judgement:
Criminal Appeal No. 549 of 1987.
From the Judgment and Order dated 23.2.87 of the Bombay High Court in Crl.
W.P. No. 96 of 1986.
753 Anil B. Divan, V.P. Vashi, Ms. Naina Kapur and K.J. John for the Appellant.
H.M. Jagtiani, section Mullik, A.S. Bhasme, Ms. Kamini Jais wal and A.M. Khanwilkar for the Respondents.
The Judgment of the Court was delivered by NATARAJAN, J.
What falls for consideration in this appeal by special leave is whether the High Court has erred in law in setting aside the judgments of the courts below in a matter arising under Section 630 of the Companies Act in exercise of its powers under Sec. 482, Cr.
P.C. The facts are as under: Messers Jenson and Nicholson (India) Ltd. (appellant company), had secured a flat in Bombay (No. 84, Mehr Dad, Cuffe Parade) belonging to one Mehdi Mandil, on leave and licence basis for the residential occupation of the flat by its officers/employees.
The leave and licence agreement was entered into on behalf of the company by the Ist respondent who was then the Divisional Sales Manager of the company at Bombay, the registered office of the company being at Calcutta.
It is common ground the Ist respondent acted on behalf of the company under a Power of Attorney executed in his favour by the company.
The leave and licence was for an initial period of 11 months but subject to renewal for a total period of 66 months.
The agreement provided for payment of advance compensation of Rs. 16,500 for 11 months and a monthly compensation of Rs. 1,500 and a deposit of Rs.3,50,000 free of interest to be returned at the end of the licence period.
The company paid the deposit and the advance compensation and was paying the monthly compensation of Rs. 1,500 thereafter.
On taking possession of the flat on 1.11.1980, the company allowed the 1st respondent to occupy it as an employee of the company.
More than three years later, i.e. on 23.3.1984, the Ist respondent filed a suit (Suit No. 1360/84) in the Court of Small Causes, Bombay against the company and the owner of the flat for a declaration that he is the actual licencee of the flat and for permanent injunction to restrain the de fendants from interfering with his possession of the flat.
The Ist respondent claimed to be the licencee of the flat on the basis of two letters dated 25.1.1984 and 1.2.1984 writ ten to him by a junior employee of the company, viz. one Mr. Jain who was the Officer Manager of the company at Bombay and working under the Ist respondent.
In those letters Mr. Jain has made it appear that the Ist respondent was the tenant of the flat.
Besides the reliefs of declaration and injunction, certain other reliefs such as fixation of stand ard rent etc. were also asked for in the suit against the owner of the flat.
Three days after the 754 filing of the suit i.e. on 26.3.1984, the Ist respondent tendered a letter of resignation to the company and his resignation was accepted by the Management on 27.3.84.
In accordance with his claim to be the licencee of the flat, the Ist respondent offered to reimburse the company the deposit amount of Rs.3,50,000 but the company declined the offer and asserted that it was the licencee of the flat and not the Ist respondent.
As the Ist respondent failed to vacate the flat after resigning his post, the company filed a complaint against him under Section 630 of the Companies Act in the Court of the Additional Chief Metropolitan Magistrate, Bombay.
The complaint was filed on behalf of the company by its power of attorney Mr. Atul Mathur who had been appointed as Division al Sales Manager, Bombay in place of the Ist respondent after his resignation.
The Additional Chief Metropolitan Magistrate took the complaint on file and after trial found the Ist respondent guilty under Section 630 of the Companies Act and sentenced him to pay a fine of Rs. 1,000 and also directed him to deliver possession of the flat to the compa ny on or before 15.6.87 in default to suffer S.I. for three months.
Against the said judgment, the Ist respondent pre ferred an appeal to the Sessions Court but by judgment dated 22.10.1986, the Addl.
Sessions Judge, Greater Bombay dis missed the appeal.
The Trial Magistrate as well as the Appellate Court concurrently ' held that the company was the licencee of the flat, that the Ist respondent had acted only as the power of attorney of the company in entering into the agreement, that his occupation of the fiat was only as an employee of the company and consequently the Ist respondent was in unlawful occupation of the flat after he ceased to be an employee of the company.
The Ist respondent was therefore directed to deliver possession of the flat to the company.
Despite the concurring judgments rendered against him, the Ist respondent filed a petition before the High Court under Article 227 of the Constitution but at the time of arguments, he was permitted to convert the petition into one under Section 482, Code of Criminal Procedure.
Three conten tions as under were urged before the High Court to assail the judgments of the Courts below: 1.
The complaint had been filed by a person without due authority to act on behalf of the company and this irregularity vitiated the entire proceedings, 2.
The Additional Session Judge had wrongly cast the burden of proof on the accused and he wrong approach has vitiated the judgment of the First Appellate Court.
755 3.
Since complicated questions of title were involved, the Additional Chief Metropolitan Magistrate had no jurisdiction or competence to adjudicate the matter in summary proceed ings under Section 630 of the Companies Act.
The first two contentions did not find favour with the High Court.
On the first contention, the High Court held that though the power of attorney conferred only special powers on Mr. Atul Mathur to act on behalf of the company only in civil suits, sales tax proceedings and excise mat ters.
Mr. Atul Mathur could still validly file the complaint as he was an officer of the company in the rank of Manager and could therefore validly act on behalf of the company.
The High Court further held that even if Mr. Atul Mathur did not have the requisite competence to file the complaint, the irregularity was a curable one under Section 465 of the Code of Criminal Procedure.
As regards the second contention, the High Court held that the Addl.
Sessions Judge hag nowhere cast the burden of proof on the accused in dealing with the appeal and hence the appellate judgment did not suffer from any perversity or illegality.
The High Court, however, sustained the third contention of the 1st respondent and set aside the sentence of fine and the direction to the Ist respondent to deliver possession of the flat to the company.
In giving its acceptance to the third contention, the High Court felt influenced by the two letters Exs.
3 & 4 written by Mr. Jain and felt that the letters afforded basis for the Ist respondent to bona fide dispute the company 's claim for possession of the flat.
The High Court was also of the view that since the Ist respondent had filed a suit even before the complaint was filed, the Civil Court was in seisin of the matter and therefore the Criminal Court "ought to have stayed its hand and allowed the Civil Court to adjudicate upon the issue.
" In support of its view, the High Court invoked the ratio in Damodar Das Jain vs Krishna Charan Ckakraborti, [1985] 57 Com.
Cases 115.
The aggrieved company is now before us.
Mr. Anil Divan, learned senior counsel appearing for the company argued that the High Court, after having held t. hat there were no reasons to interfere with the concurrent findings of the Courts below, ought not to have gone back on its view and rendered a finding that a bona fide dispute was involved in the proceedings and the dispute could only be adjudicated upon by a civil court and not by a criminal court in summary proceedings under Section 630 of the Companies Act.
Mr. Anil Divan referred to the acceptance of the findings of the first two Courts by the High Court in its judgment in the following terms. "I do not think that there is any scope for re appreciating 756 or re appraising the evidence.
Two Courts below have come to concurrent findings of fact, and I see no reason for interfering with the conclusions arrived at by the Courts below.
" It was therefore urged by the counsel that once the concur rent findings of the Courts below found acceptance with the High Court, there was no justification for the High Court to set aside the judgments of the two Courts.
The learned counsel further submitted that Section 630 of the Companies Act has been provided with an intent and purpose and its scope and ambit have been set out by this Court in reported decisions, but the High Court has failed to notice them and construed Section 630 in an unrealistic manner and this had led to mis carriage of justice, Mr. Divan also invited our attention to the leave and licence agreement entered into by the company with the owner of the flat as well as an affida vit and letter given by the first respondent at the time of the agreement and submitted that in the face of these clinching documents, there was absolutely no room for the first respondent to contend that he was the licencee and not the company of the fiat in question.
He also commented upon the conduct of the Ist respondent in getting two letters exhibit Nos. 3 and 4 written by a junior employee of the company without the knowledge of the Directors of the company and filing a suit on the basis of those letters and resigning his post three days later and refusing to vacate the flat.
It was finally urged by Mr. Divan that the High Court went wrong in applying the ratio in Damodar Das Jain (supra) because there was no bona fide dispute between the Ist respondent and the company regarding the flat occupied by the Ist respondent.
Mr. Jagtiani, learned counsel for the first respondent who had appeared for him before the High Court also contend on the other hand that the High Court has acted rightly in exercising its power under Section 482 Cr.
P.C. and in setting aside the judgments of the lower courts and the High Court 's judgment does not suffer from any error of law which needs correction by this Court.
The arguments of Mr. Jagtia ni may briefly be summarised as under: 1.
Proceedings under Section 630 of the Compa nies Act are in the nature of criminal pro ceedings and consequently the burden of proof is upon the complainant.
Besides, the accused is entitled to the benefit of doubt on all matters not proved beyond reasonable doubt.
Moreover any weakness in the accused 's case set up by way of defence cannot be relied upon to fill up the lacuna in the prosecution case.
757 2.
The letters Exs. 3 and 4 written by Mr. Jain on behalf of the company have not been convincingly disproved by the company and as such a bona fide doubt exists as to who is the actual licencee of the flat and the said dispute can be resolved only by a Civil Court and not by a Criminal Court.
