judgement:
Civil Appeal No. 219 of 1974.
Appeal by Special Leave from the Judgment and Order dated the 3 3 1972 of the Madras High Court in Writ Appeal No. 416 of 1970.
R. M. Mehta and section P. Nayar for the Appellant.
A. V. Rangam and Miss A Subhashini for Respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judgment dated 3 March 1972 of the High Court of Madras.
The respondent in an application under Article 226 of the Constitution asked for a writ of mandamus directing the appellant Unison to pay the respondent pension at the rate of 1s 9d per rupee in accordance with Regulations 934 A and 934 D of the Civil Service Regulations.
862 The respondent is a Ceylonese national.
He joined the Indian Civil Service on 6th October 1933.
After 15 August 1947 he continued to serve in our country until his retirement on 31 December 1949.
At his retirement he was sanctioned an annuity of $ 743 2 shillings 6 pence per annum.
He commuted a part of his pension leaving a balance of Rs. 500 per month.
Between March, 1968 and October 1969 he resided in Uganda in East Africa.
When the respondent was in Uganda he claimed pension at the rate of 1s 9d to a rupee.
His request was accepted by the Accountant General, Madras.
The Union Government reversed the decision and directed that the conversion rate should be 1s 6d to a rupee and the excess payment should be recovered from the respondent.
The respondent thereafter made an application under Article 226 of the Constitution.
The High Court accepted the petition of the respondent on the ground that the respondent shifted his residence from Ceylon to Uganda and was, therefore, entitled to benefit under the second proviso to Article 934 of the Civil Service Regulations.
The second proviso to Article 934 was as follows: "Provided that save where a pensioner resides in India (which for the purpose of this Article and Articles 934 A, 934 B, 934 C. 934 D and 935 shall be deemed to include Burma, Ceylon, Nepal, and the French and Portuguese establishments in India) the minimum rate of conversion shall be 1/9 per rupee".
The question of payment of pension to Members of the Indian Civil Service in Sterling was examined by this Court in V. B. Raju & Ors.
vs State of Gujarat & Ors.
The Constitution (Twentyeighth Amendment) Act, 1972 introduced Article 312 A. Article 312 A confers power on Parliament to make law, inter alia, to vary or revoke prospectively or retrospectively the conditions of service as respects pension of persons who having been appointed by Secretary of State or Secretary of State in Council to a Civil Service of the Crown in India before the commencement of the Constitution retired or otherwise ceased to be in service at any time before the commencement of the Constitution (28th Amendment) Act, 1972.
The Constitution (28th Amendment) Act, 1972 came into existence on 27 August 1972.
Parliament on 21 September 1972 made the law called the Former Secretary of State Service Officers (Conditions Service) Act, 1972.
A former Secretary of State officer means a person referred to in sub clause (a) or sub clause (b) sub clause (1) of Article 312 A of the Constitution.
The respondent is a former Secretary of State Service officer within the meaning of sub clause (a) of clause (1) of Article 312 A. Section 8(1) of the Conditions of Service Act, 1972 enacts that no former Secretary of State Service officer shall be entitled or be deemed to have been entitled, to claim (a) pension in sterling; or (b) 863 that his pension shall be paid outside India; or (c) where his pension was expressed in sterling or a fixed sterling minimum was applicable in respect of the pension payable to him, that his pension shall be commuted in the rupee equivalent of the amount fixed in sterling at a rate of exchange exceeding the rate of rupees thirteen and one third to the pound sterling.
Section 12 of the Former Secretary of State Service officers (Conditions of Service) Act, 1972 states that the provisions of this Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than this Act or in any rule, regulation or order or other instrument having effect by virtue of any law other than the 1972 Act.
The Constitution Bench of this Court in V. B. Raju 's case (supra) held that the former Members of the Indian Civil Service as a result of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India or by converting $ 1000 at the rate of exchange exceeding the rate of exchange of Rupees thirteen and one third to the pound sterling.
The judgment of the High Court cannot be sustained by reason of change in law.
The appeal is accepted and the judgment of the High Court is set aside.
Parties will pay and bear their own costs.
S.R. Appeal allowed.

summary:
The claim of his pension at the rate of 1sh 9d.
to a rupee by the respondeent, a former Secretary of State Service Officer was allowed by the Accountant General, but the Union appellant reversed it and directed recovery of the excess payment.
The respondent basing his claim under the second proviso to article 934 of the Civil Service Regulations moved the High Court under article 226 of the Constitution which was accepted.
The Letters Patent Appeal filed by the Union was dismissed.
The appeal by special leave, in view of the Constitution (28th amendment) Act 1972 introducing article 312A and the , was accepted and the court.
^ HELD: (i) Under section 12 of the Former Secretary of State Service Officers (Conditions of services) Act 1972, enacted by Parliament by virtue of article 312A of the Constitution the provisions of the Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than the Act or in any rule, regulation or order or other instrument, having effect by virtue of any law other than the 1972 Act.
[863 B] (ii) The former members of the Indian Civil Service as a result of Ss. 8 & 12 of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India, or by converting $ 1000/ at the rate of exchange exceeding the rate of exchange of rupees thirteen one third to the pound sterling.
[863 C] (iii) The Judgment of the High Court holding that the second proviso to article 934 of the Civil Service Regulations applied to the instant case, cannot be sustained by reason of change in law.
[863 D] V. B. Raju vs State of Gujarat & Ors.
[1975] 1 S.C.R. 797, followed.


judgement:
Civil Appeal Nos.
1565 1569/73.
Appeals by Special Leave from the orders Nos.
4844 4848 of 1972 dated 25th November 1972 of the Central Govt., Ministry of Finance, Govt.
of India.
D. V. Patel and K. R. Nambiyar for the Appellant.
G. L. Sanghi and Girish Chander for the Respondents.
The Judgment of the Court was delivered by UNTWALIA, J.
The appellant company in these appeals by special leave is a manufacturer of rubber tyres and tubes.
It imports several raw materials including Pyratex Vinyl Pyridine Latex used in the manufacture of rubber tyres and tubes.
The Customs authorities of the Government of India have been charging custom duty on V. P. Latex under the residuary item 87 of the Indin Tariff Act, 1934 instead of ICT 39 an item meant for charging duty on raw rubber.
The custom duty charged under item 87 is much more than the one chargeable under item 39.
A countervailing duty under item 15 A of the Central Excise Tariff in accordance with the Central Salt and Excise Act, 1944 is also charged if the article imported is not treated as raw rubber.
On five consignments of V. P. Latex imported by the appellant in the year 1968 custom duty was charged under item 87 by the Appraiser pursuant to his order of assessment.
Since he was an officer lower in rank than the Assistant Collector of Customs the appellant filed five applications before the Assistant Collector under section 27 (1) of the Customs referred to as the Act, for refund of the excess amount of duty charged.
In other words, the appellant took the stand that if a custom duty would have been charged on V. P. Latex under item 39 then the amount would have been less to the extent of Rs. 3,74,879.49 on the five consignments in question.
It, therefore, claimed the refund of the said amount, the details of which are as follows: ___________________________________________________________ Bill No. and date Date of Delay Amount claim for refund ____________________________________________________________ 1.
D. NO.
1644 dated 8 4 69 31/4 Months 50,305.53 24 6 1968 2.
D. No. 1024 dated 27 6 69 3 Months 60,339.97 18 9 1968 3.
D. No. 1132 dated 8 4 69 2 Months 1,61,615.10 21 8 1968 4.
D. No. 1931 dated 10 4 69 1 Months 50,512.71 23 7 1968 5.
D. No. 68 dated 10 4 69 4 Months 52,106.18 1 6 1968 ____________ 3,74,879.49 ____________________________________________________________ Under section 27(1) of the Act the application for refund had to be made before the expiry of six months from the date of payment of duty, the date of payment being the date of the bill in each case.
Thus there was a delay varying between 1 month to 4 months in the filing of each of the applications for refund.
The Assistant Collector of Customs dismissed the applications on the ground that they were filed out of time.
The appeals to the Appellate Collector of Customs filed under section 128(1) (b) of the Act failed.
The appellant took the matter in revision to the Central Government under section 131.
The revisions were dismissed by the Central Government by their order dated November 29, 1972 stating therein: "The Govt.
of India have carefully considered the reasons advanced by the petitioners for their failure to prefer the claims for refund within the time stipulated under section 27 of the , but see no justification to interfere with the appellate orders.
The revision applications are, therefore, rejected.
" These appeals were filed from the said order after obtaining special leave of this Court.
Mr. D. V. Patel learned counsel for the appellant submitted that in view of the recent decision of this Court in Dunlop India Ltd. etc.
vs Union of India & Ors.
V. P. Latex was chargeable to duty under item 39 only.
The applications filed by the appellant for refund of the excess amount have erroneously been dismissed on the ground of having been filed out of time.
