judgement:
N: Criminal Appeal No. 353 of 1986 915 From the Judgment and order dated 25.2.1986 of the Patna High Court in C.W.J.C. No. 227 of 1985.
R.K. Garg and Miss Rani Jethmalani for the Petitioner.
D. Goburdhan for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This Appeal and the Writ Petition challenge the order passed by the District Magistrate, Dhanbad under section 12(2) of The Bihar Control of Crimes Act, 1981 (hereinafter called the said 'Act ').
The order was passed on 15th January, 1985 and was served on the petitioner on 7th December, 1985.
The impugned order was approved by the Government on 15th January, 1985.
The said Act was an Act to make special provisions for the control and suppression of anti social elements with a view to maintenance of public order.
Section 12 deals with power to make orders for detaining persons, Clause (d) of section 2 of the said Act states "Anti Social Element ' as a person who is: (i) either by himself or as a member of or leader of a gang, habitually commits, or attempts to commit or abets the commission of offences, punishable under Chapter XVI or Chapter XVII of the Indian Penal Code; or (ii) habitually commits or abets the commission of offences under the Suppression of Immoral Traffic in Women and Girls Act, 1956; or (iii) who by words or otherwise promotes or attempts to promote on grounds of religion, race, language caste or community or any other grounds whatsoever, feelings of enmity of hatred between different religions, racial or language groups of castes or communities; or (iv) has been found habitually passing indecent remarks to, or teasing women or girls; or (v) who has been convicted of an offence under Section 25, 26,27, 28 or 29 of the Arms Act of 1959.
916 Under section 3, the power is thereof externment on certain conditions.
Sub sections(1) and (2) of section 12 of the said Act provides as follows: "12.
Power to make orders detaining certain persons (l) The State Government may if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order and there is reason to fear that the activities of anti social elements can not be prevented otherwise than by the immediate arrest of such person, make an order directing that such anti social element be detained.
(2) If, having regard to the circumstances prevailing or likely to prevail in any area within the local limits of the jurisdiction of a District Magistrate, the State Government is satisfied that it is necessary so to do, it may by an order in writing direct, that during such period as may be specified in the order, such District Magistrate may also, if satisfied as provided in sub section (1) exercise the power conferred upon by the said sub section: Provided that the period specified in an order made by the State Government under this sub section shall not, in the first instance exceed three months, but the State Government may, if satisfied as aforesaid that it is necessary so to do, amend such order to extend such period from time to time by any period not exceeding three months at any one time.
" The other provisions are not material for the present purpose.
In so far as these are relevant have been dealt with in the judgment under appeal and it is not necessary to reiterate these again.
The High Court in the judgment under appeal has referred to the order of detention exhaustively.
The High Court has narrated the facts in the judgment under appeal and stated as follows: "On 11.3.84 on a confidential information a raid was organised under the leadership of the officer in charge of 917 Dhanbad Police Station to apprehend one Sri Raghunath Singh an absconder detenu of the National Security Act.
According to the confidential information he was going to witness a Qwali programme at Sijua gate within Jagota Police station.
As soon as the raiding party reached the Sijua gate they saw that Raghunath Singh was coming out of club and was going towards Sijua More.
The police cordoned him and told him about his arrest under the National Security Act.
On this the aforementioned Raghunath Singh called one Sakaldeo Singh who was coming towards him alongwith his associates duly armed.
Sakaldeo Singh immediately reached the spot and asked the detenu and his other associates to open fire.
As ordered the detenu opened fire on the police party.
The police party, however, escaped injury.
Meanwhile Raghunath Singh took the position and opened fire from his revolver which hit the S.I. Sri.
R. K. Verma, a member of the raiding party who fell on the ground.
The police party also opened fire but the detenu and his associates, quite in number, under the coverage of firing fled away by breaking the cordon of the police party.
The incident took place at about 1.50 a.m. in presence of a large gathering which was witnessing the Qwali programme.
This created great panic and alarm amongst the people who were witnessing the programme and they started running helter and skelter for their lives.
A complete confusion prevailed in the programme and the police had a hard time to control the situation.
This adversely affected the public order.
The people were so much afraid that they stopped moving freely in the area.
It is alleged that the detenu is a terror in the area and nobody dares to speak against him.
He is an uncrowned king of the Mafia World and the people living in the area are under the constant threat of life and property.
A case bearing Jogta P.S. Case No. 22 dated 11.3.84 under section 142/149/307/ 326/353/333/224/225 I.P.C./27 Arms Act was registered for this incident and charge sheet had already been submitted in the case.
Besides the aforesaid ground two cases have been referred to in the order of detention as background to show the criminality of the detenu: 1.
Kenduadih P.S. Case No. 43 dated 11.3.83 under section 302/34 I.P.C./25(1A)/27 of the Arms Act/3/5 of the 918 Explosive Substance Act.
In this case the detenu with his associates is alleged to have murdered one Sri Nagendra Singh in broad day light and a charge sheet in this case had already been submitted.
The other case referred to as a background is that numbered as Kenduadih P.S. Case No. 31 dated 11.3.84 under section 25(1A)/35 Arms Act.
In this case a DBBL gun looted in Keswar P.S. Case No. 5/84 under section 395 of the Indian Penal Code was recovered from the detenu 's house besides cartridges of various Arms.
A charge sheet in this case had also been submitted.
" Upon these materials, the District Magistrate, in his order of detention, has reiterated that he was satisfied that the petitioner is an anti social element and habitually commits offences punishable under Chapters XVI and XVII of the Indian Penal Code and as such his movements and acts adversely affect the public order.
The District Magistrate further stated that he was satisfied on ground No. 1 referred to hereinbefore.
In so far as Jogta P.S. Case No. 22 dated 11.3.84 is concerned, it was with regard to the same incident which resulted in the detention of the petitioner/appellant.
So far as the background was concerned, the incident No. 2 mentioned therein was Kunduadih P.S. Case No. 31 dated 11.3.84 with regard to the same date i.e. 11.3.84 but with regard to a different occurrence.
In that case a gun was looted and a case under I.P.C. was instituted under section 395 of the Indian Penal Code.
Said gun was recovered from the petitioner 's/appellant 's house beside cartridges of various arms and a charge sheet had been submit ted in connection with Jogta P.S. Case No. 22 dated 11;3.84.
These cases were pending at the relevant date.
Therefore, there was no question of the acquittal or termination of the petitioner one way or the other in respect of both the incidents of the same date.
