judgement:
Appeal No. 208 of 1969.
August 19, 1960, of the Third Industrial Tribunal, West Bengal, in Case No. VIII 119 of 1958.
A. V. Viswanatha Sastri, section K. Bose and Sardar Bahadur, for the appellant.
D. N. Mukherjee, for respondent No. 1.
Janardan Sharma and B. P. Maheshwari, for respondent No. 2. 1962.
August 21.
The following Judgment of the Court was delivered by MUDHOLKAR, J. The substantial question which.
falls for decision in this appeal by special leave.against an award made by the Third Industrial Tribunal, West Bengal, centres round the 662 question of production bonus.
The appellant company runs a steel mill at Belur.
There are various departments in the mill which have been grouped under three headings: direct productive departments, indirect productive departments and nonproductive departments.
In the last mentioned group come the general office, accounts department, establishment department, time office. stores, shipping department, drawing and design department, laboratory, progress and planning department, civil construction department, watch and ward department, medical department , and welfare department.
The first group consists of the following five departments : 1.
Steel foundry 2.
Electric Furnaces 3.
Rolling Mills 4.
Bolt and nuts shop and 5.
Machine shops.
The second group consists the following departments : 1.
Refractory attached to the electric furnaces 2.
Mill General, attached to the rolling Mills 3.
Roll turning, attached to the rolling Mills 4.
Yard Mazdoors, attached to the rolling mills and 5.Civil maintenance department, electric maintenance department and mechanical 'Maintenance department.
It is common ground that each productive department has an individual target for the purpose 663 of payment of production bonus over and above the wages.
The existing targets were fixed (a) in 1948, in electric furnaces and rolling mills;(b) in December, 1956, in the steel foundry and(c) in January, 1959, in the bolt and nut workshop.
According to the appellant the targets were revised from time to time in consultation and with the concurrence of the representatives of the workmen of the department concerned as and when occasion arose for doing so in consequence of the adoption of better methods of production, now techniques, addition of plant and machinery etc.
The workmen in three indirect productive departments, namely, refractory attached to the electric furnace, 'mill general ' attached to the rolling mills and roll turning attached to the rolling, mills are paid production bonus at the rate of 75% of the average rate of production bonus earned by the respective direct productive department to which these three indirect productive departments are attached.
The Yard Mazdoors attached to the rolling mills are paid on the basis of an arbitration award which is subsisting between the workmen and the company.
In civil maintenance, electric maintenance and mechanical maintenance departments, the workmen are paid production bonus at the rate of 75% of the average rate calculated on the basis of production bonus paid to the workmen in the productive, departments taken together.
In the steel foundry department, the target was 20 pounds per man per day until the end of 1956.
Towards the end of 1956 the Appellant had direct negotiations with the workers ' representatives of the department, and in view of the additions to the 664 plant and machinery and provision for additional facilities and working space and improvement in the technique of production 'Which raised considerably the production capacity of the said department, it was agreed to raise the target upto 25 pounds per man per day, The value of machinery and plant added to this department alone would be about Rs. 2 lakhs.
About Rs. 4.5 lakhs worth of electric cranes were also subsequently installed.
They are working for this department and the electric furnace department.
Since December, 1956 there have been further additions of machinery etc, to the extent of about Rs. 3 lakhs in this department alone.
According to the appellant the workmen all along worked without protest against the targets in force from time to time.
But nine months after the revised targets came into operation the second respondent, which is one of the two unions to which the workmen of the company belong, protested against the raising of targets in the steel foundry department form 20 to 25 pounds.
According to the appellant company, different schemes for payment of incentive bonus have been adopted in the different departments because incentive bonus is directly linked up with production targets.
These targets, according to the appellant, have been fixed by direct negotiations with the workman 's representatives in the respective departments as for instance the increase of the targets in the steel foundry from 20 pounds to 25 pounds per head per day at the end of the year 1956.
The respondent No, 1 which is the other union did not make any protest in this matter and indeed even in the proceedings before the Tribunal it did not join hands with the second respondent.
The Government of West Bengal, having come to the conclusion that an industrial dispute had arisen between the appellant and its workmen 665 with respect to the payment of incentive bonus, referred it for adjudication to the Third Industrial Tribunal under section 10 of the .
Both the unions filed their written statements before the Tribunal.
Subsequently disputes on the same question with three associate companies were also referred for adjudication to the same Tribunal.
We are, however, not concerned with the disputes other than the one in which the appellant, the National Iron & Steel Co. Ltd., is concerned.
The substance of the claims made on behalf of the workmen by the respondent No. 2 may be briefly summarised thus: The incentive bonus scheme at present in force should be revised so as to cover those categories of workmen who are at present out of it and to remove all anomalies in the existing scheme as well as to remove such differences as are found to exist.
It is further claimed that the present targets of production should be refixed and brought to the 1948 level.
The first respondent did not attack the targets on the standard of performance or production existing in the different departments of National Iron & Steel Co. Ltd. The main thing it wants is that the scheme of incentive bonus should be extended to all productive departments at the same rate without making any distinction between alleged direct productive workmen and alleged indirect productive workmen.
It wants that workmen in the indirect productive departments should be paid incentive bonus at the same rate at which workmen of the productive department to which the particular indirect productive department is attached are paid.
It also wants that a workman employed in the maintenance department, civil maintenance department 666 and siding maintenance department of the appellant should be paid one half of the total rate arrived at by adding the rates at which all the productive departments of the appellant as also the workmen of the associate companies are paid, As regards the workmen employed in the non productive departments it wants them to be paid bonus at one fourth of the total rate arrived at by adding the rates at which the workmen in the productive departments are paid.
It wants also that four employees in the shipping department should be paid at the rate at which the workmen of the rolling mills department are paid and the three chemists in the laboratory should be paid the same rate as workmen in electric furance department.
Finally it wants incentive bonus to be assessed on the basis of basic wages and dearness allowance earned by the workmen and also on the basis of the total earnings including the earnings for the days described as non productive days.
We may mention here that the appellant has denied that there were any anomalies in respect of the incentive schemes in the various departments.
The stand that it takes is that the introduction of such schemes being entirely the function of the management the company is under no legal or moral obligation to extend it to all categories of workmen.
The claim of the respondent No. 1 for the revision of targets and removal of anomalies and differences in the existing bonuses is thus said to be wholly unfounded.
The appellant has further justified the classifications of departments into direct productive, indirect productive and nonproductive on the ground that.
it is in conformity with the existing practice in the industry.
The employees in the productive departments are paid incentive bonus at the full rate which is normally payable for them for the 667 work they do and that there is no practice of employing direct productive workers in the indirect productive departments and that the workmen employed in the maintenance department are paid at 75% of the average bonus.
Production bonus, according to it, is paid to such workmen as are directly engaged in production work and maintenance and that non productive workmen are not covered by the existing scheme.
It also disputes the claim made by the first respondent on behalf of four clerks in the shipping department and the three chemists in the laboratory.
After the statements were filed by all the parties it was urged on behalf of the appellant that issues should be framed.
But the Tribunal did not accede to the request.
Ultimately, by an order made by it, the Tribunal said that it would adjudicate only on those points which were raised in subparagraphs "1, 2(b) and (c) of paragraph 18 of the written statement filed by the NISCO Karmachari Sanghs (respondent No. 1) and also on the points raised in the prayer portion in paragraph 25 of the written statement of Belur Iron & Steel, Workers ' Union (respondent No. 2)".
The Tribunal first considered the question of the revision of tragets.
According to it the target in the steel foundry department which was raised in December, 1956 from 20 lbs.
to 25 lbs.
should be reduced to 23 lbs.
In regard to the electric furnace department, rolling mills, bolt and nut shop and machine shop the Tribunal held that the target should be 50% of the productive capacity or efficiency of the workmen of the department.
It negatived the claim of the workmen for removal of the alleged anomalies in the existing bonus scheme.
With regard to the workmen 's claim for the exten 668 sion of the scheme to the clerical and watch andward staff the Tribunal held as follows: "This incentive production bonus shall be paid to workmen of the non productive departments at '.he rate of 12 1/2% of the total rate to be arrived at, by adding the rates at which all the productive departments may be paid.
This rate is allowed in consideration of the fact that the workmen of the non productive departments are not directly connected with production but only remotely.
The calculation of this bonus will be made with reference to basic pay only excluding D.A." The Taibunal further held that this would also apply to the four workmen in the shipping department and three chemists in the laboratory.
In so far as the workmen employed in the indirect productive department were concerned the Tribunal held that there was no case for making any change because the present rate of 75% of the bonus paid to the workmen of the productive departments was fair and reasonable. 'The Tribunal rejected the claim of the workmen that rates of production bonus to all categories of workmen whether employed in direct productive or indirect productive departments have to be uniform.
