judgement:
Appeal No. 1258 of 1966.
Appeal from the judgment and order dated September 16, 1965 of the Calcutta High Court in First Appeal No. 146 of 1960.
C. B. Agarwala, P. K. Chakravarty, Prodyot Kumar Chakra varty and Uma Mehta, for the appellant.
B. Sen, section P. Mitra, section N. Mukherjee, G. section Chatterjee for, Sukumar Basu, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by certificate from a judgment of a Division Bench of the Calcutta High Court reversing the judgment and decree of a learned Single Judge made in exer cise of original jurisdiction in a suit filed by the appellant.
2 The record of the case is voluminous and apparently that led to very lengthy judgments both by the Single Judge and the Division Bench.
A host of facts have been introduced out of which it is necessary to state only those which are relevant for the purpose of the disposal of the points before us.
The appellant was appointed Station Officer in the Bengal Fire Service in 1943.
In March 1949 he was appointed to act as Assistant Director of Fire Services and Regional Officer, Calcutta Industrial Area until further orders.
section Bose, who was appointed Director ,of Fire Service on or about the same date, received some complaints against the appellant.
He made certain preliminary enquiries.
In the beginning of May 1949 Bose informed the appellant that the post of Assistant Director Fire Service would be treated as abolished with effect from the date of the appointment ,of the appellant as Assistant Director.
This led to protests by the appellant against the abolition of that post.
A lot of acrimonious dialogue started between Bose and the appellant; the former made his final report to section K. Gupta, Secretary Local Self Government, as to the charges which were to be preferred against the appellant.
On July 12, 1949 the appellant was suspended.
On July 19, 1949 a communication containing the charges against the appellant was sent to him by section K. Gupta, Secretary Local Self Government.
It is necessary to reproduce it in extenso "Charges.
Whereas it has been made to appear to the Government of West Bengal (1) that you, Sri section C. Chakravarty, Regional Officer, Calcutta Industrial Area, West Bengal Fire Service incited the subordinate staff of the said service by circulating false rumours regarding the retrenchment policy of the Government, thereby spreading insubordination and discontent within the Force; (2) that you, Sri section C. Chakravarty, Regional Officer, Calcutta Industrial Area, West Bengal Fire Service, took an active part in a conspiracy to implicate the present Director of Fire Service West Bengal in a false case by planting firearms in his office and to injure him by planting a time bomb in his car when he might be going on inspection; 3 (3) that you, Sri section C. Chakravarty, Regional Officer, Calcutta Industrial Area, West Bengal Fire Service, have been guilty of (a) wilful disobedience of Government Order directing you to stay at your headquarters at Barrackpore and of the order of the Director Fire Service to produce the petrol log book of your inspection car; (b) grave negligence of duty, failure to attend office on many days and irregular attendance even on the days when you came to office, resulting in accumulation of work; (c) fabricating false entries in the cash book by putting signatures on dates when you did not attend office; (d) taking illegal issue of petrol from the accounts of different fire stations in addi tion to the quota allotted to you for your use.
and (e) cooking up false complaint against some members of the staff of the West Bengal Fire Service whom you tried to rope in into the conspiracy but failed and refusing permission to them to see the Director, Fire Service, apprehending a disclosure.
AND whereas these acts of indiscipline, conspiracy negligence in the performance of your duties and other irregularities were committed by you while you were holding the responsible, position of the Regional Officer, Calcutta Industrial Area, in a disciplined Organisation like the West Bengal Fire Service and which, therefore, amounted to an abuse or misuse of the position so enjoyed by you.
Now, therefore, you are directed to show cause why you should not be dismissed from the service of the Government or otherwise suitably punished departmentally.
The enquiry will be conducted by the undersigned Sri 'section C. Chakravarty is directed to put in a written statement of his defence by the 8th August, 1949, and to state within the time aforesaid whether he desires to be heard in person.
illegible.
Local Self Government Department Secy.
to the Govt.
of Calcutta.
The 19th July, 1949 West Bengal 4 It is common ground that a statement of the allegations on which each charge was based was never sent to the appellant.
He sent a letter dated August 5, 1949 with reference to the communication containing the charges.
He emphatically denied what had been alleged against him and described the charges as false and actuated by mala fides.
What is worth noticing is that the appellant in categorical terms stated that the charges and allegations were vague, indefinite and lacking in material particulars and pointed out that "unless the charges are made specific to the point and contain full details with date, time, place, and person etc. it is impossible for me to meet them properly." No further particulars or details were supplied at that stage or subsequently.
section K. Gupta submitted his report on May 1, 1950.
He found charges 1, 2 and 3 (b) as having been proved against the appellant.
Charge 3 (a) was dropped.
As regards charges 3 (c) and 3 (d) it was found that there had been gross negligence on the part of the appellant in attendance as well as in carrying out all his ordinary duties, vis., checking and signing of the cash book and disposal of current work including grant or refusal of leave applications.
The appellant was not found guilty of charge 3 (e) On June 10, 1950, the Deputy Secretary to the Government, West Bengal, sent a notice to the appellant in which it was stated that in view of the findings of the Enquiry Officer he was considered to be unsuitable for retention in service and it was proposed to remove him.
A summary of the findings of the Inquiry Officer was sent and the appellant was directed to show cause why he should not be removed from the service of the Government.
The appellant wrote a long letter on July 1, 1950 in which he once again pointed out that according to law he was entitled to have a statement of allegations on which each charge was based before the enquiry started.
But he was not given any such statement with the result that he could not defend his case properly.
On June 16, 1950 the Director of Fire Services communicated an order of dismissal to the appellant who filed an appeal to the Government without any success.
In August 1951 the appellant moved the High Court under article 226 of the Constitution for quashing the order of dismissal.
In April 1952 the High Court acceded to the appellants prayer and quashed the order of dismissal on the sole ground that the punishment which had been tentatively proposed in the show cause notice was removal and therefore an order of dismissal could not have been made. ' On May 15, 1952 the appellant called upon the Government to reinstate him in his post.
On May 31, 1952 an order was made by the Governor, West Bengal, removing the appellant from service.
A memorandum was sent by the Joint Secretary, Local Self Government, along with a copy of the order of the Governor.
It was stated therein that after a careful considera 5 tion of the report of the Enquiry Officer and the representation submitted by the appellant the Government, in consultation with the Public Service Commission, West Bengal, had decided that he should be removed from service.
In September 1952 the appellant filed a suit in the Calcutta High Court challenging the order of his removal from service and asking for various reliefs including a declaration that lie was still in government service and a decree for arrears of pay and allowances from the date of suspension till institution of the suit and interim pay and allowances till the disposal of the suit together with interest etc.
We need refer only to para 19(a) of the plaint in which it was pleaded that the enquiry was vitiated because under the rules and procedure for holding such enquiry the appellant was entitled to be furnished with definite charges.
But the charges and allegations were vague, indefinite and lacking in material particulars and in spite of repeated requests these, were neither made specific nor material particulars like, day time, place and persons were supplied.
In the written statement filed by the respondent it was denied that the charges or allegations were vague, indefinite or lacking in material particulars as alleged.
It is unnecessary to set out the other pleadings but the issues which were settled would indicate the points which the trial court was called upon to decide.
These issues were: 1.
Is there a valid contract of employment between the plaintiff and the defendant under the Government of India Act ? 2.
Was the suspension order dated 12th July 1949 mala fide, wrongful and ultra vires ? 3.
Was Mr. section K. Gupta in a position to exercise unbiased mind in the matter of enquiry ? 4.
Was the order dated 16th September 1950, illegal, void and ultra vires in the Constitution and it cannot operate to terminate the service of the plaintiff ? 5.
Was the order of removal dated 31st May 1952 illegal, void in law and ultra vires in the Constitution of India and the Civil Service Rules for grounds stated in paragraph 29 and 30 of the plaint ? 6.
Was the plaintiff no longer in suspension and was unable to be reinstated in service to his usual pay and allowances from the date of his suspension in view of the order dated 24th April 1952 ? 6 7.
To what relief, if any, is the plaintiff entitled ? Some additional issues were framed out of which we may only refer to those which were settled on June 8, 1959 and which were in these terms : 1.
Was the enquiry made by Mr. Gupta vitiated on the grounds as alleged in paragraph 19 of the plaint ? 3.
Is the Court debarred from trying issue Nos. 4, 5 and 6 and the additional issues settled today by reason of res judicata ? The learned Judge, found that the Enquiry Officer section K. Gupta was biased against the appellant before he held the enquiry.
It was further found that no particulars and other necessary details were given in the charges and they were vague resulting in noncompliance with Rule 55 of the Civil Services (Classification, Control and Appeal) Rules and the necessary particulars were not supplied in spite of the repeated objections of the appellant to the charges being vague and indefinite.
In the opinion of the learned Judge the trial was vitiated for want of definite charges.
It was held that the appellant had been duly appointed as member of the Fire Service of the State and that a contract in terms of Ar t. 299 of the Constitution was not necessary.
Issues 2 and 4 were not pressed.
Reading the prayer in the light of the averments in the plaint the learned Judge granted a declaration that the purported removal of the appellant was void and inoperative And he remained or was still in government service.
He was held entitled to salary and other benefits from the date of his suspension till the date of the judgment.
It was particularly mentioned that the parties had worked out the figures of the salary and allowances etc.
at Rs. 69,636/ for which a decree was granted together with interest at 6% per annum till the date of realisation.
The respondent filed an appeal to the Division Bench of the High Court.
We do not consider that we need refer to all the points dealt with by the Division Bench.