In respect of Incident No. 1 referred to hereinbefore i.e. Kenduadih P.S. Case No. 43 dated 11.3.84 under section 302/34 I.P.C./25(1A)/27 Arms Act/3/5 Explosive Substance Act in which the petitioner/ appellant and his associates are alleged to have murdered Sri Nagendra Singh in the broad day light, a charge sheet had been submitted but the case had not been tried or terminated in any manner.
All these cases were pending disposal.
919 There is a proximity between these incidents betraying a nature and a tendency of committing these offences.
But it cannot be denied that these indicate, in the facts of this case, that the petitioner/appellant was one who habitually committed offences which are at least punishable under I.P.C.
We have noted who is an anti social element under the Act.
The petitioner/appellant has not yet been convicted under any of these sections referred to hereinbefore.
So far as the incidents referred to hereinbefore betray criminal propensity.
The first incident is of a case which was one year prior to the date of the detention order and the other incident was of the same date.
If in this background, an appropriate authority charged with the implementation of the Act comes to the satisfaction that the petitioner/appellant is one who is habitually committing or abetting the commission of offences, such a conclusion is neither irrational nor unreasonable.
In Vijay Narain Singh vs State of Bihar & Ors.
, ; , this Act came up for consideration by this Court.
But in that case the facts were entirely different.
In that case the petitioner was facing trial for offences under section 302 read with section 120B, 386 and 511 of the Indian Penal Code and was allowed to be enlarged on bail by the High Court.
But before the petitioner was released in that case the District Magistrate passed an order on 16th August, 1983 under section 12(2) of the said Act for detention of the petitioner.
The grounds of detention supplied to the petitioner related to the incidents which took place in 1975 and 1982.
There is a gap of 6 7 years in between the majority of the judges in that decision (O. Chinnappa Reddy and E.S. Venkataramiah, JJ) observed that the law of preventive detention is hard law and therefore should be strictly, construed.
Care should, therefore, be taken that liberty of a person is not jeopardized unless his case fell squarely within the four corners of the relevant law.
A.P. Sen, J. disagreed.
It is not necessary to discuss the decision in detail in view of the facts of that case and difference of the facts in this case.
We only reiterate that what the majority of the learned judges said was that while adequacy or sufficiency was no ground of a challenge, rele vancy or proximity were grounds of challenge.
We may respectfully add that proximity would be relevant in order to determine whether an order of detention was arrived at irrationally or unreasonably.
It is well settled that the detaining authority is not the sole judge of what national security or public order requires.
But neither is the court the sole judge of the position.
When power is given to an authority to act 920 on certain facts and if that authority acts on relevant facts and arrives at a decision which cannot be described as either irrational or unreasonable, in the sense that no person instructed in law could have reasonably taken that view, then the order is not bad and the Court cannot substitute its decision or opinion, in place of the decision of the authority concerned on the necessity of passing the order.
See in this connection the observations of The Barium Chemicals Ltd. and Anr.
vs The Company Law Board and others, Preventive detention for the social protection of the community is, as noted and observed in Vijay Narain Singh 's case (supra), a hard law but, it is a necessary evil in the modern society and must be pragmatically construed, so that it works.
That is how law serves the society but does not become an impotent agent.
Anti social elements creating havoc have to be taken care of by law.
Lawless multitude bring democracy and constitution into disrepute.
Bad facts bring hard laws hut these should be properly and legally applied.
It should be so construed that it does not endanger social defence or the defence of the community, at the same time does not infringe the liberties of the citizens.
A balance should always be struck.
The executive authority is not the sole judge of what is required for national security or public order.
But the court cannot substitute its decision if the executive authority or the appropriate authority acts on proper materials and reasonably and rationally comes to that conclusion even though a conclusion with which the court might not be in agreement.
It is not for the court to put itself in the position of the detaining authority and to satisfy itself that untested facts reveal a path of crime provided these facts are relevant.
See in this connection the observations of O. Chinnappa Reddy, J. in Vijay Narain Singh 's case (supra) at Pages 440 and 441.
In the facts of this case and having regard to the nature of the offences, the impugned order cannot be said to be invalid and improper one.
The High Court has very exhaustively dealt with this aspect and we respectfully agree with the High Court 's view.
There is no analogy between the instant case and the facts of Vijay Narain Singh 's case (supra) decided by this Court.
On materials on record it cannot be said as the High Court has rightly pointed out that the power of preventive detention has been 921 used to clip the 'wings of the accused ' who is involved in a criminal prosecution.
Certain allegations had been made that all materials had not been supplied to the accused.
This is not true because as the High Court noted that all relevant F.I.Rs were received by the petitioner and in token whereof he had put his signature in black and white in his own hand.
The fact that the petitioner was in jail has been taken into consideration.
How these factors and to what extent these should be taken into consideration have been discussed by this Court in Writ Petition (Criminal) No. 296 of 1986 (With SLP (Criminal) No. 1265 of 1986).
It is not necessary to reiterate them.
In the instant case the limits have not been transgressed.
In the background of the facts of this case that all the relevant documents were in fact supplied and no other document was asked for, the observations of this Court in Ichchu Devi Chorana vs Union of India & Ors., ; at 651 on which reliance was placed by Mr. Garg on behalf of the petitioner/appellant do not apply.
Mr. Goberdhan, on behalf of the State of Bihar, rightly pointed out that in the facts and circumstances of this case and the background of the scheme of this Act, there was no scope of the application of the principles reiterated by this Court in Ibrahim Ahmed Batti vs State of Gujarat and others; , at 558.
Similarly the observations of this Court in State of Punjab vs Jagdev Singh Talwandi ; at 62 & 63, upon which Mr. Garg relied can have no application.
All the relevant documents were supplied.
All the statutory safeguards were complied with.
In view of the backgrounds in the facts and circumstances of this case and the grounds mentioned in the affidavit of the District Magistrate filed before the High Court in the case under appeal as well as in Writ Petition in this Court and the facts found by the High Court which are based on cogent and reliable evidence, there is no ground for interference with the order of detention.
Preventive detention as reiterated is hard law and must be applied with circumspection rationally, reasonably and on relevant materials.
Hard and ugly facts make application of harsh laws imperative.
The detenu 's rights and privileges as a free man should not be unnecessarily curbed.
922 No other points were urged before us.
This Court has reiterated in Writ Petition (Criminal) No. 296 of 1986 with SLP (Criminal) No. 1265 of 1986 the relevant aspect of the preventive detention law.
In that view of the matter it is not necessary to reiterate those principles again here.
Preventive detention is a necessary evil in the modern restless society.
But simply because it is an evil, it cannot be so interpreted as to be inoperative in any practical manner.
Judged by all relevant standards, the impugned order of detention in the case of the petitioner cannot be said to be either illegal or beyond the authority of law.
