judgement:
Civil Appeals Nos. 106 and 107 of 1975.
Appeals by Special Leave from the Judgment and Order dated 18 10 74 of the Orissa High Court in O.J.C. Nos. 851 and 850 of 1972 respectively.
section V. Gupte (In CA 107/75) and Vinoo Bhagat for the Appellant.
G. Rath, Advocate General, and B. Parthasarthi for Respondent No. 1 (In CA 106/75 and Respondent in CA 107/75).
The Judgment of the Court was delivered by GOSWAMI, J.
This judgment will govern both the above mentioned appeals.
We may take the facts briefly from Civil Appeal No. 107 of 1975.
The Orissa Textile Mills Limited is a public limited company (briefly the company) and is engaged in manufacture of textile articles.
It is located at Choudwar in the District of Cuttack (Orissa).
On May 12, 1960, the company (described in the agreement as Consumer) entered into an agreement with the State of Orissa (described in the agreement as the Supplier) for supply of electric power.
The contract was for a period of five years from the date of supply of electric power, namely, February 1, 1963 and it was thereafter to so continue unless and until the same was determined by either party giving to the other six calendar months ' notice in writing of the intention to terminate the agreement.
It is common ground that the agreement has not been terminated.
It may be appropriate at this stage to refer to a few clauses in the agreement.
Clause 12 provides for charges to be paid by the consumer as well as about maximum demand.
Clause 13 reads as follows: "The tariff and conditions of supply mentioned in this Agreement shall be subject to any revision that may be made by the Supplier from time to time".
309 Clause 22 deals with extra charge regarding domestic lighting, fans, domestic power and street lighting, etc.
in the colony of the Mills.
Clause 23 reads as follows: "Any dispute or difference arising between the Consumer and the Supplier or their respective Electrical Engineers as to the supply of electrical energy hereunder or the pressure thereof or as to the interpretation of this Agreement or the right of the Supplier or the consumer respectively to determine the same or any other question, matter or thing arising hereunder shall be referred to a single arbitrator who shall be mutually agreed upon by both parties.
The arbitrator 's decision thereon shall be final and the provisions of the Arbitration Act of 1940 (X of 1940) or of any other statutory modification thereof for the time being in force shall apply to any such reference".
On April 1, 1962, the Orissa State Electricty Board (briefly the Board) was constituted by the State Government under section 5 of the (briefly the Act).
Under section 60(1) of the Act "all debts and obligations incurred, all contracts entered into and all matters and things engaged to be done by, with or for the State Government for any of the purposes of this Act before the first constitution of the Board shall be deemed to have been incurred, entered into or engaged to be done by, with or for the Board. " By this section, therefore, the Board assumed all obligations of the State Government in respect of matters to which the Act applied.
It is common ground that the contract entered between the company and the State Government is binding on both.
The Board decided to levy a surcharge of 10 per cent on the power tariff then in force with effect from July 1, 1972, and a Press Note was issued accordingly.
The material portion of the Press Note may be extracted: "The Orissa State Electricity Board has decided to levy a general and uniform surcharge of 10 per cent on the power tariff now in force except on the following categories of consumers who will pay the existing tariff: (1) Power Intensive Industries which are governed by Special Agreements.
(2) Domestic power and lighting.
In respect of irrigation loads (pumping and agriculture) the power tariff will be Re. 0.16p (sixteen paise) per unit (Kwh) with a rebate of Re. 0.01p (one paise) per unit 'KwhP ' for timely payment.
The above levy of surcharge of 10 per cent is also applicable to the power supply to the Hindustan Steel Ltd., Rourkela and Kalinga Iron Works, Barbil.
310 The levy of 10 per cent surcharge will be on demand charges, unit charges, maximum and minimum charges and reservation charges.
* * * * The levy of surcharge and revised tariff for irrigation loads has become necessary for improving the Board 's overall financial return and enabling it to undertake larger developmental programmes like rural electrification.
* * * * It appears that the second purpose in the above Press Note with reference to "larger developmental programmes like rural electrification" was omitted by a revised Press Note.
The company unsuccessfully challenged the levy of the surcharge by an application under article 226 of the Constitution in the Orissa High Court.
Several contentions were raised in the petition before the High Court.
The surcharge was, inter alia, challenged as being violative of article 14 of the Constitution.
This objection was repelled by the High Court and the learned counsel appearing on behalf of the company was unable to press the same before us in view of the Presidential suspension of that article during the emergency.
Some other grounds, including that clause 13 is ultra vires the Act, were taken before the High Court but have not been pressed before us.
Mr. Gupte, the learned counsel appearing on behalf of the appellants, submits as follows: (1) The Board has no power to levy a surcharge under the provisions of the Act.
(2) Clause 13 of the agreement cannot take in the levy of surcharge.
It is, therefore, not a matter for reference to arbitration under clause 23 of the agreement.
(3) Assuming it has power under the Act or under clause 13 to levy a surcharge, the Board in exempting certain categories and imposing surcharge upon the appellants is guilty of discrimination which is impermissible under section 49 of the Act and clause (2) of Schedule I to the agreement.
With regard to his first contention Mr. Gupte submits that surcharge is unknown to the provisions in the Act and the Board has no power under the Act to levy a surcharge.
It is not possible to accede to the submission that the demand of surcharge cannot be included in the revision of rates of tariff.
The word surcharge is not defined in the Act, but etymologically, inter alia, surcharge stands for an additional or extra charge or payment (see Shorter Oxford English Dictionary).
Surcharge is thus a 311 superadded charge, a charge over and above the usual or current dues.
Although, therefore, in the present case it is in the form of a surcharge, it is in substance an addition to the stipulated rates of tariff.
The nomenclature, therefore, does not alter the position.
Enhancement of the rates by way of surcharge is well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act.
The first submission of counsel is, therefore, of no avail.
Before we deal with the second submission of counsel, we may refer to a recent decision of this Court in M/s Titagarh Paper Mills Ltd. vs Orissa State Electricity Board and Another(1) (briefly the Titagarh 's case) to which one of us was a party.
This Court following the decision in the Indian Aluminium Company vs Kerala State Electricity Board(2) with regard to the scope of sections 49 and 59 of the Act held in the Titagarh 's case (supra) as follows: ". neither section 49 nor section 59 confers any authority on the Board to enhance the rates for supply of electricity where they are fixed under a stipulation made in an agreement.
The Board has no authority under either of these two sections to override a contractual stipulation and enhance unilaterally the rates for the supply of electricity".
It is clear from the above decision that an agreement entered in exercise of the power conferred by the statute, such as under section 49(3) of the Act, cannot be set at naught by unilateral exercise of power by the Board under the Act to enhance the rates agreed upon between the parties in the absence of any provision in that behalf in the agreement itself.
In the Indian Aluminium Company 's case (supra) there was no provision in the agreement with regard to the revision of tariff, such as we find in clause 13 of the present agreement.
This Court, therefore, had not to consider in that case about the effect of a clause like clause 13.
In the Titagarh 's case (supra), however, this Court had to take into consideration clause 13 of the agreement therein which is the identical clause in the present case.
Sub sections (1) and (2) of section 49 empower the Board to fix uniform rates of tariff.
Sub section (3) of section 49 on the other hand reserves to the Board the power of fixing different tariffs having regard to certain factors mentioned therein.
Section 49(3) contemplates what are known as 'special agreements '.
Power under section 49(1) and (2) cannot be invoked during the subsistence of special agreements providing for stipulation of rates of tariff in absence of any reservation therein.
Exercise of power under section 49(1) and (2) as also under section 59 will remain suspended during the currency of the special agreements between the parties and no unilateral enhancement of rates is permissible under law.
There is only a pro tempore ban on revision of rates during the subsistence of statutory special agreements entered in conformity with section 49(3) of the Act.
