judgement:
ivil Appeal No. 1202 of 1974.
From the Judgment and Order dated 19.7.1972 of the Madras High Court in Writ Petition No. 1064 of 1967.
Anil Dev Singh and C.V.S. Rao for the Appellant.
Ambrish Kumar and A.T.M. Sampath for the Respondent.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This appeal by Special Leave is from the Judgment and Order of the High Court of Judicature at Ma dras, dated 19th July, 1972 in Writ Petition No. 1864 of 1967, allowing the petition and quashing the demand made by the appellant under Rule 10 A of the Central Excise Rules, hereinafter referred to as 'the Rules ', payable by the respondent under the Central Excise and Salt Act, 1944, hereinafter referred to as 'the Act '.
M/s. Ramakrishnan Kulwant Rai, the respondent firm, owned the Steel Rolling Mill, located at No. 4 B, 4 C, North Railway 447 Terminus Road, Royapuram, Madras 13.
The said Mill was leased out to a partnership firm known as M/s. Steel Indus tries.
After termination of the lease the respondent firm took back possession of the said Mill on 1 8 1962 and in formed the Central Excise Authorities about this by their letter dated 16 11 1962 and resumed manufacture of Steel from scraps and was advised to take out a licence for which it applied on 30 11 1962.
Though the respondent firm had ultimately sold away the Rolling Mill on 8 4 1963, the Superintendent of Central Excise, by his letter dated 13 10 1965 demanded a sum of Rs. 31,0 18.2013 as excise duty.
On information furnished by the firm about its manu facture of only 775.455 metric tonnes of Steel, the Deputy Superintendent of Central Excise reduced the demand to a sum of Rs. 6,4 19.38p only, and the demand was reiterated by notice dated 13 4 1967, pursuant whereto the respondent firm showed cause on 15th May, 1967 but the Assistant Collector of Customs, by his order dated 14th June, 1967, confirmed the demand.
The respondent firm challenged the demand by moving writ petition No. 1864 of 1967 in the High Court of Judicature at Madras contending, inter alia, that it was manufacturing steel products prior to 13 6 1962, only suspending manufac ture during the period of lease and resuming thereafter, and as such, was entitled to exemption from payment of duty; that the demand for payment of duty was time barred; that rules 10 & 10A invoked in support of the demand were ultra vires inasmuch as there was no provision in the Act to enable the Government to frame rules for the recovery of duty short levied.
The High Court by the impugned order following its earlier judgment in writ petition Nos. 265 & 266 of 1967, which relied upon its earlier decision in writ petition No. 1055 of 1968, upheld the contention of the respondent firm holding that Rule 10 A did not apply to cases where there had been no prior levy of excise duty in respect of the articles manufactured during the relevant period and that the duty was sought to be recovered only by the issue of demand under Rule 10 A of the Rules.
The High Court having rejected leave to appeal, the.
appellant obtained special leave on 23 7 1974.
Mr. Anil Dev Singh, learned counsel for the appellant submits that it is necessary to decide the substantial question of law of general importance, namely, whether Rule 10 A of the Rules, as it stood at the relevant time, was valid or not as conflicting decisions have been creating difficulties for the department in collecting short levies or escaped excise duties.
Counsel refers us to , AIR 1972 S.C. 448 2563, and The learned counsel states that Rule 10 A was in force upto 6 8 1977 whereafter it was amended with effect from that date and the amended rule continued till 16 11 1980 where after it was enacted as Section 11 A of the Act by the Amendment Act 25 of 1978 and that Section came into force with effect from 1.7 11 1980.
Mr. Ambrish Kumar, the learned counsel for the respond ent submits that the learned standing counsel for the Cen tral Government having conceded that the rationale of the decision in Haji J.A. Kareem Sait vs Dy.
Commercial Tax Officer, Mettupalayam, 18 STC .370, which held that sub Rule (7) of Rule 5 of the Central Sales Tax (Madras) Rules 1957, providing for limitation and determination of escaped turn over by best judgment was in excess of the rule making power and the sub Rule as a whole, was therefore, invalid, would apply with equal force to Rule 10 A as well and that in view of the same decision he would not be able to sustain the demands under Rule 10 A and yet he could sustain the demand under Rule 9(2) of the Rules, it is no longer open to the appellant to challenge the validity of Rule 10 A in this appeal, and that too after so many years.
Counsel for the appellant answers that the learned standing counsel thereby cannot be said to have conceded that Rule 10 A was invalid.
He had only said that in view of the decision in 18 STC 370, he would not be able to sustain the demands under Rule 10 A; and that even if it could be taken as a concession, the appellant could not be estopped from showing that the rule is valid so that Central Excise revenue is not allowed to escape.
We agree with the learned counsel for the appellant and proceed to examine the validi ty of Rule 10 A as it stood at the relevant time.
Rule 10 A of the Rules read as under: "10 A. Residuary powers for recovery of sums due to Government Where these Rules do not make any specific provision for the collection of any duty or any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place as the officer may specify.
" Rule 10 A provided the machinery for collection of tax from the assessee after the goods had left the factory premises.
This rule con 449 templated that the duty or deficiency in duty was payable on a written demand made by the proper officer in cases where either the Rules did not make any specific provision for the collection of any duty or of any deficiency in duty if the duty had for any reason been short levied.
Therefore, before Rule 10 A could be resorted to, it had to be found that either the Central Excise Rules did not make any specific provision for the collection of duty in respect whereof a demand was being made by the proper officer, or that there was no specific provision therein for the collection of the deficiency in duty which had been short levied for any reason.
It was a residuary provision and it applied only when there was no other specific provision in the Rules.
Where there had been no assessment at all there was no reason why claim and demand of the respondent could not be said to be recoverable under Rule 10 A.
The learned counsel for the appellant submits that this Rule is perfectly valid being covered by the rule making powers under the Act while the learned counsel for the respondent, submits that it is ultra vires the Act being not covered by its rule making powers.
The question, therefore, is whether the Rule is valid.
Chapter II of the Act deals with levy and collection of duty.
Under Section 3 of the Act duties specified in First Schedule to the Act were to be levied.
Sub section (1) of Section 3, at the relevant time, read as follows: "(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India, and a duty on salt manufactured in, or import ed by land into, any part of India as, and at the rates, set forth in the First Schedule.
" In Citadel Fine Pharmaceuticals vs Dis trict Revenue Officer, Chingleput, , where the enactment, namely, the Medicinal and Toilet Preparations (Excise Duties) Act (XVI of 1955) was silent on the question of levies of escaped assessment, it was held that the Rules made under that Act could not extend the charging power and Rule 12, in so far as it sought to extend the charging power under Section 3 of that Act, was held to be invalid and without jurisdic tion.
Rule 12 of those Rules read as follows: "12.
Residuary powers for recovery of sums due to 450 Government Where these rules do not make any specific provision for the collection of any duty or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the collecting Government under the Act or these rules, such duty, deficiency in duty or sum shall on written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" Rule 12 was somewhat similar to RUle 10 A of the Rules and had been held to be ultra vires on the ground that it did not have the required statutory backing.
In M/s. Agarwal Brothers vs The Union of India, , it was held that a licence issued under the Central Excise Rules was personal to the licensee and therefore, a transferee of factory licensed to manufacture iron and steel products from the former licensee could only be treated as a new licensee after the relevant date mentioned in the Notification No. 13 1 of 1962, dated 13th June, 1962, and as the petitioner applied for a licence much later, the exemption under the Notification was not available to the petitioner who could not be applying for renewal of the earlier licence held by the transferors and hence the exemption under the Notifica tion was not available to the petitioner.
Demand, therefore, could only be made under Rule 10 A which, it was held, could not be invoked in view of the decisions in W.P. No. 1053/68, namely the Citadel Fine (supra).
A Division Bench of Kerala High Court in Kerala Poly thene vs Superintendent, Central Excise, since reported in , held that Rule 10 A of the rules was not ultra vires the rule making power conferred by the Act on the Central Government.
Balakrishna Eradi, J., as he then was, observed that the scope of the rule making power con ferred by Section 3(1) of the Act was wide enough to embrace all matters relating to the manner in which both the levy and the collection of duties of excise on all excisable goods other than salt were to be made.
The provision con tained in Rule 10 A was thus fully within the scope of the said power and hence it was not correct to say that Rule 10 A was ultra vires the rule making power conferred by the Act on the Central Government.
The cases of Agarwal Brothers (supra) and Citadel Fine Pharmaceuticals (supra) were dis tinguished pointing out that there was much difference in scopes of Section 3 of the Medicinal and Toilet Preparations (Excise Duties) Act (XVI of 1955) and of Section 3 of the Act.
Comparing the provisions of the two Sections it was observed that there was funda 451 mental difference in their policy and scheme.
Under Section 3 of the Medicinal and Toilet Preparations Act only the manner of collection of the duties was left to be prescribed by the rules and levy of the duty was to be made at the rates specified in the Schedule to the Act.
In enacting Section 3 of the Act i.e. Central Excise and Salt Act, the Parliament had empowered the rule making authority to pre scribe by rules the manner of levy of duties and also the manner of collection of duties of excise on all excisable goods other than salt.
Manifestly the rule making power conferred by this Section is very much wider in its ambit than the power conferred on the rule making authority under Section 3 of the Medicinal and Toilet Preparations (Excise Duties) Act whereunder only the manner of collection of duties could be laid down by rules.
We respectfully agree with this view.
We also find that in Agarwal Brothers (supra) though one of the questions raised was the validity of Rule 10 A of the Rules, the Court did not consider the said question on merits in view of the submission made by the standing counsel for the State Government on the basis of Rule 10 A in the light of the earlier decisions of the same High Court, striking down Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules.
That decision can not obviously be regarded as authority supporting the con tention that Rule 10 A was ultra vires the rule making power.
We find that Rule 10 A, was incorporated because of the decision of the Nagpur High Court in Messrs Chhotabhai Jethabhai Patel vs Union of India, After that decision the Central Government by a notifica tion, dated December 8, 195 1, amended the Rules by addition of the new Rule 10 A.