Before we conclude we must point out that another point was taken that in the order there was no mention of the period of detention.
There could not be an indefinite detention.
The State Government has clearly notified the period of detention of the petitioner and indicated that he should be in detention till 6th December, 1986.
This appears at Annexure I at page 52 of the Paper Book of Criminal Appeal No. 353 of 1986.
The said order was passed under section 22 of the said Act by the State Government.
In the premises the Writ Petition fails and is dismissed.
The Criminal Appeal is also dismissed.
A.P.J. Petition and Appeal dismissed.

summary:
The Bihar Control of Crimes Act, 1981 was enacted to make special provisions for the control and suppression of anti social elements with a view to maintenance of public order.
Section 2(d) defines "Anti Social Element" and section 12 deals with power to make orders for detaining certain persons.
Upon the materials, the District Magistrate, hl his order of detention under section 12(2) has stated that he was satisfied that the petitioner was an anti social element and was habitually committing offences punishable under Chapters XVI and XVII of the Indian Penal Code and as such his movements and acts adversely affected the public order.
The incidents referred to in the grounds of detention showing criminal propensity of the petitioner had taken place one year prior to the date of passing of the detention order.
The petitioner unsuccessfully challenged his detention before the High Court.
Dismissing the writ petition as well as the appeal, this Court, ^ HELD: 1.
Preventive Detention for social protection of the community is a hard law but, it is a necessary evil in the modern society and must be pragmatically construed, so that it works.
That is how law serves the society but does not become an impotent agent.
Anti social elements creating havoc have to be taken care of by law.
Lawless multitude bring democracy and Constitution into disrepute.
Bad facts bring hard laws but these should be properly and legally applied.
It should be so construed that it does not endanger social defence or the defence of the community, at the same time does not infringe the liberties of the citizens .
A balance should always be struck.
[920B D] 914 2.
The executive authority is not the sole judge of what is required for national security or public order.
But, the court cannot substitute its decision if the executive authority or the appropriate authority acts on proper materials and reasonably and rationally comes to that conclusion even though a conclusion with which the court might not be in agreement.
It is not for the court to put itself in the position of the detaining authority and to satisfy itself that untested facts reveal a path of crime provided these facts are relevant.
[920E F] 3.
If, in the background of a case, and having regard to the definition of 'anti social element ' in section 2(d) of the Bihar Control of Crimes Act, 1981, an appropriate authority charged with the implementation of the Act, comes to the satisfaction that the detenu is one who is habitually committing or abetting the commission of offences, such a conclusion is neither irrational nor unreasonable.
[919C D] 4.
In the instant case, it cannot be said that the power of preventive detention has been used to clip the 'wings of the accused ' who was involved in a criminal prosecution.
The fact that the petitioner was in jail has been taken into consideration and all the relevant documents were in fact supplied to him.
Judged by all relevant standards the order of detention cannot be said to be either illegal or beyond the authority of law.
Therefore, there was no ground for interference with the order of l detention.
[920H; 921A G] 5.
While adequacy or sufficiency is no ground of a challenge, relevancy or proximity are grounds of challenge and proximity would be relevant in order to determine whether an order of detention was arrived at irrationally or unreasonably.
[919G H] Vijay Narain Singh vs State of Bihar & Ors., ; and The Barium Chemicals Ltd. and Anr.
vs The Company Law Board and others, [1366] (Supp.) SCR 311, followed.
Ichchu Devi Choraria vs Union of India & Ors., ; at 651, Ibrahim Ahmed Batti vs State of Gujarat and others; , at 558 and State of Punjab vs Jagdev Singh Talwandi, [1984] 2 SCR at 62 & 63 inapplicable.


judgement:
Civil Appeal No. 1969 of 1986 From the Judgment and order dated 26.9.1984 of the Delhi High Court in Civil Writ Petition No. 2329 of 1984.
Govinda Mukhoty, K.G. Bhagat and Mahabir Singh for the Appellant.
G.B. Pai, O.C. Mathur, Miss Meera Mathur, D.N. Mishra and section Sukumaran for the Respondents.
The Judgment of the Court was delivered by THAKKAR, J.
A CAT scan of this appeal reveals three problems, viz: I.
Whether a rule or regulation framed by a public sector undertaking which is an authority under the control of Government of India and is a 'State ' within the parameters 927 of Article 12 of the Constitution of India empowering the employer to terminate the services of an employee by giving notice of the prescribed period or payment of salary for the notice period in lieu of such notice is constitutional? II.
If it is unconstitutional, whether the employee whose services are terminated under the said rule or regulation is always and invariably entitled to reinstatement? Whether option to pay compensation in lieu of reinstatement can be given to the employer in fit cases? III.
What would be the appropriate amount to be reason ably awarded in lieu of reinstatement? These are the questions which call for answers in this appeal. ' Undisputed are the following facts, the same being incapable of being disputed: (1) The respondent Corporation (I.T.D.C.) is 'State ' within the parameters of Article 12 of the Constitution of India it being an instrumentality of the State as per the law enunciated by this Court in Central Inland Water Transport Corporation Limited & Anr.
vs Brojo Nath Ganguly and Anr.
and Central Inland Water Transport Corporation Limited & Anr.
vs Taran Kanti Sengupta & Anr., (2) Appellant was an employee of the Respondent Corporation holding the post of Manager of Hotel Ranjit, New Delhi, at the material time when his services were terminated by the impugned order.2 (3) Services of the Appellant were terminated in exercise of powers under Rule 31 (v) of the ITDC Conduct Discipline and Appeal Rules 1978, (ITDC rules) by 1.By Special Leave arising out of W.P. No. 2329 of 1984 dismissed by the High Court of Delhi summarily by its order dated 26.9.1984.
Annexure P 10, Memorandum No. P B(OP) 22 dated 18th September.
928 giving pay for 3 months in lieu of 3 months ' notice,3 under the said rule.
Rule 31 (v) of the I.T.D.C. Rules, the constitutional validity of which is questioned from the platform of Articles 14 and 16 (1) of the Constitution of India, provides: "31.
Termination of services: The services of an employee may be terminated by giving such notice or notice pay as may be prescribed in the contract of service in the following manner: i) X X X X ii) X X X X iii) X X X X iv) X X X X v) of an employee who has completed his probationary period and who has been confirmed or deemed to be confirmed by giving him 90 days ' notice or pay in lieu thereof.
" This rule cannot co exist with Articles 14 and 16 (1) of the Constitution of India.
The said rule must therefore die, so that the fundamental rights guaranteed by the aforesaid constitutional provisions remain alive.
