judgement:
Appeals Nos. 231 and 232 of 1958.
Appeal by special leave from the judgment and order dated October 21, 1957, of the Madras High Court in Writ Petitions Nos. 675 and 676 of 1957.
R. Ganapathy Iyer, section B. Adityan and G. Gopalakrishnan, for the appellant.
A. N. Sinha and P. K. Mukherjee, for respondent No. 1. 1958.
November 24.
, J. These appeals raise a question of considerable importance as to the scope of an enquiry in an election petition wherein election is called in question under section 100(1)(c) of the Representation of the People Act, 1951 (43 of 1951), on the ground that a nomination paper had been improperly ' rejected.
625 The facts are that during the general elections which were held in 1957 six persons including the,, appellant, Veluswami Thevar, the second respondent ' Chellapandian, and the fourth respondent, Arunachalam, were nominated for election to the Legislative Assembly of the State of Madras from Alangulam Constituency in the District of Tirunelveli At the time of the scrutiny which was on February 1, 1957, Chellapandian raised an objection to the nomination of Arunachalam on the ground that he was the Head Master of the National Training School, Tiruchendur, which was a Government aided school, and that he was therefore disqualified under section 7, cls.
(d) and (e) of the Representation of the People Act, 1951 (hereinafter referred to as the Act), as holding an office of profit under the Government.
In upholding this objection, the returning officer observed: " Sri section Arunachalam is not present at the time of scrutiny of nominations nor any authorised agent of his could take notice of the objection and file a reply. ' In view of the objection which has not been cleared by Sri section Arunachalam by satisfying me that he is not holding an office of profit in a concern in which the State Government has financial interest, the objection is upheld and Sri section Arunachalam is disqualified under Sections 7(d) and (e) of Act 43 of 1951.
Accordingly his nomination is rejected.
" The five nomination papers were accepted; two of the candidates subsequently withdrew from the election; the other three went to the polls, and on March 10, 1957, the appellant who secured the largest number of votes was declared elected.
On April 18, 1957, Raja Nainar, the first respondent, who was not a candidate but a voter filed E. P. No. 109 of 1957 praying that the election of the appellant be declared void on the ground that the rejection of the nomination paper of Arunachalam was improper, because he had ceased to be a Head Master at the time of his nomination, and that further the institution was a private one.
The appellant filed a written statement in which he pleaded that Arunachalam was 79 626 not qualified to be chosen not merely on the ground put forward by Chellapandian before the returning officer but also on the grounds that he was interested as a partner in contracts for the execution of works for the Government, and that further he had entered into an agreement with the District Board, Chittoor, to serve as a teacher in that Board, and that his nomination paper was therefore rightly rejected.
Raja Nainar then came out with the application, 1.
A. No. 5 of 1957, out of which the present proceedings arise, to strike out the additional grounds of disquali fication raised in the statement of the appellant on the ground that the Tribunal had no jurisdiction to enquire into any ground of disqualification which was not taken before the returning officer, and that accordingly the new grounds put forward by the appellant should be struck out.
By its order dated August 17, 1957, the Tribunal held that the question to be decided by it was whether there was a valid nomination paper, and that to decide that, it could go into grounds other than those which were put forward before the returning officer, and, in that view, dismissed the application.
The correctness of this order was challenged by Raja Nainar in two Writ Petitions Nos. 675 and 676 of 1957, preferred under article 226.
Therein, he repeated his contention that it was not competent to the Tribunal to enquire into any but the grounds which had been put forward before the returning officer, and prayed that a writ of certiorari be issued to quash the order in 1.
A. No. 5 of 1957 and a writ of prohibition, to restrain the Tribunal from enquiring into the new grounds raised by the appellant.
These applications were heard by a Bench of the Madras High Court consisting of Rajagopalan and Rajagopals Ayyangar, JJ., who upheld the contention of the petitioner, and stated their conclusion in these terms: " We are clearly of opinion that the enquiry before the Tribunal must be restricted to the objections which the returning officer had to consider and decide, but not necessarily to the material placed 627 before the returning officer at the stage of the summary enquiry.
The Tribunal has jurisdiction to adjudicate upon the truth and validity of those objections on relevant material, even if that material be other than that placed before the returning officer.
The Tribunal has no jurisdiction to investigate the truth or validity of the objections which were not put forward before the returning officer, and which he had therefore no occasion to consider.
Once again we have to point out that we are discussing only the position of a candidate whose nomination was rejected, and not, for instance, that of a returned candidate." " A further objection was also taken before the learned judges that as the decision of the Election Tribunal was open to appeal under section 116A of the Act, the court should, in exercise of its discretion under article 226, decline to entertain writ petitions against interlocutory orders.
But the learned judge held that as the Tribunal had no jurisdiction to entertain grounds other than those which were put forward before the returning officer, writs could issue under article 226.
In the result, they quashed the order of the Election Tribunal in 1.
A. No. 5 of 1957, and issued a writ of Mandamus directing it to dispose of the application afresh in accordance with law as laid down in the judgment.
It is against this judgment that the present appeals have been preferred on leave granted by this Court under article 136, and the point that arises for decision is whether in an election petition questioning the propriety of the rejection of a nomination paper under section 100(1)(c) of the Act, it is open to the parties to raise grounds of disqualification other than those put forward before the returning officer.
It will be convenient at this stage to refer to the provisions of the Act hearing on this question.
Section 32 of the Act provides that, "Any person maybe nominated as a candidate for election to fill a seat if he is qualified to be chosen to fill that seat under the provisions of the Constitution and this Act.
" Under section 33(1), the candidate is to deliver to the returning officer a nomination paper completed in the 628 prescribed form and signed by the candidate and by an elector of the constituency as proposer.
Section 33 (4) enacts that, " On the presentation of a nomination paper, the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the nomination paper are the same as those entered in the electoral rolls: Provided that the returning officer shall permit any clerical or technical error in the nomination paper in regard to the said names or numbers to be corrected in order to bring them into conformity with the corresponding entries in the electoral rolls; and where necessary, direct that any clerical or printing error in the said entries shall be overlooked.
" Section 35 provides inter alia that the returning officer shall cause to be affixed in some conspicuous place in his office a notice of the nomination containing descriptions similar to those contained in the nomination paper both of the candidate and of the proposer.
Section 36, omitting what is not material, is as follows: 36.
(1) " On the date fixed for the scrutiny of nominations under section 30, the candidates, their election agents, one proposer of each candidate, and one other person duly authorized in writing by each candidate, but no other person, may attend at such time and place as the returning officer may appoint; and the returning officer shall give them all reasonable facilities for examining the nomination papers of all candidates which have been delivered within the time and in the manner laid down in section 33.
(2) The returning officer shall then examine the nomination papers and shall decide all objections which may be made to any nomination, and may, either on such objection or on his own motion, after such summary inquiry, if any, as he thinks necessary, reject any nomination on any of the following grounds: (a) that the candidate either is not qualified or is disqualified for being chosen to fill the seat under any of the following provisions that may, be applicable, namely 629 Articles 84, 102, 173 and 191, Part 11 of this Act, or (b) that there has been a failure to comply With any of the provisions of section 33 or section 34; or (c) that the signature of the candidate or the pro.
poser on the nomination paper is not genuine. . . . . . . . . . (5) The returning officer shall hold the scrutiny on the date appointed in this behalf under clause (b) of section 30 and shall not allow any adjournment of the proceedings except when such proceedings are interrupted or obstructed by riot or open violence or by causes beyond his control: Provided that in case an objection is made the candidate concerned may be allowed time to rebut it not later than the next day but one following the date fixed for scrutiny, and the returning officer shall record his decision on the date to which the proceedings have been adjourned.
(6) The returning officer shall endorse on each nomination paper his decision accepting or rejecting the same ania, if the nomination paper is rejected, shall record in writing a brief statement of his reasons for such rejection.
" Then, we have section 100(1)(c), the construction of which is the main point for determination.
It is as follows: 100.
(1) " Subject to the provisions of subsection (2), if the Tribunal is of opinion (c) that any nomination has been improperly rejected ;. the Tribunal shall declare the election of the returned candidate to be void." Now, the whole controversy between the parties is as to what the expression " improperly rejected " in section 100(1)(c) means.
According to the appellant, when the nomination paper of a candidate who is under no such disqualification as is mentioned in section 36(2) has been rejected, that is improper rejection within section 100(1)(c).
Acoording to the respondent, when the 630 nomination paper of a candidate is rejected by the returning officer on the ground that he is subject to a specified disqualification, the rejection is improper, if it is found that that disqualification does not exist.
If the former view is correct, then the scope of an enquiry before the Tribunal must extend to all matters which are mentioned in section 36(2), and if the latter, then it must be limited to determining whether the ground on which the returning officer has rejected the nomination is well founded.
Now, to decide what the expression " improperly rejected " in section 100(1)(c) precisely imports, it is necessary to examine the relevant provisions of the Act bearing on the question and the setting of the above section therein.
