judgement:
Appeals Nos. 705 724 1971.
(From the Judgment and Order dated 3 9 1970 of the Patna High Court in C.W.J.C. Nos. 992, 1042, 1088, 1096 1101, 1148 1150, 1194, 1244 1247, 1722/68 and 146/69 re spectively).
D.P. Singh, S.C. Agarwal and V. 1.
Francis, for the Appel lants.
Sachin Chaudhary (in CA.
705/71) for Respondent No. 1.
B. Sen, and section 1.
Sorabjee (in CA.
709/71), S.B. Sany al, S.C. Banerjee, D.N. Mukerjee and A.K. Nag for Respondent No. 1 (in CAs.
705 713 & 718 and Respondents in 714/71).
D.N. Gupta, for Respondents (In CAs.
715 717/71).
S.N. Prasad (In CAs.
706/71), S.P. Nayar and Girish Chandra for Respondent No. 2 (in CA.
706 708, 713/71).
A.K. Sen, B. Sen, D.N. Mukherjee and A. K. Nag for Respondent (in CA.
724/71).
The Judgment of the Court was delivered by JASWANT SINGH, J.
This batch of 20 Civil Appeals Nos. 705 to 724 of 1971 by certificate under Article 133(1)(a) of the Constitution which are directed against the common judgment dated September 3, 1970, of the High Court of Judicature at Patna and raise important questions relating mainly to interpretation and scope of section 30A of the (Act 67 of 1957) (hereinafter referred to as the 1957 Act), shall be disposed of by this judgment.
Circumstances leading to these appeals in so far as they would be helpful in appreciating the points involved are: Prior to October 25, 1949, proprietors of big estates like Rajas of Ramgarh and Jharia granted, in exercise of their untramelled discretion, mining leases of huge tracts of land in the districts of Hazaribagh, Dhanbad, and Singhbhum to various persons for winning and extracting coal for a period of 999 years in lieu of payment of premiums and fixed annual rental.
There was in these leases either no stipulation for payment of royalty or the royalty stipulated for was very low.
Except in a few cases, the lessees of these mining leases did not work the mines them selves and granted sub leases thereof more or less or similar terms.
On September 8, 1948, the Central Legislature passed the Mines and Minerals (Regulation and Development) Act, 1948 (Act No. 53 of 1948) (hereinafter referred to as 'the 1948 Act ') under Entry 36 of List I of Seventh Schedule to the Government of India Act, 1935.
The Act, as declared in its Preamble, was enacted as it was considered expedient in public interest to provide inter alia for the regulation of mines and for the development of minerals Sub section (1) of section 4 of the Act ' prohibited the grant after the commencement of the Act of any mining lease otherwise than in accordance with the rules made under the Act.
Sub section (2) of section 4 of the Act provided that any mining lease granted contrary to sub section(1) would be void and of no effect.
Section 5 of the Act empower 160 ed the Central Government to make rules for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area. 'Section 7 of the Act empowered the Central Government to make rules for the purpose of modifying or altering the terms and conditions of any existing mining lease i.e. any mining lease granted prior to the commencement of the Act, so as to bring such lease into conformity with the rules made under section 5.
In exercise of the powers conferred on it by section 5 of the Act, the Central Government made the Miner al Concession Rules, 1949.
Both the 1948 Act and the Mineral Concession Rules, 1949, came into force on October 25, 1949.
Rule 41 of the Mineral Concession Rules which related to the conditions of mining leases made it compulsory for every mining lease to include a condition enjoining the lessee to pay royalty on the minerals at the rate specified in the ,First Schedule to the Rules which in case of coal was 5% of the F.O.R. price.
The 1948 Act was extended to Chhota Nagpur by a notifi cation dated January 16, 1950, issued under section 92 of the Government of India Act, 1935.
The provisions of the Mineral Concession Rules, 1949, did not apply to leases or sub leases granted anterior to October 25, ' 1949.
The Constitution of India came into force on January 26, 1950.
Articles 246 and 254 of the Constitution which relate to the distribution of legislative powers and Entry 54 of List I (Union List) and Entry 23 of List II (State List) of the Seventh Schedule to the Constitution read thus "Article 246: (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (2) Notwithstanding anything in clause (3), Parlia ment, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Sche dule(3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumer ated in List II in the Seventh Schedule.
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a "State notwithstanding that such matter is a matter enumerated in the State List".
"Article 254: (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provi sion of an existing law with respect to one of the matters enumerated in the concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the 161 law made by the Legislature of such State or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumer ated in the Con current List contains any provi sion repugnant to the pro visions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the Presi dent and has received his as sent prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State." "Entry 54 of List 1 (Union List).
Regulation of mines and mineral development to the extent to which such re gulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest." "Entry 23 of List II (State List).
Regulation of mines and subject to the provisions of List I with mineral development respect to regulation and development under the control of the Union.
" The Constitution was followed by the Bihar Land Reforms Act, 1950 (Act XXX of 1950) (hereinafter referred to as 'the Bihar Land Reforms Act ') which though passed on September 11, 1950, came into force on September 25, 1950.
This legislation, as evident from its preamble, was enacted as it was considered expedient to provide for transference to the State of the interests of proprietors and tenure holders in land and of mortgagees and les sees of such interests including interest in mines and minerals.
On the publication of notifications under sections 3 and 3A of the Bihar Land Reforms Act, the estates or tenures of proprietors or ten ure holder as also the intermediary interests of all intermediaries passed to and became vested in the State.
Section 4 of the Bihar Land Re forms Act declared the consequences flowing from the vesting of the estate or tenure in the State.
Clause (a) of section 4(1) provided that on publi cation of the aforesaid notifications, such estate or tenure, including the interests of the proprie tor or tenure holder in any building etc., in trees etc.
, as also his interest in all sub soil includ ing any rights in mines and minerals, whether discovered, or undiscovered, or whether being worked or not, inclusive of such rights of a lessee of mines and minerals comprised in such estate or tenure other than the interests of raiyats or under raiyats shall, with effect from the date of vesting, vest absolutely in the State free.
from all encumbrances and such proprietor or tenure holder shall cease to have any interest in such estate or tenure other than the interests expressly saved by 162 or under the provisions of the Act.
Thus the interest of the proprietor or tenure holder includ ing his rights in mines and minerals, inclusive of rights of a lessee of mines and minerals came to an end and vested absolutely in the State.
Having once so vested, certain rights were conferred by statute on the proprietors and tenure holders and the lessees. ' Section 9 of the Bihar Land Reforms Act provided that mines which were in operation.
at the commencement of the Act and were being worked directly by the.
intermediary shall be deemed to have been leased by the State Government to the intermediary and he would be entitled to retain possession of those mines as a lessee thereof.
