judgement:
Civil Appeal No. 2183 of 1984.
From the Judgment and Order dated 28.3.1984 of the Kerala High Court in W. P. No. 131 of 1982.
M. K. Ramamurthi, V. J. Francis and N. M. Popli for the Appellants.
G. D. Gupta, Ms. Halida Khatun, Subba Rao, R. N. From the Judgment and Order dated 28.3.1984 of the Kerala High Court in W. P. No. 131 of 1982.
Poddar, Ms. Subhadra, Ms. Alka, B. B. Tawaklcy and Mrs. Urmila Kapur for the Respondents.
The Judgment of the Court Was delivered by DESAI, J.
Chagrined by the failure of the attempt to pressurise junior engineers to boycott the examination and further irritated by the holding of the examination the appellants have knocked at the 883 doors of this Court, putting forth utterly unsustainable contentions.
Appellants are junior engineers in the Telegraph Wing of the Post & Telegraph Department.
The next avenue of promotion for a Junior Engineer is the post of Assistant Engineer.
Promotions were governed by Telegraphic Engineering Service (Class Il) Recruitment Rules, 1966 ( '1966 Rules ' for short ).
By these rules Telegraphic Engineering Service ( Class Il ) was formed.
The Rules were to apply to posts as specified in Clause (I) of the Schedule which specified the post of Assistant Engineer and other equivalent posts having allied designations.
Clause (I) in Appendix I to the 1966 Rules provides that recruitment to the service shall be entirely by promotion on the basis of selection of Junior Engineers through a qualifying departmental examination.
An approved list shall he ' prepared by a duly constituted Departmental Promotion Committee, by selection from amongst the officials who qualifying the departmental examination.
Sub Clause (4) provided that the departmental qualifying examination shall be open to Junior Engineers who fulfill, amongst others, the condition specified therein.
It reads as under: "Those recruited and absorbed in that grade against the vacancies of a year, ordinarily, not less than five years prior to the year of announcement of the said examination.
These rules were in force till superseded by Telegraphic Engineering Service (Group Posts) Recruitment Rules, 1981 ( '1981 Rules ' for short) enacted in exercise of the power conferred by the proviso to Article 309 of the Constitution with effect from May 7, 1981.
The controversy centers round the Note appended to sub clause (4 of Appendix I of 1981 Rules which reads as under: "40 There shall be normally one examination, consisting of two parts called Qualifying cum Competitive Examination for promotion to the Service and shall be held at least once in a calendar year in the manner and in accordance with the syllabus prescribed in Appendix Ill to these rules.
Note: After the commencement of these rules, the first two examinations shall only be competitive for which the eligibility shall be restricted to only those officers who have 884 already qualified in the Departmental Qualifying Examination held before the commencement of these rules.
" Appellants were recruited as Junior Engineers in the year 1973.
ln other words, they belong to 1973 batch.
Their grievance is that they have completed five years of service which conferred on them eligibility to appear at an examination which was to be held under 1966 Rules.
1966 Rules contemplated only one examination styled as Qualifying Departmental Examination.
1981 Rules which superseded 1966 Rules provide for one examination to be held in two parts namely Qualifying Examination and Competitive Examination.
Before one is permitted to take a Competitive Examination he has to clear Qualifying Examination.
In short, if one has not qualified at the Qualifying Examination he can not take the Competitive Examination.
The appellants ' grievance is that from 1973 to 1982 or to be specific after 1978 when they became eligible to take Qualifying Examination no Qualifying Examination was held till May 7, 1981 when 1966 Rules were superseded by 1981 Rules which introduced the concept of Competitive Examination which could alone be taken after in qualifying the Qualifying Examination and for a period of two years as per the Note appended to clause (4) Qualifying Examination was not to be held.
The contention is that this is an invidious manner of denying them the opportunity to take the examination and thereby deny them equality of opportunity in the matter of promotion.
Appellants accordingly filed O.P. No. 5714/81 under article 226 of the Constitution in the High Court of Kerala impugning the constitutionality of the Note appended to clause (4) of Appendix I to 1981 Rule.
A learned Single Judge of the High Court, before whom the petition came up for hearing, held that the policy reflected in the Note appended to clause (4) of Appendix I to 1981 Rules is irrational as it has no reasonable connection with the needs of the office or the object sought to be attained.
A direction was given that the Note shall be applied to the appellants.
By the judgment rendered on March 9, 1982, the learned Judge gave a further direction that the department can either hold the over due qualifying examination of 1980 or it can hold the qualifying cum competitive examination but it must be done forthwith so that the appellant who were petitioners before the High Court may not be altogether 885 excluded from the examination or examinations to be held.
The respondents to the writ petition, the Union of India and others filed Writ Appeal No. 131 of 1982 which came up before a Division Bench of the High Court.
The Division Bench disagreed with the learned Single Judge observing that the Note to Rule 4 is not ultra vires but this was subjects to the further directions given by the Division Bench.
Taking note of the fact that in the meantime, a competitive examination was conducted, a direction was given that the result be published and the candidates who are declared successful in the examination should be appointed to 33 1/3% of the vacancies which arose between May 7, 1981 and May 7, 19 82.A further direction was given that the second competitive examination contemplated in note to clause (4) must be conducted after a qualifying examination as envisaged in 1966 and/or 1981 Rules is conducted within a period of six months from the date of the judgment and all those examinees found declared successful at the qualifying examination be permitted to take the competitive examination which must be held within six months from the date of the result of the earlier examination.
A direction was given that the candidates declared successful at the competitive examination be appointed to 33 1/3% quota of posts in the vacancies that arose between May 7, 1982 and May 7, 1983.
There was some further directions which are hardly material for the present purpose.
The writ appeal was disposed of in these terms.
Original petitioners aggrieved by the decision of Division Bench have filed this appeal by special leave.
By sheer passage of time, this appeal and even the main petition have become infructuous.
Even in service jurisprudence the clock of history, sometimes, cannot be put back and even if it is found that the respondents have committed an error in implementing the statutory rules no relief can be granted.
This is one such case.
Appellants are Junior Engineers of the 1973 batch belonging to the service styled as Telegraphic Engineering Service (Class II) re designated as Telegraphic Engineering Service (Group Posts).
Appellants as Junior Engineers can look forward to become Assistant Engineers by promotion.
Indisputably, the recruitment to the post of Assistant Engineer in the service is by promotion from 886 the cadre of Junior Engineers.
Under the 1966 Rules, Junior Engineers would become eligible for promotion on qualifying at a qualifying examination.
The eligibility criterion for taking the examination was service of five years.
Appellants who are Junior Engineers of 1973 batch became eligible for taking the examination that may be held in 1978 and onwards.
Once in November, 1980 and another in January, 1981, programme of holding qualifying examination, where 1973 recruits could have appeared, was announced but subsequently cancelled and on May 7, 1981, 1966 Rules were superseded by 1981 Rules.
1981 Rules envisaged a qualifying cum competitive examination.
Eligibility criterion for taking competitive examination was successful clearance of qualifying examination.
Therefore, unless a qualifying examination is held one would have no chance to take competitive examination.
For 1973 recruits no qualifying examination is held.
In 1981 Rules by a note appended to clause (4) of Appendix 1, it was provided that the next two examinations under 1981 Rules would only be competitive examination.
The sum total of these developments would certainly come in the way of appeallants who are of 1973 batch from taking competitive examination and unless they qualify at that examination they would not be eligible for promotion to the post of Assistant Engineer.
In 1982 a competitive examination was held.
Junior Engineers who were recruited prior to 1973 and who had qualified at the qualifying examination held in August 1980 could appear at this competitive examination.
As Junior Engineers of 1973 and sub" sequent batches were not admitted to qualifying examination held in 1982 and as no qualifying examination was held in November 1980 and January 1981 and as two examinations under the 1981 Rules were only to be competitive examination, certainly they have been denied an opportunity to take the examination.