Counsel submitted that the appellant used to pay custom duty not as and when a particular consignment was received but by making deposits in a running account.
Hence no parti 866 cular date of payment could be assigned in respect of a particular consignment.
He further submitted that the duty was paid under protest and hence under the proviso to sub section (1) of section 27, the limitation of six months did not apply.
Mr. G. L. Sanghi, learned counsel for the respondents contended that no case of running account had been made before the authorities below and that there was nothing to show that the duty had been paid under protest in relation to any of of the five consignments.
It is no doubt true that in view of the decision of this Court mentioned above the custom duty was chargeable on import of V. P. Latex under item 39.
The authorities below do not seem to have decided the refund applications of the appellant on merits.
They have dismissed them merely on the ground of limitation.
The only question, therefore, which falls for determination by us is whether the applications for refund were filed out of time.
Section 27 reads as follows: "27.
(1) Any person claiming refund of any duty, paid by him in pursuance of an order of assessment made by an officer of customs lower in rank than an Assistant Collector of Customs may make an application for refund of such duty to the Assistant Collector of Customs before the expiry of six months from the date of payment of duty: Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation Where any duty is paid provisionally under section 18, the period of six months shall be computed from the date of adjustment of duty after the final assessment thereof.
(2) If on receipt of any such application the Assistant Collector, of Customs is satisfied that the whole or any part of the duty paid by the applicant should be refunded to him, he may make an order accordingly.
(3) Where, as a result of any order passed in appeal or revision under this Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf.
(4) Save as provided in section 26, no claim for refund of any duty shall be entertained except in accordance with the provisions section.
The appellant 's case obviously and admittedly was not covered by sub section (3) as it had not challenged the order of assessment in any appeal or revision.
Nor was it a case where any duty was paid provisionally under section 18.
The appellant 's case was governed by sub section (1) of section 27.
No. case of any running account was set up by the appellant nor was there anything in the records of this case to substantiate it.
Custom duty was paid in respect of each of the five consignments on the date of its respective bill.
Ultimately this 867 position could not be disputed before us.
The appellant, however, contended that the duty was paid always under general protest which covered the cases of these five consignments also.
Hence under the proviso to sub section (1) the limitation of six months does not apply.
Our attention was drawn to several letters in the records of the appeals before us to substantiate the plea of payment under protest, but none of them helps the appellant.
We may refer to only two of them.
The appellant wrote a letter on February 8, 1968 to the Assistant Collector of Customs, Madras making out a case therein that V. P. Latex was assessable to duty under item 39 ICT.
Finally in this letter a protest was made for the assessment of duty under item 87 on V. P. Latex imported by the company in the past.
This letter was written before the five consignments in question were imported and duty paid thereon.
The protest, therefore, embodied in the letter aforesaid was not in respect of any of these consignments.
A letter written on July 15, 1968 was a letter written at a point of time when two out of the five consignments had been imported; but three were imported after the writing of this letter by the appellant to the Asstt.
Collector of Customs, Madras.
This letter relates to a consignment of 59 drums of V. P. Latex which could not be connected with any of the five consignments in question.
Thus there is nothing to show that duty on them was paid under protest, general or specific.
It was lastly contended on behalf of the appellant that in view of the recent decision of this Court, the Govt. should be directed to refund the excess amount of Rs. 3,74,879.49 charged on the five consignments.
We are unable to do so because the present appeals arising out of the orders made by the Government of India in proceedings under section 27(1) of the Act have got to fail on the ground that the view taken by the authorities below on the question of limitation could not be shown the incorrect.
In the result the appeals fail and are dismissed.
There will be no order as to costs.
S.R. Appeals dismissed.

dataset_name: IN-Abs

summary:
"V. P. Latex" imported by the appellants was treated as falling under item 87 of the Indian Tariff Act 1934, the custom Authorities and custom duty was charged, in addition to a countervailing duty under item 15A of the Central Excise Tariff, in accordance with the Central Salt & Excise Act 1944.
The appellants contending that V.P. Latex is an item of raw rubber covered only by item 39 of the Indian Tariff Act 1934 preferred refund claim under section 27(1) of the Customs Act before the Assistant Collector, which was dismissed on the ground of limitation.
The appeal under section 128(1)(b) and the Revision failed.
Dismissing the appeals, by special leave the Court.
^ HELD: In the instant case, there was nothing to show that duty was paid under protest, general or specific and therefore the claim was not within the period of limitation.
The view taken by the authorities on the question of limitation was correct.
[867 DE] Dunlop India Ltd., etc.
vs Union of India, [1976] (2) S.C.R., P. 98 referred to.


judgement:
ivil Appeals Nos.
785 of 1971 and 1781 of 1975.
Appeal by Special Leave from the judgment and orders dated the 2nd September, 1970 and 25th March, 1974 of the Madhya Pradesh High Court in Misc.
Petition Nos. 3/68 and 390/72 respectively.
V. M. Tarkunde and K. J. John of M/s. J. B. Dadachanji & Co. for the appellant (In CA 785/71) Ram Panjwani, Dy.
Gen. (M.P.) with H. section Parihar for respondent No. 1 (In CA 785/71 & appellant in CA.
1781/75).
section P. Nayar for respondent No. 2 (In CA.
785/71) G. L. Sanghi, A. K. Sanghi, C. K. Ratnaparkhi and A. G. Ratnaparkhi for respondent No. 3 (in CA 785/71) M/s. Balakrishnan and Ghatate, for respondents in CA 1781/75.
The Judgment of the Court was delivered by UNTWALIA, J.
These two appeals by special leave have been heard together as they originate from a common dispute between the parties.
They are being disposed off by a common judgment and order.
To provide for the regulation of mines and the development of minerals under the control of the Union of India The , Central Act 67 of 1957 hereinafter referred to as the Act, was passed.
In section 3 of the Act clause (a) says: "minerals" includes all minerals except mineral oils.
" Clause (e) provides: "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declared to be a minor mineral," For the sake of convenience and to distinguish minor minerals from minerals, the minerals are generally called major minerals and will be described as such hereinafter in this judgment.
Provisions of sections 4 to 13 are applicable to the grant of any prospecting licence or a mining lease for a major mineral.
In exercise of the power under section 13, the Central Government made the Mineral Concession Rules, 1960 hereinafter called the Central Rules.
The State Government was authorised by section 15 of the Act to make Rules for regulating the grant of prospecting licences (now quarry leases) and mining leases in respect of minor minerals.
The Government of Madhya Pradesh in exercise of the said power made the Madhya Pradesh Minor Mineral Rules, 1961 hereinafter called the State Rules.
In clause (iii) of Rule 2 'quarry lease ' was stated to mean a mining lease for minor minerals.
879 Limestone is found in abundance in the State of Madhya Pradesh.
The Central Government issued a notification dated the 1st June, 1958 in exercise of the powers conferred on them by clause (e) of section 3 of the Act declaring "limestone used for lime burning" as a minor mineral.
By a subsequent notification dated the 20th September, 1961 the description of the limestone as a minor mineral was changed and only "limestone used in kilns for manufacture of lime used as building material" was declared as a minor mineral.
The power to grant a quarry lease for limestone as a minor mineral or a mining lease for limestone as a major mineral rested in the State Government the former under the State Rules and the latter under the Central Rules.
Applicants had to apply to the State Government in the respective forms prescribed in the two Rules.
Gorelal Dubey the appellant in Civil Appeal No 785 of 1971 made and application on May 7, 1965 to the State Government for a quarry lease for "limestone for burning purpose" for a term of 10 years mentioning in paragraph 3 of the application "minor minerals" against the 6th column "Minor minerals or minerals which the applicant intends to mine.
" The land in respect of which the application was made by the appellant measured 8.36 acres and is situated in village Bistara, District Jabalpur.
The firm, Ram Chander Badri Prasad Gaur, respondent No. 3 filed an applications before the State Government on June 2, 1965 under the Central Rules in respect of the same area asking the Goverment to grant a mining lease to it for mining limestone as a major mineral By their order dated November 10 1965 a quarry lease was granted by the State Government to the appellant and a Lease Deed was executed on November 10, 1965 including special clause 18A therein.
Respondent No. 3 filed an application in revision before the Central Government.
They allowed the revision by their order dated December 14, 1967 holding therein that in substance the application for a lease filed by the appellant was an application for major mineral and lease granted was also not for minor mineral, hence the grant of the lease to the appellant was not competent.
The Central Government, therefore, directed the State Government to consider the application of respondent No. 3 for grant of mining lease for limestone over an area of 8.36 acres in village Bistara.
The appellant filed a writ petition (M.P. No. 3/1968) in the Madhya Pradesh High Court to challenge the order of the Central Government.