For, otherwise, the guarantee enshrined in articles 14 and 16 of the constitution can be set at naught simply by framing a rule authorizing termination of an employee by merely giving a notice.
In order to uphold the validity of the rule in question it will have to be held that the tenure of service of a citizen who takes up employment with the 3.
Memorandum No. P B (OP) 22 dated 18th September, 1984.
"Please be advised that your services are no longer required hence stand terminated with immediate effect.
In accordance with rule No. 31(v) of ITDC Conduct, Discipline and Appeal Rule 1978, you are hereby paid three months pay in lieu of notice and a cheque No. 089988 dated 18.9.84 drawn on State Bank of India, New Delhi, representing a sum of Rs.7,950 (Rupees Seven Thousand Nine Hundred and Fifty only) is enclosed.
" 929 State will depend on the pleasure or whim of the competent authority unguided by any principle or policy.
And that the services of an employee can be terminated even though there is no rational ground for doing so, even arbitrarily or capriciously.
To uphold this right is to accord a "magna carta" to the authorities invested with these powers to practise uncontrolled discrimination at their pleasure and caprice on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices.
An employee may be retained solely on the ground that he is a sycophant and indulges in flattery, whereas the services of one who is meritorious (but who is wanting in the art of sycophancy and temperamentally incapable of indulging in flattery) may be terminated.
The power may be exercised even on the unarticulated ground that the former belongs to the same religious faith or is the disciple of the same religious teacher or holds opinions congenial to him.
The power may be exercised depending on whether or not the concerned employee belongs to the same region, or to the same caste as that of the authority exercising the power, of course without saying so.
Such power may be exercised even in order to make way for another employee who is a favourite of the concerned authority.
Provincialism, casteism, nepotism, religious fanatism, and several other obnoxious factors may in that case freely operate on the mind of the competent authority in deciding whom to retain and whom to get rid of.
And these dangers are not imaginary ones.
They are very much real in organisations where there is a confluence of employees streaming in from different states.
Such a rule is capable of robbing an employee of his dignity, and making him a supine person whose destiny is at the mercy of the concerned authority (whom he must humour) notwithstanding the constitutional guarantee enshrined in Articles 14 and 16 of the Constitution of India.
To hold otherwise is to hold that the fundamental right embedded in Articles 14 and 16 (1) is a mere paper tiger and that it is so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorizes termination of the service of an employee by merely giving a notice of termination.
Under the circumstances the rule in question must be held to be unconstitutional and void.
This Court has struck down similar rules in similar situations.
In State Electricity Board vs D.B. Ghosh, [1985] 2 S.C.R. 1014, Chinnappa Reddy J. speaking for a three Judge Bench of this Court has observed.
that a (similar) regulation,4 authorizing the 4.
Regulation 34 of Regulations framed by West Bengal State Electricity Board reading the 930 termination of the services of a permanent employee, by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof, was ex facie 'totally arbitrary ' and 'capable of vicious discrimination '.
And that it was a naked 'hire and fire ' rule and parallel of which was to be found only in the "Henary VIII clause" which deserved to be banised altogether from employer employee relationship.
The regulation thus offended Article 14 of the Constitution of India and deserved to be struck down on that account.
In Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Another AND Central Inland Water Transport Corporation Limited & Anr.
vs Tarun Kanti Sengupta and Anr.
(Supra) a Division Bench of this Court has struck down a similar rule5 in so far as it authorized termination of employment by serving a notice thereunder as being violative of article 14 of the Constitution of India, inter alia, in as much as it was capable of being selectively applied in a vicious manner by recourse to 'pick and choose ' formula.
There is, under the circumstances, no escape from the conclusion that Rule 31(v) of the aforesaid ITDC rules which provides for termination of the services of the employees of the respondent corporation simply by giving 90 days ' notice or by payment of salary for the notice period in lieu of such notice, deserves to be quashed.
As the occasion so demands, we feel constrained to place in focus and highlight an important dimension of the matter.
The impugned regulation is extremely wide in its coverage in the sense that it embraces the 'blue collar ' workmen, the 'white collar ' employees, as also the 'gold collar ' (managerial cadre) employees of the Undertaking.
In so far as the 'blue collar ' and 'white collar ' employees are concerned, the quashing does not pose any problem.
In so far as the 'gold collar ' (managerial cadre) employees are concerned, the consequence of quashing of the "34.
In case of a permanent employees, his services may be terminated by serving three months ' notice or on payment of salary for the corresponding period in lieu thereof.
Rule 9 (i) of (Service, Discipline and Appeal) Rules of 1979 of Central Inland Water Transport Corporation Ltd. reading: "9.
Termination of employment for Acts other than misdemeanour.
(i) The employment of a permanent employee shall be subject to termination on three months ' notice on either side.
The notice shall be in writing on either side.
The company may pay the equivalent of three months ' basic pay and dearness allowance, if any, in lieu of notice or may deduct a like amount when the employee has failed to give due notice.
" 931 regulation calls for some reflection.
In the private sector, the managerial cadre of employees is altogether excluded from the purview of the Industrial Disputes Act and similar labour legislations.
The private sector can cut the dead wood and can get rid of a managerial cadre employee in case he is considered to be wanting in performance or in integrity.
Not so the public sector under a rule similar to the impugned rule.
Public sector undertakings may under the circumstances be exposed to irreversible damage at the hands of a 'gold collar ' employee (belonging to a high managerial cadre) on account of the faulty policy decisions or on account of lack of efficiency or probity of such an employee.
The very existence of the undertaking may be endangered beyond recall.
Neither the capitalist world nor the communist world (where an employee has to face a death sentence if a charge of corruption is established) feels handicapped or helpless and countenances such a situation.
Not being able to perform as per expectation or failure to rise to the expectations or failure to measure up to the demands of the office is not misconduct.
Such an employee cannot thus be replaced at all.
If this situation were to be tolerated by an undertaking merely because it belongs to the public sector, it would be most unfortunate not only for the undertaking but also for the Nation.
The public sector is perched on the commanding heights of the National Economy.
Failure of the public sector might well wreck the National Economy.
On the other hand the success of the public sector means prosperity for the collective community (and not for an individual Industrial House).
The profits it makes in one unit can enable it to run a losing unit, as also to develop or expand the existing units, and start new units, so as to the generate more employment and produce more goods and services for the community.
The public sector need not therefore be encumbered with unnecessary shackles or made lame.
It is wondered whether such a situation can be remedied by enacting a regulation permitting the termination of the employment of employee belonging to higher managerial cadre, if the undertaking has reason to believe, that his performance is unsatisfactory or inadequate, or there is a bonafide suspicion about his integrity, these being factors which cannot be called into aid to subject him to a disciplinary proceeding.