Under section 32 of the Act, any person may be nominated as a candidate for election if he is duly qualified under the provisions of the Constitution and the Act.
Section 36(2) authorises the returning officer to reject any nomination paper on the ground that he is either not qualified, that is, under sections 3 to 7 of the Act, or is disqualified under the provisions referred to therein.
If there are no grounds for rejecting a nomination paper under section 36(2), then it has to be accepted, and the name of the candidate is to be included in a list.
Vide section 36(8).
Then, we come to section 100(1)(c) and section 100(1)(d)(1), which provide a remedy to persons who are aggrieved by an order improperly rejecting or improperly accepting any nomination.
In the context, it appears to us that the improper rejection or acceptance must have refer ence to section 36(2), and that the rejection of a nomination paper of a candidate who is qualified to be chosen for election and who does not suffer from any of the dis qualifications mentioned in section 36(2) would be improper within section 100(1)(c), and that, likewise, acceptance of a nomination paper of a candidate who is not qualified or who is disqualified will equally be improper under s.100(1)(d)(1).Section 32 confers a substantive right on a candidate to be chosen to the legislature subject only to the limitations enacted in articles 84, 102, 173 and 191 of the Constitution and sections 3 to 7 of the Act, and sections 36 and 100 provide the machinery for the exercise and enforcement of that right.
It is a sound 631 rule of construction that procedural enactments should be construed liberally and in such manner as to render the enforcement of substantive rights effective.
Readings section 100(1)(c) in the context of the whole enactment, we think that an enquiry before the Tribunal must embrace all the matters as to qualification and disqualification mentioned in section 36(2), and that it cannot be limited to the particular ground of disqualification which was taken before the returning officer.
It was contended for the respondent that the proceedings before the Tribunal are really by way of appeal against the decision of the returning officer, and that, therefore, the scope of the enquiry in the election petition must be co extensive with that before the returning officer, and must be limited to the ground taken before him.
It was argued that a decision could be said to be improper only with reference to a ground which was put forward and decided in a particular manner by the returning officer, and that therefore the expression " improperly rejected " would, in its true connotation, restrict the scope of the enquiry before the Tribunal to the ground taken before the returning officer.
We are unable to agree with this contention.
The jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 100(1)(c) is not in the nature of an appeal against the decision of the returning officer.
An election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Act.
The respondents have a right to file written statements by way of reply to it; issues have to be framed, and subject to the provisions of the Act, the provisions of the Code of Civil Procedure regulate the trial of the petition.
All the parties have the right to adduce evidence, and that is of the essence of an original proceeding as contrasted with a proceeding by way of appeal.
That being the character of the proceedings, the rule applicable is that which governs the trial of all original proceedings; that is, it is open to a party to put forward all grounds in support of or negation of the claim, subject only to such limitations as may be found in the Act.
632 It should be noted in this connection that if a petition to set aside an election on the ground of improper rejection of a nomination paper is in the nature of an appeal against the decision, of the returning officer, then logically speaking, the decision of the Tribunal must be based only on the materials placed before the returning officer given with respect to the ground which was urged before him, and no fresh evidence could be admitted before the Tribunal except in accordance with 0. 41, R. 27.
The learned judges in the court below, however, observe that though the enquiry before the Tribunal is restricted to the particular ground put forward before the returning officer, it is not restricted to the material placed before him, and that all evidence bearing on that ground could be adduced before the Tribunal.
This, in our view, is quite correct.
The enquiry which a returning officer has to make under section 36 is summary in character.
He may make " such summary enquiry, if any, as he thinks necessary "; he can act suo motu.
Such being the nature of the enquiry, the right which is given to a party under section 100(1)(c) and section 100(1)(d)(1) to challenge the propriety of an order of rejection or acceptance of a nomination paper would become illusory, if the Tribunal is to base its decision only on the materials placed before the returning officer.
It was contended for the respondent that even with reference to the ground taken before the returning officer, no evidence other than what was placed before him could be brought before the Tribunal, and he relied on the following observations of the learned judges in Charanjit Lal vs Lehri Singh (1) : " Whether a nomination has been improperly rejected or not, has to be considered in relation to the state of evidence before the returning officer at the time of the scrutiny.
The testimony of the returning officer shows that he rejected the nomination, because it did not appear to him that on the question of age the candidate Shri Pirthi was qualfied to stand for election ' " (1) A. I. R. 1958 punj.
633 There,, a nomination paper had been rejected by the returning officer on the ground that the candidate did,, not appear to possess the age qualification required by article 173.
The correctness of this order was challenged in an election petition.
Evidence was taken as to the age of the candidate in this petition, and eventually it was held that the order of the returning officer was right.
In the order of rejection, the returning officer also stated: " The nomination is rejected as the age is not mentioned in the nomination paper.
Neither the candidate nor the proposer or any person duly authorised on his behalf is present to testify to his age.
" Now, the argument before the High Court was that the failure to mention the age in the nomination paper was a formal defect which should have been condoned under section 36(4) of the Act.
The learned judges held that the defect was not merely one of failure to mention the age but of want of the requisite qualification in age, and that that could not be cured under section 36(4).
In this context, the observations relied on could not be read as meaning that no evidence could be adduced even in respect of a ground which was urged before the returning officer, as, in fact, evidence was taken before the Tribunal and a finding given, and if they meant what the respondent suggests they do, we do not agree with them.
It is to be noted that in many of the cases which came before this Court, as for example, Durga Shankar Mehta vs Thakur Raghuraj Singh and others (1), the finding of the Tribunal was based on fresh evidence admitted before it, and the propriety of such admission was never questioned.
And if the true position is, as we have held it is, that it is open to the parties to adduce fresh evidence on the matter in issue, it is difficult to imagine how the proceedings before the Tribunal can be regarded as in the nature of appeal against the decision of the returning officer.
In support of his contention that it is only the ground that is urged before the returning officer that (1) [1955] 1 S.C.R. 267.
80 634 can be raised before the Tribunal, Mr. Sinha, learned counsel for the respondent, relies on the provision in section 36(6) that when a nomination paper is rejected, the returning officer should record his reasons therefor.
The object of this provision, it is argued, is to enable the Tribunal to decide whether the order of the returning officer is right or not, and by implication it confines the scope of the enquiry before the Tribunal to the ground put forward before the returning officer.
This contention is, in our opinion, unsound.
Now, when a nomination paper is accepted, section 36(6) does not require that any reason should be recorded therefor.
If the contention of the respondent is right, it would follow that acceptance of a nomination paper can never be questioned.
But that would be against section 100(1)(d)(1), and it must therefore be held that an acceptance can be questioned on all the grounds available under section 36(2).
Section 100(1)(d)(1) deals with improper acceptance of a nomination paper, and if the word " improper " in that provision has reference to the matters mentioned in section 36(2), it must have the same connotation in section 100(1)(c) as well.
The word " improper " which occurs in both section 100(1)(c) and section 100(1)(d)(1) must bear the same meaning in both the provisions, unless there is something in the context to the contrary, and none such has been shown.
There is another difficulty in the way of accepting this argument of the respondent.
A candidate may be subject to more than one disqualification, and his nomination paper may be questioned on all those grounds.
Supposing that the returning officer upholds one objection and rejects the nomination paper on the basis of that objection without going into other objections, notwithstanding that under section 36(2) he has to decide all the objections, is it open to the respondents in the election petition to adduce evidence on those objections ? According to the respondent, it is not, so that if the decision of the returning officer on the objection on which he rejected the nomination paper is held to be bad, the Tribunal has no option but to set aside the election under section 100(1)(c), even though the candidate was, in fact, disqualified and his nomination paper was rightly rejected.
Mr. Sinha for the respondent concedes that the result would be anomalous, but he says that the Law of Election is full of anomalies, and this is one of them, and that is no reason for not interpreting the law on its own terms.
It is no doubt true that if on its true construction, a statute leads to anomalous results, the Courts have no option but to give effect to it and leave it to the legislature to amend and alter the law.
But when on a construction of a statute, two views are possible, one which results in an anomaly and the other not, it is our duty to adopt the latter and not the former, seeking consolation in the thought that the law bristles with anomalies.
Anomalies will disappear, and the law will be found to be simple and logical, if it is understood that when a question is raised in an election petition as to the propriety of the rejection of a nomination paper, the point to be decided is about the propriety of the nomination and not the decision of the returning officer on the materials placed before him, and that decision must depend on whether the candidate is duly qualified and is not subject to any disqualifications as provided in section 36(2) It remains to deal with one more contention advanced on behalf of the respondent, and that is based on the following observations in Hari Vishnu Kamath vs Syed Ahmad Ishaque and others (1): " Under this provision R. 47(4), the Tribunal is constituted a court of appeal against the decision of the returning officer, and as such its jurisdiction must be co extensive with that of the returning officer and cannot extend further.
" The argument is that if the jurisdiction of the Tribunal is co extensive with that of the returning officer, then the enquiry before it must be confined to the grounds which were urged before the returning officer.