312 Mr. Gupte, however, submits that since there have been special agreements between the parties the stipulated rates could not be increased by adding the surcharge in question.
This argument proceeds on a wrong assumption that surcharge is absolutely different from rates of tariff.
Besides the submission fails to take count of clause 13 of the agreement with regard to revision of rates.
The ratio of the Indian Aluminium Company 's case (supra) will be available on all fours only where there is nothing in the special agreement with regard to revision of rates during the subsistence of the agreement.
With regard to the second submission, which overlaps to some extent with the first, Mr. Gupte points out that revision of tariff under clause 13 cannot include levy of surcharge which is distinct from tariff.
He also draws our attention to the various clauses in the Press Note where both the expressions 'surcharge and tariff ' are freely used.
On the other hand, the learned Advocate General submits that the import of surcharge depends upon the nature of the original charge.
If the surcharge is appended to a tariff it partakes of the character of tariff.
When the Press Note introduces the surcharge in addition to tariff rates, not much can be made of for use of the two words separately.
We have already noted the meaning of the word 'surcharge ' while dealing with the first submission of the learned counsel.
We may only add that this Court in Titagarh 's case (supra) put the matter beyond controversy in the following words: "Now, the effect of the levy of coal surcharge would be to enhance the rates for the supply of electricity stipulated under the agreement".
Besides in the Titagarh 's case (supra) this Court further observed as follows: "Questions such as: whether the Board has power under clause (13) of the agreement to levy any coal surcharge at all when no such power was conferred on it by the Act, whether the action of the Board in levying the coal surcharge on the appellant under clause (13) of the agreement was arbitrary and unreasonable or whether it was based on extraneous and irrelevant considerations and whether, on the facts and circumstances of the case, the Board was justified under clause (13) of the agreement to levy the coal surcharge on the appellant, are plainly questions arising under the agreement and they are covered by the arbitration provision contained in clause (23) of the agreement.
All the contentions raised by the appellant against the claim to justify the levy of the coal surcharge by reference to clause (13) of the agreement would, therefore, seem to be covered by the arbitration agreement and there is no reason why the appellant should not pursue the remedy of arbitration which it has solemnly accepted under clause (23) of the agreement and instead invoke the extraordinary 313 jurisdiction of the High Court under Article 226 of the Constitution to determine questions which really form the subject matter of the arbitration agreement.
" Although this Court was dealing with the coal surcharge in the above decision, there is no distinction in principle between the coal surcharge or a surcharge simpliciter and the ratio of the above decision will be applicable in this case.
The second submission of the learned counsel, therefore, fails and the point is squarely covered by the above decision.
The matter is, therefore, covered by the arbitration clause 23 of the agreement.
With regard to the last submission regarding discrimination founded upon section 49 of the Act and clause (2) of the Schedule I to the agreement, Mr. Gupte relied upon sub section (4) of section 49 which provides that in fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person.
He also draws our attention to clause (2) of the conditions of supply in the First Schedule to the agreement to the effect that "the Department shall not be entitled to discriminate between different consumers in fixing the charges for the supply of energy".
The agreement is entered under the provisions of section 49(3) of the Act.
If we read section 49 as a whole we find that under sub section (1) of that section, the Board in supplying electricity to any person not being a licensee "may for the purposes of such supply frame uniform tariffs".
However, under sub section (2) of that section in fixing the uniform tariffs the Board shall have regard to the various factors under four heads (a), (b), (c) and (d).
Then comes sub section (3) which preserves the power of the Board, "if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors".
Mr. Gupte submits that there is no reason why the power intensive industries, which are governed by special agreements, should have been exempted from the levy of surcharge in the Press Note.
He further points out that there are eight industries referred to in paragraph 20 of the Special Leave Petition which have not been subjected to the aforesaid 10 per cent surcharge even though the rates of electricity charged per unit in their case are less than those of the Orissa Textile Mills.
It is enough to point out that the industries referred to in the Special Leave Petition were covered by special agreements and we are not even told whether these special agreements had a similar clause like clause 13 in the present case.
This Court has held that special agreements entered under section 49(3) cannot be given a go by while exercising the power of revision of rates under section 49 read with section 59.
That being the position, the objection on the score of discrimination loses all importance.
The totality of the provisions under section 49 does not give any scope for the plea of discrimination raised in this case and in view of clause 13 in the agreement itself.
314 We can appreciate the handicap of counsel in advancing his arguments under the head of discrimination having lost the protective amulet of article 14 of the Constitution under the Presidential embargo during the emergency.
A plea of discrimination which is available when article 14 is in free play is not at par with the interdict of 'undue favour ' under section 49 of the Act.
Apart from this, when law makes it obligatory for certain special agreements to continue in full force during their currency stultifying the power of the Board to revise the rates during the period, no ground of discrimination can be made out on the score of exempting such industries as are governed by special agreements.
Although the Press Note in the instant case did not recite any provisions of the Act under which the same was issued, mere omission to do so does not disentitle the Board to reply upon clause 13 of the agreement for a claim to revision of the rates, although in the form of a surcharge in this case.
We, therefore, do not give any significance to the omission in the Press Note to refer to clause 13 or to any other provision of the Act.
The matter is, therefore, covered by the arbitration clause 23 of the agreement.
It is not for this Court to speculate what answers the Arbitrator will enter with regard to the disputed questions that may be raised before him.
We are not to be understood as expressing any opinion on the merits of the dispute or difference between the parties with regard to the surcharge.
It is then submitted that this Court should not use its discretion in favour of arbitration in a matter where it is a pure question of law as to the power of the Board to levy a surcharge.
This submission would have great force if the sole question involved were the scope and ambit of the power of the Board under sections 49 and 59 of the Act to levy a surcharge, as it was sought to be initially argued.
The question in that event may not have been within the content of clause 23 of the agreement.
But all questions of law, one of which may be interpretation of the agreement, need not necessarily be withdrawn from the domestic forum because the court has discretion under section 34 of the Arbitration Act or under article 226 of the Constitution and that the court is better posted to decide such questions.
The arbitration clause 23 is a clause of wide amplitude taking in its sweep even interpretation of the agreement and necessarily, therefore, of clause 13 therein.
We are, therefore, unable to accede to the submission that we should exercise our discretion to withhold the matter from arbitration and deal with it ourselves.
We, therefore, find no justification in interfering with the conclusion of the High Court in dismising the writ application.
In the result the appeals fail and are dismissed.
We will, however, make no order as to costs.
P.B.R. Appeals dismissed.

summary:
Under cl. 13 of the agreement between the parties the tariff and conditions of supply of electricity were subject to any revision that may be made by the supplier from time to time.
Clause 23 states that any dispute or difference arising between the consumer and the supplier shall be referred to an arbitrator.
The respondent issued a press note deciding to levy a surchage of 10 per cent on certain categories of customers, which included the appellants.
The appellants challenged the levy but the High Court dismissed their writ petitions.
On appeal to this Court it was contended that (1) the Board had no power under the Act to levy a surcharge, (2) cl.
13 of the Agreement could not take in the levy of surcharge and as such it is not a matter for reference to arbitration under cl. 23 of the agreement and (3) in exempting certain categories and imposing surcharge upon the appellants the Board was guilty of discrimination, which is impermissible under section 49 of the Act and cl. 2 of Schedule I to the Agreement.
Dismissing the appeals, ^ HELD: (1) Enhancement of the rates by way of surcharge is well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act.
The word "surcharge" is not defined in the Act.
Etymologically it stands for an additional or extra charge or payment, and in the present case it is in substance an addition to the stipulated rate of tariff.
[311 A B; 310H] (2) (i) It is only where there is nothing in a special agreement with regard to revision of rates during the subsistence of the agreement that the existence of the special agreements prevents any increase of the rates stipulated in the special agreements by adding the surcharge.