If termination is made, under such a rule or regulation, perhaps it may not attract the vice of arbitrariness or discrimination condemned by Articles 14 and 16(1) of the Constitution of India, inasmuch as the factor operating in the case of such an employee will place him in a class by himself and the classification would have sufficient nexus with the object sought to be achieved.
Of course it is for the concerned authorities to tackle the sensitive problem after due deliberation.
We need say no more.
932 Time is now ripe to turn to the next question as to whether it is obligatory to direct reinstatement when the concerned regulation is found to be void.
In the sphere of employer employee relations in Public Sector Undertakings, to which Article 12 of the Constitution of India is attracted, it cannot be posited that reinstatement must invariably follow as a consequence of holding that an order of termination of service of an employee is void.
No doubt in regard to 'blue collar ' workmen and 'white collar ' employees other than those belonging to the managerial or similar high level cadre, reinstatement would be a rule, and compensation in lieu thereof a rare exception.
In so far as the high level managerial cadre is concerned, the matter deserves to be viewed from an altogether different perspective a larger perspective which must take into account the demands of National Interest and the resultant compulsion to ensure the success of the public sector in its competitive co existence with the private sector.
The public sector can never fulfil its life aim or successfully vie with the private sector if it is not managed by capable and efficient personnel with unimpeachable integrity and the requisite vision, who enjoy the fullest confidence of the 'policy makers ' of such undertakings.
Then and then only can the public sector undertaking achieve the goals of 1.
maximum production for the benefit of the community, 2.
social justice for workers, consumers and the people, and 3.
reasonable return on the public funds invested in the undertaking.
It is in public interest that such undertakings or their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in a bonafide manner unable to function harmoniously as a team working arm in arm with success in the aforesaid three dimensional sense as their common goal.
These factors have to be taken into account by the Court at the time of passing the consequential order, for the Court has full discretion in the matter of granting relief, and the Court can sculpture the relief to suit the needs of the matter at hand.
The Court, if satisfied that ends of justice so demand, can certainly direct that the employer shall have the option not to reinstate provided the employer pays reasonable compensation as indicated by the Court.
So far as the facts of this case are concerned, we are satisfied that 933 this is a fit case for granting compensation in lieu of reinstatement, instead of granting 'reinstatement '.
For, it cannot be said that the apprehension voiced by the respondent Corporation as regards the negative consequences of reinstatement is unreasonable.
We do not propose to pronounce on the validity or otherwise of the allegations and counter allegations made by the parties in their respective affidavits.
Suffice it to say that the relations between the parties appear to have been strained beyond the point of no return.
The Trade Union of the employees has lodged a strong protest and even held out a threat of strike, in the context of some acts of the Appellant.
Such unrest among the workmen is likely to have a prejudicial effect on the working of the undertaking which would prima facie be detrimental to the larger National interest, not to speak of detriment to the interest of concerned undertaking.
We are not impressed by the submission that the Union is virtually a 'company 's Union.
In any case such disputed questions of facts cannot be resolved in this forum.
We are prima facie satisfied that the apprehension is not ill founded.
What is more, reinstatement is perhaps not even in the interest of the appellant as he cannot give his best in the less than cordial atmosphere and it will also result in misery to him, let alone the other side.
Neither the undertaking nor the appellant can improve their image or performance, or, achieve success.
In fact it appears to us that both sides will be unhappy and miserable.
These are valid reasons for concluding that compensation in lieu of reinstatement, and not reinstatement, is warranted in the circumstances of the present case.
Counsel for the appellant having forcefully pressed the claim for reinstatement, has contended that in case the Court is disinclined to order reinstatement, the appellant ought to be awarded the full salary and allowances which would have accrued to him till the date of his superannuation which is more than 8 years away.
We think it would be unreasonable to award 8 years ' salary and allowances, as lump sum compensation in lieu of reinstatement.
We consider it unreasonable because: (i) To do so would tantamount to paying to the appellant EVERY MONTH 20% OVER AND ABOVE what he would have earned if he was continued in service WITHOUT DOING ANY WORK as the lump sum payment of 8 years ' salary invested at 15% interest (it being the current rate of interest) would yield a monthly recurring amount equivalent to his current monthly salary 'plus ' 20%; 934 (ii) To do so would be tantamount to paying to him his present salary etc.
plus 20% more every month not only till his date of retirement but till his death (if he lives longer) and also to his heirs thereafter, IN PERPETUITY.
(iii) Besides, the corpus of the lumpsum amount so paid as compensation would remain with him in tact.
Obvious it is, therefore, that the Court would be conferring a 'bonanza ' on him and not compensating him by accepting this formula.
The submission, accordingly, deserves to be repelled unhesitatingly.
In our considered opinion, compensation equivalent lo 3.33 years ' salary (including allowances as admissible) on the basis of the last pay and allowances drawn by the appellant would be a reasonable amount to award in lieu of reinstatement taking into account the following factors viz: 1.
The corpus if invested at the prevailing rate of interest (15%) will yield 50% of the annual salary and allowances.
In other words every year he will get 50% of what he would have earned by way of salary and allowances with four additional advantages: (i) He will be getting this amount without working.
(ii) He can work somewhere else and can earn annually whatever he is worth over and above, getting 50% of the salary he would have earned.
(iii) If he had been reinstated he would have earned the salary only upto the date of superannuation (upto 55, 58 or 60 as the case may be) unless he died earlier.
As against this 50% he would be getting annually he would get not only beyond the date of superannuation, for his & lifetime (if he lives longer), but even his heirs would get it in perpetuity after his demise.
(iv) The corpus of lump sum compensation would re main intact, in any event.
No doubt he will not have the advantage of further promotion, but 935 then what are his prospects, given the present relationship? Besides, the chances of promotion can be set off against the risk of a departmental disciplinary proceeding.
Factors (i), (ii), (iii) and (iv) are of such great significance that compensation on the basis of 50% of his annual salary and allowances is much more to his advantage.
We are thus satisfied that compensation in lieu of reinstatement on the aforesaid basis is more than reasonable.
therefore.
direct that: I The Respondent Corporation shall reinstate the appellant with full back wages (including usual allowances), or, at its option, II The Respondent Corporation shall pay to the appellant: (1) Salary including usual allowances for the period commencing from the date of termination of his service under the impugned order till the date of payment of compensation equivalent to 3.33 years ' salary including usual allowances to him.
(2) Provident Fund amount payable to the appellant and retirement benefits computed as on the date of payment as per clause 1 shall be paid to him within 3 months from the said date.