In our judgment the Division Bench was wholly in error in reversing the decision of the learned Single Judge on one of the crucial points, namely, non compliance with Fundamental Rule 55 and complete vagueness and indefiniteness of the charges on which no proper enquiry could be held.
It is incomprehensible how the details as to date, time, place and person etc.
would not have made the charges more definite as appears to have been the opinion of the Division Bench.
We are unable to agree that the details without which a delinquent servant cannot properly defend himself are a matter of evidence.
In this connection reference may be made to Fundamental Rule 55 which provides, inter 7 alia, that without prejudice to the provisions of the Public Servants Enquiry Act 1850 no order of dismissal removal or reduction shall be passed on a member of service unless he is informed in writing of the grounds on which it is proposed, to take action and has been afforded an adequate opportunity of defending himself.
The grounds on which it is proposed to take action have to be reduced to the form of a definite charge or charges which have to be communicated to the person charged together with a statement of the allegations on which each charge is based and any other circumstance which it is proposed to be taken into consideration in passing orders has also to be stated.
This rule embodies a principle which is one of the basic contents of a reasonable or adequate opportunity for defending oneself.
If a person is not told clearly and definitely what the allegations are on which the charges preferred against him are founded he cannot possibly, by projecting his own imagination, discover all the facts and circumstances that may be in the contemplation of the authorities to be established against him.
By way of illus tration one of the grievances of the appellant contained in his letter dated March 24, 1950, to the Enquiry Officer may be mentioned.
This is what he said though the language employed is partly obscure and unhappy : "Regarding the first charge I beg to submit that the allegation is vague.
In the charge it has not been specifically stated as to where, when and before whom I circulated false rumours, regarding retrenchment policy of the Government and thereby spread insubordination.
In fact if one goes through the statements of P.Ws.
made to D.F.S. as submitted before my suspicion, it will appear that no specific case could have made with all material particular as to date, time and person.
Having been able to take deposition and to conduct enquiry keeping me in dark and finally put me out of office, Sri section Bose was able to win over the witnesses and was able to shape his case to suit his pur pose.
" Now in the present case each charge was so bare that it was not capable of being intelligently understood and was not sufficiently definite to furnish materials to the appellant to defend himself.
It is precisely for this reason that Fundamental Rule 55 provides, as stated before, that the charge should be accompanied by a statement of allegations.
The whole object of furnishing the statement of allegations is to give all the necessary particulars and details which would satisfy the requirement of giving a reasonable opportunity to put up defence.
The appellant repeatedly and at every stage brought it to the notice of the 8 authorities concerned that he had not been supplied the statement of allegations and that the charges were extremely vague and indefinite.
In spite of all this no one cared to inform him of the facts, circumstances and particulars relevant to the charges.
Even if the Enquiry Officer had made a report against him the appellant could have been given a further opportunity at the stage of the second show cause notice to adduce any further evidence if he so desired after he had been given the necessary particulars and material in the form of a statement of allegations which had never been supplied to him before.
This could undoubtedly be done in view of the provisions of article 311 (2) of the Constitution as they existed at the material time.
The entire proceedings show a complete disregard of Fundamental Rule 55 in so far as it lays down in almost mandatory terms that the charges, must be accom panied by a statement of allegations.
We have no manner of doubt that the appellant was denied a proper and reasonable opportunity of defending himself by reason of the charges being altogether vague and indefinite and the statement of allegations current findings against the respondent on that point.
The resupplied to him.
In this situation, for the above reason alone, the trial judge was fully justified in decreeing the suit A faint attempt was made by the learned counsel for the respondent to assail the decision of the trial court on issue No. 1 Both the single Judge and the Division Bench had given con current finding against the respondent on that point.
The respondent cannot be permitted to reagitate the matter before us.
We accordingly allow this appeal, set aside the judgment and decree of the Division Bench and restore that of the trial ,court.
The appellant will further be granted a declaration that he is entitled to the salary and allowances for the period subsequent to the date of the decree of the learned Single Judge of the High Court to the date of his superannuation.
The appellant will be entitled to his costs in this, Court.

summary:
The appellant filed a suit in the Calcutta High Court challenging his; removal, after a departmental enquiry, from the post of Assistant Director of Fire Services and Regional Officer Calcutta Industrial Area.
The suit was decreed in his favour,by the Civil Judge but the Division Bench reversed the decree.
In appeal to this Court, by certificate the question was whether the appellant had been denied a reasonable opportunity to defend himself inasmuch as the charges were vague and no statement of allegations as required by Fundamental Rule 55 of the Central Service (Classification Control & Appeal) Rules was furnished to him.
HELD: The appeal must be allowed: The appellant repeatedly and at every stage brought to the notice of the authorities concerned that he had not been supplied the statement of allegations and that the charges were extremely vague and indefinite.
In spite of this he was not informed of the facts and Circumstances and particulars relevant to the charges.
The entire proceedings showed a complete disregard of Fundamental Rule 55 in so far as it lays down in an almost mandatory manner that the charges must be accompanied by a statement of allegations.
There could be no doubt that the appellant was denied a proper and reasonable chance to defend himself by reason of the charges being altogether vague and indefinite and the statement of allegations containing the material facts and particulars not having been supplied to him.
[6 H; 7 D]


judgement:
l Appeals Nos. 1001 to 1003 of 1965.
Appeals from the judgment and decree dated December 22, 1961 of the Orissa High Court in First Appeals Nos. 82, 83 and 84 of 1958.
Bishan Narain and P. C. Bhartari, for the 'appellants (in all the appeals).
B. P. Maheshwari, for respondent No. 1 (in C.A. No. 1002 of 1965).
Sadhu Singh and Jagmohan Khanna, for respondents Nos.
1 to 5 (in C.A. No. 1003 of 1965).
The Judgment of the Court was delivered by Grover, J.
These appeals have been brought by certificate from a common judgment of the Orissa High Court.
Five different suits were filed against certain defendants on the foot of five different pronotes.
All the five suits were ' heard together and were decreed by the trial judge.
In respect of two suits the valuation being low the appeals were preferred before the District Judge and in three suits the appeals were filed in the High Court.
The High Court dismissed the appeals.
It is altogether unnecessary to refer to the points in controversy between the parties because.
the sole question which has been agitated before us relates to the admissibility of certain assessment orders 311 on which reliance has been placed for deciding whether the contesting defendants were the partners of firm Surajmal Manilal on whose behalf the pronotes had been executed.
The learned subordinate judge had found that the suit transactions were genuine and execution on behalf of the firm as well as the passing of consideration had been proved.
He had further found that the contesting defendants were joint with their uncle Manilal in 1949 and that they were the partners of the firm Surajmal Manilal being members of a trading family, and therefore they were liable to the extent of the assets of the joint family in their hands.
It appears that the assessment orders were produced not by the contesting defendants but by the son of Manilal who was the assessee.
After examining section 54 of the Income tax Act 1922 and the various decisions of the High Courts the learned judges of the High Court ,game to the conclusion that the general consensus was that if a copy of the assessment order or a certified copy thereof was produced by the assessee waiving his privilege it would be admissible in evidence.
Section 54(1) of the Act was in the following terms section 54(1) "All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act, or in any evidence given, or affidavit or deposition made, in the course of any proceedings under this Act other than proceedings under this Chapter, or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the (1 of 1872), no Court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents of record or any part of any such record, or to give evidence before it in respect thereof.
" Under sub section (2) if a public servant disclosed any particulars contained in a statement, return etc.
mentioned in sub section
(1) he was liable to punishment with imprisonment as well as fine.
The prohibition against disclosure was not applicable to the facts and particulars in such cases and circumstances as were set out in sub section
Now it is quite clear that section 54 created a complete bar to the production by officials and other servants of the Income tax Department of any such documents which were mentioned in sub sections
(1) and (2).
It also made it obligatory on them to treat as confidential the records and documents mentioned in the 312 sub sections.
They were further prohibited from giving any evidence.
relating to them.
The question which came up for consideration before the courts was if the documents could be given without requiring a public servant to produce them could the court allow them to be tendered and admitted into evidence ? The Madras High Court held in Mythili Ammal vs Janaki Ammal & Another(") that statements made in income tax returns could not be brought up in court against the person making them or against any one else nor could the income returns be proved by secondary evidence under section 64 of the .
The Calcutta High Court in Promatha Nath Pramanick vs Nirode Chandra Ghose (2) considered it startling that when an assessment order was to be treated as confidential under section 54 of the Act a joint assessee could be permitted the use of the copy of such an order to the detriment of his co assessee in contentious proceedings between them.
A Full Bench of the Madras High Court, however, held in Rama Rao vs Venkataramayya(3) that a return was confidential and could not be disclosed to a third party but there could be no objection to the maker of a return having a COPY for his own purposes if he so desired and he was not bound to treat the document as confidential.
In other words he could produce that document as evidence in court.
It is unnecessary for the purposes of this case to go into the larger question of production of the documents covered by section 54(1) by third parties as it was the son of Manilal the assessee who had produced the assessment orders which are in dispute.
There is an overwhelming weight of authority in favour of the view that assessment orders could be produced by the assessee or his representative in interest; see Emperor vs Osman Chotani(4), Suraj Narain vs Seth Jhabhu Lal & Others(5) and Buchibai vs Nagpur University(6).
In our opinion the law laid down by these cases on the admissibility of evidence of assessment orders produced by an assessee or his representative in interest is unexceptionable.
We may refer to a decision of this Court in Charu Chandra Kundu vs Gurupada Ghosh (7) on which reliance was placed on behalf of the appellants.