The High Court dismissed the writ application by order dated September 2, 1970 affirming the view of the Central Government that in substance and in effect the application for and grant of lease to the appellant by the State Government was for a major mineral and not a minor mineral.
Since the other two points urged before the High Court were not pressed in argument before us, we need not make any reference to them.
The appellant came to this Court against the order of the High Court.
Special leave to appeal was granted but stay was refused.
The result was that the appellant 's lease could remain in operation for a period of about 5 years and for the last 5 years, respondent No. 3 who was granted a mining lease pursuant 880 to the order of the Central Government has been carrying on its operation of mining limestone as a major mineral.
During the pendency of the lease in favour of the appellant, rate of royalty was enhanced by the State Government in exercise of their power under the State Rules.
Demands of more royalty were made from the appellant by the State Government.
He filed a writ petition (MP No. 328/1968) in the High Court on July 23, 1968 to challenge the demand of the enhanced royalty.
After the decision dated September 2, 1970 of the High Court in M.P. 3 of 1968 the appellant amended his M.P. 328/1968 by introducing paras 20A and 20B and a prayer (b)(i) in the writ application to say that he was liable to pay, in view of the decision of the High Court, royalty on the limestone quarried by him at a rate which were chargeable on limestone as a major mineral.
On certain grounds, which are not necessary to be detailed here, the High Court allowed M.P. 328/1968 by its judgment and order dated December 14, 1970 and remanded the matter of quantification of the amount royalty due from appellant to the authorities concerned.
After remand the authorities determined the amount of royalty due from the appellant at Rs. 16,722/ and demanded the same from him.
The appellant filed a writ petition (MP 390) 72) in the High Court to attack the demand of Rs. 16,722/ from him and contended that if royalty was charged from him on the basis of limestone as a major mineral then he had paid Rs. 36,000 and odd more.
The High Court by its judgment and order dated March 25, 1974 allowed M.P. 390/1972 and quashed the demand of Rs. 16,722 made by the State Government from the appellant.
The State of Madhya Pradesh filed an application for special leave to appeal from the said decision of the High Court.
During the course of hearing of Gorelal Dubey 's appeal, special leave was granted by us and thereupon the appeal was registered and numbered as CA 1781/75.
Mr. Tarkunde appearing for the appellant in CA 785/71 submitted that in view of the decision of this Court in Smt.
Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others the decision of the Central Government as also of the High Court to the effect that the appellant application for and grant of lease to him was in substance a lease for a major mineral is erroneous.
He submitted that the order should be quashed and the State Government should be directed to grant a fresh lease to the appellant for another period of 10 years or the balance of the said period as the case may be.
Mr. Sanghi appearing for respondent No. 3 endeavoured to point out that the decision of this Court in Rukmani Bai 's case (supra) was distinguishable and the decision of the Central Government and the High Court is correct.
He further pointed out that the appellant had himself taken categorical stand in MP 328/1968 and MP 390/1972 that he had quarried limestone as a major mineral, disposed it of as such and was liable to pay royalty only on that basis.
Counsel further submitted that there was no renewal clause in the appellant 's lease and the period of 10 years having expired now 881 the appellant was entitled to no relief in this Court.
Mr. Ram Panjwani, appearing for the State of Madhya Pradesh supported the appellant on the question of the nature of his lease as being one for a minor mineral and pressed the Govermnent 's demand of Rs. 16,722 in C. A. 1781/75.
It appears even after the issuance of the notification dated September 20, 1961 by the Central Government making a change in the description of the limestone as a miner mineral confusion persisted amongst the applicants for quarry lease of limestone as also the governmental authorities.
They did not clearly appreciate the distinction between the new description of limestone as a minor mineral given in 1961 notification and the one which had been mentioned in the 1958 notification.
In Rukmani Bai 's case the appellant had stated in column 6 of the application "limestone for burning as a minor mineral" and the lease which was granted described it as "Iimestolle for burning".
Taking into consideration the totality of the facts it was held by this Court that the application and the grant of the lease was for limestone as a minor mineral.
The facts of the instant case are almost identical, the only difference being that in column 6 of the application the present appellant had merely stated 'minor minerals '.
But reading the said expression with the expression "limestone for burning purpose" mentioned in para 1 the same result follows.
A contrary view expressed by the Central Government and the High Court does not hold good.
We, therefore, hold that the application of the appellant was for a minor rnineral and the lease granted to him was for the same.
After the adverse decision of the High Court, he was ill advised to take the stand that he was liable to pay royalty on the amount of limestone quarried by him only as a major mineral.
We were a bit surprised to know that the amount of royalty which is chargeable on limestone as a major mineral is lower than the one chargeable upon it as a minor mineral.
Without further light it seems to us curious.
In paragraph 8 at page 996 it was pointed out in Rukmani Bai 's case by this Court with reference to the two notifications issued by the Central Government in the years 1958 and 1961: "The field of minor mineral, in so far as it concerned limestone, was narrowed down.
Formerly limestone used for burning for manufacture of lime, whatever may be the uses to which such lime may be put, whether as building material or for other purposes, was within the definition of 'minor mineral ', but after the amendment, it was only lime stone used for burning in kilns for manufacture of lime used as building material that was covered by the definition of minor mineral.
When limestone is used for burning for manufactories of lime for industrial or sophisticated purposes otherwise than as building material, it would have to be of superior quality and hence after the amendment, was classified as major mineral, leaving only limestone used for burning in kilns for manufacture of lime used as building 882 material to be regarded as minor mineral.
But in both cases, whether under the original notification or the amended notification, limestone was contemplated to be used for burning for manufacture of lime.
The only difference was that in the former, burning could be by any means or process and lime manufactured could be for any purpose in cluding building material, while in the latter, burning could be only in the kilns and for manufacture of lime used only as building material and for no other purpose.
" It was admitted at the Bar that ordinarily and generally only limestone of inferior grade is used as burning in kilns for manufacture of lime used as building material and limestone of superior grade is used either as such for industrial purposes or a high quality lime produced from it is used for purposes other than building material including industrial or sophisticated purposes.
For the purpose of some clarification we may add a few words to point out the distinction between the two notifications.
Limestone used for lime burning was a minor mineral under 1958 notification irrespective of the process of burning or the quality of the lime it produced.
After the 1961 notification only that type of limestone would be a minor mineral which is capable of being used for burning materials for producing that quality of lime which can ordinarily and generally be used as a building material.
The leasee 's responsibility ceases when the limestone quarried by him is used for burning in kilns producing the building material quality of lime.
It would be beyond his control to see that the lime so produced was actually used as a building material.
But then by and large the question of grant of a lease for quarrying or mining the limestone will have to be decided by the State Government on the basis of the quality of the limestone in a particular area.
Mr. Sanghji endeavioured to place materials before us to show that in the area in question was to be found limestone of high grade and quality.
He, therefore, submitted that the State Government should not be permitted to waste the national wealth of high grade limestone by granting a quarry lease as a minor mineral merely for the purpose of getting more royalty on it.
We see force in this argument but it is not possible for us to decide the contentious question as to whether the limestone found in the area was such that could be used as a minor mineral or was fit to be used as a major mineral.
If a major portion in the area is such that can be used as a minor mineral.
then a lease in accordance with the State Rules will have to be granted and a special clause like clause 18A may be provided therein if per chance some quality of limestone quarried in the demised area is found to be of high grade.
Similarly if the major portion is found to be of high grade limestone, then a mining lease for mining lime stone as a major mineral in accordance with the Central Rules will have to be granted.
A special clause may be incorporated in such a lease also.
In either event the lease will be liable to be cancelled if the lessee commits any breach of the terms of the lease including the one as to the purpose of using the limestone as a major or a minor mineral.
883 Following Rukmini Bai 's case we have held that the application filed by the appellant and the lease granted to him was for quarrying limestone as a minor mineral.
But that does not entitle him to get the relief as he wants from this Court.
A peculiar feature of this case, and which may occur in respect of some other area is that there, were two applicants one the appellant was wanted the lease of limestone as a minor mineral and the other respondent No. 3 who wanted it as a major mineral.
In such a situation it was not open to the State Government to merely ignore the application of respondent No. 3 and grant lease to the appellant.
Nor was it appropriate for the Central Government on the view which has been found to be erroneous by us to direct the State Government to consider the application of respondent No. 3 alone.
The proper course in such a situation is to direct the State Government to consider both the applications, determine the question as to whether the quality of the limestone contained in the area in question is such that a lease to quarry it as a minor mineral should be granted or is such that a lease for mining it as a major mineral should be granted and then it should proceed to grant the lease.
The proper course which ought to have been followed has neither been followed nor has been directed to be followed.
For the reasons stated above, we allow C.A. 785/71, quash the order of the High Court as also of the Central Government.