Appellants who similarly situated persons tried extra constitutional methods to pressurise the powers that be, from holding the qualifying examination and subsequently from declaring its results.
This Court had to interpose to put down such pressure tactics by a mandatory direction given at an interim stage that the results of the examination already held must be declared.
We are informed that the results have been declared.
887 Mrs. Urmila Kapoor, learned counsel represented one such successful candidate.
Even though the results are declared, the follow up action of promotion and appointment has not been taken.
We propose to give appropriate directions in this matter.
In the backdrop of these facts, can it be said that the appelIants have been victimised or subjected to discriminatory treatment or have been denied equality of opportunity in the matter of pro motion.
Appellants do not question the legality of rules which prescribe a qualifying cum competitive examination for becoming eligible for promotion to the post of Assistant Engineer.
Their grievance is that note 4 appended to clause I introduces discrimination In that Junior Engineers of 1972 and prior batches will alone be able, if they had cleared the qualifying examination, to take the competitive examination which would be held under 1981 Rules and as only the competitive examination was to be held, Junior Engineers of 1973 and subsequent batches, even if they have put in five years of qualifying service, would be denied an opportunity to i take the examination.
The learned Single Judge of the High Court held the note to be ultra vires.
We find it difficult to agree with the view of the learned Single Judge in this behalf.
However the Division Bench has clearly opined that the note is not ultra vires.
Mr. Ramamurthy, learned counsel for the appellants contended that the note inheres the pernicious tendency of denying equality of opportunity in the matter of taking examination because it permits the department to provide a bottleneck coming in the way of Junior Engineers of the 1973 batch from taking the competitive examination by not holding the qualifying examination.
We see nothing wrong in the policy disclosed by the note.
lt was pointed out that by 1982 nearly 7, 000 Junior Engineers had become eligible for taking competitive examination.
There was some dispute about the figure but we are prepared to accept the figure as given by Mr. Ramamurthy, learned counsel that 4, 000 Junior Engineers of pre ` 1973 batch were qualified for taking competitive examination.
Mr. Ramamurthy contended that if the eligibility criterion is five years of service DO artificial road block could be created so as to come in the way of such qualified Junior Engineers from taking the examination.
As an additional string to the bow, it was submitted that if the purpose of holding a competitive examination is to select best all eligible persons must be permitted to take the examination and ll 888 no artificial barrier need to be created.
It was submitted that not holding of the qualifying examination creates such an impermissible road block in the way of Junior Engineers of 1973 and subsequent batches from taking competitive examination.
If by 1982, more than 4, 000 Junior Engineers of pre 1973 batch had become eligible to take the examination and if the accumulated number of vacancies was around 300, it is difficult to accept the submission of Mr. Ramamurthy that everyone who has just put in five years of service must be permitted to take the examination.
It is a known principle of service jurisprudence that even though mini mum eligibility criterion is fixed enabling one to take the examination yet the examination can be confined on a rational basis to recruits upto a certain number of years.
That constitutes recognition of long experience and not permitting some irate junior to score a march.
If by 1982, nearly 4, 000 Junior Engineers of pre 1973 batches had become eligible for taking competitive examination, the department would be perfectly justified in keeping the examination open only to persons who have put in such long service and leaving others to wait for the next examination.
If for taking examination this aspect introduces classification, it is based on rational and intelligible differentia which has a nexus to the object sought to be achieved.
By the note, for a period of two years only pre 1973 Junior Engineers who had cleared qualifying examination were given a chance to take competitive examination.
If this introduces a classification, it is valid.
It caters to a well known situation in service jurisprudence that there must be some ratio of candidates to vacancies.
And it is based on long experience as a rational basis for classification.
Viewed from this angle, we find nothing in the policy underlying the note to rule (4) as being either discriminatory or arbitrary or denying equality of opportunity in the matter of promotion.
It had the desired effect of not having a glutt of Junior Engineers taking examination compared to fewer number of vacancies.
Length and experience were given recognition by the note The promotion can be thus by stages exposing the promotional avenue gradually to persons having longer experience.
This seems to be the policy underlying the note and we see nothing improper or unconstitutional in it.
However the situation has materially changed.
More than 4 years elapsed sine the note has appeared One examination is 889 a ready taken.
Even Junior Engineers of 1973 batch have by now put in more than 12 years of service.
Therefore while upholding the note and consequently rejection the appeal we propose to give the following directions to remove the irritants: (i) Successful candidates of 1982 competitive examination, results of which have been declared pursuant to the directions of this Court, must be given promotion as Assistant Engineer within a period of two months from today.
(ii) The next qualifying examination permitting all those who are eligible under the rules to appear at it must be held latest by July 31, 1985 and the results be declared by September 30, 1985.
(iii) The next competitive examination must be held by December 31, 1985 and the results by declared by February 28, 1986.
(iv) Consequent promotions keeping in view the vacancies available must be given within a period of three months after the result is declared.
This appeal is disposed of in these terms with no order as to costs M. L. A. Appeal dismissed.

summary:
Clause (1) in Appendix I to the Telegraphic Engineering Service (Class II) Recruitment Rules, 1966 (1966 Rules, for short), provided that promotion of a Junior Engineer to the post of Assistant Engineer shall be entirely by promotion on the basis of selection of Junior Engineers through a qualifying departmental examination.
Sub clause (1) provided that the departmental qualifying examination shall be open to Junior Engineers who were recruited and absorbed in that grade against the vacancies of a year, ordinarily not less than five years prior to the year of announcement of the said examination.
Sub clause (4) of Appendix I to the Telegraphic Engineering Service (Group Posts) Recruitment Rules, 1981 (1981 Rules, for short) which superseded the 1966 Rules envisaged a qualifying cum competitive examination for promotion to the post of Assistant Engineers.
and the Note appended to sub cl.
(4) provides that for a period of 2 years after the commencement of the 1981 Rules, the first two examinations shall only be competitive for which the eligibility shall be restricted to only those officers who have already qualified in the Departmental Qualifying Examination held before the commencement of these Rules.
" The appellants/Junior Engineers, who were recruited in the year 1973, challenged in the High Court the constitutionality of the Note appended lo clause (4) of Appendix I to 1981 Rule 5 on the ground that note 4 appended to clause I introduces discrimination in that Junior Engineers Or 1972 and prior batches will alone be able, if they had cleared the qualifying examination, to take the competitive examination which would be held under 1981 Rules and as only the competitive examination was to be held, Junior Engineers of 1973 and subsequent batches, even if they have put in five years of qualifying service, would be denied an opportunity to take the examination, and that this is an invidious manner of denying them the opportunity to take the examination and thereby deny them equality of opportunity in the matter of promotion.
The learned Single Judge held that the Note to clause (4) of Appendix I to the 1981 Rules was ultra vires.
On appeal by the respondent Union of India, the Division Bench of the High Court held that the Note was not ultra Vires.
882 Dismissing the appeal by the appellants, the Court, ^ HELD: (I) By sheer passage of time, this appeal and even the main petition have become infractions.
Even in service jurisprudence the clock of history, sometimes, cannot be put back and even if it is found that the respondents have committed an error in implementing the statutory rules no relief can be granted.
This is one such case.
[885F G] (2) If by 1982, nearly 4,000 Junior Engineers of pre 1973 batches had become eligible for taking competitive examination, the department would be perfectly justified in keeping the examination open only to persons who have put in such long service and leaving others to wait for the next examination.
If for taking examination this aspect introduces classification, it is based on rational and intelligible differentia which has a nexus to the object sought to be achieved.
By the note, for a period of two years only pre 1973 Junior Engineers who had cleared qualifying examination were given a chance to take competitive examination.
If this introduces a classification, it is valid.
It caters to a well known situation in service jurisprudence that there must be some ratio of candidates to vacancies.
And it is based on long experience as a rational basis for classification.