The lease by the State Government to the interme diary, according to sub section (2) of section 9 was to have such terms and conditions as might be agreed upon between the State Government and the intermediary or in the absence of such agreement, as might be settled by the Mines Tribunal appointed under section 12 of the Act provided that all such terms and conditions had to be in, accordance with the provisions of any Central Act for the time being in force regulating the grant of new mining leases.
According to the proviso,.
such terms and conditions were to be in accordance with the provi sions of the 1948 Act which was in force at the ,time the estate vested in the State of Bihar.
The mines in the present cases, it may be mentioned, were not worked by the intermediary lessees.
Sec tion, 10 of the Bihar Land Reforms Act which dealt with leases of mines and minerals which subsisted on the date immediately preceding the date of vesting of the estate or tenure provided: "10.
Subsisting leases of mines and minerals ( 1 ) Notwithstanding anything contained in this Act, where, immediately before the date of vesting of the estate or tenure there is a subsist ing lease of mines or minerals comprised the estate or tenure or any part thereof, the whole or that part of the estate or tenure comprised in such lease shall, with effect from the date of vest ing, be deemed to have been leased by the State Government to the holder of the said subsisting lease for the remainder of the term of that lease, and such holder shah be entitled to retain posses sion of ' the leasehold property.
(2) The terms and conditions of the said lease by the State Government shall mutatis mutan dis be the same as the terms and conditions of the subsisting lease referred to in sub section (1), but with 'the additional condition that, if in the opinion of the State Government the holder of the lease had not, before the date of the commencement of this Act, done any prospecting or development work, the State Government shall be entitled at any time before 'the expiry of one year from the said date to determine the lease by giving three months ' notice in writing: Provided that nothing in this sub section shall be deemed to prevent any modifications being made in the terms and conditions of the said lease in accordance with the provision of any Central Act for the time being in force regulating the modifi cation of existing mining leases.
163 (3) The holder of any such lease of mines and minerals as is referred to in sub section ( 1 ) shall not be entitled to claim any damages from the outgoing proprietor or tenure holder on the ground that the terms of the lease executed by such proprietor or tenure holder in respect of the said mines and minerals have become incapable of fulfilment by the operation of this Act.
" The consequence of the operation of sections 4(1)(a) and 10(1) of the Bihar Land Reforms Act as held by this Court in Bihar Mines Ltd. vs Union of India(1) and reiterated in Chhatu Ram Horil Ram Private Ltd. vs State of Bihar & Anr.(2) was not that the old original contractual leases of mines and minerals comprised in the estate and subsisting on the date of vesting continued with the Government substi tuted as lessor in place of original lessor but was that the original contractual leases came to an end on the date of vesting as a result of section 4(1)(a) of the Act and for the remainder of the terms of those leases, fresh statutory leases in favour of the lessees came into being under sec tion 10(1) of the Act.
All the estates of Jharia Kajya within which the leases in question fell became vested in the State of Bihar on November 3, 1951, Thenceforth i.e. from November 3, 1951, the subsisting leases came to be treated as new statutory leases granted ,by the State Government in terms of section 10(1) of the Bihar Land Reforms Act in view of the decision of this Court in Bihar Mines Ltd. vs Union of India (supra).
In 1956 the Mining Leases (Modification of Terms) Rules, 1956 providing for the modification and alteration of the terms and conditions of the mining leases granted prior to the commencement of the 1948 Act so as to bring them in conformity with the terms and conditions of the mining leases granted after the commencement of the 1948 Act in accordance with the Mineral Concession Rules, 1949, were promulgated under section 7 of the 1948 Act on Septem ber 4. 1956.
These Rules by virtue of the definition of the "existing mining lease" contained in rule 2(c) of the Mining Leases (Modification of Terms) Rules, 1956 were made expressly inapplicable to mining leases in respect of coal granted before October 25, 1959 the date of commencement of 1948 Act, with the result that the mining leases or sub leases of the respondents were not affected by the provi sions of the 1948 Act or the rules made thereunder.
The 1948 Act was replaced by the (Act No. 67 of 1957) (hereinafter referred to as 'the 1957 Act ') which though after being passed by the Parliament under Entry 54 of List I of the Seventh Schedule to the Constitution received the assent of the President on December 28, 1957, came into force on June 1, 1958.
Section 9 of the 1957 Act provided : "9.
Royalties in respect of mining leases:(1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything (1) ; (2) ; :A.I.R. 1969 S.C .177.
164 contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed by him from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral.
(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral "removed by him from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral.
(3) The Central Government may by notifica tion in the official gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be pay able in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not (a) fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral at the pit 's head, or (b) enhance the rate of royalty in respect of any mineral more than once during any period of four years.
It will be noticed that sub section (1) of the above quoted section made it obligatory for the holder of a mining lease granted before the com mencement of the 1957 Act notwithstanding anything contained in the instrument of his lease or in any other law in force at the commencement of the 1957 Act to pay in respect of any mineral removed by him from the leased area after December 28, 1957, royalty at the rate specified in the Second Sched ule of the 1957 Act which for coal was fixed at 5% of F.O.R. price subject to a minimum of fifty N.P. per ton.
Section 16 of the 1957 Act provided that mining leases granted before October 25, 1949 would, as soon as might be, after the commencement of the 1957 Act, be brought into conformity with the provisions of the 1957 Act and the rules made under sections 13 and 18 thereof.
Section 29 of the 1957 Act provided for the effective continuance of the rules made or purport ed to have been made under the 1948 Act in so far as they related to matters provided for in the former Act and were not inconsistent therewith.
The effect of section 9 of the 1957 Act as held by this Court in State of Madhya Pradesh & Anr.
vs Dadabhoy 's New Chirimiri Ponri Hill Colliery Co. Pvt. Ltd. (1) was that the rate of royalty was enhanced in case of those lessees who, under the leases obtained by them before the commencement of the Act, were paying a rate lesser than 5% while the royalty payable by lessees similarly placed was reduced if they were paying royalty at a higher rate.
As the enhancement envisaged by section 9 of the 1957 Act was apprehended to lead to an increase in the cost of production of coal which is a vital mineral for (1) [972] 2 S.C.R. 609.
165 the industrial development and occupies a basic position in the economy of the country, various representations were made to the Government of India to reduce the royalty.
Impelled by these representations, the Central Government moved a Bill in March, 1958, being Bill No. 33 of 1958, and got, by means of Mines and Minerals (Regulation and Development) Amendment Act, 1958, section 30A inserted in the 1957 Act reading as follows : "30A.
Notwithstanding anything contained in this Act the provisions of sub section (1) of section 9 and of subsection (1 ) of section 16 shah not apply to or in relation to mining leases grant ed before the 25th day of October, 1949 in respect of coal but the Central Government, if it is satis fied that it is expedient so to do, may by notifi cation in the official gazette direct shall all or any of the said provisions (including any rules made under sections 13 and 18) shall apply to or in relation to such leases subject to such exceptions and modifications, if any, as may be specified in that or in any subsequent notification." This section, it would be seen, consisted of two parts.