The leaser granted to respondent No. 3 pursuant to the said order shall cease to have effect.
The State Government is directed to consider both the applications for grant of lease and dispose of the matter afresh in the light of this judgment.
It will be open to the State Government to grant a lease for such period as it deems fit and proper to determine or for the balance of the period of the lease of the party to whom it may be granted.
For the past period the appellant will be liable to pay royalty on the amount of limestone quarried by him during the subsistence of his lease on the basis of the royalty payable on a minor mineral and respondent No. 3, similarly, will be liable to pay royalty on the amount of limestone extracted by it during the period of its lease on the basis of the rates chargeable on a major mineral.
Learned counsel for Gorelal Dubey during the course of argument had offered to withdraw his writ petitions M.P. 328/68 and M.P. 390/1972 and to pay the sum of Rs. 16,722, if it be found that the lease granted to him was a lease for a minor mineral.
In view of our finding recorded above, we allow CA 1781/75, set aside the orders of the High Court made in the two writ petitions and allow them to be withdrawn.
We shall make no order as to costs in any of the matters.
S.R. Appeals allowed.

summary:
In respect of an area of 8.36 acres of land containing limestone in the village Bistara, Jabalpur District, there were two applications before the State Government (Respondent in C.A. 785/71 & Appellant in C.A. 1781/75) empowered to grant prospecting licence or a mining lease for a major mineral under the Mineral Concessions Rules, 1960 or a "quarry lease" under the Madhya Pradesh Mineral Rules, 1961, for a minor mineral as defined in section 3(e) of the one by "GD", (the appellant in C.A. 785/71 and respondent in C.A. 1781/75) dated 7 5 1965 for a quarry lease for "limestone for burning purposes, minor minerals intended" and another by "RC" dated 2 6 1965 for a mining lease for "a major mineral".
The "quarry lease" was granted to "GD" on 1 11 1965 and the lease deed was executed on 10 11 1965 with a special clause 18A therein.
In revision by "RC" against the order granting quarry lease to GD the Central Government by its order dated 14 12 1967, holding that in substance the application of "GD" was an application for "major mineral" and, there fore.
the grant of the "quarry lease" to the appellant was not competent, directed the respondent State to consider the application of "RD" for the grant of mining lease.
As the writ petition No. 3/68 assailing the said order, filed by "GD" in the M.P. High Court was dismissed on 2 9 1970, GD obtained a special leave (CA 785/71), but the stay was refused, resulting in his lease running in operation only for a period of about 5 years and "RD" carrying on its operation of mining limestone as a major mineral.
During the pendency of the lease in favour of "GD" the rate of royalty was enhanced by the State Government and "GD" filed another writ petition (MP No. 328/1968) in the High Court on 23 7 1968.
As the MP 3/68 Was dismissed on 2 9 1970, "GD" amended the application suitable in MP 328/68 with the words "in view of the decision of the High Court, he was liable to pay royalty at a rate which were chargeable as a major mineral".
The High Court allowed the writ petition, remanded the matter of qualification of the amount of royalty due from "GD".
After the remand, the State Government determined the royalty at Rs. 16,722/ .
The said demand was again 877 challenged by "GD" for the third time by way of a writ petition No. MP 390/72 contending that if royalty was charged from him on the basis of a major mineral, then he had paid Rs. 36,000/ and odd more.
The writ was allowed in 25 3 1974 during the course of the hearing of CA 785/71 in the Supreme Court and the appeal by special leave (CA 1781/75) obtained by the respondent State against the order dated 25 3 1974 was heard with CA 785/71.
Allowing CA 785/71 on merits, following the decision in Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others; , and allowing CA 1781/75 with permission to the appellant to withdraw the writ petitions No MP 328/68 and MP 390/72, the Court: ^ HELD: (1) The facts of the instant case, being almost identical as Smt.
Rukmani Bai Gupta 's case, with the only difference that in column 6 of his application the present appellant had merely stated "minor minerals" reading the said expression with the expression "limestone for burning purposes" mentioned in paragraph 1, the same result follows.
Therefore, the application of the appellant was for a minor mineral and the lease granted to him was for the same.
After the adverse decision of the High Court, he was ill advised to take the stand that he was liable to pay royalty on the amount of limestone quarried by him out as "a major mineral", that the amount of royalty which is chargeable upon it as "a major mineral" is lower than one chargeable upon it as a "minor mineral".
[881 CE] Smt.
Rukmani Bai Gupta vs The State Government of Madhya Pradesh, Bhopal and others.
; , followed.
HELD FURTHER: (2) The distinctive points between the 1958 and 1961 notifications are as under: (a) Limestone for lime burning was a 'minor mineral" under the 1958 notification irrespective of the process of burning or the quality of the lime it produced.
[882 C] (b) After the 1961 notification only that type of limesone would be a "minor mineral" which is capable or being used for burning in kilns for producing has quality of lime which can ordinarily and generally be used as a building material.
[882 D] (c) The lessees ' responsibility ceases when the limestone quarried by him is used for burning kilns producing the building material quality of lime.
It would be beyond his control to see that the lime so produced was actually used as a building material.
(3) The question of grant of a lease for quarrying or mining the limestone will have to be decided by the State Government on the basis of the quality of the limestone in a particular area.
If a major portion in the area is such that can be used as a "minor mineral" then a lease in accordance with the State Rules will have to be granted and a special clause like clause 18 may be provided therein if per chance some quality of limestone quarried in the demised area is found to be of high grade.
Similarly if the major portion is found to be of high grade limestone, then a mining lease for mining limestone as a major mineral in accordance with the Central Rules will have to be granted.
A special clause may be incorporated in such a lease also.
In either event the lease will be liable to be cancelled if the lessee commits any breach of the terms of the lease including the one as to the purpose of using the limestone as a major or a minor mineral.[882 EH] (4) In situations like the instant case where there were two applicants one wanting the lease of limestone as a minor mineral and the other who wanted it as a major mineral, it was not open to the State Government to merely ignore the application for major mineral and grant lease to the appellant; nor was it appropriate for the Central Government to direct the State Government to consider the application for major mineral.
The proper course in such a situation is to direct the State Government to consider both the applications, determine the question as to whether the quality of the limesone contained in the area in question is such that a lease to quarry it as a minor mineral should 878 be granted and then it should proceed to grant the leave.
In the instant case the proper course which ought to have been followed has neither been followed nor has been directed to be followed by the Central Government.
[883 AD]


judgement:
Civil Appeal No. 1536 of 1970.
Appeal by special leave from the judgment and order dated the 10th November, 1969 of the Orissa High Court at Cuttack in O.J.Cs.
No. 877 of 1969.
Santosh Chatterjee and G. section Chatterjee for the Appellant.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is by Pratap Narain Singh Deo who is the, proprietor of two cinema halls in Jeypore, district Koraput, Orissa.
It is not in dispute that Srinivas Sabata, respondent No. 1, (hereinafter referred to as the respondent) was working as a carpenter for doing some ornamental work in a cinema hall of the appellant on July 6, 1968, when he fell down, and suffered injuries resulting in the amputation of his left arm from the elbow.
He served a notice on the appellant dated August 11, 1968 demanding payment of compensation as his regular employee.
The appellant sent a reply dated August 21, 1968 stating that the respondent was a casual contractor, and that the accident had taken place solely because of his own negligence.
The respondent then made a personal approach for obtaining the compensation, but to no avail.
He therefore made an application to the Commissioner for Workmen 's Compensation, respondent No. 2, stating that he was a regular employee of the appellant, his wages were Rs. 120/ per mensem, he had suffered the injury in the course of his employment and was entitled to compensation under the , (hereinafter referred to as the Act).
Notice of the application was served on the appellant on October 10, 1968 calling upon him to show cause why penalty to the extent of 50 percent and interest at 6 percent per annum should not be imposed on him under section 4A of the Act on the amount of compensation payable by him because of the default in making the payment of the compensation.
The appellant contested the respondents ' claim on the grounds mentioned above and on the further ground that respondent No. 2 had no jurisdiction to entertain and adjudicate on the claim.
He filed a memorandum of agreement on April 10, 1969 accepting the liability to pay compensation for a sum which was found by the Commissioner to be so grossly inadequate that he refused to register it.
The Commissioner held in his order dated May 6, 1969 that the injury had resulted in the amputation of the left arm of the respondent above the elbow.
He held further that the respondent was a carpenter by profession and "by loss of his left hand above the elbow he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only.
" He therefore adjudged him to have lost "100 percent of his earning capacity.
" On that basis he calculated the amount of compensation at Rs. 9800/ 874 and ordered the payment of penalty to the extent of 50 per cent together with interest at 6 percent per annum, making a total of Rs. 15,092/ .