One of the points urged on behalf of the appellant before the Tribunal and taken in the statement of the case is that the introduction of incentive bonus, fixation of targets and fixation of production hours is a function of the management and the Tribunal has no right to interfere.
It has been held by this Court in Titaghur Paper Mills Co. Ltd. vs Its Workmen (1) that while it is the function of the management whether or not to introduce a scheme of incentive bonus, once such a scheme is (1) [1959] Supp. 2 S.C.R. 1012.
669 introduced the right to claim such bonus become,; a condition of service of workmen and, therefore, the Industrial Tribunal has jurisdiction to vary the scheme enforced by the employer including the rates of bonus.
This Court has pointed out in that case that the payment of incentive bonus is payment of further emoluments to the workmen depending not upon extra profits but upon extra production, as an incentive to them to put in more than the standard performance.
Where, therefore, the management has introduced a scheme for the grant of such bonus it is open to the Tribunal to vary the terms of the scheme if the circumstances of the case justify its doing so.
In view of the decision in that case Mr. Vishwanatha.
Sastri fairly conceded that the tribunal had jurisdiction to refix the targets as well as to refix the rates of the incentive bonus provided it found that the targets were too high or the rates wholly incommensurate to the additional performance put in by the workmen.
His main grievance on this score, however, was that the Tribunal had no material before it for reducing the targets in the steel foundry department, from 25 lbs.
per capita per day to 23 lbs.
He further contended that the view of the Tribunal that the targets for the other direct productive departments should be 50% of the capacity of the unit or the efficiency of workmen would lead to startling results.
He also drew our attention to an application made by the appellant during the course of the proceedings before the Tribunal for the appointment of assessors for the purpose of giving opinion on various technical matters which have to be borne in mind for the preparation of a scheme for incentive bonus payable to workmen engaged in different departments of the appellant.
No order was passed on this application by the Tribunal even though on ' being reminded of its omission to do so the Tribunal promised to make an order later.
So here we are faced with a situation where there 670 is no adequate data for judging what would be reasonable and proper targets from the point of view of both the employeres and the employees and what would be the reasonable rates of incentive bonus.
The Tribunal would have done well to bear in mind the fact that for the determination of technical matters it is always desirable to have the assistance of persons who are familiar with the subject.
No doubt the ultimate decision would rest with Tribunal but since the decision has to be based on proper material it should not, have denied to itself the opportunity of obtaining, the appropriate material.
On this one ground alone the award of the Tribunal with respect to the fixation of targets and the rates of incentive bonus in the various departments will have to be quashed.
For revising the target of 25 lbs.
per day in the steel foundry department the Tribunal had hardly any material before it.
It failed to give due importance to the fact that the original target of 20 lbs.
was raised to 25 lbs.
by the appellant after discussing the matter with the workmen concerned and with their consent.
The Tribunal would do well to remember that though it has power to vary an existing scheme and, therefore, also the targets provided therein, it cannot do so lightly.
Primarily it is the function of the management to fix and ordinarily even, to revise the targets.
No doubt, in exercise of this function the management must consult the workmen concerned.
But where all that has been done and the revised targets are the result of agreement between the management and the workmen there must be good reasons for revising the targets.
What the Tribunal has done with respect to the targets in the 'other productive department is still more unjustified.
As already stated it has fixed the targets in these departments at 50% of the total 671 productive capacity per month in these mills or 50% of the efficiency of the workmen employed.
It has directed that incentive bonus should be calculated at the present rate on the quantum of production in excess of those revised targets.
On the face of it, it would appear to have fixed the targets at very low levels and the result of doing this would be that half or more than half of the total earnings of a workman would come to him by way of incentive bonus without the production going up.
Its scheme, rather than proving as an incentive to production, would virtually be a disincentive.
Speaking about premium systems Florence Peterson in her "Survey of Labour Economics revised edition, has observed at p. 329 : "No matter what name they go by, all premium systems have one distinct characteristic, namely, a guaranteed rate with premium payments for production beyond an established standard.
The standard may be in terms of units of output or units of time, that is, minutes or hours.
The essential distinction in the various incentive systems have to do with (1) the point or level of production at which premiums begin, and (2) the formula used for determining premium rates.
In all premium systems the crucial factor is where the 'task ' or standard ' is set.
The policy adopted can tend towards either of two directions, namely, a strict standard which is difficult to accomplish, with high premiums for better than standard, or a lenient standard with relatively small permiums.
If a very, strict standard is set which can be exceeded 672 only through the best efforts of the most com petent workers, the guaranteed rate tends to become the actual earnings rate for most of the workers.
If, on the other hand, a rela tively easy standard is fixed, the major por tion of the total earnings of most employees on the job will consist of premium wages.
The second fundamental distinction in incentive plans has to do with the formula for the division of gains when above standard production is attained, regardless of whether or not the established standard is high or low.
Increasing the ratio of returns to the worker is obviously done for the purpose of encouraging ever higher production.
Plans providing for a decreasing ratio of returns, or a declining wage curve, are based upon the principle that increased output not only is a result of the workers efforts but is also due to improvement in working conditions for which management is responsible, and that management should therefore 'share ' in the gains. " Bearing in mind these observations and the fact that ordinarily the rate of incentive bonus is correlated to the target it would follow that if the target originally fixed by the employee is very high then the existing incentive bonus payable may well be regarded as having been fixed high.
Whether that is in fact so or not would, however, be a question to be decided by the Tribunal.
In this case the Tribunal without considering this point has directed that incentive bonus should be paid to the workmen in the department concerned at the existing rates even 673 though the targets have been halved.
That direction is pot proper.
On behalf of the workmen Mr. Sharma alleged that the existing targets are fixed so high that for earning incentive bonus the workmen have to sweet.
This contention also needs to be examined by the ,Tribunal. 'Now, since the scheme of incentive bonus already prevails in most of the departments of the company the Tribunal will have the jurisdiction to consider whether the existing scheme is onerous, unrealistic, unreasonable or otherwise.
We would, however, reiterate that the scheme should not be interfered with by the Tribunal unless it comes to the definite conclusion that the targets fixed are so high that an average working with ordinary efficiency can earn only the daily wage but nothing more.
It would render the task of the Tribunal easy if it tries to elicit the requisite information from assessors as well as from others conversant with t6 operations in each department.
Where, after considering the relevant material the Tribunal finds that targets are too high or not reasonably attainable, it will undoubtedly be within its competence to refix them.
But while refixing them it should take care to see that the targets are not so low that the major portion of the total earnings of most employees will consist of incentive bonus.
Thus in revising the scheme prepared by the management the Tribunal has on the one hand to guard the interest of the workmen and prevent what may fairly be called sweating and on the other it has to see to it that the revised targets do not encourage laziness or reduce production to low or uneconomic level.
The Tribunal should further bear in mind that where the targets have been agreed to between the employer and the employees and even though a scheme of incentive bonus has been in operation for some time and the workmen have had experienced of it no complaint has been made by them that the scheme is onerous.
This would be a relevant circumstance to be taken 674 into consideration when a demand is made long, after the scheme has been in force for revision of targets.
Again it must bear in mind the effect on production ascribable to improved techniques or to the installation of improved machinery.
Here the Tribunal has adverted to none of the matters.
To put it mildly, the manner in which the Tribunal 'has dealt with the question is wholly unsatisfactory.
We do not understimate the difficulty presented by the question of fixing of targets.
Perhaps the Tribunal 's s task in this regard would be rendered less difficult if, for instance, it can obtain material from which it could ascertain what the average production in each department was before the introduction of the original scheme and before improved techniques ware introduced and better machinery installed.
In the light of the material before it, the Tribunal should consider whether the old production could safely be accepted as the targets.
We realise that here it is the appellant 's case that the adoption of better techniques and installation of new machinery has made it possible for the workmen to produce more in the same time.
This contention of the appellant needs to be examined.
Here again, expert opinion will be valuable.
If the Tribunal finds that the increase in production is solely ascribable to the innovations made and the workload of the workmen has not been increased, there would be a case for the upward revision of the old targets correspondingly.
A complication will undoubtedly arise where the workload of workmen has increased.
When such is that case the Tribunal will have to bear in mind the fact that workmen are after all human beings and not machines, that they are apt to feel tired if they have to work at a a higher tempo than in the past, that performing mechanical operations over, a over a long period produces not only boredom but also a great strain on the 375 muscular powers of workmen with the result that it produces more fatigu, physical as well as psycho.
logical.
In such a case the revised target must, therefore, be reasonably below the level at which results of these kinds are apt to ensue.
What we have said is not exhaustive of the factors to be borne in mind and it would be open to the Tribunal to bear in mind such other factors as would be relevant in this connection.
The next question which has to be considered is the extension of the scheme for payment of incentive bonus to the clerical and watch and ward staff.
In Burn & Co., Ltd. vs Their workmen (1) this Court hold that from the point of view of economics the clerical and subordinate staff in an industry, like its manual workers, contribute towards its production and there man, therefore, be no reason for excluding them wholly from the benefits of a scheme of incentive bonus.