Under the first part, the provisions of sections 9(1) and 16(1) were expressly made inapplicable to or in relation to pre October 25, 1949 mining leases for coal.
The second part empowered the Central Government on being satisfied that it was expedient so to do to direct by notification that all or any of those provisions (including the rules made under sections 13 and 18) would apply to or in relation to such leases subject to such exceptions and modifications, if any, as might be specified in that or any subsequent notification.
The "exceptions and modifications" which could be so specified in the notification were obviously in regard to the application, when such application was decided upon, of sections 9 ( 1 ) and 16 ( 1 ) and the relevant rules.
The aforesaid section 30 A was given a retrospective effect by virtue of section 2 of the Amendment Act 15 of 1958.
Vide notification No. GSR 432 dated May 29, 1958, the 1957 Act was brought into force with effect from June 1, 1958.
By notification No. S.O. 3094 dated December 29, 1961, the Central Government in exercise of the powers conferred on it by the second part of section 30A of the 1957 Act, directed the provisions of sub section (1) or section 9 to apply with immediate effect to or in relation tO mining leases in respect of coal granted before October 25, 1949 subject to the modification that lessees were required to pay royalty at the rates specified in the agreements between them and the lessor or at the rate of 21/2% on F.O.R. price of coal, whichever was higher, in place of the rate of royalty specified in respect of coal under the Second Sched ule.
After the notification, the ' State Government started demanding royalty at 21/2% and initiated proceedings under the Public Demands Recovery Act to realize royalty at 21/2% for the period between 29.12.1961 and 31.12.1965.
On October 26, 1964, the Bihar Land Reforms Act was amended by insertion of section 10 A originally by the Bihar Amendment Ordi 166 nance No. 3 of 1964 which was subsequently replaced by the Bihar Land Reforms (Amendment) Act, 1954 (Bihar Act 4 of 1965).
Under this newly added section, the lessees ' interest in mines and minerals which were subject to sub leases also came to vest in the State of Bihar.
Thus the State also acquired the right to sub lease.
On October 27, 1964, the interests of Chakroborty and Adhikaris from whom sub leases appear to have been taken in the beginning of the current century vested in the State of Bihar.
On January 1, 1966, a notification being S.O.No. 81 of 1966, was issued by the Central Government under section 30A of the 1957 Act superseding the notification No. S.O. 3094 dated December 29 1961 and applying the provisions of section 9(1) of the 1957 Act to leases granted prior to the commencement of the said Act.
On October 3, 1966, this Court pronounced judgment in Bihar Mines Ltd. vs Union of India (supra) holding therein that the whole or that part of the estate or tenure com prised in an) ' lease of mines and minerals would, with effect from the date of vesting, be deemed to have been leased out by the State Government to the holder of the subsisting lease (i.e. the first lessee) for the remainder of the period of the lease and that the statutory lease thus held by the head lessee from the State Government under section 10 of the Bihar Land Reforms Act, would be a new lease granted after October 25. 1949, and that the sub leases would also be deemed to be new leases granted by the new lessee from the State Government, as the rights of the original lessee under the original lease had ceased on the vesting of the estate, and he was to be deemed to have got a new lease from the State.
On December 22, 1967, the Patna High Court held in Narendra Nath Mandal vs State of Bihar & Ors.
(1) that a lessee of a coal mine was liable to pay royalty for the period beginning from the date of vesting of an estate under the Bihar Land Reforms Act to May 31, 1958 at 5% of F.O.R. price of coal subject to a minimum of eight paise per ton by virtue of section 29 of the 1957 Ace read with Rule 41 and Schedule I of Mineral Concession Rules, 1949, and at the same rate from the date on which the 1957 Act came into force by virtue of section 9(1) of the said Act read with Second Schedule thereto because neither section 30A nor the notification issued thereunder was applicable to the said lease in view of the effect of the vesting of estate in the State of Bihar and the coming into existence of a new lease by force of section 10 of the Act which could not be said to be a lease granted before October 25, 1949 which alone was the subject matter of section 30A of the 1957 Act.
In June 1968, demands were made by the District Mining Officer, appellant No. 2 herein, for payment of royalty at the rate specified in the Mineral Concession Rules, 1949 in respect of the period commencing from November 3, 1951 the date of vesting of the estates of the head lessors under the Bihar Land Reforms Act till May 31, 1958 and in respect of the period from June 1, 1958 the date of coming into force of the 1957 Act to December 12, 1965, at the rate C. J.C. 653of 1965 (Patna H.C.) 167 specified in the Second Schedule to the 1957 Act, after setting off 211/2% already realised, in view of the decision in Narendra Nath Mandal 's case (supra).
Aggrieved by these demands, the respondents filed petitions in the High Court of Patna for issue of writs of certiorari and ,mandamus quashing the demand notices and restraining the State from demanding royalty as indicated above.
The case as set up by the respondents in the writ peti tions was that as Rule 41 of the Mineral Concessions Rules, 1949, requiring royalty to be paid at the rate specified in Schedule 1 to the rules, applied only to a ' lease granted under the said Rules after the commencement of the 1948 Act and had no application to the leases and subleases of the respondents, royalty could not be claimed on the basis of 5 % of F.O.R. price of coal in respect of the period between the date of vesting under the Bihar Land Reforms Act and May 31, 1958the date immediately preceding the date on which the 1957 Act was brought into force; that as regards the period between June 1, 1958 and December 28, 1961 royalty at con tractual rates alone was payable because the provisions of section 9(1) of the 1957 Act had no application to statuto ry leases deemed to.
have come into existence under section 10(1) of the Bihar Land Reforms Act and alternatively be cause by virtue of the provisions of section 30A of the 1957 Act the provisions of section 9(1) of the said Act were not applicable to or in relation to the mining leases in respect of coal granted before October 25, 1949 until the Central Government, by notification, decided otherwise; that as regards the claim in respect of the period from December 29, 1961 to December 31, 1965 'royalty at 21/2% of F.O.R. price of coal had already been paid by the respondents as per notification of the Central Government issued in exer cise of the power under section 30A of the 1957 Act and having itself invited and accepted this payment in full discharge of the respondents ' liability for royalty payable for the said period, the State was not entitled to unilater ally revoke the aforesaid discharge or satisfaction and claim further royalty at 21/2% of F.O.R. price of coal over and above what has already been paid.