Viewed from this angle, there is nothing in the policy underlying the note to rule (43 as being either discriminatory or arbitrary or denying equality of opportunity in the matter of promotion.
lt had the desired effect of not having glutt of Junior Engineers taking examination compared to fewer number of vacancies.
Length and experience were given recognition by the note.
The promotion can be thus by stages exposing the promotion; l avenue gradually to persons having longer experience.
This seems to be the policy underlying the note and therefore there is nothing improper or unconstitutional in it.
[888D G]


judgement:
l Appeals Nos, 477 478 & 479 Of 1971.
From the Judgment and Order dated 28.
1970 of the Andhra Pradsh High Court in Writ Petition No. 232, 233 and 234 of 1970.
B. R. L. Iyengar, S.S. Javali, Attar Singh and G. N. Rao for the Appellants.
T. V.S.N. Chari for the Respondent.
by VENKATARAMIAM, J. The short question which arises for consideration in these appeals by certificate is whether the exemption granted by the Government of Andhra Pradesh from payment of tax by a notification dated March 27, 1963 issued under section 9(1) of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (Act No. 5 of 1963) (hereinafter referred to as 'the Act ') in respect of the motor vehicles operated by the appellants on certain inter State routes came to an end with effect from January 1,1970.
The brief facts which have led to these appeals are these.
The appellant in Civil Appeal No. 477 of 1971 was operating a stage carriage service from the year 1965 under a permit granted by the Regional Transport Authority, Bangalore between Bangalore in the State of Mysore (now called the State of Karnataka) and Hindupur in the State of Andhra Pradesh.
The said permit had been duly countersigned by the concerned Transport Authority in the State of 894 Andhra Pradesh.
The appellant in Civil Appeal No. 478 of 1971 was operating a stage carriage service between Bangalore in the State of Mysore and Kadiri in the State of Andhra Pradesh from 1963 by virtue of a permit issued by the Regional Transport Authority Ban galore and countersigned by the concerned Transport Authority in the State of Andhra Pradesh.
Similarly, the appellant in Civil Appeal U No. 479 of 1971 was operating the stage carriage service between Tumkur in the State of Mysore and Tirupathi in the State of Andhra Pradesh under a permit issued by the Regional Transport Authority, Tumkur and countersigned by the appropriate Transport Authority in the State of Andhra Pradesh.
The counter signatures of the three permits, referred to above, had been done pursuant to certain Inter State agreements entered into between the State of Mysore and the State of Andhra Pradesh under section 63(3) of the .
On March 27, 1963 the Government of Andhra Pradesh had issued a notification under section 9(1) of the Act, the relevant part of which read as follows: "In exercise of the powers conferred by sub section (1) of section 9 of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (Andhra Pradesh Act S of 1963), the Governor of Andhra Pradesh hereby exempts from payment of the tax leviable under the said Act, all stage carriages, contract carriages, public carriers, and private carriers, registered in the State of Mysore and operating on a route which lies in both the States of Mysore and Andhra Pradesh.
Provided that: i) the route is recognised by both the States to be such a route: ii) every such motor vehicle is operating in accordance with the conditions of a permit granted as a result of an agreement arrived at between the two States, iii) the tax leviable in respect of every such motor vehicle under any law for the time being in the State of Mysore has been paid in full in that state" Since the motor vehicles used by the appellants satisfied the conditions mentioned in the above notification they came to be 895 exempted from payment of the motor vehicles tax under the Act.
On January 25, 1968 the Government of the State of Mysore published an approved scheme under section 68 D of the which was popularly known as the 'Kolar Scheme ' authorising the State Transport Undertaking in the State of Mysore to operate exclusively state carriage services on certain routes and the said scheme came into force with effect from January 1,1969.
The said scheme provided that the State Transport Undertaking of the State of Mysore would operate its services on all the routes covered by the said scheme to the complete exclusion of other persons.
It however stated that the existing permit holders on the inter State routes could continue to operate on such inter State routes subject to the condition that their permits would be rendered ineffective on the overlapping portions of the notified routes which lay within the State of Mysore.
The routes on which the appellants were running their stage carriage services being such inter State routes the were also required to comply with the said condition.
After the above scheme came into force, when the question of renewal of counter signatures of certain stage carriage permits issued in favour of certain operators in the State of Andhra Pradesh who were operating stage carriage services from a place in the State of Andhra Pradesh to a place in the State of Mysore came up for consideration before the concerned Regional Transport Authorities in the State of Mysore, the said Regional Transport Authorities declined to countersign the said permits.
Consequently, the Andhra Pradesh operators could not continue to operate their services on the notified routes.
On the representation made by the said Andhra Pradesh operators a meeting of the Home Secretaries of the two States was held on November 7, 1969 to consider the questions arising out of the refusal of the Regional Transport Authorities in the State of Mysore to countersign the permits issued by the authorities in the Andhra Pradesh State and the imposition of the restrictions OD the operators on inter State routes whose permits were still in force by the scheme which prohibited the picking up or setting down of passengers on the overlapping portions of the notified routes in the State of Mysore.
At that meeting it was resolved interalia that notwithstanding the inter State agreements, the ten routes mentioned in the resolution which included the three routes on which the appellants were operating their stage carriage services should be deleted from the purview of the inter State agreements and that the 896 Mysore operators who were operating their services on the said inter State routes would have to pay tax for plying their motor vehicles in the Andhra Pradesh limits from the quarter commencing from January 1, 1970.
It was further resolved that the existing permits issued by the Regional Transport Authorities in the State of Mysore, when they came up for renewal would not be countersigned by the Andhra Pradesh State Austerities and that the said permits would cease to be in force after the expiry of the period for which they had been issued.
On receipt of the above recommendations made by the Home Secretaries, the Government of Andhra Pradesh passed an order on December 29, 1969, the relevant part of which read as follows: "ORDER: The Government hereby ratify the conclusions arrived at the meeting held at Hyderabad on 7th November, 1969 between the representatives of the Governments of Mysore and Andhra Pradesh in regard to the operation of road transport services on inter.
State routes between the two States as appended to this order.
The Transport Commissioner is requested to take necessary further action in consultation with the Transport Commissioner, Mysore and report to the Government.
the action taken".
No notification was, however, issued under section 9(1) of the Act cancelling the exemption which had been granted earlier in respect of the motor vehicles which were operating on certain inter State routes including the motor vehicles of the appellants demand was, however, made by the concerned officers in the State of Andhra Pradesh asking the appellants to pay tax under the Act with effect from January 1,1970.
Aggrieved by the said notices of demand, the appellants filed writ petitions under Article 226 of the Constitution on the file of the High Court of Andhra Pradesh questioning the validity of the notices of demand issued to them.
Some OF the operators in Andhra Pradesh, who were affected by the scheme published by the State of Mysore also filed writ petitions on the file of the High Court of Andhra Pradesh questioning the validity 897 Of the scheme on various grounds with which we are not concerned in these cases.
Those writ petitions were dismissed by the learned Single Judge of the High Court of Andhra Pradesh.
The Andhra Pradesh operators who were aggrieved by the judgment of the learned Single Judge preferred writ appeals before the Division Bench of that High Court.
Those writ appeals and the writ petitions filed by the appellants and some others were all heard by a Division Bench of the High Court and were disposed of by a common judgment on December 28, 1970.
We are concerned in these cases only with the writ petitions filed by the appellants.
The main ground urged on behalf of the appellants in their writ petitions was that in the absence of a notification issued under section 9(1) (b) of the Act revoking the exemption which had been granted earlier, it was not open to the State of Andhra Pradesh or any of its officers functioning under the Act to demand payment of motor vehicles tax under the Act in respect of their motor vehicles.
The Division Bench of the High Court held that since it was not necessary to issue a notification under section 9(1) for granting the exemption from payment of tax payable under the Act, it was also not necessary to issue a notification under section 9(1) of the Act for withdrawing the exemption already granted under the Act and that therefore the demand made by the concerned officer was sufficient to reimpose the tax payable under the Act on the appellants.
