taken placl! at Belgium there "-'<l'i no quc~ tion of sale occasioning the import of the good<:;.

The appellant then came to this C'-0urt by speci.:il leave.

On behalf of the re.; pondents two preliminary objection" v.e-e r.liscd : ( 1) The appr.:llant had no£ complied with O.Xlll r. 2 of the Supreme Court Rules, 1950 before coming to this Court; (2) The appellant h; id filed only two appeal< in this Court whilo the High Court's judgment !..:overed four re\'ision pctition'i.

HELD : (i) 'lhe appellant had not filed a petition for certificale before the Madras High Court as required hy O.XllI r. 2 becau'ie of the view of that High Court that no c; uch petition lay in Revenue matters. There fore non-compliance wilh 0.Xlll r. 2 could he condoned.

(ii) Two revisions were filed in the High Court by the •ppellont and two by the State in respect of tY.'O assessment orders and they were disposed of by a common judgn1ent. The subject matler of lhe four revisions were two assegsmcnts, one under the Madras General Sates Tax Act and the other under the Central Sal"' Tax Act. The appellant was quite right in tiling two appeals before this Court. [356 B-D]

"(tii) Section 5(2) of the Central Sales Tax Act does not lay down any condilion that before a sa1e could be said to have occasil)fled import it i!

,..

A necessary that the sale should have preceded the import. Tho High Court wrongly held so. [358 D-E]

Tata Iron & Steel Co. Ltd. v. S. R. Sarkar, [1961] I S. C. R. 379, relied on. ·

The Cement Marketing Co. of India v. State of Mysore, [1963] 3 S.C.R. 777 State Trading Corporation of India v. State of Mysore, [1963] 3 S.C.R. 792 and Singareni Collieries Co, v. Commissioner of Commercial Taxes, Hyderabad, [1966] 2 S.C.R. 190, referred to.

(iv) Jn the present case it was quite clear from the contract that it wa-s incidental to the contract that the axle-box bodies. would be manufactured in Belgium, inspected there, and imported into India for the consignee.

Movement of goods from Belgium to India wa5 in -pursuance of the conditions of the contract between the assessee and the D!fector-General of Supplies. There was no possibility of those good• being diverted by the assessee for any other purpose. Consequently the saleg took place in the couroe of import of goods within •· 5(2) of the Act and were therefore exempt from taxation. [358 Fi

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 143 and 144 of 1965.

Appeal by special leave from the judgment and order date August 16, 1963 of the Madras High Court in Tax Cases Nos. 100, 219, 220 and 225 of 1962.

Veda Vyasa and K. K. Jain, for the appellant.

E A. Ranganadham Chetty and A. V. Rangam, for the respon

dent.

The Judgment of the Court was delivered by

Slkri, J. These two appeals by special leave are directed against the judgment of the Madras High Court in Tax Cases Nos.

100, 219, 220 and 225 of 1962, and involve the interpretation of s. 5(2) of the Central Sales Tax Act (64 of 1956)-hereinafter referred to as the Act. The relevant facts are these. The appellant K. G. Khosla & Co., hereinafter referred to as the assessee entered into a contract with the Director-General of Supplies and Disposal, New Delhi, for the supply of axle-box bodies. According to the contract the goods were to be manufactured in Belgium, and the D.G.I.S.D., London, or his representative, was to inspect the goods at the works of the manufacturers. He was to issue an inspection certificate. Another inspection by the Deputy Director of Inspections, Ministry of W.H. & S., Madras, was provided for in the contract. It was his duty to issue inspection notes on Form No. WSB.65 on receipt of a copy of the Inspection Certificate from the D.G.I.S.D. London and after verification and visual inspection. The goods were to be manufactured according to specifications by M/s La Brugeoies. ET. Nivelles, Belgium. Thee

assessee was entitled to be paid 90 % after inspection and delivery of the stores to the consignee and the balance of 10% wa! payable on final acceptance by the consignee. In the case of deliveries on F.O:R. basis, the assessee was entitled to 90 % payment after inspection on proof of despatch and balance 10 % after receipt of stores by the consignees in good condition. The date of delivery was "in 8 months ex-your principal's works from the date of receipt of order and the approved working drawings, i.e. delivery in India by 31-7-1957, or earlier." The assessee was entirely responsible for the execution of the contract. Clause 17(1) of the Contract provides:

"The Contractor is entirely responsible for the execution of the contract in all respects in accordance with the terms and conditions as specified in the A/T and the schedule annexed thereto. Any approval which the Inspector may have given in respect of the stores, materials or other particulars and the work or workmanship involved in the contract (whether with or without test carried out by the contractor's Inspector) shall not bind the purcha!er and notwithstanding any approval or acceptance given by the Inspector, it shall be lawful for the consignee or the stores on behalf of the Purchaser to reject the stores on arrival at the destination, if it is found that the stores supplied by the contractor are not in confirmity with the terms and conditions of the Contract in all respects."

Further, the assessee was responsible for the safe arrival of the goods at the destination. By an endorsement the D.G.l.S.D., London, was requested to issue pre-inspection delay reports regularly to all concerned, including the Railway Liaison Officer, C/o D.G.S. & D. Shahjahan Road, New Delhi. He was also requested to endorse copies of the Inspection Certificates to the Director of Inspection, Ministry of W.H. & S. Bombay. It is further found by the Sales Tax Appellate Tribunal that "the Belgian manufacturers, after manufacture, consigned the goods to the appellants by ship under bills of lading in which the consignee was the appellants themselves. The goods were consigned to Madras Harbour, cleared by the appellant's own clearing agents and despatched for delivery to the buyers thereafter."

In pursuance of this contract, the asscssee supplied axle-box bodies of the value of Rs. 1,74,029.50 to the Southern Railway at Perambur Works and of the value of Rs. 1,32,987.75 to Southern Railway, Mysore. The Joint Commercial Tax Officer held that the former sales were liable to tax under the Madras General Sales Tax Act and the latter under the Central Sales Tax Act.

He rejected the contention of the asscssee that the sales were in the . course of import.

He held that "there was no privily of contract

• ' '

1 ' .

_.,

A ,. ..

~ ..

/ •

between the foreign seller and the Government for the goods ..

The goods were shi\, ped only as the goods of the seller and intended for them. They were cleared as their own and delivered after clearance. The transaction is therefore one of intra-state sales. and not one in the course of import. The sale is completed only when the goods are delivered in this state and so it is not occasioning the import. It is also seen from the contract of sale that the terms of delivery are F.0.R. Madras. Again Cl. (1) of the contract says that any approval where the Inspector may have given in respect of stores materials or other particulars and the work or workmanship involved in the contract shall not bind the purchaser and notwithstanding any approval or acceptance given by the Inspector it shall be lawful for the consignee of the stores on behalf of the purchaser to reject the stores on arrival at the destination. It will be seen from the words underlined by me that the purchaser has reserved the right to reject the goods even though an inspection of the goods might have been made. So there is no force in the argument of the dealer that the goods were appropriated to the contract of sale."

The assessee filed two appeals but the Appellate Assistant Commissioner, agreeing with the Joint Commercial Tax Officer, rejected the appeals. The Appellate Tribunal on appeal held that the property in the goods had not passed on to the buyers even while the goods were with the Belgian manufacturers and that the sale by the appellants had not occasioned the imports. The Tribunal, however, accepted the contention of the assessee that sales. to the extent of Rs. 22,983 75 and Rs. !0,987.50 had taken place in the course of import as the goods had been appropriated to the contract while the goods were on the high seas.