In the present case cl. 13 of the agreement provides for revision of rates and the surcharge is not absolutely different from rates of tariff because the effect of the levy of surcharge would be to enhance the rate of supply of electricity stipulated under the agreement.
[312 A B] M/s.
Titagarh Paper Mills Ltd. vs Orissa State Electricity Board and Another, , followed.
Indian Aluminium Company vs Kerala State Electricity Board, ; , explained.
Therefore, the matter in dispute is covered by the arbitration clause of the Agreement.
[313 B] (ii) Although the press note did not recite any provision of the Act, mere omission to do so did not disentitle the Board to rely upon clause 13 for a claim to revision of the rates.
[314 C] (iii) This is not a fit case for the Court in its discretion, to withhold the matter from arbitration and itself deal with it merely because the Court has discretion to do so under section 34 of the Arbitration Act or under article 226 of the 308 Constitution and that the Court is better posted to decide such questions.
The arbitration clause is of wide amplitude, taking in its sweep even interpretation of the agreement and necessarily, therefore, of cl. 13.
[314 F] (3) The totality of the provisions under section 49 does not give any scope for the plea of discrimination raised in this case and in view of cl. 13 of the agreement itself.
As regards the various industries which have not been subjected to the charge, it is not known whether there is a similar provision like cl. 13 in the agreements.
[313 G H] When the law makes it obligatory for certain special agreements to continue in full force during their currency stultifying the power of the Board to revise the rates during the period, no ground of discrimination can be made out on the score of exempting such industries as are governed by special agreements.
[314 B] M/s.
Titagarh Paper Mills Ltd. vs Orissa State Electricity Board and Another, , applied.


judgement:
Civil Appeal No. 721 of 1974.
Appeal by Special Leave from the Judgment and Order dated the 25th August 1972 of the Bombay High Court in Spl.
Civil Appln.
No. 1831 of 1968.
V. M. Tarkunde, Sharad Manohar, V. N. Ganpule and P. C. Kapoor for the Appellant.
M. N. Shroff for Respondents 1 3.
K. K. Singhvi, R. K. Garg, E. C. Agarwal and V. J. Francis for Respondent No. 4.
The Judgment of the Court was delivered by UNTWALIA, J.
The only point which falls for our determination in this appeal by special leave is whether clause 7(1)(a) of the Bombay Police Officers (Combined Cadre) Conditions of Service Order, 1954 hereinafter called the Order, made by the Government of Bombay in exercise of the powers conferred by clause (b) of Section 5 of the Bombay Police Act, 1951 is constitutionally invalid being violative of Articles 14 and 16 of the Constitution of India as has been held by the Bombay High Court in the Writ Petition filed by respondent no.4.
In the Province or the State of Bombay, there were two separate police forces the Mofussil police force governed by the Bombay District Police Act, 1890 and the City Police of Bombay governed by the 317 City of Bombay Police Act, 1902.
Some steps for inter mixing and inter transfer of officers of one force to the other were taken by making some provisions in Bombay Act XVI of 1949 called the Police Forces (Control and Direction) Act, 1949.
The Bombay Police Act of 1951 repealed the earlier Acts.
Under the Order which came into force on and from the 1st August, 1954, provision was made in clause 4 empowering the State Government whenever it thought fit to order the transfer of any police officer belonging to the combined cadre from Greater Bombay to any District and vice versa.
The combined cadre was sought to be formed under clause 3 of the Order.
Two separate lists of the officers in accordance with their respective seniority were, however, maintained even under clause 3 of the Order.
Previously there was one Police Training School at Nasik where cadets for training were sent.
The period of their training was 18 months.
On passing out the training the cadets were appointed to the posts of Sub Inspectors of Police.
Some were appointed to the District Police Force and some were sent to the Police Force of Greater Bombay.
In the year 1939 due to certain exigencies of administration such as introduction of the scheme of Prohibition and the impending second World War more Sub Inspectors were needed to be appointed for Greater Bombay.
A new Training School was opened at Naigaum a part of Greater Bombay.
This new Training School remained in existence for about a decade from the 1st of May, 1939 to 1st of June, 1949.
The period of training was reduced from 18 months to a much shorter period varying from 3 to 8 months.
Thus cadets of particular batches after completion of training for a shorter period were straightaway appointed as Sub Inspectors of Police in Greater Bombay.
This went on for a period of about 10 years as already stated.
On the other hand, almost invariably, the training period at Nasik School remained of 18 months.
On the general principle of fixation of seniority, the two seniority lists which were maintained separately even under the Order, were maintained on the basis of their passing out the training and in order of merit obtained at the passing examination.
But since after the formation of the combined cadre under the Order transfers were to be made under clause 4, a difficulty was felt in the matter of fixation of seniority vis a vis the officer who had been appointed after completion of full training period and the one who had been appointed on the training of a shorter period.
To avoid this anomaly and difficulty, a provision was made in clause 7 of the Order thus: "7.
(1) When an officer who was in service immediately before the formation of the Combined Cadre is transferred under clause 4, his seniority among Police Officers of equivalent ranks in Greater Bombay or in the Districts, as the case may be shall be determined in the case of an officer who was appointed to a post either in Greater Bombay or in the Districts after a course of training at a Police Training School, (a) if the training commenced on any date between the period from Ist May 1939 to 1st June 1949 (both inclusive) with reference to the date on which training commenced; 318 (b) in other cases, with reference to successful completion of such a course and inter se the place occupied in the results of the examination held at the end of such a course.
" Respondent No. 4 was a Police Officer appointed in the year 1948 after a short training period at Naigaum School.
He challenged by a writ application the vires of the entire Order on certain grounds.
He prayed for a direction to respondents 1 to 3 for not giving affect to the Order and for re fixation of seniority.
There was some dispute as to the seniority of a police officer appointed in a regular manner and the one appointed to the police force from the Excise Department.
The High Court allowed the writ application in part, declared clause 7(1)(a) of the Order as constitutionally invalid and also directed the adjustment of places of seniority as between the police officers who came by regular appointments and those who came from the Excise Department.
Some officers of the Department were impleaded as respondents in the writ application in their respective capacity.
The two such officers made parties in the writ application were respondents 4 and 5 of the Mofussil Police Force.
Respondents 6 and 7 therein were police officers who had come from the Excise Department.
Appellants 1 and 2 in the present appeal are two other police officers of the Mofussil Police Force and appellant No. 3 is a Police officer who came from the Excise Department.
He was respondent 6 in the writ application.
The order of the High Court made against appellant No. 3 could not be assailed before us.
Appellant No. 3, is not, therefore, entitled to any relief in this appeal.
So far the case of appellants 1 and 2 is concerned, it must be noted that the High Court has declared clause 7(1) (a) of the Order void being violative of Articles 14 and 16 of the Constitution on three grounds: (1) That the Government had reduced the period of training at Naigaum School as against the resolution dated April 6, 1940 providing for the establishment of a Training School at Naigaum.
(2) That according to the said clause of the Order the commencement of the training period of the Mofussil officer was to be taken for determination of his seniority whereas in case of the officer belonging to the Greater Bombay Police Force, the date of his appointment was to be taken and in the opinion of the High Court, this was clearly discriminatory.
(3) That in case of a cadet whose period of training had been extended on account of his failure at the examination the impugned clause gave an advantage even to such a bad officer.
In our opinion, none of the grounds forming the basis of the judgment of the High Court is sustainable.
The attack on Rule 7(1)(a) was not specifically made in the writ application as originally presented 319 by respondent No. 4.
He laid the foundation for the attack in his re joinder application.
A counter affidavit thereafter was filed by the State stating the facts which led to the framing of clause 7(1)(a).
Respondent No. 4 filed a further rejoinder.
It was not disputed, rather, admitted on all hands that at Naigaum School the training period was much shorter than the period of 18 months which continued at Nasik.