The High Court accordingly, dismissed the writ petitions filed by the appellants and on the applications made by the appellants issued certificates of fitness under Article 133(1),(b) of the Constitution to prefer appeals before this Court.
These appeals are filed on the basis of the said certificates.
The appellants urged before the High Court two grounds in support of their contention that the impugned notices of demand issued by the authorities under the Act calling upon them to pay motor vehicle tax with effect from January 1, 1970 were invalid and unenforceable: (i) that the State Government, having granted exemption by a notification issued under section 9 (1) of the Act, could not withdraw or revoke the exemption without issuing a notification under section 9 (1) (b) of the Act; and (ii) that since the appellants had spent large sums on the business of running the stage carriage services on the routes in question on the basis of the representation made by the State of Andhra Pradesh that it would not levy tax under the Act in respect of those vehicles, it 898 was not open to the State of Andhra Pradesh to withdraw the said concession unilaterally.
The High Court rejected both these contentions.
On the first contention, the High Court observed thus: "Even so, it was pointed out on behalf of the petitioners that the tax concession was originally given by a notification and there was no withdrawal of such concession by another notification.
When a concession was given by a notification, it was argued, it could be withdrawn only by another notification.
The learned counsel appearing for the Governments frankly admitted that there was no such notification withdrawing the concession, though the State of Andhra Pradesh issued a memo dated 15.1.1970 to all the Regional Transport Authorities informing them about the withdrawal of the concession.
The important question of the matter is, however, whether the concession had to be withdrawn under a notification alone.
What should be really examined is whether the granting of the concession itself was required by law to be done only by a notification.
Learned counsel for the petitioners altogether failed to bring to our notice any such requirement of law.
They could not point out any statutory provision or rule which required that a concession of this nature could be given only under a notification.
Simply because the Government of Andhra Pradesh thought it necessary to issue a notification giving the permit holders tax concession though there was no legal requirement to issue a notification for that l; ' purpose, it does not follow that withdrawal of the concession should also be by a notification.
Thus, the argument based on the absence of a notification withdrawing the tax concession appears to us wholly untenable.
" It is unfortunate that the High Court while deciding the above question overlooked the relevant provisions contained in Section 9 of the Act.
Section 9 of the Act reads thus: "9.(1) The Government may, by notification.
(a) grant an exemption, make a reduction in the 899 rate or order other modification not involving an enhancement in the rate, of the tax payable (i) by any person or class of persons, or (ii) in respect of any motor vehicle or class of motor vehicles or motor vehicles running in any particular area; and (b) cancel or vary such exemption, reduction or other modification.
(2) Any notification issued under sub section (1) shall be laid, as soon as may be after it is issued, on the table of the Legislative Assembly of the State while it is in session for a total period of fourteen days which may be comprised in one session or in two successive sessions." (underlining by us) Section 9 of the Act provides that the Government may by notification grant an exemption of the tax payable by any person or class of persons and it may cancel or vary such exemption, reduction or other modification.
Any notification issued under subsection (I) of section 9 of the Act either granting any exemption or cancelling it is required to be laid, as soon as may be after it is issued, on the table of the Legislative Assembly of the State.
The expression 'notification ' is defined by section 2 (d) of the Act as a notification published in the Andhra Pradesh Gazette.
The State Government by section 3 of the Act is authorised to levy by issuing a notification tax on every motor vehicle used or kept for use in a public place in the State Andhra Pradesh.
When once a notification is issued under section 3 of the Act in respect of any motor vehicle.
the tax becomes payable by the registered owner of the motor vehicle or any other person having possession or control there of.
Such person can be exempted from the payment of the tax so levied only by a notification issued under section 9 (1) of the Act.
A notification issued under section 9 being a statutory instrument can be cancelled or modified in the manner prescribed by the Act and in no other way.
It is significant that any notification issued under section 9(1) of the Act either granting exemption or cancelling or varying such exemption has got to be placed on the table of the Legisla 900 tive Assembly.
Both the notification issued under section 3 of the Act and the notification issued under section 9 (1) thereof fall within the meaning of the expression law ' referred to in Article 265 of the Constitution.
The State Government can grant exemption from payment of tax or cancel an exemption already granted only in accordance with section 9 (1) of the Act.
That is the legislative mandate.
In the instant case, admittedly no notification is issued as provided by clause (b) of section 9 (1) of the Act either cancelling or withdrawing or varying the exemption granted earlier by the notification issued under section 9 (1).
The High Court erred in holding that the learned counsel for the appellants had not drawn its attention to any statutory provision or rule which provided that a concession of this nature could be given only under a notification.
A mere perusal of the provisions of section 9 and the notification which is issued thereunder, would have made it very clear that no exemption from the payment of the tax due under the Act could be granted exempt by the issue of a notification.
It is hazardous to depend on one ' memory while construing a statutory provision and this case serves as a good illustration of this statement.
Having held that it was not necessary to issue a notification for granting an exemption, the High Court misled itself into thinking that the issue of a notification for the purpose of withdrawing the concession already granted was also unnecessary.
The reason given by the High Court for rejecting this contention of the appellants is, therefor wholly untenable.
Having realist the weakness of the ground on which the High Court had rejected the contention of the appellants in this regard, the learned counsel for the State Government raised a new ground before us in order to sustain the impugned notices of demand He contended that the exemption from payment of the tax leviable under the Act could be claimed by the appellants only so long as the routes on which they were operating their stage carriages continued to be recognised by both the States to be such routes, and in support of this contention he relied upon clause (i) of the proviso to the notification dated March 27, 1963 under which exemption had been granted.
He argued that since at the meeting of the Home Secretaries held on November 7, 1969 it had been agreed that the vehicles which were being operated by the Mysore operators would have to pay the tax to the State of Andhra Pradesh with effect from January 1, 1910, the notification granting exemption 901 became inapplicable to the motor vehicles of the appellants with effect from the said date.
In other words the contention urged on behalf of the State of Andhra Pradesh was that since the motor vehicles operated by the appellants ceased to answer the description of the motor vehicles to which the notification granting exemption applied, these appellants could not claim the benefit of it.
On going through the records before us, we are of the view that this ground is equally unsustainable.
The agreement arrived at by the Home Secretaries on November 7, 1969, could not be considered as equivalent to an agreement entered into between the two States, unless and until both the Governments agreed to give effect to it.
It was not effective on its own force.
It was only recommendatory in character.
It is no doubt true that on December 29, 1969 the Government of Andhra Pradesh issued an order unilaterally stating that it had ratified the conclusions arrived at by the Home Secretaries at the meeting of November 7, 1969 in regard to the operation of road transport services on inter State routes between the two States, but it is seen that by the very order the Government of Andhra Pradesh directed the Transport Commissioner Andhra Pradesh to take necessary further action in consultation with the Transport Commissioner, Mysore and to report to the Government the action taken by him.
It is seen from a notification published by the Government of Andhra Pradesh in the Andhra Pradesh Gazette Part I Extraordinary dated May 24, 1971 under section 63 (3 A) of the that the Government of Andhra Pradesh had not till then taken a firm decision on the question whether the routes in question should be de recognised or excluded from the purview of inter State agreements.
The relevant part of that notification reads thus: "DRAFT AGREEMENT BETWEEN ANDHRA PRADESH AND MYSORE STATES RE: TRANSPORT BY MOTOR VEHICLES.
(G. O. Rt.
No. 1189, Home (Transport I) Department, dt.
1st April, 1971) NOTIFICATION At the inter State Conference held between the representatives of the Governments of Andhra Pradesh and Mysore States at Hyderabad on 7.
1969 and 902 11.
5. 1970, and at Bangalore on 6/7.