The appellant felt aggrieved and filed a writ petition in the High Court of Orissa, but it was dismissed summarily on October 10, 1969.
He has therefore come up in appeal to this Court by special leave.
It has not been disputed before us that the injury in question was caused to the respondent by an accident which arose out of and in the course of his employment with the appellant.
It is also not in dispute that the injury resulted in amputation of his left arm at the elbow.
It has however been argued that the injury did not result in permanent total disablement of the respondent, and that the Commissioner committed a gross error of law in taking that view as there was only partial disablement within the meaning of section 2(1)(g) of the Act which should have been deemed to have resulted in permanent partial disablement of the nature referred to in item 3 of of Schedule I of the Act.
This argument has been advanced on the ground that the amputation was from 8" from tip of acromion and less than 41/2" below tip of olecranon.
As will appear, there is no force in this argument.
The expression "total disablement" has been defined in section 2(i) (1) of the Act as follows: "(1) "total disablement" means such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of the accident resulting in such disablement.
" It has not been disputed before us that the injury was of such a nature as to cause permanent disablement to the respondent, and the question for consideration is whether the disablement incapacitated the respondent for all work which he was capable of performing at the time of the accident.
The Commissioner has examined the question and recorded his finding as follows: "The injured workman in this case is carpenter by profession.
By loss of the left hand above the elbow, he has evidently been rendered unfit for the work of carpenter as the work of carpentry cannot be done by one hand only.
" This is obviously a reasonable and correct finding.
Counsel for the appellant has not been able to assail it on any ground and it does not require to be corrected in this appeal.
There is also no justification for the other argument which has been advanced with reference to item 3 of of Schedule I, because it was not the appellant 's case before the Commissioner that amputation of the arm was from 8" from tip of acromion to less than 41/2" below the tip of olecranon.
A new case cannot therefore be allowed to be set up on facts which have not been admitted or established.
875 It has next been argued that the Commissioner committed serious error of law in imposing a penalty on the appellant under section 4A(3) of the Act as the compensation had not fallen due until it was 'settled ' by the Commissioner under section 19 by his impugned order dated May 6, 1969.
There is however no force in this argument.
Section 3 of the Act deals with the employer 's liability for compensation.
Sub section (1) of that section provides that the employer shall be liable to pay compensation if "personal injury is caused to a workman by accident arising out of and in the course of his employment.
" It was not the case of the employer that the right to compensation was taken away under sub section (5) of section 3 because of the institution of a suit in a civil court for damages, in respect of the injury, against the employer or any other person.
The employer therefore became liable to pay the compensation as soon as the aforesaid personal injury was caused to the workman by the accident which admittedly arose out of and in the course of the employment.
It is therefore futile to contend that the compensation did not fall due with after the Commissioner 's order dated May 6, 1969 under section 19.
What the section provides is that if any question arises in any proceeding under the Act as to the liability of any person to pay compensation or as to the amount or duration of the compensation it shall, in default of a agreement, be settled by the Commissioner.
There is therefore nothing to justify the argument that the employer 's liability to pay compensation under section 3, in respect of the injury, was suspended until after the settlement contemplated by section 19.
The appellant was thus liable to pay compensation as soon as the aforesaid personal injury was caused to the appellant, and there is no justification for the argument to the contrary.
It was the duty of the appellant, under section 4A(1) of the Act, to pay the compensation at the rate provided by section 4 as soon as the personal injury was caused to the respondent.
He failed to do so.
What is worse, he did not even make a provisional payment under sub section (2) of section 4 for, as has been stated, he went to the extent of taking the false pleas that the respondent was a casual contractor and that the accident occurred solely because of his negligence.
Then there is the further fact that he paid no heed to the respondent 's personal approach for obtaining the compensation.
It will be recalled that the respondent was driven to the necessity of making and application to the Commissioner for settling the claim, and even there the appellant raised a frivolous objection as to the jurisdiction of the Commissioner and prevailed on the respondent to file a memorandum of agreement setting the claim for a sum which was so grossly inadequate that it was rejected by the Commissioner.
In these facts and circumstances, we have no doubt that the Commissioner was fully justified in making an order for the payment of interest and the penalty.
The appeal fails and is dismissed.

summary:
Under Section 2(i)(1) of the Workmen 's Compensation Act, 1923,"total disablement" means such disablement, whether of a temporary or Permanent nature, as incapacitates a workmen for all work which he was capable of per forming at the time of time ocident resulting in such disablement.
Under section 4A(3), when an employer defaults in paying the compensation within one month from the date it fell due, the Commissioner may direct payment of penalty and interest if he is of the opinion that there was no justification for the employer 's delay.
The Commissioner, in the present case, awarded compensation, holding that the respondent was a carpenter by profession, that he suffered an injury by an accident which arose out of and in the course of his employment with the appellant, that it resulted in the amputation of his left arm from above the elbow, that in consequence he had become unfit for the work of carpenter as carpentery cannot be carried on with one hand only, and that, therefore, the respondent had lost 100% of his earning capacity, that is, that he suffered total disablement.
He also ordered the payment of penalty under section 4A(3) together with interest at 6 per cent per annum.
The appellant 's writ petition to the High Court challenging the order was dismissed.
In appeal to this Court, it was contended, (1) that the amputation was of the nature referred to in item 3 of Part II of Sch.
I of the Act and must therefore be deemed to have resulted only in permanent partial disablement, and (2) that the Commissioner erred in imposing a penalty, as com pensation had not fallen due until it was settled by the Commissioner under section 19.
Dismissing the appeal.
^ HELD: (1) The finding of the Commissioner that there was total disablement was correct.
The argument with reference to item 3 of Part II of Sch I was a new case which could not be allowed to be raised by the appellant because the facts relied on had not been admitted or established.
[874G H] (2) The Commissioner was fully justified in ordering the Payment of penalty and interest.
[875A] (a) Section 3(1) of the Act provides that an employer shall be liable to pay compensation if personal injury is caused to a workman by accident arising out of and in the course of his employment.
Therefore under section 4A(1) it was the duty of the appellant to pay the compensation at the rate provided in section 4, as soon as the personal injury was caused to the respondent.
Not only did the appellant not do so or even make a provisional payment under section 4A(2), he took the false pleas that the respondent was a casual contractor and that the accident was caused solely by the respondent 's own negligence, and raised frivolous objections before the Commissioner that he had no jurisdiction and even prevailed on the respondent to file a memorandum of agreement settling the claim at a grossly inadequate sum.
He was therefore liable to pay the penalty and the interest.
[875B, E H] (b) There is nothing in section 10 which provides that if any question arises in any proceeding under the Act as to the liability of any person to pay company on or as to the amount or duration of the compensation it shall, in default 873 of agreement, be settled by the Commissioner to justify the argument that appellant 's liability to pay compensation was suspended until after the settlement under section 19.
[815 CE]


judgement:
Civil Appeal Nos. 354 and A 355 of 1971.
From the Judgment dated 28th October 1970 of the Punjab and Haryana High Court at Chandigarh in L.P.As.
Nos. 85 and 86/70.
M. N. Phadke, P. C. Bhartari and K. K. John for the Appellant (in both the appeals).
section K. Mehta, K. R. Nagaraja, M. Qarnaruddin and P. N. Puri for Respondent No. 1 (In CA 354) and Respondents Nos. 1 and 2 (in C.A. 355) Naunit Lal and R. N. Sachthey for Respondent 2 in CA 354 and respondent 3 in CA 355.
The Judgment of the Court was delivered by KHANNA, J.
This`judgment would dispose of two civil appeals Nos. 354 and 355 of 1971 which have been filed on certificate by Tuhi Ram Sharma appellant against the Full Bench judgment of the Punjab and Haryana High Court.
The appellant joined service as Agricultural Inspector in the Agricultural Department of Punjab Government in 1945.
Teja Singh, Bhale Ram and Prithvi Singh joined as Agricultural Inspector in the said Agricultural Department on different dates between 1950 and 1958.
The appellant was confirmed as Agricultural Inspector in 1959.
On May 20, 1961 the appellant was appointed against a temporary post of Block Development and Panchayat officer in the Development Department of the State.
By order dated October 28, 1966 the appellant was made substantive permanent Block Development and Panchayat officer with effect from April 1, 1964.
As a result of partition of Punjab the appellant as well as Teja Singh, Bhale Ram and Prithvi Singh were allocated to the State of Haryana.
On February 26, 1969 the Governor of Haryana passed an order deconfirming the appellant on his request from the post of Block Development and Panchayat officer with effect from that date.
