judgement:
Civil Appeal No. 1649 (NT) of 1974 From the Judgment and Order dated 25.1.1974 of the Orissa High Court in S.J.C. No. 111 of 1972.
Govind Das and J.R. Das for the Appellant.
S.C. Manchanda, Miss A. Subhashini and K.C. Dua for the Respondent.
The Judgment of the Court was delivered by PATHAK J.
This appeal by special leave is directed against the judgment of the High Court of Orissa disposing of an Income tax Reference and answering the following question in favour of the revenue and against the assessee: "Whether in the facts and circumstances of the case, the loss of Rs.30,045 claimed by the assessee is a capital loss or a revenue loss?" The assessee is a private limited company carrying on business as a contractor.
In April 1964 it entered into a contract with the South Eastern Railway Administration for the execution of earth work, bridge work and other miscellaneous works required for the construction of a new railway yard.
As it was required to supply earth outsidethe railway land the assessee found it expedient to buy two pieces of land from which earth could be excavated and conveniently taken to the work site.
One piece of land was acquired at a cost of Rs.53,196 during the calendar year 1964 corresponding to the assessment year 1965 66, and the other piece of land was acquired for Rs.15,045 during the calendar year pertaining to the assessment year 1966 67, bringing 221 the total cost to Rs.68,241.
Soon after the work was over, the assessee sold both lands for a sum of Rs.23,000, thereby sustaining a loss of Rs.45,241.
The assessee treated this as the value of the excavated earth, and apportioned the amount in its accounts in the following manner, Rs.8,196 as the cost of the earth for the assessment year 1965 66, Rs.30,045 towards the earth excavated in the assessment year 1966 67, and Rs.7,000 towards the earth excavated for the assessment year 1967 68.
The Income tax Officer accepted the claim for the assesment year 1965 66.
The claim of the assessee to a deduction of Rs.30,045 for the assessment year 1966 67 was disallowed on the ground that it represented a capital loss.
The assessee proceeded in first appeal to the Appellate Assistant Commissioner of Income tax but the appeal was dismissed.
A second appeal was allowed by the Income tax Appellate Tribunal on the ground that the land formed a wasting asset and by constant digging of the earth the land had become unserviceable.
On a reference being made to the High Court of Orissa at the instance of the Commissioner of Income tax on the question of law set forth earlier the High Court held that the loss of Rs.30,045 claimed by the assessee was a capital loss and therefore, the assessee was not 'entitled to a deduction.
The question in this appeal before us is a short one.
Can it be said that the loss of Rs.30,045 is a capital loss or a revenue loss? It is not in dispute that the assessee did not deal in land.
It was a contractor and it had acquired the land for the purpose of obtaining a ready supply of earth in order to fulfil the contract with the Railway Administration.
The land was not its stock in trade.
What it needed as raw material for the purpose of the contract was loose earth and this it obtained by the process of excavation from the land.
Moreover, the two pieces of land were shown as fixed assets by the assessee itself in its balance sheet.
Learned counsel for the assessee relies on M.A. Jabbar vs Commissioner of Income tax, Andhra Pradesh, , 497 8 but that is a case where the land was taken on lease for a limited period of 11 months with the right to enter, occupy and use for a quarrying purpose and to render marketable and carry away sand within or on the land.
This Court held that the lease money paid by the assessee was deductible as revenue expenditure.
The Court referred to the short period of the lease, which indicated that the lease was not an asset of an enduring nature, that the only right under the lease was to take away the sand lying on the land, and in fact as the sand lay on the 222 surface no question arose of digging and excavating for the sand, and no operations were to be performed on the land.
The Court laid great emphasis on the circumstance that the assessee did not acquire the land.
Therefore, the Court held that the assessee "did not acquire any fixed or capital asset of an enduring nature.
" The facts in the present case are entirely different.
Here, the assessee was full proprietor of the two pieces of land and for an indefinite period.
The reason for acquiring the land was no doubt to provide a ready supply of earth to the work site nearby, but there was nothing to prevent the assessee from continuing as owner of the land even after the railway contract had been executed and putting it to any other use.
The land was treated by the assessee as its fixed asset.
In all the circumstances of the case, the two pieces of land must be regarded as capital assests, and the loss claimed by the assessee must be regarded as a capital loss.
The High Court is right in the view taken by it, and the appeal is liable to be dismissed.
The appeal is dismissed with costs.
A.P.J. Appeal dismissed.

summary:
The assessee company while carrying on business as a Contractor entered into a contract with the Railway Administration, inter alia, for the execution of earth work required for the construction of a new railway yard.
For this purpose, the assessee purchased two pieces of land at a total cost of Rs.68,241.
Soon after the work was over, the assessee sold both lands for a sum of Rs.23,000, thereby sustaining a loss of Rs.45,241.
The assessee treated this as the value of the excavated earth, and apportioned the amount in its accounts in assessment years 1965 66, 1966 67 and 1967 68.
The claim of the assessee to a deduction of Rs.30,045 for the assessment year 1966 67 was disallowed by the Income tax Officer on the ground that it represented a capital loss.
The Appellate Assistant Commissioner dismissed the first appeal of the assessee.
The Income Tax Appellate Tribunal allowed the second appeal of the assessee on the ground that the land formed a wasting asset and by constant digging of the earth the land had become unserviceable.
In the Reference, on the question whether the loss of Rs.30,045 claimed by the assessee is a capital loss or a revenue loss, the High Court held that the loss of the said amount claimed by the assessee was a capital loss and, therefore, the assessee was not entitled to a deduction.
Dismissing the appeal of the assessee company to this Court, ^ HELD: The assessee was full proprietor of the two pieces of land and for an indefinite period.
The reason for acquiring the land was no doubt to provide a ready supply of earth to the work site nearby, but there was nothing to prevent the assessee from continuing as owner of 220 the land even after the railway contract had been executed and putting it to any other use.
The land was treated by the assessee as its fixed asset.
In all the circumstances of the case, the two pieces of land must be regarded as capital assets, and the loss claimed by the assessee must be regarded as a capital loss.[222B D] M.A. Jabbar vs Commissioner of Income tax, Andhra Pradesh, , 497 8 distinguished.


judgement:
No. 90 of 1977 etc.
(Under Article 32 of the Constitution of India.) AND Review Petition No. 4 17 454/87 etc.
T.S. Krishnamurthi Iyer, C. Sitaramiah, L.N. Sinha, A.S. 884 Nambiar.
G. Narayana Rao, K. Ramkumar, K. Ram Mohan.
M.S. Guru.
Raj Rao, Subodh Markandeya, Ashok K. Sharma, M.S. Ganesh.
P.N. Misra, D.C. Taneja, B. Parthasarathi, B.B. Sawhney, P. Krishna Rao, B. Krishna Prasad, Ms. Malini, T.V.S.N .
Chari, Ms. Vrinda Grover, section Wasim A. Qadri, Naresh Mathur, Ms. Sunita, P.P. Singh and Ms. section Relan for the appearing parties.
The Judgment of the Court was delivered by BHAGWATI, C.J.
These writ petitions challenge the con stitutional validity of clause (5) of Article 371 D of the Constitution.
Though original when the writ petitions were filed.
the constitutional validity of clause (3) of Article 371 D was also assailed, this challenge was not pressed on behalf of the petitioners and the arguments were confined only to the challenge against the constitutional validity of clause (5) of that Article.