In reply the appellants herein submitted inter alia that the demands were lawful, that the combined effect of sec tions 9 and 29 of the 1957 Act read with Second Schedule thereto and the Mineral Concession Rules, 1949 was that the respondents who were lessees or sub lessees were liable to pay royalty at the rate of 5% of F.O.R. price of coal from the date of vesting of the respective estates of the pro prietors who had granted head leases in the State of Bihar for the entire period in question; that section 9(1) of the 1957 Act was very comprehensive and applied to all leases whether contractual or statutory which came into existence before the 1957 Act was brought into operation; that section 30A of the 1957 Act applied only to leases in respect of coal which had been granted before October 25, 1949 and not to the new statutory mining leases of the respondents deemed to have been granted by the State Government before the coming into operation of the 1957 Act under the provisions of section 10 of the Bihar Land Reforms Act; and that the provisions of section 9(1) of the could not be taken to have been suspended by section 30A of the Act so far as the leases in question were concerned.
All the writ petitions were heard by a Sepcial Bench of five Judges of the High Court.
The said Bench by its judgment and order dated September 3, 1970 allowed all the writ petitions filed by the respondents and quashed the impugned notices holding that Narendra Nath Mandal 's case (supra) had been wrongly decided; that rule 41 of the Mineral Concession Rules, 1949 made under section 5 of the 1948 Act which was claimed by the appellants to have been continued in force by virtue of section 29 of the 1957 Act and to justify the, demand for royalty for the period prior to June 1, 1958 was applicable only to contractual grants envisaged by the said Rules and could have no application to statutory leases arising by virtue of section 10 of the Bihar Land Reforms Act; that there was no warrant for pushing back section 9 of the 1957 Act by virtue of section 29 thereof to any date anterior to that on which the said Act came into force; that as section 30A of the 1957 Act on its true interpretation, imposed a temporary bar on the operation of the provisions of section 9(1) not only in respect of mining leases grant ed before October 25, 1949 in respect of coal but also in relation to those leases which expression covered the statu tory leases of the respondents which must be deemed to have come into existence with effect from the date of vesting under the Bihar Land Reforms Act, the demand for royalty for the period commencing from June 1, 1958 to December 31, 1965 was also unjustified and illegal.
Aggrieved by the judgment and order of the Special Bench of the High Court, the appellants filed a petition in the High Court under Articles 132 and 133(1)(a) of the Constitu tion for grant of certificate of fitness for appeal to this Court.
The High Court by itsorder dated January 22, 1971 granted the certificate of fitness under Article 133(1 )(a) of the Constitution enabling the appellants to prefer the aforesaid appeals to this Court.
Counsel for the parties have reiterated before us the contentions urged on behalf of their clients before the High Court.
Two important questions arise for determination by us in these appeals: (1) whether the claim for royalty in regard to the period prior to June 1, 1958 can be sustained; (2) whether the claim for ' royalty in regard to the period from June 1, 1958 to December 31 1965 is justified.
So far as the demand for royalty at 5% Of F.O.R. price of coal for the period prior to June 1, 1958 the date on which the 1957 Act came into force is concerned we are of opinion that it is not justified in view of the fact that Rule 41 of the Mineral Concession Rules, 1949 applied only to contractual leases envisaged by Chapter IV of the said Rules (which were made inter alia for regulating the grant of mining leases in respect of any mineral) and not to the statutory leases which came into existence as a result of the deeming provision embodied in section 10 of the Bihar Land Reforms Act.
This view is in accord with the decision of this Court in Chhatu Ram 's case (supra) where dealing with Rule 40 of the Mineral Concession Rules 169 1949 which relates to the period of lease, Shah, J. who delivered the judgment of the Court observed that the rule manifestly applied to grants made by the Government and had No. application to statutory leases arising by reason of section 10 of the Bihar Land Reforms Act.
We, therefore, find ourselves in complete agreement with the High Court that the claim for royalty for the period prior to June 1, 1958, is wholly unfounded and cannot be supported.
So far as the demand for royalty for the period beginning with June 1, 1958 and ending with December 31, 1965 is con cerned, we are of the opinion that no exception can be taken to the view expressed in this behalf by the High Court in its judgment under appeal. 'This becomes abundantly clear from a close scrutiny of section 30A (supra) of the 1957 Act, the provisions whereof may usefully be recalled at this stage.
Before examining, however,.
section 30A, it would be profitable to advert to section 9 (supra) of the Act.
This section, it would be seen consists of three parts.
Sub section (1) casts a liability on the holder of a mining lease granted before June 1, 1958 the date of the commencement of the Act to pay royalty in respect of any mineral removed by him from the leased area after that date at the rate for the time being specified in the Second Schedule, notwithstanding anything contained in the instru ment of lease or in any law in force on the aforesaid date of the commencement of the Act.
Sub section (2) makes also the holder of a mining lease granted on or after June 1, 1958 liable to pay royalty in respect of any mineral removed by him from the leased area at the rate for the time being specified in the Second Schedule.
Sub section (3) empowers the Central Government to amend the Second Schedule and enhance or reduce the rate of royalty in re spect of any mineral by issue of a notification subject to the restriction contained in the proviso to this sub sec tion.
Section 30A which, as is evident from its opening words, has an overriding effect on the other provisions of the Act affords a temporary protection from applicability of section 9(1) and section 16(1) of the Act not only to the leases granted before October 25, 1949, but also to the statutory leases which came into existence as a result of the operation of section 10(1) of the Bihar Land Reforms Act and replaced the former category of leases subsisting immediately before the date of vesting in the State of the estates or tenures on the publication of the notifications under sections 3 and 3A of the Bihar Land Reforms Act.
This conclusion irresistibly flows from the words "or in relation to" occurring in section 30A of the 1957 Act after the words "shall not apply to" and before the words "mining leases granted before the 25th day of October 1949" The aforesaid words which are of great significance of enlarge the scope of section 30A and bring within the umbrella of its protection the mining leases granted before October 25, 1949 as also the statutory leases which sprang up in their place by virtue of the legal fiction contained in Section 10(1) of the Bihar Land Reforms Act on the re:sting in the State of the estates or tenures.
As expressly ordained by sub sections (1) & (2) of section 10 of the Bihar Land Reforms Act, not ' only the ' holder of a statutory lease had to be the same as the holder of a subsisting 13 1003 SCI/76 170 lease for the remainder of the term of that lease but the terms and conditions of the statutory lease had also muta tis mutandis to be the same as the terms and conditions of the subsisting lease i.e. the original lease except to the extent mentioned in sub section (2).
Thus the statutory lease being inextricably linked up with the aforesaid sub sisting lease which it replaced as a result of the aforesaid provisions of the Act came within the purview of section 30A of the 1957 Act.
The interpretation sought to be placed by the appellants on the phraseology of section 30A of the 1957 Act cannot be accepted as;.
it would unduly re strict and limit the scope of that section and defeat the object which it was intended to effectuate viz. to mitigate the rigour of liability for payment of royalty under section 9 of the 1957 Act at the rate specified in the Second Sched ule in respect of the coal removed from ' the leased area after the commencement of the Act.