The assessee challenged the validity of the Rule but a full bench of the Nagpur High Court re jected the assessee 's contention and held that Rule 10 A covered a case for increased levy on the basis of a change of law.
That decision was challenged before this Court unsuccessfully.
This Court in Chhotabhai Jethabhai Patel and Co. vs The Union of India, ; , reject ed the assessee 's claim regarding non applicability of Rule 10 A stating that it had been specifically designed for the enforcement of a demand like the one in that case.
We also find that in N.B. Sanjana vs Elphinstone Spin ning and Weaving Mills Company Ltd., [2971] 1 SCC 337, while holding that Rule 10 A did not apply to the facts of that case, this Court observed that Rule 10 A did not apply as the specific provision for collection of duty in a case like that was specially provided for by Rule 10 and, therefore, action should have been taken under that Rule.
452 In Assistant Collector vs National Tobacco Co. Ltd., ; , this Court held that the High Court erroneously refused to consider whether the impugned notice in that case fell under Rule 10 A.
It was observed that Rules 10 and 10 A seemed to be so widely worded as to cover any inadvertance, error etc.; whereas Rule 10 A would appear to cover any deficiency in duty if the duty had, for any reason, been short levied, except that it would be outside the purview of Rule 10 A if its collection was expressly provided by any Rule.
It was further observed that both the Rules as they stood at the relevant time dealt with collec tion and not with assessment and what was said in N.B. Sanjana 's case (supra) that Rule 10 A was of residual in character and would be inapplicable if a case fell within a specified category of cases mentioned in Rue 10, was reiter ated.
In D.R. Kohli vs Atul Products Ltd., [1985] 2 S.C.R. 832, this Court pointed out the differences between the two Rules namely Rule 10 and Rule 10 A as: "(i) whereas Rule 10 applies to cases of short levy through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, the description or value of the excisable goods on the part of the owner, Rule 10 A was a residuary clause applied to those cases which were not covered by Rule 10 and that; (ii) whereas under Rule 10, the deficit amount could not be collected after the expiry of three months from the date on which the duty or charge was paid or adjusted in owner 's account current or from the date of making the refund, Rule 10 A did not con tain any such period of limitation.
" It would thus be clear that this Court interpreted Rule 10 A, distinguished it from Rule 10 and applied it to the appropriate facts and circumstances of different cases.
It would be reasonable to infer that in none of the cases any doubt about the validity of the Rule 10 A was entertained.
We may now examine the contention that at the relevant time Rule 10 A was not covered by the rule making power conferred on the Central Government by Section 37.
Section 37 dealt with power of Central Government to make Rules.
Sub section (1) said: "The Central Government may make rules to carry into effect the purposes of this Act." Sub section (2) enumerated the matters the rules might provide for 'in particular ' and "without prejudice to the generality of the foregoing power." Thus, the section did not require that the enumerated rules would be exhaustive.
Any rule if it could be shown to have been made "to carry into effect the pur poses of the Act" would 453 be within the rule making power.
Chapter II of the Act dealt with the levy and collection of duty.
Section 3 as it stood at the relevant time provided that duties specified in the First Schedule were to be levied.
We have quoted Sub section (1).
The First Schedule contained Item Nos.
description of goods and rates of duty.
Section 3 has subsequently been amended by the Finance Acts of 1982 and 1984, and the Cen tral Excise Tariff Act of 1985.
This section, it would be seen, expressly empowered the levy and collection of duties of excise on all excisable goods as provided in the Act including its First Schedule.
It could not, therefore, be said that Rule 10 A was not covered by the above provision.
It is an accepted principle that delegated authority must be exercised strictly within the limits of the authori ty.
If rule making power is conferred and the rules made are in excess of that power the rules would be void even if the Act provided that they shall have effect as though enacted in the Act as was ruled in State of Kerala vs K.M. Charia Abdullah & Co., ; Therein the High Court having declared rule 14 A of the Madras General Sales Tax Rules, 1939 as ultra vires, on appeal, this Court by majori ty held that the validity of the rule, even though it was directed to have effect as if enacted in the Act, was always open to challenge on the ground that it was unauthorised.
The validity of the delegated legislation is generally a question of vires, that is, whether or not the enabling power has been exceeded or otherwise wrongfully exercised.
Scrutinising the provisions of Rule 10 A in the light of the above principles and pronouncements of this Court, we have no doubt that Rule 10 A of the Rules, as it existed at the relevant time, was valid and not ultra vires the rule making power.
Demand notices lawfully issued under the rule by the competent authority could not, therefore, be challenged on the ground of the rule 10 A itself being ultra vires.
Wheth er those could be challenged on any other ground must neces sarily depend on the facts and circumstances of the case.
The High Court having proceeded on the basis that Rule 10 A was not available to support the demand notice, we set aside the impugned order of the High Court, allow the ap peal, and remand the case to the High Court for disposal in accordance with law.
We leave the other questions open.
Under the peculiar facts and circumstance of the case, we leave the parties to bear their own costs.
Y. Lal Appeal al lowed.

summary:
Respondent firm owned a Steel Rolling Mill situate at Madras.
The said mill was leased out to a partnership firm viz., M/s. Steel Industries and after the expiry of the lease period, the Respondent took back the possession of the Mill on 1.8.1962 and informed the Central Excise Authori ties, who advised the Respondent to take out a licence for which it applied on 30.11.1962 Respondent sold away the Rolling Mill on 8.4.1963.
The Superintendent of Central Excise by his letter dated 13.10.1965 raised a demand of Rs.31,018.20 p. on the respondent on account of excise duty.
The Respondent having informed the Department that the firm had manufactured only 775.455 metric tonnes of steel, the demand of excise duty was reduced to Rs.6,419.38 p. only.
The Respondent, though pleaded that it was not liable to pay excise duty demanded, yet the Assistant Collector of Customs by his order dated 14.6.1967 confirmed the demand.
The Respondent firm challenged the validity of the demand by filing a Writ Petition in the High Court.
Respond ent contended before the High Court that (i) it was entitled to exemption of duty; (ii) that the demand for payment of excise duty was time barred and (iii) that Rules 10A under which the demand has been made are ultra rites as there was provision in the Act to enable the Government to frame rules for the recovery of duty short levied.
The High Court allowed the Writ Petition and upheld the contention advanced by the Respondent holding that Rule 10A did not apply to cases where there has been no prior levy of excise duty in respect of the articles manufactured during the relevant period.
Hence this appeal by the Department.
445 The question that arose for determination by this Court was whether Rule 10A of the Rules, as it stood at the rele vant time, was valid? Counsel for the appellant wile plead ing that the Rule was valid submitted that it was necessary to decide this question in view of the conflicting decisions creating difficulty for the Department in collecting short levies or escaped excise duty.
Counsel referred to decisions reported in 1972(2) MLJ 476; ; ; ; and 1977(2) Tax L.R. 1680.
Counsel for the Respondent urged that the Standing Counsel for the Central Government had conceded the ration ale of the decision in Haji J.A. Kateera sait vs Dy.
Commer cial Tax Officer, Mettupalayam;, 18 STC 370 which held that Sub Rule (7) of Rule S of the Central Sales Tax (Madras) Rules 1957 was in excess of the rule making power and as such the Sub rule as a whole was invalid.
In view of the said decision, the appellant would not be able to sustain the demand under Rule 10A; and it is no longer open to the appellant to challenge the validity of Rule 10A in the appeal.
Allowing the appeal and remanding the matter to the High Court, Court, HELD: Chapter II of the Act deals with levy and collec tion of duty.
Under Section 3 of the Act, duties specified in First Schedule to the Act were to be levied.
Rule 10A provided the machinery for collection of tax from assessee after the goods had left the factory premises.
This rule contemplated that the duty or deficiency in duty was payable on a written demand made by the proper officer in cases where either the rules did not make any specific provision for the collection of any duty or of any deficiency in duty, if the duty had for any reason been short levied.
It was a residuary provision and it applied only when there was no other specific provision in the Rules.
Where there had been no assessment at all there was no reason why claim and demand of the Respondent could not be said to be recoverable under Rule 10A. [449E; 448H; 449B C] The validity of the delegated legislation is generally a question of vires, that is, whether or not the enabling power has been exceeded or not.
Rule 10A as it existed at the relevant time, was valid and not ultra vires the rule making power.
Demand notice lawfully issued under the rule by the competent authority could not, therefore, be chal lenged on the ground of the Rule 10A itself being ultra vires.
Whether these could be challenged on any other ground must necessarily depend on the facts 446 and circumstances of each case.
[453E F] Kerala Polythene vs Superintendent Central & Excise, M/s. Chhotabhai Jethabhai Patel vs Union of India, Stateof Kerala vs K.M. Charie Abdullah & Co., [1965] 1 S.C.R.601.
Any rule if it could be shown to have been made 'to carry into, effect the purposes of the Act ' would be within the rule making power.
[452H; 453A] Citadel Fine Pharmaceuticals vs District Revenue Offi cer, Chingleput, ; M/s. Agarwal Brothers vs Union of India, ; N.B. Sanjane vs Elphin stone Spinning and Weaving Mills Company Ltd., ; Assistant Collector vs National Tobacco Co. Ltd., ; and D.R. Kohli vs Atul Products Ltd., ; , referred to.


judgement:
ition (Civil) No. 1055 and 1088 of 1988.
(Under Article 32 of the Constitution of India. ) R.P. Kapur for the petitioners.
V.C. Mahajan, Mrs. Kitty K. Manglam and Ms. A. Subha shini for the Respondents.
The Judgment of the Court was delivered by OZA, J.
After hearing the learned counsel for parties it clearly emerges that the two petitioners and one Smt.
Rekha Mehta who had filed a petition earlier were all the employ ees of one institution known as Nari Kiketan.
This institu tion was fully funded by Delhi Administration and was con trolled by Board managing the affairs.