It was urged before, this Court on the authority of decision in Titaghur Paper Mills case (2) that the introduction of incentive bonus is the function of the management and the Tribunal should not impose a scheme for payment of such bonus on the management.
Dealing with this contention this Court observed "In the present case, however, the incentive bonus scheme has already been introduced by the company for the major part of its workmen and all that is now asked for is that the benefit of the scheme should be extended to the remainder of the workmen." Mr. Viswanatha Sastri has not challenged the correctness of the view taken by this Court in Bum & CO 'S Case.
His main grievance with regard to the direction in the award extending incentive bonus scheme to clerical and watch and (1) , 426.
(2) (1959) SUPP.
2 S.C.R. 1012, 676 ward departments is that if implemented it would entitle these workmen to get in effect 100% bonus or perhaps even more.
There are, as already stated, five productive department% and five indirect productive departments.
Now, if we, take 100 as the rate in each productive department the rate for the five indirect productive departments would be 75 and the total for all the departments would come to 875 and 12 1/2% of that would come to nearly 110 It is possible, as Mr. Sharma suggests that this is not what the Tribunal intended to do and that what it intended was to take the average rate for all the productive and indirect productive departments and give 12 of the average rate as bonus to the workmen of the nonproductive departments.
It may be that that was the intention of the Tribunal but the way in which it has expressed itself leads to the absurd result that the workmen employed in the non productive departments will actually get more incentive bonus than workmen emyloyed in the productive departments : Before, however, coming to the conclusion that the scheme of incentive bonus should be extended to these workmen the Tribunal would do well to ascertain whether a case has been made out by them for grant of incentive bonus.
Indeed one of the grounds which persuaded this Court in Burn & Co 's case (1) to extend the scheme of incentive bonus to the clerical staff was that there was increase in their work in consequence of rise in production.
The Tribunal would do well to ascertain whether in view of the increased production there has been a rise in the workload, if we may use that expression, with regard to nonproductive workmen.
If it finds that the workload has increased they could be held entitled to incentive bonus.
(1) ; , 426.
677 We may further point out that in Burn & co 's case (1) the Tribunal did not proceed to lay down the rate of incentive bonus to the clerical and subordinate staff but merely directed the company to extend the scheme to them and lay down the rates and conditions for those classes of workmen to be entitled to get the incentive bonus.
This Court has impliedly approved this direction.
Indeed, bearing in mind the principle that initially the whole question of incentive bonus involving the fixation of targets, prescribing rates an( lavingly down other conditions is the function of the management, we have no doubt that the course taken by the Tribunal in Burn & CO 's Case (1) was the proper one.
One more question remains to be considered and that is the contenation of Mr. Viswanatha Sastri that no question arises for payment of incentive bonus to piece rate workmen.
His argument is that if a piece rate workman produces more he earns more and, 'therefore, there is nothing more that he is entitled to.
We do not agree.
Even with regard to piece rate workmen there is a norm and if a piece rate workman produces anything beyond that norm he should be entitled to be pail for the excess at a higher rate.
That is what is being done in England and other industrialised countries like the United States and there appears to be no reason why it should not be required to be done in our country.
What the enhanced rate should be would necessarily be a matter to be determined with the assistance of assessors as well as of the company and the workmen.
We would, however, admininister a caution.
The result of prescribing a higher rate for production above the norm should not lead to a glaring disparity between the total actual earnings of an average piece rate workman and of a time rate workman working over the same period of time.
For, a wide disparity may lead to (1) ; ,426.
678 discontent, which is something which must be avoided in the interest of the industry as well as the workmen.
For the reasons stated above we quash the award in so far as it relates to the fixation of targets in the various departments of the appellant, fixation of rate of incentive bonus for time rate workmen as well as piece rate workmen and extension of the scheme to non productive departments and remand the dispute to the Tribunal for adjudication after appointing assessors, considering all relevant material placed before it by the parties to the dispute and make a fresh award in the light of our observations.
The rest of the award is affirmed.
There will be no order as to costs in this appeal.

dataset_name: IN-Abs

summary:
The appellant runs a steel mill and there are various departments in the mill which are grouped under three headings.
By agreement between the management and the workmen different production targets and different incentive bonus schemes for different departments have been in force for some time.
The respondent No. 2 on behalf of the work men claimed that incentive bonus scheme at present in force should be revised so as to cover those categories of workmen who are at present out of it.
It was further claimed that the present targets of production should be refixed and brought to the 1948 level.
On the failure of the parties to come to a settlement the Government referred the matter to the Industrial Tribunal for adjudication.
The Tribunal by its award directed the revision of production targets in certain departments.
With regard to the claim for extension of the scheme to the clerical and Watch and Ward Staff and the workmen in the shopping depart ment the Tribunal awarded the extension at certain specified rates.
The claim for revision of the rates of bonus in the indirect productive department was rejected.
The Tribunal also rejected the claim of the workmen that the rates of production bonus to all catagoriesd of workmen should be made uniform.
The appellants thereupon appealed to this Court by way of special leave.
The main question raised in the appeal was whether the Tribunal had jurisdiction to refix the production targets as well as the rates of incentive bonus.
A further question raised was whether piece rate workmen are entitled to incentive bonus.
The appellants made a grievance of the fact that their request to appoint assessors for giving opinion on technical matters was rejected by the Tribunal.
They also alleged that the Tribunal had no adequate data before it to determine the proper production targets.
661 Held, that the Tribunal ought to have borne in mind the fact that for the determination of technical matters it is always desirable to have the assistance of persons who are familiar with the subject and it should not deny to itself the opportunity of obtaining the appropriate material.
While it is the function of the management whether or not to introduce a scheme of incentive bonus, once such a scheme is introduced the Industrial Tribunal has jurisdiction to vary the scheme including the rates of bonus.
But the scheme should not be interfered with lightly.
The Tribunal is entitled to consider whether the scheme is erroneous, unrealistic or unreasonable.
Where after consideration of relevant materials the Tribunal finds the targets are too high it can refix them.
But it should also see that the targets fixed are not too low.
Held, also, that piece rate workmen are entitled to be paid at a higher rate for the excess they have produced beyond a norm.
But in fixing the higher rate care should be taken to avoid glaring disparity between the total earnings of an average piece rate worker and of a time rate workman working over the same period.


judgement:
Appeals Nos.
207 to 209 of 1961.
Appeals from the judgment and decree dated August 23, 1957, of the Bombay High Court at Nagpur in First Appeals Nos. 105 to 107 of 1952 from Original Decree.
section T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
C. K. Daphtary, Solicitor General of India, N. section Bindra and R. H. Dhebar for P. D. Menon, for the respondent No. 1 Girish Chandra for sardar Bahadur, for respondents Nos. 3 and 8. 1963.
February 11.
The judgment of the Court was delivered by DAS GUPTA, J.
The appellant is a building contractor.
He constructed buildings for the Bai 982 Gangabai Memorial Hospital, Gondia, Kunwar Tilaksingh Civil Hospital, Gondia, and also for the Twynam Hospital, Tumsar, all within the district of Bhandara in Madhya Pradesh, in execution of three separate contracts in respect of the three hospitals which were concluded between him and Deputy Commissioner of Bhandara.
Though he received part payment in respect of each of these contracts he claims not to have received full payment of what was due to him.
On April 1, 1948 he brought the three suits out of which these three appeals have arisen for obtaining payments which he claims was due to him.
His averments in all the three plaints are similar, except that in respect of one of the suits, viz., the one in respect of the construction work done for the Bai Gangabai Memorial Hospital, he has also claimed the price of some furniture said to have been supplied by him at the request of the Deputy Commissioner.
The common case of the plaintiff in these three suits was that the Deputy Commissioner entered into these contracts ""as repre sentative of the Provincial Government" after having obtained previous sanction of that Government.
It was further his case that the Deputy Commissioner, Bhandara, as the administration head of the hospitals entered into these contracts and as such was liable to pay the amounts due on the contracts.
The plaint also averred that the Gondia Municipal Committee, Gondia, in the suit in respect of Bai Gangabai Memorial Hospital and the Dispensary Funds Committee in the other two suits were liable to satisfy plaintiff 's claim inasmuch as they had taken the benefit of the work done under the contract which was not intended to be done gratuitously.
On these averments the plaintiff impleaded the Provincial Government of the Province of Central Provinces and Berar as the first defendant, and the Deputy Commissioner of the Bhandara District, as the second defendant, in all the three suits.
The Gondia Municipal Committee was impleaded as the third defendant in 983 Suit No. 3 B of 1948, i. e., the suits in respect of Bai Gangabai Memorial Hospital.
The Dispensary Funds Committee was impleaded as the third defendant in the other two suits.
In both, the members of the Dispensary Funds Committee were also impleaded by name as defendants.