But in order to understand the true scope and ambit of the controversy raised before us in regard to the constitutional validity of clause (5), it is necessary for us to refer also to the provision enacted in clause (3) of Article 371 D. Clauses (3) and (5) of Article 371 D read as follows: "The President may, by order, provide for the Constitution of an Administrative Tribunal for the State of Andhra Pra desh to exercise such jurisdiction, powers and authority including any jurisdiction, power and authority which imme diately before the commencement of the Constitution (Thirty Second Amendment) Act, 1973, was exerciseable by any Court (other than the Supreme Court) or by any Tribunal or other authority as may be specified in the order with re spect to the following matters, namely: (A) . . (B) . . (C) . . (5) The order of the Administrative Tribunal finally dis posing of any case shall become effective upon its confirma tion by the State Government or on the expiry of three months from the date on which the order is made.
whichever is earlier; 885 Provided that the State Government may.
by special order made in writing for reasons to be specified therein, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be." Article 371 D was introduced in the Constitution by the Constitution (Thirty Second Amendment) Act 1973 which came into force with effect from 1st July 1974.
The genesis of this Amendment made in the Constitution by introduction of Article 371 D lay in the formation of the State of Andhra Pradesh on 1st November 1956.
The State of Andhra Pradesh was constituted of portions of territories drawn from the erstwhile State, of Andhra and Hyderabad.
The territories from the erstwhile State of Hyderabad which were included in the State of Andhra Pradesh commonly known as the Telengana area.
Before the territories of the Telengana area were amalgamated with the other territories to form the State of Andhra Pradesh, there was a set of rules known as the Mulki Rules in operation in the Telengana area under the regime of the Nizam of Hyderabad and these rules provided for residen tial clarification for all public employment.
Soon after the formation of the State of Andhra Pradesh Parliament enacted Public Employment (Requirement as to Residence) Act 1957 making special provision for requirement as to residence for public employment and brought it into force with effect from 21st March 1957.
The constitutional validity of this Act was challenged by some of the persons employed in the ministeri al services of the Andhra Pradesh Government in Narasimha Rao vs State of Andhra Pradesh, ; and this Court by its judgment dated 28th March 1969 held Section 3 of this Act in so far as it related to the Telengana area ultra vires clause (3) Article 16 of the Constitution.
This Court, however left open the question whether in view of the constitutional invalidity of this Act the Mulki Rules exist ing in the Telengana area could be said to be continuing in force by virtue of Article 35(b) of the Constitution.
This question, however, came up for consideration before this Court in Director of Industries and Commerce vs V.V. Reddy, ; This Court held that the Mulki Rules continued in force even after the formation of the State of Andhra Pradesh under Article 35(b) of the Constitution.
Meanwhile, however, there were two wide spread agitations one in the Telengana area and the other in the Andhra region of the State between 1969 and 1972, creating a political turmoil and virtually the paralysing administration of the State.
The political leaders of the State were considerably exercise over this situation and they made 886 concerted effort to find an endeavouring solution to this problem in order to secure full emotion integration of the people of the State.
21st September 1973 a six Point Formula was evolved by the political leaders to provide for a uniform approach for promoting accelerated development of the backward areas of the State so as to secure balanced development of the State as a whole and providing equitable opportunities to different areas of the State in the matter of education and employment in public services.
The imple mentation of this Six Point Formula envisaged inter alia amendment of the Constitution conferring power on the Presi dent of India in order to secure smooth implementation of the measures based upon the Six Point Formula without giving rise to litigation and consequent uncertainty.
It was in pursuance of this requirement that Article 371 D was intro duced in the Constitution in order to give effect to the Six Point Formula.
One of the measured contemplated in the Six Point Formula related to the setting up of an Adminis trative Tribunal with jurisdiction to deal with grievances relating to public services and clauses (3) to (8) of Arti cle 371 D gave effect to this proposal and provided for the establishment of an Administrative Tribunal and its consti tution and powers.
Pursuant to Clause (3) of Article 371 D, the President of India made an order on 19th May 1975 con stituting an Administrative Tribunal for the State of Andhra Pradesh with jurisdiction to deal with the service matters specified in that order.
No constitutional objection to the validity of Clause (3) of Article 371 D could possibly be taken since we have already held in S.P. Sampath Kumar vs Union of India and Ors., ; , decided on 9th December, 1986 that judicial review is a basic and essential feature of the Constitution and it cannot be abrogated without affecting the basic structure of the Constitution, but Parliament can certainly without in any way violating the basic structure doctrine amend the Constitution so as to set up an effective alternative institutional mechanism or arrangement for judicial review.
One of us (Bhagwati, CJ.) pointed out in the judgment delivered in that case that: "the basic and essential feature of judicial review cannot be dispensed with but it would be within the competence of Parliament to amend the Constitution so as to substitute in place of the High Court, another alternative institutional mechanism or arrangement for judicial review, provided it is not less efficacious than the High Court.
" We summarised the consti tutional position in regard to the power of Parliament to amend the Constitution with a view to taking up the juris diction of the High Court in the following words: 887 " . . if any constitutional amendment made by Parliament takes away from the High Court the power of judicial review in any particular area and vests it in any other institu tional mechanism or authority, it would not be violative of the basic structure doctrine, so long as the essential condition is fulfilled, namely, that the alternative insti tutional mechanism or authority set up by the parliamentary amendment is no less effective than the High Court.
" Parliament was therefore competent by enacting Clause (3) of Article 371 D to provide for setting up an Administrative Tribunal and excluding the jurisdiction of the High Court in regard to the matters coming within the jurisdiction of the Administrative Tribunal, so long as the Administrative Tribunal was not less effective or efficacious than the High Court in so far as the power of judicial review is con cerned.
The constitutional validity of Clause (3) of Article 371 D could not therefore be successfully assailed on the ground that it excluded the jurisdiction of the High Court in regard to certain specified service matters and vested it in the Administrative Tribunal.
But the real controversy between the parties centered round the constitutional validity of Clause (5) of Article 371 D.
This clause provides that the order of the Adminis trative Tribunal finally disposing of the case shall become effective upon its confirmation by the State Government or on the expiry of three months.
from the date on which the order is made, whichever is earlier.
Standing by itself, this clause could not be regarded as in any way rendering the Administrative Tribunal less efficacious than the High Court because it would not be an extraordinary or unusual provision to lay down a period of time during which an order made by a tribunal may not be given effect to presumably in order to enable the State Government either to make arrange ments for implementing the order of the tribunal or to prefer an appeal against it.
But what really introduces an infirmity in Clause (5) of Article 371 D is the provision enacted in the proviso which says that the State Government may by special order made in writing and for reasons to be specified therein, modify or annul any order of the Adminis trative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be no effect, as the case may be.
The State Government is given the power to modify or annul any order of the Administrative Tribunal before it becomes effective either by confirmation by the State Government or on the expiration of the period of three months from the date of the order.
The State Government can at 888 any time before the expiry of three months from the date of the order modify or annul the order unless it has, by a prior signification of its will, confirmed the order.
It will thus be seen that the period of three months from the date of the order is provided in Clause (5) in order to enable the State Government to decide whether it would confirm the order or modify or annul it.
Now almost invaria bly the State Government would be a party in every service dispute brought before the Administrative Tribunal and the effect of the proviso to Clause (5) is that the State Gov ernment which is a party to the proceeding before the Admin istrative Tribunal and which contests the claim of the public servant who comes before the Administrative Tribunal seeking redress of his grievance against the State Govern ment, would have the ultimate authority to uphold or reject the determination of the Administrative Tribunal.
It would be open to the State Government, after it has lost before the Administrative Tribunal, to set at naught the decision given by the Administrative Tribunal against it.
Such a provision is, to say the least, shocking and is clearly subversive of the principles of justice.
How can a party to the litigation be given the power to over ride the decision given by the Tribunal in the litigation, without violating the basic concept of justice? It would make a mockery of the entire adjudicative process.