A civil suit had already been filed by the first respondent and it was pending in the Civil Court and as such the Criminal Court should not have adjudicated upon the rights of the parties but should have directed them to seek their remedies before the Civil Court.
The explanation offered by Mr. Jain that he had written the letters under duress and coercion has been falsified by his admissions in cross examination and hence the Criminal Court should have accepted the first respond ent 's plea that a bona fide dispute existed between the parties regarding the licence rights over the flat and refrained from adju dicating upon the rights of the parties in the complaint filed under Section 630.
Damodar Das Jain 's case sets out the cor rect ratio and the High Court was fully justi fied in applying the said ratio to this case.
Before we deal with the contentions of the parties, we may refer to Section 630 of the Companies Act and the deci sions of this Court on the scope and ambit of the Section.
Section 630 reads as under: "section 630.
Penalty for wrongful withholding of Property(1) If any officer or employee of a company (a) wrongfully obtains possession of any property of a company; or (b) having any such property in his possession, wrongfully withholds it or know ingly applies it to purposes other than those expressed or directed in the articles and authorised by the Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees.
(2) The Court trying the offence may also order such 758 officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongful ly withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years.
" There was a divergence of opinion between the Bombay High Court and the Calcutta High Court regarding the interpreta tion of the words "any officer or employee of a company", the Bombay High Court giving a broader interpretation to the words and the Calcutta High Court giving a narrow interpre tation.
The controversy was set at rest by this Court in Baldev Krishna Sahi vs Shipping Corpn.
of India Ltd., [1987] (IV) SCC 361 by holding that the term "officer or employee" of a company applies not only to existing officers or em ployees but also to past officers or employees if such, officer or employee either (a) wrongfully obtains possession of any property, or (b) having obtained possession of such property during his employment, wrongfully withholds the same after the termination of his employment.
It was pointed out that wrongful obtainment of possession would attract Section 630(1)(a) and wrongful withholding of possession of company 's property would attract Section 630(1)(b) of the Act.
It is therefore clear that the purpose of enacting Section 630 is to provide speedy relief to a company when its property is wrongfully obtained or wrongfully withheld by an employee or ex employee.
In a later case Amritlal Chum vs Devo Prasad Dutta Roy, ; which arose directly from the decision of the Calcutta High Court in Amritlal Chum vs Devi Ranjan Jha, the view taken in Baldev Krishan Sahi (supra) was affirmed and the High Court 's judgment was reversed.
Coming now to the question whether the licence for occupation of the flat was obtained by the company or the first respondent, we may refer to three crucial documents.
The first one is the leave.and licence agreement dated 1.11.
The deed specifically states that the licencee is Messrs Jenson and Nicholson (India) Ltd. having its regis tered office at Calcutta and Executive office at Bombay and that the company shall have the flat "for the use and occu pation as residence by its bona fide employee/employees and/or his/their families" and shall not be transferred to anyone else (vide clauses 11 & 12).
The agreement was en tered into by the first respondent as the power of attorney agent of the company and he has contemporaneously executed an affidavit on 1.11.
1980 wherein he has affirmed as fol lows: 759 "I say that for the purpose of secur ing a flat on leave and licence basis for providing residence for the employees of the company, I have entered into negotiations on behalf of the company, with Shri Mehdi Mandil the owner of flat No. 84 on the 8th floor of the building known as 'Mehr Dad ' at Cuffe Parade, Bombay, to allow the company the use and occupation of the said flat under a leave and licence to be executed between the said Mehdi Mandil and the said company." (Emphasis supplied).
In para 3 of the affidavit, the first respondent has given an assurance that the flat "would be made use of for the purpose of residence only by the bona fide employees of the company and/or their/families.
" In para 4, the first re spondent has affirmed "that neither the company nor any employee of the company who may be in occupation of the flat would claim any rights/title or interests or any rights of tenancy other than the right to use and occupy the said flat purely as a licencee under and in accordance with the terms and conditions of the leave and licence agreement." On 5.11.
1980, the Ist respondent, acting for the company, has writ ten a letter to the licenser Mr. Mehdi Mandil stating inter alia as under: "The flat being given to the company, it would be occupied by only the bona fide official employee of the company." "Yours faithfully, Jenson & Nicholson (India) Ltd. Sd/ Atul Kalra Divisional Sales Manag er, Bombay.
" These documents clinch the issue and prove beyond a shadow of doubt that the flat was taken on leave and licence basis by the company only for providing accommodation to its employee or employees during their term of employment in the company.
It was purely on that basis the first respondent who was the Divisional Sales Manager was allowed to occupy the flat and he was allowed to occupy the flat till he resigned his post on 26.3.
It is pertinent to mention here that it was the company which had given the deposit of Rs.3,50,000 to the licenser and had been paying the licence fees, advance and monthly, all through.
Notwithstanding this incontrovertible position, the first respon 760 dent developed ideas to cling to his possession of the flat even after ceasing to be an employee of the company.
Conse quently, he contrived to obtain two letters dated 25.1.1984 and 1.2.
1984 from Mr. Jain who was only working as Office Manager at Bombay.
In the first letter, Mr. Jain has formal ly written to say (though he and the Ist respondent were working in the same office) that the company has received a letter from the Municipal Corporation regarding the rateable value of the flat and that the first respondent may deal with the matter.
Instead of stopping with that, Mr. Jain has gone on to say as follows: "We are forwarding the said letter to you, to deal with the same as you are the tenant of the flat and you are in possession of the same.
The flat was taken by you from the landlord, but the landlord had insisted to have the agreement in the name of the company merely.
The company will not be liable if the rateable value of the flat is increased and if there is any consequential increase in the property taxes.
All the matters will be be tween you and the landlord.
Please therefore deal with the letter as you deem fit." (Emphasis supplied).
Yours faithfully, Jenson & Nichol son (India) Ltd. Sd/ (A.S .
JAIN) Office Manager, Bombay.
On 30.1.
1984, the appellant has acknowledged the letter and agreed to deal with the corporation authorities and has in addition stated that he will also take steps for fixation of standard, rent by the Court as the landlord was charging exorbitant rent.
Digressing for a moment, it has to be noticed that the Ist respondent had come to realise the rent to be exorbitant only after 3 years and 2 months and just before he wanted to claim tenancy rights for himself.
Re verting back to the correspondence, Mr. Jain has sent a reply on 1.2.1984 to state that the company will have no objection to legal proceedings being taken for fixation of standard rent of your flat at 84, Mehr Dad, Cuffe Parade, Bombay but however he (1st respondent) alone will have to bear the expenses including the court fees and advocate 's fees and the company will not be liable to re imbuse him.
It is on the footing of these two 761 letters the first respondent sought to build up a case that he was the actual licensee of the flat and not the company.
Before considering the explanation given by Mr. Jain as to his writing the letters, it will be worthwhile to notice certain factors.
In the first place, Mr. Jain was only a junior employee of the company viz. Office Manager, Bombay and could not therefore have directed the Ist respondent to attend to the matter of furnishing information to the corpo ration authorities about the rateable value of the flat.
Secondly, Mr. Jain and the first respondent were both work ing in the same office and as such it is inconceivable that Mr. Jain would have carried on a correspondence with the 1st respondent instead of merely placing the alleged letter of the corporation before the first respondent for suitable action by him.
Thirdly, Mr. Jain joined the services of the company only in July 1983 i.e. long after the company had taken the flat on licence and as such he could not have known what were the terms of the leave and licence agreement and who was the actual licensee of the flat.
Fourthly, even if Mr. Jain had purported.
to act on behalf of the company, he would have sent copies of the letters to the Head Office at Calcutta but he had not done any such thing and on the other hand he had suppressed information from the Head Office about the correspondence.
The Ist respondent too had not brought the matter to the notice of the Head Office at Calcutta.
The Ist respondent resigned his post on 26.3.84 and in order to forestall the company from seeking his eviction, he had filed a suit on 23.3.84 to seek the reliefs of declaration and injunction.
All these factors lead to the unmistakable conclusion that the first respondent had some how prevailed upon Mr. Jain to give the letters Exs.
3 & 4 with the ulterior motive of filing a suit and then tendering his resignation.
Now coming to the explanation offered by Mr. Jain for writing the two letters, he has sworn to an affidavit that he was "pressurised and threatened" by the 1st respondent to sign the letters without knowing the implications.
He has also given evidence to the same effect in the trial of the case before the Additional Chief Metropolitan Magistrate.
Mr. Jagtiani strenuously contended that Mr. Jain 's statement that he gave the letters under coercion has been disproved by the answers elicited from Mr. Jain in his cross examina tion viz. that the 1st respondent did not actually threaten him but he construed the commanding manner in which he made the demand as containing a threat.
Mr. Jagtiani 's argument was that once Mr. Jain 's explanation for giving the letters stood falsified, then the letters must be treated as genuine documents binding on the company and affording material to the 1st 762 respondent to contend that he was the real licensee of the flat.
We are unable to find any merit in this contention.
Even assuming for arguments sake that Mr. Jain had not written the letters under threat, the Ist respondent 's case will not stand advanced in any manner.
A junior employee of the company cannot relinquish the rights of the company in favour of the 1st respondent especially when the Ist re spondent himself had categorically stated in the leave and licence agreement as well as in his affidavit and letter that the company was the licencee of the flat and the em ployees are not entitled to claim any tenancy rights for themselves.