If as contended by the appellants, the protection envisaged by section 30A is restricted to leases granted before October 25, 1949, sec tion 30A would be ' rendered nugatory because on the coming into being of the statutory leases as a result of section 10(1) of the Bihar Land Reforms Act, there would hardly be left any mining lease to which section 30A of the 1957 Act would be applicable.
Thus there can be no room for doubt that the Legislature intended that section 30A of the 1957 Act should cover the aforesaid statutory leases as well.
It will be apposite in this connection to refer to the following statement of objects and reasons given in the Bill which sought to introduce section 30A in the 1957 Act with retrospective effect which can be usefully resorted to for ascertaining the true scope of section 30A and the extent of the protection afforded by it : " .
It ' is considered that these changes will have numerous undesirable consequences.
The areas covered by these mining leases are principally in West Bengal and Bihar and they account for as much as 80 per cent of the total coal production in the country.
The royal ties paid on this coal vary over a wide range but are gener ally much below the rate per ton prescribed in the Second Schedule.
A sudden and uniform increase of these royalties is likely to have an unsettling effect in the industry and may retard the programme of coal production under the Second Five Year Plan . . " Thus the above discussion makes it crystal clear that the statutory mining leases in respect of coal which sprang up under section 10(1) of the Bihar Land Reforms Act also acquired a temporary immunity from the applicability of sections 9(1) and 16(1) of the Act until the Central Govern ment came out with a notification making the said provisions applicable with or without modification to these leases.
Accordingly, we have no hesitation in holding in agreement with the High Court that the further demand for royalty for the second period indicated above cannot also be sustained.
For the foregoing reasons, we find no force in these appeals which are dismissed.
In the circumstances of the case, the parties are left to pay and bear their own costs of these appeals, P.B.R. Appeals dis missed.

summary:
Prior to October 25, 1949, the proprietors; of big estates granted mine leases either without payment of royalty or at very low royalty.
In most c the lessees granted sub leases on similar terms.
The Mines and Mine (Regulation and Development) Act, 1948, prohibited grant of any mine lease except in accordance with rules made under the Act.
41 of Mineral Concession Rules, 1949 which came into force on October 25, 1 made it compulsory for every mining lease to include a condition regard payment of royalty on the minerals.
The rule, however, did not apply leases or sub leases granted prior to October 25, 1949.
Under the Bihar Land Reforms Act, 1950 passed by the State legislate the interest of a proprietor or tenure holder as.
well as of the lessee including rights in mines and minerals, came to an end and vested absolutely in State.
Section 10 provided that the whole or part of the estate or term comprised in a subsisting lease shall be deemed to have been leased by State Government to the holder for the remainder of the term of lease.
The w replaced the 1948Act came into force on June 1, 1958.
Section 9(1) of Act made it obligatory for the holder of a mining lease granted before commencement of the 1957 Act to pay in respect of any mineral removed him from the leased area after December 28, 19 '57, royalty at a specified Section 16 provided that a mining lease granted before October 25, 194_9, w be brought into conformity with the provisions of the 1957 Act and the r Section 29 provided for the effective continuance of the rules made under 1948 Act in so.
far as they related to.
matters provided for in the 1957 and were not inconsistent therewith.
Section 30A which was inserted in the 1957 Act provides that the proviso of section 9(1) and of section 16(1) "shall not apply to or in relation to mining lease granted before October 25, 1949" and empowered the Central Government direct by notifi cation that all or any of the provisions of sections 9(1) and 1.
shall apply to or in relation to such leases subject to such exceptions and notifications if any, as might be specified in that or in any subsequent notification Section 30A was given retrospective effect.
In 1967, the High Court, in Narendra Nath Mandal vs State of Bihar & held (i) that a lessee of a mine was liable to pay royalty for the period being from November 3, 19,51 (date of vesting of an estate under the Bihar Reforms Act) to.
May 31, 1958 by virtue of section 29 of 1957 Act read with and Schedule I of 1949 Rules and (ii) from June 1, 1958 (the date of col into force of the 1957 Act) to December 31, 1965 b.y virtue of section 9(1) of Act read with the second Schedule there to because neither section 30A nor notification was ap plicable to the, lease in view of the effect of the vesting estate in the State and the coming into.
existence of a new lease by fore section 10 of the Act.
After this decision the State issued demand notices to respondents for payment of royalty in accordance with the decision of High Court.
Allowing the respondents ' Writ petitions, the High Court quashed the der notices.
The High Court held that Mandal 's case had been wrongly decide On the question whether the claim for royalty (1) prior to June 1, and (2) from June 1, 1958 to December 31, 1965 could be sustained.
158 Dismissing the appeals of the State, HELD: (1) The High Court was right in holding that the claim for yalty prior to June 1, 1958 was wholly unfounded and cannot be supported.
Bihar Mines Ltd. vs Union of India this Court held that the consequence of the operation of sections 4(1)(a) and 10.(1) of the Bihar Act was that the original ntractual leases came to an end on the date of vesting and for the remainder the terms of those leases fresh statutory leases in favour of the lessees me into being under section 10(1) of the Act as a result of which from November 3, 1951, the subsisting leases came to be treated as new statutory leases wanted by the State Government in terms of section 1D(1) of the Bihar Act, 1950.
the 41 of the Mineral Concession Rules, 1949 applied only to contractual cases envisaged by Chapter IV of the Rules and not to the statutory leases which came into existence as a result of the deeming provision in section 10 of e Bihar Land Reforms.
[169 B; 163 B D] Bihar Mines Ltd. vs Union of India ; ; A.I.R. 1967 S.C. 7 followed.
Chhatu Ram Horil Ram Private Ltd. vs State of Bihar & Anr. ; ; applied.
(2) The High Court was also right in its view that the demand for payment of royalty for the period from June 1, 1958 to December 31, 1965 cannot sustained.
[168 G] (a) Section 30A which has an over riding effect on the other provisions of Act, affords a temporary protection from applicability of sections 9(1) and (1) of the Act not only to the leases granted before October 25, 1949 but also the statutory leases which came into existence as a result of the operation of 10(1) of the Bihar Land Reforms Act and replaced the former category of ses subsisting immediately before the date of vesting in the State of the ates or tenures on the publication of the notifications under section 3 and 3A the Bihar Land Reforms Act.
This conclusion irresistibly flows from the tds "or in relation to" occurring in section 30A after the words "shall not apply and before the words "mining leases granted before the 251h day of October 9".
These words, enlarge the scope of section 30Pt and bring within the umbrella its protection mining leases, granted before October 25, 1949 as also the utory leases which sprang up in their place by virtue of the legal fiction tained in section 10(1 ) of the Bihar.