Not only is the power conferred on the State Government to modify or annul the decision of the Administrative Tribunal startling and wholly repugnant to our notion of justice but it is also a power which can be abused or misused.
It is significant to note that in the last about three years this power has been exercised by the State Government in an inordinately large number of cases and even interim orders made by the Administrative Tribunal have been set at naught by the State Government though no such power is conferred on the State Government under the proviso to Clause (5).
It is clear on a proper construction of the proviso read with Clause (5) that it is only an order of the Administrative Tribunal finally disposing of the case which can be modified or annulled by the State Government and not an interim order made by the Administrative Tribu nal.
But we find from the record that this limitation has been completely brushed aside by the State Government and it would be no exaggeration to say that the State Government has behaved in a most extravagant manner in modifying or annulling orders made by the Administrative Tribunal which were found inconvenient.
We may point out that even at the time when Article 371 D was introduced in the Constitution, Parliament debates show that the Home Minister who piloted the bill did not envisage exercise of this power save in the most exceptional cases.
Here, however, we find that this power has been indiscriminately used by the State Govern ment.
But that apart, we do think that this power 889 conferred on the State Government is clearly violative of the basic concept of justice.
It is obvious from what we have stated above that this power of modifying or annulling an order of the Administra tive Tribunal conferred on the State Government under the proviso to Clause (5) is violative of the rule of law which is clearly a basic and essential feature of the Constitu tion.
It is a basic principle of the rule of law that the exercise of power by the executive or any other authority must not only be conditioned by the Constitution but must also be in accordance with law and the power of judicial review is conferred by the Constitution with a view to ensuring that the law is observed and there is compliance with the requirement of law on the part of the executive and other authorities.
It is through the power of judicial review conferred on an independent institutional authority such as the High Court that the rule of law is maintained and every organ of the State is kept within the limits of the law.
Now if the exercise of the power of judicial review can be set at naught by the State Government by over tiding the decision given against it, it would sound the death/knell of the rule of law.
The rule of law would cease to have any meaning, because then it would be open to the State Government to defy the law and yet get away with it.
The Proviso to Clause (5) of Article 371 D is therefore clearly violative of the basic structure doctrine.
The question of constitutional validity of the Proviso to Article 37 I D can also be looked at from another angle.
Clause (3) of Article 37 I D empowers the President by order to provide for the setting up of the Administrative Tribunal and vesting in the Administrative Tribunal the jurisdiction of the High Court in respect of the specified service mat ters.
This constitutional amendment authorising exclusion of the jurisdiction of the High Court and vesting of such jurisdiction in the Administrative Tribunal postulates for its validity that the Administrative Tribunal must be as effective an institutional mechanism or authority for judi cial review as the High Court.
If the Administrative Tribu nal is less effective and efficacious than the High Court in the matter of judicial review in respect of the specified service matters, the constitutional amendment would fall foul of the basic structure doctrine.
Now it can hardly be disputed that the provision enacted in the Proviso to Clause (5) of Article 371 D deprives the Administrative Tribunal of its effectiveness and efficacy because it enables the State Government which is a party to the litigation before the Administrative Tribunal to over fide the decision given by the Administrative Tribunal.
The power of judicial review vested in the 890 High Court under Articles 226 and 227 does not suffer from any such infirmity because whatever the High Court decides is binding on the State Government, subject only to a right of appeal to a court of superior jurisdiction and the State Government cannot, for any reason, set at naught the deci sion of the High Court.
But the power of judicial review conferred on the Administrative Tribunal is by reason of the Proviso to Clause (5) of Article 371 D subject to the veto of the State Government and it is not at all effective or efficacious because the State Government can defeat its exercise by just passing an order modifying or nullifying the decision of the Administrative Tribunal.
The Proviso to Clause (5) of Article 371 D has the effect of emasculating the striking power of the Administrative Tribunal and the State Government can make the decision of the Administrative Tribunal impotent and sterile.
It is therefore obvious that the Proviso to Clause (5) of Article 371 D renders the Administrative Tribunal a much less effective and effica cious instiutional mechanism or authority for judicial review than the High Court in respect of the specified service matters.
In the circumstances the conclusion is inescapable that the proviso to Clause (5) of Article 371 D by which power has been conferred on the State Government to modify or annul the final order of the Administrative Tribu nal is violative of the basic structure doctrine since it is that which makes the Administrative Tribunal a less effec tive and efficacious institutional mechanism or authority for judicial review and it is only by striking down that provision as being outside the constitutent power of Parlia ment that Clauses (3) to (8) of Article 371 D can be sus tained.
We must therefore hold that the Proviso to Clause (5) of Article 371 D is unconstitutional as being ultra vires the amending power of Parliament and if the Proviso goes, the main part of clause (5) must also fall alongwith it, since it is closely inter related with the proviso and cannot have any rationable for its existence apart from the Proviso.
The main part of clause (5) of Article 37 I D would, therefore, also have to be declared unconstitutional and void.
We accordingly allow the writ petitions and declare clause (5) of Article 371 D alongwith the Proviso to be unconstitutional and void.
The Government of India is di rected to ensure that the necessary amendment is carried out in the Presidential Order, so as to bring it in conformity with the law laid down by us in this judgment.
The Orders made by the State Government in exercise of the power con ferred under the proviso to clause (5) of article 371 D shall be quashed and set aside.
There will be no order as to costs.
891 ORDER We direct that the operation of the Judgment and Order dated December 20, 1986 pronounced by this Court shall extend to those cases only which were made the subject of consideration by this Court by virtue of these petitions and appeal having been filed in this Court.
We direct further that in those cases where the peti tions were filed directly and without having been processed judicially and decided by the Administrative Tribunal, the Order will operate insofar that those cases will now stand remanded to the Administrative Tribunal for judicial consid eration in accordance with the observations of this Court in the Judgment of December 20, 1986.
This direction will also cover those Writ Petitions which were transferred from the High Court to this Court.
They shall stand transferred to the Administrative Tribunal and be considered similarly.
In all those cases where Writ Petitions were filed against the Orders of the State Government modifying or superseding the Orders of the Administrative Tribunal, we direct that those cases shall be treated as concluded by the relative orders of the Administrative Tribunal as they stood before the said orders were interfered with by the State Government.
We may add that Mr. L.N. Sinha, learned counsel appear ing for the Union of India in all these cases, sought the permission of the Court to urge a ground in respect of the interpretation of Article 371 D of the Constitution.
He contended that the power of Judicial review, even construed as a basic feature of the Constitution, was not precluded by the provisions of Article 371 D of the Constitution and therefore the Judgment of this Court called for review.
We are not satisfied, however, that we should interfere.
The Review Petitions are disposed of accordingly.
A.P.J. Petitions allowed.

dataset_name: IN-Abs

summary:
Article 371 D was introduced in the Constitution by the Constitution (Thirty Second Amendment) Act 1973, which came into force with effect from 1st July, 1974, and pursuant to c1.(3) thereof the President of India made an order on 19th May, 1975 constituting a, Administrative Tribunal for the State of Andhra Pradesh with jurisdiction to deal with service matters specified in that order.
In these petitions under article 32, the petitioners chal lenged the validity of ds.
(3) & (5) of article 371 D. However, challenge to cl.
(3) was not pressed and arguments confined only to cl.
Allowing the Petitions, HELD: (1) Clause (5) of article 371 D of the Constitution along with the Proviso is declared to he unconstiutional and void.
The Government of India is directed to ensure that the necessary amendment is carried out in the Presidential Order dated 19th May, 1975 so as 880 to bring it in conformity with the law laid down by this Court in the instant case.