Fully realising, the weakness in his case, the Ist respondent has made an attempt to authenticate the letters Exs. 3 and 4 by contending that Mr. Roy, Director of the Company had instructed Mr. Jain from Calcutta to write the letters and hence the letters were fully binding upon the company.
The story invented by the Ist respondent was right ly disbelieved by the Trial Court and the Appellate Court because it is inconceivable that Mr. Roy would have asked a junior officer like Mr. Jain to write the letters instead of asking some one from the Head Office itself to write the letters.
No suggestion was put to Mr. Jain in the witness box that he wrote the letters under the instructions of Mr. Roy.
There is also no mention in the letters that they were being written as per the instructions received from the Head Office.
Another strange feature is that a copy of the let ters has not been sent to the Head Office.
Such would not have been the case if the letters had really been written by Mr. Jain under directions from the Head Office.
Mr. Jagtiani sought to discredit the affidavit and the evidence of Mr. Jain on the ground that Mr. Jain had given his affidavit after consulting the company 's lawyer and secondly he had not been punished by the company for his misconduct.
The arguments of the counsel in this behalf have no merit in them because Mr. Jain was duty bound to explain to the company the circumstances in which he had arrogated powers to himself and written the letters Exs. 3 and 4 to the Ist respondent.
Naturally therefore he would have sought the guidance of the company 's counsel as to how the affida vit is to be formally worded.
As regards the company not awarding any punishment to Mr. Jain, it was open to the company to pardon him for the folly of his action when it came to know that he had been unwittingly made use of by the Ist respondent to write the letters in question.
All these factors have unfortunately escaped the notice of the 763 High Court and the omission has led the High Court to accept the first respondent 's contention that there was a bona fide dispute between him and the company as to who was the actual licencee of the flat.
We have already referred to the rele vant portions of the leave and licence agreement and the affidavit and letter of the Ist respondent wherein he has categorically accepted that the company was the licencee of the flat.
Secondly, the evidence projected by the Ist re spondent to lay claim to licence rights over the flat is his own creation without the knowledge of the company.
The two letters in question had been obtained from a junior employee who had joined the company long after the flat was taken on rent and who knew nothing of the agreement between the company and the owner of the flat.
The author of the letters has himself confessed that he had signed the letters at the behest of the Ist respondent without knowing the implica tions of his act.
Leaving aside these factors, even if we are to take that Mr. Jain had of his own accord written the letters, can it ever be said that the letters afford scope for the Ist respondent to contend that he is bona fide entitled to dispute the company 's claim to possession of the flat.
The sequence of events also go to show that the Ist respondent had formulated a plan for clinging to his posses sion of the flat even after resigning his post and in ac cordance with that plan he had obtained the letters Exs. 3 and 4 and then filed a suit in order to forestall the compa ny from proceeding against him under Section 630 of the Companies Act.
Merely because the Ist respondent had schem ingly filed a suit before tendering his resignation, it can never be said that the Civil Court was in seisin of a bona fide dispute between the paries and as such the Criminal Court should have stayed its hands when the company filed a complaint under Sec. 630.
If a view is mechanically taken that whenever a suit has been filed before a complaint is laid under Section 630, the Criminal Court should not pro ceed with the complaint, it would not only lead to miscar riage of justice but also render ineffective the salutory provisions of Section 630.
So much for the bona fides of the alleged dispute pro jected by the Ist respondent regarding the company 's claim to possession of the flat.
Coming now to the question of law, the High Court has invoked the ratio in Damodar Das Jain, (supra).
The facts therein were very different and it was with reference to those facts, the High Court held that a bona fide dispute existed between the parties therein.
This may be seen from the question posed for consideration by the High Court, viz. "whether on the facts and circum stances of the case, the Magistrate could himself, under Section 630, determine the dispute as to the title to the property." On the evidence before it, the High Court held 764 and rightly so that there was a genuine dispute between the parties and the said dispute required adjudication by a Civil Court in the suit filed by the ex employee.
While rendering its judgment, the High Court had construed Section 630 properly and observed that "the magistrate 's jurisdic tion thereunder (under Section 630) would extend only to those cases where there was no dispute, or in any event no bona fide dispute, that the property involved was the property of the company." (emphasis supplied).
Mr. Jagtiani pointed out that the decision of the High Court in Damodardas Jain (supra) was affirmed by this Court in Damodardos vs Krishna Charan Chakraborti & Anr., [1988] 4 Judgment Today page 7 14.
He fails to notice that the ac ceptance of the High Court 's view was with reference to the facts of the case.
This may be seen from the following observation in the judgment of this Court.
"The High Court felt that the disputes raised by the respOndent herein were bona fide disputes.
Before us it has not been disputed that this view of the High Court was correct as far as the ques tion whether the Company could be held to be a tenant of the flat is concerned.
" Therefore what has to be seen in a complaint under Section 630 is whether there is "no dispute or no bona fide dispute" regarding a property claimed by the company between the company and its employee or ex employee.
It is needless to say that every dispute would not become a bona fide dispute merely because the company 's claim to possession is refuted by an employee or ex employee of the company.
As to when a dispute would amount to a bona fide dispute would depend upOn the facts of each case.
In the present case the High Court has realised this position and observed that "while considering whether the plea of tenancy is a bona fide plea, it is always necessary to examine and consider the transaction on the basis of which the plea is based" (vide para 39).
While stating the position correctly, the High Court went wrong in holding that the serf serving documents produced by the 1st respondent gave a touch of bona fides to his defence.
The High Court was therefore not fight in thinking that the ratio in Damodar Das Jain (supra) was attracted to the case in as much as the defence put forward by the Ist respOndent was patently an incredible story.
Another contention of the 1st respOndent to thwart the proceedings under Section 630, which has been repelled by all the Courts including the High Court, is regarding the competence of PW 1 Mr. Atul Mathur, the present Divisional Sales Manager of the company, to 765 file the complaint on behalf of the company.
Belatedly, the Ist respondent has filed a memorandum of cross objections against the finding of the High Court on this question.
The appellant 's counsel objected to the memorandum of cross objections being entertained as it has been filed belatedly and furthermore, the appellant has not been given notice or furnished copies of the cross objections.
Leaving aside the technical pleas, we find the cross objections to be worth less even on merit.
The Ist respondent would say that the power of attorney in favour of Mr. Atul Mathur empowers him to act on behalf of the company only in civil suits, sales tax proceedings, and excise matters and does not empower him to file criminal complaints on behalf of the company.
The Ist respondent 's contentions suffer from a misconstruction of the terms of the power of attorney executed by the compa ny.
The power of attorney, read as a whole, is seen to confer general powers on Mr. Atul Mathur and not merely special powers.
It has been engrossed on stamp papers of the value of Rs.50 and it is indicative of the nature of the deed.
Though specific reference is made in the power of attorney only to the filing of suits and to matters relating to sales tax and Central Excise, there is a general clause which reads as follows: "AND THE COMPANY HEREBY agrees that all acts, deeds and things lawfully done by the Attorney shall be construed as acts, deeds and things done by it and the company undertakes to ratify & confirm all and whatsoever that its said Attorney shall do or cause to be done by virtue of Powers hereby given.
" The power of attorney has been executed just before the complaint was filed and it is stated in the complaint that Mr. Atul Mathur was filing the complaint on behalf of the company and he was duly authorise to do so.
The High Court was therefore, not right in construing the power of attorney as conferring only special powers and not general powers on Mr. Atul Mathur.
Be that as it may, the High Court has held, and very rightly, that as Mr. Atul Mathur was the Divisional Sales Manager of the company at Bombay, he was certainly competent to file the complaint on behalf of the company as per instructions given to him from the Head Officer of the Company We do not therefore find any substance in the contention of the Ist respondent that the complaint suffered from a material irregularity not curable under Section 465 Cr.
P.C. Incidentally, we may observe that in spite of con tending that the complaint suffered from an irregularity, the Ist respondent has neither pleaded nor proved that a failure of justice has been occasioned on account of the alleged irregularity.
766 Learned counsel for the Ist respondent relied upon Ballavdas Agarwala vs Shri J.C. Chakravarty, ; in support of his contention that the company 's com plaint suffered from an irregularity not curable under Section 465 Cr.
In the view we have taken of the matter viz. that Mr. Atul Mathur had the requisite authority to file the complaint on behalf of the company, the question does not survive for consideration.
The cross objections must therefore fails even if entertained.
For the aforesaid reasons, the judgment of the High Court is not sustainable.
We therefore, allow the appeal, set aside the judgment of the High Court and restore the judgments of the Additional Chief Metropolitan Magistrate and the Additional Sessions Judge.
However, the first respondent is given time till 30.9.89 to deliver possession of the flat to the company failing which the sentence of imprisonment awarded to him would be enforced.
Y.Lal Appeal allowed.

summary:
The appellant Company took a fiat No. 84, Mehr Dad, Cuffe Parade, Bombay, from its owner Mehdi Mandil on leave and licence basis for the residence of its Officers '/Employ ees '.
The first Respondent, Divisional Manager of the Compa ny at Bombay, acted as power of attorney of the Company and executed the agreement with the land lord for leave and licence initially for a period of 11 months renewable for a total period of 66 months.