It is also not in dispute that all the three persons mentioned above, the two petitioners and Smt.
Rekha Mehta, are identically situated in respect of their conditions of service.
On 1.12.79 the Board was superseded and the institution was taken over by the Delhi Administration and the staff of this institution Nari Niketan was absorbed in the Delhi Administration vide Order No. 4 2(3) 79 DSW ESTT dated 27.2.80.
By this order about 20 officials were absorbed in time scale and pay as were being drawn by them prior to 1.12.79.
These facts are not disputed.
It is also not in dispute that Smt.
Rekha Mehta when after retirement was not given pensionary benefits she filed a petition in this Court No. (C) 539 of 1987.
This Court passed the order in the case of Smt.
Rekha Mehta as: "Rule issued and made absolute.
Arguments heard.
The respondents arc directed to calcu late the pension and other retiral benefits of the petitioner taking into account her an tecedent of service before absorption and pay the same as early as possible and in any event not later than three months from today.
The respondent will pay costs quantified at Rs. 2,000 to the petitioner.
" Thereafter these two petitioners have again filed writ petitions alleging that they have retired and therefore they are entitled to the same pensionary benefits which were given to Smt.
Rekha Mehta as they belong to the services of Nan Niketan institution, subsequently 602 absorbed in the services of Delhi Administration.
It is also not in dispute that these petitioners repeatedly approached the respondent Delhi Administration and made representations for getting the pensionary benefits as were granted to Smt.
Rekha Mehta after the orders were passed by this Hon 'ble Court.
Unfortunately in spite of all this nothing was done consequently these two writ petitions were filed before this Court.
Learned counsel appearing for the Delhi Administra tion attempted to contend that the decision in the case of Smt.
Rekha Mehta will not be applicable but realising the difficulty he only read through the affidavit filed in return wherein a long story as to how the papers tossed from department to department and ultimately no decision was taken.
There is also reference to the Govt.
of India, Minis try of Personnel & Training, Public Grievances & Pensions and it is stated that in the opinion of these departments the judgment of this Court in Smt.
Rekha Mehta was a judg ment in the particular case only and these petitioners are not entitled to pensionary benefits.
It is unfortunate that such a simple affair where the services in an institution under the control of the Delhi Administration and fully funded by the Delhi Administration when taken over and the staff absorbed in the Delhi Administration it could be said that they will not be entitled to ordinary facilities like the pensionary benefits when available to other staff of the Delhi Administration and apart from it when in one case of an employee of the institution whose services were absorbed in the Delhi Administration has been decided by this Court still the counter affidavit indicates the working of the departmental officials who chose to opine that it is not binding on the Go, vt.
That was a case only of a particular employee in spite of the fact that Union of India is alleged as a party.
It has chosen not to keep a counsel present at the time of hearing of these petitions.
All these circum stances go to indicate as to how the matters are handled by our Administration resulting in unnecessary litigation and heavy expenditure on the public exchequer.
Apart from, the expenditure of litigation the costs that have to be paid in such litigation.
The facts as are not in dispute the case of one of the employees having been decided by this Court it was expected that without resorting to any of the methods the other employees identically placed would have been given the same benefit, which would have avoided not only unnecessary litigation but also of the waste of time and the movement of files and papers which only waste public time.
Learned counsel only read out the counter and stated that it was thought that the case of Smt.
Rekha Mehta will not be ap plicable to the case of the present petitioners although learned counsel had no argument in law to sup 603 port such a contention.
The petitions are therefore allowed and it is directed that the petitioners shall be paid their pensionary benefits within 3 months from today.
It is fur ther directed that the petitioners shall be entitled to costs of Rs.2500 in each case.
It is also directed that the matter will be considered at the appropriate level to see that such things do not happen in future so that unnecessary litigation is avoided and costs to the public exchequer is saved.
P.S.S Petitions allowed.

dataset_name: IN-Abs

summary:
An institution being fully funded by the respondent Administration was taken over and the affected stuff ab sorbed in its services in the time scale of pay.
The peti tioners who comprised the said staff were not given pension ary benefits upon retirement.
They, therefore, filed these writ petitions.
This court in a petition by one of the affected employ ees (Smt.
Rekha Mehta vs Delhi Administration, W.P. (C) No. 539 of 1987 decided on April 4, 1988) had directed payment of pensionary benefits.
However, the case of the respondent was that the said decision having been rendered in a partic ular case, it would not be applicable to the petitioners in the instant case.
Allowing the writ petitions, HELD: The services in an institution under the control of and fully funded by the respondent Administration having been taken over by it and the staff absorbed in the time scale of pay, it could not be said that they would not be entitled to ordinary facilities like the pensionary benefits available to other staff.
[602D] The case of one of the employees having been decided by this court, it was expected that without resorting to any of the methods, the other employees identically placed would have been given the same benefit.
[602G] [The petitioners to be paid pensionary benefits within three months.
The matter to be considered at the appropriate level to see that such things do not happen in future, so that unnecessary litigation is avoided and cost to the public exchequer is saved.]


judgement:
No. 5 (N) of 1974.
(Under Article 32 of the Constitution of India).
Soli J. Sorabjee, Harish N Salve, A.K. Verma, K.J. John, Srinivasamurthy, Ms. Naina Kapur, J.B. Dadachanji and Joel Pares for the Petitioners.
Shanti Bhushan and A.V. Rangam for the Respondents.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
In these writ petitions under Article 32 of the Constitution of India, three electric supply undertakings in the State of Tamil Nadu, namely, Vellore Electric Corporation Ltd., Nagapatam Electric Supply Co. Ltd., and Kumbakonam Electric Supply Corporation Ltd., challenge the constitutional validity of the Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973, ( 'Act ' for short) on the ground that the 'Act ', which envisages the acquisition of the Electric Supply Undertak ings of three petitioners, as violative of Articles 14, 19(1)(f), 19(1)(g) and 31 of the Constitution.
These writ petitions were heard along with Writ Petition (Civil) Nos. 457 and 458 of 1972, pertaining to the acquisi tion of Tinsukhia Electric Supply Co. Ltd., and Dibrugarh Electric Supply Co. Ltd., under the provisions of the Tin sukhia and Dibrugarh Electric Supply Undertakings (Acquisi tion)Act, 1973, (Assam Act 1973) and the main contentions touching the constitutionality of such State laws, providing for acquisition of private electricity undertakings inde pendently of and without recourse to the option to purchase envisaged by the terms of licences and under the provisions Sections 6, 7 and 7A of the Electricity Act 1910 are con sidered in the main judgment in the said WP 481 Nos. 457 & 458, separately rendered today.
The scheme and the broad features of The Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973, which received the assent of the President on 30th September, 1973, are that the "Act" enables and provides for the acquisition of the private undertakings engaged in the business of supplying electricity to the public other than those belonging to and are under the control of the State Electricity Board or the local authorities.
Section 2 of the Act declares that the "Act" is for giving effect to the policy of the State towards securing of the Directive Principles, specified in clauses (b) & (c) of Article 39 of the Constitution of India.
Section 3 is the interpretation clause.
Section 4 empowers the State Govern ment to declare, by order in writing, that any undertaking shall vest in Government on the date specified in such order.
The proviso to Section 4 enables the Government to modify, by advancing or postponing, the date originally fixed in such order, or the modified date; or to cancel such order.
The proviso is, however, subject to a limitation which is in terms following: "So, however, that no such order shall be modified or cancelled after the undertaking has vested in the Government but such cancel lation shall not be deemed to prevent the Government from taking any proceeding de novo in respect of such undertaking under this Act." The mode of promulgation and the incidence and consequence of an order under sub section (1) of Section 4, are envisaged in subsection (3) (4) & (5) of Sections 4 and 6 of the Act.
Sub sections (3), (4) and (5) of Section 4 provide: "(3) Every order under sub section (1) shall be (a) served on the licensee in the prescribed manner; and (b) published in such manner as the Government may deem fit.
(4) On the vesting date the under taking, to which the order under sub section (1) relates, shall, subject to the provisions of section 6, stand transferred to, and vest in, the Government.
482 (5) Every licensee who, after the vesting date, was in possession of, or deriv ing any benefit from the undertaking vested in the Government under sub section (1), shall be liable to pay to the Government, for the period, after such vesting, for which he was in such possession or deriving such benefit, an amount as compensation for the use, occupa tion or enjoyment of that undertaking as the prescribed authority may fix in the prescribed manner.
Such authority shall take into consid eration such factors as may be prescribed.
" We shall refer to Section 6 and its impact at an appropriate stage later.
Section 5 of the "Act" envisages the "amount" to be given to the licensee on whom an order has been served under Section 4 and provides for its determination on two alterna tive basis Basis (A) or Basis (B) as may be chosen by the licensee in the exercise of the option given under Section 8.
Section 7(1) contemplates and requires the appointment of an ,Accredited Agent" by the licensee within three months of service of the order under Section 4(1).
Such accredited agent is required within one month of his appointment or with such further time as may be granted by Government, signify the choice of the Basis for the determination of the "Amount".
Section 8(2) says that the choice of the Basis once intimated shall not be open to revision except with the concurrence of the Government. 'Basis (A) ' provides that the amount to be given shall be equivalent to 12 times of the average net annual profits of the undertaking during a period of any five Account years at the option of the licen see within a period of seven consecutive account years immediately preceding the vesting date. 'Basis (B) ' contem plates a different mode of determination of the amount.
It provides for payment of the aggregate value of the sums specified in clauses (i) to (ix) of sub section (2) of Section 5.
Section 10 speaks of the deduction that the Government is entitled to make for the amount.
They are specified at clauses (a) to (i) of Section 10.
Section 11 provides for the manner of payment of the "Amount".
Section 13(1) renders any dispute "in respect of any of the matters in clauses (a) to (e) of Section 13(1)" arbitrable.
The Arbitrator is required, by Section 11(2), to be a District Judge or a person who is a retired District Judge or a retired High Court Judge.