The Orders made by the State Government in exercise of the power conferred under the Proviso to cl.
(5) of article 371 D shall be quashed and set aside.
[890G H] (2) Clause (5) of article 371 D provides that the order of the Administrative Tribunal finally disposing of the case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier.
This clause by itself could not be regarded as in any way rendering the Administrative Tribunal less efficacious than the High Court because it would not be an extra ordinary or unusual provi sion to lay down a period of time during which an order made by a Tribunal may not be given effect to, enabling the State Government either to make arrangements for implementing the order of the Tribunal or to prefer an appeal against it, but what really introduces an infirmity in cl.
(5) is the provi sion enacted in the Proviso, which says that the State Government may by special order made in writing for reasons to be specified therein, modify or annual ally order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect.
[887D G] (3) Invariably the State Government would be a party in every service dispute brought before the Administrative Tribunal and the effect of the Proviso is that the State Government which is a party to the proceeding before the Administrative Tribunal and which contests the claim of the public servant who comes before the Administrative Tribunal seeking redress of his grievance against the State Govern ment would have the ultimate authority to uphold or reject the determination of the Administrative Tribunal.
It would be open to the State Government, after it has lost before the Administrative Tribunal, to set at naught the decision given by the Administrative Tribunal against it.
Such a provision is, to say the least, shocking and is clearly subversive of the principles of justice.
A party to the litigation cannot be given the power to over ride the decision given by the Tribunal.
It would be violating the basic concept of justice and make a mockery of the entire adjudicative process.
Not only is the power conferred on the State Government to modify or annul the decision of the Administrative Tribunal starting and wholly repugnant to the notion of justice but it is also a power which can be abused or misused.
[888B E] (4) In the last about three years this power has been exercised by the State Government in large number of cases and even interim orders 881 made by the Administrative Tribunal have been set at naught though no such power is conferred on the State Government.
It is only an order of the Administrative Tribunal finally disposing of the case which can be modified or annulled by the State Government and not an interim order made by the Administrative Tribunal.
The record shows that this limita tion has been completely brushed aside and the State Govern ment has behaved in a most extravagant manner in modifying or annulling orders made by the Administrative Tribunal which were found inconvenient.
Even the Parliament debates show that the bill envisaged exercise of this power in most exceptional cases.
However, this power has been indiscrimi nately used by the State Government.
[888E H] (5) It is a basic principle of the rule of law that the exercise of power by the executive or any other authority must not only be conditioned by the Constitution but must also be in accordance with law and the power of judicial review is conferred by the Constitution with a view to ensuring that the law is observed and there is compliance with the requirement of law on the part of the executive and other authorities.
It is through the power of judicial review conferred on an independent institutional authority such as the High Court that the rule of law is maintained and every organ of the State is kept within the limits of the law.
If the exercise of the power of judicial review can be set at naught by the State Government by over riding the decision given against it, it would sound the death knell the rule of law.
The rule of law would be meaningless as it would be open to the State Government to defy the law and yet to get away with it.
The Proviso to c1.(5) of article 37 1 D is, therefore, violative of the basic structure doc trine.
[889B E] (6) Clause (3) of article 371 D empowers the President by order to provide for the setting up of the Administrative Tribunal and vesting in it the jurisdiction of the High Court in respect of the specified service matters.
This constitutional amendment authorising exclusion of the juris diction of the High Court and the vesting of such Jurisdic tion in the Administrative Tribunal postulates for its validity that the Administrative Tribunal must be as effec tive an institutional mechanism or authority for judicial review as the High Court.
If the Administrative Tribunal is less effective and efficacious than the High Court in the matter of judicial review in respect of the specified serv ice matters, the constitutional amendment would fail foul of the basic structure doctrine.
Undisputedly the provision enacted in the Proviso to cl.
(5)of article 371 D deprives the Administrative Tribunal of its effectiveness and efficacy because it enables the State Government which is a party to the litigation before the Administrative Tribunal to over ride its decision.
The 882 power of judicial review vested in the High Court under articles 226 and 227 does not suffer from any such infirmity because whatever the High Court decides is binding on the State Government, abject only to a right of appeal to a Court of superior jurisdiction and the State Government cannot, for any reason, set at naught the decision of the High Court.
But the power of judicial review conferred on the Administrative Tribunal is, by reason of the Proviso to Cl.
(5) of article 371 D, subject to the veto of the State Government and it is not at all effective or efficacious because the State Government can defeat its exercise by just passing an order modifying or nullifying the decision of the Administrative Tribunal.
The Proviso to Cl.
(5) has the effect of emasculating the striking power of the Administra tive Tribunal and the State Government can make the decision of the Administrative Tribunal impotent and sterile.
There fore, the Proviso to Cl.
(5) renders the Administrative Tribunal a much less effective and efficacious institutional mechanism or authority for judicial review than the High court in respect of the specified service matters.
The conclusion is that the Proviso to Cl.
(5) of article 371 D by which power has been conferred on the State Government to modify or annul the final order of the Administrative Tribu nal is violative of the basic structure doctrine and it is only by striking down that provision that cls.
(3) to (8) of article 371 D can be sustained.
[889E H; 890A E] (7) Therefore, the Proviso to Cl.
(5) of article 371 D is unconstitutional as being ultra vires the amending power of Parliament and if the Proviso goes, the main part of cl.
(5) must also fall alongwith it, since it is closely inter related with the proviso and cannot have any rationale for its existence apart from the Proviso.
The main part of cl.
(5) of Article 371 D would, therefore, also have to be declared unconstitutional and void.
[890E F] (8) If any constitutional amendment made by Parliament takes away from the High Court the power of judicial review in any particular area and vests it in any other institu tional mechanism or authority, it would not be violative of the basic structure doctrine, so long as the essential condition is fulfilled that the alternative institutional mechanism or authority set up by the parliamentary amendment is no less effective than the High Court.
[887A B] (9) Parliament was, therefore, competent by enacting cl.
(3) of article 371 D to provide for setting up an Administra tive Tribunal and excluding the jurisdiction of the High Court in regard to the matters coming within the jurisdic tion of the Administrative Tribunal, so long 883 as the Administrative Tribunal was not less effective or efficacious than the High Court in so far as the power of judicial review is concerned.
[887B D] S.P. Sampath Kumar vs Union of India and Ors., ; , followed and Narasimha Rao vs State of Andhra Pradesh, ; and Director of Industries and Commerce vs V.V. Reddy, ; , referred to.
(R.S Pathak C J, Ranganath Misra vs Khalid, G.L. Oza and M.M. Dutt, JJ.) 5th May, 1987 Disposing of the review Petitions, HELD: 1.
The operation of the judgment and order dated December 20, 1986 shall extend to those cases only which were considered by this Court.
[891A B] 2.
The cases in which Petitions were filed directly will now stand remanded to the Administrative Tribunal for judi cial consideration in accordance with the observations of this Court in the judgment of December 20, 1986.
[89lB C] 3.
This direction will also cover those writ petitions which were transferred from the High Court to this Court.
They shall stand transferred to the Administrative Tribunal and be considered similarly.
[891C D] 4.
Those cases in which the State Government modified or superseded the orders of the Administrative Tribunal shall be treated as concluded by the relative orders of the Admin istrative Tribunal as they stood before the said orders were interfered with by the State Government.
[891D E]


judgement:
ivil Appeal Nos.
256 of 1985 and 4875 of 1984.
From the Judgment and Order dated 24th August, 1984 of the Bombay High Court in Writ Petition.
4232 of 1983.