If during the period of 10 years cadets on the basis of a shorter period of training were appointed to the Bombay Police Force without any specific order of the Government (although it must not be the case) it might have affected the validity of their appointment but not the fact that they had been so appointed on a shorter period of training.
The High Court has committed an error in the interpretation of the provision contained in clause 7(1) (a) of the Order.
On transfer of any police officer from Greater Bombay to the District and vice versa, if his training had commenced on any date between the period of 1st May, 1939 to Ist June, 1949, then his seniority was to be determined vis a vis the police officer of the force to which he was transferred with reference to the dates on which their training commenced.
It is not that in one case it will be the date of commencement of the training and in the other it will be the date of appointment, as seems to have been wrongly thought by the High Court.
To explain, we may take an example.
Suppose a Sub Inspector A whose training had menced say on Ist April, 1947 resulting in his appointment on Ist on Ist November, 1947 was transferred to the Mofussil where, let us suppose again, a police officer B was there whose training had commenced say on lst April, 1947 resulting in his appointment on 1st October, 1948 then in such a case B will be senior to A because his training commenced earlier even though he was appointed later.
But if there be an officer, suppose C, in the Mofussil whose training commenced say on 1st April, 1947 resulting in his appointment on 1st December, 1948, then he cannot be senior to A by taking 1st June, 1947 as the date of commencement of his training and comparing with 1st November, 1947 the date of appointment of A.
This interpretation of the rule which we have put was accepted to be the correct interpretation on all hands including the Government.
Learned counsel for respondent No. 4, however, submitted that the impugned seniority list had not been prepared by the Government on such an interpretation of clause 7(1)(a), but the list prepared is on the basis of the interpretation given by the High Court.
On behalf of the State we were informed that it was not so.
We have no doubt in our mind that even if there be any mistake or discrepancy in the seniority list which is found to be not in conformity with the interpretation put by us to clause 7(1)(a), then that mistake or discrepancy will have to be removed sooner than later and the seniority list will be set at right accordingly.
Ordinarily and generally the method of fixation of seniority as provided in sub clause (b) of clause 7(1)(a) of the Order was the correct and proper method to be followed.
But because of the special situation of appointment of some police officers during the period of 320 10 years on a shorter period of training a departure was made as provided in sub clause (a).
A cadet who received his full training for 18 months at Nasik for no fault of his was appointed later than a cadet who started training later at Naigaum but was appointed earlier than the former.
There was nothing wrong, illegal or unreasonable in making a provision in sub clause (a) that in such a situation the commencement of the period of training will be taken as the date for the purposes of fixation of seniority.
There was a reasonable and rational nexus between the object and the rule.
It was for the rule making authority to decide and to choose in such a situation either the date of commencement of the training or the date of appointment.
Taking the former date in the special circumstances seems to be reasonable and justified.
Such a provision cannot be said to be violative of Articles 14 and 16 of the Constitution.
The third ground for declaring clause 7(1)(a) ultra vires given by the High Court theoretically was correct but materials were placed before us from the various affidavits to show that hardly there was such a case which had got the advantage of the clause even after failure in the examination.
There was one such case of hardship of not passing out the examination in time due to reasons beyond the control of the cadet.
Clause 7(1)(a), in our opinion, was not meant to give any undue advantage to a non deserving police officer who failed to pass the training examination at the proper time.
No specific instance was brought to our notice where such advantage had been accorded.
For the reasons stated above, the appeal of appellants 1 and 2 is allowed and that of appellant No. 3 is dismissed.
It is held that clause 7(1)(a), of the order is constitutionally valid and not discriminatory.
The directions given to respondents 1 and 3 to set right the seniority list by the High Court on the basis of the alleged invalidity of clause 7(1)(a) of the order is set aside.
In the circumstances, we shall make no order as to costs.
S.R. Appeal allowed in part.

dataset_name: IN-Abs

summary:
Appointments to the posts of sub inspectors (either to the Distt.
Police Force or the Police Force of Greater Bombay) in the State of Bombay, prior to 1st of May 1939, were after a training of 18 months at the Police Training School at Nasik.
Between the period 1st May 1939 and 1st of June 1949, a new training school at Naigaum a part of Greater Bombay was started wherein the period of training varied from 3 to 8 months and after the short training the cadets were appointed straight away as Sub Inspectors of Police in Greater Bombay.
Separate seniority lists were maintained for the Distt.
force and the city force.
The Nasik school continued to exist side by side with 18 months training.
On the general principle of fixation of seniority when the combined cadre service order came into force w.e.f. 1 8 54 the two seniority lists were maintained on the basis of their passing out the training and in order of merit obtained at the passing examination.
After the formation, when transfers were to be made, a difficulty arose in fixing the inter se seniority of the officers appointed after full 18 months training and one appointed after training for a shorter period and to avoid anomaly and hardship a provision was made in clause 7 whereby for the purpose of seniority (i) in the case of officers whose training commenced on any date from 1 5 39 to 1 6 1949, the date of commencement of the training was taken and (ii) in other cases, the dote of successful completion of such a course and inter se the place occupied in the results of the examination held at the end of such a course was taken.
When the constitutionality of Clause 7(1)(a) was challenged, the High Court of Bombay declared Clause 7(1)(a) of the order void, being violative of Articles 14 and 16 of the Constitution on three grounds: (1) That the Government had reduced the period of training at Naigaum School as against the resolution dated April 6, 1940 providing for the establishment of a Training School at Naigaum.
(2) That according to the said clause of the Order the commencement of the training period of the Mofussil officer was to be taken for determination of his seniority whereas in case of the officer belonging to the Greater Bombay Police Force, the date of his appointment was to be taken and in the opinion of the High Court, this was clearly discriminatory.
(3) That in case of a cadet whose period of training had been extended on account of his failure at the examination the impugned clause gave an advantage even to such a bad officer.
Dismissing the appeal appellant No. 3 and allowing the appeal of appellants Nos. 1 and 2.
the Court ^ HELD: (i) The High Court has committed an error in the interpretation of the provision contained in clause 7(1) (a) of the Bombay Police Officers (Combined Cadre) Conditions of Service Order.
On transfer of any police officer from Greater Bombay to the District and vice versa, if his training had com 316 menced on any date between the period of 1st May 1939 to 1st June 1949 then his seniority was to be determined vis a vis the police officer of the force to which he was transferred with reference to the dates on which their training commenced.
It is not that in one case it will be the date of commencement of the training and in the other it will be date of appointment.
[319 C D].
(ii) Ordinarily and generally method of fixation of seniority as provided in sub clause (b) of clause 7(1)(a) of the order was the correct and proper method to be followed.
But because of the special situation of appointment of some police officers during the period of 10 years on a shorter period of training, a departure was made as provided in clause (a).
There was nothing wrong, illegal or unreasonable in making a provision in sub clause (a) that in such a situation the commencement of the period of training will be taken as the date for the purposes of fixation of seniority.
There was a reasonable nexus between the object and the rule.
[319 H, 320 A B] (iii) It was for the rule making authority to decide and to choose in such a situation either the date of commencement of the training or the date of appointment.
Taking the former date in the special circumstances is reasonable and justified.
Such a provision is not violative of article 14 and 16 of the Constitution.
[320 B C] (iv) To hold clause 7(1) as ultra vires on the ground that it gives any advantage even to such a bad officer whose period of training had been extended on account of his failure in the examination may be theoretically correct.
Clause 7(1)(a) was not meant to give any undue advantage to a non deserving police officer who failed to pass the training examination at the proper time.
[320 C D] (v) Clause 7(1)(a) of the order is constitutionally valid and not discriminatory.
[320 E]


judgement:
ition No. 461 of 1971.
Under article 32 of the Constitution of India AND Civil Appeals Nos. 506 510, 842 844, & 1710 1713 of 1971 From the Judgment and order dated the 12 3 1970 and 27 4 1971 of the Andhra Pradesh High Court in W.P. Nos.