Chapter III of the Act, comprising Sections 14, 15, 16 and 17 contemplate and provide for the termination of agree ments between the licensee on the one hand and the managing agent or the managing 483 director, as the case may be, on the other; the continuation under the Government or the Electricity Board, of services of persons on the staff of the licensee taking an inventory of the assets and for information in regard to the documents maintained by the licensee and other incidental matters.
Sections 18 and 19 of Chapter IV deal with offences, penalties and procedure therefore Chapter V, comprising Sections 20, 21, 22, 23 and 24, deals with miscellaneous matters.
Two sections in Chapter V are of particular rele vance.
Section 22(i), inter alia, provides that no provi sions of Electricity Act, 1910, or the Electricity Supply Act, 1948, in so far as such provisions are inconsistent with any of the provisions of the Act, shall have any ef fect.
Section 23 refers to and deals with the action initi ated under the earlier State law viz., the Tamil Nadu Elec tric Supply Undertaking (Acquisition) Act, 1954, (Tamil Nadu Act 29 of 1954) which is repealed by the 'Act '.
Sub section (1) of Section 23 says that the said Act 29 of 1954 shall cease to apply to any undertaking as defined in Section 3(12) of the 'Act ' which has "not vested with and taken possession of by the Government under the provisions of the 1954 Act" before the commencement of the 1973 Act.
Sub section (2) and (3) of Section 23 envisage and provide for situations where some action had been initiated by the 1954 Act but such action had not culminated in the vesting of the undertaking and possession thereof being taken over by Government.
Sub section (2) and (3) of Section 23 provide: "(2) Notwithstanding anything con tained in the 1954 Act, if, in pursuance of any order under sub section (1) of section 4 of the 1954 Act in respect of any undertaking as defined in section 3 (12) of this Act, the Government have not taken possession of such undertaking before the commencement of this Act that order shall lapse and be of no effect and such undertaking shall not vest and shall be deemed never to have vested in the Govern ment under the 1954 Act and in respect of such undertaking it shall be lawful for the Govern ment to make an order under subsection (1) of section 4 of this Act and the provisions of this Act shall accordingly apply to such undertaking." "(3) Notwithstanding anything contained in the 1954 Act, where, in respect of any undertaking as defined in section 3(12) of this Act, the Government have postponed the date of vesting under the proviso to sub section (1) of 484 section 4 of the 1954 Act, that undertaking shall not vest, and shall be deemed never to have vested, in the Government under the 1954 Act, notwithstanding the expiration of a period of one year from the date originally fixed under sub section (1) of section 4 of the 1954 Act and in respect of such undertak ing it shall be lawful for the Government to make an order under sub section (1) of section 4 of this Act, and the provisions of this Act shall accordingly apply to such undertaking." The provisions of Section 23 acquire particular signifi cance in the case of the Kumbakonam Electric Supply Corpora tion Ltd. and Nagapatam Electric Supply Co. Ltd., petition ers in W.P. 14 & 15 of 1974, as, indeed, proceedings for the acquisition of the undertakings of these two companies had been initiated under the 1954 Act but full effectuation thereof had been interrupted by the interlocutory orders made by courts in proceedings in which these two companies had challenged the validity of the 1954 Act.
Section 23 of the present 'Act ' seeks legislatively to set at naught such legal consequences as might come to be considered as ensuing from the action taken under the earlier 1954 Act.
Some contentions urged in these cases centre round what the petitioners refer to as some irreversible, vested rights according to them under the earlier proceedings under the 1954 Act.
The Vellore Electric Corporation Ltd., petitioner in WP No. 5(N) of 1974, was granted on 14.5.1929 by the Govern ment of the then Presidency of Madras under the provisions of the , (1910 Act ' for short), for the supply of.
electrical energy within the municipal limits of Vellore town which was later extended to cover the adjacent area of Ranipet.
Clause 12 of the licence envisages the option to the Government to purchase the licensee 's undertaking on the expiry of 30 years from the commencement of the licence or if licence is renewed thereafter on expi ration of every subsequent period of 20 years, during the continuance of the licence.
At the relevant time when the order under Section 4(1) was made, the remaining period of the licence was upto 14.5.
The State Government in exercise of powers under Section 4(1) of the Act made an order dated 30.10.1973, served on the petitioner on 5.11.
1973 fixing 1.12.1973 (which was later postponed to 7.1.1974) as the date of vesting.
The facts in W.P. 14 of 1974 are the following: 485 The petitioner, the Kumbakonam Electric Supply Corpora tion Ltd., a public limited company, then engaged in the business of distribution and supply of electrical energy in the Taluks of Kumbakonam and Papanasam and a portion of Thanjavur Taluk, in the District of Thanjavur in the State of Tamil Nadu, was granted a licence dated 15.4.1930 under the , by the Government of the then Presidency of Madras.
The initial period of the licence was 20 years with a provision for renewal for further peri ods of 7 years each.
At the time the impugned order under Section 4(1) of the "Act" was made, in relation to the Electricity Supply Undertaking of this company, the unex pired period of the licence was up to 15.4.1978.
On 12.1.1968, the State Government in exercise of its power under Section 4(1) of the Madras Electricity Supply Undertakings (Acquisition) Act, 1954, made an order for the taking over of the undertaking.
The petitioner company filed a writ petition No. 704 of 1968 in the High Court of Madras, challenging the constitutional validity of the 1954 Act under which the order was made.
That writ petition was dis missed on 31.7.1968.
The Writ Appeal No. 338 of 1968, filed by the petitioner was also dismissed by the Division Bench.
The petitioner preferred, by special leave, an appeal to this Court in CA 119 of 197 1.
During the pendency of the proceedings before the High Court and before this Court, petitioner had had the benefit of interlocutory orders, "staying delivery of possession of the undertaking".
Howev er, the petitioner withdrew the appeal, according to it, on the suggestion of the Government With a view to facilitating negotiations for a settlement.
However, on 30.9.1973, the 'Act ' in the present proceed ings came into force.
As noticed earlier, sub section (2) and (3) of Section 23 of the 'Act ' statutorily abrogates the effect, incidents and consequences of all earlier proceed ings taken under the 1954 Act, except in cases where the vesting and the taking over of possession of the undertaking had already occurred before 30.9.1973.
The order under Sec tion 4(1) of the 1973 Act in the case of the petitioner in WP 14 of 1974 was made on 30.10.1973 declaring 1.12.1973 as the date of the vesting.
In WP No. 15 of 1974, the first petitioner, the Nagapatnam Electric Supply Co. Ltd., a public limited compa ny, was the grantee of a licence, dated 22.8.1933, under the , by the then Government, Presi dency of Madras, for the supply of electricity in the areas specified in the grant.
The initial period of the .
licence was 20 years with a provision for renewal for further peri ods of 486 7 years each.
At the time the order under Section 4(1) impugned in the writ petition was made, the unexpired period of the licence was upto 22.8.1974.
As in the case of Kumbak onam Electric Supply Corporation Ltd., so in the present case, Government in purported exercise of powers under Section 4(1) of the earlier Act, viz., the Tamil Nadu Elec tricity Supply Undertaking (Acquisition) Act, 1954, had made an order on 12.1.1968 declaring that the undertaking of the petitioner shall vest in the Government with effect from 15.7.1968.
The petitioner also challenged the constitutional validity of the 1954 Act in WP No. 703 of 1968 in the High Court of Madras.
The writ petition was dismissed in Madras High Court on 3.7.1968.
The Writ Appeal 337 of 1968 pre ferred by the company before a Division Bench of the High Court, also came .to be dismissed.
The Company preferred, by special leave, CA No. 120 of 1971 before this Court.
During the pendency of the proceedings in the High Court and in the appeal before this Court, there were interlocutory orders, staying delivery of possession of the undertaking.
The appeal before this Court was however, withdrawn by the company on 5.10. 1972.
Thereafter, 1973 Act came into force.
As stated earli er, SectiOn 23 of the 'Act ' sought to nullify the effect.
of the action taken under the 1954 Act and a fresh order dated 30.10.1973 under Section 4(1) of 1973 Act came to be promulgated declaring that the undertak ing of the .
petitioners would vest in Government with effect from 1.12.1973.
The three petitioner companies assail the constitu tional validity of the 'Act ' as also the orders made under Section 4(1) in the individual cases.
We have heard Sri Hansh Salve, learned counsel for the petitioners in the three petitions and Shri Shanti Bhushan, learned Senior Advocate for the State of Tamil Nadu and its authorities.
The challenge in the main, is to the constitu tionality of the "Act", on the basis of discrimination as between the procedures for take over contained in Section 6 and 7 of the Electricity Act, 1910, on the one hand and the less advantageous, so far as licencee is concerned, con tained in the present 'Act '.
However, some specific provi sions are also challenged as arbitrary and unreasonable.