Now, the observations quoted above were made statedly with reference to R. 47, and assuming that they apply to an enquiry under section 100(1)(c), the question still remains, what is the jurisdiction of the returning officer in hearing objections to nomination papers? (31) ; , 1132.
636 His jurisdiction is defined in section 36(2), and the Tribunal must therefore have jurisdiction to decide all the questions which can be raised under that section.
The fact that a particular ground which could have been raised was not, in fact, raised before the returning officer does not put an end to his jurisdiction to decide it, and what he could have decided if it had been raised, could be decided by the Tribunal, when raised.
Mr. Ganapathy Iyer, learned counsel for the appellant, invited our attention to the decisions of the Election Tribunals on the question whether grounds other than those raised before the returning officer could be put forward in an enquiry in an election petition.
They held, with one solitary exception, that it is permissible, and indeed, it is stated in Mengh Raj vs Bhimandas (1) as settled law that the rejection of a nomination paper can be sustained on grounds not raised before the returning officer.
If the legislature which must be taken to have knowledge of the law as interpreted in those decisions wanted to make a departure from it, it would have said so in clear terms, and in the absence of such an expression, it would be right to interpret section 100(1)(c) as not intended to alter the law as laid down in those decisions.
It is now necessary to refer to the decisions which have been cited before us.
In Durga Shankar Mehta 's case (2), the election was to a double member constituency.
The appellant who obtained the largest number of votes was declared elected to the general seat and one Vasantarao, to the reserved seat.
The validity of the election was challenged on the ground that Vasantarao was below the age of 25 years, and was, therefore, disqualified to stand.
The Election Tribunal upheld that objection, and set aside the entire election.
The decision was taken in appeal to this Court, and the point for determination was whether the election of the appellant was liable to be set aside on account of the disqualification of Vasantarao.
It was held that the matter fell within section 100(2)(c) as it then stood and not under section 100(1)(c), and that the election of the appellant could not be declared void.
(1) , 31O. (2) [19551 1 S.C.R. 267.
637 This is not a direct pronouncement on the point now in controversy, and that is conceded.
In Vashist Narain Sharma vs Dev Chandra and others (1), a question was raised as to what would be " improper acceptance " within the meaning of section 100; but in the view taken by this Court, no opinion was expressed thereon.
The question now under consideration came up directly for decision before the High Court of Rajasthan in Tej Singh vs Election Tribunal, Jaipur (2), and it was held that the respondent to an election petition was entitled to raise a plea that the nomination of the petitioner rejected on one ground by the returning officer was defective on one or more of the other grounds mentioned in section 36(2) of the Act, and that such a plea, if taken, must be enquired into by the Election Tribunal.
In Dhanraj Deshlehara vs Vishwanath Y. Tamaskar (3), it was observed by a Bench of the Madhya Pradesh High Court that in determining whether a nomination was improperly rejected, the Election Tribunal was not bound to confine its enquiry to the ground on which the returning officer rejected it, and that even if the ground on which the returning officer rejected the nomination could not be sustained, the rejection could not, be held to be improper if the Tribunal found other fatal defects in the nomination.
An unreported judgment of the Andhra Pradesh High Court in Badrivishal Pitti vs J. V. Narsing Rao (4) has been cited before us, and that also takes the view that in an enquiry before the Election Tribunal, it is open to the parties to support an order of rejection of a nomination paper on grounds other than those which were put forward before the returning officer.
We are in agreement with these decisions.
As the question has also been raised as to the propriety of interfering in writ petitions under article 226 with interlocutory orders passed in the course of an enquiry before the Election Tribunal, we shall express our opinion thereon.
The jurisdiction of the High Court to issue writs against orders of the Tribunal is (1) ; (2) [1954] 9 E.L.R.193 (3) (4) Special Appeal No. 1 Of 1957.
638 undoubted; but then, it is well settled that where there is another remedy provided, the court may properly exercise its discretion in declining to interfere under article 226.
It should be remembered that under the election law as it stood prior to the amendment in1956, election petitions were dismissed on preliminary grounds and the correctness of the decision was challenged in applications under article 226 and in further appeals to this Court, with the result that by the time the matter was finally decided, the life of the legislatures for which the election was held would have itself very nearly come to an end thus rendering the proceedings infructuous.
A signal example of a case of this kind is to be found in the decision reported in Bhikaji Keshao Joshi and another vs Brijlal Nandlal Biyani and others (1).
It is to remedy this defect that the legislature has now amended the law by providing a right of appeal against a decision of the Tribunal to the High Court under section 116 A, and its intention is ' obviously that proceedings before the Tribunal should go on with expedition and without interruption, and that any error in its decision should be set right in an appeal under that section.
In this view, it would be a proper exercise of discretion under article 226 to decline to interfere with interlocutory orders.
In the result, we allow the appeals, set aside the orders of the court below, and dismiss the writ petitions.
filed by the respondent, with costs here and in the court below.
Appeal allowed (1) [1055] 2 S.C.R. 428.

summary:
The nomination paper of the fourth respondent who was one of the candidates for election to the Legislative Assembly of the State, was rejected by the returning officer on the ground that as he was the Headmaster of a Government aided school he was disqualified under section 7(d) and (e) of the Representation of the People Act, 1951, to be chosen for election.
One of the voters of the constituency filed a petition praying that the election of the appellant be declared void under section 100(1)(c) of the Act on the ground that the rejection of the nomination paper of the fourth respondent was improper because the latter had ceased to be a Headmaster at the time of his nomination and that, further, the institution was a private one.
The appellant, who was the second respondent in the petition, contended that the nomination paper of the fourth respondent was rightly rejected not only on the ground put forward before the returning officer but also for the reasons that he was interested in Government contracts and that he had agreed to serve as a, teacher under the District Board.
The question was whether in an election petition challenging the validity of the rejection of a nomination paper under s: 100(1)(c) of the Act, it was open to the parties to raise grounds 624 of disqualification other 'than those put forward before the returning officer.
It was contended for the respondent that the proceedings before the Election Tribunal were really by way of appeal against the decision of the returning officer and that, therefore, the scope of the enquiry in the election petition must be co extensive with that before the returning officer and must be limited to the grounds taken before him.
Held, that an election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Representation of the People Act, 1951, and that the jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 100(1)(c) of the Act is not in the nature of an appeal against the decision of the returning officer.
Held, further, that in considering whether a nomination paper was improperly rejected under section 100(1)(c), the real question for decision would be whether the candidate was duly qualified and was not subject to any disqualifications as provided in section 36(2) of the Act.
The Tribunal would, consequently, be competent to entertain grounds of disqualification other than those put forward before the returning officer.
The expression " improperly rejected " in section 100(1)(c) of the Act, explained.
Mengh Raj vs Bhimandas, , Tej Singh vs Election Tribunal, JaiPur, and Dhanraj Deshlehara vs Vishwanath Y. Tamaskar, (1958) 15 E. L. R. 260, approved.


judgement:
Appeal Nos.
173031/1993.
From the Judgment and Order dated 30.6.1992 and 2.9.1992 of the Jammu and Kashmir High Court in L.P.A. No 161/90.
and C.W. P. No. 1352/88.
D.D. Thakur, M.H. Baig.
Rajendra Mal Tatia, Indra Makwana and K. K. Gupta (for Suresh A. Shroff & Co.) for the Appellants.
V.R. Reddy, Addl.
Solicitor General and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard counsel for the parties.
Leave granted in S.L.Ps. 12608/92 and 16418/92.
The appeals are directed against the judgment of the Division Bench of the Jammu and Kashmir High Court allowing a special appeal preferred by the State of Jammu and Kashmir against the judgement of the learned Single Judge.
The learned Single Judge had allowed the writ petition filed by the appellants herein.
The matter pertains to approval and publication of the select list of District Munsifs prepared by the Jammu and Kashmir Public Service Commission.
On May, 28. 1984 the High court intimated the Government of ten vacancies in the category of munsifs and requested the Government to initiate appropriate steps for selection of candidates.
The government wrote to the public service commission and the latter issued the notification and put the process in motion.
Written test was held in the year 1985.
viva voce was also held.
At that stage, the High Court requested the government (with a copy forwarded to the public service commission) to select twenty candidates in the place of ten.
This was done on December 10, 1985.
The government, in turn, requested the public service commission on December 27, 1985 to select twenty 100 candidates.
On March 11, 1986 the Public Service Commission sent three select lists,.
one containing twenty candidates, the other containing three scheduled castes candidates and a waiting list of ten candidates.
From the record placed before us by the learned counsel for the State of Jammu and Kashmir, it appears that the government received several complaints against the selection process.
The government appears to have been satisfied prima facie with some of those complaints and was toying with the idea of scrapping the entire list and asking for a fresh selection.
The select list sent by the commission was kept pending without being approved as required by Rule 39 of the Jammu and Kashmir Civil Service,, (.Judicial) Recruitment Rules, 1967.