III The appellant shall vacate and make over possession of the premises provided to the appellant by the respondent company before the expiry of 3 months from the date of this order or within one month of the day on which payment under clause II is made, whichever is later.
IV Respondent shall pay the costs to the Appellant.
V Interim order shall stand vacated subject to the direction embodied in Clause III.
VI Since the amount is being paid in one lump sum, it is likely that the employer may take recourse to Section 192 of the Income tax Act, 1961 which provides that any person responsible for paying any income chargeable under the head 'Salaries ', shall, at the time of payment, deduct income tax on the amount payable at the average rate of 936 income computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.
If, therefore, the employer proceeds to deduct Income tax as provided by Section 192, we would like to make it abundantly clear that the appellant would be entitled to relief under Section 89 of the Income tax Act which provides that where by reason of any portion of asses see 's salary being paid in arrears or in advance by reason of his having received in any one financial year salary for more than 12 months or a payment which under the provisions of clause (3) of Section 17 is a profit in lieu of salary, his income is assessed at a higher rate than that it would otherwise have been assessed, the Income tax officer shall on an application made to him in this behalf grant such relief as may be prescribed.
The prescribed relief is set out in Rule 21 A of the Income tax Rules.
The appellant is entitled to relief under Section 89 because compensation herein awarded includes salary which has been in arrears as also the compensation in lieu of reinstatement and the relief should be given as provided by Section 89 of the Income tax Act read with Rule 21 A of the Income tax Rules.
The appellant is indisputably entitled to the same.
If any application is required to be made, the appellant may submit the same to the competent authority and the Corporation shall, through its Tax Consultant, assist the appellant for obtaining the relief.
The appeal is allowed.
The order of the High Court is set aside.
Order in the aforesaid terms is passed.
P.S.S. Appeal allowed.

dataset_name: IN-Abs

summary:
Rule 31(v) of the Indian Tourism Development Corporation (Conduct, Discipline and Appeal) Rules, 1978 provides that the services of an employee, who had completed his probationary period and who has been confirmed or deemed to be confirmed, may be terminated by giving him 90 days ' notice or pay in lieu thereof.
The services of the appellant, who was an employee of the respondent Corporation holding the post of Manager of a Hotel at the material time were terminated by Memorandum No. P B(OP) 22 dated 18th September, 1984, in exercise of the powers under the said rule by giving him pay for three months in lieu of notice.
Aggrieved by the said order the appellant filed a writ petition in the High Court assailing the constitutional validity of r. 31(v) of the said Rules, which was summarily dismissed.
Allowing the appeal by special leave, the Court, ^ HELD: 1.
The Indian Tourism Development Corporation is an 924 instrumentality of the State and, therefore, 'State ' within the parameters of Article 12 of the Constitution of India.
[927D E] Central Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr., applied.
2.1 Rule 31(v) of the Indian Tourism Development Corporation (Conduct, Discipline and Appeal) Rules, 1978, is unconstitutional and void, for such a rule which provides for termination of the services of the employees of the respondent Corporation simply by giving ninety days ' notice or by payment of salary for the notice period in lieu of such notice, cannot co exist with Articles 14 and 16(1) of the Constitution of India.
The fundamental right embedded in these Articles is not a mere paper tiger nor is it so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorises termination of the services of an employee by merely giving a notice of termination.
[930D E;928F;929F] 2.2 The tenure of service of a citizen who takes up employment with the State cannot be made to depend on the pleasure or whim of the competent authority unguided by any principle or policy, nor his services allowed to be terminated on an irrational ground arbitrarily or capriciously.
The authorities cannot be invested with uncontrolled discriminatory power to practise on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices.
Provincialism, casteism, nepotism, religious fanaticism, and several other obnoxious factors may in that case freely operate on the mind of the competent authority in deciding whom to retain and whom to get rid of.
And these dangers are not imaginary ones.
They are very much real in organisations where there is a confluence of employees streaming in from different States.
Such a rule as in the instant case, is capable of robbing an employee of the dignity, and making him a supine person whose destiny is at the mercy of the concerned authority.
The impugned rule, therefore, deserves to be quashed.
[928H; 929A B; D F] Central Inland Water Transport Corporation Limited & Anr.
vs Brojo Nath Ganguly & Anr., ; State Electricity Board vs D. B. Ghosh, [1985] 2 S.C.R. 1014, referred to.
3.1 The Court has full discretion in the matter of granting relief to suit the needs of the matter at hand.
If satisfied that ends of justice so demand, the Court can certainly direct that the employer shall have the 925 option not to reinstate, provided the employer pays reasonable compensation as indicated by it.
[932G] 3.2 In the sphere of employer employee relations in public sector undertakings, to which Article 12 of the Constitution of India is attracted, it cannot be posited that reinstatement must invariably follow as a consequence of holding that an order of termination of service of an employee is void.
Though in regard to workmen and employees, reinstatement would be a rule, and compensation in lieu thereof a rare exception, as regards the high level managerial cadre the matter deserves to be viewed from an altogether different perspective.
[932A C] 3.3 The public sector needs to be managed by capable and efficient personal with unimpeachable integrity and the requisite vision, who enjoy the fullest confidence of the policy makers.
It is but in public interest that such undertakings or their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in a bonafide manner unable to function harmoniously as a team.
These factors have to be taken into account by the Court at the time of passing the consequential order.
[932E G] In the instant case, it cannot be said that the apprehension voiced by the respondent Corporation as regards the negative consequences of reinstatement is unreasonable.
The relations between the parties appear to have been strained beyond the point of no return.
The Trade Union of the employees has lodged a strong protest and even held out a threat of strike, in the context of some acts of the appellants.
Such unrest among the workmen is likely to have a prejudicial effect on the working of the undertaking which would prima facie be detrimental to the larger National Interest.
In such a situation neither the undertaking nor the appellant can improve their image or performance.
It is, therefore, a fit case for granting compensation in lieu of reinstatement.
[933A C] 4.
In the private sector the managerial cadre of employees is altogether excluded from the purview of the Industrial Disputes Act and similar labour legislations.
It can cut the dead wood and can get rid of a managerial cadre employee in case he is considered to be wanting in performance or in integrity.
Not so in the public sector under a rule similar to r. 31(v).
Public sector undertakings may under the circumstances be exposed to irreversible damage at the hands of an employee belonging to a high managerial cadre on account of the faulty policy 926 decisions or on account of lack of efficiency or probity of such an employee.
The very existence of the undertaking may be endangered beyond recall.