Reforms Act on the . vesting in the se of the estates or tenures.
As expressly ordained by section 10(1) and (2) the Bihar Land Re forms Act not only the 'holder 017 a statutory lease had be the same as the holder of a subsisting lease for the remain der of the of that lease but the terms and conditions of the statutory lease had also 'aris mutandis to be the same as the terms and conditions of the subsisting e i.e. the original lease except to the extent in sub section
Thus the statu lease being inextricably linked up with the subsist ing_lease which it replacas a result of the aforesaid provi sions of the Act, came within the purview s.30.A of the 1957 Act.
The interpretation sought to be placed by the ellants on the phraseology of section 30A cannot be accepted as it would unduly lict and limit the scope of that section and defeat the object which it was nded to effectuate, namely, to mitigate the rigour of liability for payment of dty under section 9 of the 1957 Act after the commencement of the Act.
If, ontended by the appellants, the protection envisaged by section 30A is restricted the leases granted before October 25, 1949, section 30A would be rendered atory because on the.
coming into being of the statutory leases as a result 10(1) of the Bihar Land Reforms Act, there would hardly be left any ing lease to which, section 30A would be applicable.
There can be no room doubt that the Legislature.
intended that section 30A of the 1957 Act should 'r the statutory leases as well.
A B] b) Statutory mining leases in respect of coal which sprang up under )(1) of the Bihar Land Reforms Act also acquired a temporary immunity the applicability of sections 9(1) and 16(1) of the Act until the Central Government came out with a notification making the said provisions applicable with without modification to these leases.
[170 G] 159


judgement:
il Appeal No. 212 of 1975.
(Appeal by Special Leave from the Judgment and Order dated 26 6 1974 of the Kerala High Court in A.S. No. 510/72).
L.N. Sinha, Sol.
of India, Shaymla Pappu and Girish Chandra for the appellant.
A.S. Nambiar for the respondent.
The Judgment of the Court was delivered by BEG, J.
The Union of India and the Commander, Officer incharge, Naval Base, Cochin, are the appellants before us by grant of special leave against a judgment and decree of a Division Bench of the High Court of Kerala.
The Division Bench had affirmed the decision of a learned subordinate Judge awarding Rs. 25,000/ as damages, together with inter est @ 6% per annum, to the plaintiff respondent for the illegal termination of the respondent 's services.
The plaintiff respondent was serving as a Welder, Grade II, in the Civilian Defence Forces at the Naval Base, Cochin, at the time of this allegedly illegal termination of service by an order of 25th October, 1968, of the Govt.
of India, Ministry of Defence.
Special leave was granted on condition that the appel lants Will bear the costs of the respondent in any event.
The point of law sought to be canvassed before us is: Does the doctrine that a Central Govt.
servant holds his post "at the pleasure of the President", contained in Article 310 of the Constitution, authorise the passing of an order of termination of services, without assigning any reason what soever, of the holder of a post "connected with defence ?" There is no finding anywhere that the services of the plaintiff respondent were terminated as a measure of pun ishment for any wrong done by him or for incompetence, although, a perusal of the pleadings would show that the appellants denied the assertions of the plaintiff respondent that he was efficient and entitled to promotions as he had qualified for them by passing certain tests.
The Subordinate Judge had awarded only Rs. 25,000 .
out of a claim of Rs. 75,000/ made on the ground that, but for illegal termination of the service of the plaintiff respond ent, the plaintiff would have continued in service upto the age of 60 years and duty promoted instead of being thrown out of service at the age of 41.
The plaintiff respondent alleged that the termination of his service, without giving any reason whatsoever, was contrary to, rules made under Article 309.
A glance at paragraph 4 of the plaint shows that the violation of rules 89 relating to conduct of disciplinary proceedings was alleged by the petitioner.
In paragraph 5 of the plaint, however, he alleged: "As per the terms of appointment and the rules governing the service of the petitioner,, he is entitled normally to continue in service till the age of 60.
If his service had not been terminated as per the impugned order, the petitioner would have been entitled to continue for a further period of 19 years and 8 months".
He proceeded to assert: "Due to the illegal termination, the peti tioner had lost a valuable right vested in him by virtue of his appointment and guaranteed by the Constitution of India and the rules framed thereun der namely a right to continue in service for the full period of 19 years and 8 months and thus to gain a livelihood for himself and his family".
A perusal of the judgment of the Division Bench shows that the only point really considered by it was whether the pleasure of the President mentioned in Article 310 of the Constitution, can over ride rules made under Article 309 of the Constitution.
The High Court had explained away a passage cited from State of U.P. & Ors., vs Babu Ram Upadhya(1) by observing that it did not support the argument that rules made under Article 309 of the Constitution did not control the pleasure of the President, under Article.310, which was to be subject to matters otherwise expressly provided in the Constitution.
The passage so explained away runs follows :.
"If there is a specific provlsion in some part of the Constitution giving to a Government servant a tenure different from that provided for in article 310, that Government servant is excluded from the operation of article 310.
The said words refer, inter alia,, to articles 124, 148, 218 and 324 which provide that the Judges of the Supreme.
Court, the Auditor General, the Judges of the High Courts and the Chief Election Commissioner shall not be re moved from their offices except in the manner laid down in those Articles.
If the provisions of the Constitution specifically prescribing different tenures were excluded from article 310, the purpose of that clause would be exhausted and thereafter the Article would be free from any other restrictive operation.
In that event, article 309 and 310 should be read together, excluding the opening words in the latter Article, namely, "Except as expressly provided by this Constitution".
Learned Counsel seeks to confine the operation of the opening words in article 309 to the provisions of the Constitution which empower other authorities to make rules relating to the conditions of service of certain classes of public servants:, namely articles 146(2), 148(5) and 229(2).
That may:be so, but there is no reason why article 310.
should (1) A.I.R. 1961 S.C. 751. 8 1003 SCI/76 90 be excluded therefrom.
It follows that while article 310 provided for a tenure at pleasure of the President or the Governor, article 309 enables the legislature or the executive, as the case may be, to make any law or rule in regard, inter alia, to conditions of service without impinging upon the overriding power recognised under article 310".
The Kerala High Court relied on Union of India vs J. N. Sinha & Anr.,(1) to hold that doctrine of office held at the pleasure of the President was subject to rules made under Article 309 of the Constitution, and pointed out that it was held, inter alia, by a Division Bench of this Court (at p. 42): "A Government servant serving under the Union of India holds his office at the pleasure of the President as provided in Article 310 of the Consti tution.
But this "pleasure" doctrine is subject to the rules or law made under Article 309 as well as to the conditions prescribed under Art.311 ".