Meanwhile, the High Court had been pressing for approval of the names in view of a number of vacancies and the consequent accumulation of work.
Number of courts were without presiding officers.
In particular, the High Court said, there was urgent need for at least thirteen Munsifs.
In the circumstances, the government approved, on December 23, 1986.
tile names of thirteen persons out of the list recommended by the public service commission and Published the same.
They were appointed on December 30, 1986.
Meanwhile, a writ petition had been tiled in the High Court for a direction to the Government to approve and publish the list recommended by the public Service commission.
On December 30, 1986.
the Advocate General for the State stated before the court that the Government has already approved thirteen entries and that the question of approval of the remaining, persons in the list was under the active consideration of the Government.
Recording the said statement, the writ petition was dismissed as settled.
The Government however, did not approve any of the other names in the lists.
evidently in view of the very same reasons for which they were disinclined initially to approve the said lists.
Meanwhile, the candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list.
The High Court was also addressing the government from time to time to approve the list in view of certain vacancies arising since the appointment of the thirteen Munsifs aforementioned.
Since no further names were being approved by the Government, the writ petition, from which these appeals arise, was filed on September 14, 1988.
The writ petition was allowed on July 11,1990 by a learned Single Judge and a direction was issued to the State Government to approve and publish the list of 101 the remaining candidates submitted by the public service commission to it for appointment as munsifs immediately in accordance with the Rules of 1967 and to consider the appointment of such candidates (including the writ petitioners) as munsifs in the vacancies existing or likely to exist in accordance with the recommendations to be made by the High Court.
On appeal, the Division Bench disagreed with the learned Single Judge.
The Bench held that approval and publication of the select list by the Government under Rule 39 is not a mere ministerial act but a meaningful one.
It is open to the government to examine the select list carefully and to reach its own conclusion regarding the suitability and merits of the candidates and publish the names of only those candidates who are found suitable.
While approving the list, the Division Bench held, the State Government cannot alter or temper with the order of merit determined by the commission but it is certainly open to the government to stop at a particular point where it feels that a particular candidate is not meritorious and not to approve the remaining list.
The government is not bound to fill up the existing vacancies within a particular time frame.
The mere inclusion in the select list also does not confer upon the candidates any indefeasible right to appointment.
The recommendations of the commission are not binding upon the State Government held the Division Bench.
In the facts and circumstances of the case, it must be held that the remaining seven names in the select list have been disapproved by the government.
The writ petition also suffers from leaches.
The persons who had meanwhile become eligible and qualified to apply for the said post should also be given a chance.
A list prepared as far back as 1985 86 cannot be directed to be approved in the year 1992.
In these appeals, it is submitted by the learned counsel for the appellants that once the public service commission prepares and recommends a select list, the government has no power to sit in judgment over it.
It is bound to approve the list as recommended.
The function of the government under Rule 39 of the 1967 Rules is merely ministerial and formal.
Even otherwise, the government has not disclosed any reasons for not approving the seven names while approving the first thirteen.
The government 's action is arbitrary and capricious.
It is indeed vitiated by inadmissible and extraneous considerations.
The government cannot be allowed an absolute power in the matter.
On the other hand, it is contended by Sri Dipankar Gupta, learned Solicitor General appearing for the State of Jammu and 102 Kashmir that the function of the government under Rule 39 is not merely formal or ministerial.
The government being the appointing authority, is entitled to scrutinise the list prepared by the public service commission.
It is open to the government either to approve or disapprove the list either wholly or in part.
As a matter of fact, a large number of complaints were received by the government against the said selection and many of them were also found to be not without substance.
However, in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration.
The remaining seven names were not approved inasmuch as no vacancies were available at that time.
In all the circumstances of the case, the Hon 'ble Chief Minister took a decision on March 28, 1988 not to approve any further names and to go in for fresh selection.
Inasmuch as the vacancies at the end of the year 1986 were not more than thirteen, the refusal to approve the remaining seven is a valid and bonafide exercise of power and discretion on the part of the government.
The appellants have no legal right to be appointed just because their names have been included in the select list prepared by the public service commission.
The first requisition by the High court was sent in May, 1984.
The written test was held in 1985.
The select list was recommended in March, 1986.
After a lapse of more than seven years, the said list cannot now be directed to be given effect to, the learned Solicitor general submitted.
Such a direction would deprive a large number of persons, who have become qualified and eligible to apply and complete for the said post meanwhile of the opportunity of applying for the said post.
Many of them may even become age barred meanwhile, he submitted.
It is true that the government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the government has an absolute power.
Such an argument does violence to the constitutional scheme.
The Constitution has created a public service commission and assigned it the function of Conducting examinations for appointments to the services of the Union or to the services of the State, as the case may be.
According to Article 320 clause (1) this is the primary function of the commission.
The Government is directed to consult the public service commission on all matters relating to methods of recruitment to civil services and to civil posts and on the principles to be followed in making.
appointment to civil services and posts and on the suitability of candidates for 103 such appointment, among other matters.
An examination of Articles 317 to 320 makes it evident that the constitution Contemplates the commission to he an independent and effective body outside the governmental control.
This is an instance of application of the basic tenet of democratic form of government viz., diffusion of governing power, The idea is not to allow the concentration of governing power in the hands of one person, authority or organ.
It is in the light of this constitutional scheme that one has to construe Rules 39 and 41 of the 1967 Rules.
They read as follows: 39.Final List: The list of selected candidates after it is approved shall be published by the Government Gazette and a copy thereof shall be sent to the court along with the Waiting list, if any, furnished by the commission for record in their office.
Security to the list: The list and the Waiting list of the selected candidates shall remain in operation for a period of one year from the date of its publication in the, Govt.
Gazette or till it is exhausted by appointment of the candidates whichever is earlier, provided that nothing in this Rule shall apply to the list and the waiting list prepared as a result of the examination held in 1981 which will in operation till the list or the waiting list is exhausted.
" Construed in the above light, Rule 39, in our opinion, does not confer an absolute power upon the government to disapprove or cancel the select list sent by the public service commission.
Where, however, the government is satisfied, after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration of corruption, favourtism or nepotism, it can refuse to approve the select list.
In such a case, the government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
Indeed, clause (2) of Article 323 obliges the Governor of a State to ray a copy of the annual report received from the 104 commission before the Legislature "together with a memorandum explaining, as respect the cases, if any, where the advice of the commission was not accepted (and) the reasons for such non acceptance.
" Evidently, this is meant as a check upon the power of the government.
This provision too militates against the theory of absolute power in the government to disapprove or reject the recommendations of the commission.
For the same reason, it must be held that the government cannot pick and choose candidates out of the list.
Of course, where in respect of any particular candidate any material is discovered disclosing his involvement in any criminal activity, the government can.
always refuse to appoint such person but this would not be a case touching the select list prepared and recommended by the commission.
It is equally not open to the government to approve a part of the list and disapprove the balance.
In this case, it may be remembered that the government itself had asked for a list of twenty and the commission had sent a list of twenty.
(we are not concerned with the waiting list sent by the commission, at this stage).
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
A reading of Rule 41 makes this aspect clear.
The list remains valid for one year from the date of its approval and publication.
If within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
In this case, no doubt, a number of complaints appears to have been received by the government about the selection process.
We have seen the note file placed before us.
It refers to certain facts and complaints.
But if the government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names) the cannot put forward any ground for not approving the remaining list.
I indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or have disapproved the entire list of twenty.
The objection, the government have pertains to the very process of selection i.e., to the entire list, and not individually to any of the remaining seven candidates.
It is true that mere inclusion in the select list does not confer upon 105 the candidates included therein an indefeasible right to appointment State of Haryana vs Subhash Chandra Marwaha A.I.R. 1 973 S.C.2216; M.S, Jain vs
State of Haryana A.I.R. and State of Kerala vs A. Lakshmikutty A.I.R. but that is only one aspect of the matter.
The other aspect is the obligation of the government to act fairly.
The whole exercise cannot be reduced to a farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the government the government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
We do not think that any government can adopt such a stand with any justification today.
This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash vs Union of India 1991 1 3 S.C.C.47 where the earlier decisions of this court are also noted.
The following observations of the court are apposite: "It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied.
Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post.
Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies.
However, it does not mean that the State has the licence of acting in an arbitrary manner.
The decision not to fill up the vacancies has to he taken bona fide for appropriate reasons.
And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted.
This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Hary 106 ana vs Subhash Chander Marwahs, Neelima.
Shangla vs State of Haryana or Jatendra Kumar vs State of Punjab.
" We may reiterate that the principle of Article 323, referred to hereinabove, is equally relevant on the nature of the power of the government in such a matter.
Looked at from the above stand point, it appears that the government 's action in not approving the rest of the seven names in the Select list is unsustainable but there are certain circumstances which induce us not to interfere in this matter.
They are: (i) During the period of one year from the date of approval of ' thirteen names (23.12.1986/30.12.1986) no vacancy bid arisen.
which means that even if the list of twenty had been approved and published on December 23 or December 30.