Ram Jethmalani, Khatu Cooper, S.B. Bhasme, Ms. Rani Jethmalani, Tushad Cooper, G. Subramaniam, Ashok Sharma, Ajai Singh Chandal, V.S. Desai, A.S. Bhasme, A.M. Khanwilkar for the appearing parties.
K. Parasaran, Attorney General, P.H. Parekh and Ms. Indu Malhotra for the Interveners.
The Judgment of the Court was delivered by OZA, J.
These two appeals were heard by us and by our order dated March 10, 1986 we maintained the judgment of the High Court and dismissed both the appeals, by this order we modified the order 894 for compensation which was passed by the High Court.
Our reasons for the same are: The necessary facts for the disposal of these appeals are that the appellant in one of the appeals before this Court who was the third petitioner before the High Court is a private limited company incorporated for the purposes of carrying among others the business of exporting frozen meat of buffaloes, sheep and goats.
The Al Kabeer Exports Pvt.
Ltd. alongwith other two took initiative in the business and obtained an import licence, a project being 100% export oriented.
The licence they obtained stipulated the entire production of the plant to be exported for 10 years and the construction and the operation of the project were to be according to the standards of hygiene prevailing in the European Economic Community Countries and of the U.S. Foods and Drugs Administration.
The plant was to be equipped with the most modern equipments.
The petitioners selected a site of agricultural lands in village Savandhe in Bhiwandi Taluka of Thane District, comprised in Survey No. 40/2, 41, 42, 44, 45 and 70 totally admeasuring about 68,327 square metres.
This site was included in "U" Zone in the Bombay Metropoli tan Regional Plan for the period from 1970 to 1991 prepared under the Bombay Metropolitan Region Development Authority Act, 1974, "U" Zone denoting that the land was future urban isable area.
The site is situated at a distance of 2 kilometres from Bhiwandi Town having Muslim majority which has been a trou ble spot for communal riots for past some years, with the surrounding villages of Savandhe, Gorsai, Shelar, Chavindra, Pogoan and Bhorpada situate at a distance of 1/2 kin, 1 km, 1/2 Inn, 11/2 km, 2 km, and 2kms.
respectively.
These vil lages have a population of about 400, 1500, 3000, 2500, 500 and 1500 respectively, majority of the population of all these villages being Hindus.
This site is situated on the bank of river Kamawari whose water is used for the purposes of drinking and washing by the inhabitants of the surround ing villages and where the Hindus from Bhiwandi and the aforesaid surrounding villages immerse their Ganesh idols on the Ganpati Immersion Day.
After selecting the site the petitioners obtained the requisite permission from the relevant authorities and on 4.4.1980 they obtained permission from the Sarpanch of the Group Gram Panchayat of Savandhe which certificate stated that if the land comprised in the site of the plant was converted into non agricultural plot in favour of the peti tioner, the Panchayat would not have any objection what 895 soever as it will increase the income of the Panchayat.
Petitioners (High Court).
obtained the consent from the Maharashtra Prevention of Water Pollution Board under Sec tion 28 of the Maharashtra Prevention of Water Pollution Act, 1969 to discharge the effluents from the proposed plant in the water pollution prevention area of Ulhas River basin as notified under Section 18 of the Act subject to certain terms and conditions.
The proposed plant was registered as an industry by ' the Director General of Technical Develop ment on 8th January 1981.
On 11.8.80 Collector Thane was approached for permission to use the land for non agricul tural purposes for the said plant under Section 44 of the Maharashtra Land Revenue Act, 1966.
Collector granted the said permission by his order dated 5.4.1982 subject to certain terms and conditions.
It appears that thereafter some trouble started and the villagers round about Bhiwandi town which included also the villages mentioned above addressed a complaint to one Shri Sadanand Varde, M.L.A. from Bombay, making the following grievances: (i) that the construction of the abattoir has been started without the permission of the Gram Panchayat, (ii) that cows, bulls and buffaloes were to be slaughtered in the abattoir, (iii) the abattoir was likely to pollute the air giving rise to diseases endangering the health of the villagers, (iv) that discharge of effluent from the abattoir in the river would pollute the river water which was used for drinking both by the villagers and cattle thereby endangering the life of the villagers as well as the cattle which is the means of livelihood of the villagers, (v) that the prices of land would be reduced on account of pollution thereby preventing the industrial development of the villages and (vi) the religious feelings of the Hindus in Bhiwandi town and the villages would be hurt since the effluents from the abattoir would be discharged in the river where traditionally Hindus were immersing their Ganesh idols.
The villagers therefore prayed that under no circum stances, the abattoir should be permitted.
Shri Varde in his turn alongwith a letter dated 24th January, 1983 forwarded the said complaint to the Revenue Minister of the State Government with a request to consider the objections of the villagers and to stop the construction in the meanwhile.
On the basis of this letter it appears that the Government on 17.2.83 called for a report in the matter from the Collector Thane who in turn called a report from the Tehsildar Thane and Tehsildar Thane in his turn issued a notice to all the parties including the promoters of this project and on 7.3.83 'recorded the statements of respective parties in cluding Shri Rizwan Bubere, the holder of a General Power of Attorney and the Tehsildar sent his report on the same day to the Collector.
In the 896 meantime on 5.4.83 a detailed representation was received against the venture (abattoir) by the Revenue Minister of the State from the Sarpanch of Savandhe Gorsai Group of Gram Panchayat and others.
In this representation more or less similar grounds as were initially raised in representation to the M.L.A. were raised.
The Government by its order dated 28th April, 1983 directed the petitioners to stop the con struction work for a period of 15 days pending investigation and on 30th April, 1983 the Government directed the Commis sioner, Konkan Division to submit his detailed report on the complaint received from the villagers by holding an on the spot inspection.
The Commissioner made enquiries and on the spot inspection on 9th and 11th May, 1983, submitted his report on 17th May, 1983, it was received by the Govern ment on 18th May, 1983.
By order dated 25.5.1983 Government further stayed the construction for a period of one month.
On 7th June, 1983 Al Kabeer Exports Pvt. Ltd. and others filed a petition before the High Court challenging the order of stay granted by the Government and obtained an ad interim stay of the Government 's order pending admission of the Writ Petition.
Government filed their affidavit on 13.6.83 and stated that the Government was reconsidering the matter and ultimately by order dated 14.6.83 High Court admitted the writ petition and continued the interim relief of stay granted but Government was directed to pass its final orders in the matter.
On 16.8.1983 one Dr. Vyas filed his Writ Petition before the High Court being No. 2717 of 1983 challenging the order dated 5.4.
1982 of Additional Collector, Thane grant ing permission to the petitioners for converting the land to non agricultural use and prayed for stoppage of construction work and on the same day ad interim stay was granted by the High Court.
It appears that on a statement made by the GoVernment counsel that Government would take a final deci sion in the matter on or before 15 10.83 the Court modified its interim order passed earlier and permitted construction work to continue at the risk of the persons concerned with out prejudice to the writ petition.
On 7th October, 1983 the Government issued a show cause notice in its revisional jurisdiction under Section 257 of the Code and on 14.10.83 the petitioners were supplied with the grounds on which the Government proposed to revise the order of Additional Collector, Thane.
The appellants herein replied to the show cause notice, and the grounds by their written submissions dated 2.11.83.
Hon 'ble Minister heard the revision on the same day and by his order dated 25.11.1983 897 set aside the order of Additional Collector and cancelled the permission granted to the appellants to use the land for purposes of their said project.
In the meanwhile, on 18.11.83 violent riots had taken place directed against the setting up of the abattoir in the village Savandhe and in the clashes of rioters with the police personnel 4 persons were killed, many others injured, and property was damaged to a considerable extent.