The High Court also relied on State of Madhya Pradesh & Ors.
vs Shardul Singh,(2) where the same Division Bench of this Court had held inter alia (at p. 111 ): "Article 310(1) of the Constitution declares that every person who is a member of Civil service of a State or holds any civil post in a State holds office during the pleasure of the Governor of a State.
But the pleasure doctrine embodied therein is subject to the other provisions in the Constitu tion.
Two other Articles in the Constitution which cut down the width of the power given under Article 310 (1) are Articles 309 and 311.
Article 309 provides that subject to the provisions of the Constitution acts of the appropriate Legislature may regulate the, recruitment, and conditions of service of persons appointed, to public.
services and posts in connection with the affairs of the Union or of any State.
Proviso to that Article says: 'Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor of a State or such person as he may direct in the: case of services and posts in connection with the af fairs of the State to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate Legislature under this article, and any rules so made shall have effect subject to the provisions of any such Act ." The High Court then referred to N. Ramanatha Pillai vs State of Kerala & Anr.
,(3) a decision of 5 learned Judges of this Court, in which Ray CJ., speaking for the Constitution Bench of this Court, (1) A.I.R. 1971 S.C. 40.
(2) at 111.
(3) ; at 2645.
91 while considering the power of the Govt.
to create, continue, and abolish a post said (at p. 2645): "Article 309 provides that subject to the.
provisions of the Constitution, Acts of the appropriate Legislature may regulate the recruit ment and conditions of service of persons appoint ed, to public services and posts in connection with the affairs of the Union or of any State.
There fore, Acts in respect of terms and conditions of service of persons are contemplated.
Such Acts of Legislature must however be subject to the provi sions of the Constitution.
This attracts Article 310 (1).
The proviso to article 309 makes it compe tent to the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor of a State or such person as he may direct in the case of services and posts in con nection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed,, to such services and posts under the Union and the State.
These Rules and the exercise of power conferred on the delegate: must be subject to Article 310.
The result is.
that Article 309 cannot impair or affect the pleasure of the ' President or the Gover nor therein specified.
Article 309 is, there fore, to be.
read subject to Article 310".
The High Court, after citing the passage set out above, said: "We do not understand the above passage as suggesting that Article 310 cannot in any manner be controlled by Rules framed under Article 309".
After a consideration of decisions of this Court in this manner it expressed its views as follows: "These cases, we think, sufficiently indicate that while it may be open to the PreSident or to the Governor to dismiss a civil servant at pleas ure, if Rules have been framed under Article 309 of the Constitution to regulate the mode and manner of termination of service, these .have to be com plied with.
This, we think, is reasonable and understandable enough on first principles.
If the untrammelled pleasure of the President has been subjected to Rules framed by the President himself in regard to the manner of termination of service, the pleasure must be subject to such Rules".
The Division Benh of the High Court then re corded its conclusion: "We are therefore of the opinion that in the instant case, the Civil Services (Classification, Control and Appeal) Rules, having been framed under Article 309 of the Constitution, the same had to be followed before the respondent 's service was terminated.
The same not having been admittedly complied with, the finding of the ' Court below that the termination is illegal was correct and requires no interference.
No arguments were addressed on the quantum of damages awarded".
92 We do not think that the difficulty before the High Court could be resolved by it by following what it consid ered to be the view of a Division Bench of this .Court in two cases and by merely quoting the views expressed by larger benches of this Court and then observing that these were insufficient for deciding the point before the High Court.
It is true that in each of the cases cited before the High Court, observations of this Court occur in a con text different from that of the case before us.
But, we do not think that the High Court acted correctly in skirting the views expressed by larger benches of this Court in the manner in which it had done this.
The proper course for a High Court, in such a case, is to try to find out and follow the opinions expressed by larger benches of this Court in preference to those expressed by smaller benches of the Court That is the practice followed by this Court itself.
The practice has now crystallized into a rule of law de clared by this Court.
If, however, the High Court was of opinion that the views expressed by larger benches of this Court were not applicable to the facts of the instant case it should have said so giving reasons supporting its point of view.
we have perused the Central Civil Service (Classifica tion, Control and Appeal) Rules of 1965, (hereinafter re ferred to as '1955 Rules ') which deal principally with procedure for disciplinary proceedings and penalties and appeals and reviews against orders passed under the rules.
There is no rule there dealing with the conditions under which a service such as that of the plaintiff respondent may be terminated.
We fail to see any rule made under Article 309 of the Constitution which was violated by the impugned order of termination of service of the plaintiff respondent.
We do not consider ourselves called upon to.
decide a ques tion which has really not arisen in the case.
before us.
The 1965 Rules are applicable when disciplinary proceed ings are taken.
They do not make disciplinary proceedings under the rules incumbent or obligatory whenever the services of a person covered ' by these rules are terminated.
The obligation to follow the procedure for punishment laid down in the rules flows from the provisions of Article 311 of the Constitution.
And, as the opening words of Arti cle 310 show, the doctrine of office held at the pleasure of the ' President does not apply to cases covered by Article 311.
Rule 3 of the above mentioned rules begins.
as follows: "3.
Application. (l ) These rules shall apply to every Government servant including every civilian Government servant in the Defence Serv ices, but shall not apply to (a) any railway servant, as defined in rule 102 of volume I of the Indian Railway Establishment Code, (b) any member of the All India Services, (c) any person in casual employment, (c) any person in casual employment, (d) any person subject to discharge from service on less than one month 's notice.
(e) any person for whom special provision is made, in respect of matters covered by these rules, by or under 93 any law for the time being in force or by or under any agreement entered into by or with the, previous approval of the President before or after the commencement of these rules, in regard to matters covered by such special provisions; (2) Notwithstanding anything contained in sub rule (1), the President may by order exclude any class of Government servants from the operation of all or any of these rules.
(3) Notwithstanding anything contained in sub rule (1), or the Indian Railway Establishment Code, these rules shall apply to every Government servant temporarily transferred to a Service or post coming within exception (a) or (e) in sub rule (1 ), to whom, but for such transfer, these rules would apply.
(4) If any doubt arises (a) whether these rules or any of them apply to any person, or (b) whether any person to whom these rules apply belongs to a particular service the matter shall be referred to the President, who shall decide the same".
Even if the parties were governed by these rules, because the plaintiff held a civil post in one of the Defence; Departments, yet there must be some violation of one of these rules, which were no doubt framed under Article 309 read with clause 5 of Article 148 of the Constitution, before any question of a conflict between a rule framed under Article 309 and the provisions of Article 310 could possibly arise.
We fail to see such a conflict here.
These rules merely lay down procedure for matters cov ered by Article 31 l of the Constitution.
There is no doubt that proceedings under Article 311 of the Constitution constitute an exception to the doctrine of pleasure con tained in Article 310 of the Constitution.
But, in the case before us, no question of any disciplinary proceedings has been discussed because it did not arise at all.