1986 none of the seven persons would have been appointed.
At the end of one year.
the list lapis and becomes inoperative.
The first letter of the High Court stating that one or two more vacancies have arisen and requesting the Government to approve the remaining names, was sent only on August 13,1988 i.e., long after the expiry of the one year period.
Any direction at this stage to approve the list would be a futile exercise.
The list cannot be operated with respect to the vacancies existing as on today; and (ii) When the government failed to act within a reasonable period from the date of the order December 30, 1986 ) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General ) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more then twenty months and approached the High Court only on September 14.
This delay in our opinion, disentitles the petitioners from any relief in the facts and circumstances of the case.
For the above reasons, the appeals fail and are dismissed.
No costs.
WRIT PETITION (C) NO.
81 OF 1993: 107 The petitioner in this writ petition was included in the waiting list prepared by the public service commission.
Since the appeals preferred by the candidates at serial No. 14 onwards in the main list have themselves failed.
there is no question of giving any relief to this petitioner.
The writ petition accordingly fails and is dismissed.
No costs.
V. P. R. Appeals dismissed.

dataset_name: IN-Abs

summary:
On 28.5.1984, the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates.
Written test was held in the year 1985 and viva voce was also held by the Public Service Commission.
On 10.12.1985 the High Court requested the Government to select twenty candidates in the place of ten.
On 27.12.1885 the Government requested the public Service Commission to select twenty candidates.
On 11.3.1986 the public service commission sent three select lists, one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates.
The Government received several complaints against the pro cess of selection.
It was toying with the idea of scrapping the entire list and asking for a fresh selection.
95 On 23.12.1986, as the High Court said that there was urgent need for at least thirteen Munsifs, the government approved the name,,, of thirteen persons out of the list recommended by the Public Service commission and published the same.
They were appointed on 30.12.
Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission.
On 30.12.1986, the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration.
The High Court dismissed the writ petition as settled.
The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission.
The candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies.
Another writ petition was riled to direct the Government to approve the remaining seven names from the select list.
The High Court (Single judge) allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs, immediately in accordance with the Jammu and Kashmir Civil Services (judicial) Recruitment Rules, 1967 and to consider the appointment of the candidates (including the writ petitioner .) as Munsifs in the vacancies existing or likely to arise, in accordance with the recommendations to he made by the High Court.
On appeal, the division Bench of the High Court reversed the decision of the Single Judge.
The present appeals by special leave were flied against the 96 decision of the Division Bench,.
contending that once the Public Service Commission prepared and recommended a select list, the Government had no power to sit in judgment over it; that the Government was bound to approve the list as recommended; that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal; that the Government 's action was arbitrary and capricious and vitiated by any admissible and extraneous consideration.
The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial; that the Government, being the appointing authority, was entitled to scrutinies the list open to the Government either to approve or disapprove the list, either whollY or in part , that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance; that in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration; that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government; that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission.
Dismissing the appeals.
this Court.
HELD: 1.1.
It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power.
Such an argument does violence to the constitutional scheme.
(102 F) 1.2.
Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where, however, the Government is satisfied, after due enquiry that the selection has been vitiated either (on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption.
favourtism or nepotism.
it can refuse to 97 approve the select list.
In such a case, the Government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
(103 F H) 1.3.
article 323 (2) is meant as a check upon the power of the Government.
The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission.
For the same reason, it must he held that the Government cannot pick and choose candidates out of the list.
It is equally not open to the Government to approve a part of the list and disapprove the balance.
(104 B) 1.4.
Where is respect of any particular candidates an), material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission.
(104 C) 1.5.
In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty.
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the Government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
The list remains valid for one year from the date of its approval and publication, if within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
(104 E F) 1.6.
If the Government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names), they cannot put forward any ground for not approving the remaining list.
Indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty.
The objection, the Government have pertains to the very process of selection i.e., to the entire list and not individually to any of the remaining seven candidates.
(104 G) 1.7.
Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment.
(104 H) State of Haryana vs Subhash Chandara Marwaha, ; , M. section Jain vs State of Haryana , A.I.R. 1977 S.C. and State of Kerala vs A. Lakshmikutty: A.I.R. 1987 S.C. 331, referred to.
(111 E) 1.8.
The other aspect is the obligation of the Government to act fairly.
The whole exercise cannot be reduced to a more farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
(105 B C) Shankarsan Dash vs Union of India.
; , referred to.
The Government 's action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter.
They are: (1) During the period of one year from the date of approval of thirteen names (23.12.1986/30.121986) no vacancy had arisen, which means that even if the list of twenty had been approved and published on December 23 or December 30, 1986 none of the seven persons would have been appointed.
At the end of one year, the list lapses and becomes inoperative.
(II) When the Government failed to act within a reasonable period from the date of the order (December 30, 1986) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more than twenty months and approached the High Court only on 99 September 14, 1988.
This delay disentitles the petitioners from any relief in the facts and circumstances of the case.
(106 C G)


judgement:
l Leave Petition (Civil) No. 10784 of 1992 etc.
From the judgment and Order dated 13.3.1992 of the Central Administrative Tribunal, New Delhi in O.A. No. 262 of 1991.
M. K. Ramamoorthy, H.S. Gururaja Rao, R. Venkataramani, S.M. Garg, T.L. Roy, T.V. Ratnam, E.X. Joseph, D.N. Paul and M.M. Kashyap for the Petitioners.
D.N. Dwivedi, Addl.
Solicitor General, V.K. Verma and Ms. Ameeka Singh for the Respondents.
The Judgment of the Court was delivered by VENKATACHALA,J.
In these Special Leave Petitions, we are concerned with the Grievance of the employees belonging to the office of the Comptroller and Auditor General of India, working in the Railway Audit Department.
These employees who were Section Officers prior to 1st March, 1984, got promotion from that day as Assistant Audit Officers on a pay scale of Rs. 650 30 740 35800 EB 40 1040 and were designated as Officers 'Group B Gazetted '.
On the recommendations of the Fourth Pay Commission; the said pay scale of Assistant Audit Officers was revised to Rs. 2,000 3,200 from 1st January, 1986.
The grievance of the Assistant Audit Officers Group B Gazetted, is that the Indian Railways should not have denied to them the benefits, such as, issue of Railway Travel Passes/P.T.0s., allotment of Railway Quarters, giving of accommodation in Rest Houses/Retiring Rooms, taking of family members while on tour, etc.
admissible to Group B Gazetted Officers of the Railways.
The Principal Bench of the Central Administrative Tribunal, to be referred to herein after as "the Tribunal", which examined the said grievance, rejected it by order dated 13th March, 1992.
The grievance, so rejected by the Tribunal, is again ventilated in these Special Leave Petitions, seeking redressal therefor.
Since the facts which have given rise to the grievance, furnish the background, for examining its merit, it would be advantageous to advert to them at the 299 out set.
The Railway Board in its letter No. E(G) 58PS5 20/1 dated 14th April, 1960, addressed to the General Managers of the Indian Railways, spelled out its policy in the matter of issuance of Railway Passes/P.T.0s.
to the staff of the Railway Audit Department including the Indian Audit & Accounts Service Officers (IA&AS Officers) of that Department, thus: i.
The scale of Passes/P.T.0s.
and the rules governing their issue will be the same as applicable to Railway servants from time to time.
Passes/P.T.0s.
to IA & AS Officers, if are to be issued when they are proceeding on leave exceeding four months, they should have completed one year 's service in the Railway Audit Department and the Comptroller and Auditor General of India ought to assure by declaring that the Officers concerned will return to Railway Audit Department on the expiry of such Officers ' leave.
IA & AS Officers working in the Railway Audit Department will pot be entitled to grant of certificates which would entitle them to obtain travel concessions on Railways outside India.
Passes/P.T.0s.
will be issued by the Chief Auditors irrespective of home or foreign line.
It was mentioned in the above letter that the same was issued with the sanction of the President of India.
The policy contained in the above letter was followed by the Indian Railways for several years.
In the meantime, the Director of Audit, Central Railway, by his notice dated 19th December, 1983, made it known that the Central Government had, on the recommendations of the Comptroller and Auditor General of India, sanctioned higher scale of pay of Rs. 650 30 740 35 800 EB 40 1040 to 80 per cent of Section Officers on the staff of the Railway Audit Department and that scale of pay would become effective from 1st March, 1984.
It was indicated in that notice that the Section Officers on the staff of the Railway Audit Department getting such higher scale of pay, will have their designation as Assistant Audit Officers (Group B Gazetted).
Similar notice, it is said, was issued by the concerned Director of Audit of every other Zone of the lndian Railways.
The said scale of the pay of the Assistant Audit Officers (Group B Gazetted) came to be revised as Rs. 2,000 300 3,200 from 1st January, 1986 as per the recommendations of the Fourth Pay Commission.