Mr. G. K. Tiwari, who as Deputy Commissioner, Bhandara, signed the argument was impleaded in his personal capacity in all the three suits (Defendant No. 4 in Suit No. 3 B, Defendant No. 9 in Suit No. 2 B and defendant No. 14 in Suit No. 1 B).
The State of Madhya Pradesh was later substituted for the Provincial Government of the Province of Central Provinces and Berar as the first defendant in all the three suits.
It was admitted in the plaint that the construction could not be completed within the time mentioned in the contracts but it was pleaded that the time was not the essence of the contract and further, that the delay was due to the Deputy Commissioner 's failure to supply the necessary materials in time and inclemency of weather and also that time was extended by the Deputy Commissioner.
In all the three suits the plaintiff made his claim at a higher rate than the contract rate on the plea that, the Deputy Commissioner had sanctioned these higher rates.
For the purpose of the present appeals in which we are concerned solely with a question of law it is unnecessary to mention the various other averments in the plaint.
It is necessary to mention however that in Suit No.3 B the plantiff asked for a decree of Rs. 21,281/ with costs and interest from the date of suit against defendants 1 to 3 and in the alternative, against defendant No. 4, i. e., Mr. G. K. Tiwari.
In suit No. 1 B, the plaintiff claimed a decree for Rs. 12,000/ with full costs and future interest from the date of suit against defendants 1 to 3 and/or defendant No. 14, i. e., Mr. G. K. Tiwari.
In Suit 984 No. 2 B, the plaintiff asked for a decree for Rs. 32,208/ with costs and future interest against defendants 1 to 3 and/or defendant No. 9, i. e., Mr. G. K. Tiwari.
The main contention of the State of Madhya Pradesh in resisting the suits was that the agreement for the construction of the buildings was not made on behalf of the State Government and also that the hospital was not government hospital and therefore it had no liability.
The same contentions were raised by the Deputy Commissioner, Bhandara and Mr. Tiwari, personally.
All of them further contended that even on merits the plaintiff was not entitled to any relief, for, though time was essence of the contract the work was not finished within the time agreed upon.
They also resisted the plantiff 's claim to increased rates on the ground that the previous sanction of the Deputy Commissioner had not been obtained.
Another contention raised in all the suits was that the plaintiff 's claim was barred by time.
The other defendants also contested the suits on grounds which it is unnecessary for the purpose of the present appeals to set out.
The Trial judge held that the agreements in question were made for and on behalf of the State and further, that the constructions had "beyond doubt benefited the State" and so the State was liable.
The learned judge also rejected the various objections raised by the defendants to the plaintiff 's claim on merits except that he disallowed part of the plaintiff 's claim and gave the plaintiff a decree for part of his claim against the State of Madhya Pradesh in all the three suits.
He also held that none of the other defendants were liable and dismissed the suits as against them.
Against the Trial Court 's decision in these suits the State of Madhya Pradesh preferred appeals to 985 the High Court of judicature at Nagpur.
During the pendency of these appeals the State of Madhya Pradesh was substituted by the State of Bombay.
In all these appeals the plaintiff Pannalal was impleaded as the first respondent; and all the other defendants were also impleaded as respondents.
Disagreeing with the Trial Court the High Court held that the contract entered into by the Deputy Commissioner was not binding on the State Government; that the Deputy Commissioner signed the contract at his own discretion; and further, the contracts not having been entered into in the form as required under section 175(3) of the Government of India Act, 1935, were not enforceable against the State Government.
The High Court also held that the Government could not be held to have ratified the action of the contracts entered into by the Deputy Commissioner.
The High Court also rejected the argument that the Government having received the benefit of the works must pay for them, on their finding that the hospitals were not government hospitals and Government "can in no sense be regarded as having benefited by anything done with respect to them".
On these findings the High Court set aside the decree passed by the Trial Court against the State Government and allowed the appeals with costs.
It appears that a prayer was made on behalf of the plaintiff respondent that the High Court should pass decrees against the Deputy Commissioner, Bhandara, under Or. 41, r. 33 of the Code of Civil Procedure.
That prayer was rejected by the High Court in these words : "Shri Phadke then prayed that under Order 41 rule 33 of the Code of Civil Procedure we should pass decrees against the Deputy Commissioner, Bhandara, who was indubitably, a party to the contracts.
Though the provisions of Order 41, 986 rule 33 are wide enough to permit this we do not see any reason why we should exercise our power when it was open to the respondent No. 1 to prefer a cross objection against the dismissal of his suits against those defendants, as well as against some other defendants.
" The High Court also rejected the Counsel 's prayer to grant him leave to file a cross objection at that stage.
In the result, all the three suits were dismissed by the High Court in their entirety.
The High Court however granted a certificate under article 133(1)(c) of the Constitution.
On the basis of that certificate these three appeals have been preferred by the plaintiff.
Two grounds were urged in support of the appeals.
The first was that the High Court was wrong in holding that the State Government was not liable.
The second ground urged was that, in any case, the High Court ought to have granted relief to the plaintiff against such of the other defendants as it thought fit under the provisions of Order 41, rule 33 of the Code of Civil Procedure.
There is, in our opinion, no substance in the appellant 's contention that the State Government was liable.
On the materials on the record, it appears clear to us that the Deputy Commissioner did not act on behalf of the State Government in signing the contracts.
Nor can it be said that the State Government derived benefit from the work done by the plaintiff.
In our opinion, the High Court was right in its conclusion that the State Government was not liable in respect of any of these contracts and rightly dismissed the suits as against the defendant No. 1.
This position was not seriously disputed before us.
There is however much force in.
the appellant 's contention that the High Court ought to have exercised its jurisdiction under Or. 41, r. 33 of the Code 987 of Civil Procedure in favour of the plaintiff.
The operative portion of that rule, which was for the first time introduced in the Civil Procedure Code in 1908, is in these words : "33.
The appellate court shall have power to pass any decree and make any order which ought to have been passed or made, and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection.
" A proviso was added to this by Act 9 of 1922 which, however, does not concern us.
It is necessary however to set out the illustration to the rule which runs thus : "A claims a sum of money as due to him from X or Y, and in a suit against both obtains a decree against X. X appeals and A and Y are respondents.
The appellate court decides in favour of X. It has power to pass a decree against Y." Even a bare reading of Order 41, rule 33 is sufficient to convince any one that the wide wording was intended to empower the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between a respondent and a respondent.
It empowers the appellate court not only to give or refuse relief to the appellant by allowing or dismissing the appeal but also to give such other relief to any of the respondent as "the case may require." In the present case, if there was DO impediment in law the High Court could 988 therefore, though allowing the appeal of the State by dismissing the plaintiff 's suits against it, give the plaintiff a decree against any or all the other defendants who were parties to the appeal as respondents.
While the very words of the section make this position abundantly clear the illustration puts the position beyond argument.
The High Court appears to have been in no doubt about its power to give the plaintiff relief by decreeing the suits against one or more of the other defendants.
But say the learned judges, "we do not think it proper to do so as the plaintiff could have asked for this relief by filing a cross objection under Or. 41, r. 22, C. P. C., but has not done so.
" The logic behind this seems to be that the cross objection under Or. 41, r. 22 could be filed only within the time as indicated therein and if a respondent who could have filed a cross objection did not do so, is given relief under Or. 41, r. 33, Or.
41, r. 22 is likely to become a dead letter.
The whole argument is based on the assumption that the plaintiff could, by filing a cross objection under Or. 41, r. 22, Civil Procedure Code,, have challenged the Trial Court 's decree in so far as it dismissed the suits against the defendants other than the State.
, We are not, at present advised, prepared to agree that if a party who could have filed a cross objection under Or. 41, r. 22 of the Code of Civil procedure has not done so, the appeal Court can under no circumstances give him relief under the provisions of Or. 41, r. 33 of the Code.
It is, however, not necessary for us to discuss the question further as, in our opinion, the assumption made by the High Court that the plaintiff could have filed a cross objection is not justified.
Whether or not a respondent can seek relief against any other respondent by a cross objection 989 under Or. 41, r. 22.
Civil Procedure Code, was a vexed question in Indian courts for a long time.
The present Order 41, r. 22 has taken the place of the former section 561 of the Code of 1882.
Indeed, the provision as regards raising an objection by a respondent without a separate appeal appears even in the Code of 1859 as section 348. 'The same provision in a little more detailed form was enacted in the Code of 1877 as section 561.
It was reproduced in the Code of 1882 also as section 561 with slight amendments in these words : "Any respondent though he may not have appealed against any part of the decree, may upon the hearing not only support the decree on any of the grounds decided against him in the court below, but take any objection to the decree which he could have taken by the way of appeal, provided he has filed a notice of such objection Dot less than seven days before the date fixed for the hearing of the appeal.
Such objection shall be in the form of a memo randum., and the provisions of section 541, so far as they relate to the form and contents of the memorandum of appeal shall apply thereto.