The assessee then filed two revisions before the High Court and the Deputy Commissioner of Commercial Taxes, Madras filed two revisions challenging the deductions of the two sums of

Rs. 22,983 75 and Rs. 10,987 50. The High Court allowed the petitions filed by the State and dismissed the petitions filed by the assessee. It rejected the contention of the assessee that the property in the goods must be deemed to have passed at the stage when the goods were approved by the representative in the factory of the manufacturers at Balgium. The High Court further rejected the contention of the assessee that the sale by the assessee to the Government Department had occasioned the import on the ground that "before a sale can be said to have occasioned the import, it is ncccs, ary that the sale should have preceded the import", and as the sale had not taken place at Belgium there was no question of the sale occasioning the import of the goods.

Before we deal with the merits of the appeals, we must dispose of two preliminary objections raised by Mr. Ranganadham Chetty.

-0n behalf of the respondents. Basing himself on Management of A Ilindusthan Commercial Bank Ltd. v. Bhagwan Dass(') he urged that the assessee should have filed an application for leave to appeal before the High Court before applying for special leave.

We see no force in this objection. It is common ground that the Madras High Court had at the relevant time consistently taken the view that no application for leave to appeal to Supreme Court lay before the High Court in matters involving revenue. In these circumstances we dispense with the requirement of Order XIII, r. 2 of the Supreme Court Rules, and overrule the objection. The second preliminary objection raised by him was that the assessec should have filed four appeals and not two appeals because there were four revision petitions before the High Court. We see no force in this objection also. Two revisions were filed by the assessce and two by the State in respect of two assessment orders and they were disposed of by one common judgment. The subject matter of the four revisions were two assessments, one under the Madras General Sales Tax Act and the other under the Central Sales Tax Act. In our opinion, the assessce was qtiitc right in filing two appeals before this Court.

The learned counsel for the assessce Mr. Ved Vyasa, raised two points before us : First that the 'ales were in the course of import within the meaning of s. 5(2) of the Act; and secondly that the property in the goods passed in Belgium and consequently the sales were outside the State within the meaning of art. 286(1) (a) of the Constitution. As we are of the opinion that the asscssce must succeed on the first point it will not be necessary to deal with the second point.

Section 5(2) of the Central Sales Tax Act provides :

"5(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India."

Section 3 of the Act, which deals with inter-state trade and commerce may also be set out as it employs the same terminology and has been interpreted by this Court. S. 3 reads :

"A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the 'ale or purchase-

(a) occasions the movement of goods from one State to another; or

(I) (I965j 2 S.C.R. 265.

~.

(b) is effected by a transfer of documents of title to the goods during their movement from one State to another."

~ , It is not necessary to set out the two Explanations to s. 3. •' It seems to us that the expression "occasions the movement

- -'

B of goods" occurring in s. 3(a) and s. 5(2) must have the same meaning. In Tata Iron and Steel Co. Ltd. Bombay v. S. R. Sarkar,(') Shah, J. speaking for the majority, interpreted s. 3 as follows:

"In our view, therefore, within clause (b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by transfer of documents of title thereto: clause

(a) of section 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State."

These observations of Shah, J., were cited with appreval by this Court in The Cement Marketing Co. of India v. The State of Mysore(2).

This case, it is true, was not dealing with the Central Sales Tax Act, but the Court was dealing with a similar question arising 1mder art. 286 of the Constitution, before its amendment. But the same Bench, in dealing with a case arising under the Act (The State Trading Corporation of India v. The State of Mysore<'>) again approved of the observations in Tata Iron and Steel Co. caseOl.

Sarkar, I., observed thus:

"The question then is, did the sales occasion the movement of cement from another State into Mysore within the meaning of the definition? In Tata Iron and Steel Co., Ltd. v. S . . R. Sarkar<'J it was held that a sale occasions the movement of goods from one State to another within section 3(a) of the central Sales Tax Act, when the movement "is the result of a covenant or incident of the contract of sale." That the cement concerned in the disputed sales was actually moved from another State into Mysore is not denied. The respondents only contend that the movement was-not the result of a covenant in or an incident of the contract of sale."