Even then, the Assistant Audit Officers who Were designated as 'Group B Gazetted ' continued to have the privileges and facilities of 'Group B Officers of the Indian Railways.
However, by its letter No. E(W) 87PS51/3 dated 27th July, 1989 addressed to all General Managers, Indian Railways, the Railway Board referring to the creation of posts of Assistant Audit Officers in the Railway Audit Department and the incumbents in those posts having been given Group B Gazetted status, stated thus: "As a result of restructuring of the cadre of Indian Audit and Accounts Department, a number of posts of Assistant Audit Officers have been created in the scale of Rs. 2000 3200 and classified as Group 'B 'posts carrying a gazetted status.
The eligibility of these officers to various facilities as admissible to the Gazetted Officers on Railways in scale of Rs. 2000 3500 has been considered but the same has not been agreed to.
It has been decided that the Audit Officers in scale of Rs. 2000 3200 may be given the privileges and facilities viz. Passes/PTOs.
allotment of Railway Quarters and Rest Houses/retiring Rooms and taking family with them while on tour etc.
as admissible to the Railway Employees in identical scale of pay viz. Rs. 2000 3200.
" The said letter shows that it had been issued with the concurrence of the Finance Directorate of the Ministry of Railways.
But, the contents of the said letter were modified by a telegram, which read thus: "No. E(W)87PS51/3.
In partial notification of Ministry of Railway 's letter of even number dated 27.7.89 Ministry of Railway have decided that the Assistant Audit Officers given the Gazetted status between 1st March, 1984 and 31.12.1985 shall continue to enjoy the facility of passes, PTOS.
Quarters etc.
enjoyed by them as a result of conferring of the gazetted status on them during the period mentioned above (As personal to them.)" The said telegram makes it obvious that those Assistant Audit Officers in the Railway Audit Department who got Gazetted status between 1st March, 1984 and 31st December, 1985, shall alone be entitled to the facilities of Passes/P.T.0s.
, Quarters etc,and not those who got such Gazetted status after 31st December, 301 Then, there is the letter No. PCIV/86/ Imp./46 dated 30th October, 1987 issued by the Railway Board to the General Managers of the Indian Railways, which shows that the president of India had, consequent upon the revision of pay scales of the Central Government employees recommended by the Fourth Pay Commission, reclassified all the posts under the Indian Railways, thus: "Classification Description of Posts of posts Group A All posts in scale Rs. 2200 4000 and above.
Group B Posts in scale Rs. 2375 3500 applicable to accounts Officers only and other posts of Officers in scale Rs. 2000 3500(all Deptts.) Group C.
All posts in scales Rs. 825 1200 and above including posts of Post graduate Teachers (Selection Grade)/Head masters Middle School (Selection Grade)in scale Rs. 2000 3500, Supervisors in scale Rs. 2375 3500 and excluding those mentioned for Groups 'A ' and `B '.
Group D All posts in scales Rs. 750 940, Rs. 7751025 and Rs. 800 1150.
" The said classification of posts in the Indian Railways is done, as becomes clear from the said letter, consequent upon the introduction of Railway Services (Revised Pay) Rules, 1986.
In this context, it would be necessary to advert to the Railway Servants (Pass) Rules, 1986 made by the President of India under the proviso to Article 309 of the Constitution regulating the issuance of passes and Privileged Ticket Orders to Railway servants.
Meaning of 'railway servant for the purposes of the said Rules is given in clause (h) of Rule 2 thereof,.
thus: "railway servant ' means a person who is a member of a service or who holds a post under the administrative control of Railway Board and includes a person who holds a post in the Railway Board.
Persons lent from a service or post which is not under the administrative control of the Railway Board to a service or post which is under such administrative control do not come within the scope of this definition.
This term excludes casual labour for whom special 302 orders have been framed.
" Schedule II of the said Rules contains the classification (categorisation) of Railway servants into Group A, Group B, Group C and Group D and refers to certain privileges admissible to them.
That Schedule, which provides for issue of passes on privilege account to Railway servants puts Group A Group B Railway servants in one category.
Group C Railway servants are put in altogether a different category for the purpose of issue of passes to them.
From the said facts, it becomes clear that the Assistant Audit Officers in the Railway Audit Department, who hold the posts on the pay scale of Rs. 2,0003,200, although designated as Group B Officers, are not treated on par with Railway servants of the Indian Railways in the category of Group B Officers, to wit, the Railway servants holding the posts of Assistant Accounts Officers and other Officers on the higher pay Scale of Rs 2,000 3,500.
Therefore, the obvious reason for denial of the privileges conferred upon Group B Railway Officers under the Railway Servants (Pass) Rules, 1986, to Assistant Audit Officers of the Railway Audit Department, was the latter holding posts of lower pay scale of Rs. 2,000 3,200.
It was contended by the learned counsel for the petitioners that the Assistant Audit Officers working in the Railway Audit Department could not have been treated differently from Group B Officers of the Indian Railways in the matter of issue of privilege Passes/P.T.0s.
to them when the latter No. E. (G) 58PS5 20/1 dated 14th April, 1960 issued by the Railway Board with the sanction of the President, clearly laid down the policy that scale of Passes/P.T.0s.
and the Rules governing their issue will be the same as applicable to Railway servants from time to time.
It was also contended by them that the Railway Servants (Pass) Rules, 1986 issued by the President of India, since exclude the Assistant Audit Officers from 'B ' category Officers, they would be violative of Article 14 of the Constitution.
Lastly, it was contended by them that the decision of the Indian Railways that the Assistant Audit Officers of the Railway Audit Department, who were given the Gazetted status between 1st March, 1984 and 31 st December, 1985, alone shall continue to enjoy the facilities of Passes/P.T.0s., Quarters etc. has since resulted in denial of such facilities to the Assistant Audit Officers who were given the Gazetted status after 31st December, 1985, the same (decision) is violative of Article 14 of the Constitution.
We are unable to find merit in any of the said contentions urged on behalf of the Assistant Audit Officers in support of their grievance, for the reasons which we shall presently state.
303 The Assistant Audit Officers although working in the Railway Audit Department, are the Officers who are appointed by the Comptroller and Auditor General of India and work under his.
control and supervision.
No doubt, the Railway Board, as seen from its letter dated 14th April, 1960 adverted to earlier, had decided to give to the staff and Officers working in the Railway Audit Department the facilities admissible to Railway servants of comparable status.
It is not for us to go into the question whether it was obligatory for the Railways to confer such facilities on the staff and Officers of the Railway Audit Department, who in reality belong to the Department of Comptroller and Auditor General of India, inasmuch as that question is not required to be decided by us.
When the said letter dated 14th April, 1960, containing the Railway Board 's policy of issuance of Passes/P.T.0s.
is seen, it shows that the staff of the Railway Audit Department is treated more generously than the Officers of the same Audit Department in the matter of issuance of Passes/P.T.0s.
to them (Officers), in that, the issuance of passes to the latter category is made subject to certain restrictions.
No doubt, when certain Section Officers were promoted as Assistant Audit Officers and conferred the status of 'Group B Gazetted ' by the Comptroller and Auditor General of India, such Officers were treated notwithstanding their lower pay scale, on par with 'B ' Group Officers in the Indian Railways as regards privileges/facilities obtainable by them from the Railways.
But, when the scale of pay of the Assistant Audit Officers of the Railway Audit Department was revised on the recommendations of the Fourth pay Commission, the scale of pay of the Assistant Audit Officers, who had been designated as Group 'B ' Officers, by the Comptroller and Auditor General of India, fell short of the scale of pay of the Railway servants of the Railway Department classified as Group 'B ' Officers by the President of India.
It cannot be overlooked that it is the President of India, who made the Railway Services (Revised Pay) Rules, 1986, on the basis of the pay revision of the Central Government Servants, as recommended by the Fourth Pay Commission and it is again the order of the President of India, which classified the Railway servants into Group A, Group B, Group C, and Group D according to the minimum and maximum scale of pay of the posts held by them.
Indeed, it was not disputed on behalf of the petitioners that the Assistant Audit Officers of the Railway Audit Department who are on the pay scale of Rs. 2,000 3,200 are treated on par with the Railway servants (Officers) who are on the pay scale of Rs. 2,000 3,200 in matters of giving the facilities or conferring of privileges.
What has happened is that the Railway Servants (Pass) Rules, 1986, when are made, certain extra privileges relating to issuance of Passes/P.T.0s.
are conferred on Railway servants, that is, Officers in Group 'A ' and Group 'B ' However, Group 'B ' Railway servants, according to classification made by the president of India, on revision of their pay scales are those whose pay scales are Rs.2,000 3,500.
What is contended for on behalf of the Assistant Audit Officers, is that the fact that their 304 scale of pay is lower then Rs. 2,000 3,500 as applicable to `B ' Group Gazetted Officers of the Railways should be ignored and the status that is conferred upon them by the Comptroller and Auditor General of India as Group B Gazetted ' alone should form the basis to give them facilities or confer privileges on par with 'B ' Group Gazetted Railway servants.