7. 1970, the outstanding issues between the two States w re discussed and it is proposed to enter into an inter State agreement between Andhra Pradesh and Mysore State Governments on the fol lowing issues: Item No. 1 (a): It is proposed to delete the undermentioned inter State routes from the inter State Agreement as it is not possible for the Andhra Pradesh State to implement the agreements due to the approved schemes of the Mysore State Road Transport Corporation: 1.
Tirupathi to Tumkur 2.
Bellary to Manthralayam 3.
Gorantla to Bangalore 4.
Anantapur to T. B. Damsite 5.
Hindupur to Bangalore.
Kadiri to Bangalore.
As a result of deletion of these routes from the agreement the Andhra Pradesh authorities will not countersign the permits issued by the Mysore Authorities on these routes when they come up for renewal and counter signatures issued by both the States on these routes will lapse by efflux of time.
The vehicles plying on these routes are not entitled for single point taxation as a result of deletion of these routes from the agreement with effect from 1.1.
1970 (Underlining by us) From the portion of the notification extracted above, it is seen that even on May 24, 1971 the question of deletion of the routes between Tirupathi and Tumkur, Hindupur and Bangalore and Kadiri and Bangalore, from the purview of the inter State agreement was still in the stage of a proposal.
By the said notification the State Government of Andhra Pradesh had invited objections from persons who were effected by it, to make their re 903 presentations as can be seen from the last part of the said notification which reads thus; "The above proposal is hereby published for information of persons likely to be affected thereby as required under section 63 (3 A) of the ; and notice is hereby given that the proposal will be taken into consideration after the expiry of 30 days from the date of its publication in the Andhra Pradesh Gazette (both days inclusive) and that any objection or suggestion which may be received from any person with respect thereto, before the aforesaid time, will be considered by the Government of Andhra Pradesh, Objections and suggestion should be addressed to the Secretary to Government of Andhra Pradesh in the Home Department, Hyderabad in duplicate.
" The records produced before us further disclose that the above notification issued under section 63 (3 A) of the Motor vehicles Act, 1939 was cancelled and a second notification containing fresh proposals was issued on June 22, 1972 and that the said second notification was cancelled and a third notification containing similar proposals was issued on September 10, 1973.
It is seen that ultimately an inter State agreement was arrived at between the Government of Andhra Pradesh and the Government of Karnataka on August 28, 1975 under section 63 (3 B) of the by which the exemption which had been given earlier was continued.
It is also not disputed that the permits issued in favour of the appellants, having been in the meanwhile countersigned when they came up for renewal by the concerned authorities in the State of Andhra Pradesh were in force at the time when the new inter State agreement came into force and the appellants were eligible for the benefit of the exemption agreed upon by the two States.
It is, therefore, clear that at no material point of time the routes in question had ceased to be recognised by either of the States.
Hence, the submission that the motor vehicles in question were not within the purview of the notification issued under section 9 (1) of the Act with effect from January 1, 1970 cannot be accepted.
It was next urged that sub section (3 A) of section 63 of the 904 which prescribed a detailed procedure for the purpose of concluding an inter State agreement was introduced by way of an amendment with effect from March 2, 1970 by Act 56 of 1969 and before that date no such 1970 formality was required to be followed before entering into any such agreement.
It was enough that the two State Governments mutually agreed upon the terms of the agreement for purposes of the provsio to sub section (3) of section 63 of the Motor Vehicles Act, 1963 as it stood then.
In the above situation it was urged that the resolution passed by the Home Secretaries on November 7, 1969 and the order passed by the Government of Andhra Pradesh on December 29, 1969 ratifying the said resolutions were sufficient in the eye of law to treat the inter State routes referred to therein as having been deleted from the purview of the earlier inter state agreements.
This argument does not carry the case of the Government of Andhra Pradesh any further.
It may be that it was possible for the two States to enter into an inter State agreement before March 2, 1970 without following the elaborate procedure prescribed under sub section (3 A) of section 63 of the .
But as already mentioned the resolutions adopted at the meeting of the Home Secretaries were not effective unless they were agreed upon by both the State Government later on and the order passed by the Government of Andhra Pradesh on December 19, 1969 unilaterally merely directed the Transport Commissioner of Andhra Pradesh to take further action after consulting the Transport Commissioner of the State of Mysore.
It is not shown that before March 2, 1970 when sub section (3 A) of section 63 of the came into force any inter State agreement concluded by both the State Governments on the lines of the conclusions arrived at by the Home Secretaries had come into existence.
Hence we do not find any substance in this contention too.
In view of the above, we do not consider it necessary to into the question whether the Government of Andhra Pradesh was precluded by the rule of promissory estoppel from issuing the impugned notices of demand.
After giving our anxious consideration to the whole case, we are of the view that the appellants were entitled to claim the exemption granted by the notification issued under section 9 (1) of the 905 Act during the relevant period.
In the result, the judgment of the High Court insofar as it held that the appellants were not entitled to the exemption from payment of tax during the relevant period, is liable to be set aside.
We, accordingly, set aside the judgment of the High Court to the above extent.
The impugned notices of demand are quashed.
The Government of Andhra Pradesh is directed not to take any steps to recover the tax demanded by it from the appellants.
The appeals are accordingly allowed.
Having regard to the circumstances of the case, we make no order as to costs, A. P. J. Appeals allowed.

dataset_name: IN-Abs

summary:
The appellants were operating stage carriage services on inter State routes between the States of Mysore and Andhra Pradesh The procedure envisaged counter signature of permits in pursuance to the inter State agreements entered into by the two States under s.63 (3) of the .
On March 27, 1963 the Government of Andhra Pradesh issued a notification under section 9 (1) of the Andhra Pradesh Motor Vehicles laxation Act, 1963 exempting from the payment of tax under the said Act of stage carriages registered in the State of Mysore and operating on routes which lie in both the State of Mysore and Andhra Pradesh.
The appellants satisfied the conditions envisaged in the notification and were exempted from payment of Motor Vehicle tax.
On January 25, 1968 the State of Mysore published and approved a scheme under section 68 of the .
the scheme authorised the State Transport Undertaking in the State of Mysore to operate exclusively stage carriage services on certain routes and the said scheme came into force with effect from January 1, 1969.
The scheme envisaged that the existing permit holders on the inter State routes could continue to operate on such inter State routes subject to the condition that their permits would be rendered ineffective on the over lapping portions of the notified routes which lay within the State of Mysore.
After the scheme came into force the question of renewal of countersignatures of certain stage carriages permits came up for consideration and the authorities in the State of Mysore declined to countersign the stage carriage 891 permits.
Consequently the operators in the State of Andhra Pradesh could not continue to operate their services on the notified routes.
On their representations a meeting of the Home Secretaries of the two States was held on November 7, 1969 and it was resolved that notwithstanding the inter State Agreements, the ten routes which included the three routes on which the appellants were operating the stage carriage services should be deleted from the purview of the inter State Agreements and that the Mysore State operators who were operating the services on inter State routes would have to pay tax for plying the motor vehicles in the Andhra Pradesh from the quarter commencing from January 1, 1970.
No notification was, however, issued under section 9 (1) of the Act cancelling the exemptions which had been granted earlier in respect of the motor vehicles which were operating on the inter State routes including the motor vehicles of the appellants.
A demand was made by the officers in the State of Andhra Pradesh asking the appellants to pay tax under the Act with effect from January 1, 1970.
Being aggrieved by the notices of demand, the appellants filed Writ Petition under Article 226 questioning the validity of the notices of demand issued to them contending (i) that in the absence of a notification issued under Section 9 (1) (b) of the Act revoking the exemption which had been granted earlier, it was not open to the State of Andhra Pradesh or any of the officers functioning under the Act to demand payment of motor vehicles tax under the Act in respect of their motor vehicles, (ii) that the impugned notices of the demand issued by the authorities calling for payment of motor vehicles tax with effect from January 1. 1970 were invalid and unenforceable and (iii) that since the appellants had spent large sums of money on the business of running the stage carriage services on the routes in question, it was not open to the, State of Andhra Pradesh to withdraw the said concession unilaterally.