Against the decision of the Minis ter cancelling the permission granted by Additional Collec tor the petition was filed in the High Court on 5.12.83 under articles 226 and 227 of the Constitution for quashing the decision of the Government and it is that petition which gave rise to the present two appeals.
The main question which was raised before the High Court and also before us about the scope of Section 257 of the said Revenue Code and power of State Government in exercise of revisional jurisdiction.
It was also incidentally raised that revisional powers could not be exercised beyond 90 days.
Grounds under Article 19(1)(g) also were raised.
The learned Judges of the High Court have examined the scope of Sections 44 and 257 of the Revenue Code in detail and after considering all the facts and circumstances came to the conclusion that the Government had the power to revise even suo motu orders passed by Additional Collector and found that the grounds on the basis of which the Government acted existed and therefore the action on the part of the Govern ment was bonafide and in public interest although the learned Judges felt that the Government did not act dili gently but still in the public interest the High Court maintained the order passed by the Government with the directions to compensate the persons concerned.
Mainly it is on this ground that the learned Judges of the High 'Court have maintained the order passed by the Government.
After hearing arguments at length, in our opinion, the view taken by the High Court appears to be correct.
We see no reason to interfere with the view taken by the High Court, as we have observed earlier.
We therefore dismissed both the appeals.
P.S.S Appeals dismissed.

summary:
The petitioner appellant carrying on the business of exporting frozen meat of buffaloes, sheep and goat, sought to establish an abattoir, meat processing plant and a cold storage in a riots prone area near Bombay.
The site was situated on the bank of a river whose water is used for purposes of drinking and washing, besides religious usage, by the inhabitants of the surrounding villages.
The Sarpanch of the Group Gram Panchayat granted no objection certifi cate.
The District Collector granted permission to use the land for non agricultural purposes for the said plant under s.44 of the Maharashtra Land Revenue Code, 1966 on April 5, 1982.
At this stage the villagers raised objections to the setting up of the plant and made a representation to the Revenue Minister alleging that construction of the abattoir and discharge of effluent from the abattoir into the river would pollute the river water which was used for drinking purposes.
The Government issued a show cause notice to the appellants on October 7, 1983 under s.2S7 of the Code for ,cancellation of the order of the District Collector.
The Minister heard the revision and by his order dated November 25, 1983 set aside the order of the District Collector.
Aggrieved by the said order the appellants fried a petition in the High Court under articles 226 and 227 of the Constitution for quashing the decision of the Government cancelling the permission.
The High Court upheld the order of the Government but directed it to pay compensation for the cost incurred in setting up the project up to October 7, 1983, being the date when show cause notice was issued.
893 The petitioners appealed to this Court by special leave against upholding of the impugned order while the State preferred the appeal ' by special leave against the direction for payment of the compensation.
Dismissing the cross appeals this Court confirmed the judgment of the High Court upholding the order of the Gover ment.
It also held the appellants entitled to compensation in lieu of costs incurred on the project and interest on the compensation amount for the period subsequent to October, 7, 1983.
Pronouncing the reasons, the Court, HELD: The High Court has examined the scope of ss.44 and 257 of the Maharashtra Land Revenue Code, 1966 in detail and after considering all the facts and circumstances came to the conclusion that the Government had the power to revise even suo moto orders passed by the Collector and found that the grounds on the basis of which the Government acted existed and, therefore, the action on the part of the Gov ernment was bona fide and in public interest, although it did not act diligently, but still in public interest the High Court maintained the order passed by the Government with the direction to compensate the persons concerned.
The view taken by the High Court appears to he correct.
There is no reason to interfere with it.
[879D F]


judgement:
vil Appeal No. 11 (N) of 1969.
From the Judgment and Order dated 22/23.8.
1968 of the Bombay High Court in S.C.A. No. 1418 of 1964.
V.N. Ganpule for the Appellant in C.A. No. 2211 of 1969.
S.B. Bhasme, P.C. Kapur, V.N. Ganpule and S.K. Agnihotri for the Appellants in C.A. No. 1191 of 1970.
Nemo for the Respondents in C.A. No. 2211 of 1969.
Vinod Bobde, D.N. Mishra and Ms. Sunita for the Respond ents in C.A. No. 1191 of 1970.
Mrs. Urmila Sirur, for the Intervener.
The Judgment of the Court was delivered by BHAGWATI, CJ.
The only question which arises in these appeals is whether sub section 1(b) of section 88B is uncon stitutional and void as offending Article 26 of the Consti tution.
The constitutional validity of sub section 1(b) of section 88B is assailed on the ground that by reason of condition (i) in the proviso to this sub section, sections 32 to 32 R of the Bombay Tenancy and Agricultural Lands Act 1948 (hereinafter referred to as the 'Tenancy Act ') are made applicable to lands which are the properties of a Trust for an institution for public religious worship, if such Trust is not registered or deemed to be registered under the Bombay Public Trust Act, 1950 and the applicability of sections 32 to 32R of the Tenancy Act to such lands contra venes the right of the institution to own and acquire move able and immovable property under Article 26 of the Consti tution.
The High 869 Court negatived this challenge urged on behalf of the peti tioners.
We are also of the view that this challenge must fail.
It is not necessary to go into any detailed reasons for the purpose of holding that sub section 1(b) of section 88B does not offend Article 26 of the Constitution on ac count of condition (i) in the proviso to that sub section.
This condition provides that in order that the lands belong ing to a Trust for an institution for public religious worship should be entitled to exemption from the operation of sections 32 to 32R of the Tenancy Act, the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950.
This condition does not in any way militate against the exception which is made in the main part of sub section 1(b) of section 88B in favour of lands belonging to a Trust for an institution for public religious worship.
It merely introduces a requirement that the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950 and this requirement is intro duced in order to ensure that the Trust is really and truly a trust which falls within the language of sub section 1(b) of section 88B, namely, that it is genuinely a trust for an institution for public religious worship.
If the Trust is registered or deemed to be registered under the Bombay Public Trust Act, 1950, that would afford incontrovertible proof of the fact that it is a trust for a charitable or religious purpose.
This condition does not, therefore, in any way detract from the exemption granted under sub section 1(b) of section 88B.
So also, condition (ii) introduced in the proviso does not detract from the exemption, since all that it requires is that the entire income of the lands belonging to a trust for an institution for public religious worship must be appropriated for the purposes of such Trust.
If lands be longing to a trust for an institution for public religious worship are to be eligible for exemption under sub section 1(b) of section 88B, it would be quite legitimate for the legislature to insist that the entire income of such lands must be appropriated for the purposes of such Trust.
That would ensure that the trust is a genuine Trust for public religious worship and is not merely a facade for carrying out some other purpose.
We are, therefore, of the view that sub section 1(b) of section 88B does not offend against Article 26 of the Con stitution by reason of the introduction of conditions (i) and (ii) in the proviso to that subsection.
These appeals must fail on this short ground.
They are accordingly dis missed but without any order as to costs.
S.R. Appeals dis missed.

summary:
In order that the lands belonging to a Trust for an institution for public religious worship should be entitled to exemption from the operation of Sections 32 to 32R of the Tenancy Act, 1948, two conditions namely (i) that the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950; and (ii) that the entire income of the lands belonging to a Trust for an institution for public religious worship must be appropriated for the purposes of such a Trust who added under the proviso to section 36B(1)(b) of the Act.
The challenge to the constitu tional validity of the same was negatived by the Bombay High Court.
Hence the appeals by special leave.
Dismissing the appeals, the Court, HELD: Sub section 1(b) of section 88B of the Bombay Tenancy and Agricultural Lands Act, 1948 does not offend against Article 26 of the Constitution by reason of the introduction of conditions (1) and (ii) in the proviso to that sub section.