The agreement also provided for an advance payment of Compensation amounting to Rs. 16,500 monthly compensation of Rs. 1500 and a deposit of Rs.3,50,000 to be returned at the end of the licence period free of interest.
The company complied with all the terms of the agreement.
On 1.11.80, the appellant Company allowed the first Respondent to occupy the flat as company 's employee.
Three years later i.e. on 23.3.84, the first Respondent filed a suit in the Court of Small Causes Bombay against the Company and the owner of the flat for a declaration that he was the actual licencee of the flat and for a permanent injunction to restrain the defendants from interfering with his posses sion of the flat.
He based his claim as a licencee on the basis of two letters dated 25.1.84 and 1.2.84 written by the Manager of the Company, one Mr. Jain.
Three days after filing the said suit, first Respondent resigned and his letter of resignation was accepted by the company on 27.3.84.
Since the first Respondent, ex employee of the company did not vacate the flat, the company filed a complaint against him under Section 630 of the Companies Act before the_ Addl.
Chief Metropolitan Magistrate, Bombay.
The Com plaint was filed by Mr. Atul Mathur, as attorney of the company, who by then had taken over the place vacated by the first respondent.
751 The trial Magistrate found the first respondent guilty under Section 630 of the Company 's Act and sentenced him to pay a fine of Rs. 1,000 and directed to deliver vacant possession of the fiat to the company.
In lieu of payment of fine aforesaid, first respondent was directed to undergo simple imprisonment for 3 months.
The first respondent preferred an appeal to the Session Court against the order of the Trial 'Magistrate.
By his order dated 22.10.86, the Addl.
Sessions Judge, Greater Bombay dismissed the appeal.
Thus both the trial court as also the first appellate Court concurrently found that the company was the real licencee.
Thereupon the first Respondent filed a Petition under Article 227 of the Constitution before the High Court, which later, he was permitted to convert as one under Sec.
482 of the code of criminal procedure.
The first Respondent con tended before the High Court: (i) That the complaint was not properly filed inasmuch as the complainant was not duly authorised by the company which irregularity vitiated the proceedings; (ii) That the Addl.
Chief Judl.
Magistrate had no jurisdiction to adjudi cate such a complicated matter in summary proceedings under Section 630 of the Companies Act, and (iii) The Addl.
Ses sions Judge had wrongly cast the burden of proof on the accused.
The High Court rejected the contentions (1) and (3) and came to the conclusion that the letters written by Mr. Jain afforded basis for the first respondent to bona fide dispute the company 's claim for possession of the flat.
The High Court also took the view that the first respondent having filed civil suit earlier in point of time, the Criminal Court ought to have stayed its hand and allowed the Civil Court to adjudicate upon the issue.
Damodar Das Jain vs Krishna Charan Chakraborti & Anr., [1985] 57 Com.
Cases.
Aggrieved by the High Court 's order allowing the first Respondent 's Writ Petition, the company has filed this appeal by special leave and the question that fails for determination by the Court is whether the High Court was right in reversing the Judgments of the Courts below in a matter arising under Section 630 of the company 's Act in exercise of its powers under section 482, Cr.
Allowing the appeal and granting time to the first Respond ent till 752 30.9.89 to vacate the flat in question, this Court, HELD: The term "Officer or Employee" m Section 630 of the Company 's Act applies not only to existing officers or employees but also to past employees or officers if such officer or employee either wrongfully obtains possession of any property or having obtained the possession during his employment withholds the same after the termination of his employment.
Baldev Krishna Sahi vs Shipping Corpn.
of India Ltd., [1987] IV SCC 361 and Amrit Lal Chum vs
Devo Prasad Dutta Roy; , [758C] Merely because the first respondent had schemingly filed a suit before tendering his resignation, it can never he said that the Civil Court was in seisin of a bona fide dispute between the parties and as such the Criminal Court should have stayed its hands when the company filed a com plaint under Section 630.
If a view is mechanically taken that whenever a suit has been flied before a complaint is laid under Section 630, the Criminal Court should not pro ceed with the complaint, it would not only lead to miscar riage of justice but also render ineffective the salutory provisions of Section 630.
[763E F] What has to he seen in a complaint under Section 630 is whether there is "no dispute or no bona fide dispute" re garding a property claimed by the company between the compa ny and its employee or ex employees.
It is needless to say that every dispute would not become a bona fide dispute merely because the company 's claim to possession is refuted by an employee or ex employee of the company.
As to when a dispute would amount to a bona fide dispute would depend upon the facts of each case.
[764E] The Court set aside the judgment of the High Court and restored those of the Additional Chief Metropolitan Magis trate and the Addl.
Sessions Judge.
[766C] Damodardas vs Krishna Charan Chakraborti & Anr., [1988] 4 Judgment Today p. 714.
and Ballavdas Agarwala vs Shri J.C. Chakravarty; , , referred to.


judgement:
vil Appeal No. 27(NM) of 1989.
From the Judgment and Order dated 20.9.88 of the Government 817 Of India, Ministry of Industry, Department of Company Af fairs, Shastri Bhavan, New Delhi in No. 2/51/85 M II.
Anil B. Divan, Nitin Thakkar, P.H. Parekh and section Dogra for the Appellant.
Anil Dev Singh, H. Sharma, Sushma Suri, Harish Salve, Mohini Sud and Praveen Kumar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
1.
This appeal has been preferred under section 55 of the Monopolies & Restrictive Trade Practices Act ( 'the Act ') from an order of the Central Government (C.G.) dated 20.9.88.
By the said order the C.G. granted an application made by respondent No. 1 (hereinafter referred to as 'the Modis ') under section 22 of the Act for permis sion to establish an undertaking for the manufacture of Ossein and Gelatine in the State of Rajasthan.
The petition er, which claims to be an association of Ossein and Gelatin manufacturers in India, made representations before the C.G. objecting to the grant of the application by the Modis.
These objections having been rejected and the application granted by the said order, the aggrieved petitioner has preferred this appeal.
We admit the appeal and, having heard counsel on both sides, proceed to dispose of the appeal finally.
The following contentions have been urged by Sri Divan in support of the appeal: (a) The order dated 20.9.88 is vitiated as it merely sets out the bald conclusion of the officer concerned.
It is not a reasoned or well considered order.
(b) The appellant had pointed out that the grant of permission to Modis would be against public interest.
It would completely cripple the small scale business of the members Of the appellant association which, even earlier, had been functioning far below capacity due to insufficient supply of crushed bones.
These objections had not been properly dealt with in the order.
(c) The order has been passed by one Sri Vijayaraghavan whereas a personal oral hearing in the matter had been given by Sri S.S. Khosla.
This has resulted in the violation of the fundamental rule of natural justice that "he who hears must decide".
818 (d) The hearing had taken place on 23.1.86 while the final order was passed more than two and half years later.
This, coupled with the change in personnel referred to above, has resulted in the denial of natural justice to the petitioner.
(e) Modis had stated in their application that bonemeal would be the raw material used by them but, later, they changed it into "crushed bones".
The appellant had no opportunity of meeting the new case.
(f) The representative of Modis had presented certain documents at the personal hearing but copies thereof had not been supplied to the appellant despite a grievance made by it the very next day.
The appellant 's contentions broadly fall under two heads: one, the denial of natural justice and two, the failure to pass a reasoned order.
It will be convenient to deal with the latter objection first.
We are unable to accept the appellant 's contention that the impugned order is bald, unreasoned or cryptic and vio lates the requirements for such an order enunciated in the Oramco case , where this Court reaffirmed the following observations made in the Bombay Oil case ; "We must, however, impress upon the Government that while disposing of applications under Sections 21, 22 and 23 of the , it must give good reasons in support of its order and not merely state its bald conclusion.
The faith of the people in administrative tribu nals can be sustained only if the tribunals act fairly and dispose of matters before them by well considered orders . . " The order of the Government is a detailed and elaborate one.
It sets out the contentions and deals with them seriatim.
The point made that existing units were already functioning below capacity due to insufficient supply of crushed bones and that the entry of the Modis into the arena would drive them out of business has not been overlooked.
Only, as against this the Government has considered to be more weighty the economic advantages in granting the application of the Modis arising out of the circumstances: (a) that they would be setting up the industry in a backward area; (b) that they had categorically 819 undertaken to export at least 60% of their proposed produc tion; (c) that since they would be producing their own hydrochloric acid, the availability of such acid to others will not be affected; and (d) that the short supply of the raw material (crushed bones) may not be a constraint for permitting the manufacture of value added products like Ossein and Gelatine.
The order bears testimony to the fact that the pros and cons have been fully considered and a decision taken.
It is not within the province of the Courts to appraise the evidence or review the conclusion of the Government.
The first branch of the argument of the counsel for the appellant, therefore, fails.
On the issue of natural justice, we are satisfied that no prejudice has been caused to the appellant by any of the circumstances pointed out by the appellant.
It is true that the order has been passed by an officer different from the one who heard the parties.
However, the proceedings were not in the nature of formal judicial hearings.
They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting.
It has not been brought to our notice that any salient point urged by the petitioners has been missed.
On the contrary, the order itself summa rises and deals with all the important objections of the petitioners.
This circumstance has not, therefore, caused any prejudice to the petitioners.
The delay in the passing of the order also does not, in the above circumstances, vitiate the order in the absence of any suggestion that there has been a change of circumstances in the interregnum brought to the notice of the authorities or that the author ity passing the order has forgotten to deal with any partic ular aspect by reason of such delay.