There the appellant had applied to the trial court praying that the Commissioner of Income tax be directed to arrange for the production before the court of the record of the statement made by the respondent therein.
In that situation it was held that the prohibition imposed under section 54 of the Act was absolute and the operation of the section was not obliterated by any waiver by the assessee in whose assessment the evidence was tendered, documents produced or (1) (2) (3) (4) (1942)101.T.R.429.
(5) (1945)131.T.R.13.
(6) (1947)151.T.R.150.
(7) ; 313 record prepared.
It is apparent that in that case the question of production of an assessment order by the assessee himself did not come up for consideration.
These appeals fail and are dismissed with costs.
One hearing fee.
V.P.S. Appeals dismissed.

dataset_name: IN-Abs

summary:
Section 54 of the Income tax Act, 1922, created a complete bar to the production by officials and other servants of the Income tax Department of the documents mentioned in the section.
But, where the assessee or his representative in interest himself produces a copy of the incometax assessment order in any legal proceeding the order would be admissible in evidence.
[311H; 312 G H; 31 B A] Emperor vs Osman Chotani , Suraj Narain vs Seth Jhabhu Lcl & Ors., and Buchibai vs Nagpur University, , approved.
Charu Chandra Kundu v, Gurupada Ghosh; , , referred to.


judgement:
Appeal No. 1218 of 1968.
Appeal from the judgment and order dated November 29, 1966 of the Punjab High Court in Civil Writ No. 271 of 1966.
M. C. Setalvad and R. N. Sachthey, for the appellant.
The respondent did not appear.
268 The Judgment of the Court was delivered by Hegde, J.
On September 12, 1963, the Government of Punjab passed the following order : "Subject : Reservation for the members of Scheduled Castes, Scheduled Tribes and Backward Classes in promotion cases.
Sir, I am directed to refer you to the subject noted above and to say that at present reservation for Scheduled Castes, Scheduled Tribes and other Backward Classes is applicable to new appointments and not to promotions which are governed by consideration of merit and seniority alone.
Since those castes/classes are poorly represented in various services in the upper grades under the State Govt. it has been under the active consideration of Government that some reservation in higher grade posts as well should be made for them.
It has now been decided that except in the case of All India Services 10 per cent of the higher posts to be filled by promotion should be reserved for the members of Scheduled Castes, Scheduled Tribes and Backward Classes (9 per cent for the ' members of Scheduled Castes and Scheduled Tribes and 1 per cent for the Backward Classes) subject to the following conditions : (a) the persons to be considered must possess the minimum necessary qualification; and (b) they should have at least a satisfactory record I of service." Up till that date reservation for Scheduled Castes.
Scheduled Tribes and Backward Classes was confined to initial recruitment.
The first out of every five initial recruitments was reserved for, Scheduled Castes, Scheduled Tribes or other Backward Classes.
On January 14, 1964, the Government clarified its order dated September 12, 1963.
In this case we are not concerned with the first paragraph of that clarification.
The second paragraph of that clarification reads thus : "Government have since been receiving references from several quarters seeking clarification in regard to the implementation of the said decision.
After careful consideration of the matter, it has now been decided that : (a) The said decision should be applied to all promotion posts already vacant on 12th September, 1963, or falling vacant thereafter.
269 (b) The reservation should not imply that 10 per cent of the total posts reserved for promotion in any cadre have to be filled by Scheduled Castes personnel in the sense that all existing/ future vacancies will be filled up by Scheduled Castes/Tribes and other Backward Classes candidates until their share in higher services comes up to 1 0 per cent.
(c) This provision of reservation applies to all State.
services including Class 1, II, III, and IV posts, the only exception being All India Services.
(d) This reservation should apply even in the case of short term leave vacancies unless it is likely to involve unnecessary dislocation of work in different offices and avoidable expenditure and inconvenience due to mid year transfers etc.
(e) So far as Scheduled Castes/Tribes are concerned, the very first vacancy existing on/arising after the 12th September, 1963, should retreated as reserved for them and only if no such official is available for promotion against the vacancy reserved for them in the first block of 10 vacancies, a candidate belonging to other Backward Classes may be selected in preference to the remaining officials against one such post only out of one hundred, since the reservation for other Backward Classes may not exceed I per cent.
However, if Sheduled Castes/ Tribes candidates are available to fill one out of every ten vacancies, the specific reservation in favour of other Backward Classes should be the, 51st vacancy.
(f) One reserved vacancy should be carried over to the next block of ten vacancies in case it cannot be filled up within any block of ten posts.
Thus, if no Scheduled Castes/Tribes/Backward Classes candidate is promoted against any of the first 10 vacancies the number of vacancies available to such candidates in the following block will betwo.
(g) In case an out of turn promotion has already been given to a candidate belonging to Scheduled Castes/Tribes or Backward Classes against a reserved vacancy and then in the same block it happens to be the turn of a candidate belonging 270 to the said castes/classes for promotion, such candidate should not be ignored on the ground that 10 per cent reservation has already been exhausted." Thereafter by another letter of March 18, 1964, the Government issued further clarification of their aforementioned com munications.
That clarification reads "To illustrate the above point if there is an official of the Scheduled Castes placed at a position say 73rd in a list prepared for promotion to the higher parts and a vacancy arises therein, he would have precedence over the other 72 officials to benefit out of the first vacancy that occurs on or after 12th September, 1963.
Ms turn would not be withheld merely for the fact that his number on the select list is not in the first ten." Respondents Nos. 1 and 3 to this appeal were both working in the Forest Department of the Government as Head Assistants.
Respondent No. 1 was senior to Respondent No. 3 Respondent No. 3 belonged to a Scheduled Caste.
Hence in view of the order of the Government, Respondent No. 3 was promoted tem porarily as Superintendent ignoring the claim of Respondent No. 1. 'Aggrieved by that order Respondent No. 1 moved the High Court of Punjab to quash the promotion of Respondent No. 3 and direct the Government to promote him as Superin tendent in the place of Respondent No. 3.
The High Court has quashed the promotion of Respondent No. 3.
The State of Punjab (now substituted by the State of Haryana) has brought this appeal after obtaining a certificate from the High Court under article 133(1)(c) of the Constitution.
In the opinion of the High Court reservation made for the .Scheduled Castes, Scheduled Tribes and Barckward Classes is not impermissible under the Constitution in view of article, 16(4) of the Constitution as interpreted by this Court in The General Manager, Southern Railway vs Rangachari.(1) But the Government has violated article 16(1) by reserving the first out of a group of 10 posts for the Scheduled Castes, Scheduled Tribes and Backward Classes.
The High Court was persuaded by the Counsel for the first respondent to visualise various hypothetical cases under which reservation of the type impugned in the present case could lead to various anomalies such as the person getting the 'benefit of the reservation may jump over the heads of several of his Seniors not only in his own grade but even in the higher grades.
They visualised the possibility of Head Assistant leaping ,over the heads of several seniors of his in the grade of Head (1) [1962] 2.S.C.R.586.
271 Assistants and thereafter in the grade of Superintent; subsequently in the grade of Under Secretaries, Deputy Secretaries and so on and so forth.
It is not the finding of the High Court that in any of the grades to which the impugned orders apply, the possibilities visualised by the High Court are imminent or even likely.
article 16(1) is an extension of article 14.
It provides "There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State." But the equality contemplated by this clause is not an embo died equality.
It is subject to several exceptions and one of the exceptions is that provided in article 16(4) which says : "Nothing in this Article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State is not adequately represented in the services under the State.
" In Rangachari 's case(1) this Court ruled that the reservation contemplated by article 16(4) can be made not merely to initial recruitment but also to posts to which the promotions are to be made.
This is what Gajendragadkar J. (as he then was) speaking for the majority observed (at pp. 604 & 605) : "We must in this connection consider an alternative argument that the word posts must refer not to selection posts but to posts filled by initial appointments.
On this argument reservation of appointments means re servation of certain percentage in the initial appointments and reservation of posts means reservation of initial posts which may be adopted in order to expedite and make more effective the reservation of appointments themselves.
On this construction the use of the word posts appears to be wholly redundant.
In our opinion, having regard to the fact that we are construing the relevant expression 'reservation of appointments ' in a constitutional provision it would be unreasonable to assume that the reservation of appointments would not include both the methods of reservation, namely, reservation of appointments by fixing a certain percentage in that behalf as well as reservation of certain initial posts in order to make the reservation of appointments more effective.
That being so, this alternative argument which confines the word 'posts ' to initial posts (1) [1962] 2S.C.R.586.
272 seems to us to be entirely unreasonable.
On the other hand under the construction by which the word 'posts ' includes selection posts the use of the word 'posts ' is not superfluous but serves a very important purpose.
It shows that reservation can be made not only in re gard to appointments which are initial appointments but also in regard to selection posts which may fall to be find by employees after their employment.
This construction has the merit of interpreting the words ' appointments ' and 'posts ' in their broad and liberal sense and giving effect to the policy which is obviously the basis of the provisions of article 16(4).
Therefore, we are disposed to take the view that the power of reservation which is conferred on the State under article 16(4) can be exercised by the State in a proper case not only by provided for reservation of appointments but also by providing for reservation of selection posts.
This construction, in our opinion, would serve to give effect to the intention of the Constitution markers to make adequate safeguard for the advancement of backward classes and to secure for their adequate representation in the services.
" The extent of reservation to be made is primarily a matter for the State to decide.
By this we do not mean to say that the decision of the State is not open to judicial.
review.
The reservation must be only for the purpose of giving adequate representation in the services to the Scheduled Castes, Scheduled Tribes and Backward Classes.