[869G H] Both conditions (i) and (ii) do not in any way detract from the exemption granted under sub section i(b) of section 88B of the Act.
Condition (i) merely introduces a require ment that the Trust must be registered or deemed to be registered under the Bombay Public Trust Act, 1950 and this requirement is introduced in order to ensure that the Trust is really and truly a trust which falls within the language of subsection 1(b) of section 88B, namely, that it is genu inely a trust for an institution for public religious wor ship.
If the Trust is registered or deemed to be registered under the Bombay Public Trust Act, 1950, that would afford incontrovertible proof of the fact that it is a trust for a charitable 868 or religious purpose.
Condition (ii) requires that the entire income of the lands belonging to a Trust for an institution for public religious worship must be appropriat ed for the purposes of such Trust.
If lands belonging to a trust for an institution for public religious worship are to be eligible for exemption under sub section t(b) of section 88B, it would be quite legitimate for the legislature to insist that the entire income of such lands must be appro priated for the purposes of such Trust.
That would ensure that the trust is a genuine Trust for public religious worship and is not merely a facade for carrying out some other purposes.
[869C F]


judgement:
Criminal Appeal No. 300 of 1985.
From the Judgment and Order dated 4.2.85 of the Bombay High Court in Crl.
Writ Petition No. 487 of 1984.
Govind Mukhoty, P.H. Parekh and Ms. L. Krishnamurthy for the Appellant.
A.B. Rohatgi, S.B. Bhasme, R. Karanjawala, Mrs. Karanja wala and M.N. Shroff for the Respondents.
The following Judgments were delivered: BHAGWATI, CJ.
In this appeal by special leave the appel lant who is a freelance journalist by profession and a Member of the Maharashtra State Legal Aid and Advice Commit tee, seeks to challenge the judgment of the Bombay High Court delivered on 4th February, 1985 on a writ petition filed by her.
In the writ petition she made grievance about the work ing of the New Observation Home located at Mankhurd which is maintained and managed by the Children 's Aid Society, Bom bay.
According to her, the Children 's Aid Society, is regis tered under the , and has also been treated as a Public Trust under the Bombay Public Trusts Act of 1950.
The Society was rounded on 1st May, 1926.
The Chief Minister of Maharashtra State is the ex officio President and the Minister for Social Welfare is the Vice President of the Governing Council of the Society.
The said Society receives grants from the State.
It has set up a Remand Home at Umerkhadi within Bombay area and it is now run as an Observation Home under the provisions of the Bombay Children 's Act, 1948 (hereinafter referred to as 'the Act ').
The Society runs three observation homes one at Umerkhadi established in 1927, the second at Mankhurd estab lished in 1960 and the third, the New Observation Home also at Mankhurd.
873 The appellant 's letter of 22nd August, 1984 was treated as a writ petition by the High Court wherein the grievances made by the petitioner were of four types as set out by the High Court in paragraph 23 of its judgment: (1) Delay in repatriation or restoration of children to their parents in respect of whom orders for repatriation were made by the Juvenile Court; (2) Non application of mind in the matter of taking children into custody and directing production before the Juvenile Court; (3) Absence of proper follow up action after admission of the children in the Observation Homes, in particular, grievance was made that the Child Welfare Officers were not performing their duties and such failure led to continued detention of children without any justification; and (4) Detention in such circumstances was illegal and the condition very often resulted in harassment to the children so detained.
The Society appeared before the High Court and filed counter affidavits denying allegations of facts raised in the writ petition and both parties produced documents.
The High Court went into the matter at considerable length, found some of the allegations to be without any justifica tion and yet others were accepted.
In paragraphs 44 and 45 of the impugned judgment, the High Court colated its direc tions and recommended thus: "(A) (i)A copy of the repatriation order passed by the Juvenile Court should always be sent to the Juvenile Aid Police Unit as it is now sent to the Observation Home.
The order should specify that the police should implement that order within a week.
What should be done by the police and the Observation Home in case the order is not implemented is mentioned in paragraph 27 of this judgment; (ii) The possibility of detailing sufficient number of personnel in the police department for the work con 874 nected with the Bombay Children Act should be speedily considered (Paragraph 28); (iii) The Government should immediately review the resolu tion dated 2nd September, 1965 issued by the Education and Social Welfare Department, which fixes the allowances for escort duties done by voluntary organisations (paragraph 29); (iv) It is also recommended that the Government should consider the constitution of an Escort Service which can consist of police personnel, youth volunteers and Government servants (latter part of paragraph 29); (v) The observation homes and the JAPU should not wait for a sufficient number of children being ready for being escorted before implementing the orders passed by the Juvenile Court (Paragraph 30).
(B) (i)The Magistrate presiding over the Juvenile Court should insist, in the case of local children, that the police must trace the parents of the children within a maximum period of 48 hours and take steps to restore them to their parents (paragraphs 32 and 33) (ii) Any tendency, if there is one, on the part of the personnel of JAPU of fulfilling the quota for a month should be firmly put down; (paragraph 32); In this Court, the appellant has maintained that the High Court failed to, consider several of the contentions advanced by her at the hearing of the writ petition, namely, (1) children while staying in the Observation Homes are forced to work without remuneration and are engaged in hazardous employment.
There were instances where Observation Homes assigned the work to private entrepreneurs with a view to making financial gains for the Society.
In support of this circumstance, reliance was placed upon an affidavit on behalf of the respondent filed in the High Court.
The appel lant next contended, relying on the balance sheet of the Society forming part of the annual report, it has been contended before the High Court that the Society was making a profit of about Rupees four lakhs a year by engaging children into it to discharge various types of labour with out making any payment to 875 them.
According to the appellant, the shortfall in follow up action has not been properly considered by the High Court and the directions given by it are inadequate.
In giving the directions, the High Court lost sight of mandatory provi sions of the Children 's Act as also the provisions in Arti cles 21 and 24 of the Constitution and the provisions con tained in the Directive Principles of the State Policy.
It is the submission of the appellant that Respondent No. 1 Society should have been treated as a State and not as a voluntary organisation.
In view of the materials placed on the record about the constitution and manning of the Society as also funding thereof, according to the appellant, the Court should have appreciated the position that it was the protector of the helpless children living within its juris diction and such care and attention and provisions of ameni ties as were necessary for their proper upkeep and bringing up should have been ensured by the judgment of the High Court.
She also contended that the directions of the High Court in the matter of illegal detention of children was not adequate.
Children are the citizens of the future era.
On the proper bringing up of children and giving them the proper training to turn out to be good citizens depends the future of the country.
In recent years, this position has been well realised.
In 1959, the Declaration of all the rights of the child adopted by the General Assembly of the United Nations and in Article 24 of the International Covenant on Civil and Political Rights 1966.
The importance of the child has been, appropriately recognised.
India as a party to these Interna tional Charters having rectified the Declarations, it is an obligation of the Government of India as also the State machinery to implement the same in the proper way.
The Children 's Act, 1948 has made elaborate provisions to cover this and if these provisions are properly translated into action and the authorities created under the Act become cognizant of their role, duties and obligation in the per formance of the statutory mechanism created under the Act and they are properly motivated to meet the situations that arise in handling the problems, the situation would certain ly be very much eased.
The problem is such that it does not brooke delay.
There is no unanimity of the problem also though there may be a pattern, every individual case is likely to pose a situation very often peculiar to itself.
A set pattern would not meet the situation, and yield the desired results.
What is, therefore, necessary is to appropriately train all the functionaries under the statute, create in them the neces sary bias and motivate them adequately to arise to the demand of every situation.