The contentions in support of the petitions urged at the hearing of these petitions of which (b) & (c) are particular to WP Nos. 14 and 15 of 1974 may be noticed and formulated thus: 487 "(a) that the legislative declaration in Section 2 of the 'Act ' that the legislation is for giving effect to the Directive Principles of State Policy, specified in clauses (b) & (c) of Article 39 of the Constitution is invalid, it being merely a pretext to undo and take away the petitioners ' legitimate entitle ment to the payment of market value as provid ed in the terms of the licence read with Section 6 and 7 of Electricity Act, 19 10, and, accordingly, the legislation does not attract the constitutional validity from challenge under Article 31 C of the Constitu tion; (b) that, pursuant to the order made under Section 4(1) of the 1954 Act petitioners ' undertakings stood vested in Government in the year 1968 and the concomitant right to receive compensation as determinable under and in terms of the 1954 Act was came to be vested in the petitioners and got crystalized into a 'chose in action ' and that in the circum stances the impugned 'Act ' which in effect and substance acquires only these "choses in action", and not the undertakings as such which had already vested under the 1954 Act; (c) that Section 23(2) of the Impugned Act in so far it seeks to undo the legal incidents and consequences of the order made which provided a less disadvantageous standards for the determination of the amount and the im pugned orders which seeks to declare that the said undertakings vest again in Government this time pursuant to order pro mulgating under Section 4(1) of the impugned Act is violative of Article 14, 19(1)(g) and 31 (as the latter Articles then stood) being a fraud on the power to acquire; (d) that the 'Act ' is violative of Article 14 of the Constitution in as much as it seeks to confer upon the Government an alternative and discriminatory power of attaining the same end, namely, the acquisition of petitioners ' undertakings on terms more advantageous to the Government and more disadvantageous to the petitioners than those contained in the Elec tricity Act 1910; that the direct effect of the impugned Act is to extinguish the rights conferred upon the petitioners to carry on a lawful business in terms of the subsisting licences in their favour and is violative of Article 19(1)(f) (as it then stood) and 19(1)(g): 488 (e) that, at all events, Section 4(5) of the Act which renders a licencee, who after the vesting date was in possession of, or deriving any benefit from, the undertaking liable to pay to Government compensation for the use occupation enjoyment of the undertak ing is arbitrary and violative of Articles 14 and 31; (f) that clause 5(2)(i) of the Act which excludes from the compensation of the 'Amount ' works paid for by the consumers is violative of Article 19(1)(g) and Article 31; (g) that Section 10(d) providing for deduc tion from the 'Amount ' sums due to the Govern ment or the Electricity Board by the licencee account of electricity supplied by Government is arbitrary, as the provision empowers deduc tions of even sums bona fide disputed by the licencee of debts.
(h) that, while proviso to Section 6(e) enables debts, mortgages and obligations of the licencee to attach to the "amount" to be given under the Act.
Section 10 again envis ages the same 'amount ' to be deducted from the 'amount ', leading to a possible double recov ery of the same debt; (i) that Section 10(f) providing for deduc tion of loss sustained by Government by reason of any property belonging to the undertaking not having been handed over at the marketvalue of the property is unreasonable in as much as under Basis B. Such Market value is not but only the book value is the basis of determina tion of the amount; (j) that provisions of Section 8 which prescribes a period of one month during which the accredited representative has to exercise a right of auction is unreasonably short, rendering the procedure prescribed for the choice of the Basis of determination of the 'Amount unfair and arbitrary. ' 7.
Re: Contentions (a), (b), & (c): These contentions could be dealt with together.
The principal argument is that that there is no rational and direct nexus between the objects of the Act and the Direc tive Principles of (1) State Policy adumorated in clauses (b) & (c) of Article 39 in as much as the 489 impugned Act was brought forth only to avoid the conse quences of the terms of the licences and the beneficent provisions of Section 6, 7 and 7 A of the Electricity Act 1910.
If there is, thus, no protection to the law of Article 31 C, then its provisions would clearly violate Articles 14, 19 and 31.
These contentions have to be examined with reference to the provisions of the Constitution as they stood in 1973.
Article 31 C was introduced by Section 3 of the Constitution (25th Amendment) Act 1971 with effect from 20.4.1972.
Arti cle 31 C, before the expansion of its scope by the 42nd Amendment, protected a law giving effect to the Policy of the State towards implementing the principles specified in Clauses (b) & (c) of Article 39.
Article 31 itself had not then been deleted but its scope had been considerably cut down and a law providing for acquisition of property, even if it did not have the protection of Article 31 C, could not be tested with reference to the adequacy of the 'amount ' payable for the acquisition.
The 'just equivalent ' or ful lindemnification principle had been done away with and the question of the adequacy of the amount was rendered non justiciable.
It was strenuously urged on Sri Salve that the impugned Act had no rational and direct nexus with the objects of clauses (b) & (c) of Article 39 as the covert but easily discernible purpose of the Act was to deny to the petition ers ' their rights under terms of the licence and the benefit of Sections 6, 7 & 7(A) of the 1910 Act.
A somewhat similar ' contention was urged in WP Nos. 457 & 458 of 1972 where a similar legislation of the State of Assam was challenged.
The contention is noticed in our judgment in those appeals thus: " . the acquisition of the two undertak ings are challenged by the petitioner on several grounds, the principal attack, howev er, being that the legislations, brought forth, as they were, in the wake of the pri vate negotiations and the exercise of the option to purchase, are not bona fide, but constitute a mere colourable exercise of the legislative power and that, at all events the real objects of the two legislations have no direct and reasonable nexus to the objects envisage in clause (b) of Article 39 of the Constitution and that a careful and critical discernment of the context in which the legis lation was brought forth would lay bare before the judicial eye that what was sought to be acquired was not "undertakings" of the two companies but really the difference between the "market value" of the 490 undertakings which the State had agreed, under the private treaties, to pay and what, in any event, the State was obliged to pay under the provisions of Section 7A, as it then stood on the one hand and the "Book Value" of the undertaking, which the law seeks to substitute on the other.
If the protective umbrella of Article 31 C is, thus, out of the way, the 'amount ' payable under the impugned law, it is urged, would be illusory even on the judicial ly accepted tests applied to Article 31(2) as it then stood " " . .
Learned Counsel submitted that in order to decide whether a Statute is within Article 31 C or not, the Court has to examine the nature and character of the legis lation and if upon such scrutiny it appears that there is no nexus between the legislation and the principles in Article 39(b) the legis lation must be held to fall outside the pro tection of Article 31 C . " The contention was not accepted.
Repelling it, we observed in the course of the judgment in WP Nos. 457 & 458 of 1972: "The proposition of Sri Sorabjee, in princi ple, is, therefore, unexceptionable; but the question remains whether, upon the application of the appropriate tests, the impugned statute fails to measure up to the requirements of the Constitution to earn the protection under Article 31 C . . " "It is not disputed that the elec tricity generated and distributed by the undertakings of the petitioner companies constitute "material resources of the communi ty" for the purpose and within the meaning of Article 39(b)." " .
The idea of distribution of the material resources of the community in Article 39(b) is not necessarily limited to the idea of what is taken over for distribution amongst the intended beneficiaries.
That is one of the modes of "distribution".
Nationalisation is another mode . " "On an examination of the scheme of the impugned law the conclusion becomes inescapable that the legislative measure is one of na tionalisation of the undertakings and the law is eligible for and entitled to the protection of Article 31 C." 491 Referring to the contention in that case that not every provision of a law can and need to eligible for the protection of Article 31 C and that; accordingly, the provisions as to the quantification of the amount which were meant to achieve an oblique motive and inter dicting and extinguishing rights to receive market value under the 1910 Act would not attract the protection of Article 31 C, It was held: " .
We are afraid this contention pro ceeds on an impermissible dichotomy of the components integral to the idea of nationali sation.
The economic cost of social and eco nomic reform is, perhaps, amongst the most vexed problems of social and economic change and constitute the core element in Nationali sation.
The need for constitutional immunities for such legislative efforts at social and economic change recognise the otherwise unaf fordable economic burden of reforms . . " "It is, therefore, not possible to divorce the economic considerations or compo nents from the scheme of the nationalisation with which the former are inextricably inte grated.
The financial cost of a scheme of nationisation lies at its very heart and cannot be isolated.
Both the provisions relat ing to the vestitute of the undertakings in the State and those pertaining to the quanti fication of the "Amount" are integral and inseparable parts of the integral scheme of nationalisation and do not admit of being considered as distinct provisions independent of each other.
These observations fully answer the contention of Sri Salve in regard to the question whether impugned Act at tracts protection of Article 31 C or not.
If Article 31 C comes in, Articles 14, 19 and 31 go out.
The second limb of the Contention (a) is that the im pugned Act seeks to take over petitioners ' undertakings which had already vested in Government under the 1954 Act.
It is, no doubt, true that appropriate orders had been made under Section 4(1) of 1954 Act.
Sri Salve contends that by the operation of law, the undertakings of the two petition ers, namely, Kumbakonam Electric Supply Corporation Ltd. and Nagapatnam Electric Supply Co. Ltd. became vested in Govern ment and that Section 23 of the present Act virtually creates an artificial divestitive event and seeks to re invest it again in Govern 492 ment by the device under the impugned Act with the sole object of cutting down the quantum of the "amount".
Sri Salve pointed out that Section 5 of the 1954 Act envisaged three alternative Bases Basis A, Basis B, and Basis C and that under Basis A the amount equal to 20 times of the average net annual profit of the undertaking during a period of five consecutive accounting years immediately preceding the vesting date was payable.
The number of years ' purchase value is, Sri Salve says, now reduced to 12 by the impugned Act.
Shri Salve submits that the amount payable under the 1973 Act is wholly illusory.
Shri Shanti Bhushan, learned Senior counsel for the State, submitted that if it is held that the legislation has the protection of Article 31 C, barring the question of legislative competence all other attacks based on Articles 14 and 19 and 31 cannot be countenanced.
Sri Shanti Bhushan submitted that all the contentions that the petitioners advance in support of their challenge to the validity of the Act rest, in the ultimate analysis, on Articles 14, 19 and 31 which is precisely what Article 31 C forbids.
So far as legislative competence is concerned, Shri Shanti Bhushan submitted that it is referable to Entry 42 of List III and with Presidential assent, the legislation prevails over any other law and, therefore, no question of lack of legislative competence can be urged.
Learned counsel submitted that the contentions urged by the petitioners, in the last analysis, would amount to this: that a legislation which offends Articles 14.
19 and 31.
would not be a valid law at all and would, therefore, not be eligible to protec tion Article of 31 C.
If a law satisfies the demand of Article 14, 19 and 31 then such a law, says learned counsel, would not need the protection of Article 31 C at all and that such an approach would render Article 31 C itself meaningless.
In regard to the Contention (d), Sri Shanti Bhushan would say that it proceeds on a factual fallacy.
There cannot, it is urged a vesting of the undertaking in the Government under the 1954 Act unless the concept of vesting has and is accompanied by, the plenitude of the legal inci dents and consequences of such vesting for purposes of the implementation of the 1954 Act.