360 364 of 1970, 4365 4366/69, 2704/71 and 295, 297 298, 301/70 respectively.
AND Civil Appeals Nos. 2319 to 2354 of 1972 From the Judgment and order dated the 24 2 1971 of The Madras High Court in Writ Petitions Nos. 1794, 2544, 2563, 2570.
733 2598, 2600, 2634, 2635, 2636, 2642, 2643, 2644, 2764, 2795, 2806.
2807, 3409, 3459, 3679, 3698 and 3699 of 1969, and 161, 162, 307, 308, 1071, 1512, 1514, 1779, 2279, 2282, 2283, 2285, 3164, 3534 and 3535 of 1970 respectively.
A. V. Koteswara Rao and K. Rajendra Chowdhary for the Petitioners (In W.P. No. 461/71).
B. Sen, G. section Rama Rao for the Appellants (in CAs.
506510 and 1710 to 1713/71).
Naunit Lal, K. Srinivasamurthy and Lalita Kohli for the Appellants (In CAs.
2319 2354/72) and for Respondents (In CAs: Nos.
506 to 510 and 842 to 844/71).
Gopalaratnam and A. T. M. Sampath for the Respondents (In CAs.
2328, 2332, 2343 and 2337/72).
B. Sen section Gopalakrishnan (Mrs.) for Respondents (In CAs.
2323 2327, 2331, 2335 36, 2342 and 2344 47/72).
The Judgment of the Court was delivered by MATHEW, J.
We first take up for consideration Civil Appeals Nos.
506 510 of 1971.
The appellants in these appeals filed writ petitions before the Andhra Pradesh High Court questioning the validity of notices issued by the 2nd respondent therein under the Emergency Risks (Goods) insurance Act (Act 62 of 1962) and the Emergency Risks (Factories) Insurance Act (Act 63 of 1962) (hereinafter referred to as the Acts, collectively and individually as 'the Goods Act ' and 'the Factories Act ' respectively).
The impugned notices stated that the appellants had evaded payments of emergency risks insurance premia in respect of goods or factories, is the case may be, by undervaluing the goods or factories for the purpose of insuring them under the Acts.
A learned Single Judge of the High Court allowed the writ petitions on the ground that, after the expiry of the Acts, there could be no authorized officer to determine the quantum of the evaded premia on the basis of the correct value of the goods or factories.
Appeals were filed against the orders, and a Division Bench of the Court, by a common judgment, held that the liability to pay the evaded premia arose during the currency of the Acts and that the extent of the liability could be ascertained by authorized officer even after the expiry of the Acts and allowed the appeals.
These appeals are directed against the common judgment.
The President of India, after the Chinese aggression in October, 1962, proclaimed an Emergency under Article 352 of the Constitution on 26 10 1962.
The proclamation was revoked by the President on 10 1 1968.
The Acts came into force with effect from 1 1 1963.
The Acts were in substance similar to War Risks Insurance Acts which were in force in the United Kingdom during the Second World 734 War.
It was realised after the Chinese aggression that it was necessary to make provision, if possible on war footing, for reinstating the factories damaged or ruined by enemy action and for reimbursing the loss or damage of goods and continue the commercial and economic activity with a view to stabilize the economy of the country.
In view of the magnitude of the task, no private agency in the field of insurance could have undertaken it.
By the Acts, the Central Government undertook the task of insuring factories and goods against loss damage sustained by enemy action.
The Acts in substance provided for compulsory insurance against emergency risks of every person carrying on business as a seller or supplier of goods in respect of the insurable goods, which were from time to time owned or deemed to have been owned by him in the course of such business, if the insurable value of such goods lying in one and the same city or district exceeded Rs. 30,000/ and of all factories falling within the purview of the Factories, 1948.
The schemes framed under the Acts provided for procedural matters relating to the mode of valuation of the insurable goods and assets, receipt of applications for the issue of policies, payment of premium, the terms and conditions attaching to such policies and settlement of claims and other matters.
The provisions of the two Acts were more or less similar.
We would now refer to certain provisions of the 'Factories.
Act '.
Under section 1(3) of that Act, it was provided that the Act would remain in force during the period of operation of the proclamation of emergency issued on 26 10 1962 and for such further period as the Central Government might declare to be the period of emergency for the purpose of the Act.
It was also provided in that section that the expiry of the Act shall not affect anything done or omitted to be done before such expiry and section 6 of the , shall apply upon the expiry of the Act as if it were repealed by a Central Act.
Section 2(f) of that Act defined 'insurable value ' of property as the value of the property as ascertained for the purpose of insurance under the Act.
Section 2(j) defined 'quarter ' as meaning a period of three months commencing on the first day of January, April, July or October and section 2(i) defined 'emergency risks '.
Section 3 of that Act empowered the Central Government to put into operation a scheme called the "Emergency Risk (Factories) Insurance Scheme", where by the Central Government would undertake, in relation to factories, the liability of insuring property against emergency risks.
Under section 3(3) (a), the liability of the Central Government as insurer did not extend to more than 80 per cent of the insurable value of the property insurable.
Under section 3(3) (c), the premium under a policy was payable at a rate not exceeding 3 per cent per annum of the sum insured as may be specified in the scheme.
Section 3(7) enjoined that every scheme shall be laid before each House of Parliament for a total period of thirty days.
735 Section 5(1) said that while a scheme was in operation, every owner of a factory shall take out a policy of insurance against emergency risk, issued in accordance with the scheme, for a sum not less than the insurable value of the property, and, if any owner of factory failed to fulfil the obligation under section 5(1) and failed to pay the premium on the policy which was subsequently due, he was liable to be convicted of an offence under section 5(4), punishable with fine and, that would be without prejudice to any other penalty or liability incurred in consequence of the failure.
Section 6 placed restrictions on carrying on certain insurance business.
By section 7, the Central Government was authorised to create an "Emergency Risks (Factories) Insurance Fund".
The Central Government was authorized, under section 8, to require the owner or occupier to furnish any document or information to a person authorized by it.
Section 11 provided that where any person had failed to insure as or to the full amount, required by the Act, and had thereby evaded the payment by way of premium of any money which would have had to pay but for such failure, an officer authorized in that behalf by the Central Government might determine the amount the payment of which had been so evaded.
The amount so determined shall be payable by such person and shall be recoverable from him as provided in sub section (2) of section 11.
And sub section (2) stated that any installment of premium due on a policy of insurance issued under the scheme and any amount determined as payable under sub section (1) shall be recoverable as an arrear of land revenue and shall be a first charge on the property in respect of which the default was made.
Section 11(3) stated that a person against whom a determination is made under sub section (1) could, within the period specified in the scheme, appeal against such determination to the Central Government, whose decision therein shall be final.
Now we will note a few relevant provisions of the Emergency Risk (Factories) Insurance Scheme.
The Scheme was put into operation with effect from 1 1 1963.
In clause 6 of the Scheme it was provided that an application for insurance should be made in the form set out in Part A or Part of the First Schedule thereto according as the application was for the original or supplementary policy, and that it should be made to the government agent or such other officer of the government agent as might be authorized by that agent in this behalf and the application must be accompanied by a treasury challan evidencing the payment of the requisite premium into the Government treasury.
Clause 7 pertained to the method of valuation of insurable property.
It laid down that the insurable value of the property shall be ascertained in accordance with the principles mentioned therein.
Clause 8 fixed the rate of premium to be 25 paise for every 100 rupees or any part thereof in respect of the quarter ending 31 3 1963.
Clause 9 related to issue of policy and verification of previous policies.
Clause 12 mentioned the date from which the policies would be effective.
736 Clause 13(1) provided that where any person had failed to pay any premium due from him or to insure as, or to the full amount, required by the Act and had thereby evaded the payment by way of premium of any money which he would have had to pay but for such failure, the amount evaded shall be determined in accordance with the Third Schedule; and sub clause (2) provided for appeal against the determination.