Such a situation can be remedied by enacting a regulation permitting the termination of the employment of employee belonging to higher managerial cadre, if the undertaking has reason to believe that his performance is unsatisfactory or inadequate, or there is a bonafide suspicion about his integrity, these being factors which cannot be called into aid to subject him to a disciplinary proceeding.
If termination is made under such a rule or regulation, perhaps it may not attract the vice of arbitrariness or discrimination condemned by Articles 14 and 16(1) of the Constitution of India, inasmuch as the factors operating in the case of such an employee will place him in a class by himself and the classification would have sufficient nexus with the object sought to be achieved.
[931A H] [Taking into account various factors, compensation equivalent to 3.33 years ' salary (including allowances as admissible) on the basis of the last pay and allowances drawn by the appellant was determined to be a reasonable amount to award in lieu of reinstatement, with statutory relief under section 89 of the Income tax Act, 1961 read with r. 21 A of the Income tax Rules, 1961.] [934C D; 936D E]


judgement:
Special Leave Petition (Civil) No. 11638 of 1986 From the Judgment and Order dated 12th September, 1986 of the Madhya Pradesh High Court in M.P. No. 2845 of 1986.
B.K. Rawat, M.K. Dua, Aman Vachher and S.K. Mehta for the Petitioners.
1003 The following Order of Court was delivered ORDER Since this petition is filed against an interim order we do not propose to interfere with the order of the High Court.
The Petition is dismissed.
We, however, deprecate the practice of granting of temperory permits repeatedly to ply stage carriages for short periods even when it is made out that there is a grave need for increasing the number of regular services on the routes in question in public interest.
In many cases this practice has led to undesirable results.
In all such cases the proper action to be taken by the Regional Transport Authorities is to grant regular permits in accordance with law either by inviting applications for grant of permits or on the applications made by intending operators suo motu under section 57(2) of the .
We hope that the Regional Transport Authorities will take necessary steps in accordance with law in respect of all the routes to alleviate the suffering of the travelling public.
M.L.A. Petition dismissed.

summary:
In a petition for special leave against an interim order of the High Court, ^ HELD: (1) As the special leave petition is filed against an interim order of the High Court, this Court does not propose to interfere.
[1003B] (2.1) The practice of granting of temporary permits repeatedly to ply stage carriages for short periods even when it is made out that there is a grave need for increasing the number of regular services on the routes in question in the public interest is deprecated.
In many cases this practice has led to undesirable results.
[1003B C] (2.2) The proper action to be taken by the Regional Transport Authorities in such cases is to grant regular permits in accordance with law either by inviting applications for grant of permits or on the applications made by intending operators suo motu under section 57(2) of the .
[1003C D]


judgement:
ivil Appeal Nos.
2925 26 of 1981 From the Judgment and Order dated 19th December, 1980 of the Delhi High Court in Letter Patent Appeal No. 6 of 1978.
M.K. Ramamurthi and P.P. Singh for the Appellants.
R.K. Garg, P.H. Parekh and C.V. Subba Rao for the Respondents.
The Judgement of the Court was delivered by VENKATARAMIAH, J. Some of the officials who had been directly appointed as Assistants in the Intelligence Bureau of the Government of India in the year 1957 filed a writ petition in the year 1976 in Civil Writ Petition No. 638 of 1976 on the file of the High Court of Delhi questioning the validity of the appointments of certain other Assistants in the Intelligence Bureau of whom some had been appointed prior to 1.2.1954 and the remaining had been appointed or absorbed as Assistants prior to the induction of the writ petitioners into service as Assistants and also the assignment of seniority to them over and above the petitioners in the Writ Petition.
The said Writ Petition was dismissed by the learned Single Judge.
Aggrieved by the 996 decision of the learned Single Judge, the petitioners in the writ petition filed an appeal in the Letters Patent Appeal No. 6 of 1978 before a Division Bench of the High Court.
The Division Bench allowed the appeal, set aside the judgment of the learned Single Judge and held that the posts of Assistants which existed on 1.2.1954 had to be filled by persons who were eligible in terms of Paragraph 15 of the reorganisation Scheme of 1955 effective from 1.2.1954 and that there was infringement of the terms of Paragraph 15 in their cases.
The Division Bench also gave some other ancillary directions resulting in the disturbance of the seniority of the respondents who had been working in the Intelligence Bureau.
By the date of the said judgment the said respondents had put in more than 25 years of service as Assistants in the Intelligence Bureau.
Aggrieved by the decision of the Division Bench, the Union of India as well as the officials, who had been appointed prior to the date on which the writ petitioners were appointed have filed these two appeals by special leave.
At the outset it should be stated that it is distressing to see that cases of this kind where the validity of the appointments of the officials who had been appointed more than 32 years age is questioned are still being agitated in courts of law.
A Government servant who is appointed to any post ordinarily should at least after a period of 3 or 4 years of his appointment be allowed to attend to the duties attached to his post peacefully and without any sense of insecurity.
It is unfortunate that in this case the officials who are appellants before this Court have been put to the necessity of defending their appointments as well as their seniority after nearly three decades.
This kind of fruitless and harmful litigation should be discouraged.
The ministerial posts in the Intelligence Bureau were reorganised with effect from 1.2.1954 vide Ministry of Home Affairs Letter No. 40/154/49 P.III dated 17.9.1955.
In accordance with the said Scheme the Ministerial Duty Posts were reorganised into following three categories: Category A Administrative Officer and the Assistant Director (Non Police) Category B Superintendents and Assistant Superintendents Categoty C Assistants.
997 All Duty Posts in Category 'C ' were required by that Scheme to be filled by Assistants or U.D.Cs placed in charge of such posts.
The posts of Assistants were classified as belonging to Grade IV in the Intelligence Bureau Service.
The mode of initial constitution of Grade IV, confirmation of the existing Assistants called 'departmental candidates ' at the initial stage and the future recruitment to Grade IV consisting of Assistants were regulated by Paragraphs 15 and 16 of the said Scheme.
The principle of fixation of seniority as laid down in the Ministry of Home Affairs Office Memorandum No. 20/1/40 Ests(S) dated 14.5.1940 was that if a vacancy arose in the cycle meant for a direct recruit, the direct recruit would rank senior to the departmental candidate even though the direct recruit joined the post after the departmental candidates had been promoted and confirmed.
This principle of fixation of seniority was subsequently superseded by the Ministry of Home Affairs Office Memorandum No. 30/44/48 Apptts, dated 22.6.1949 which provided that the seniority would be determined on the basis of the length of service.
Prior to the reorganisation which came into force with effect from 1.2.1954 the seniority of Assistants in the Intelligence Bureau was fixed on the basis of the 1949 Office Memorandum.