When the delivery of posses sion of the undertaking pursuant to the alleged vesting under the 1954 Act had been interdicted by the High Court and the Supreme Court by orders of stay, at the instance of the petitioners, the exercise under the 1954 Act became infructuous and the present stance of the petitioners is merely an attempt to exploit to their own advantage a situa tion emerg 493 ing from the consequences of their own actions.
That apart, the contention (d), says counsel, is really one based on Articles 14, 19 and 31 and the protection of Article 31 C to the Act would, in any event, disallow any such attack.
On a consideration of the matter, we think that all the Contentions (a), (b), (c) and (d) are covered in one form or the other our pronouncement in WP Nos. 457 and 458 of 1972.
We are also of the opinion that Sri Salve 's contention that what was sought to be acquired was mere "choses in action" is not sound.
In any event, the decision of this Court in State of Madhya Pradesh vs Ranojirao Shinde & Anr., ; relied upon by Shri Salve to contend that choses in action could not be acquired would require to be read with later pronouncement in Madan Mohan Pathak vs Union of India & Ors., ; It is not necessary, however, to pronounce on this point as in our view what was acquired were not merely choses inaction but the undertak ings themselves.
Contentions (a), (b) and (c) accordingly fail and are held and answered and against the petitioners.
Re: Contention (d): The submission of learned counsel on the point is that the impugned Act confers upon the State Government an alter native procedure, concurrently with the one envisaged in Sec.
6 of the Electricity Act, 19 10, for attaining the same end viz., the acquisition of an Electricity Undertaking.
It is urged that Sec.
6 of the 1910 Act has been held to amount to conferment of power upon the authorities to take away the property of the licensee.
The option under Sec. 6 is really statutory and in its essential nature the power is not distinguishable from the State 's power to acquire an indi vidual 's property which really is and forms the basis of the impugned Act.
It appears to us that there are certain fallacies basic to the argument.
The special nature of the subject matter of the grant in relation to distribution in the community of such material resources be it electricity, water, gas or other essential amenities of life was recognised by this Court.
The following observations of the United States Supreme Court in New Orleans Gaslight Co. vs Louisiane Light & Heat Producing & Mfg. Co., ; were referred to: "the manufacture and distribution of gas by means of 494 pipes, mains and conduits placed under legis lative authority in the public ways of a municipality, is not an ordinary business in which everyone may engage as of common right upon terms of equality; but is a franchise relating to matters of which the public may assume control . . " and said: " . .
It thus appears that American Lawyers describe the business of supplying energy as well as the business of supplying water and gas as a franchise, and it also appears that, in granting licence or sanction to a person to engage in such busi ness, a condition is usually imposed for the compulsory acquisition of the business when the licence or sanction comes to an end".
[See The Okara.
Electric Supply Co. Ltd. vs The State of Punjab, AIR If the impugned law is within the legislative competence of the State Legislature as indeed it must be held to be the State law, with the Presidential assent, prevails and is not over borne by the Central law.
The impugned State law, by its 22nd Section, expressly excludes the operation of any provision of the Electricity Act, 1910, in so far as such provision is inconsistent with the provisions of the State Law.
The constitutional immunity afforded to the State law prevents any challenge to it on grounds based on Article 14 or 19.
We have held that the State law has such protection.
The contention (d) has thus, no foundation.
It has to fail.
Re: Contention (e): 12.
This pertains to the liability of the licensee to account to Government in respect of possession of and any benefit derived from the undertaking after the date of the vesting.
This provision is assailed as arbitrary and uncon stitutional.
There is nothing unreasonable about this provi sion which merely recognises the obligation of a licensee to account for its acts in relation to a property which has already vested in Government.
There is no substance in this contention either.
Re: Contention (f): This contention arises in the context of Sec.
5(2)(i) of the Act.
In 495 computing the amount payable under "Basis B" the aggregate value of the sums specified in several clauses of 1 Sec.
5(2) has to be taken.
5(2)(i) while requiting the book value of all "completed works in beneficial use pertaining to the undertaking and handed over to the Government" to be taken, however, excludes therefrom works paid for by the consumers.
The contention of the petitioners is that the "works paid for by the consumer" is also the property of the licensee and cannot legitimately be excluded.
A substantial ly similar contention was urged and has been considered and negatived at para 29 of our judgment in WP Nos. 457 and 458 of 1972.
The reasons stated by us in negativing the conten tion in that case fully answer the present point.
Contention (f) is also insubstantial.
Re: Contention (g): Section 10(d) envisages,deduction from the amount pay able towards and on account of arrears of electricity charges payable by the licensee to the Government or the Electricity Board.
as the case may be, for the supply of Electricity made by them to the licensee.
This is a legiti mate item of deduction.
But, the point Shri Salve sought to put across is that ,even a disputed and untenable.
claim in that behalf becomes entitled to deduction.
There is no justification for this apprehension.
Section 13(1)(e) makes such a dispute as one of the arbitrable disputes and no deduction of a disputed claim can be justified by Government if the arbitrator who is or has been a District Judge or a retired High Court Judge holds that the deduction is unjus tified.
Contention (g) has no substance either.
Re: Contention (h): The grievance sought to be made out on the matter is that while Section 6(2) of the Act has the effect of vesting all the assets specified in Sec.
6(2)(i)(b) in Government free from encumbrances and the proviso to Sec.
6(2) renders the amount payable to the licensee as substituted security for the debts, mortgages and obligations in substitution of the assets vesting in Government, however, Sec.
10(e) ren ders one species of such debt viz,.
sums due to the Govern ment or the Electricity Board, liable to be deducted from the amount.
Shri Salve contends that this would make for a double recovery of the same debt.
This, we are afraid, is a wrong way of looking at the two provisions.
If a debt is deducted from the "amount", .the debt is satisfied and is extinguished and no further debt remains outstanding to get itself attached to and became an encumbrance upon the sub stituted 496 security viz., the 'amount '.
6(2) and Sec.
10(e) must be construed harmoniously and in a reasonable manner.
There is no scope for any apprehension of a possible double recov ery of the same debt.
There is no substance in contention (h).
Re: Contention (i): The point of the matter is that sec.
10(f) entitles the deduction of the market value of any "property" or "right" which vests in Government and which is not delivered by the licensees to Government.
The grievance of the petitioner is that while recovery of "market value" is sought to be made for non delivery of the item, however, in computing the "amount" only the "book value" of such "property" or "right" is taken into account.
This, it is contended, is an instance of application of double standards and is, therefore, arbi trary.
We see no substance in this contention.
The measure of the reimbursement for an asset withheld by the licensee is the corresponding expenditure to be incurred by Govern ment for replacement which, in eminently conceivable cases, could be the market value of the asset which is so withheld by the licensee and which has to be replaced to keep the undertaking functioning.
There is no substance in this contention either.
Re: Contention (j): Shri Salve submitted that the accredited representative is, under sec.
8(1), given only a month 's time from the date of his appointment to signify the choice under section 5 as to of the basis of determination of the amount.
The time granted, it is said, is unreasonably short.
The argument clearly overlooks the clause 'or such further time as may be granted by the Government ' occurring in Section 8(1).
If the exercise of this power is arbitrary or capricious the licen see has remedies in Administrative Law.
But the provision itself cannot be held to be bad.
There is no substance in this contention either.
Certain other subsidiary contentions were urged at the hearing.
All these matters have been elaborately consid ered in our judgment in Writ Petn.
Nos. 457 and 458 of 1972 arising out of the Assam legislation.
We have not found any merit in them.
However, there is one aspect which merits considera tion.
Shri Salve submitted that the petitioners in Writ Petn.
No. 5(N) of 1974, who initially, on 16.1.1974, had opted for basis A had sought a change to basis B by their application dated 4.10.1977.
On 2.2.1978, 497 Government refused to permit the change.
Shri Salve submits that a serious and indeed, irreparable hardship has been occasioned to the petitioners by this arbitrary refusal.
In these writ petitions we have dealt with questions of consti tutionality leaving the questions of construction of the provisions to the appropriate authorities.
However, having regard to the checkered history of the proceedings, it appears to us that Shri Salve 's submission deserves to be accepted.
Accordingly, the order of the Government dated 2.2.1978 refusing a change in the basis for determination of the amount is set aside and the Government is directed to consider and dispose of the application dated 4.10.1977 afresh within two months from today.
We make it clear that the Government shall not unreasonably withhold the permis sion for the change.
In the result, subject to the direction in para 19 supra relating to W.P. No. 5(N) of 1974, we find no sub stance in these writ petitions which are dismissed.
There will be no order as to costs.
T.N.A. Petitions dismissed.

summary:
The petitioner companies viz., Veilore Electric Corpora tion Ltd., Kumbakonam Electric Supply Corporation Ltd. and Nagapatam Electric Supply Corporation Ltd. were grantee of licences under the by the Government of the then Presidency of Madras for supply of electrical energy in their respective areas.
In exercise of its power under Section 4(1) of the Madras Electricity Supply Undertakings (Acquisition) Act, 1954, the State Government issued orders dated 12.1.1968 taking over the undertakings of the Petitioner Companies viz., Kumbakonam Electricity Supply Company and Nagapatam Electric Supply Company declaring that their undertakings shall vest in the Government with effect from the dates specified in their respective orders.
These two petitioner companies filed writ petitions in the High Court of Madras challenging the constitutional validity of the 1954 Act, which were dismissed.
The Writ Appeals filed by them were also dismissed by a Division Bench of the High Court.
Thereafter appeals were filed in this Court, which were however, later withdrawn.
Though proceedings for the acquisition of the undertak ings of these two companies had been initiated under the 1954 Act but full effectuation thereof had been interrupted by the interlocutory orders made by the courts staying delivery of possession of the undertaking.
Subsequently the Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973 came into force which, inter alia, nul 477 lifted the effect of the action taken under the the State Government issued fresh orders under Section 4(1) of 1973 Act declaring that the undertakings of these two petitioner companies shah vest in Government with effect from 1.12.1973.