On March 20, 1969 the Governor of Haryana passed the impugned order which reads as under: "The Governor of Haryana is pleased to promote temporarily Shri Tuhi Ram Sharma, Agricultural Inspector, now working as Block Development and Panchayat officer as District Agricultural officer in H.A.S. Class IT subject to the approval of the Haryana Public Service Commission and to post him at Rohtak in place of Shri Narain Singh who is transferred to Narnaul as District Agricultural officer, Shri Prithvi Singh who is working against the post of District Agricultural officer, Narnaul is reverted to the post of Agricultural Inspector being the junior most.
718 The character roll file of Shri Tuhi Ram in two parts is sent herewith.
Its receipt may please be acknowledged.
" Two writ petitions were filed praying the quashing of the above order.
one petition was filed by Prithvi Singh respondent and the other was filed by Bhale Ram and Teja Singh respondents.
Learned single Judge (Tuli J.) as per judgment dated January 30, 1970 allowed both the writ petitions and quashed the impugned order on the following two grounds: "(i) the impugned promotion had been made in violation of the mandatory requirements of rule 7 of the Haryana Agricultural Service Class II Rules, 1947 (hereinafter called the 1947 rules) which required appointment being made to the service by promotion by selection on the advice of Haryana Public Ser vice Commission inasmuch as Sharma had been promoted without obtaining the advice of the Commission which head to be taken before the selection for promotion was made, and not after having promoted Sharma, and (ii) in view of the binding earlier Division Bench judgment of this Court in Labhu Ram & ors.
vs The State of Punjab and Ors.
it was held that Sharma had on his confirmation as Block Development and Panchayat officer on October 28, 1966 (with effect from April 1, 1964, vide Annexure A) in the Development Department of the Haryana State, ceased to be a member of the Haryana Agricultural Service from which post alone he could have been promoted to the post in question, and his lien on the post of Agricultural Inspector automatically stood terminated under Rule 3.12 of the Punjab Civil Services Rules Volume I, Part I." It was also observed by learned single Judge that but for the earlier Division Bench judgment in the case of Labhu Ram & Ors.
vs State of Punjab, he would have been inclined to hold in favour of Sharma appellant on the second point mentioned above.
Four Letters Patent appeals were filed against the judgment of the single Judge.
Two of those appeals were by Sharma appellant, while the other two were filed by the State of Haryana.
When the appeals came up for hearing before the Division Bench, the learned Judges referred the matter to the Full Bench.
In the meantime, on March 5, 1970 the Governor of Haryana in consuitation with the Haryana Public Service Commission promoted Sharma appellant as District Agricultural officer in Class II on regular basis and posted him as such with effect from April 1, 1969.
All the learned Judges constituting the Full Bench held that the first ground on which the impugned order had been quashed, namely, non procuring of the advance advice of the 719 Haryana Public Service Commission was not well founded.
It was also observed that the earlier case of Labhu Ram was clearly distinguishable and had no bearing.
By a majority of two to one the Full Bench upheld the judgment of the single Judge on the second ground, namely, that the lien of the appellant on the post of Agricultural Inspector had automatically been terminated.
It is the above conclusion of the majority which has been as .
sailed in these two appeals before us.
Mr. Phadke on behalf of the appellants has invited our attention to the relevant rules on the subject and has contended that the conclusion of the majority of the learned Judges of the Full Bench that the lien of the appellant on the post of Agricultural Inspector had stood terminated is not well founded.
As against that, Mr. Nagaraja has canvassed for the correctness of the above view of the learned Judges of the High Court.
After hearing the learned counsel for the parties, we are of the opinion that there is considerable merit in the contention of Mr. Phadke.
We may at the outset reproduce the relevant rules of the Punjab Civil Service Rules, Volume I, Part I as applicable to the State of Haryana: "3.12.
Unless in any case it be otherwise provided in these Rules, a Government servant on substantive appoint appointment to any permanent post acquires a lien on that post and cases to hold any lien previously acquired on any other post.
E, 3.14.
(a) A competent authority shall suspend the lien of a Government servant on a permanent.
post which he holds substantively; if he is appointed in a substantive capacity.
(1) . . . . (2) to a permanent post outside the cadre on which he is borne, or (3) . . . . . . . . . . . 3.15.
(a) Except as provided in clause (c) of this rule and in note under rule 3.13, a Government servant 's lien on a post may, in no circumstances, be terminated, even with his consent, if the result will be to leave him without a lien or a suspended lien upon a permanent post.
(b) In a case covered by sub clause (2) of clause (a) of rule 3.14 the suspended lien may not, except on the written request of the Government servant concerned, be 720 terminated while the Government servant remains in Government service.
(c) Notwithstanding the provisions of rule 3.14(a), the r lien of a Government servant holding substantively a permanent post shall be terminated while on refused leave granted after the date of compulsory retirement under rule 8.21; or on his appointment substantively to the post of Chief Engineer of the Public Works Department.
In a case covered by rule 3.14(a)(2), where a Government servant is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne, rule 3.15(b) precludes permanently the termination of his suspended lien unless and until a written request to this effect is received from him.
The result is that it is possible for such a Government servant to stop his suspended lien being removed from the parent cadre indefinitely and, thus cause inconvenience to the parent office.
Such a situation may be met by appropriate executive action being taken by the controlling officer who may re fuse his consent to such a Government servant being can firmed or retained in a permanent post outside his cadre unless he agrees to his lien on a permanent post in his parent office being terminated.
" The learned Judges constituting the majority of the Full Bench 3: in holding that the appellant 's lien on the post of Agricultural Inspector had stood terminated relied upon rule 3.12.
Perusal of the above rule shows that normally a Government servant on substantive appointment to any permanent post acquires a lien on that post and ceases to hold any lien previously acquired on any other post.
The opening words of the above rule, however, show that it would apply unless it be otherwise provided in the rules.
Rule 3.14(a)(2) carves out an exception to the general rule contained in rule 3.12.
According to rule 3.14(a)(2), a competent authority shall suspend the lien of a Government servant on a permanent post.
which he holds substantively if he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne.
When the appellant was appointed was Block Development and Panchayat officer in a substantive permanent capacity, his case squarely fell within the ambit of rule 3.14(a)(2) as the post of Block Development and Panchayat officer was outside the cadre of Agricultural Inspectors to which the appellant belonged: In the circumstances, it was imperative for the competent authority to suspend the lien of the appellant on the permanent post of Agricultural Inspector which he had held substantively.
The competent authority, however, failed to suspend the lien of the appellant on the post of Agricultural Inspector.
The appellant plainly cannot suffer because of such inaction or omission on the part of the competent authority.
A reading of the rule leaves no doubt that a duty is cast upon the competent 721 authority to suspend the lien of a Government servant on a permanent post which he holds substantively if he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne.
The imperative nature of the rule is also clear from the use of the word "shall" in clause (a) as against the use of the word "may" in clause (b) of that rule.
The appellant, in our opinion, cannot be penalised because of the omission of the competent authority to it in accordance with the mandatory provisions of rule 3.14 (a)(2).
Clause (b) of rule 3.15 also makes it clear that in a case covered by sub clause (2) of clause (a) of rule 3.14, the suspended lien of the Government servant concerned may not, except on the written request of that Government servant, be terminated while he remains in Government service.
The note to rule 3.15 shows a way out in case any difficulty is experienced on account of the operation of rule 3.14(a) (2).
It is nobody 's case that any written request was made by the appellant for terminating his suspended lien on the post of Agricultural Inspector.
As such, we find it difficult to uphold the finding of the majority of the learned Judges that the.
lien of the appellant on the post of Agricultural Inspector had stood terminated.
In our opinion, the third Judge who was in the minority took a correct view of the matter when he observed that the Government servant is not to be penalised and cannot be deprived of the safeguards provided by rule 3.14 because of the fact that the competent authority had not taken the necessary steps.
As the Governor has deconfirmed the appellant from the post of Block Development and Panchayat officer, the suspended lien of the appellant on the post of Agricultural Inspector would stand revived with effect from February 26, 1969.
The promotion of the appellant in the parent Agricultural Department from the post of Agricultural Inspector to that of District Agricultural officer by the impugned order cannot in the circumstances be held to suffer from any legal infirmity.
We accordingly accept the two appeals, set aside the judgments of the learned single Judge and the Full Bench and dismiss the writ petitions filed by Prithvi Singh, Bhale Ram and Teja Singh respondents.
The parties in the circumstances shall bear their own costs throughout.

summary:
While holding the post of Agricultural Inspector in the Agricultural Department, the appellant was appointed against a temporary post of Block development and Panchayat officer in the Development Department of the State, and was confirmed in that post with effect from April 1, 1964.
As a result of the partition of Punjab, the appellant and the respondents (who were also Agricultural Inspectors) were allocated to the State of Haryana.
On February 26, 1969 at the request of the appellant, the Governor of Haryana deconfirmed the appellant from the post of Block Development and Panchayat officer with effect from that date.
On March.