The argument that the application of the Modis had referred to bonemeal as the raw material used and this was later changed to "crushed bones" is pointless because it is not disputed that all along the petitioners were aware that the reference to bonemeal was incorrect and that the Modis were going to use crushed bones in their project.
The last contention that some documents were produced at the hearing by the Modis which the peti tioners could not deal with effectively is also without force as, admittedly, the assessee 's representatives were shown those documents but did not seek any time for consid ering them and countering their effect.
There has, there fore, been in fact, no prejudice to the petitioners.
They have had a fair hearing and the Government 's decision has been reached after considering all the pros and cons.
We are unable to find any ground to interfere therewith.
There was some discussion before us on a larger question as to whether the requirements of natural justice can be said to have been 820 complied with where the objections of parties are beard by one officer but the order is passed by another.
Sri Salve, referring to certain passages in Local Government Board vs Alridge, ; Ridge vs Baldwin, ; ; Regina vs Race Relations Board, Ex parte Selvarajan, and in de Smith 's Judicial Review of Administra tive Action, Fourth Edn.
p. 219 220 submitted that this was not necessarily so and that the contents of natural justice will vary with the nature of the enquiry, the object of the proceeding and whether the decision involved is an "institu tional" decision or one taken by an officer specially empow ered to do it.
Sri Divan, on the other hand, pointed out that the majority judgment in Gullappalli Nageswara Rao vs APSR TC, [1959] Supp. 1 SCR 3 19 has disapproved of Al ridge 's case and that natural justice demands that the hearing and order should be by the same officer.
This is a very interesting question and Alridge 's case has been dealt with by Wade (Administrative Law, 6th Edition at pp.
507 et seq.) We are of opinion that it is unnecessary to enter into a decision of this issue for the purposes of the present case.
Here the issue is one of grant of approval by the Government and not any particular officer statutorily desig nated.
It is also perfectly clear on the records that the officer who passed the order has taken full note of all the objections put forward by the petitioners.
We are fully satisfied, therefore, that the requirements of natural justice have been fulfilled in the present case.
For the reasons stated above, the appeal stands dismissed.
No costs.
G.N. Appeal dismissed.

dataset_name: IN-Abs

summary:
Respondent No. 1 made an application to the Central Government for permission to establish an undertaking for the manufacture of Ossein and Gelatine in the State of Rajasthan.
The appellant Association made representations before the Central Government objecting to the grant of the said application inter alia on the ground that it would cripple the small scale business of its members, who were already functioning far below capacity on account of short supply of crushed bones.
The Central Government rejected the objections and granted the application of the Respondent, under section 22 of the , by its order dated 20.9.1988.
Aggrieved by the said order, appellant association has preferred this appeal under section 55 of the MRTP Act.
On behalf of the appellant, it was contended that the Central Government has failed to pass a reasoned order and has not followed the principles of natural justice.
Dismissing the appeal, HELD: 1.
The order of the Government is a detailed and elaborate one.
It sets out the contentions and deals with them seriatim.
The point made that existing units were already functioning below capacity due to insufficient supply of crushed bones and that the entry of the Respondent No. 1 into the arena would drive them out of business has not been overlooked.
Only, as against this, the Government has considered to be more weighty the economic advantages in granting the application of Respondent No. 1 arising out of the circumstances that they would be setting up the industry in a backward area; that they had categorically undertaken to export at least 60% of their proposed pro 816 duction; that since they would be producing their own hydro chloric acid, the availability of such acid to others will not be affected; and that the short supply of the raw mate rial (crushed bones) may not be a constraint for permitting the manufacture of value added products like Ossein and Gelatine.
The order bears testimony to the fact that the pros and cons have been fully considered and a decision taken.
It is not within the province of the Courts to ap praise the evidence or review the conclusion of the Govern ment.
[818G H; 819A B] Oramco Chemicals Pvt. Ltd. vs Gwalior Rayon Silk Manu facturing (Weaving) Company Ltd. & Anr., and Bombay Oil Industries vs Union of India, ; , referred to.
In the instant case, requirements of natural justice have been fulfilled and no prejudice has been caused to the appellant.
Of course the order has been passed by an officer different from the one who heard the parties.
However, the proceedings were not in the nature of formal judicial hear ings.
They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting.
The order itself summarises and deals with all the important objections.
The delay in the passing of the order also does not vitiate the order in the absence of any suggestion that there has been a change of circumstances in the interregnum brought to the notice of the authorities or that the author ity passing the order has forgotten to deal with any partic ular aspect by reason of such delay.
The contention that the application of Respondent No. 1 had referred to bonemeal as the raw material used and this was later changed to 'crushed bones ' is pointless because it is not disputed that all along the appellant was aware that the reference to bonemeal was incorrect and that Respondent No. 1 was going to use crushed bones in the project.
That some documents were produced at the hearing by Respondent No. 1 which the appel lant could not deal with effectively is also without force as, admittedly, the appellant 's representatives were shown those documents but they did not seek any time for consider ing them and countering their effect.
Moreover, the issue is one of grant of approval by the Government and not any particular officer statutorily designated.
It is also per fectly clear on the records that the officer who passed the order has taken full note of all the objections put forward by the petitioners.
[819C H; 820A D]


judgement:
ivil Appeal No. 3224 of 1989.
From the Judgment and Order dated 6.9.83 of the punjab & 769 Haryana High Court in R.S.A. No. 1092 of 1975.
M.R. Sharma and M.C. Dhingra for the Appellant.
Anil Dev Singh, P.P. Singh and C.V.S. Rao for the Re spondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Special leave granted.
Appellant was recruited as an Assistant Executive Engi neer in the Military Engineering Service upon his selection by the Union Public Service Commission through the combined Central Engineering Service Examination of 1960 and he joined as an Assistant Executive Engineer on 24.4.1962.
A provisional seniority list was prepared in August, 1963 as claimed by him and the appellant represented that his previ ous service under the Central Government in consideration of which he had been given three increments at the time of joining should have been taken into account.
In January, 1967, the seniority list was published where, as the appel lant pleaded, he was shown at the 483rd position.
He repre sented against the lower placement and asked for placing him at the appropriate place.
The Departmental Promotion Commit tee did not consider him for promotion on the basis of his lower placement in the seniority list and he was not promot ed.
Appellant, therefore, filed a suit for redress of his grievance of lower placement and for consequential reliefs.
The suit was dismissed.
Appellant 's appeal before the Dis trict Judge was also dismissed and thereupon the appellant went before the High Court in second appeal but that too was dismissed.
It is against the judgment of the High Court affirming those of the Courts below that this appeal has been brought before this Court.
Before we go into the merits of the matter we must indicate that the case has not been appropriately placed in the Courts below and relevant material has not been made a part of the present record.
The claim in this litigation has to be considered in the backdrop of two earlier cases Bachan Singh vs Union of India, ; is the judgment of this Court where a dispute relating to the same Military Engineering Service involving inter alia of a claim of seniority came to be disposed of by a Constitution Bench.
It is not necessary to refer at any length to the judgment in view of the fact that the result of 770 the subsequent litigation in the case of A. Janardhana vs Union of India & Ors., ; would be sufficient for the present Notice was given in this appeal to hundreds of respond ents whom the appellant had impleaded, but no one has ap peared to contest his claim in this Court.
There has been no dispute in the Courts below and here too that the appellant has been legally recruited to the Service.
In Janardhana 's case at p. 618 of the Report this Court held: "Keeping in view the exigencies of service and the requirements of the State, temporary.
posts would be a temporary addition to the strength of the cadre, unless it is made clear to the contrary that the temporary posts are for a certain duration or the appointments to temporary posts are of an ad hoc nature till such time as recruitment according to rules is made.
In the absence of any such provision, persons holding permanent posts and temporary posts would become the members of the service provided the recruitment to the temporary posts is legal and valid.
Once the recruitment is legal and valid, there is no difference between the holders of permanent posts and temporary posts insofar as it relates to all the numbers of the service.
" In the instant case, the Union of India accepted the position that recruitment through the Union Public Service Commission had been regularly made and the post was not a temporary one but as the performance of the appellant had not been of a high order, he had been placed below treating him to be temporary a position for which there is not much of legal support.
Some controversy was raised as to whether Janardhana 's decision would operate as res judicata in view of the fact that the appellant had been impleaded in the litigation.
Janardhana 's civil appeal before this Court arose out of a writ petition in the High Court and as paragraph 36 of the judgment at p. 625 of the Report indicates: "By an order made by the High Court the names of respondents 3 to 4 18 (in which the appel lant was included) were deleted since notices could not be served on them on account of the difficulty in ascertaining their present 771 addresses on their transfers subsequent to the filing of these petitions.
" It is not the case of the respondent that the appellant had volunteered to appear in the writ petition or before this Court in the Janardhana 's dispute.
Strictly speaking, Janardhana 's decision may not have the effect of res Judicata for the present litigation, but we do not think in a dispute of the present dimension where hundreds of employees are concerned, it would be proper for the employees to litigate over the same issues from time to time.
If it would be open to members of the service from time to time to raise disputes of the same nature and intro duce uncertainty into the Service, that would affect the efficiency of the service and would be against public inter est.