A similar order was passed b.v the State Government under Section 4(1) of 1973 Act in respect of the third petitioner company viz. Vellore Electric Corporation Ltd., declaring that the undertaking of this company shall vest in the Government with effect from 7.1.1974.
By an order dated 2.2.1978 the State Government also rejected the application of the petitioner Vellore Electric Corporation seeking a change in the basis for determination of amount from basis A to basis B under the 1974 Act.
Writ Petitions were filed in this Court under Article 32 of the Constitution by the three affected companies chal lenging the constitutional validity of the Tamil Nadu Pri vate Electricity Supply Undertakings (Acquisition) Act, 1973, as well as the orders made under Section 4(1) on the ground that the 'Act ', which envisages the acquisition of the Electric Supply Undertakings of petitioners as violative of Articles 14, 19(1)(f), 19(1)(g) and 31 of the Constitu tion.
Dismissing the Writ Petitions, HELD: 1.
The electricity generated and distributed by the undertakings of the petitioner companies constitute "material resources of the community." for the purpose and within the meaning of Article 39(b).
1.1 The idea of distribution of the material resources of the community in Article 39(b) is not necessarily limited to the idea of what is taken over for distribution amongst the intended beneficiaries.
That is one of the modes of "distribution".
Nationalisation is other mode.
1.2 On an examination of the scheme of the impugned law the conclusion becomes inescapable that the legislative measure is one of nationalisation of the undertakings and the law is eligible for and entitled to the protection of Article 31 C. 1.3 The economic cost of social and economic reform is, perhaps, amongst the most vexed problems of social and economic change and constitute the core element in National isation.
The need for constitutional immunities for such legislative efforts at social and economic 478 change recognise the otherwise unaffordable economic burden of reforms.
It is, therefore, not possible to divorce the economic consideration or components from the scheme of the nationalisation with which the former are inextricably integrated.
The financial cost of a scheme of nationalisa tion lies at its very heart and cannot be isolated.
Both the provisions relating to the vestitute of the undertakings in the State and those pertaining to the quantification of the 'Amount ' are integral and inseparable parts of the integral scheme of nationalisation and do not admit of being consid ered as distinct provisions independent of each other.
Tinsukia Electric Supply Co. Ltd. vs
State of Assam, [1989](3) S.C.C. 709; applied. 1.4 In view Of the fact that what was acquired in the instant case were not merely "choses in action" but the undertakings themselves, it is not necessary to go into the question whether a "choses in action" can at all be ac quired.
State of Madhya Pradesh vs Ranojirao Shinde & Anr., ; and Madan Mohan Pathak vs Union of India & Ors., ; ; referred to.
The subject matter of the grant in relation to dis tribution in the community of such material resources be it electricity, water, gas or other essential amenities of life has a special nature.
New Orleans Gaslight Co. vs Louisiane Light & Heat Producing & Mfg. Co., ; ; The Okara Electricity Supply Co. Ltd. vs The State of Punjab, A.I.R. 1960 S.C. 284; referred to.
2.1 The impugned law is within the legislative compe tence of the State Legislature and such State law, with the Presidential assent, prevails and is not over borne by the Central law.
The impugned State law, by its 22nd section, expressly excludes the operation of any provisions of the Electricity Act, 1910, in so far as such provision is incon sistent with the provisions of the Stare Law.
The Constitu tional immunity afforded to the State law prevents any challenge to it on grounds based on Article 14 or 19. 3.
There is nothing unreasonable about the provision which merely recognises the obligation of a licensee to account for its acts in relation to a property which has already vested in Government.
There 479 fore Section 4 which pertains to the liability of the licen see to account to Government in respect of possession of and any benefit derived from the undertaking after the date of the vesting is not arbitrary and unconstitutional.
The deduction envisaged by Section 10(d) from the amount payable towards and on account of arrears of elec tricity charges payable by the licensee to the Government or the Electricity Board as the case may be for the supply of Electricity made by them to the licensee is a legitimate item of deduction.
It cannot be held to be arbitrary on the apprehension that even a disputed and untenable claim in that behalf becomes entitled to deduction.
Section 13(1)(e) makes such a dispute as one of the arbitrable disputes and no deduction of a disputed claim can be justified by the Government if the arbitrator who is or has been a District Judge or a retired High Court Judge holds that the deduction is unjustified.
If a debt is deducted from the "amount", the debt is satisfied and is extinguished and no further debt remains outstanding to get itself attached to and becomes an encum brance upon the substituted security viz., the 'amount '.
Section 6(2) and Section 10(e) must be construed harmonious ly and in a reasonable manner.
There is no scope for any apprehension of a possible double recovery of the same debt.
Therefore the Act cannot be challenged on the ground of possible double recovery of the same debt under Section 6(2) and Section 10(e).
The measure of the reimbursement for an asset with held by the licensee is the corresponding expenditure to be incurred by Government for replacement which, in eminently conceivable cases, could be the market value of the asset which is so withheld by the licensee and which has to be replaced to keep the undertaking functioning.
Therefore Section 10(f) cannot be held to be arbitrary on the ground that it is an instance of application of double standards because while recovery of "market value" is sought to be made for non delivery of the item whereas in computing the "amount" only the "book value" of such "property" or "right" is taken.
It cannot be said that the accredited representative is, under Section 8(1), given only a month 's time from the date of his appointment to signify the choice under Section 5 as to the basis of determination of the amount.
Section 8(1) also provides 'or such further time as may be granted by the Government '.
If the exercise of this power is arbi trary or capricious the licensee has remedies in Administra tive 480 Law.
But the provision itself cannot be held to be bad or invalid on the ground that time granted under the Section to signify choice under Section 5 is unreasonably short.
The order of the Government dated 2.2.1978 rejecting the application of the Petitioner, Vellore Electric Corpora tion and refusing a change in the basis for determination of amount from basis A to basis B is set aside and the Govern ment is directed to consider the matter afresh.


judgement:
vil Appeal Nos. 2436 to 2438 of 1989.
From the Judgment and Orders dated 7.4.83 and 2.5.
1986 of the Orissa High Court in O.J.C. Nos. 108 and 109 of 1986 and 6 of 1984 respectively.
T.U. Mehta, Gobind Das and Vinoo Bhagat for the Appellants.
G.L. Sanghi, R.K. Mehta and A.K. Panda for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
These three appeals raise a common question about the interpretation of the term "family" in Section 37(b) of the Orissa Land Reforms Act, 1960 (hereinafter referred to as the Act).
According to clause (a) of Section 37 of the Act the term "person" includes inter alia family.
Clause (b) of Section 37 being the clause under consideration may usefully be reproduced.
It reads: "(b) "family" in relation to an individual, means the individual, the husband or wife, as the case may be, of such individual and their children, whether major or minor, but does not include a major married son who as such had separated by partition or otherwise before the 26th day of September, 1970." According to the appellants in these three appeals partition in their respective families had been taken place in the year 1965.
The Act except Chapters III and IV came into force on Ist October, 1965.
Chapter IV of the Act which contains the provisions relating to ceiling and disposal of surplus land came into force on 7th January, 1972.
Suo motu proceedings under Section 42 of the Act for declaration of surplus land and consequential purposes were initiated in the year 1974.
Objections were filed asserting inter alia that in view of the partition in the families of the appel lants in the year 1965 the land in the ancestral properties which fell in the share of the appellants could not be club 607 bed with those of their father.
This contention, however, was not accepted on the definition of the term "family" contained in Section 37(b) of the Act.
Such of the major married sons who as such had separated by partition before the 26th day of September, 1970 as contemplated by the definition of the term "family" were allotted separate ceiling units but so far as the appellants are concerned their shares were clubbed with those of their father and only one ceiling unit was allotted as contemplated by the relevant provision of the Act.
The appellants having failed to get relief in the ap peals and revisions filed by them under the Act challenged the orders passed by the various authorities under the Act in writ petitions before the .High Court of Orissa.
These writ petitions were dismissed relying on the decision of a Full Bench of that Court in Nityananda Guru vs State of Orissa and others, A.1.R. 1983 Orissa Page 54 (F.B.).
It is these orders of the High Court which have been challenged in these appeals.
The validity of Section 37(b) of the Act does not appear to have been challenged before the High Court nor has it been seriously challenged even before us except by making a faint submission that even if by virtue of the said provision being incorporated in the 9th Schedule, it may be immune from challenge in view of Article 3lB of the Consti tution, the protection under Article 31C would not be avail able to it and it would be hit by Article 14 unless it was established that it had nexus with the policy of the State towards securing any of the principles laid down in Part IV of the Constitution.
This submission even if it is permitted to be raised for the first time in this Court has obviously no substance in view of the undisputed position that the Act aims at agrarian reform and the provisions with regard to declaration of surplus land and its distribution among the have nots namely landless persons is apparently to give effect to the policy of the State towards securing the principle laid down in Article 39(b) of the Constitution occurring in Part IV thereof and Section 37(b) has a clear nexus with that policy.
The aforesaid submission has, there fore, no substance.
At this place it may also be pointed out that validity of analogous provisions dealing with laws for declaration and distribution of surplus land framed by the States of Andhra Pradesh, Haryana and Maharashtra has already been upheld by this Court after rejecting challenges to them on various grounds in Tumati Venkaish etc.
vs State of Andhra Pradesh; , ; Seth Nand Lal & Anr.
vs State of Haryana & Ors.
, ; and Waman Rao & Ors. etc.
vs Union of India and Ors.
, ; 608 The main attack against the judgment of the Full Bench of the Orissa High Court in the case of Nityananda Guru (supra) relying on which the writ petition filed by the appellants were dismissed by the High COurt has been on the ground that partition in the respective families of the appellants in the year 1965 having been accepted, Section 37(b) of the Act had to be read in such a manner as to exclude the land which had fallen to the share of the appel lants even though they did not fall within the category of "a major married son who as such had separated by partition or otherwise before the 26th day of September, 1970" as contemplated by the definition of the term "family" in the said section.
It was urged that this purpose could be achieved by adding the word "or" between the words "major" and "married".