20, 1969, the Governor passed an order promoting the appellant temporarily as District Agricultural officer describing him as "Agricultural Inspector, now working as Block Development and Panchayat officer".
The respondents challenged the order, and the High Court allowed their writ petition holding that the appellant 's lien on the post of Agricultural Inspector from which post alone he could have been promoted to the post of District Agricultural officer automatically stood terminated under r. 3.12 Punjab.
Civil Service Rules, on his confirmation as Block Development officer.
Allowing the appeal to this Court, ^ HELD: Under r. 3. 12 normally, a Government servant, on substantive appointment to any permanent post, acquires a lien on that post and ceases to hold any lien previously acquired on any other post.
But, the opening words of the rule show that it would apply unless it is otherwise provided in the Rules.
Rule 3.14 (a) (2) provides otherwise by carving out an exception.
It provides that a competent authority shall suspend the lien of a Government servant on a permanent post which he holds substantively, if he is appointed in d substantive capacity to a permanent post outside the cadre on which he is borne.
When the appellant was appointed as Block Development and Panchayat officer in a substantive permanent capacity, his case fell squarely within the ambit of r. `3 14(a) (2) as, the post of Block Development and Panchayat officer was outside the cadre of Agricultural Inspectors to which the appellant belonged.
The use of the word "shall" in cl.
(a) against the use of the word "may" in cl.
(b) of the rule shows that it was imperative for the competent authority to suspend the lien of the appellant on the permanent post of Agricultural Inspector which he held substantively.
He should not suffer because of the competent authority 's failure to do so.
[720 E, H, 721 A] Further, under r. 3.15, in a case covered by r. 3.14 (a) (2) the suspended lien of a Government servant may not, except on the written request of the Government servant,`be terminated while he remains in Government service; but no written request was made by the appellant in the presnt case for terminating his suspended lien on the post of Agricultural Inspector.
[712 B, C] Therefore, when the Governor deconfirmed the appellant from the post of Block Development and Panchayat officer, the suspended lien of the appellant on the post of Agriculture Inspector stood revived with effect from February 26, 1969, and his promotion in his parent Agricultural Department from the post of Agricultural Inspector to that of District Agricultural officer by the impugned order, does not suffer from any legal infirmity.
[721 D E] 717


judgement:
Civil Appeals Nos.
133 188 of 1975.
[Appeals by Special Leave from the Judgments and Orders dated the (1) 29 4 1970, (2) 28 7 1970, (3) 12 3 1970, (4) 28 7 1970, (5) 7 9 1970, (6) 7 4 1970 & (7) 12 3 1970 of the Madras High Court at Madras in (1) W.P. Nos.
2929, 3253 and 68, 123 and 260 of 1970, (2) W.P. Nos.
1606 and 1607/70, (3) W.P. Nos.
1998, 2484, 2567, 2568, 2569, 2663 65, 3046, 3125, 3126, 3182, 3363 65, 3410, 3508, 3555 60, 3630, 3631, 3667 3668, 3810 3812 and 869 3650 of 1969, (4) W.P. Nos.
2647, 2648/69 and 1121, 1451, 1452 and 1495 and 1496 of 1970, (5) W.P. Nos.
1912, 1913, 1919, 2123, 2318, 2516 and 2610 of 1970, (6) W.P. Nos.
2088, 2317 and 2515/70 and (7) W.P. No. 3666 of 1969 respectively.
Niren De, Attorney General of India and R. N. Sachthey, for the Appellants.
M. R. M. Abdul Karim and Shaukat Hussain for the Respondents (In Cas.
Nos. 137, 140, 149, 152 155, 164, 169, 178, 179, 181, 182, 183 and 187/75.) Mrs. section Gopalakrishnan for the Respondents (In CA No. 177 of 1975).
The Judgment of the Court was delivered by RAY, C.J.
These appeals arise out of the judgment dated 11th December, 1968 in writ petition No. 3838 of 1968 in the High Court at Madras.
In the present appeals the writ petitions in the High Court were allowed following the judgment of the High Court in the aforesaid writ petition No. 3838 of 1968.
In Civil Appeals No. 262 273 of 1971 arising out of the common judgment dated 11 December, 1968 of the High Court at Madras in writ petition No. 3838 of 1968 this Court in the decision in Union of India & Anr.
vs M/s Parameswaran Match Works etc.
set aside the orders of the High Court and dismissed the writ petitions.
The present appeals were not heard at that time because service was not complete.
This Court by order dated 14 July, 1975 directed that these appeals be listed for hearing on 21 November, 1975.
The Union made an application for consolidation of appeals, reduction of security and early hearing of the appeals.
The respondents were served in that application.
Pursuant to that application this Court ordered on 14 July, 1975 the hearing of the appeals on 21 November, 1975.
The respondents have entered appearance in all these appeals.
In these appeals the respondents who were petitioners in the High Court asked for a writ of prohibition restraining the appellants from collecting any duty in excess of Rs. 3.75 per gross from the petitioners in pursuance of notification dated 21 July, 1967 as amended by notification dated 4 September, 1967.
The case of the respondents in the High Court was that they filed declaration on 22 December, 1969 for 1969 70 that they would not produce more than 75 million match sticks during the financial year.
The respondents claimed to be entitled to the concessional 870 rate of excise duty at Rs. 3.75 per gross pursuant to the notification dated 21 July, 1967.
The further case of the respondents in the High Court was that the notification dated 4 September, 1967 was issued stating that the concession of Rs. 3.75 per gross would be available to such "D" Class manufacturers who had filed the declaration before 4 September, 1967.
The respondents challenged the fixing of the date 4 September, 1967 as an arbitrary time limit making unreasonable discrimination between the same category of manufacture simply on the basis of the application being before or after 4 September, 1967.
The respondents craved reference to the judgment of the High Court in writ petition No. 3838 of 1968 dated 11 December, 1968 and prayed for orders in terms of that judgment.
The High Court accepted the petition of the respondents following the judgment in writ petition No. 3838 of 1968 dated 11 December, 1968.
The appellants challenged the decision of the High Court and relied on the decision of this Court in M/s Parameswaran Match Works case (supra).
This Court in M/s Parameswaran Match Works case (supra) held that the purpose of the notification dated 4 September, 1967 was to enable bonafide small manufacturers of matches to earn a concessional rate of duty by filing the declaration.
The small manufacturers whose estimated clearance in a year was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible because they would become entitled to the concessional rate of duty on their clearance from time to time.
The purpose of the notification was to prevent larger units who were producing or clearing more than 100 million matches in a year and who could not have made a declaration from splitting up into smaller units in order to avail of the concessional rate of duty by making the declaration subsequently.
The classification founded on a particular date was held to be reasonable because the choice of a date was to protect the smaller units in the industry from competition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation, the larger units could become the ultimate beneficiaries of the bounty.
Counsel for the respondents relied on an observation of this Court in M/s Parameswaran Match Works case (supra) at page 576 of the Report to the effect that the manufacturers who came to the field after 4 September, 1967 were entitled to concessional rate of duty if they satisfied the condition prescribed in clause (d) of the notification dated 4 September, 1967.
In M/s Parameswaran Match Works case (supra) the match works asked for a licence on 5 September, 1967 for manufacturing matches stating that it began the industry from 5 March, 1967 and also filed a declaration that the estimated manufacture for the financial year 1967 68 would not exceed 75 million matches.
Parameswaran Match Works contended there that it was denied the benefit of the concessional rate of duty on the ground that it applied for a licence and filed the declaration on 5 September, 1967 after the expiry of the fixed date.
This Court held that the 871 concessional rate would be availed by them who satisfied the condition laid down in the notification.
The case of the respondents as laid in the petition before the High Court was that they were claiming an order in terms of the judgment in writ petition No. 3838 of 1968.
There is no allegation in the petition that the respondents came to the field after 4 September, 1967 or that they started manufacturing matches after 4 September, 1967.
The notification dated 4 September, 1967 gave relief, inter alia, to factories mentioned in sub clause (d) of the notification.
The factories mentioned in sub clause (d) are those "whose production during any financial year does not exceed or is not estimated to exceed 100 million matches and are recommended by the Khadi and Village Industries Commission for exemption under this notification as a bonafide cottage unit or which is set up by a cooperative society registered under any law relating to cooperative societies for the time being in force".
There are no allegations in the petitions in the High Court that the respondents were recommended by the Khadi and Village Industries Commission for exemption as bonafide cottage units or were set up by cooperative society registered under any law relating to cooperative societies.
No case was made by the respondents in the petitions on the basis of exemption under sub clause (d).
A contention was advanced by the respondents that the Khadi and Village Industries Commission was not competent to make any recommendation as contemplated in sub clause (d) .