That also would call into jeopardy the guarantees of public service and expose the officers into an atmosphere of insecurity.
A seniority list of a cadre should not be made the subject matter of debate too often.
We have, therefore, to consider the claim of the appellant keeping these aspects in view and referring to the conclusions reached in Janard hana 's case.
At p. 625 of the Report this Court came to the conclusion: "In our opinion, there was no justification for redrawing the seniority list affecting persons recruited or promoted prior to 1969 when the rules acquired statutory character.
Therefore, the 1974 seniority list is liable to be quashed and the two 1963 and 1967 sen iority lists must hold the field.
" The District Judge in appeal in paragraph 10 of his judgment came to find that the appellant 's placement was raised from serial 483 to 89.
The High Court in its judgment has indi cated: "Shri Sharma went up in appeal but the same was dismissed by the learned District Judge.
He affirmed the findings of the trial Judge on issues 1 and 3.
He also held that the suit of the appellant was barred by limitation.
During the pendency of appellant 's appeal before the District Judge, Bachan Singh 's case had been decided by the Supreme Court and as a conse quence thereof, his seniority was changed from St. No. 483 in 1967 seniority list to Sr. No. 89.
So he got the main relief.
His claim remained only for his reconsideration for promotion on the basis of his new ranking on the seniority list." 772 The High Court has again indicated: "Pursuant to the judgment in Bachan Singh 's case, fresh Seniority list was prepared in 1974 in which the appellant 's name figured at St. No. 89 instead of 483.
This list was challenged by A. Janardhan.
His appeal was allowed and the said list was quashed.
It was further held that 'there is nothing to suggest that 1963 and 1967 seniority lists were provi sional or were likely to be re drawn.
There fore, till the 1949 Rules acquired statutory character in 1969, the seniority lists of 1963 and 1967 in respect of Assistant Executive Engineers were quite legal and valid and were drawn upon the basis on the principle which satisfies the test Article 16 '.
So the senior ity lists of 1963 and 1967 were upheld.
The grievance of the appellant stands disposed of by this judgment to which he was a party.
" As we have already pointed out, appellant was not a party in Janardhana 's case inasmuch as no notice was taken to him and the case was disposed of without affording an opportunity to him of being heard.
The plea of limitation raised by the respondents should not have been upheld in the facts of the case.
As already indicated, the seniority list was being changed from time to time.
The appellant has represented against the 1967 senior ity list.
The dispute was already pending before this Court in Bachan Singh 's case.
In fact, without waiting for the judgment of this Court in Bachan Singh 's case, the plaintiff came to Court on 22.3.
The appellant was entitled to make a representation against the seniority list and rejec tion of the representation actually would have given him the cause of action.
In these circumstances, non suiting himon the plea of limitation would not at all be justified.
We, therefore, do not accept the conclusion of the High Court that plaintiffs action was barred by limitation.
We take it that when this Court in Janardhana 's case held on the facts placed before it that 'there was no justi fication made out for redrawing the seniority list affecting persons recruited or promoted prior to 1969 ' it meant a total topsy turvying of the list.
Individual claims, if any, could not have been barred from consideration if by the time Janardhana 's case came to be disposed of, claims were pend ing adjudication before the Court.
Appellant 's case was already before the 773 High Court by the time Janardhana 's appeal was disposed of by this Court.
The appellant was certainly entitled to be treated as a recruit of 1960 and to be placed above the recruits of 1961.
The stand taken before this Court in the counter affidavit filed by respondent No. 1 that it was open to him to appear in the competitive examination in the succeeding year, that is, in the year 1961 to better his position is no justification for depriving him of his legit imate claim to a higher placement in the seniority in the cadre.
While we affirm the view in Janardhana 's case that the seniority list should not be disturbed, the appellant 's claim has also to be accommodated.
In these circumstances, we direct that the appellant 's position shall be shown below the recruits of 1960 and above those of 1961 and he may be bracketed with one who has been assigned that position and an appropriate rectification shall be made in the seniority list of 1967 on the basis of the placement in terms of this judgment.
His entitlement to promotion on the basis of such position shall be considered by the respondents within four months hence.
The appellant shall be entitled to his costs throughout.
Hearing fee is assessed at Rs.2,000.
G.N. Appeal allowed.

summary:
Appellant joined the Military Engineering Service as Assistant Executive Engineer, upon his selection by the Union Public Service Commission through the combined Engi neering Service Examination held in 1960.
He represented that his previous service in Central Government should be considered in fixing his seniority.
in the seniority list published, the appellant 's name was shown at 483rd position.
The appellant made a representation against the lower place ment.
Departmental Promotion Committee did not consider him for promotion because of the lower placement.
Challenging the lower placement, the appellant filed a suit before the Civil Court which was dismissed.
His first appeal before the District Judge as also the second appeal before the High Court met the same fate.
This appeal, by special leave, is against the judgment of the High Court.
The respondents resisted the appeal on grounds of limitation and res judicata.
Allowing the appeal, HELD: 1.1.
There has been no dispute in the Courts below, and here too, that the appellant has been legally recruited to the service.
The Union of India accepted the position that recruitment through the Union Public Service Commission had been regularly made and the post was not a temporary one but as the performance of the appellant had not been of a high order, he had been placed below treating him to be temporary a position for which there is not much of legal support.
[770B C, E, F] 1.2.
Strictly speaking, Janardhana 's decision may not have the effect of res judicata for the present litigation, but in a dispute of the present dimension where hundreds of employees are concerned, it would not be proper for the employees to litigate over the same issue 768 from time to time.
If it would be open to members of the service from time to time to raise disputes of the same nature and introduce uncertainty into the service, that would affect the efficiency of the service and would be against public interest.
That also would call into jeopardy the guarantees of public service and expose the officers into an atmosphere of insecurity.
A seniority list of a cadre should not be made the subject matter of debate too often.
[771B D] A. Janardhana vs Union of India & Ors., ; ; affirmed.
The plea of limitation raised by the respondents should not have been upheld in the facts of the case.
The seniority list was being changed from time to time.
The appellant had represented against the 1967 seniority list.
The dispute was already pending before this Court in Bachan Singh 's case.
In fact, without waiting for the judgment of this Court in that case, the plaintiff came to Court on 22.3.1971.
The appellant was entitled to make a representa tion against the seniority list and rejection of the repre sentation actually would have given him the cause of action.
In these circumstances, non suiting him on the plea of limitation would not at all be justified.
[772E G] Bachan Singh vs Union of India, ; , referred to.
Individual claims, could not have been barred from consideration if by the time Janardhana 's case came to be disposed of, claims were pending adjudication before the Court.
Appellant 's case was already before the High Court by the time Janardhana 's appeal was disposed of by this Court.
The stand taken by Respondent No. 1 that it was open to the appellant to appear in the competitive examination in the succeeding year to better his position, is no justification for depriving him of his legitimate claim to a higher place ment in the seniority in the cadre.
Appellant 's position shall be shown below the recuirts of 1960 and above those of 1961 and he may be bracketed with one who has been assigned that position and an appropriate rectification shall be made in the seniority list of 1967 on the basis of the placement in terms of this judgment.
His entitlement to promotion on the basis of such position shall be considered by the re spondents within four months hence.
[772H; 773A D]


judgement:
ivil Appeal No. 2183 of 1988.
From the Judgment and Order dated 25.3.1988 of the Allahabad High Court in F.A.F.O. No. 951 of 1987.
N.D.B. Raju and N. Ganapathy for the Appellants.
M.S. Ganesh and Murlidhar for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The question raised in this appeal relates to the liability of the owner of an insured vehicle to pay compensation for the accident caused by negligence of an unlicensed driver.
The facts which are now found are these.
A constable while returning home after performing his duties was knocked down by a tractor owned by appellant No. 1 Kashiram Yadav.
Appellant No. 2 Raghuraj was then driv ing the tractor.
He had no driving licence.
The widow of the constable and her children claimed compensation from the appellants and the insurer.
The owner resisted the claim contending inter alia that he had already sold the vehicle to a third party and that vehicle was driven by the licensed driver Gaya Prasad at the time of the accident.
Both these facts were not established.
The Tribunal held that Raghuraj Singh was driving the tractor and the accident took place due to his rash and negligent driving and not due to any fault on the part of the constable.
Since Raghuraj Singh had no driving licence, the Tribunal held that the 813 owner of the vehicle alone is liable to pay the compensa tion.
Having reached that conclusion, the Tribunal deter mined the amount of compensation payable to the claimants.
A sum of Rs.96,000 was awarded with interest at the rate of 12 per cent per annum till realisation.
This award of the Tribunal has been affirmed by the High Court.
We are not concerned with the quantum of compensation determined by the Tribunal.
That question has not been agitated before us.
The only contention that was canvassed before us is as to the liability of the insurer to indemnify the owner to satisfy the judgment against him.
Section 96 of the imposes duty on the insurer to satisfy judgments against persons insured in respect of third party risks.
Sub section 2 thereof provides exception to the liability of the insurer.
Sub sec.
2(b) of sec.
96 provides that the insurer is not liable to satisfy the judgments against the persons insured if there has been a breach of a specified condition of the policy.
One of the conditions of the policy specified under clause (ii) is that the vehicle should not be driven by any person who is not duly licensed, or by any person who has been disqualified from holding or obtaining driving licence during the period of disqualification.