Unless the respondent files with objection a written acknowledgement from the appellant or his pleader of having received a copy thereof, the Appellate Court shall cause such a copy to be served, as soon as may be after the filing of the objection, on the appellant or his pleader, at the expense of the respondent.
" The question whether a respondent could by way of cross objection seek relief against another respondent under these provisions was first raised before the courts almost a century ago.
Both the Calcutta and the Bombay High Courts held in a number of cases that ordinarily it was not open to a respondent 990 to seek relief as against a co respondent byway of objection, though in exceptional cases this could be done.
(Vide Burroda Soundree Dossee vs Nobo Gopal Mullick (1), Maharaja Tarucknath Roy vs Tuboornnissa Chowdhrain (2), Ganesh Pandurang Agte vs Gangadhar Ramkrishna (3) , Anwar Jan Bibi vs Azmut Ali(4).
These decisions it is proper to mention were given under the Code of 1859 where section 348 provided that "Upon hearing of the appeal, the respondent may take any objection to the decision of the lower court which he might have taken if he had preferred a separate appeal from such decision.
" After this section was replaced by section 561 in the Code of 1877 and the Code of 1882 the question whether a respondent can file an objection against another respondent came up before the courts several times and the decision remained the same.
The Patna and the Allahabad High Courts also took the view that as a general rule the right of a respondent to urge cross objections should be limited to asking relief against the appellant only and it is only where the appeal opens up questions which cannot be disposed of properly except by opening up matters as between correspondents that relief against respondents can also be sought by way of objections.
The Madras High Court took a different view in Timmayya vs Lakshmanan (5), and held that the words of the section were wide enough to cover all objections to any part of the decree and it was open to a respondent seek relief under this section even against another respondent, and this view was reiterated by that Court even after the Code of 1908 made an important change in the provision by using the word "cross objection" in place of "objection".
Ultimately however in 1950 a Full Bench of the Madras High Court in Venkateshwarlu vs Rammama (1), considered the question again and decided overruling all previous decisions that on a proper construction of the language, Or. 41, r. 22 confers only a restricted (1) (2) (3) (1869) 6 Bom.
H.C. Rep. 244.
(4) (5) (6) L R. 991 right on the respondent to prefer objection to the decree without filing a separate appeal; that such objection should, as a general rule, be primarily against the appellant, though in exceptional cases it may incidentally be also directed against the other respondents.
The Lahore High Court which had earlier followed the former view of the Madras High Court also decided in Jan Mohamed vs P. N. Razden (1), to adopt the other view held by the High Courts of Allahabad, Bombay, Calcutta and Patna.
The Nagpur High Court has also adopted the same view.
(Vide Chandiprasad vs Jugul Kishore) (2).
In our opinion, the view that has now been accepted by all the High Courts that Order 41, r. 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and it is only in exceptional cases, such as where the relief sought against the appellant in such an objection is intermixed with the relief granted to the other respondents, so that the relief against the appellant cannot be granted without the question being re opened between the objecting respondent and other respon dents, that an objection under Or. 41, r. 22 can be directed against the other respondents, is correct.
Whatever may have been the position under the old section 561, the use of the word " 'cross objection" in Or.
41 r. 22 expresses unmistakably the intention of the legislature that the objection has to be directed against the appellant.
As Rajammannar C. J., said in Venkataswrlu vs Ramamma (3).
"The legislature by describing the objection which could be taken by the respondent as a "cross objection" must have deliberately adopted the view of the other High Courts.
One cannot treat an objection by a respondent in which the appellant has no interest as a cross objection.
The appeal is by the appellant against a respondent, the cross objection must be an objection by a respondent against the appellant".
We think, with respect, that these observations put (1) A.I.R. 1944 Lah.
(2) A.I.R. 1948 Nag.
(3) I.L.R. 992 the matter clearly and correctly.
That the legislature also wanted to give effect to the views held by the different High Courts that in exceptional cases as mentioned above an objection can be preferred by a respondent against a correspondent is indicated by the substitution of the word "appellant" in the third paragraph by the words "the party who may be affected by such objection.
" On the facts of the present case, we have come to the conclusion that it was not open to the plaintiff appellant before the High Court to file any cross objection directed against the other defendants who were correspondents.
The High Court was therefore wrong in refusing to consider what relief, if any, could be granted to the plaintiff under the provisions of Or. 41, r. 33, Civil Procedure Code.
Learned Counsel who appeared for the Gondia Municipality in Civil Appeal No. 209 of 1961, relied on the decision of the Privy Council in Anath Nath vs Dwarka Nath (1), for his contention that rule 33 could not be rightly used in the present case.
In that case the plaintiff challenged a revenue sale as wholly void for want of jurisdiction and bad for irregularities and further contended that the respondent had been guilty of fraud or improper conduct to the prejudice of his co owners in the estate.
The Trial Court rejected the plaintiff 's case that the sale was void for want of jurisdiction and bad for irregularities but accepted the other contention and gave the plaintiff a decree.
On appeal, the High Court held that no fraud or improper conduct towards co owners in respect of the revenue sale had been proved against respondent No. 1.
The High Court refused to grant any relief to the plaintiff on the other ground which had been rejected by the Trial Court in the view that it was no longer open to the plaintiff who had not filed any cross objections to the decree of the Trial Court to maintain that the revenue (1) A.I.R. 1939 P.C. 86.
993 sale should be set aside for want of jurisdiction or irregularity.
In accepting this view of the High Court the Privy Council observed : "In their Lordships view the case came clearly within the condition imposed by the concluding words of sub r.
(1) of R. 22, " 'provided he has filed such objections in the Appellate Court, etc., etc".
It was contended however that the language of R. 33 of the same Order was wide enough to cover the case.
Even if their Lordships assume that the High Court was not wholly without power to entertain this ground of appeal an assumption to which they do not commit themselves they are clearly of opinion that Rule 33 could not rightly be used in the present case so as to abrogate the important condition which prevents an independent appeal from being in effect brought without any notice of the grounds of appeal being given to the parties who succeeded in the courts below.
" This decision is of no assistance to the respondents.
For the question which we have considered here, viz., how fir it is open to a respondent to seek relief against a co respondent by way of cross objection did not fall for consideration by the Privy Council.
The Privy Council based its decision on the view that it was open to the respondent before the High Court to file a cross objection under Or. 41, r. 22 against the appellant and had not to consider the question now before us.
We think it proper also to point out that the decision of the Privy Council in Anath Nath 's case (1), should not be considered as an authority for the proposition that the failure to file a cross objection where such objection could be filed under the law invariably and necessarily excludes the application of Or. 41, r. 33.
There their Lordships assumed, without deciding, that the (1) A.I.R. 1939 P. C. 86, 994 High Court was not wholly without power to entertain the other ground of appeal but in the special circumstances of the case they thought that it would not have been right to give relief under the provisions of Rule 33 to the appellant.
As the High Court has refused to exercise its powers under Or. 41, r. 33 of the Code of Civil Procedure on an incorrect view of the law the matter has to go back to the High Court.
We maintain the High Court 's order in so far as it dismisses the suits against the State of Bombay but set aside the order in so far as it dismisses the suits against the other defendants and send the case back to the High Court in order that it may decide, on an examination of the merits of the case, whether relief should be granted to the plaintiff under the provisions of Or. 41, r. 33, Civil Procedure Code.
Costs incurred in this Court will abide the final result in the appeals before the High Court at Bombay.
Appeals allowed in part.
Case remanded.

summary:
The appellant brought three suits claiming full payment with interest in respect of three hospitals constructed by him in execution of three separate contracts between him and the Deputy Commissioner.
The trial Judge decreed the suits for part of his claim against the State of Madhya Pradesh and held that other defendants were not liable, and accordingly dismissed the suits against them.
On appeals preferred by the State of Madhya Pradesh, the High Court set aside the decree against the State Government ' and allowed the, appeals with costs.
The plaintiff at that stage prayed for leave of the High Court to file a cross objection and also for decrees to be passed against the Deputy Commissioner under O. 41, r. 33 of the Code Of Civil Procedure, which was rejected and all the suits were dismissed.
It was urged that (1) the State Government was liable in respect of all of these contracts and (2) the High Court ought to have granted relief against such of the other defendants as it thought fit under O. 41, r. 33 of the Code of Civil Procedure.
Held, that the State Government was not liable in respect of any of these contracts.
Held, further, that the wide wording of O. 41, r. 33 empowers the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between a respondent and a respondent.
It could not be said that if a party who could have filed a cross objection under O. 41, r. 22 did not do so, the appeal court could under no circumstances give him relief under the provision of O. 41, r. 33.
Order 41, r. 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and 981 it is only in exceptional cases that an objection under O. 41, r. 22 can be directed against the other respondents.