Section 15 of the which speaks of the functions of the Commission states in clauses (c), (d), (f), (g) and (h) that the Commission may take steps to provide for the sale and marketing of khadi or of products of village industries, to encourage and promote research in the development of village industries.
to undertake, assist or encourage the development of village industries, to promote and encourage cooperative efforts among manufacturers of khadi and persons engaged in village industries.
Section 15(h) specifically states that the Commission may take steps for ensuring the genuineness of, and for granting certificates to producers of, or dealers in, khadi or the products of any village industry.
These provisions indicate that the Khadi and Village Industries Commission is competent to grant certificates recommending village industries for exemption under clause (d) of the notification dated 4 September, 1967.
The appeals are all covered by the decision in M/s Parameswaran Match Works case (supra).
The appeals are accepted.
The orders of the High Court are set aside and the petitions are dismissed.
There will be one set of costs to the appellants.
P.B.R. Appeals allowed.

summary:
For the purpose of protecting the smaller manufacturers from the cometition of larger manufacturers, the Government of India, by a notification dated 21 July 1967, amended by notification dated 4 September, 1967, declared a concessional rate of duty to those manufacturers who had filed a declaration before 4 September 1967 that their estimated annual clearance would be less than 75 million match sticks.
This Court in Union of India vs Parameswaran Match Works etc. ; setting aside the judgment of the High Court holding that classification was invalid, held the classification founded on a particular date to be reasonable; and the concessional rate would be availed of even by those manufacturers who came to the field after 4 September, 1967 if they satisfied the condition in clause (d) of the notification regarding quantity of matches and are recommended by the Khadi and Village Industries Commission for exemption.
The respondent filed declarations on 22 December, 1967 that they would not produce more than 75 million match sticks during the year 1969 70 and claimed to be entitled to the concessional rate of excise duty.
In appeal to this Court the respondents sought to support the judgment of the High Court on the grounds (i) that they were entitled to the exemption on the basis of clause (d) of the notification; and (ii) that the Khadi and Village Industries Commission was not competent to make any recommendation.
Allowing the appeal, ^ HELD: (1) The appeals are covered by the decision of this Court in Parameswaran Match Works case and no case is made out by the respondents on the basis of exemption under cl.
(d) of the notification.
There is no allegation in the petition that the respondents came into the field after 4 September 1967 or that they started manufacturing the matches after 4 September, 1967 or that they were recommended by the Khadi and Villages Industries Commission mission.
[871 D & B] (2) Under section 15(h) of the the Commission may take steps in ensuring the genuineness of, and for granting certificates to producers of, or dealers in, Khadi or the products of any village industry.
Therefore, the Commission is competent to recommend for exemptions under cl.
(d) of the Notification.


judgement:
ition No. 96 of 1972.
Under Article 32 of the Constitution of India.
I. N. Shroff for the appellant/petitioner.
B. B. Ahuja and section P. Nayar for respondents.
The Judgment of the Court was delivered by SHINGHAL J.
This is a petition under article 32 of the Constitution.
Bhupendra Ratilal Thakkar, petitioner No. 1, is the managing partner of the other petitioner M/s Rajnikant Nareshchandra Shroff, which is a partnership firm carrying on the business of "shroffs and bankers".
Its principal place of business is said to be at Mehmadabad, with branches at Surat and Bombay.
The petitioners applied for registration of the firm on April 7, 1971, and had time to file their return of income upto June 30, 1972.
It has been claimed that the firm had large sums of money in cash as well as 'hundis ' and other bills of exchange which formed its stock in trade and that there was no justification for thinking that it would not do what was required to be done under the law relating to income tax.
The firm had a sum of Rs. 12,00,000/ as cash on January 10, 1972, which is said to have been duly entered in its books of account in the Bombay branch office.
The grievance of the petitioners is that some of the 892 respondents entered these premises on January 10, 1972, "in purported exercise of the powers conferred by section 132", and seized the sum of Rs. 12,00,000/ along with the books of account and other documents.
Searches are also said to have been carried out in Mehmedabad office and the branch office at Surat, and some more books of account, papers and documents are said to have been seized there.
The petitioners have stated that as the sum of Rs. 12,00,000/ was the stock in trade of the firm, and it had not been secreted, there was no justification for the seizure of the money or the books and the other documents.
They have accordingly stated that the seizure was an abuse of the authority conferred by sections 132 and 132 A of the Income tax Act, 1961, hereinafter referred to as the Act, and rules 112, 112 A, 112 B, 112 C and 112 D of the Income tax Rules, 1962, hereinafter referred to as the Rules.
The petitioners have contended that sections 132 and 132 A of the Act are unconstitutional because they are violative of articles 14, 19(1)(f) and (g) and 31(1) of the Constitution.
It has also been urged that the aforesaid rules are illegal as they are not backed by any legal authority.
The aforesaid provisions have also been challenged on the ground that they are violative of article 14.
In regard to sections 132 and 132 A of the Act, the petitioners have further stated that they should be struck down as they confer naked, arbitrary, unguided, discriminatory and uncanalised power on the executive authority.
The petitioners have also prayed for the restoration of the property which has been seized by the income tax authorities.
It has been pointed out in the petition that three similar writ petitions were pending in this Court, including writ petition No. 446 of 1971.
Pooran Mal vs Director of Inspection Investigation.
The respondents have admitted the search and the seizure of the property, but have stated that this was done because the Commissioner of Income tax, Gujarat I, respondent No. 1, had reasons to believe that the petitioners would not produce their books of account etc.
even though they would be useful to the department for taking proceedings under the Act.
It has also been stated that there was enough material before the Commissioner for exercising the power under section 132(1) of the Act.
The respondents have made specific averments in this connection including the averment that books of account were unreliable, and that the claim that the sum of Rs. 12,00,000/ was shown as balance in the books of account was incorrect.
They have also denied the allegation that any search was carried on in the Mehmedabad head office of the petitioner firm or that the sum of Rs. 12,00,000/ was kept as the firm 's stock in trade or that the firm was left with no other money whatsoever.
The petitioners ' contention against the legality of sections 132 and 132 A of the Act and the Rules has also been controverted.
It will be recalled that in their writ petition the petitioners have made a specific reference to Pooran Mal 's writ petition No. 446 of 1971.
That case has been heard and decided by this Court on December 14, 1973 and the decision has been reported in Pooran Mal 893 etc.
vs Director of Inspection (Investigation) of Income Tax, New A Delhi and others Mr. Shroff has frankly conceded that the points which have been raised in this petition have been considered in that case, and that he has nothing to say in regard to the validity of sections 132 and 132 A of the Act and rules 112 and 112 A of the Rules or the averments in the petition in that connection.
In fact it has been held by this Court in Pooran Mal 's case that "it was impossible to hold that the impugned provisions were violative of articles 14, 19 or 31.
" All that Mr. Shroff has argued is that the validity of rules 112 B and 112 C of the Rules was not the subject matter of examination in Pooran Mal 's case and that it would be necessary for this Court to examine that part of the controversy, as and when it is permissible to do so, with reference to the provisions of article 14 of the Constitution.
We have gone through rules 112 B and 112 C of the Rules.
Rule 112 B relates to the release of the articles seized under section 132(5) of the Act, and merely provides that where, in pursuance of that section, any assets or part thereof have to be released, the Income tax officer shall forthwith deliver the same to the person from whom custody they were seized.
Rule 112 C provides for the release of the remaining assets, and it is to the effect that they shall be made out or paid to the person from whose custody they were seized, after the discharge of the liabilities referred to in cl (i) of sub section (1) of section 132 A of the Act.
Both these are therefore beneficial rules, and there can be no satisfactory reason for challenging their validity with reference to article 14 of the Constitution.
So when the present case is not different from Pooran Mal 's case, there is no merit in this writ petition.
It is hereby dismissed.
There will however be no order as to costs.
P.H.P. Petition dismissed.

summary:
The petitioners carry on business as Shroffs and Bankers.
The Income tax Department searched various premises of the petitioners and seized a sum of Rs. 12 lakhs in cash from the petitioners, under section 132 and 132A of the Income tax Act.
The petitioners contended that the said amount represented the stock in trade of the petitioners.
The petitioners also contended that the provisions of section 132 and 132A of the Income tax Act, 1961, as well as rules 112, 112A, 112B and 112C of the Income Tax Rules, 1962, were unconstitutional as violative of Article 14, 19(1)(f) and (g) and 31(1) of the Constitutional.
Section 132 and 132A were further challenged on the ground of conferring naked, abitrary, unguided, discriminatory and uncanalised power on the executive authority.
Dismissing the petition, ^ HELD: (1) This Court has already upheld in Pooran Mal 's case the validity of section 132 and 132A as well as rules 112 and 112A. [893 A & C] (2) Rules 112B and 112C relate to the release of the articles seized and are therefore beneficial rules and as such cannot be challenged.
[893D]