This Court then, on the facts of the case, found that the movement of cement from another State into Mysore was the result of a covenant in the contract of sale or incident of such contract. This Court did not go into the question as to whether the property had

(I) [1961] I S.C-R. 379 : II S.T.C. 655.

passed before the movement of the goods or not, and this was be A cause according to the decision in Tata Iron and Steel Co. v. S. R.

SarkarC'> it did not matter whether the property passed in one State or the other. Tata Iron & Steel Co.C 1> case was again followed by this Court in Singareni Collieries Co. v. Commissioner of Commercial Taxes, Hyderabad(').

The learned counsel for the respondent, Mr. A. Ranganadham Chetty, invited us to hold that the observations of Shah, J., in Tata Iron and Steel Co. {1) case were obiter, and to consider the question afresh.

We are unable to reopen the question at this stage. Shah, J., was interpreting s. 3 of the Act, and although the Court was principally concerned with the interpretation of s. 3{b), it was necessarv to consider the interpretation of s. 3{a) in order to arrive at the correct interpretation of s. 3(b). Further these observations were approved in The Cement Marketing Co. of India

v. The State of Mysore('), The State Trading Corporation of !11dia,

v. The State of Mysore(') and Singareni Collieries Co. v. Commissioner of Commercial Tax, Hyderabad(').

In the State Trading Corporation(•) case, in so far as the assessment for the assessment year 1957-58 was concerned, this Court applied the principles laid down in Tata Iron and Steel Co.(1) case. Accordingly we hold that the High Court was wrong in holding that before a sale could be said to have occasioned import it is necessary that the sale should have preceded the import.

The next question that arises is whether the movement of axle-box bodies from Belgium into Madras was the result of a covenant in the contract of sale or an incident of such contract.

It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle-box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee. Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose.

Consequently we hold that the sales took place in the course of import of goods within s. 5(2) of the Act, and are, therefore, exempt from taxation.

In the result the appeals are allowed, the judgment of the High Court reversed and the assessment orders quashed. The appellant will have his costs here and in the High Court. One set of hearing fee.

----·---··-- (!) (1961) l S.C.R. 379: 11 S.T.C. 655.

Appeals allowed.

(2) (1966] 2 S.C.R. 190.

(4) (1963] 3 S.C.R. 792: 14 S.T.C. 188.

K. G. KHOSLA & CO

P. B. GAJENDRAGADKAR

c. SHAH

s. M. SIKRI

V. RAMASWAMI

SATYASARAYA1'A RAJU, JJ.

s. 5(2)

India

Perambur

Mysore

Belgium

Supreme Court Rules, 1950

Madras High Court

Section 5(2)

Central Sales Tax Act

[1963] 3 S.C.R. 777

[1963] 3 S.C.R. 792

[1966] 2 S.C.R. 190

Veda Vyasa

K. K. Jain

E A. Ranganadham Chetty

A. V. Rangam

Slkri

s. 5(2)

Central Sales Tax Act

K. G. Khosla & Co.

New Delhi

London

of W.H. & S., Madras

D.G.I.S.D. London

La Brugeoies

Clause 17(1)

Ministry of W.H. & S. Bombay

Sales Tax Appellate Tribunal

Madras

Southern Railway

Perambur Works

Southern Railway, Mysore

Central Sales Tax Act

Balgium

Ranganadham Chetty

Supreme Court

Central Sales Tax Act

Ved Vyasa

s. 5(2)

art. 286(1)

Section 5(2)

Central Sales Tax Act

Section 3

S. 3

s. 3

s. 3(a)

s. 5(2)

Shah

s. 3

section 3

section 3

Central Sales Tax Act

art. 286

Tata Iron and Steel Co.

Sarkar

section 3(a)

Sales Tax Act

Tata Iron & Steel Co.

A. Ranganadham Chetty

s. 3

s. 3

s. 3

s. 3(b)

Tata Iron and Steel Co.(1

s. 5(2)

(1966] 2 S.C.R. 190

(1963] 3 S.C.R. 792