According to learned counsel if that is done the term "individual" would not include a major son who had separated by partition before the 26th day of September, 1970 even if he had not married prior to that date.
We find it difficult to take recourse to this mode of interpretation of Section 37(b) in view of its plain language.
1n British India General Insurance Co., Ltd. vs Captain Itbar Singh and Others, sub section (2) of Section 96 of the was sought to be interpreted by the learned Solicitor General in a manner which involved addition of certain words.
The submission was repelled and it was held: "The learned Solicitor General concedes this and says that the only word that has to be added is the word "also" after the word "grounds".
But even this the rules of inter pretation do not permit us to do unless the section as it stands is meaningless or of doubtful meaning, neither of which we think it is.
" On a plain reading of the definition of the term "fami ly" in Section 37(b) of the Act we are of the view that the said definition as it stands is neither meaningless nor of doubtful meaning.
In this connection, it may be pointed out that keeping in view the agrarian reform which was contem plated by the Act and particularly the provisions of Chapter IV relating to ceiling and disposal of surplus land which were calculated to distribute the surplus land of big tenure holders among the overwhelming have nots of the State the Legislature in its wisdom gave an artificial meaning to the term "family".
The main provision containing the definition of the term is to be found in the first part of Section 37(b) namely "family in relating to an individual means the individual, the husband or wife as the case may be of such individual and their children whether major or minor.
"The later part of Section 609 37(b) namely "but does not include a major married son who as such had separated by partition or otherwise before the 26th day of September, 1970" does not on the face of it contain a matter which may in substance be treated as a fresh enactment adding something to the main provision but is apparently and unequivocally a proviso containing an exception.
This admits of no doubt in view of the words "but does not include".
In the Commissioner of Income Tax, Mysore vs The Indo Mercantile Bank Limited, [1959] Supp. 2 SCR 256.
it was held: "Ordinarily the effect of an excepting or a qualifying proviso is to carve something out of the preceding enactment or to qualify something enacted therein which but for the proviso would be in it and such a proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and proper ly construed without attributing to it that effect." (Emphasis supplied) That apart the submission made by learned counsel for the appellants would also lead to an anomalous situation if the word "or" is added between the words "major" and "mar ried".
Not only a major unmarried son who had separated by partition before the 26th day of September, 1970 would get excluded from the definition of the term "family" even a minor married son would get so excluded.
The result would be that even though marriage of a minor son is prohibited by law such son would be placed at an advantageous position to a minor son who was law abiding and had not married.
Further the submission made by learned counsel for the appellants completely ignores the words "as such" used in the later part of Section 37(b) which contains the exception referred to above.
Given its proper meaning the words "as such" can only be interpreted to mean that it is only such son who would get the benefit of the exception who had separated by partition or otherwise before the 26th day of September, 1970 as "major married son".
The submission by counsel for the appellants that the words "as such" qualify only "son" and not "major married son" and are meant to distinguish son from brother or uncle etc.
is misconceived on the plain language of Section 37(b) which contemplates clubbing of land of spouse and children only and not of brother and uncle etc.
So, the question of using the words "as such" to distinguish son from brother or uncle etc. does not arise.
Further, for accepting this submission the words "major married" will have to be omitted as superfluous which 610 cannot be done in the garb of interpretation.
Learned counsel for the appellants also urged that a son who had separated by partition or otherwise from his father was himself an "individual" and if his land was clubbed with that of his father, he will be subjected twice to the provi sions relating to declaration of surplus land.
This submis sion too is equally untenable.
Land of such son alone who does not fall within the exception is to be clubbed with that of his father and with regard to land which had been so clubbed the son obviously cannot be treated as another "individual" in his own right for purposes of declaration of surplus land.
Only such son who falls within the exception will be liable to be dealt with as an "individual" in his own right, as his land has not been clubbed with that of his father.
Even on the facts of these appeals nothing has been brought to our notice to indicate that the land of the appellants which was clubbed with that of their father was subjected twice to the provisions relating to declaration of surplus land treating the appellants also as individuals.
It was then urged by learned counsel for the appellants that according to the definition of the term "family" as contained in Section 37(b) of the Act, land of a married daughter is liable to be clubbed twice; firstly, with that of her father and secondly, with that of her husband.
Ac cording to him it is against the spirit of the law dealing with the question of declaration of surplus land.
Suffice it to say, so far as this submission is concerned that none of appellants in these appeals is a married daughter and as such we do not find it necessary to go into this question.
We may also point out that dealing with an almost similar submission with regard to interpretation of Section 123(7) of the Representation of the People Act, 1951 it was held by a Constitution Bench of this Court in Rananjaya Singh vs Baijnath Singh and others, [1955] S.C.R. Page 671 at 676: The learned advocate, however, contended that such a construction would be against the spirit of the election laws in that candidates who have rich friends or relations would have an unfair advantage over a poor rival.
The spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect to in opposition to the plain language of the sections of the Act and the rules made thereunder.
If all that can be said of these statutory provisions is that construed according to the ordinary.
grammatical and natural meaning of their language 611 they work injustice by placing the poorer candidates at a disadvantage the appeal must be to Parliament and not to this Court.
" In view of the foregoing discussion we are of the opin ion that the Full Bench of the Orissa High Court in the case of Nityananda Guru (supra) lays down the correct law.
One more submission has been made by learned counsel for the appellants in the Civil Appeal arising out of SLP (Civil) No. 9079 of 1986.
It has been urged that certain Home Stead urban land of the appellants not connected with agricultural lying inside Udala Notified Area Council has wrongly been included as agricultural land in the draft statement.
This submission does not appear to have been made either before the High Court or before the authorities under the Act.
In the counter affidavit filed by the Additional District Magistrate (Land Reforms), Mayurbhanj, Orissa it has been stated in reply to paragraphs 21 to 24 of the SLP that there is no Home Stead land and no non agricultural land belonging to the appellant land holders in the Notified Area Council of Udala.
It has also been stated in paragraph 3(c) of the said counter affidavit that no Notification as contemplated by Section 73(c) of the Orissa Land Reforms Act has been made by the State Government.
It has further been stated therein that the Urban Land (Ceiling and Regulation) Act, 1976 has not been made applicable so far to the Udala Notified Area Council.
In this view of the matter it is not possible for us to record any finding with regard to this submission, and consequently we express no opinion in this behalf.
In the result, we find no merit in any of these appeals and they are accordingly dismissed but in the circumstances of the case there shall be no order as to costs.
R.S.S. Appeals dismissed.

summary:
Proceedings were initiated in 1974 under the Orissa Land Reforms Act, 1960 for declaration of surplus land of the appellants.
The appellants filed objections asserting, inter alia, that in view of the partition in their families in the year 1965 the land in the ancestral properties which fell in their share could not be clubbed with those of their father.
This contention was not accepted on the definition of the term "family" contained in section 37(b) of the Act.
Such of the major married sons who as such had separated by parti tion before the 26th day of September, 1970, as contemplated by the definition of the term "family", were allotted sepa rate ceiling units but so far as the appellants were con cerned, their shares were clubbed with those of their fa ther.
The appellants, having failed to get relief in the appeals and revisions filed by them under the Act, chal lenged the orders passed by the various authorities in writ petitions before the High Court of Orissa which were dis missed, relying on its earlier Full Bench decision in Nitya nanda Guru vs State of Orissa, (A.I.R. 1983 Orissa 54).
Before this Court it was contended that (1) the protec tion under Article 31(C) would not be available to section 37(b) of the Act and it would be hit by Article 14 unless it was established that it had nexus with the policy of the State towards securing any of the principles laid down in Part IV of the Constitution; (2) section 37(b) of the Act had to be read in such a manner as to exclude the land which had fallen to the share of the appellants even though they did not fail within the category of a major married son" as contemplated by the definition of the term "family" in that section, by adding the word "or" between the words "major" and "married", (3) the words "as such" qualify only "son" and not "major married son" and are meant to distinguish son from brother or uncle, etc.
Dismissing the appeals, it was, 605 HELD: (1) The Act aims at agrarian reform and Section 37(b) has a clear nexus with the policy of the State towards securing the principle laid down in Article 39(b) of the Constitution occurring in Part IV thereof.
[607E F] Tumati Venkaish etc.
vs State of Andhra Pradesh; , ; Seth Nand Lal & Anr.
vs State of Haryana, ; and Waman Rao & Ors.
vs Union of India, ; referred to.
(2) It is difficult to take recourse to the suggested mode of interpretation of section 37(b), i.e., by adding the word "or" between the words "major" and "married" in view of its plain language.
[608C D] (3) On a plain reading of the definition of the term "family" in section 37(b) of the Act, the said definition as it stands is neither meaningless nor of doubtful meaning.
[608F] British India General Insurance Co. Ltd. vs Captain Itbar Singh Ors., referred to.
(4) Keeping in view the agrarian reform which was con templated by the Act and particularly the provisions of Chapter IV relating to ceiling and disposal of surplus land which were calculated to distribute the surplus land of big tenure holders among the overwhelming havenots of the State.
the Legislature in its wisdom gave an artificial meaning to the term "family".
[608F G] (5) The main provision containing the definition of the term 'family ' is to be found in the first part of section 37(b), namely "family in relation to an individual means the individual, the husband or wife as the case may be of such individual and their children whether major or minor".
The latter part of section 37(b), namely "but does not include a major married son who as such had separated by partition or otherwise before the 26th day of September 1970", does not on the face of its contain a matter which may in substance be treated as a fresh enactment adding something to the main provision but is apparently and unequivocally a proviso containing an exception.
This admits of no doubt in view of the words "but does not include".
[608G H; 609A B] Commissioner of Income Tax, Mysore vs The lndo Mercan tile Bank Limited, [1959] Supp.
2 SCR 256 referred to.
(6) Given its proper meaning, the words "as such" can only be 606 interpreted to mean that it is only such son who would get the benefit of the exception who had separated by partition or otherwise before the 26th day of September, 1970 as "major married son".
[609F]