The High Court rejected the contentions and dismissed the Writ Petition holding that since it was not necessary to issue a notification under section 9 ,(1) for granting the exemption from payment of tax payable under the Act, it was also not necessary to issue a notification under section 9 (1) of the Act for withdrawing the exemption already granted and normally the demand made was sufficient to reimpose the tax payable under the Act.
G Allowing the appeals on the question whether the exemption granted by the Government of Andhra Pradesh from payment of tax by a notification dated March 27, 1963.
issued under section 9 (1) of the Andhra Pradesh Motor Vehicles Taxation Act 1963 in respect of motor vehicles operated on certain inter State routes came to an end with effect from January 1, 1970, the Court, 892 ^ HELD: (1) The appellants were entitled to claim the exemption from payment of tax granted by the notification issued under section 9 (1) of the Act during the relevant period.
The judgment of the High Court in so far as it held that the appellants were not entitled to the exemption is set aside.
The impugned notices of the demand are quashed.
[904H; 905A B] (2) Section 9 of the Act provided that the Government may by notification grant an exemption of the tax payable by any person or class of persons and lt may cancel or vary such exempting, reduction or other modification.
[899D E] ( (3) The expression 'notification ' is defined in section 2 (d) of the Act as a notification published in the Andhra Pradesh Gazette.
[892E] (4) Once a notification is issued under section 3 in respect of any motor vehicle, the tax becomes payable by the registered owner of the motor vehicle or any other person having possession or control thereof.
Such a person can be exempted from payment of tax only by notification issued under section 9 (1) of the Act.
A notification issued under section 9 being a statutory instrument can be cancelled or modified in the manner prescribed by the Act and in no other way.
[899F G] (5) The State Government can grant exemption from payment of tax or cancel the exemption already granted only in accordance with section 9 (1).
That is the legislative mandate.
[90OA B] (6) In the instant case, no notification was issued as provided by Cl.
(b) of section 9 (l) of the Act either cancelling or withdrawing or varying the exemption granted earlier by the notification issued under section 9 (1).
[900B] (7) The agreement arrived at by the Home Secretaries on November 7, 1969 could not be considered as equivalent to an agreement entered into between the two States, unless and until both the Governments agreed to give effect to it and it was not effective on its own force It was only recommendatory in character.
(901B.C] (8) A notification published in the Andhra Pradesh Gazette dated March 24th, 1971 under section 63 (3A) of the indicated that the Government of Andhra Pradesh had not taken a firm decision on the question whether the routes in question should be de recognised or excluded from the purview of the inter State Agreements.
By the said notification the State Government of Andhra Pradesh invited objections from persons who were effected to make their representations.
This notification was cancelled and a second notification was issued on June 22, 1972 and this notification was also cancelled and a third notification containing similar proposals was issued on September 10, 1973.
It clearly indicated that at no material point of time the routes in question had ceased to be recognised by either of the States.
The 893 contention that the motor vehicles in question were not within the purview of the notification issued under section 9 (1) of the Act with effect from January 1, 1970 cannot be accepted.
[901D H: 902A H: 903A G] (9) It was possible that the two States could have entered into inter State Agreement before March 2, 1970 without following the elaborate procedure prescribed under sub section
(3A) of section 63 of the .
The resolutions adopted at the meeting of Home Secretaries were not effected by both the State Governments and the order passed by the Government of Andhra Pradesh on December 29, 1969 unilaterally merely directed the Commissioner of Andhra Pradesh to takes further action.
It is, however, not shown that before the said date when sub section 3 (A) of the section 63 came into force any inter State Agreement concluded by both the State Governments on the aforesaid lines had come into existence.
[904C F]


judgement:
Civil Appeal No. 3187 of 1982 From the Judgment and Order dated 22.1.1974 of the Allahabad High Court in C.M.P. No. 1395 of 1968.
872 A.R. Gupta for the Appellant.
B. Datta, Rishi Kesh, Badri Prasad, Ajit Pudissary, Girish Chandra and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by DESAI, J.
Another unequal fight between a giant public sector undertaking: Oil and Natural Gas Commission (Corporation ' for short) and a Store Keeper which has been brought to this Court by the ultra legalist stand taken by the Corporation which lacks equanimity and smacks of victimisation.
The appellant was appointed as Assistant Store Keeper in April, 1962 and was posted at Dehradun.
Later on when the Corporation decided to recruit Store Keeper, the appellant was selected in open competition and was appointed on December 7, 1963 as such.
He was posted at Cambay, Gujrat and later on December 24, 1963 sent back to Dehradun.
The office order dated February 26, 1964 recites that the appellant has been appointed as Store Keeper till further orders and the post is sanctioned for the period February 7, 1964 to February 29, 1964.
In other words, a man selected in an open competition was offered the post which was to last for 22 days roughly.
He was also told that his appointment was purely temporary and that other terms of service were those as set out in the letter dated December 7, 1963, one of which was that the appellant will be on probation for a period of six months from the date of the appointment and the same may be extended at the discretion of the appointing authority and that the appointment may be terminated at any time by a months ' notice given by either side.
On January 13, 1965, the appellant was informed in writing by the Memorandum No. PF/K 44 /64 ENT that the appellant on successful completion of the probation period of six months, is continued in service on regular basis until further orders.
By office order dated April 6, 1947, the appellant who was described as Store keeper, Grade I Mech.
Branch was transferred to Cambay Nawagam project.
This transfer order was challenged by the appellant on diverse grounds in a suit filed by him.
He sought an interim in 873 junction restraining the respondents from implementing the order of transfer.
Interim injunction as prayed for was granted.
The Oil & Natural Gas Commission Employees Mazdoor Sabha (Union for short), Dehradun submitted a charter of demands on May 15, 1967 and it was followed by a notice threatening direct action by the members of the Union.
It appears that the appellant was an active worker of the Union.
The usual management response emerged be a secret letter dated September 1, 1967.
Shri R.P. Sharma, Chief Engineer under whom the appellant was at the relevant time working was told that the appellant is the main trouble maker and that he is being given free hand by his immediate superiors and that the Chief Engineer did not keep strict vigilance over the activities of the appellant.
The employees of the Corporation went on strike on September 12, 1967.
It was called off on September 24, 1967.
On September 28, 1967, the Union submitted a list of workmen to the Corporation requesting the Corporation to give them the status of protected workmen as required by Sec. 33 (4) of the .
Appellant 's name appears at section No. 2 in this letter.
On December 27, 1967 the Union complained of victimisation of the active union workers including the appellant On December 29, 1967 Office Order No. M (Engg) 1 (1)/67 was issued by which the services of the appellant were terminated with immediate effect in accordance with the terms and conditions of his service.
A cheque in the amount of Rs. 317 accompanied the order being one month 's pay in lieu of notice.
The appellant challenged in Writ Petition No. 1395/68 in the Allahabad High Court the legality and validity of the order terminating his services.
A Division Bench of the Allahabad High Court held that despite the order dated January 13, 1965 that on successful completion of the probation period, the appellant has been appointed on a regular basis as Store Keeper, he was none the less a temporary employee of the Corporation till the date on which his services were terminated.
The High Court further held that the Corporation is not an industrial establishment within the meaning of the expression in and therefore the Model Standing Orders enacted under the Act were not applicable to the undertaking of the Corporation.
However, the High Court examined an alternative contention that 874 assuming that the Industrial Establishment (Standing (Orders) Act, 1946 does apply to the undertaking of the Corporation, yet in view of the provisions contained in Sec.
13B of the Act, no provisions of the Act would apply to the undertaking of the Corporation.