It is not in dispute that the certificate of insurance concerned in this case contains this condition.
If, therefore, there is a breach of this condition, the insurer will not be liable to indemnify the owner.
Counsel for the appellants however, submitted that insurer alone would be liable to pay the award amount even though the tractor was not driven by a licensed driver.
In support of the contention, he placed reliance on the deci sion of this Court in Skandia Insurance Co. Ltd. vs Kokila ben Chandravadan and Ors., [1987] 2 SCC 654.
We do not think that that decision has any relevance to the present case.
There the facts found were quite different.
The. vehicle concerned in that case was undisputedly entrusted to the driver who had a valid licence.
In transit the driver stopped the vehicle and went to fetch some snacks from the opposite shop leaving the engine on.
The ignition key was at the ignition lock and not in the cabin of the truck.
The driver has asked the cleaner to take care of the truck.
In fact the driver had left the truck in the care of the clean er.
The cleaner meddled with the vehicle and caused the accident.
The question arose whether the insured (owner) had committed a breach of the condition incorporated in the certificate of insurance since the cleaner operated the vehicle on the fatal occasion without driving licence.
This Court expressed the view that it is 814 only when the insured himself .entrusted the vehicle to a person who does not hold a driving licence, he could be said to have committed preach of the condition of the policy.
It must be established by the Insurance Company that the breach is on the part of the insured.
Unless the insured is at fault and is guilty of a breach of the condition, the insur er cannot escape from the obligation to indemnify the in sured.
It was also observed that when the insured has done everything within his power in as much as he has engaged the licensed driver and has placed the vehicle in his charge with the express or implied mandate to drive himself, it cannot be said that the insured is guilty of any breach.
We affirm and reiterate the statement of law laid down in the above case.
We may also state that without the knowl edge of the insured, if by driver 's acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured.
The insurer in such a case cannot take the defence of a breach of the condition in the certificate of insurance.
But in the present case, the onus of the insurer has been discharged from the evidence of the insured himself.
The insured took a positive defence stating that he was not the owner of the vehicle since he had already sold the same to a third party.
This has not been proved.
Secondly, he took a defence stating that the vehicle at the relevant time was driven by a licensed driver, Gaya Prasad, (PW 2).
This was proved to be false:There is no other material even to indicate that the vehicle was entrusted to the licensed driver on the date of the fatal accident.
With these distin guishing features in the present case, we do not think that the ratio of the decision in Skandia Insurance Co. Ltd. 's case could be called to aid the appellants.
In the result, the appeal fails and is dismissed.
In the facts and circumstances of the case, we make no order as to costs.
G.N. Appeal dismissed.

summary:
A Constable while returning home after performing his duties was knocked down by a tractor owned by appellant No. 1, and driven by appellant No. 2 who had no driving licence.
As a result of the accident, the Constable died and his widow and children claimed compensation, before the Tribu nal.
Awarding a compensation of Rs.96,000 the Tribunal held that at the time of the accident the vehicle belonged to appellant No. 1 and was driven by appellant No. 2, who had no driving licence, that the accident took place due to his rash and negligent driving, and appellant No. 1 alone was liable to pay the compensation.
The appellant has come in appeal, by special leave, contending that the insurer alone would be liable to pay the compensation amount, even though the tractor was not driven by a licensed driver.
Dismissing the appeal, HELD: 1.
Section 96 of the imposes a duty on the insurer to satisfy judgments against persons insured in respect of third party risks.
Sub section 2 thereof provides exception to the liability of the insur er.
Sub sec.
2(b) of sec.
96 provides that the insurer is not liable to satisfy the judgments against the persons insured if there has been a breach of a specified condition of the policy.
One of the conditions of the policy specified under clause (ii) is that the vehicle should not be driven by any person who is not duly licensed or by any person, who has been disqualified from holding or obtaining driving licence, during the period of disqualification.
It is not in dispute that the certificate of insurance concerned in this case contains this condition.
If, therefore, there is a breach of this condition, the insurer will not be liable to indemnify the owner.
[813C E] 812 2.
In the present case, the onus of the insurer has been discharged from the evidence of the insured himself.
The insured took a positive defence stating that he was not the owner of the vehicle since he had already sold the same to a third party.
This had not been proved.
Secondly, he took a defence stating that the vehicle at the relevant time was driven ' by a licensed driver.
This was proved to be false.
There is no other material even to indicate that the vehicle was entrusted to the licensed driver on the date of the fatal accident.
[814D F] Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan and Ors., [1987] 2 SCC 654, distinguished.


judgement:
ivil Appeal No. 3050 of 1989.
From the Judgment and Order dated 21.12.87 of the Orissa Administrative Tribunal in T.A. No. 161 of 1987.
P.P. Rao and C.S.S. Rao for the Appellant.
P.N. Misra and A.K. Panda for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
Leave granted.
This appeal is directed against the judgment of the Orissa Administrative Tribunal, Bhubaneswar dated 21.12.
1987 dismissing the appellant 's suit challenging his pre mature retirement from service.
The appellant, a qualified Electrical Engineer with training in West Germany, joined service of Orissa Govern ment as an Assistant Engineer (Electrical) in 1955.
In 1961 he was promoted to the rank of Executive Engineer (Electri cal) and deputed to the Orissa State Electricity Board.
In March, 1976 he was promoted to the post of Superintending Engineer (Electrical) on the basis of merit.
In 1979 while working on the post of Superintending Engineer (Electrical) he was allowed to cross the Efficiency Bar with effect from 1.1.1979.
He also officiated on the post of Chief Engineer (Electrical) in Orissa State Electricity Board.
Since he had completed 50 years of age a Review Committee constituted by the Government of Orissa considered his service record in October, 1983 for determining his suitability for retention in service in accordance with the first proviso to Rule 71(a) of the Orissa Service Code.
On the recommendation of the 806 Review Committee the State Government by its order dated 10.11.1983 pre maturely retired the appellant from service.
He filed a civil suit before the Subordinate Judge, Bhuba neswar challenging the validity of his pre mature retirement on a number of grounds.
On the Constitution of the Orissa Administrative Tribunal the suit was transferred to the Administrative Tribunal, Bhubaneswar, under Section 29 of the Administrative Tribunals Act.
The Tribunal by its order dated 21.12.1987 dismissed the suit and upheld the validity of appellant 's pre mature retirement.
Hence this appeal.
The Tribunal held that the Review Committee on an as sessment of the overall performance of the appellant 's conduct had bona fide made recommendations to the State Government that the appellant 's retention in service was not in public interest, and in pursuance thereof the State Government retired the appellant pre maturely.
The Tribunal further held that the order of pre mature retirement does not suffer from any legal infirmity.
Learned counsel for the appellant urged that the Tribunal committed serious error in upholding the order of pre mature retirement as the recom mendation of the Review Committee was vitiated as it was rounded on irrelevant and inadmissible material.
In this connection, he urged that the Review Committee had consid ered a number of adverse remarks contained in the appel lant 's service record for the remote past years which had no relevance and it had further considered adverse entries relating to the recent years although those adverse entries had not become final as the representations against those adverse entries had not been considered of by the State Government.
He urged that while considering overall perform ance of the appellant the Review Committee was influenced by the entries of remote past, which had lost their signifi cance as inspite of those entries the appellant had been promoted to higher post on merit and he had also been per mitted to cross Efficiency Bar.
Before we consider these submissions it would be pertinent to refer of the recommen dations of the Review Committee which are as under: "From the year 1969 70 to 1982 83, Shri Bai dyanath Mohapatra has got adverse remarks for the years 1969 70, 1970 71, 1972 73, 1975 76, 1976 77, 1981 82 and 1982 83.
Although he was an intelligent officer, he did not apply his mind and did not bestow adequate zeal in his work.
He did neither assume responsibility nor did he work hard for which the Chief Engineer had to deal with his Executive Engineers and Assistant Engineers directly.
He was found to be too cursory in dealing with the problems and adept in 807 putting the responsibilities for deficiencies on others.
His performance during most of the years was found to be of average standard.
The Committee, considering his overall perform ance, was of the view that his continuance in service is not desirable in public interest and that he be retired prematurely.
This officer would have retired on superannuation on 30.9.1989." No exception can be taken to the Government 's opinion in retiring the appellant pre maturely on the basis of the aforesaid recommendation of the Review Committee as it clearly indicated that the appellant 's retention in service was not in public interest.
The purpose of the Rule confer ring power on the Government to retire Government servants pre maturely is to energise its machinery by "chopping of the dead wood" as held by this Court in Union of India vs J.N. Sinha, [1971] 1 SCR 791.
The question which falls for consideration is whether the Review Committee was justified in making its recommendations on the basis of adverse en tries awarded to the appellant in remote past especially when the appellant had been promoted to the post of Superin tending Engineer in 1976 and he had further been permitted to cross Efficiency Bar in 1979.
The adverse entries relat ing to the years 1969 70, 1970 71, 1972 73 and 1975 76, had lost all significance, because inspite of those entries the appellant was considered to be an intelligent and efficient officer and in that view he was promoted to the post of Superintending Engineer.
If those entries did not reflect deficiency in appellant 's work and conduct for the purpose of promotion, it is difficult to comprehend as to how those adverse entries could be pressed into service for retiring him pre maturely.