Sub clause (3) of clause 13 stated that where the amount determined under the provisions of sub clause (1) or sub clause (2) was fully recovered, the government agent shall, as soon as possible after such recovery, send the requisite application forms to the defaulter for completion and return, and a policy or supplementary policy in respect of the property concerned according as the recovery was in respect of non insurance or under insurance shall be issued by the government agent on receipt of the application correctly filled in, the said policy being made out so as to take effect from the date the amount was fully recovered.
Clause 16 declared that the insured person shall bear 20 per cent of the loss or damage.
It also declared that if the total value of the property insured exceeded the sum insured, the insured person shall be considered as his own insurer for the excess as well as for 20 per cent of the sum insured.
The First Schedule to the Scheme contained forms of applications for a policy or supplementary policy and other matters.
The Second Schedule gave a model form of the policy to be Issued.
According to the Third Schedule, the authorized officer, when he k had reason to believe that the owner or occupier of any property insurable under the Act had failed to pay any premium and had thereby evaded the payment by way of premium of any money which he would have had to pay but for such failure, the officer may serve on such owner or occupier a notice requiring him to show cause why he failed to insure the property or to full amount as required by the Act and further to produce before the officer on such date any document or other evidence in support of his case.
The officer, after providing him an opportunity of being heard shall assess the insurable value of the property and the amount of premium, the payment of which had been evaded.
The Schedule made provisions for appeal to the Central Government.
The provisions of the Scheme framed under the 'Goods Act ' were practically the same.
The appellants challenged the finding of the High Court that the liability to pay the evaded premia arose during the currency of the Acts and contended that the liability itself was dependent on the ascertainment by the authorized officer of the insurable value of the factory or goods in accordance with the Third Schedule and that until the extent of the liability was so ascertained, there could be no liability and so, section of the was not attracted.
In other words, the contention was that until the liability of the insured was determined by the authorized officer by ascertaining the correct 737 insurable value in accordance with the provisions of the Third Schedule no liability to pay the evaded premia arose and therefore, no liability was incurred before the expiry of the Acts which could be enforced under the provisions of section 6 of the after their expiry.
It is clear from the provisions of the Acts that the duty to take out insurance policy for the full insurable value of the factory of goods was mandatory and that the failure to do so was an offence.
Besides, in the case of failure to insure for the full insurable value, provisions were made for recovery of the relative premia.
To effectuate this purpose, the procedure for determination of the insurable value of the factory or goods and of the premia evaded was also provided.
There is no compulsion in a voluntary insurance that the cover should be made for the entire insurable value of the property.
The premium collected in a voluntary insurance is related to the quantum of the risk undertaken in the light of the insurable value suggested by the insured.
Generally, in a voluntary insurance, the premium is paid in consideration of the cover provided.
In other words, premium is paid in order to enable the insurer to indemnify the insured against loss or damage on account of the risk specified.
The scheme of insurance envisaged by the Acts was different.
There was no element of consensus on the fundamental terms of insurance in the scheme.
The liability to take insurance policy for the full insurable value of the factory or goods was compulsory.
The terms and conditions of the policy to be taken were governed solely by the provisions of the Acts and the Schemes.
It is a mistake to assume that the rights and liabilities of the parties in this statutory scheme were similar to those of a voluntary contract of insurance.
If the liability to take the insurance policy for the full insurable value was absolute and if the terms and conditions of insurance were settled by the terms of the statutes and the Schemes read with the Schedules, there is no merit in the contention of counsel for the appellants that the obligation of the President as insurer was same as that of an insurer in a contract of voluntary insurance.
The liability to pay premia ill case of under valuation was not dependent upon the subsequent determination of the full insurable value of the factory or goods insured.
If the factory or goods was under valued, when the insurance policy was taken, the liability to pay premia on the basis of the full insurable value arose at the time when the policy was taken.
That liability was not dependent upon the ascertainment of the full insurable value by the authorized officer in accordance with the Third Schedule.
In Ekambarappa vs Excess Profits Tax officer(ll) this Court held that the liability for excess profits tax arose at the close of the accounting year and was not dependent upon its ascertainment by an order of assessment.
In the same way, the liability to pay the premia on the basis of the full insurable value of the factory or goods insured was incurred Acts and the schemes were in operation. 'The (1) ; 738 liability to pay premia on the basis of the full insurable value of the factory or goods is one thing; the quantification of the amount is another.
But it was argued that if a policy was taken not for the full in surable value, the authorized officer should have ascertained the cor rect insurable value within the quarter and a supplementary policy should have been issued on the basis of the full insurable value, also within the quarter, so that the liability to pay premia on the basis of the full insurable value might arise.
In other words, the argument was that the liability to pay premia on the basis of the full insurable value in case of under insurance was conditioned by the capacity on the part of the insurer to issue a supplementary policy within the quarter undertaking to indemnify the insured on the basis of the correct value against emergency risks, and, as the insurer ceased to have the capacity after the expiry of the quarter, and a fortiort after the expiry of the Acts, to issue a supplementary policy undertaking the liability to indemnify against loss arising out of emergency risk, on the basis of the full insured value, the obligation to pay premia on the full insurance value ceased, as, after the expiry of the Acts, there could no longer be any emergency risk.
We do not think that the argument is correct.
As we said, the obligation to insure for full insurable value of the factory or goods was an obligation which was not dependent upon the corresponding liability of the insurer to indemnify.
If the owner of factory or goods failed to take insurance policy at the time he ought to have taken it and pay the premia, the liability of the insured to pay the premia could be enforced under clause 13 or 14 respectively of the Schemes under the 'Goods Act ' or the 'Factories Act '.
In such a case there would be no obligation on the part of the President to indemnify the insured in case of loss or damage on account of emergency risk the insured did not take out the policy of insurance.
The obligation to issue the policy or supplementary policy, as the case may be, would arise only after payment or recovery of the evaded premia, and even then, the liability of the insurer under the policy or supplementary policy would be from the date of payment or recovery of the evaded premia.
The fact, therefore, that no supplementary policy was issued before the expiry of the Acts is no answer for not fulfilling the obligation of the insured to pay the premia in accordance with the correct insurable value of the factory or goods as determined under the Third Schedule to the Schemes.
Therefore, if under 6.
S of the 'Factories Act ' or under section 7 of the 'Goods Act ', the liability to pay the premia on the full insurable value was incurred before 'he expiry of the Act, section 6 of the would enable the ascertainment of the extent of liability for the evaded premia by an officer who was authorized when the Act was in force or by an officer authorised after the expiry of the Act.
The principle behind section 6 of the is that all the provisions of the Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceeding, remedy, may be instituted, continued or enforced as if the Acts had not expired.
739 The Third Schedule to the Schemes provides for the method of ascertaining the liability in case of under insurance.
The provisions of the Third Schedule show that the officer has to give an opportunity to the insured to show cause why he should not be made to pay the premia on the basis of correct value of the factory or goods under valued.
It was contended for the petitioner in Writ Petition No. 461 of 971 that the provisions of the Acts contravened Articles 14, 19 and Article 19 is not available to the petitioner for challenging the validity of the provisions of the Acts as these Acts were passed during the currency of the proclamation of emergency under Article 352.
No doubt, when the proclamation of emergency was revoked in 1968, the provisions of the Acts became liable to be challenged on the ground that they violated Article 19(1); but the liability incured for acts or omissions during the currency of the proclamation of emergency cannot be nullified even if it be assumed that the provisions of the Acts were violative of Article 19.
In other words, liability crated by an act or omission when the Acts were in operation during the currency of the proclamation of emergency cannot be challenged even after the revocation of the proclamation on the ground that the provisions of the Acts violated Article 19.
This, we think, is the principle laid down by this Court after reading Article 358 of the constitution in Makhan Singh vs State of Punjab(1).