There is no finding that any punishment was imposed upon the plaintiff respondent.
It may be that mere termination of service, when the plaintiff.respondent was holding a perma nent post and entitled to continue in service until 60 years of age, may constitute punishment per seven when the termination of service is not meant as a punishment.
But, in that event,, there had to be a finding on the rule or order under which the plaintiff was entitled to continue in serv ice.
until he reached the age of 60 years.
The High Court had cited no rule made under.
Article 309 to show that there was any such provision.
In P.L. Dhingra vs Union of India(1) Das, CJ., speaking for the majority of a Bench of five judges of this Court, said (at p. 47): "It has already been said that where a person is appointed substantively to a permanent post in Government service.
(1) ; at 47.
94 he normally acquires a right to hold the post until under the rules, he attains the age of superannua tion or is compulsorily retired and in the absence of a contract, express or implied, or a service rule,.
he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or.
other disqualifications and appropriate proceedings are taken under the service rules read with article 311 (2).
Termination of service of such a servant so appointed must per se be a punishment, for it operates as a forfeiture of the servant 's rights and brings about a premature end of his employ ment".
The propositions laid down in Dhingra 's case (supra) by this, Court mean that, unless a legally justifiable ground is made out for the termination of the service of a Govern ment servant.
in permanent service, in the sense that he is entitled to remain in service until he ' reaches the age of retirement, he could be deemed in a given case to be pun ished by an apparently innocent order of termination of service.
If, however, the respondent belonged to a class of government servants the tenure or conditions of whose serv ice was subject to the over riding and unqualified sway of the power to terminate his services at will, by reason of Article 310(1) of the Constitution, we doubt whether he could claim to be a "permanent" servant, who could continue, as of right, in service until he reaches the age of super annuation.
At any rate, he could not be a "permanent" Government servant of the same class as one protected by Article 311.
Even if we were to hold that the plaintiff respondent was constructively punished, the provisions of Article 311, unfortunately, do not apply to such a Government servant as the respondent was.
Whereas the power contained in Article 310 governs all Government servants, including those in the services connected with defence, the benefits of Article 311, which impose limitations on the exercise of this power in cases of punishment, do not extend to those who hold posts "connected with defence".
Constitution Bench of this Court has held, after a review of relevant authorities, this to be the position of the.
holder of a post such as that of the plaintiff respondent in L. R: Khurana vs Union of India.
(1) As the plaintiff respondent was not entitled to the protection of Article 311, the only effect of the 1965 Rules upon his case is that they could be applied if disci plinary proceedings had been taken against him as the holder of a post "connected with defence".
In other eases of such servants,.
where no such disciplinary proceedings are instituted (and none were started against the plaintiff respondent), the 1965 Rules, governing procedure for.
punishments to be imposed, will not apply at all.
There is no legal obligation to apply those rules here.
The legal obligation to apply them to every case of punish ment, flowing from Article 311, is confined to holders of posts covered by Article 311.
On this question, we are bound by the decision of a bench of five learned Judges of this Court in Khurana 's case (supra).
(1) ; 95 We were asked to import the obligation to apply the procedure prescribed by Article 311 to a case such as the one before us by invoking the aids of Articles 14 and 16.
Apart from the fact that these .Articles could not be in voked against a discrimination made by Constitutional provi sions, no such case was set up earlier.
We cannot permit it at this stage.
The only ground on which the respondent had assailed the order of termination of his service was non compliance of 1965 Rules, which meant ' that he claimed the protection of Article 311 of the Constitution.
But for the reasons given above, this protection is not available to him.
Therefore, this appeal must succeed.
Consequently, we allow this appeal, set aside the judgment and decree of the High Court and ,dismiss the plaintiff 's suit.
But: in the circumstances of the case, the appellant will, in keeping with the undertaking given at the time of grant of special leave, bear the costs of both sides throughout.
Appeal allowed.

dataset_name: IN-Abs

summary:
Respondent was a welder in the Civilian Defence Forces.
On his services being terminated, without stating any rea son, he filed a suit for damages for illegal termination on the basis that he would have continued in service upto the age of 60 instead of being thrown out at the age of 41.
The trial Court gave a decree for damages which was affirmed by the High Court on the ground.
that the doctrine of post held during the pleasure of the President, contained in article 310, does not authorise the termination without complying with the procedure prescribed by the Central Civil Service 's (Classification, Control and Appeal) Rules, 1965, framed under article 309.
Allowing the appeal to this Court, HELD: (1) The Rules deal principally with the procedure for disciplinary proceedings and penalties and appeals and reviews against orders passed under the rules.
They are applicable if disciplinary proceedings had been taken against the respondent, but they do not make disciplinary proceedings incumbent or obligatory whenever the services of a person are terminated.
In the present case there were no disciplinary proceedings against the respondent.
[92 D E] (2) The mere termination of the service.
by an apparent ly innocent order, of a Government servant in permanent service, in the sense that he is entitled to remain in service until he reaches the age of retirement, could be deemed, in a given case, to be a punishment.
But, in that event, there had to be a finding on the rule or order under which the respondent was entitled to continue in service until he reached the age of 60.
There is no reference to any such rule and there was no finding that any punishment was imposed upon him or that his services were terminated as a measure of punishment for any wrong done by him or for incompetence.
[94 C; 93 G] P.L. Dhingra vs Union of India ; @ 47 referred to.
(3) Even assuming that the respondent was constructive ly punished, there is no legal obligation to apply the Rules.
The legal obligation to apply them to every case of punishment, flows from the provisions of article 311 and is confined to holders of posts covered by article 311.
But the provisions of article 311 do not apply to the respondent since they do not apply to the holder of a post connected with defence.
[94 E] L.R. Khurana vs Union of India ; followed.
(4) Terefore, when no disciplinary proceedings are instituted, the Rules will not at all apply, and there is no other rule dealing with the conditions under which the service, such as that of the respondent.
may be terminated.
Since there was no violation of any rule no question of a conflict between a rule framed under article 309 and the doc trine of pleasure contained in article 310, which applies to all Government servants including those in the services connected with defence, arises in the present case.
[94 G] 88 (5) The High Court in dealing with the question consid ered the view of a Divisional Bench of this Court in two cases, merely quoted the views expressed by larger Benches of this Court, and then observed that these were insuffi cient for deciding the point before it.
The High Court did not act correctly in thus skirting the views expressed by larger Benches of this Court.
The proper course for the High Court was to try to find out and follow the opinions expressed by the larger Benches in preference to those expressed by smaller Benches.
This practice is followed even by this Court and has crystallized into a rule of law.
If, however, the High Court was of opinion that the views expressed by larger Benches of this Court were not applica ble to the facts of the present case it should have said so, giving reasons in support.
[92 A C]