The High Court repelled the contention of the appellant that the order of termination of service is violative of Oil and Natural Gas Commission (Conduct, Discipline and Appeal), Regulations, 1964 observing that as the service of the appellant was not dispensed with on the allegation of misconduct, but as it was an order of termination of service simpliciter in accordance with the Regulation 25, no other regulation is shown to have been contravened by the impugned order.
The High Court rejected the submission on behalf of the appellant that as the Corporation is a State or at any rate instrumentality of the State ' as contemplated by article 12 of the Constitution and therefore, the appellant is entitled to the protection of Art 14 and 16 observing that 'it is not the requirement of law that in order to dismiss one employee on the ground of unsuitability, the Government or the Corporation is required to dismiss all an observation which has left us guessing for its content and meaning.
The Division Bench finally concluded that as the service of the appellant were terminated not because of any personal bias of the officers of the Corporation but because of his unsatisfactory work, the allegation of mala fides cannot be upheld.
Accordingly, the writ petition was dismissed with no order as to costs.
Hence this appeal by special leave.
Mr. B. Datta, learned counsel who appeared for the respondents did not press before us the contention that the Corporation is not an instrumentality of the State.
In view of the numerous decisions of this Court and especially one in Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi & Anr.(1), a Constitution Bench of this Court in terms held that 'the Oil and Natural Gas Commission is an instrumentality of the State and is comprehended in the expression other authority ' in article 12, and that any termination of service of the employee of the Corporation, if (1) [197513 S.C.R. 619.
875 successfully questioned would permit the court to make a declaration that the employee continues to be in service. ' Even if the employees of the Corporation, which is an instrumentality of the State, cannot the be said to be the members of a civil service of the Union or an All India service or hold any civil post under the Union, for the purpose of article 310 and 311 and therefore, not entitled to the protection of article 311, they would none theless be entitled to the protection of the fundamental rights enshrined in article 14 and 16 of the Constitution.
In other words, they would be entitled to the protection of equality in the matter of employment in public service and they cannot be dealt with in an arbitrary manner.
(See A.L. Kalra vs Project and Equipment Corporation of India Ltd.)(1).
The next question is whether the service of the appellant was terminated in accordance with law or regulation or in a thoroughly arbitrary manner ? Factual matrix set out hereinbefore will affirmatively show that on successful completion of his probation period, the appellant was appointed on the regular establishment as Store Keeper.
Thus effective from 13, 1965, the appellant was appointed on regular basis as Store Keeper.
There is nothing to show in the order that on completion of the probation period, he was appointed as a temporary Store Keeper.
The words used are: 'He is continued in service on a regular basis until further orders. ' The expression 'until further orders ' suggest an indefinite period.
It is difficult to construe it as clothing him with the status of a temporary employee.
It is even worst than being a probationer because the apprehended further order may follow the very next day.
Therefore, the expression until further order ' being thoroughly irrelevant has to be ignored.
It is even inconsistent with the appointment on regular basis as stated in that very order.
If the appellant was appointed on regular basis, his service cannot be terminated by one month 's notice.
If it is by way of punishment, as the High Court has found it to be so, it will be violative of the principles of natural justice in that no opportunity was given to the appellant to clear himself of the (1) 11984] 3 S.C.C. 317. 876 alleged misconduct which never found its expression on paper but which remained in the minds of those passing the order of termination of service.
If it is discharge simpliciter, it would be violative of article 16 because a number of Store Keepers junior to the appellant are shown to have been retained in service and the appellant cannot be picked arbitrarily.
He had the protection of article 16 which confers on him the fundamental right of equality and equal treatment in the matter of public employment.
Mr. Datta however, contended that the earlier order dated December 7, 1963 recites that the appointment could be terminated by either side by one month 's notice and that was the power invoked in terminating the service of the appellant.
The order dated December 7, 1963 was at the time when the appellant was appointed on probation.
On successful completion of probation, the appellant became a member of the regular establishment.
The contract of service, if any, has to be in tune with article 14 and 16 and such unilateral power of termination of service without giving reasons is so abhorent that it smacks of discrimination and therefore, violative of article 14.
The High Court brushed aside this aspect by merely observing that in order to dismiss one employee on the ground of unsuitability, the Government or the Corporation is not required to dismiss all '.
If it is suggested that you can dismiss anyone without a semblance of an enquiry or without whisper of the principles of natural justice, then such an approach overlooks the well established principle that where State action affects livelihood or attaches stigma, the punitive action can be taken after holding an enquiry according to the principles of natural justice.
In other words, an unbiased Judge, and an opportunity to controvert the allegation and to clear oneself are the minimum principles of natural justice which must inform such drastic power of dismissal affecting livelihood of an employee.
If the observation of the High Court was with reference to the contention of the order being violative of article 14 and 16, it overlooks the fact that the Corporation attempted to sustain its action on the ground that the services of the appellant were no more required which will certainly impel the court to enquire whether the post had been abolished or whether retaining the juniors, the inconvenient person was thrown out under the garb of being surplus.
Therefore, the approach of the High Court in this behalf is not appreciable.
877 Accepting the finding of the High Court that the appellant was removed from service on the ground of his unsatisfactory work, the same could not have been done without an enquiry in accordance with principles of natural justice.
At any rate the action appears to be thoroughly arbitrary.
If the facts are properly viewed this public sector corporation has disclosed the typical private employer 's unconcealed dislike and detestation of an active trade unionist.
From the facts stated in the earlier portion of the judgment, it appears that appellant was a protected workman.
Add to this the fact that the secret letter of Mr. L J. Johnson dated September 6, 1967 reveals the inner working of the mind of the top brass of the Corporation when Mr. Johnson states that Mr. Joshi (appellant) ;5 the main trouble maker in the corporation.
Earlier on March 29 1967, the Assistant Director wrote to the Director of Stores to transfer the appellant from Dehradun to Assam, the usual management response namely, to transfer the active trade union worker to weaken the trade union movement.
Even a charge of victimisation qua the appellant was made in writing.
The then Petroleum Minister Mr. Ashok Mehta wrote to Mr. Natwarlal Shah.
ONG Employees Mazdoor Sabha wherein he assured that the Corporation would not be interested in victimising anyone and yet soon after within three months, the services of the appellant were terminated.
And now reasons for the termination of service of the appellant may be examined.
The appellant is considered unsuitable for the job as found by the High Court.
How he became unsuitable is an aspect not even examined by the High Court.
On the contrary one has to refer to several communications eulogizing the services of the appellant which have been placed on record.
One Ganga Ram, Personnel Officer, ONGC, Tel Bhavan, Dehradun has certified on August 26, 1964 that Shri Joshi was found to be 'very sincere, conscientious dependable and hard working official and he is very much loyal to his duties as Store Keeper and he has done exceedingly well ' He also states that Mr. Joshi knows his job thoroughly well '.
On April 15,1965, the Controller of Stores and Purchase, the immediate superior of the appellant writes that 'Mr. Joshi knows his work very well and he is very conversant with the purchase work, accounting and maintenance of stores.
He is a very bright young man of blameless character and would do very well in any position of responsibility '.
This letter of appreciation was sent when the 878 officer was relinquishing his charge of the post of Controller of Stores and Purchase.
On January 16.1968, the Chief Engineer Shri R P. Sharma has issued a certificate in which it is stated that he found Mr. Joshi sincere, intelligent and hard working young man fully trust worthy and dependable for any confidence that may be reposed in him '.
This will clearly show that the charge of unsuitability was either cooked up or conjured up for a collateral purpose of doing away with the service of an active trade union worker who because of his activities became an eye sore.
Accordingly we are unable to agree with the view taken by the High Court that the termination of service was legal, valid or justified.
This appeal will accordingly succeed.
The question then is: what relief we must grant ? Ordinarily, where the order of termination of service is shown to be bad and illegal, the necessary declaration must follow that the employee continues to be in an uninterrupted service and he is entitled to full backwages.
We would have been perfectly justified in giving the declaration and making that order.
However, the appellant is out of service from December 29, 1967 till today.