876 We appreciate that this is a difficult job but an intricate situation requiring delicate handling with full understand ing of the problem would definitely require appropriate manning of the machinery.
More than a mite of the grievances made by the appellant could not have been there if there had been competent handling of the situation.
It is very much necessary, therefore, that officers at the different level called upon to perform statutory duties by exercising powers conferred under the Statute have to be given the proper training and only when they had the requisite capacity in them should they be called upon to handle the situation.
Gerontocracy in silence manner indicated that like a young plant a child takes roots in the environment where it is placed.
Howsoever good the breed be if the sapling is placed on a wrong setting or an unwarranted place, there would not be the desired growth.
Same is the situation with the humane child.
The Child Welfare Officer (Probation) as also the Superintendent of the Observation Home must be duly motivated.
They must have the working knowledge in psycholo gy and have a sense of keen observation on their good func tioning would depend the efficacy of the scheme.
We are not inclined to agree with the contention ad vanced by the appellant that for employment in children 's home, the children would be given remuneration.
Children in Observation Homes should not be made to stay long and as long as they are there, they should be kept occupied and the occupation should be congenial and intended to bring about adaptability in life aimed at bringing about a selfconfi dence and picking of humane virtues.
We are not inclined to agree with the supervision over the Homes.
Indeed, without this aspect being assured, the conditions of these Homes could not improve.
Dedicated workers have to be found out, proper training to them has to be imparted and such people alone should be introduced into the children homes.
The Juvenile Court has to be manned by a Judicial Offi cer with some special training.
Creation of a Court with usual Judicial Officer and labelling it as Juvenile Court does not serve the requirement of the statute.
If that were so, the statute have no necessity of providing a Juvenile Court.
The statutory scheme contemplates a judicial officer of a different type with a more sensitive approach oriented outlook.
Without these any Judicial Officer would, indeed, not be competent to handle the special problem of children.
877 In recent years, children and their problems have been receiving attention both of the Government as also of the society but we must say that the problems are of such enor mous magnitude that all that has been done till now is not sufficient.
If there be no proper growth of children of today, the future of the country will be dark.
It is the obligation of every generation to bring up children who will be citizens of tomorrow in a proper way.
Today 's children will be the leaders of tomorrow who will hold the country 's banner high and maintain the prestige of the Nation.
If a child goes wrong for want of proper attention, training and guidance, it will indeed be a deficiency of the society and of the Government of the day.
A problem child is indeed a negative factor.
Every society must, therefore, devote full attention to ensure that children are properly cared for and brought up in a proper atmosphere where they could receive adequate training, education and guidance in order that they may be able to have their rightful place in the society when they grow up.
We agree with the appellant that the respondent Society should have been treated as a State within the meaning of Article 12 as it is undoubtedly an instrumentality of the State on the basis of the test laid down by this Court.
The respondent Society has, therefore, to regulate its activi ties not only in accordance with the statutory requirements but also act in a manner satisfying the requirements of the Constitutional provisions in Articles 21 and 24 as also the Directive Principles of the State Policy.
We would direct the State of Maharashtra to take prompt action to strictly enforce the law, act up to the require ments of the constitutional obligations and proceed to implement the directions given by the High Court as also by us in this judgment.
We direct that the State of Maharashtra shall pay to the appellant costs fixed at Rs.5000.
Before we part with this case, we may refer to a griev ance made by the appellant in regard to some of the observa tions made by the High Court relating to her stand in the writ petition.
The appellant pointed out that these observa tions were disparaging and the High Court ought not to have made the same.
We may point out even at the cost of reitera tion that the appellant is a social worker and a freelance journalist and she brought the matter before the High Court being genuinely aggrieved on account of non implementation of the statute and being moved by the condition of the children in the New Observation Home.
The appellant brought the writ petition before the High Court in larger public interest and for the purpose of securing im 878 plementation of the law.
We do not think that the observa tion made by the High Court against her were justified.
In fact, the High Court accepted most of the complaints made by her and proceeded to give relief by way of directions and recommendations.
The High Court should have borne in mind that the appellant was not a lawyer and was not acquainted with the procedure followed in the Court.
There was, there fore, no need to make those observations.
We would, there fore, direct that the observations criticising the appellant may be deleted.
PATHAK, J.
On the basis of the earlier authorities of this Court by which this Bench of two Judges must be bound, it appears that we must treat the Children 's Aid Society as falling within the expression "the State" within the meaning of Article 12 of the Constitution.
Having said that, I agree with the order proposed by the learned Chief Justice.

summary:
The respondent a society registered under the is also a Public Trust under the Bombay Public Trusts Act of 1950.
It has set up many Obser vation Homes under the provisions of the Bombay Children 's Act 1948.
The appellant, in a letter 10 the High Court, made certain grievances about the working of the New Observation Home managed by the respondent at Mankhurd.
The High Court treated the aforesaid letter as a writ petition and disposed it of by giving certain directions.
Aggrieved by the decision of the High Court, the appel lant filed the present appeal by special leave contending that the High Court failed to consider (i) that children while staying in the Observation Homes are forced to work without remuneration and are engaged in hazardous employ ment; (ii) that the shortfall in follow up action in the Observation Homes has not been properly considered by the High Court and the directions given by the High Court are inadequate; and (iii) that the Society should have been treated as a State and not as a voluntary organisation within the meaning of articles 21 and 24 of the Constitution.
Disposing of the appeal, HELD: 1.1 Children are the citizens of the future era.
On the 871 proper bringing up of the children and giving them the proper training to turn out to be good citizens depends the future of the country.
In recent years, this proposition has been well realised.
Every society must, therefore, devote full attention to ensure that children are properly cared for and brought up in a proper atmosphere where they could receive adequate training, education and guidance in order that they may be able to have their rightful place in the society when they grow up.
[875D; 877C] 1.2 The Children 's Act 1948 has made elaborate provi sions to cover all the rights of the child and if these provisions are properly translated into action and the authorities created under the Act become cognizant of their role, duties and obligation in the performance of the statu tory mechanism created under the Act and they are properly motivated to meet the situations that arise in handling the problems, the situation would certainly be very much eased.
[875F G] 1.3 The Child Welfare Officer (Probation) as also the Superintendent of the Observation Home must be duly motivat ed.
They must have the working knowledge in psychology and have a sense of keen observation.
On their good functioning would depend the efficacy of the scheme.
[876C D] 1.4 The Juvenile Court has to be manned by a Judicial Officer with some special training.
Creation of a court with usual Judicial Officer and labelling it as Juvenile Court does not serve the requirement of the statute.
If that were so, the statute has no necessity of providing a Juvenile Court.
The statutory scheme contemplates a judicial officer of a different type with a more sensitive approach oriented outlook.
Without these any Judicial Officer would, indeed not be competent to handle the special problem of children.
[876G H] 2.
Children in Observation Homes should not be made to stay long and as along as they are there, they should be kept occupied and the occupation should be congental and intended to bring about adaptability in life aimed at bring ing about a self confidence and picking of humane virtues.
However, for employment in Children 's home, the children would not be given any remuneration.
[876E] 3.
The Children Aid Society should have been treated as a State within the meaning of article 12 and it is undoubtedly an instrumentality of the State on the basis of the test laid down by the Supreme Court.
The Society has, therefore, to regulate its activities not only in accordance 872 with the statutory requirements but also act in a manner satisfying the requirements of the constitutional provisions in Article 21 and 24 as also the Directive Principles of State Policy.
The State of Maharashtra is therefore directed to take prompt action to strictly enforce the law, act up to the requirements of the constitutional obligations and the directions given by the High Court as also by the Supreme Court in this judgment.
[877D F]