The exception provided in article 16(4) should not make the rule embodied in article 16(1) meaningless.
But the burden of establishing that a particular reservation made by the State is offensive to article 16(1) is on the person who takes the plea.
The mere fact that the reservation made may give extensive benefits to some of the persons who have the benefit of the reservation does not by itself make the reservation bad.
The length of the leap to be provided depends upon the gap to be covered.
As observed by the majority in Rangachari 's case(1) : "The condition precedent for the exercise of the powers conferred by article 16(4) is that the State ought to be satisfied that any backward class of citizens is not adequately represented in its services.
This condition precedent may refer either to the numerical inadequacy of representation in the services or even to the qualitative inadequacy of representation.
The advancement of the socially and educationally backward classes requires (1) ; 273 not only that they should have adequate representation in the lowest rung of services but that they should aspires to secure adequate representation in selection posts in the services as well.
In the context the expression 'adequately represented ' imports; considerations of 'size ' as well as 'values ', numbers as well as the nature of appointments held and so it involves not merely the numerical test but also the qualitative one.
It is thus by the operation of the numerical and a qualitative test that the adequacy or otherwise of the representation of backward classes in any service has to be judged; and if that be so, it would not be reasonable to hold that the inadequacy of representation can and must be cured only by reserving a proportionately higher percentage of appointments at the initial stage.
In a given case the State may well take the view that a certain percentage of selection posts should also be reserved.
for reservation of such posts may make the representation of backward classes in the services adequate, the adequacy of such representation being considered qualitatively.
" It is true that every reservation under article 16(4) does in troduce an element of discrimination particularly when the question of promotion arises.
It is an inevitable consequence of any reservation of posts that junior officers are allowed to take a march over their seniors.
This circumstance is bound to displease the senior officers.
It may also be that some of them will get frustrated but then the Constitution makers have thouht fit in the interes 's of the society as a whole that the backward class of citizens of this country should be afforded certain protection as observed by this Court in A. Peeriakaruppan etc.
V. State of Tamil Nadu(1): "It cannot be denied that unaided many sections of this country cannot compete with the advanced sections of the Nation.
Advantages secured due to historical reasons should not be considered as fundamental rights.
Nation 's interest will be best served taking a long range view if the backward classes are helped to march forward and take their place in line with the advanced sections of the people.
" There was no material before the High Court and there is no material before us from which we can conclude that the impugned order is violative of article 16(1).
Reservation of appointments under article 16(4) cannot be struck down on hypothetical (1) [1971] 2 S.C.R.430.
807Sup.
CI/71 274 grounds or on imaginary possibilities.
He who assails the reservation under that article must satisfactorily establish that there has been a violation of.
article 16(1).
For the reasons mentioned above this appeal is allowed and the order of the High Court set aside.
Respondent No. 1 who was the petitioner before, the High Court is not represented before this Court.
In the circumstances of this case we make no order as to costs.
V. P. section Appeal allowed.

summary:
The appellant State issued an Order according to which reservation of posts for Scheduled castes.
tribes and backward classes was made applicable not only to initial recruitment but also to promotions.
Respondents 1 and 3 were in the 'State Government service and the former was the senior.
But since the latter belonged to a scheduled caste he was promoted over.
the first respondent as per the Order.
The High Court quashed the promotion on the basis that such reservation might lead to various anomalies.
In appeal to this Court, HELD : Article 16(1) provides for equality of opportunity to all citizens in relation to appointment to any office in the service of the State subject to the exception in article 16(4) that the State may make reservations in favour of backward classes.
The reservation contemplated by article 16(4) can be made not merely to initial recruitment but also to Posts to which promotions are to be made.
Every such reservation under article 16(4) does introduce an element of discrimination and promotion of junior officers over seniors; but the Constitution makers thought fit, in the interests of society as a whole, that backward classes should be afforded some protection.
If, however, the reservation under article 16(4) makes the rule in article 16(1) meaningless the decision of the State would be open to judicial review; but the burden of establishing that a particular reservation is offensive to article 16(1) is on the person who takes the plea.
[271 C, E, 272 D G, 273 D F] In the present case, there was no material from which it could be concluded that the impugned Order violated article 16(1).
The reservation could not be struck down on hypothetical grounds or on imaginary possibilities.
[273 H] General Manager, Southern Railway vs Rangachari, ; and A. Peeriakarupan etc.
vs State of Tamil Nadu, [1971] 2 S.C.R. 430, followed.


judgement:
Appeal No. 2418 of 1966.
Appeal by special leave from the judgment and order dated February 19, 1963 of the Punjab High Court, Circuit Bench, at Delhi in F.A.0.
Appeal No. 123 D of 1961.
R. L. Agarwal, K. L. Mehta, section K. Mehta, P. N. Chadda.
M. G., Gupta and K. R. Nagaraja, for the appellant.
L. M. Singhvi, Badri Dass Sharma and section P. Nayar, for the respondent.
The Judgment of the Court has delivered by Shelat, J.
By this appeal, under special leave, the appellantcompany challenges the correctness of the judgment of the High Court of Punjab, dated February 19, 1963 refusing to set aside an umpire 's award, dated March 22, 1958.
The award was in respect of certain disputes between the company and the Union of India in the matter of disposals of the United States surplus war materials left by the Government of the U.S.A. at the end of the last World War.
These surplus materials, called the U.S. Surplus Stores, consisted of vehicles and other stores.
It was said that these were sold to the company by the Director General, Disposals through correspondence and sale notes.
These contracts of sale were subject to the General Conditions of Contract (Form Con. 117).
Cl. 13 of these General Condi tions provided that "In the event of any question or dispute arising under these conditions or any special conditions of contract or in connection with this contract the same shall be referred to the award of an arbitrator to be nominated by the Director General and an arbitrator to be nominated by the contractor, or in the case of the said arbitrators not agreeing then to the award of an Umpire to be appointed by the arbitrators in writing before proceeding on the reference .
Upon every and any such reference, the assessment of the costs incidental to the reference and award respectively shall be in the discretion of the arbitrators, or in the event of their not agreeing, of the Umpire appointed by them.
" 285 Disputes having arisen between the parties both as regards the contents and the quantity of the vehicles delivered under the contracts, they were referred, in the first instance, to two arbitrators nominated by the parties, and ultimately to an umpire.
The disputes were crystallized into nine claims by the appellant company totalling Ks.
6,73,34,500/ , and several counterclaims by the Government of India.
At the end of the arbitration, the umpire, by his said award, disallowed all the claims made by the company, except one for which he awarded RS.
6,94,000/ and held, in respect of the counter claims filed by the Government of India, that the appellant company was liable to pay to the Government in all Rs. 36,23,682.50 P. and costs amounting to Rs. 5,40,544/ .
In the result, after deducting the claim allowed to the appellant company, the company was held liable to pay to the Government Rs. 34,70,226.50 P.
The award having been filed by the umpire in the Court of the, District Judge, Delhi and the Government of India having thereupon applied for a decree in term of the award, the company applied to the Court for setting aside the award urging several grounds for so doing.
The District Judge by an elaborate judgment declined to set aside the award.
He, however, held that the award suffered from an error apparent on the face of the award in respect of the appellant 's claim No. 111(a), and further held that the counter claims 11, IV, V and VI made by the Government were not covered by the reference, and consequently, the umpire had no jurisdiction to go into them.
Declining, however, to set aside the award, he remitted it for reconsideration of the aforesaid items and also for readjustment of the amount of costs in the evert of enhanced compensation being awarded to the company in respect of its claim No. 111(a).
Dissatisfied with the judgment of the court the company filed an appeal before the High Court.
The Union of India also filed certain coss objections.
The High Court heard the appeal and the cross objections together and by its aforesaid juggment dismissed both the anneal and the cross objections and upheld the judgment of the District Judge.
In support of the claim that the award was liable to be set aside, counsel for the company submitted the following six propositions for our acceptance : 1. that the contracts of sale entered into by the company were misconstrued by the umpire and such misconstruction appears on the face of the award: 2. that the umpire.
as also the High Court, failed to take into consideration several documents while deciding the scope of the sales; 286 3.
that in respect of claim No. VI and counter claim No. VI of the Government, the umpire acted beyond his jurisdiction as those question,,; did not fall within the scope of the reference; 4.
that the umpire did not act according to law but acted as a conciliator and based his award on mere conjectures and surmises; 5.
that his conclusion on ground rent awarded to the Government was based on no evidence; and 6.
that the costs awarded to the Government were altogether disproportionate.
Before we proceed to consider these propositions, it is necessary to ascertain the scope of, section 30 of the and the principles underlying that section.
The general rule in matters of arbitration awards is that where parties have agreed upon an arbitrator, thereby displacing a court of law for a domestic forum, they must accept the award as final for good or ill.
In such cases the discretion of the court either for remission or for setting aside the award will not be readily exercised and will be strictly confined to the specific grounds set out in sections 16 and 30 of the Act.
In Hodgkinson vs Fernie,(1) Williams, J. stated the principle as follows : "where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final judge of all questions both of law and fact .
The only exceptions to that rule are, cases where the award is the result of corruption or fraud, and one other, which though it is to be regretted, is now, I think, firmly established, viz., where the question of law necessarily arises on the face of the award, or upon some paper accompanying and forming part of, the award.
" This observation was recently cited with approval in Union of India vs Bungo Steel Furniture Pvt.
Ltd. (2) The principle is that the Court, while examining an award , will look at documents accompanying and forming part of the award.
Thus, if an arbitrator were to refer to the pleadings of the parties so as to incorporate them into the award, the Court can look at them.