On the facts of these cases the High Court refused to exercise its powers under O. 41, r. 33 on an incorrect view of the law and so the appeal must be remanded to the High Court for decision what relief should be granted to plaintiff under O. 41 r. 33.
Burroda Soundree Dasee v, Nobo Gopal Mullick, , Maharaja Tarucknath Boy vs Tuboorunissa Chowdhrain, , Ganesh Pandurang Agte vs Gangadhar Ramakrishna, (1869) 6 Bom.
H.C.Rep.
2244, AnwarJan Bibee vs Azmut Ali, , Tirmnama vs Lakshmanan, Venkateswarulu vs Rammama, I.L.R. , Jan Mohamed vs P. N. Razden, A.I.R. and Ghandiprasad vs Jugul Kishore, A.I.R. , referred to.
Anath Nath vs Dwarka Nath, A.I.R. (1939) P. C. 86, held inapplicable.


judgement:
Appeal No. 832 of 1962.
Appeal by special leave from the judgment and decree dated January 22, 1962, of the Assam High Court in Gauhati, in Civil Rule No. 369 of 1961.
M. C. Setalvad and Naunit Lal, for 'the appellant.
N. C. Chatterjee and D. N. Mukherjee, for the respondent, 4 1963.
February 12.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal by special leave raises a short question about the scope and effect of the provisions contained in Article 311 (2) of the Constitution.
The said question arises in this way.
The respondent Bimal Kumar Pandit was serving appellant No. 1, the State of Assam, as an Extra Assistant Commissioner, Shillong.
On December 11, 1959, the second appellant, the Chief Secretary to the Government of Assam, served on the respondent a charge sheet containing eleven specific charges and called upon him to show cause why he should not be dismissed from service or otherwise punished under Rule 55 of the Civil Services (Classification, Control & Appeal) Rules read with article 311 of the Constitution.
The said notice further informed the respondent that the Governor of Assam had been pleased to authorise the Commissioner of Plains Division, Assam, to conduct the.
enquiry and to report to appellant No. 2.
On January 13, 1960 the respondent submitted an elaborate explanation in respect of all the charges.
The Commissioner of Plains Division, Assam, then proceeded to hold an enquiry and after considering the evidence adduced before him, he made the report on April 12, 1960.
In this report the Enquiry officer found that out of the 11 charges drawn up against the respondent, 6 had not been proved and of the remaining 5 charges, two had been fully established they were charges (7) and (10) ; and the other three charges Nos.
(1), (2) and (4) had been partially established.
The report made these findings and proceeded to add that the lapses proved did not cast any serious doubt on the honesty and integrity of the delinquent officer, although the evidence led in respect of charges (1) and (2) proved his inexperience and that led under charges (2) and (4) showed his irresponsibility.
The report further stated that in the circumstances, the 5 two charges which deserved consideration for purposes of punishment were charges (7) and (10); aid it ended with the recommendation that in view of the limited scope of the charges proved and of the age and experience of the delinquent officer, the with.
holding of three increments from his pay would meet the ends of justice in this case.
After this report was received, appellant No. 2 served a second notice on the respondent on June 1, 1960.
This notice referred to the disciplinary proceedings held against the respondent and added that the respondent was thereby required under clause (2) of article 311 of the Constitution to submit his explanation if any, why the penalty of removal from service should not be imposed upon him.
The notice further stated that a copy of the report of the Enquiring officer in the disciplinary proceedings drawn up against the respondent was enclosed.
The respondent was told that he had to submit his explanation through the Commissioner of Plains Division, Assam, on or before June 18, 1960.
On receiving this notice, the respondent submitted his explanation on June 21, 1960 in respect of the charges which had been held proved by the Enquiring officer.
After considering the explanation thus submitted by the respondent, the Governor of Assam was pleased to reduce in rank the respondent who was on probation in the Assam Civil Service, Class I to the Assam Civil Service Class Il, perma nently, with effect from the date he takes over as such.
The Governor of Assam further ordered that the respondent will be on probation in the said Class 11 Service for two years, subject to termination, if his work and conduct were not found satisfactory.
The respondent was to draw his pay in the minimum of the scale of pay of A. C. section, Class 11 and his seniority in the cadre would be determined with 6 effect from the date of his joining.
This Order was made on July 8, 1961.
The respondent then challenged the validity of this order by a writ petition in the High Court of .Judicature at Assam on August, 24, 1961.
One of tile points urged by him was that he had not been given a reasonable opportunity of showing cause against the action which was ultimately taken against him under article 311 (2); and he urged that the contravention of article 311 (2) rendered the impugned order invalid.
He urged other contentions also, but those have been rejected by the High Court, while his main point under article 3.11 (2) has been upheld.
In the result, the High Court has allowed the writ petition and issued a mandamus directing the appellants not to give effect to the order dated 8th July, 1961.
It is against this order that the appellants have come to this Court by special leave.
We have already referred to the second notice served on the respondent under article 311 (2).
The respondent 's contention which has been accepted by the High Court is that in the said notice, appellant No. 1 has not clearly indicated that it accepted the findings of the Enquiring officer; and since such a statement is not made in the notice, the respondent could not have known on what ground appellant No.1 provisionally decided to impose upon the respondent the penalty of removal from service.
The High Court has held that the notice issued under article 311 (2) must show that the dismissing authority has applied its mind to the findings of the Enquiring officer and has accepted the said findings against the delinquent officer.
In other words the notice should expressly state the conclusions of the dismissing authority, because unless these conclusions are communicated to the delinquent officer, he would not be able to make an adequate or effective representation.
According to the High Court, in recording such conclusions, the dismissing authority must 7 also indicate the reasons on which it had come to those conclusions against the delinquent officer and since the impugned notice did not contain a specific averment that the dismissing authority had accepted the findings of the enquiring officer and otherwise gave no grounds or reasons for the action proposed to be taken against the respondent, it contravened the requirements of article 311 (2) and so, it must be held to be void.
Mr. Setalvad for the appellants contends that in coming to this conclusion, the High Court has misinterpreted the scope and effect of article 311 (2).
Article 311 (1) provides, inter alia, that no person covered by the said sub article shall be dismissed or removed by an authority subordinate to that by which he was appointed.
We are not concerned with this sub Article in the present appeal.
Article 311 (2) provides that no such person as specified in article 311 (1), shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
It is now well settled that a public officer against whom disciplinary proceedings are intended to be taken is entitled to have two opportunities before disciplinary action is finally taken against him.
An enquiry must be held and it must be conducted according to the rules prescribed in that behalf and consistently with the requirements of natural justice.
At this enquiry, the public officer concerned would be entitled to test the evidence adduced against him by cross examination, where necessary, and to lead his own evidence.
In other words, at this first stage of the proceedings he is entitled to have an opportunity to defend himself.
When the enquiry is over and the enquiring officer submits his report, the dismissing authority has to consider the report and decide whether it agrees with the conclusions of the report or not.
If the findings, in the report are against the 8 public officer and the dismissing authority agrees with the said findings, a stage is reached for giving another opportunity to the public officer to show will disciplinary action should not be taken against him.
In issuing the second notice, the dismissing authority naturally has to come to a tentative or provisional conclusion about the guilt of the public officer as well as about tile punishment which would meet the requirement.
, of justice in his case, and it is only after reaching conclusions in both these matters provisionally that the dismissing authority issues the second notice.
There is no doubt that in response to this notice; the public officer is entitled to show cause not only against the action proposed to be taken against him, but also against the validity or the correctness of the findings recorded by the enquiring officer and provisionally accepted by the dismissing authority.
In other words, the second opportunity enables the public officer to cover the whole ground and to plead that no case had been made out against him for taking any disciplinary action and then to urge that if he fails in substantiating his innocence, the action proposed to be taken against him is either unduly severe or not called for.
This position is not in dispute.
The High Court seems to have taken the view that in order that the public officer may have a reasonable opportunity, tile dismissing authority must indicate its conclusions on the findings recorded by the enquiring officer and must specify reasons in supports of them.
According to this view, the fact that the copy of the report made by the enquiring officer was sent to the delinquent officer along with the notice indicating the nature of the action proposed to be taken against him, does not help to meet the requirement of ' article 311 (2).
The argument is that unless this course is adopted, it would not be clear that the dismissing authority had applied its mind and had provisionally come to some conclusions 9 both in regard to the guilt of 'the public officer and the punishment which his misconduct deserved.
It may be conceded that it is desirable that the dismissing authority should indicate in the second notice its concurrence with the conclusions of the enquiring officer before it issues the said notice under article 311 (2).
But the question which calls for our decision is if the dismissing authority does not expressly say that it has accepted the findings of the enquiring officer against the delinquent officer, does that introduce such an infirmity in the proceedings as to make the final order invalid ? We are not prepared to answer this question in the affirmative.