A period of nearly 18 years have rolled by and he will have to go back to some chagarined master.
We therefore, enquired from the learned counsel appearing for the appellant whether substantial and adequate compensation would be more acceptable to him or reinstatement with backwages.
The appellant opted for the latter and Mr. B. Datta learned counsel for the commission conceded that the Corporation would willingly pay Rs. 2 lakhs as and by way of backwages and compensation in lieu of reinstatement.
This matter was adjourned to enable learned counsel for the appellant to work out the spread over of backwages.
Mr. A.K. Gupta, learned counsel for the appellant has submitted the calculations of backwages.
The figures therein set out are not disputed.
We accept the same and treat it as part of the judgment.
A copy of it shall always be annexed to the copy of this judgment.
Accordingly this appeal is allowed and the judgment of the High Court is quashed and set aside and the rule is made absolute in the writ petition.
The Oil and Natural Gas Commission is directed 879 to pay Rs. 2 lakhs to the appellant on the basis of the calculations herein submitted in lieu of backwages and compensation in lieu of reinstatement within a period of four weeks from today.
In view of the computation made in respect of backwages and compensation from year and year, we must make it abundantly clear whether the Commission would be entitled to deduct income tax while making the payment.
In this connection we would follow the decision of this Court in Shri Sant Raj & Anr.
vs O.P. Singla & Anr.(1) In tune with that decision we give the following decision.
Now that the amount is being paid in one lump sum, it is likely that the employer may take recourse to Sec.
192 of the Income Tax Act, 1961 which provides that when any person responsible for paying any income chargeable under the head 'Salaries ' shall, at the time of payment deduct income tax on the amount payable at the average rate of income tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.
If therefore the employer proceeds to deduct the income tax as provided by Sec. 192, we would like to make it abundantly clear that each appellant would be entitled to the relief under Sec.
89 of the Income Tax Act which provides that where, by reason of any portion of assessee 's salary being paid in arrears or in advance or by reason of his having received in any one financial year salary for more than 12 months or a payment which under the provisions of clause (3) of Section 17 is a profit in lieu of salary, his income is assessed at a rate higher than that it would otherwise have been assessed, the Income Tax Officer shall on an application made to him in this behalf grant such relief as may be prescribed.
The prescribed relief is set out in Rule 21A of the Income tax Rules.
The appellant is entitled to relief under Sec. 89 because compensation herein awarded includes salary which has been in arrear for 18 years as also the compensation in lieu of reinstatement and the relief should be given as provided by Sec. 89 of the Income tax Act (1) 880 read with Rule " IA of the Income Tax Rules.
The appellant indisputably is entitled to the same.
If any application is necessary to be made, the appellant may submit the same to the competent authority and the Commission shall assist the appellant for obtaining the relief.
The appeal is allowed as herein indicated, with no order as to costs.
N.V.K. Appeal allowed.

summary:
The appellant was initially appointed in the Respondent Public Sector Undertaking as an Assistant Store Keeper and later selected as a Store Keeper.
The office order recited that the appellant had been appointed as Store Keeper till further orders, that his appointment was purely temporary, that he will be on probation for period of 6 months, and that the appointment may be terminated at any time by a month 's notice.
On successful completion of the probation period of six months, the appellant was informed that 'he was continued in service on a regular basis until further order. ' The appellant was later transfer red and the Transfer Order was challenged by him in a suit, and an obtained an interim order restraining the undertaking from implementing the transfer order.
The Employees ' Union submitted a charter of demands and it was followed by a notice threatening direct action by the members of the Union.
The appellant was an active worker of the union.
The employees went on strike, and 870 the Union submitted a list of workmen to the Corporation requesting the Corporation to give them the status of protected workmen as required by section 33(4 of the industrial Disputes Act, 1947.
The Appellant 's name appeared at S.No 2 in the Letter.
By an Office Order the services of the appellant were terminated with immediate effect in accordance with the terms and conditions of the service, and a cheque for one month 's pay in lieu of notice accompanied the order.
The appellant challenged the legality and validity of the order terminating his service in a Writ Petition and a Division Bench of the High Court dismissed the Petition.
It held that though on successful completion of the probation period, the appellant had been appointed on a regular basis as Store Keeper, he was non the less a temporary employee of the Corporation till the date on which his services were terminated.
The Corporation was not an Industrial Establishment within the meaning of the expression in the and therefore the Model Standing Orders enacted under the Act were not applicable to the Corporation.
The Order of termination of service was not violative of the Oil and Natural Gas Commission (Conduct, Discipline and Appeal) Regulations, 1964 as the service of the appellant was not dispensed with on the allegation of misconduct, but it was an order of termination of service simpliciter in accordance with Regulation 25.
As the service of the appellant were terminated not because of any personal bias of the officers of the Corporation, but because of his unsatisfactory work, the allegation of mala fides cannot be upheld.
Allowing the appeal to this Court, ^ HELD: 1 The judgment or the High Court is quashed and set aside and the rule is made absolute in the writ petition.
The Oil and Natural Gas Commission is directed to pay Rs.2 lakhs to the appellant in lieu of backwages and compensation in lieu of reinstatement within a period of four weeks.
The appellant is entitled to relief under section 89, Income Tax Act, 1961 read with Rules 21 A of the Income Tax Rule, because the compensation awarded include salary which had been in arrears for 18 years as also the compensation in lieu of reinstatement [878H, 879A, E G] 2.
If the appellant was appointed on regular basis, his service cannot be terminated by one month 's notice.
If it was by way of punishment, as the High Court has found it to be so, termination is violative of the principles of natural justice in that no opportunity was given to the appellant to clear himself of the alleged misconduct which proved the real bans for making of the order of termination of service.
If it is discharge simpliciter, it would be violative of Article 16, because a number of store keepers junior to the appellant are shown to have been retained in the service and cannot be picked arbitrarily.
He had the protection of Article 16 which confers on him the fundamental right of equality and equal treatment in the matter of public employment.
The several communications which include a letter of appreciation and 871 a certificate eulogizing the services of the appellant, clearly show that the charge of unsuitability was either cooked up or conjured up for a collateral purpose of doing away with the service of an active trade union worker who because of his activities became an eye sore.
The view taken by the High Court that the termination of service was legal, valid or justified is not therefore tenable.
[877H, 878C] 4.
Ordinarily, where the order of termination of service is shown to be bad and illegal, the necessary declaration must follow that the employee continues to be in an uninterrupted serviced and he is entitled to full back wages.
[878D] In the instant case, the appellant was out of service from December 29, 1967.A period of nearly 18 years have rolled by and he would have to go back to some chagarined master.
On enquiry, the appellant informed that substantial and adequate compensation would be more acceptable to him than reinstatement with backwages.
[878E] Shri Sant Raj & Anr.
vs Sh.
O.P.Singla & Anr Civil Appeal No. 650/82 dated April 9, 1985 referred to.
An unbiased Judge, and an opportunity to controvert the allegation and to clear oneself are the minimum principles of natural justice which must inform the drastic power of dismissal affecting the livelihood of an employee.
[876F] 6.
The Oil and Natural Gas Commission is an instrumentality of the State and is comprehended in the expression 'other authority ' in article 12, and any termination of service of the employee of the Corporation, if successfully questioned would permit the court to make a declaration that the employee continues to be in service.
Even if the employees of the Corporation, which is an instrumentality of the State, cannot be said to be the members of a civil service of the Union or an All India Service, or hold any civil post under the Union, for the purpose of Articles 310 and 311 and therefore, not entitled to the protection of article 311, they would none the less be entitled to the protection of the fundamental rights enshrined in Articles 14 and 16 of the Constitution that is they would be entitled to the protection of equality in the matter of employment in public service and they cannot be dealt with in an arbitrary manner.
[874G; 875C] Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi & Anr, ; and A. L. Kalra vs Project and Equipment Corporation of India Ltd., referred to.