In some cases, however, courts extended the principle and set aside the award on a finding that the contract, though only referred to but not incorporated into the award as part of it, had been misconstrued and such misconstruction had (1) (1857)(3)C.B.(N.S.)189, 202.
(2) [1967] 1 S.C.R.324.
287 been the basis of the award.
Thus, in Landauer vs Asser(1) the dispute between buyers and sellers of goods was as to who was entitled to certain sums paid upon a policy of insurance upon the goods.
This was referred to arbitration and the umpire made his award basing it on the construction he placed on the contract, namely, that as the parties to the contract were "by the terms thereof" principals, their interest and liability in insurance was defined to be the value of the invoice plus 5 per cent.
On an application to set aside the award, the Court of Appeal held that inasmuch as the umpire had referred to the contract and the terms thereof, it was justified in looking at the contract, and having done so, found that he had based his decision entirely upon the terms of the contract.
It also found that since the contract, if properly construed, did not justify the decision, the award was bad on the face of it and was liable to be set aside.
A similar view appears also to have been taken in F.R. Absalom Ltd. vs Great Western (London) Garden Village Society Ltd .
(2 ) where the award set out the relevant words and cl. 30 of the contract and also the conclusion of law on the meaning of those words.
Lord Russel said that since the award recited the contract and referred in terms to the provisions of cl. 30, thereby incorporating it into the award, and then stated the construction which the arbitrator placed upon that clause, the Court was entitled to look at that clause to ascertain if the construction placed by the arbitrator was erroneous.
The correctness of the decision in Landauer vs Asser(1) was challenged before the Privy Council in Chempsey Bhara & Co. vs Jivraj Balloo Spinning and Weaving Co. Ltd.(2) Lord Dune din,, however, did not expressly overrule it but rested content by observing that that decision was not binding on the Board.
But he formulated the principle thus : .LM15 " An error in law on the face of the award means, that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous.
It does not mean that if in a narrative a reference is made to a contention of one party that opens the door to seeing first what that contention is, and then going to the contract on which the parties ' rights depend to see if that contention is sound.
" (1) [1905](2) K.B. 184.
(2) (3) [1923] A.C.480.
288 The Privy Council upheld the award.
stating that it was impossible to say what was the mistake on the face of the award which the arbitrators had made as they had not tied themselves down to any legal principle which was unsound.
The mere fact that the court would have construed a document differently than the arbitrator would not induce the court to interfere unless the construction given by the arbitrator is such that it is against the well established principles of construction.
see Kelanton vs Duff Development Co.(1) I In an illuminating analysis of a large number of earlier decisions, including Landauer(2) and F. R. Absalom Ltd.(3) Diplock, L.J., in Giacomo Costa Fu Andrea vs British Italian Trading Co. Ltd. (4 ) recorded his conclusion thus "It seems to me, therefore, that, on the cases, there is none which compels us to hold that a mere reference to the contract in the award entitles us to look at the contract.
It may be that in particular cases a specific reference to a particular clause of a contract may incorporate the contract, or that clause of it, in the award.
I think that we are driven back to first principles in this matter, namely, that an award can only be set aside for error which is on its face.
It is true that an award can incorporate another document so as to entitle one to read that document as part of the award and, by reading them together, find an error on the face of the award.
" The question whether a contract or a clause of it is incorporated in the award is a question of construction of the award.
The test is, does the arbitrator come to a finding on the wording of the contract.
If he does, he can be said to have impliedly incorporated the contract or a clause in it whichever be the case.
But a mere general reference to the contract in the award is not to be held as incorporating it.
The principle of reading contracts or other documents into the award is not to be encouraged or extender.
(see Babu Ram vs Nanhemal & The rule thus is that as the parties choose their own arbitrator to be the judge in the dispute between them, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts.
Therefore.
even when an arbitrator commits a mistanke either in law or in fact in determining the matters referred to him, but such mistake does not appear on the face of the (1) [1] 1923 A.C.395 (2) [1905] 2 K.B.184 (3) (4) [1962]2 All E.R. 53, 62 (5) C. A. NO.
1 07 of 1966, Decided on 5 12 1968.
289 award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake.
In the light of the principle above stated, the first question calling for determination is, is there an error apparent on the award, in the sense that the umpire misconstrued the contracts of sale inasmuch as though those contracts were contained 'in sale notes as well as in several letters, he considered the sale notes only as containing the contracts of sale disregarding the corres pondence which had taken place between the company and the Director General, Disposals and his officers ? Such a question would undoubtedly be one of law.
But the disputes referred to the umpire contained disputes both of fact and law.
Ordinarily the decision of the umpire, even though it be on a question of law, would be binding on the parties.
The court would only interfere if the case falls within the exceptions mentioned by Williams, J. in Hodgkinson vs Fernie(1) and reaffirmed by Diplock L. J., in Giacomo Costa Fu Andrea ' vs British Italian Trading Co. Ltd.(2).
There were in all three separate sales to the appellant company,, which according to the respondents were incorporated in sale notes Nos. 160,.
161 and 197.
Before the sale note 160 was issued on July 11, 1946, it is a fact that the company had written a letter dated July 10, 1946 which was also endorsed by two officers of the Director General, Disposals.
The letter contained three clauses, the first of which stated that "M/s. Allen Berry will buy the Moran Vehicles Depot 'as is where is for Rs. 1,80,00,000/".
The two other clauses provided the manner and time of payment of the sale price.
But the letter commenced.
with the following words: "Pending detailed record of terms tomorrow the following are the broad heads of agreement, which will form the basis of sale of surplus vehicles.
" The next day, i.e., July 11, 1946, the Department issued sale note 160, which in clear terms stated that what was purchased were "all vehicles and trailers lying in Moran Depot", which meant that the vehicles sold were only those that were actually lying in that depot on July 11, 1946, and not those outside it or those borne on the records of that depot, as contended by the company.
It, however, appears from the judgment of the Trial Court (para 206) that on receipt of sale note 160, the company wrote a letter on July 11, 1946 in which it contended that "We have purchased the entire vehicle depot of Moran".
(1) ; ,202.
57) (2) [1962] 2 All ER 53, 68.
7SupCI/71 290 It appears that in view of this difference of opinion, a meeting ,of representatives of the parties, was held on July 23, 1946, the minutes of which, as recorded by the Assam Controller, U.S.A.S.S., read as follows: (2) (a) The vehicles and trailers sold to Messrs. Allen Berry and Co. Ltd., are deemed to, include all vehicles which were or should have been held in Moran Depot on the 10th July, also those which have 'been issued on a Memorandum Receipt as follows : (i) To the Americans, left behind by them in various camps and depots and not yet turned in by us.
(ii) Vehicles issued on Memorandum Receipt to military units assisting the U.S.A.S.S. Organisation.
(iii) Any surplus vehicles originally allotted to U.S.A.S.S. Units for operational purposes and now no longer required by them.
" On September 17, 1946, a secraphone message was sent from New Delhi to Calcutta which stated "We have sold U.S. Army surplus vehicles presumed to be borne on Moran list, that is those actually in Moran Vehicle Depot or those that were intended to be moved to that depot, which was meant to be parking depot for surplus U.S. vehicles in Assam area.
" On September 26 1946, the Director General, 'Disposals, wrote to the company that "The vehicles sold to you in Assam are those U.S. Army surplus.
vehicles actually in Moran Vehicle Depot or those that were intended to be moved to Moran Vehicle Depot.
Any mobile engineering equipment, such as mobile cranes, tracked tractors are, excluded from the sale to you.
" On December 10, 1946, the Controller issued a release order in respect of 1.
All vehicles and trailers lying in Moran Depot on 10th July 1946 including all United States Army Surplus Stores, excluding land and buildings lying within Moran Depot and transferred to the Government of India from the Government of the United States.
Vehicles in operational use in Calcutta and Assam as and when no longer required by the U.S.A.S.S. Organisation.
" 291 The question raised by counsel is that the umpire failed to consider all these documents while considering the scope and content of the contract of sale and relied on only sale note No. 160, dated July 11, 1946, that the contract was not contained in the said note 160 alone, and that therefore, he misconstrued the contract, and that that misconstruction, which is a point of law, is apparent on the face of the award, as it was made the very basis of the award.
The first three issues raised by the umpire were (1) whether the appellant was entitled to prove that any vehicles, stores etc.
other than those mentioned in the sale notes were sold to it; (2) whether the Government was bound by the clarifications, representation, explanations or assurances made or given by any officer or officers of the Department regarding the subjectmatter of the contracts of sale except those necessarily implicit in the sale notes; and (3) whether the Government sold any vehicles except those lying in Moran Depot on July 11, 1946, or those intended to be moved thereto.
The dispute between the parties, thus, clearly was that whereas the company claimed that the, sale was of all vehicles borne on the records of Moran Depot, irrespective of whether they were actually lying there on July 11., 1946 or not, the Government claimed that the company was entitled to those actually lying in the Depot.
According to the respondents, the contract of sale was to be found in the sale note, and therefore, any subsequent explanations or assurances given by any officer or officers of the Department could not vary or alter the terms of the contract.
These expanations and assurances were given, only to remove the misunderstanding of the company over the question of the scope and extent of the sale made to it.
The umpire set out part of the sale notes 160 and 197 in the award and then observed "the language used in these sale letters is to my mind perfectly clear, explicit and unambiguous and excludes the possibility of any vehicles, trailers or stores lying on the dates in question outside the locations specified in the sale letters having been included in the two sales.
The contention that they in fact include all vehicular stores in Assam in one case and in Bengal area in the other has been made in all seriousness and a good deal 292 of evidence both oral and documentary has been produced in support of or against such contention.