We also think that the procedure for ascertaining the correct in surable value of the factory or goods is reasonable, having regard to the provisions of the Third Schedule in that behalf and cannot, therefore, violate Article 19(1)(f) or (g).
The writ petitioner has not shown how the provisions of the Acts violated Article 14.
And, as regards the contention of the petitioner that the provisions of the Acts violated Article 31(1), we do not think that the petitioner was deprived of any property without the authority of law.
he petitioner has not succeeded in showing law the law which deprived him of his property could be challenged on the ground that it was violative of any of the provisions in of the Constitution; We dismiss Writ Petition No. 461 of 1971 and Civil Appeals Nos.
506 510, 842 844 and 1710 1713 of 1971 and allow Civil Appeals Nos.
2319 2364 of 1972 without any order as to costs.
P.H.P Appeals partly allowed.

summary:
The President of India after the Chinese aggression in 1962, proclaimed emergency under Article 352 of the Constitution.
The Parliament passed the Emergency Risks (Goods,) Insurance Act, 1962 and the Emergency Risks (Factories) Insurance Act, 1962, which came into force from 1 1 1963.
It was realised after the Chinese aggression that it was necessary to make provision for reinstating the factories damaged or ruined by enemy action and for reimbursing the less or damage of goods and continue the commercial and economic activity with a view to stabilize the economy of the country.
The Acts, therefore, provided for compulsory insurance of factories and goods against loss or damage sustained by enemy action.
The Acts further provided that if any person failed to insure the goods or factories or insured for a lesser value than what was required by the Acts and thereby evaded the payment by way of permium such amounts would be payable by such person.
Proclamation of Emergency was revoked by the President on 10 9 1968.
After the expiry of the acts, notices were issued to the appellants stating that they evaded payment of Emergency Risk Insurance Premia in respect of goods or factories by undervaluing the goods or factories.
The appellant filed a writ petition, in the High Court challenging the said notices which were allowed by a learned Single Judge on the ground that after P the expiry of the Acts there could be no authorised officer to determine the quantum, of the evaded premia on the basis, of the correct value of the goods or factories.
In an appeal the Division Bench of the High Court held that the liability to pay the evaded premia arose during the currency of the Acts and that the extent of the liability could be ascertained by an authorised officer even after the expiry of the Acts.
In the present appellant filed said judgment of the Division Bench is challenged.
G The appellants contended: 1.
That the liability to pay the evaded premia was dependent on the ascertainment by the authorised officer of the insurable value of the factory or goods and that until the extent of the liability was so ascertained there can be no liability and, therefore, section 6 of the General Clauses Act was not attracted.
The provisions of the Acts contravened the Articles 14, 19 and 31 of the Constitution.
732 ^ HELD: (1) The duty to take out insurance policy for the full insurable value of the factory or goods was mandatory and that the failure to do so was an offence.
To effectuate this purpose the procedure for determination of the insurable value of the factory or goods and of the premium evaded was provided.
The scheme of the insurance envisaged by the Acts was different from a voluntary insurance.
There was no element of consensus on the fundamental terms of insurance.
The liability to take insurance policy for the full insurable value of the factory or goods was compulsory.
Terms and conditions of the policy to be taken were governed solely by the provisions of the Acts and the schemes.
The liability to pay premia in case of under valuation was not dependent on the subsequent determination of the full insurable value of the factory or goods insured.
The decision in the case of Ekambarappa vs Excess Profits Tax officer holding that the liability for excess profits tax arose at the close of the accounting year and was not dependent upon its ascertainment by order of assessment is approved.
[737 B, C, D, F,G] (2) The argument that the liability to pay premia on the basis of the full insurable value in case of under insurance was conditioned by the capacity on the part of the insurer to issue a supplementary policy negatived.
The obligation to insure for full insurable value was obligation which was not dependent upon corresponding liability of the insurer to indemnity.
[738 B E] (3) Since the liability to pay the premia on the full insurable value was incurred before the expiry of the Act, section 6 of the General Clauses Act would enable the ascertainment of the extent of liability for evaded premia by an officer who was authorised when the Act was in force or by an officer authorised after the expiry of the Act.
The principle behind section 6 of the General Clauses Act is that all the provisions, of the Acts would continue ill force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceeding, remedy, may be instituted, continued or enforced as if the Acts had not expired.
[738 G H] (4) Article 19 is not available to the petitioner as these Acts were passed during the proclamation of Emergency under Article 352.
The liability incurred being acts or omissions during the currency of the proclamation of emergency f cannot be nullified even if it be assumed that provisions of the Acts were violative of Article 19.
The procedure for ascertaining correct insurable value of the factory or goods is reasonable having regard to the previsions of Third Schedule in that behalf and cannot, therefore, violate Article 19(1)(f) or (g).
[739 B, D E] (5) The petitioners were not deprived of any property without the authority of law.
There is, therefore.
no violation of Article 31(1).
The`provisions are not violative of any provisions in Part III of the Constitution.
[739 F)


judgement:
N: Criminal Appeal No. 154 of 1975.
Appeal by Special Leave from the Judgment and order dated the 18th February 1975 of the Madhya Pradesh High Court at Jabalpur in Criminal Appeal No. 789 of 1972.
Sarju Prasad and section N. Prasad for the Appellant.
Ram Panjwani, Dy.
Advocate General, M.P., H. section Parihar and I. N. Shroff for the Respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
To adjust the duration of imprisonment to the gravity of a particular offence is not always an easy task.
Sentencing involves an element of guessing but often settles down to practice obtaining in a particular court with inevitable differences arising in the context of the times and events in the light of social imperatives.
It is always a 714 matter of judicial discretion subject to any mandatory minimum prescribed by law.
Hegel in his 'Philosophy of Right ' pithily put the difficulty as follows: "Reason cannot determine, nor can the concept provide any principle whose application could decide whether justice requires for an offence (i) a corporal punishment of forty lashes or thirty nine, or (ii) a fine of five dollars or four dollars ninety three, four, etc., cents, or (iii) imprisonment of a year or three hundred and sixty four, three, etc., days, or a year and one, two, or three days.
And yet injustice is done at once if there is one lash too many, or one dollar or one cent, one week in prison or one day, too many or too few".
The present appeal by special leave being limited to sentence we are to consider about the appropriate deserts for the appellant in this case.
The appellant was a Circle organizer in the Tribal Welfare Department at Lohandiguda in the State of Madhya Pradesh.
He was entrusted with the distribution of stipends to Adivasi students of the Tribal Welfare Department School.
He misappropriated a sum of Rs. 500/ meant for four students and also forged certain entries in the bills.
He was convicted under section 409 and section 467 IPC by the Sessions Judge and sentenced for each head of charge to con current four years ' rigorous imprisonment and also to a fine of Rs. 500/ , in default to rigorous imprisonment for six months.
The High Court on appeal maintained the conviction but reduced the sentence to two years ' rigorous imprisonment maintaining the fine.
From a perusal of the judgment of the High Court which is the only document in the paper book in addition to the special leave petition, it is not very clear about the offence of forgery committee by the accused.
We would, however, say nothing more than that.
In judging the adequacy of a sentence the nature of the offence, the. circumstances of its commission, the age and character of the offender, injury to individuals or to society, effect of the punishment on the offender, eye to correction and reformation of the offender, are some amongst many other factors which would be ordinarily taken into consideration by courts.
Trial courts in this country already over burdened with work have hardly any time to set apart for sentencing reflection.
This aspect is missed or deliberately ignored by accused lest a possible plea for reduction of sentence may be considered as weakening his defence.
In a good system of administration of criminal justice pre sentence investigation may be of great sociological value.
Through out the world humanitarianism is permeating into penology and the courts are expected to discharge their appropriate roles.