The submission made on behalf of the Railways, was to the contrary.
According to the submission, the fact that the Assistant Audit Officers in the Railway Audit Department, on the pay scale of Rs. 2,000 3,200, are designated by the Comptroller and Auditor General of India as 'Group B Gazetted ' is not sufficient to equate them with Group B Officers of the Indian Railways who hold higher posts with scale of pay of Rs. 2,000 3,500.
If the Railways give the facilities and privileges to the Assistant Audit officers, who are not Railway servants, treating them on par with Railway servants of Group 'B ' they could find no valid reason to deny such facilities and privileges to the Railway servants holding posts on the pay scale of Rs. 2,000 3,200.
If that has to be done, the Indian Railways would be required to extend similar facilities and privileges to all Railway servants who hold posts in the Indian Railways on the scale of pay of Rs. 2,000 3,200.
It means extending the benefits to thousands of Railway servants involving heavy financial burden on the Indian Railways.
We find that the contentions raised on behalf of the Assistant Audit Officers, are unacceptable in that, if accepted, they would lead to unjust results of the Indian Railways conferring special privileges and facilities upon persons belonging to foreign Department of Comptroller and Auditor General of India, while their own servants who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
Therefore, there is substance in the submissions made on behalf of the Indian Railways that the grievance sought to be made out on behalf of the Assistant Audit Officers lacks merit and calls to be rejected.
We, accordingly, reject the contention advanced on behalf of the Assistant Audit Officers that they should be treated by the Indian Railways on par with Railway servants classified in Group 'B "in matters relating to the conferring of privileges and giving of facilities.
Again, when the Railway Servants (Pass) Rules, 1986, made in consonance with the classification of Railway servants, rightly made by the President of Indian consequent upon the Railway services (Revised Pay) Rules, 1986 issued under the proviso to Article 309 of the Constitution, confer facilities or privileges according to the class to which Railway servants belong, they cannot be treated as Rules which are violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
Hence, the contentions raised on behalf of the Assistant Audit Officers on the unsustainability of the Railway Servants (Pass) Rules, 1986 based on Article 14 of the Constitution, wan ant rejection as those lack in merit.
305 Coming to the last contention, viz, that the privileges given to and facilities conferred on the Assistant Audit Officers, who had been given the status of `Group B Gazetted by the comptroller and Auditor General of India, between 1st March, 1984 and 31st December, 1985, are discriminatory, all that we would wish to say is that even if such discrimination is brought about by the Railways in regard to the officers of the same category, that is, Assistant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the petitioners to obtain the benefit of such wrongly conferred privileges and facilities.
However, we do not consider it appropriate to pronounce upon the correctness of the conferment of such privileges and facilities on a small number of Assistant Audit Officers in these petitions, when they are not impleaded by the petitioners as party respondents, in these petitions.
Hence, we reject the last contention, as well.
We, therefore, find no good reason to disagree with the order of the Tribunal impugned in these Special Leave Petitions.
In the result, we dismiss these Special Leave Petitions.
However,.in the facts and circumstances of the cases we make no order as to costs.
SLPs dismissed.

summary:
Petitioners were in service, under Comptroller and Auditor General of India (C & AG for short), as Assistant Audit Officers (A.A.O. for short) Group B Gazetted, in pay scale Rs. 2000 3200, and were working in Railway Audit Department, after December 31,1985.
In 1960, Railway Board spelled out its policy, stating that scale of passes/P.T.0s.
and the rules governing their issue to staff of the Railway Audit Department will be the same as applicable to Railway servants.
However some distinctions were made as regards Indian Audit and Accounts Service Officers (IA & AS Officers) of Railway Audit Department, on recommendations of the C & AG., Central Government sanctioned higher scale of pay effective from March 1, 1984, for 80 per cent of Section officers in the Railway Audit Department to be designated as A.A.Os (Group B Gazetted).
Their pay scale was revised to Rs. 2000 3200 from January 1, 1986, on recommendation of Fourth Pay Commission.
They continued to have the privileges and facilities of Group B Officers of Indian Railway.
In 1987, consequent to the revision of pay scales of Railway posts, on recommendation by the Fourth pay Commission, the posts under Indian Railways were re classified.
Posts in scale of Rs. 2000 3200 were classified as Group 'C ' instead of Group B.
In 1989, the Railway Board, in view of restructuring of cadre of Indian Audit and Accounts Department, creation of posts of A.A.Os in scale of Rs. 2000 3200, classified as Group B Gazetted status, issued instructions that Audit Officers in Scale of Rs. 2000 3200 may 297 be given privileges and facilities viz Passes/P.T.0s.
Quarters etc, as admissible to Railway employees in identical scale.
Consequently they were not entitled to the privileges and facilities admissible to gazetted Railway Officers.
classified in Group B in scale of Rs. 2000 3500.
However, Assistant Audit Officers given Gazetted status between March 1, 1984, and December 31, 1985 were allowed to continue to enjoy the facilities of Passes/p.
T.Os quarters etc.
Petitioners filed application before the Central Administrative Tribunal, Principal Bench, claiming that Assistant Audit Officers, given Gazetted status Group B after December 31, 1985, were also entitled to the privileges and facilities admissible to Railway Officers, classified 'Group B '.
The application was rejected by the Tribunal and the Petitions filed Special Leave petition seeking redressal.
This Court dismissed the special leave petition and, HELD: That conferring special privileges and facilities, to Assistant Audit Officers, which are not provided to Railway servants in identical pay scale would lead to unjust results.
It would result in conferring special privileges and facilities, by the Indian Railways to persons belonging to foreign department of Controller and Auditor General of India, while their own servants, who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
The Railway Board 's letter dated April 14, 1960 also shows that the staff of the Railway Audit Department is treated more generously than the officers (if the same Audit Department in matters of issuance of Passes/P.T.0s.
The Assistant Audit Officers, who had been given status of gazetted Group B, by the comptroller and Audit General, cannot be treated, by the Indian Railways on par, with Railway servants, classified group B. In matters relating to conferring privileges and giving of facilities.
The Railway Servant (Pass) Rules, 1986, made in Consonance with classification of Railway servants, rightly made by the President of India, consequent upon the Railway services (Revised Pay) Rules, 1986, issued under the proviso to Article 309 of the Constitution, confer facilities and privileges according to class to which Railway servants belong, they can not be treated as Rules violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
(303 C, 304 G) That even if discrimination was brought about by the Railways in regard to officers of the same category, that is, Assist Ant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the Petitioners, to obtain she benefit of such wrongly conferred privileges and facilities.
However, this Court did not consider it appropriate to pronounce 298 upon the correctness of the conferment of such privileges and facilities to the Assistant Audit Officers, given status of Gazetted Group B between March 1, 1984 and December 31, 1985, when they had not been impleaded as party respondents.
(305 A C)


judgement:
Appeal Nos.
1583 & 1584 (NT) of 1977.
From the Judgment and Order dated 22.11.1976 of the Bombay High Court in I.T. Application No. 191 of 1976.
S.C. Manchanda, Dr. K.P Bhatnager, C. Ramesh, T.V. Ratham for P. Parmeswaran for the Appellant.
Mrs. A.K. Verma, S.V. Pathak, for J.B.D. & Co. for the Respondent.
The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
These appeals are preferred by the Revenue against an order of the Bombay High Court rejecting an application under section 256 (2) of the Income Tax Act, By means of the said application the Revenue sought to raise the following three questions: " (1) Whether, on the fact and in the circumstances of the case, the Tribunal was right in holding that the commission paid by the assessee company to its directors was an additional remuneration forming part and parcel of the salary allowed to them and that the said remuneration would not be covered by section 40 (a) (v) of the Income tax Act and thereby allowing the assessee 's claim for allowing the deduction of the whole amount of commission paid to the directors ? (ii)Whether the Tribunal was right in their view that the words "Whether convertible into money or not" used in section 40 (a) (v) of the Act postulated that ,the 88 benefit, amenity or perquisite mentioned therein covers benefit, amenity or perquisite allowed in Kind but not in cash? (iii)Whether the Tribunal was right in holding that the expenditure of Rs. 19,386 for the assessment year 1971 72 and Rs. 29,283 for the assessment year 197273 did not represent entertainment expenditure within the meaning of section 37 (ii) of the Income tax Act ?" The assessment years concerned here in are 1971 72 and 1972 73.
The first two questions go together.
The provision applicable for the A.Y. 1971 72 was Section 40 (a) (v) whereas for the A Y. 1972 73, the provision applicable is Section 40 (a) (5) which is a successor provision to Section 40 (a) (v).
The respondent is a private limited company trading in tractors and earth moving equipment.
During the accounting years relevant to the aforesaid assessment years, the assessee paid to three of its Directors commission on sales in addition to salary as follows: Assessment Director Salary Commission year 1971 72 Sh.
S.B Lal 39,000 36,171 Sh.
S.B. Mathur 18,000 36,171 Sh.