The point has also been argued at great length by learned counsel for the parties.
I have given the whole matter my most serious and earnest consideration and my view is that apart from the language of the two saledeeds ' being against such a contention, the evidence too considered as a whole does not support it.
Accordingly, I hold that the stores sold to the claimants in the case of Assam were those actually located in Moran Depot on July 10,1946 and in the case of Bengal those actually located in Jodhpur and other depots specified in the sale letter on July 31, 1946." He next held : "The alleged clarifications or representations made or explantions or assurances given by any officer or officers of the Disposals Department either verbally or in writing have been very carefully examined by me and I am of opinion that neither are they, considered as whole, capable of the interpretation sought to be put upon them by the claimants nor are the respondents bound by them.
They are not in accordance with law and do not amount to legal contracts binding the respondents.
" These passages clearly show that the umpire had considered, besides the sale notes, the oral and documentary evidence led by the parties as also the contentions urged on and as regards them by counsel for the company.
It is impossible, therefore, to uphold the contention that the various documents, i.e., the letter of the company dated July 10, 1946, 'the subsequent correspondence, minutes of the meetings which too place after the salenote 160 was issued etc. were not taken into consideration by the umpire while coming to his conclusion as to what actually was sold to the company.
The dispute, amongst other disputes, referred to the umpire and crystallized by him in the form of issues on the pleadings of the parties involved, as already stated, the question first as to what was sold, and secondly, arising out of that, the question whether besides the said sale notes 160 and 197, the subsequent clarifications or explanations were binding on the Government.
These were, no doubt, questions partly of fact and partly of law.
But questions both of fact and law were referred to the umpire and prima facie his findings on them would bind the parties unless, as explained earlier, the umpire has laid down any legal proposition, such as a construction which is made the basis of the award and is on the face of the award an error.
293 The point is, is this such a case ? True it is that this is not ,a case where a question of law is specifically referred to.
It is clearly a case falling in the category of cases, like Kalanton vs Du# Development Co. Ltd. (1) wherein deciding the questions referred to him the umpire has to decide a point of law.
In doing so, the umpire no doubt, laid down the legal propsition that the clarifications or assurances given subsequent to the dates of the said sale notes by an officer or officers of the department were not binding on the respondents nor could they affect the scope of the sales.
That answer the umpire, was entitled to give.
But the fact that he answered a legal point does not mean that he has incorporated into the award or made part of the award a document or documents, the construction of which, right or wrong, is the basis of the award.
The error, if any, in such a case cannot be said to be an error apparent on the face of the award entitling the court to consider the various documents placed in evidence before the umpire but not incorporated in the award so as to form part of it and then to make a search if they have been misconstrued by him.
This, in our understanding, is the correct principle emerging from the decisions which counsel placed before us.
In any event, this is not a case where the umpire, in the words of Lord Dunedin, "tied himself down to a legal proposition" which on the face of the award was unsound.
The award ,makes it clear in so many words that he took into.
account the entire evidence, including the documents relied on by counsel and then only came to the conclusion that it did not assist the company in its contention as to the scope of the sales.
Contentions 1 and 2 raised by Mr. Agarwal, therefore, cannot be upheld.
Contention No. 3 relates to 547 vehicles said ' to have been sold to the company under sale: note 197, dated August 2,/6, 1946.
There is no dispute that out of these vehicles the company removed 291 vehicles alleging that the delivery of the balance of 256 vehicles was withheld.
The company made a claim being claim No. VI for the price of these 256 undelivered vehicles.
The respondents contention was that the sale to the company was confined only to the U.S.A. Surplus Stores, that these vehicles did not fall within that category, but were Reverse Land Lease vehicles belonging to the Government of India under an agreement between the U.S.A. and India.
On these allegations the respondents laid counter claim No. VI claiming the price of the 291 vehicles admittedly removed by the company when they were lying in Jodhpur Depot, Calcutta.
The umpire found that the expression "Reverse Land Lease" related to the reciprocal aid articles referred to in the said agreement.
A reciprocal aid article, according to that agreement, (1) 294 meant an article transferred by the India Government to the U.S. Government under reciprocal aid under para 4 C of that agreement '.
The U.S.A. Government was deemed to have acquired as on September 2, 1945 full title over such articles except that such reciprocal aid articles incorporated into installations in India were deemed to have been returned to India Government from the date when the U.S.A. forces relinquished possession of such installations.
From the inventories produced before him, the umpire held that these 547 vehicles were incorporated into installations in India, and therefore, ownership in them vested in India Government on and after the U.S.A. forces relinquished possession of those installations.
They could not, therefore, be regarded ,is U.S. Surplus Stores which alone were and could be the subject matter of sale note 197.
Consequently, the company was not entitled to remove the said 291 vehicles which it did, much less could the company claim compensation for 256 vehicles which it alleged were not delivered to it.
In the result, the umpire allowed the Government 's counter claim No. VI, which was for the price of 291 vehicles unauthorisedly removed by the company from Jodhpur Depot.
The argument in connection with this part of the award was, firstly, that the findings of the umpire were vitiated as there was total lack of evidence on which they could be based, and secondly that in any event, the umpire had no jurisdiction to award compensation to the Government in respect of counterclaim No. VI.
The first part of the argument need not detain us as the finding that these vehicles formed part of reciprocal aid articles, the ownership in which vested in the Government of India and were therefore not U.S.A.S.S. was based on the agreement between the two Governments and the inventories produced before the umpire from which he could hold that they belonged to the Government of India from the date when the installations in which they were incorporated were relinquished by the U.S. forces, and that therefore, they could not form the subject matter of sale note 197 which related only to the U.S. Surplus St ores.
The second part of the argument, however, requires conside ration.
The question is whether the arbitration clause included.
a dispute relating to compensation in respect of the said 291 vehicles unauthorisedly removed by the company.
Cl. 13 of the General Conditions of Contract, quoted earlier, provides for reference to arbitration of all questions or disputes "arising under these conditions" or "in connection with this, contract".
Dr. Singhvi referred us to cl. 10 of these Conditions also but it is clear that it can in no sense apply to the dispute relating to, compensation.
But the words "arising under these conditions" ' 295 and "in connection.
with this contract" are undoubtedly wide and comprehensive.
it is, nonetheless, a question whether the dispute as to compensation on the ground of unauthorised appropriation of these vehicles by the company falls within cl. 13.
In Vidya Sagar Joshi vs Surinder Nath Gautam(1) the words "expenditure, in connection with election" used in section 77 of the Representation of the People Act, 1951 were construed to mean "having to do, with".
An arbitration clause wherein the words "in relation to or in connection with the contract" were construed not to contemplate a dispute raised by a contractor that he could avoid the contract on the ground that it was obtained by a fradulent misrepresentation.
(see Monro vs Bognor Urban District Coun cil(2).
But a claim for damages on the ground of negligence on.
the part of the defendant in re moving the plaintiff 's furniture against a clause for due diligence in removing it was held to fall, within the arbitration clause.
Woolf vs Collis Remo val Service (3) Counsel conceded that a dispute as to the interpretation of sale note 197 would fall under the arbitration clause.
If that is so, it must follow that the umpire was competent to decide whether the said 547 vehicles fell within the purview of the sale note or not.
If in determining that question he came to the conclusion that they did not, the obvious conclusion would be that the company was not entitled to take away 291 vehicles admittedly removed by it from the Depot.
If the company did that, would the question as to the return or of compensation in lieu of such vehicles, to which it was not entitled under the sale, be a question which arises out of or in connection with the contract ? Counsel went as far as to say that the umpire in deciding the company 's claim No. VI and the Government 's counter claim No. VI could decide that the company was not entitled to those vehicles, but could not take the next step either to direct the return of them or payment of compensation in lieu of those vehicles.
In our view, such an argument cannot be accepted.
The reason is that once it is found that he was competent to decide the dispute as to whether the said 547 vehicles were not the subject matter of the sale and 291 of them were removed unauthorisedly, he must, to do justice between the parties in respect of disputes referred to him, order the company either to return them or to pay compensation for them.
Since the first course was not possible after all these years, the second was the only and the obvious course.
The dispute raised by the respondents that 291 vehicles were not included in the sale was: co extensive with and connected with the dispute that the com (1) ; (3) [1947]2AllE.R.260.
(2) [1915] (3) K.B.167.
296 pany was bound to return them if it was found that they were not covered by the sale.
On this reasoning it is not possible to say that the umpire went beyond his jurisdiction either in rejecting the company 's claim No. VI or in accepting the corresponding counter claim No. VI of the respondents.
Contention 4 relates to 600 vehicles which had been taken out of Moran Depot for operational purposes, but which the company claimed were part of the sale under sale note 160.
The umpire held (I that those vehicles having been taken out of the Depot for operational purposes did not fall within the sale, and (2) in the alternative, that the evidence disclosed that a substantial number of vehicles in operational use were delivered to the company even though strictly speaking it was not entitled to them as they were not lying in the, Depot on.
July 10, 1946.
The umpire further held that if some of them per chance were not handed over, the respondents had sufficiently compensated the company by handing over several non operational vehicles from outside the depot to which the company was not entitled.
Counsel argued that this part of the award was vague and without any evidence to support it, and therefore, the umpire behaved in this respect more like aconcilliator than as an arbitrator.
Having held that sale note 160 covered only those vehicles which were actually lying in Moran Depot on July 10, 1946, it was not incumbent on the umpire to decide the number of operational vehicles outside the depot.