When a Government servant is promoted to a higher post on the basis of merit and selection, adverse entries if any contained in his service record lose their significance and those remain on record as part of past history.
It would be unjust to curtail the service career of Government servant on the basis of those entries in the absence of any significant fall in his performance after his promotion.
The adverse entries for the years 1969 70, 1970 71, 1972 73 and 1975 76 were communicated in a lot to the appel lant in 1978, although under the instructions issued by the State Government the adverse entries must be communicated by December of each year.
The purpose of communicating adverse entries to the Government servant is to inform him regarding his deficiency in work and conduct and to afford him an opportunity to make, amend, and improvement in his work ,and further if the entries are not justified the communication 808 affords him an opportunity to make representation.
If the adverse remarks awarded to a Government servant are communi cated to him after several years, the object of communicat ing entries is defeated.
It is therefore imperative that the adverse entries awarded to a Government servant must be communicated to him within a reasonable period to afford him opportunity to improve his work and conduct and also to make representation in the event of the entry being unjustired.
In the instant case, adverse entries relating to a number of years were communicated to the appellant in one 101 under a letter dated 27.2.1978 contrary to the instructions issued by the State Government as contained in Circular No. 29 dated 19.2.1953.
Belated communication of the entries re sulted into denial of reasonable opportunity to the appel lant to improve his performance.
Further since adverse remarks for several years were communicated with inordinate delay it was impossible for the appellant to make an effec tive representation against the same.
The appellant 's repre sentation against the aforesaid entries was rejected on 12.3.1981 on the ground that the representation was barred by time.
Since the communication of the adverse entries was itself highly belated the representation against those adverse remarks should have been considered on merits and the same could not be rejected on the alleged ground of delay as the Government itself was guilty of inordinate delay in communicating the adverse remarks to the appellant.
Adverse remarks relating to the years 1981 82 and 1982 83 were taken into account by the Review Committee in formu lating its opinion against the appellant 's ,retention in service.
The appellant 's representation against those en tries had not been considered, yet the Review Committee placed reliance on those entries.
In fact, the adverse remarks for the year 1981 82 were communicated to the appel lant under the letter dated 21.6.1983 which was received by him on 5.7.1983, and as regards the adverse remarks for the 'year 1982 83 these were communicated to the appellant under the letter dated 29.7.1983 which was received by him on 9.8.1983.
He made representation to the Government against the aforesaid adverse remarks on 1.11.1983 but before the representation could be considered by the Government the impugned order of pre mature retirement was made on 10.11.1983.
These facts make it amply clear that the appel lant 's representation against the aforesaid adverse remarks for the years 1981 82 and 1982 83 was pending and the same had not been considered or disposed of on the date the impugned order was issued.
It is settled view that it is not permissible to pre maturely retire a Government servant on the basis of adverse entries, representations against 809 which are not considered and disposed of.
Brij Mohan Chopra vs State of Punjab, ; When this aspect was pressed before the Tribunal, it took a peculiar view in holding that since the representation had not been made before the date on which the Review Committee had considered the appellant 's case, the Committee need not have waited for the disposal of the appellant 's representation and it was free to take into account the adverse remarks awarded to the appellant in the years 1981 82 and 1982 83.
The appellant placed reliance on the decision of this Court in Brij Mohan Chopra 's case but the Tribunal by some in volved logic avoided giving effect to the law laid down by this Court.
It is not disputed that in the State of Orissa a Government servant has right to make representation within six months from the date of communication of the adverse remarks.
The appellant had right to make representation against the adverse entries within six months period, there fore, the adverse entries awarded to him in the years 1981 82 and 1982 83 could not be taken into account either by the Review Committee or by the State Government in forming the requisite opinion as contemplated by Rule 71(1)(a) of the Orissa Service Code, before the expiry of the period of six months.
Since the period prescribed for making representa tion against the adverse remarks for the years 1981 82 and 1982 83 had not expired, the proper course for the Review Committee should have been not to consider those entries or in the alternative, the Review Committee should have waited for the decision of the Government on the appellant 's repre sentation.
The view taken by the Tribunal is not sustainable in law.
There is a disturbing feature of this case which viti ates Tribunal 's order.
Shri Gian Chand, Chairman of the Tribunal, ex Chief Secretary of the State of Orissa, was member of the Review Committee which made recommendation against the appellant for his pre mature retirement, and in pursuance thereof the State Government had issued the im pugned order.
It appears that Sh.
Gian Chand, had later been appointed as Chairman of the Administrative Tribunal.
Shri Gian Chand, participated in the proceedings of the Tribunal, and he is party to the decision of the Tribunal.
These facts show that Mr. Gian Chand, who had administratively taken a decision against the appellant, considered the matter judi cially as a Chairman of the Tribunal, thereby he acted as a Judge of his own cause.
While it is true that there is no allegation of personal bias against Sh.
Gian Chand, he may have acted bona fide, nonetheless, the principles of natural justice, fair play, and judicial discipline required that he should have abstained from hearing the appellant 's case.
While considering the appellant 's case the Tri 810 bunal exercised judicial powers and it was required to act judicially, as the jurisdiction of the Civil Court and High Court have been excluded and vested in the Administrative Tribunal.
The Members of the Tribunal must follow rules of natural justice in administering justice like Judges, they should not sit in judgment on their own decisions.
Gian Chand was disqualified to hear the appellant 's case.
The order of the Tribunal is vitiated on this ground but as the appellant had not raised any objection before the Tribunal against the participation of Sh.
Gian Chand, we do not consider it necessary to grant relief to the appellant on this ground.
For the aforesaid reasons we hold that the order of pre mature retirement is vitiated and the Tribunal committed error in upholding the same.
We accordingly allow the ap peal, set aside the order of the Tribunal dated 21.12.1987 and also the order of the State Government dated 10.11.
The appellant is entitled to reinstatement with all consequential benefits of service in addition to the costs.
R.S.S. Appeal allowed.

summary:
The appellant had joined service in the Orissa Govern ment as an Assistant Engineer in 1955, and in 1983 he was working on the post of Superintending Engineer.
Since he had completed 50 years of age, a Review Committee considered his service record for determining his suitability for retention in service in accordance with the first proviso to Rule 71(a) of the Orissa Service Code.
On the recommendation of the Review Committee the State Government by its order dated 10.11.1983 pre maturely retired the appellant from service.
The appellant filed a civil suit challenging the validity of his pre mature retirement.
The suit was transferred to the Administrative Tribunal.
The Tribunal held that the recom mendation of the Review Committee was bona fide and did not suffer from any legal infirmity.
Before this Court, it was contended that the recommenda tion of the Review Committee was vitiated as it was founded on irrelevant and inadmissible material.
It was urged that the Review Committee had considered a number of adverse remarks contained in the appellant 's service record for the remote past years, and had also considered adverse entries relating to recent years although those adverse entries had not become final.
Allowing the appeal and setting aside the order of premature retirement of the appellant, this Court, HELD: (1) The purpose of the Rule conferring power on the Government to retire Government servants prematurely is to energise 804 its machinery by 'chopping of the dead wood '.
[807C] Union of India vs J.N. Sinha, [1971] 1 SCR 791.
(2) When a Government servant is promoted to a higher post on the basis of merit and selection prior adverse entries if any contained in his service record lose their significance and those remain on record as part of past history.
It would, therefore, be unjust to curtail the service career of Government servant on the basis of those entries in the absence of any significant fail in his per formance after his promotion.
[807F] (3) If the adverse remarks awarded to a Government servant are communicated to him after several years, the object of communicating entries is defeated.
It is, there fore, imperative that the adverse entries awarded to a Government servant must he communicated to him within a reasonable period to afford him opportunity to improve his work and conduct and also to make representation in the event of the entry being unjustified.
In the instant case, belated communication of the entries resulted into denial of reasonable opportunity to the appellant to improve his performance.
[808A B] (4) The appellant 's representation against the adverse entries relating to a number of years was rejected on the ground that the representation was barred by time.
Since the communication of the adverse entries was itself highly belated, the representation against those adverse remarks should have been considered on merits and the same could not be rejected on the alleged ground of delay as the Government itself was guilty of inordinate delay in communicating the adverse remarks to the appellant.
[808D] (5) The appellant had a right to make representation against the adverse entries within six months period.
There fore, the adverse entries awarded to the appellant in the years 1981 82 and 1982 83 could not be taken into account either by the Review Committee or by the State Government in forming the requisite opinion contemplated by Rule 71(1)(a) of the Orissa Service Code, before the expiry of the period of six months.
It is settled view that it is not permissible to prematurely retire a Government servant on the basis of adverse entries, representations against which are not considered and disposed of.
[809C D, 808H 809A] Brij Mohan Chopra vs State of Punjab, ; (6) The Members of the Tribunal must follow rules of natural 805 justice in administering justice like judges.
They should not sit in judgment on their own decisions.
In the instant case Shri Gian Chand, who had administratively taken a decision as Chief Secretary against the Appellant, consid ered the matter judiciary as the Chairman of the Administra tive Tribunal, thereby he acted as a Judge of his own cause.
While it is true that there is no allegation of personal bias against Shri Gian Chand, he may have acted bona fide, nevertheless, the principles of natural justice, fair play, and judicial discipline required that he should have ab stained from hearing the appellant 's case.
[810B, 809F H]