It seems to us that it would be plain to the delinquent officer that the issuance of the notice indicating the provisional conclusions of the dismissing authority as to the punishment that should be imposed on him, obviously and clearly implies that the findings recorded against him by the enquiring officer have been accepted by the dismissing authority; otherwise there would be no sense and no purpose in issuing the notice under article 311 (2).
Besides, we may add that in the present case, the affidavit made by appellant No. 2 clearly shows that before the impugned notice was served on the respondent, the Government had accepted the findings of the enquiring officer which means that the Government agreed with the enquiring officer in regard to both sets of findings recorded by him.
Therefore, we do not think that the failure to state expressly that the dismissing authority has accepted the findings recorded in the report against the delinquent officer, justifies the conclusion that the notice given in that behalf does not afford a reasonable opportunity to the delinquent officer under article 311 (2).
On receiving the notice in the present case, it 'must have been obvious to the respondent that, the findings recorded against him by the enquiring officer had been accepted by the appellants and so, we think it would not be reasonable to accept the 10 view that in the present case, he had no reasonable opportunity as required by article 311 (2).
We ought, however, to add that if the dismissing authority differs from the findings recorded in the enquiry report, it is necessary that its provisional conclusions in that behalf should be specified in the second notice.
It may be that the report makes findings in favour of the delinquent officer, but the dismissing authority disagrees with the said findings and proceeds to issue the notice under article 311 (2).
ID such a case, it would obviously be necessary that the dismissing authority should expressly state that it differs from the findings recorded in the enquiry report and then indicate the nature of the action proposed to be taken against the delinquent officer.
Without such an express statement in the notice, it would be impossible to issue the notice at all.
There may also may be cases in which the enquiry report may make findings in favour of the delinquent officer on some issues and against him on some other issues.
That is precisely what has happened in the present case.
It ' the dismissing authority accepts all the said findings in their entirety, it is another matter : but if the dismissing authority accepts the findings recorded against the delinquent officer and differs from some or all of those recorded in his favour and proceeds to specify the nature of the action proposed to be taken on its own conclusions, it would be necessary that the said conclusions should be briefly indicated in the notice.
In this category of cases, the action proposed to be taken would be based not only on the findings recorded against the delinquent officer in the enquiry report, but also on the view of the dismissing authority that the other charges not held proved by the enquiring officer are, according to the dismissing authority, proved.
In order to give the delinquent officer a reasonable opportunity to show cause under article 311 (2), it is essential that the conclusions 11 provisionally reached by the dismissing authority must, in such cases, be specified in the notice.
But where the dismissing authority purports to proceed to issue the notice against the delinquent officer after accepting the enquiry report in its entirety it cannot be said that it is essential that the dismissing authority must say that it has so accepted the report.
As we have already indicated, it is desirable that even in such cases a statement to that effect should be made.
But we do not think that the words used in article 311 (2) justify the View that the failure to make such a statement amounts to contravention of article 311 (2).
In dealing with this point, We must bear in mind the fact that a copy of the enquiry report had been enclosed with the notice, and so, reading the notice in a common sense manner, the respondent would not have found any difficulty in realising that the action proposed to be taken against him proceeded on the basis that the appellants had accepted the conclusions of the enquiring officer in their entirety.
It has, however, been urged by Mr. Chatterjee for the respondent that in the present case, the appellants must have proceeded to issue the notice against the respondent after coming to the conclusion that, some of the findings recorded in the enquiry report in favour of the respondent were not correct.
His argument is that the enquiry report had suggested that the withholding of three increments would meet the ends of justice in the present case, nevertheless the notice issued by the appellants indicated that the action proposed to be taken was the respondent 's removal from service.
It is true that the ultimate action taken against him was not as severe; he has, been merely demoted to Class II Service.
But it is suggested that the severity of the punishment proposed to be inflicted on the Respondent rather suggests that the appellants felt that some of the other charges which the enquiring officer had not 12 held proved appeared to be proved to the appellants.
This argument is no doubt ingenious; but in the circumstances of this case, we do not think it can be accepted.
As this Court has held in A. N. D 'Silva vs Union of India (1), in the absence of rules or any statutory provisions to the contrary, the enquiry officer is not required to specify the punishment which may be imposed on the delinquent officer.
His task is merely to hold an enquiry into the charges and make his report setting forth his conclusions and findings in respect of the said charges.
Sometimes the enquiring officers do indicate the nature of the action that may be taken against the delinquent officer, but that ordinarily is outside the scope of the enquiry.
That being so, not much significance can be attached to the recommendation made by the enquiring officer in the present case.
Besides, it is absolutely clear that under the relevant rules, the punishment proposed to be imposed on the respondent was justified even on the findings recorded against him by the enquiring officer, and so, it would be idle to contend that unless the appellants had differed from the conclusions of the enquiring officer in respect of the charges which he held not proved, they could not have legitimately thought of imposing the said punishment on him.
Therefore, in our )pinion, the argument that the action proposed to be taken itself shows that the appellants did not accept the findings recorded by the enquiring officer favour of the respondent must be rejected.
We will now refer to some of the decisions on which Mr, Chatterjee relied.
In the case of The High Commissioner of India vs I. M. Lal ( 2 ) , the Federal Court had to consider the scope and effect of he provisions of section 240(3) of the Constitution Act of 1935. 'This provision is substantially similar to the provisions contained in article 311(2) of the Constitution.
According to the majority view of the Federal Court in that case, all that section 240(3) requited 'was (1) [1962] Supp. 1 section C. R. 968.
(2) 136. 13 not only notification of the action proposed but of the grounds on which the authority was proposing that the action should be taken, and that the person concerned must then be given reasonable time to make his representations against the proposed action and the grounds on which it was proposed to be taken.
Mr. Chatterjee contends that this decision shows that the notice served on the delinquent officer must set forth the grounds on which the particular action was proposed to be taken.
He emphasises the fact that in the judgment it has been specifically stated that grounds should be stated on which the action is proposed to be taken, and shows that the dismissing authority must its reasons in support or the said Section.
In our opinion, this argument is not justified, because the context in which the said observations were made by the Federal Court clearly shows that the grounds to the judgment refers are the findings or conclusions reached by the enquiring officer.
In fact, in tile subsequent passage, it has been expressly observed that.
the requirement of section 240(3) involves "in.
all cases where there is an enquiry and as a result, thereof some authority definitely proposes dismissal or reduction in rank, that the person concerned shall be told in full, or adequately summarised form the results of that enquiry, and the findings of the enquiring officer and be given an opportunity of showing cause with that information why lie should not suffer the proposed dismissal or reduction in rank.
" It would be noticed that this statement clearly shows that what the Federal Court held was that the dismissing authority must convey to the delinquent officer the findings of the enquiring officer either fully, or adequately summarised, and state the nature of the action proposed to be taken against him.
In other words, the officer concerned ought to know what findings have been recorded against him and should be given a chance to challenge those findings and to question the propriety 14 of the action proposed to be taken against him.
In this context, therefore, the grounds which, according to the judgment, have to be stated in the notice do not indicate grounds or reasons which would show.
why the dismissing authority accepts the enquiring officer 's report, but the grounds, reasons, or findings which have been recorded by the enquiring officer are required to be stated.
Therefore, we do not think that Mr. Chatterjee is justified in contending that the decision of the Federal Court in 1.
M. Lal 's case supports the view taken by the High Court in the present proceedings.
It is true that in the case of Khem Chand vs The Union of India (1), this Court has held that : "Reasonable opportunity envisaged by article 311 (2) includes, internal, an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the enquiry is over and after applying his mind to the gravity or otherwise of the charges proved against the Government servant, tentatively proposes to inflict one of the three punishments and communicates the same to the Government servant.
" There is no doubt that after the report is received, the appropriate authority must apply its mind to the report and must provisionally decide whether the findings recorded in the report should be accepted or not.
It is only if the findings recorded in the report against the Government servant are accepted by the appropriate authority that it has to provisionally decide what action should be taken against him But this does not mean that in every case, the appropriate authority is under a constitutional obligation to state in the notice that it has accepted the adverse findings recorded by the enquiring officer before it indicates the nature of the action proposed to be taken against the delinquent officer.
Therefore, we do not think that the decision of (1) ; , 1097, 15 this Court in Khem Chand 's case supports Mr. Chatterjee 's contention.
On the other hand, the decision of this Court in The State of Orissa vs Govindadas Panda (1), shows that a similar order issued by the Orissa Government was upheld by this Court.
In that case, the notice issued under article 311 (2) did not expressly state that the State Government had accepted the findings recorded by the enquiring officer against the Government servant in question.
In fact even the nature of the punishment which was proposed to be inflicted on him was not specifically and clearly indicted.
The Orissa High Court had struck down the order of dismissal on the ground that the notice was defective and so, the provisions of article :II 1 (2) had been contravened.
This Court in reversing the concision of the Orissa High Court, observed that "in the context, it Must have been obvious to the respondent that the punishment proposed was removal from service and the respondent was called upon to show cause against that punishment.