Consequently, if he was satisfied that even though the company was not entitled to the said 600 vehicles claimed by it, yet the authorities had delivered a substantial number of them, and for any deficiency, had also delivered non operational vehicles, there would be no purpose in going into the details of vehicles delivered to the company.
Even though, as the judgment of the Trial Court discloses (para 223), there was evidence, both oral and documentary, that the company had collected a number of vehicles lying at places outside the Depot, and the vehicles so collected were recorded by the company, yet the company had withheld the production of those records.
In view of these facts it is impossible to say that the umpire had acted without evidence, or that he behaved in the manner of a conciliator, or gave findings on conjectures and surmises.
Our interference was invited next on the question of ground rent on the ground that the amount of such rent was fixed by the umpire without any evidence.
There is hardly any substance in this contention.
The sites, on which the various depots were situated, were requisitioned by the Government under the 297 Defence of India Rules.
The Government had a statutory obligation, therefore, to pay to the owners of those sites compensation as provided by those Rules.
Under the contracts of sale the company was, bound to pay to the Government ground rent and other charges which the Government in its turn was liable to pay.
It is, therefore, not correct to say that the umpire could award only that amount which the Government had actually paid and that the umpire should, therefore, have taken an account from the Government.
It was never the case of the company that the Government had claimed ground rent higher than the compensation it was liable to pay.
The last objection was that the amount of costs awarded by the umpire to the respondents was disproportionate.
It appears from the award that the umpire fixed the amount of costs after considering the statements of expenses incurred by the parties for the hearing before him tendered by the respective counsel for the parties.
Considering the huge amounts claimed by the parties, the volume of evidence, both oral and documentary, adduced by them, the number of days occupied in recording that evidence and in arguing the case, we are not prepared to say that the discretion which the umpire.
exercised in the matter of costs was exercised in breach of any legal provision or unreasonably which can justify the Court 's intervention.
In our view, none of the six contentions urged by counsel can be upheld.
The result is that the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.

summary:
The Director General of Disposals, through correspondence and sale notes, sold to the appellant company, United States surplus was materials consisting of vehicles and other stores.
Disputes having arisen between the parties, both as regards the contents of and the quantity of the vehicles deliverable under the contracts, they were referred to arbitration as per cl. 13 of the general conditions of the contract between the parties.
The disputes consisted of claims and counter claims and the umpire after deducting the amount of one claim allowed to the appellant, held that the appellant was liable to pay to the respondent Rs. 34,70,226.50 and costs amounting to Rs. 5,40,544,00.
The award was filed in the District Judge 's Court and the appellant applied for having it set aside on various grounds.
The Court held that with respect to certain matters claimed by the respondent the umpire had no jurisdiction and remitted the award for reconsideration of those items and also for readjustment of the amount of costs.
The High Court confirmed the judgment of the District Judge.
In appeal to this Court, it was contended that the award was liable to be set aside, because : (1) the contracts of sale were misconstrued and the error appeared on the face of the award; (2) several documents bearing on the scope of the sales were not considered; (3) the umpire went beyond his jurisdiction when he awarded compensation to the respondent because the appellant removed certain vehicles; (4) that the umpire acted as a conciliator deciding matters on conjecture; (5) that the umpire fixed ground rent payable by the appellants without any evidence; and (6) that the costs awarded were totally disproportionate.
HELD : (1) When parties choose their own arbitrator to be the judge in the dispute between them, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts.
Therefore, even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him.
but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside.
Whether the contract or a clause of it is incorporated in award is a question of construction of the award.
The test is, did the arbitrator corn, ' to a finding on the wording of the contract.
If be did, he can be said to have impliedly incorporated the contract or the relevant clause but a mere general reference to the contract in the award is not to be held as incorporating it.
[288 F H; 289 A] Union of India vs Bungo Steel Furniture Pvt. Ltd. ; , followed.
283 Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. Ltd. , applied.
Kelanton vs Duff Development Co. [1923] A.% ' . 395 and Giacomo Costa Fu Andrea vs British Italian Trading Co. Ltd. , 62.
referred to.
2(a) The dispute in the present case being as to what was sold and as to whether besides the sale notes, the subsequent clarifications or.
explanations given by various officers of the respondent formed part of the contract and were binding on the respondent, and both the questions having been referred to arbitration, the umpires findings on them would bind the parties unless he laid down any legal proposition such as a construction which is made the basis of the award and is on the face of the award erroneous.
The award showed that the umpire had considered besides the sale notes the oral and documentary evidence led by the parties as also the contentions urged by counsel.
It could not, therefore, be contended that the several documents were not taken into consideration by the umpire.
[291 E F; 292 E H] (b) The umpire laid down the legal proposition that the clarifications or assurances given subsequent to the dates of the sale notes were not binding on the respondent and could not affect the scope of the sales; but the fact that he answered a legal point, which he had to decide while deciding the questions referred to him, did not mean that he incorporated into the award or made part of it a document or documents, the construction of which was the basis of the award.
If there was an error in such a case it could not be said to an error appearent on the face of the award entitling the court to consider the various documents placed before the umpire but not incorporated in the award so as to form part of it, and then to make a search if they had been misconstrued by him.
[293 B E] (3) Once it was found that it was competent for the umpire to decide that the appellant company was not entitled to keep certain vehicles which it had removed, he must, to do justice between the parties, order the appellant either to return them or to pay compensation for them.
Since the first course was not possible because of lapse of time the second was the only obvious course.
Clause 13 of the general conditions provides for reference to arbitration of all questions or disputes arising, under these conditions or in connection with this co tract, and these words are wide and comprehensive.
Therefore, the umpire did not go beyond his jurisdiction in accepting the respondent 's counter claim for compensation.
[295 D E] (4) Merely because the umpire held that even though the appellant was not entitled to some vehicles claimed by it, yet the authorities had delivered a substantial number of them.
without going into details, it could not be said that he bad acted without evidence or that he behaved in the matter as a conciliator, or gave findings on conjuncture and surmises, especially when the appellant withheld relevant evidence which was in its possession.
[296 E F] (5) Under the contracts of the sale.
the appellant was bound to pay to the respondent ground rent and other charges which the respondent in its turn was liable to pay the owners; and since it was not the appellant 's case that the respondent had claimed a higher amount there was no sub stance in the contention that the arbitrator fixed the ground rent without any evidence.
[297 A C] 284 (6) Considering the huge amounts claimed by the parties, the volume of evidence, adduced and the number of days occupied in recording that evidence and in arguing the case, it could not be said that the discretion of the umpire exercised in the matter of costs was exercised in breach of any legal provision or unreasonably.
[297 C D]


judgement:
Appeal No. 658 of 1967.
Appeal from the judgment and order dated June 27, 1966 of the Assam and Nagaland High Court in Civil Rule No. 296 of 1964.
Naunit Lal, for the appellants.
Sarjoo Prasad and section N. Prasad.
for the respondent.
307 The Judgment of the Court was delivered by shah, C. J.
On October 24, 1957 Rameshwar Agarwala hereinafter called the respondent applied to the Deputy Com missioner, Lakhimpur, for settlement of a tea garden for "special cultivation of tea".
By order dated March 11, 1964 the Government of Assam permitted settlement of the tea garden for special tea cultivation on payment of Rs . 3,86,008/ as premium.
The respondent failed to pay the amount demanded.
The State of Assam then put up the tea garden for auction.
The respondent moved a petition in the High Court of Assam for an order declaring that in fixing the amount of the premium at Rs. 3,86,008/the State acted illegally, and that the order was void and unenforceable at law because in fixing the amount of the premium the State acted without jurisdiction and the order directing auction of the tea garden for not depositing the amount demanded was also illegal.
The High Court, upheld the contention and ordered the State of Assam not to, give effect to the order dated March 31, 1964 calling upon the respondent to pay the amount due within two months of the order and the order dated November 26, 1964 directing that the tea garden be put up for auction.
With certificate granted by the High Court, the State of Assam has appealed .to this Court.
The tea garden belonged to the State of Assam.
The Govern ment of Assam in the absence of any binding statutory provision, could settle the tea garden on such commercial terms it could reasonably obtain.
The respondent applied to the Deputy Commissioner for settlement of the tea garden and requesting the State Government for early fixation of the amount of premium.
When the premium was fixed by the Government the respondent protested, contending that the action of the State was illegal Before the High Court it was contended by the Respondent that the power of the State Government to fix the premium for which it could lease the tea garden was restricted by Rule 40 framed under the Assam, Land Revenue Regulations.
The Rule reads "In addition to the land revenue payable under rule 17 and value of the timber assessed under rule 37, an applicant to whom a lease for special cultivation is granted shall be liable to pay premium.
The rate of premium shall be fixed by the State Government from time to time for each locality.
The reasons which persuaded the High to upheld the plea, raised by the respondent may be set out in their own words : "The only power which the Government has got, is to fix the rate of premium under Rule 40 of the Rules 308 under the Land Revenue Regulation and the question for us to consider is whether the order of the Government fixing the premium for settlement of this land for special cultivation is an order in conformity with Rule 40.
In our opinion, what Rule 40 provides is to confer upon the Government power to fix the rate of premium in every case which shall be payable for the settlement and it is only the Deputy Commissioner that is authorised to settle the land.
The whole purpose, of Rule 40 is to confer power on the Government to fix the rate of premium which will be valid for a particular locality and that the Deputy Commissioner has to make the settlement.
He is given the power to realise the premium fixed by the Government from time to time and to see that no document of lease is issued before the premium has been paid by the intending holder.