715 The appellant is a youngman of about 30 years.
He is an educated person who was employed in Government service.
But for the forgery he could have been tried in the court of a first class Magistrate for the offence under section 409 IPC and in that case the maximum sentence of imprisonment would have been two years ' rigorous imprisonment on the face of the High Court 's judgment, as noticed above, the part played by the appellant in the forgery is rather a little obscure.
The appellant is sure to lose his employment under the Government.
There is already indignity heaped upon him on account of conviction.
He has the opportunity to commit such offence as a Government servant in the future.
Any sentence of imprisonment imposed upon him will be a deterrent to others similarly disposed in such unlawful pursuits.
The appellant was refused bail in this Court and he is said to have served about nine months in prison.
While we do not minimise the seriousness of the offences, having regard to the circumstances mentioned above, we are of opinion that it will meet the ends of justice in this case if we order, which we do, that the appellant 's sentence be reduced to one year 's rigorous imprisonment only and in addition to a fine of Rs. 500 only, in default rigorous imprisonment for six months.
The appeal is partly allowed with modification of the sentence as ordered.
P.H.P. Appeal partly allowed.

summary:
The appellant was a Circle organizer in the Tribal Welfare Department.
He was entrusted with the distribution of stipends to adivasi students of the Tribal Welfare Department School.
He misappropriated a sum of Rs. 500/ .
meant for 4 students and also forged certain entries in the bills.
He was convicted under section 409 and section 467 of I.P.C. by the Sessions Judge and ` sentenced to 4 years rigorous imprisonment and a fine of Rs. 500/ .
The High Court on appeal maintained the conviction but reduced the sentence to 2 years rigorous imprisonment and a fine of Rs. 500/ .
on an appeal by Special leave limited only to the question of sentence.
^ HELD: 1. To adjust the duration of imprisonment to the gravity of a particular offence is not always an easy task.
It is always a matter of judicial discretion subject to any mandatory minimum prescribed by law.
In judging the adequacy of a sentence, the nature of the offence, the circumstances of its commission, the age and character of the offender, injury to individuals or to Society, effect of the punishment on the offender, eye to correction or reformation of the offender, are some amongst many other factors which would be ordinarily taken into consideration by courts.
[713GH, 714 FG] 2.
Trial Courts in this country already over burdened with work have hardly any time to set apart for sentencing reflection.
In a good system of administration of criminal justice pre sentence investigation may be of great sociological value.
Throughout the world humanitarianism is permeating into penology and the courts are expected to discharge their appropriate roles.
[714 GH] 3.
Without minimising the seriousness of the offence, having regard to the circumstances of the case, the sentence was reduced from 2 years to one year [715 C]


judgement:
N: Criminal Appeal No. 191 of 1971.
(Appeal by special leave from the judgment and order of the Bombay High Court dated 25 2 1972 in criminal appeal No. 683 of 1971.) M/s. M. K. Ramamurthi & Co. for the appellant.
M. N. Shroff and Vineet Kumar, for the respondents.
The Judgment of the Court was delivered by BEG, J.
The allegations, on questions of fact raised in the appeal now before us, were quite unusual.
The judgment of a Division Bench of the High Court of Bombay in Criminal Appeal No. 683 of 1971, in respect of coaccused Syed Ali Naki Hade Hasan, who was acquitted on 25 2 1972, shows the nature of the allegations made by the prosecutor 688 in this case.
On those allegations, it became necessary to consider whether the accused, who had been put on trial together with six others, was actually in possession of a Hotel.
The appellant claimed to be the owner of a hotel of which Jagannath, complainant, was said to be the manager.
The case of the Manager was that he had been forcefully dispossessed by the accused and that certain properties belonging to him and others, including some money, were mis appropriated by the accused.
Therefore, the appellant and five others were charged under Section 395 Indian Penal Code as well as under Section 452 read with Section 34 I.P.C.
According to the accused, Shri Jagannath and his brother, the complainant, were only licensees.
However, these are questions relating to the merits of a case in which the Trial Court had acquitted accused numbers 3 to 8 and the High Court acquitted accused No. 2.
The appeal of the only remaining accused, accused No. 1, who is the appellant before us by special leave was, however, rejected in limine by the High Court without giving any reasons for the rejection.
There is a whole catena of cases which have come up here from the Bombay High Court in which this Court has consistently disapproved of the practice followed by the Bombay High Court of not giving reasons when exercising its power of summary dismissal of criminal s appeals which lie both on questions of fact and law.
In other High Courts, such appeals are automatically admitted.
In any case, it is not possible for this Court to exercise its powers satisfactorily without giving an appellant, who may have an arguable case, an opportunity of first presenting his case to the High Court and getting a decision from it.
The power of a summary rejection of a criminal 1st appeal, even though it is exercisable under the provisions of Section 421 Criminal Procedure Code, should, in our opinion, be only exercised when the Court is satisfied, from a perusal of the judgment as well as the record, that there is absolutely no reasonable possibility of its success for the reasons mentioned in the order.
In a case such as the one now before us, it cannot be said that there are no such arguable points that, after the High Court had an opportunity of fully considering both sides of the case, it must necessarily dismiss the appeal.
At least, in such cases, where there are arguable points, the High Court should give its grounds and reasons in support of its decision to reject summarily on some absolutely clinching ground.
This Court has laid down the duty upon the High Court to record reasons.
(See: Mushtak Hussein vs The State of Bombay (13; Krishna Vithu Surosha vs State of Maharashtra (2); Mustaq Ahmed Mohmed Hussain & Anr.
vs The State of Gujarat(3); Kapurchand Kesrimal Jain vs The State of Maharashtra(4) .
It is difficult to believe that judgments of this Court have neither come to the knowledge of the Bombay High Court nor were cited on behalf of the appellant.
In any case, the law having been declared by this Court, it is the duty of the Bombay High Court to act in accord (1) (2) ; (3) ; (4) 689 ance with Article 141 of the Constitution and to apply it by giving proper reasons to justify whatever be its view.
Accordingly, we allow the appeal and set aside the order of the High Court rejecting the appeal summarily and order that the case will be treated as admitted for regular hearing of both sides by the Bombay High Court, and disposed of in accordance with the law.
,, P.H.P. Appeal allowed.

summary:
The appellant an owner of a hotel was prosecuted along with five others for forcibly dispossessing the complainant who was the Manager of the Hotel and further for misappropriating certain properties including some money belonging to the complainant.
According to the appellant, the complainant was merely a licensee.
The Trial Court acquitted accused Nos. 3 to 6 and convicted accused No. 1 and 2.
The High Court admitted the appeal of accused No. 2 and acquitted him.
The appeal of the appellant accused No. 1 was, however, rejected by the High Court it limine without giving any reasons for the rejection.
On an appeal by Special Leave, ^ HELD: 1.
There is a whole catena of cases which have come up to this Court from the Bombay High Court in which this Court has consistently disapproved of the practice followed by the Bombay High Court of not giving reasons when exercising its power of summary dismissal of criminal appeals which lie both on questions of fact and law.
In other High Courts such appeals are automatically admitted.
The power of summary rejection under section 421 of the Criminal Procedure Code should be only exercised when the Court is satisfied from a, perusal of the judgment as well as the record that there is absolutely no reasonable possibility of its success for reasons to be mentioned in the order of dismissal.
In the present case, it cannot be said that there are no arguable points.
It is difficult to believe that the judgments of this court have neither come to the knowledge of the Bombay High Court nor were cited on behalf of ' the appellant In any case, the law having been declared by this Court, it is the duty of the Bombay High Court to act in accordance with Article 141 of the constitution and to apply it by giving proper reasons to justify whatever be its view.
The judgment of the Bombay High Court was set aside and it was directed that the case should, be treated as admitted for regular hearing in she Bombay High Court and should be disposed of in accordance with law.
[688 C, E, F, G, 689 AB] F