On a reasonable reading of the notice, the only conclusion at which one can arrive is that the appellant (the State) accepted the recommendation of the Administrative Tribunal and asked the respondent to show cause against the proposed punishment, namely, that of removal from service.
" It may be added incidentally that the punishment which had been suggested by the Tribunal was removal from service, as distinguished from dismissal, and this Court held that the impugned notice must be deemed to have referred to that punishment as the action proposed to be taken against the Government servant.
Therefore, this decision, in substance, is against the contention raised by Mr. Chatterjee There are, however, some decisions which seem to lend support to Mr. Chatterjee 's argument and it is, therefore, necessary to examine them.
In the (1) Civil Appeal NO, 412/1958 decided on 10th Dec., 1958, 16 case of The State o Andhra vs T. Ramayya Suri the Andhra Pradesh High Court has held that "under article 311 (2) the authority concerned should necessarily in its order requiring the civil servant to show cause give not only the punishment proposed to lie inflicted but also the reasons for coming to that conclusion.
" If this observation is intended to lay down a general rule that in every case the appropriate authority must state its own grounds or reasons for proposing to take any specific action against the delinquent government servant, we must hold that the said view is not justified by the requirements of article 311 (2).
We ought, however, to add that in the case with which the Andhra Pradesh High Court was dealing, it appeared that the Government did not agree with the Tribunal in regard to its finding on the third charge and so, its conclusion on the said charge which was different from that of the Tribunal, weighed in its mind in proposing to take the specified action against the Government servant.
In such a case, it would be legitimate to hold that the public servant did not know what was weighing in the mind of the Government and so, did not get an adequate opportunity to challenge the view which the Government was inclined to take in respect of the third charge framed against him.
On these facts, we think, the High Court was justified in taking the view that the Government should have indicated in the notice its conclusion on the third charge.
That, however, does riot mean that in the notice, the Government ought to state its grounds or reasons in support of its conclusion.
It is the finding or the conclusion which is weighing in the mind of the Government that must, in such a case, be communicated to the public servant.
In Bimal Charan Mitra vs State of Orissa (2), the Orissa High Court has held that "the service of the copy of the findings of the punishing authority on the public servant is mandatory and the service (1) A. I. R. , (2) A. I. R. 1957 Orissa.
184, 17 of the report of the enquiring officer who is not the punishing authority, when there is no indication at all in the notice that the authority competent to punish agrees with those findings, cannot constitute substantial compliance with the requirements of article 31 1 (2).
" This decision seems to suggest that in issuing the notice under article 311.
(2), the appropriate authority must, besides serving the copy of the enquiring officer 's report on the government servant, supply the said officer the findings of the punishing authority and this requirement is treated as a mandatory requirement under article 311(2).
In our opinion, this view is erroneous.
The same comment falls to be made 'about another decision of the said High Court in Krishan Gopal Mukherjee vs The State (1).
The last decision to which reference must be made is the decision of the Bombay High Court in the State of Bombay vs Gajanan Mahadev Badley (2) .
In this case, Chief justice Chagla has observed that under article 311 (2) it is not sufficient that the State should call upon the servant to show cause against the quantum of punishment intended to be inflicted upon him; the State must also call upon the servant to show cause against the decision arrived at by a departmental enquiry if that decision constitutes the ground on which the Government proposes to take, action against the servant.
This view is clearly right.
But then in support of this conclusion, the learned Chief justice has observed that the public servant must have an opportunity to show cause not only against the punishment but also against the grounds on which the State proposes to punish him; and Mr. Chatterjee relies upon this sentence to support his argument that the grounds on which the State proposes to act must be communicated to the public servant.
In our opinion, this statement must be read along with the conclusion of the High Court (1) A.I.R. 1960 Orissa 37.
(2) A.I.R. 1954 Bom.
351. 18 and so read, it would clearly show that what the C. J. intended to lay down was that the findings recorded in the enquiry report which constitutes the ground on which the Government proposes to take action must be communicated to the public servant.
Therefore, this decision does not support Mr. Chatterjee 's argument that the notice issued under article 311(2) must expressly state that the appropriate authority accepts the findings of the enquiry officer and must give reasons in support of the action proposed to be taken against him.
In the result, we hold that the High Court was in error in coming to the conclusion that the order of demotion 'Passed against the respondent in the present case was invalid on the ground that the respondent had not been given a reasonable opportunity of showing cause against the said action under article 311(2).
The appeal accordingly succeeds, the order passed by the High Court is set aside and the writ petition filed by the respondent is dismissed.
There will be no order as to costs.
Appeal allowed.

summary:
The respondent was An Extra Assistant Commissioner.
He was charge sheeted and lie submitted an elaborate explanation in respect of all the charges.
The enquiry was held by the Commissioner and a report submitted by him.
After giving his findings, the Commissioner added that the lapses proved did not cast any serious doubt on the honesty arid integrity of the respondent and hence the withholding of three increments from his pay would meet the ends of justice.
The appellant served a second notice on the respondent and the latter was asked to submit his explanation wiry penalty of removal from service should not be imposed upon him.
The respondent submitted an explanation and the Governor of Assam, after considering the explanation, ordered his demotion.
That order was challenged by the respondent by a writ petition filed in the High Court.
The writ petition was allowed by the High Court and a writ of mandamus was issued directing the appellant not to give effect to the order of demotion.
The High Court held that the second notice did not clearly indicate that the Government had accepted the findings of Enquiry officer and as such a statement was not made in the notice, the respondent could not have known on what grounds the Government had provisionally decided to 2 impose upon him the penalty of removal from service.
It was also held that the notice must show that the dismissing authority had applied its mind to the findings of the Enquiry officer and had accepted the said findings against the respondent.
The notice should expressly state the conclusions of the dismissing authority because unless those conclusions were communicated to the respondent, he was not in a position to make an adequate or effective representation, the dismissing authority must also indicate the reasons on which it bad come to those conclusions.
As the impugned notice did not contain a specific averment that the dismissing authority had accepted the findings of the Enquiry officer and otherwise gave no grounds or reasons for the action proposed to be taken against the respondent, it contravened the provisions of article 311 (2).
The appellant came to this Court by special leave.
Held, that the High Court was in error in coming to the conclusion that the order of demotion passed against the respondent was invalid on the ground that the respondent had not been given a reasonable opportunity of showing cause against the action to be taken against him under article 311 (2) of the Constitution.
A public officer against whom disciplinary proceedings are intended to be taken is entitled to have two opportunities.
Ali enquiry must be held and it must be conducted according to the rules prescribed in that behalf and consistently with tile requirements of natural justice.
When the Enquiry Officer submits his report, the dismissing authority has to consider the report and decide whether it agrees with the conclusions of the report or not.
If the findings in the report are against the public officer and the dismissing authority agrees with them, another notice has to be given.
In issuing the second notice, the dismissing authority has to come to a tentative or provisional conclusion about the guilt of the public officer as well as about the punishment which would meet the ends of justice.
in response to this notice, the public officer is entitled to show cause not only against the action proposed to be taken against him but also against the validity or correctness of the findings recorded by tile Enquiry officer and provisionally accepted by the dismissing authority.
If the dismissing authority differs from the findings recorded in the enquiry report, it is necessary that its provisional conclusions should be specified in the second notice.
If the dismissing authority accepts the findings against the delinquent officer and differs from some or all of those recorded in his favour and proceeds to specify the nature of the action 3 proposed to be taken on its own conclusions, it is necessary that the said conclusions should be briefly indicated in the notice.
Where the dismissing authority purports to issue the notice against the delinquent officer after accepting the enquiry report in its entirety, it cannot be said that it is essential that the dismissing authority must say that it has so accepted the report.
However, it is desirable that even in such cases a statement to that effect should be made, but failure to make such statement does not contravene the provisions of article 311 (2).
As regards the functions of the Enquiry officer unless there is any rule or statutory provision to the contrary, he is not required to specify the punishment which may be imposed on the delinquent officer.
His task is merely to hold an enquiry into the charges and make his report stating forth his con clusions and findings in respect of the said charges.
Sometimes, the Enquiry officers do indicate the nature of the action that may be taken against the delinquent officer, that ordinarily is outside the scope of the enquiry.
A.N. D 'Silva vs Union of India, [1962] Supp.
1 section C. R. 968, High Commissioner of India vs I. M. Lal, , Khem Chand vs Union of India, ; , The State of Orissa vs Govindadas Pahda, C. A. No. 412/58, dt. 10 12 1958, State of Andhra vs T. Ramayya Suri, A. 1.
R. 1957 Andhra 370, Bimal Charan Mitra vs State of Orissa A. 1.
R. 1957 Orissa 184, Krishan Gopal Mukherjee vs The State, A. 1.
R. 1960 Orissa 37 and State of Bombay vs Gajnan Mahadev Baldev, A. 1.
R. , referred to.