But Rule 40 does empower, in our opinion, the State Government to fix the amount of premium in the case of a particular settlement in a particular locality. . . the rate of premium for a particular locality and the Legislature when framing the rules never intended that the Government should be empowered to fixing the total amount of premium payable by the intending holder.
In our opinion, therefore, the order passed by the Government directing the authorities to offer the land for settlement in case the petitioners pay Rs. 3,86,000/ is not in conformity with Rule 40 and this order cannot be given effect to.
" The expression "locality" is not defined in the Act or in the Rules.
We see no warrant for the assumption made by the High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region.
The Government is by the Act or the Rules not disqualified from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary a tea garden may in our judgment be appropriately regarded as a locality within the meaning of Rule 40.
The power to settle a tea garden on payment of land revenue, value of the timber and premium is to be exercised according to the Rules.
The rate of premium may be fixed by the State Government according to its commercial value.
In the absence of any restriction imposed upon the State Government requiring that a general rate shall be fixed covering a specified area larger 309 than a tea garden there is nothing which prohibits the State Government from fixing the rate of premium having regard to the commercial value of the tea garden.
In the present case the Sub Divisional Officer reported that the price of the land of the Dirpai tea garden be valued at Rs.1 500/ per bigha and on that basis the State Government computed the premium to be paid in respect of the entire Jokai Tea Garden.
Fixation of a rate of Rs. 5001 per bigha in respect of the entire area of the tea garden may be regarded as a premium fixed for the locality of the tea garden.
The matter rested entirely in contract between the Respondent and the State Government.
There was an offer by the respondent for settlement of the tea garden.
He agreed to pay the land revenue payable under r. 17.
He also agreed to pay the value of the timber assessed under r. 37.
For settlement of the tea garden for special cultivation the respondent was also liable to pay premium.
The quantum of liability to pay land revenue was governed by r. 17 and value of the timber was governed by r. 37.
The liability to pay premium had to be fixed by the State Government.
In the absence of any restriction placed by the Rules upon the power of the St ate Government, we do not think that the High Court had any jurisdiction to compel the State to enter into a contract to settle the tea garden upon the respondent on payment of premium after determining a general rate for a region larger than the tea garden.
The High Court was in error in setting aside the order passed by the Government of Assam and in declaring that the offer to settle the land of the Dirpai Tea Garden on payment of Rs. 3,86,008/ was not in conformity with r. 40.
The High Court also erred in directing that auction of the land for nonpayment of the premium shall be set aside.
The appeal is allowed and the petition filed by the respondent will be dismissed.
The respondent will pay the costs in this Court and in the High Court.
R.K.P.S. Appeal allowed.

summary:
The first respondent applied to the Deputy Commissioner, Lakhimpur for settlement of a Tea Garden for "special cultivation of tea".
In March, 1964 the Government of Assam permitted the settlement on payment of Rs. 3.86 lakhs as premium.
Upon the respondent failing to make payment of the amount, the State Government directed the auction of the tea garden.
The first respondent thereafter moved a petition in the High Court for a declaration inter alia that the State Government had acted illegally in fixing the amount of premium.
The High Court allowed the petition holding that the order fixing the premium was not in conformity with rule 40 framed under the Assam Land Revenue Regulations which required the State Government to fix the rate of premium for a particular locality; it did not empower the Government to fix the premium payable by an intending holder in a particular case.
On appeal to this Court, HELD : The High Court was in error in setting aside the order passed by the Government of Assam and in declaring that the offer to settle the tea garden on payment of the amount specified Rs. 3,86,000 was not in conformity with rule 40.
There was no warrant for the assumption made by the _High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region.
The Government is by the Act or the Rules not disqualified from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary a tea garden may appropriately be regarded as a locality within the meaning of Rule 40.
The rate of premium may be fixed by the State Government acccording to its commercial value.


judgement:
Appeal No. 595 of 1967.
Appeal from the judgment and order dated July 28, 1966, of the Assam and Nagaland High Court in Civil Rule No. 242 of 1964.
Naunit Lal, for the appellants.
D. N. Mukherjee, for the respondent.
299 The Judgment of the Court was delivered by Shah, C.J.
The Divisional Forest Officer, Kamrup Division, Assam invited tenders for the purchase of monopoly rights to quarry stone from certain areas, including Harengi Stone Quarry Mahal, for the period July 1, 1963 to June 30, 1964.
Mool Chand Sarougi hereinafter called 'the respondent ' submitted a tender accompanied by the requisite deposit of Rs. 100/ as earnest money, and offered the rate of Rs. 5.25 per rupee of royalty.
The tender, submitted by the respondent was accepted and for the minimum quantity of 1,25,000 c. ft. of stone allotted to the respondent out of the quarry he was to pay Rs. 31,250/ .
Intimation of acceptance of the tender was given to the respondent on July 13, 1963.
One Baputi Ram, a member of a scheduled tribe, appealed ' against the order of the Divisional Forest Officer accepting the, tender, to the Government of Assam and obtained a stay order.
After about three months he declined to prosecute the appeal and ' his appeal was dismissed.
The respondent then declined to, accept the settlement of the quarry.
The Divisional Forest Officer invited fresh tenders.
The offers made were not however accepted and tenders were invited again.
On January 10, 1964 a settlement was made for a minimum quantity of 50,000 c. ft. for the period from January 25, 1964 to June 30, 1964 for Rs. 10,000/ The Divisional Forest Officer, thereafter, sought to recover the amount of Rs. 31,250/ for which the tender of the respondent was accepted as arrears of land revenue in the manner provided by section 75 of the Assam Forest Regulation VII of 1891.
The respondent then moved a petition in the High Court of Assam for an order quashing the proceeding for recovery of the amount demanded.
The High Court held that the amount claimed was, not recoverable under the provisions of the Assam Forest Regulation, VII of 1891 and passed an order quashing the proceeding for recovery and issued a mandamus to the Divisional Forest Officer, Kamrup Division not to proceed with the recovery.
The State of Assam has appealed to this Court with certificate granted by the High Court.
Section 75 of the Assam Forest Regulation VII of 1891 pro vides : "All money, other than fines, payable to Crown under this Regulation, or under any rule made thereunder, or on account of the price of any forest produce, or of expenses incurred in the execution of this Regulation 300 in respect of any forest produce, may, if not paid when due, be recovered under the law for the time, being in force as if it were an arrear of land revenue.
" The amount claimed to be due from the respondent is not on account of the price of any forest produce, or of expenses incurred in the execution for recovery of any forest produce.
The amount is also not due in the execution of the Regulation.
So far there is common ground.
It was claimed, however, that the amount was due under rule 10 promulgated in exercise of power under the Regulation and on that account it was recoverable as an arrear of land revnue.
Rule 10 provides "No lease for any fixed period giving the right of removing India rubber, cane, kutcha or cutch, lac, agar, ivory, or any other forests produce shall be given otherwise than in accordance with the general or special orders of the Conservator who is empowered to authorise sales in respect of such leases, by auction, tender or any other method at such rates as he may decide in his discretion.
" The Rule in our judgment does not apply to recovery of the amount alleged to be due for failure to carry out the obligations ,of the tender by proceedings under the Assam Forest Regulation 1891.
It is again difficult to hold that stone is forest produce within the meaning of the Act.
In any event the Rule does not give rise to any liability to pay a sum of money.
It merely imposes a limitation upon the power of the officers of the Forest Department to grant leases in respect of certain forest produce.
Ile lease may not be granted except in accordance with the general or special orders of the Conservator who alone As empowered to authorise a sale in respect of such a lease.
It is a rule relating to the exercise of power to grant leases.
The High Court was, in our judgment, right in observing that the amount of damages for breach of the terms of the sale notice is not an amount due under the Regulation, or rule 10 made thereunder.
The appeal accordingly fails and is dismissed with costs.
G.C. Appeal dismissed.

summary:
The Divisional Forest Officer Kamrup Division Assam invited tenders for the purchase of monopoly rights to quarry stone for the period July 1, 1963 to June 30, 1964.
The tender submitted by the respondent was accepted and for the minimum quantity of 1,25,000 c.ft. of stone allotted to the res pondent he was to pay Rs. 31,250/ On appeal being filed against the order accepting the tender the Government of Assam granted stay of the order.
When three months later the appeal was dismissed for non prosecution the respondent declined to accept settlement of the quarry.
Thereafter tenders had to be invited again and it was only on January 10, 1964 that a settlement was made for a minimum quantity of 5000 c.ft.
for the period from January 25, 1964 to June 30, 1964 for Rs. 10,000.
The Divisional Forest Officer then sought to recover the amount of Rs. 31,250/ for which the tender of the respondent was accepted as arrears of land revenue in the manner provided by section 75 of the Assam Forest Regulation VII of 1891.
The respondent moved a petition in the High Court for an order quashing the proceeding for recovery of the amount demanded.
The High Court allowed the petition.
holding that the amount claimed was not recoverable under the aforesaid Regulation.
The State of Assam appealed to this Court with certificate.
It was conceded that the amount was not 'recoverable under section 75 of the Regulation but reliance was placed on Rule 10 of the rules made under the Regulation, HELD The appeal must fail.
Rule 10 does not apply to recovery of the amount alleged to be due for failure to carry out the obligations of the tender by proceedings under the Assam Forest Regulation 1891.
It is again difficult to hold that 'stone ' is forest produce within the meaning of the Act.
In any event the Rule does not give rise to any liability to pay a sum of money.
It merely imposes a limitation upon the power of the officers of the Forest Department to grant leases in respect of certain forest produce.
The lease may not be granted except in accordance with the general or special order of the conservator who alone is empowered to authorise sale in respect of such a lease.
[300 E F]