A.B. Mathur 7,800 36,171 1972 73 Sh.
S.B Lal 39,000 40,792 Sh.
S.B. Mathur 18,000 40,792 Sh.
A.B. Mathur 7,800 40,792 The 'commission ' in the above table means the commission paid to the said Directors on the sales effected by the assessee, at a prescribed percentage.
The Income Tax Officer treated the commission on sales as "perquisites" and disallowed the same applying Section 40 (a) (v) for the year 1971 72 and Section 40 (A) (5) for the assessment year 1972 73.
fie also disallowed the expenses referred to 89 in question No. (iii) as entertainment expenses.
On appeal, the Assistant Appellate Commissioner held that the commission on sales cannot he treated as "perquisites".
He also held that the expenditure on dinner and tea cannot be characterised as entertainment expenditure and ought not to have been disallowed.
The Revenue preferred appeals before the Tribunal against the orders of the A.A.C., which appeals were dismissed by the Tribunal following its order dated August 25, 1973 relating to assessment years 1967 68 to 1968 70.
The order dated August 25, 1973 dealt anter alia with the questions arising herein ind held the same against the Revenue.
An application under section 256 (1) was dismissed by the Tribunal.
The first question urged before us which was also the question urged before the Tribunal is whether commission on sales (paid in cash) falls within the fourcornersot Section40 (a) (v)/Section40(A) (5)" It Would be appropriate to set out the said provisions in so far as they are relevant: " Section 40 Amounts not deductible: Notwith standing anytime, to the contrary in section 30 to 38 the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession (a) in the case of any assessee. . . " (v) any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite.
whether convertible into money or not, to an employee (including any sum paid by the assessee in respect of any obligation which but for such payment would have been payable by such employee) or any expenditure or allowance in respect of any assets of the assessee used by such employee either wholly or partly for his own purpose or benefit, to the extent such expenditure or allowance exceeds one fifth of the amount of salary payable to the employee.
or an amount calculated at the rate of one thousand rupees for each month or part thereof com 90 prised of his employment during the previous year, whichever is less:" Note: (The two provisos and the two explanations are omitted as not necessary for the purpose of this case.
) Section 40 (A) (5), which in so far as it is material, is substantially in the same terms, reads as follows: "Section 40 (A) Expenses or payments not deductible in certain circumstances.
(5) (a) Where the assessee (i) incurs any expenditure which results directly or indirectly in the payment of any salary to an employee or a former employee.
or (ii) incurs any expenditure which results directly or indirectly in the provision of any perquisite (whether convertible into money or not) to an employee or incurs directly or indirectly any expenditure or is entitled to any allowance in respect of any assets of the assessee used by an employee either wholly or partly for his own purposes or benefit.
then, subject to the provisions of clause (b), so much of such expenditure or allowance as is in excess of the limit specified in respect thereof in clause (c) shall not be allowed as a deduction:" Explanation 2: In this sub section (b) "perquisite" means (i) rent free accommodation provided to the em ployee by the assessee; (ii) anv concession in the matter of rent respecting any 91 accommodation provided to the employee by the assessee: (iii)any benefit or amenity granted or provided free of cost or at concessional rate to the employee by the assessee: (iv)payment by the assessee of any sum in respect of any obligation which, but for such payment, would have been payable by the employee.
and (v) payment by the assessee of any sum whether directly or through a fund.
other than a recognised provident fund or an approved superannuation fund.
to effect an assurance on the life of the employee or to effect a contract for in annuity.
" Incidentally Section 40 (A) (5) which was inserted repealing section 10 (a) (v) his itself been deleted with effect from April 1, 1989 by the Direct Tax Laws (Amendment) Act, 1987.
The sister provision contained in sub clauses (i) and (ii) of clause (c) of ' section 40.
applicable to directors of a company (and other persons mentioned therein) has also been deleted by the very same enactment with effect from April 1. 1989.
Since the relevant provisions in section 40 (a) (v) and 40 (A) (5) are substantially similar.
we smile consider the language employed in the latter provision.
Sub clause (5) of section 40 (A) is applicable in the following Situations: (1) Where the assessee incurs any expenditure which results directed or indirectly in the payment of any salary to in employee or it former employee or (2) Where the assessee incurs any expenditure which results directly or indirectly in the provision of ' any perquisite (whether convertible into money or not to an employee; (3) (it) Where the assessee incurs directly or indirectly any 92 expenditure or provides an allowance in respect of any assets of the assessee used by the employee either wholly or partly for his own purpose or benefit; (b)Where an employee of the assessee is provided any allowance ("entitled to any allowance") in respect of any assets of the assessee used by such employee either wholly or partly for his own purposes or benefit.
In either of these situations, so much of such expenditure or allowance as is in excess of the limits specified will not be allowed as a deduction.
The question is whether the commission paid to its directors/employees on the sales effected by the assessee falls within any of the situations/clauses mentioned above.
The Revenue relies upon the second one among them.
According to them, the commission paid is a 'perquisite.
which submission they say is borne out by the words within the brackets " whether convertible into money or not" immediately following the word "perquisite".
On the other hand the contention of the assesses which his been accepted by the A.A.C. and situations/clauses contemplated by sub section 5.
Having regard to the language employed in clause (c) we are inclined to agree with the assessee.
The language of sub section (5) is significant.
The first two situations, as we have called them start with the words "where the assessee incurs any expenditure which results directly or indirectly. . . .It is difficult to say that payment of a certain cash amount by wayof commission on sales directly to an employee can be said to fall within the words "where the assessee incurs any expenditure which results directly or indirectly".
Such a payment cannot also fall within the two sub clauses of clause (3) in our analysis since they speak of an expenditure or allowance in respect of ' any assents of the assesee used by the employee.
Learned counsel for the Revenue.
Shri Manchanda argued that the words "whether convertible into money or not" bring out the intention of the Parliament and support his contention.
He says, there is no reason not to include cash payment within the ambit of sub section(5) to Section 40 (A).
We are, however.
not concerned with the generality of cash payments but only with the payment concerned herein.
Reading, the Sub section as a whole and having regard to the language employed therein, the the Tribunal is that Such cash payment does not fall within any of the 93 payment concerned herein does not fit into it.
The employees concerned herein also happen to be directors.
The provision in clause (c) of Section 40 applies to directors among others.
Of course.
Section 40 (A) (5) is applicable only to companies where as Section 40 (A) (5) is applicable to employees whether of companies or others.
In the case of directors, who are also employees, both the provisions will be attracted the higher of the two ceilings has to be applied.
The learned counsel for the respondent assessee brought to our notice it circular issued by the Central Board of direct Taxes which inter alia say.
"its read is payment of commission to the employees the question whether it forms part of salary or perquisite has to he decided on the 'acts of each case.
If the terms and conditions of service are such that commission is paid not as a bounty or benefit but is paid ,is part and parcel of 'the remuneration for the service renders by the employees.
such payment partake the nature of salary rather than as a benefit or perquisite.
If, however, on terms and conditions of service either there is no obligation for the employer to pay the commission or it is a matter purely in the discretion of the employer, such payment should he treated ,is a benefit by way of addition to salary rattler thin in lieu of salary.
" It is not necessary for us to make any comment on the said circular.
For the above reasons.
we are of the opinion that the High Court was justified refusing to direct the Tribunal to state question (1) and (2) under section 256 (2).
So far its question No.3 is concerned, it his not been seriously pressed before us having regard to the smallness of the amount involved.
It is also stated that the said question is pending consideration is a batch of appeals before this Court.
We do not propose to express any opinion on question No. 3 for the reason that the amount involved is quite small having regard to the income of the assessee respondent.
The appeals accordingly fail and are dismissed.
No costs.
Appeal dismissed.

summary:
The respondent assessee was a private limited company trading in tractors and earth moving equipment.
During the relevant the assessee pain commission on sales in addition to salary to its directors at a prescribed percentage of the sales effected by the assessee.
The Income Tax Officer treated the commission on sales as perquisites ' and disallowed the same applying section 40 (a) (v) for the year 1971 72 and section 40 (A) (5) for the assessment year 1972 73.
Which are the concerned assessment years herein.
On appeal, the Appellate Assistant Commissioner held that commission on sales cannot betreated as perquisites.
The Tribunal dismissed the Revenue 's appeal.
The question before this court was whether commission on sales (paid in cash) falls within the four corners of section 40 (a) (v) ,Section 40 (A) (5).
Dismissing the appeal, this court.
HELD: 1.
Regarding Section 40 (1) (v) /40 (A) (5) as a whole, the cash payment of the nature concerned in this case does not fall within any of the situations/clauses contemplated by sub section (5).
(92 D) Payment of a certain cash amount by way of commission on sales, directly to an employee cannot be said to fall with the words "where the assessee incurs an expenditure which results directly or indi 87 rectly" in Section 40 (A) (5).
(92 F) Nor can such a payment fall within a provision which speaks of an expenditure or allowance in respect of any assets of the assessee used by the employee DE.
(92 F)