Before the reorganisation of the Intelligence Bureau the direct recruitment of Assistants in the Intelligence Bureau was made through the Employment Exchange, advertisements and by inviting applications of persons working in other Ministries etc.
The Intelligence Bureau was exempted from making recruitment to its ministerial posts through the Union Public Service Commission in accordance with the Government orders issued from time to time.
No direct recruitment was made through the Union Public Service Commission.
It was only after the reorganisation of the ministerial posts in the Intelligence Bureau that the Union Government was required to make direct recruitment of Assistants in the ratio of 85% through the Union Public Service Commission and 15% by promotion of U.D.Cs in terms of the said Scheme.
The Intelligence Bureau was again exempted from the purview of the Union Public Service Commission since 1969 and now we are told that it conducts its own examination for making recruitment of Assistants directly.
The officials who were shown as Respondent Nos. 3 to 9, 12 to 31 and 42 to 49 in the Writ Petition were working as Assistants on 1.2.1954, i.e., the date of the reorganisation of the ministerial posts in the Intelligence Bureau.
Respondent Nos. 10 and 11 in the Writ Peti 998 tion were appointed as direct recruits through other sources before the Intelligence Bureau Ministerial Reorganisation Scheme was issued on 17.8.1955.
Respondent Nos. 32 to 41, 50 and 51 are those officers who were promoted from the posts of U.D.Cs to the posts of Assistants against 15% quota of promotees prescribed in the reorganisation scheme.
The petitioners who had filed the Writ Petition were, however, recruited through the competitive examination held by the Union Public Service Commission in the year 1955 against the 85% quota of direct recruitment provided for in the Scheme and they joined service in 1957.
The first draft seniority list of the Assistants was issued in 1958 on the basis of length of continuous service placing the officials who were respondents to the writ petition above the petitioners therein and was duly circulated .
No objections were received from the writ petitioners against the seniority assigned to them in the said seniority list.
Subsequently, the seniority lists in the Grade of Assistants were again issued in 1961 and 1965 but again no objections were raised by the writ petitioners except petitioner No. 6 who objected to the 1965 list.
In 1959 the Ministry of Home Affairs issued another Office Memorandum No. 9/11/55/IPS dated 22.12.1959 in supersession of the 1949 Office Memorandum laying down the principles of fixation of seniority.
According to this Memorandum, the seniority was to be fixed on the basis of the date of confirmation as against the 1949 Office Memorandum which laid down that the seniority should be fixed in accordance with the length of service.
On the basis of the 1959 Office Memorandum the seniority list as maintained in the Intelligence Bureau up to 1965 was revised in March, 1968.
In the revised seniority list the writ petitioners became seniors to many of the departmental Assistants (who had been impleaded as respondents) who had a longer length of service but for one reason or the other had not been confirmed in the said post or were confirmed after the confirmation of the writ petitioners.
The 1959 Office Memorandum came up for consideration before the Supreme Court in Union of India & Ors.
vs M. Ravi Varma & Ors.
; , In that decision this Court held that the Office Memorandum dated 22.12.1959 had expressly made it clear that the general principles embodied in the annexure thereto were not to have any retrospective effect and in order to put the matter beyond any pale of controversy it had been mentioned that 'hereafter the seniority of all persons appointed in the various Central Services after the date of these instructions should be, determined in accordance with the general principles annexed hereto '.
In accordance with the above view this Court held that the seniority of two of the respondents in that case, whose seniority was in issue, had to be 999 determined on the basis of their length of service in accordance with Office Memorandum dated 22.6.1949 and not on the basis of the date of their confirmation because they had been appointed prior to 22.12.1959.
Two of the respondents in the writ petition out of which these appeals arise, i.e., respondent Nos. 7 and 36 had also filed writ petitions in the High Court of Andhra Pradesh challenging the seniority list of Assistants in the Intelligence Bureau which had been issued in March, 1968.
The Andhra Pradesh High Court by its judgment dated 11.11.1974 on the basis of the decision in Ravi Varma 's case (supra) held that the seniority of respondents 7 and 36 should be fixed on the basis of the 1949 Office Memorandum.
On the basis of the judgment in Ravi Varma 's case (supra) and the decision of the High Court of Andhra Pradesh referred to above, the seniority list of the Assistants in the Intelligence Bureau was again revised for correcting the error committed earlier and a draft partial seniority list was issued on 16.6.1975 proposing to revive the earlier list dated 22.12.1958.
In this seniority list the respondents in the writ petition, who were working as Assistants at the time of the reorganisation and were governed by the 1949 Office Memorandum were shown as seniors to the petitioners who had filed the writ petition in accordance with the position in the 1958 seniority list.
The petitioners filed objections to the said seniority list.
Their objections were not accepted and a seniority list was issued in January, 1976 showing the officials who had been impleaded as respondents in the writ petition as seniors to the petitioners in the writ petition.
In the writ petition the petitioners questioned the validity of the above seniority list published in January, 1976.
The respondents in the writ petition raised a preliminary objection to the writ petition stating that the writ petition was liable to be dismissed on the ground of laches.
Although the learned Single Judge and the Division Bench have not disposed of the above writ petition on the ground of delay, we feel that in the circumstances of this case the writ petition should have been rejected on the ground of delay alone.
The first draft seniority list of the Assistants was issued in the year 1958 and it was duly circulated amongst all the concerned officials.
In that list the writ petitioners had been shown below the respondents.
No objections were received from the petitioners against the seniority list.
Subsequently, the seniority lists were again issued in 1961 and 1965 but again no objections were raised by the writ petitioners, to the seniority list of 1961, but only the petitioner No. 6 in the writ petition represented against the seniority list of 1965.
We have already mentioned that the 1968 seniority list in which the writ petitioners had been 1000 shown above the respondents had been issued on a misunderstanding of the Office Memorandum of 1959 on the assumption that the 1949 Office Memorandum was not applicable to them.
The June 1975 seniority list was prepared having regard to the decision in Ravi Varma 's case (supra) and the decision of the High Court of Andhra Pradesh in the writ petitions filed by respondent Nos. 7 and 36 and thus the mistake that had crept into the 1968 list was rectified.
Thus the list was finalised in January, 1976.
The petitioners who filed the writ petition should have in the ordinary course questioned the principle on the basis of which the seniority lists were being issued from time to time from the year 1958 and the promotions which were being made on the basis of the said lists within a reasonable time.
For the first time they filed the writ petition in the High Court in the year 1976 nearly 18 years after the first draft seniority list was published in the year 1958.
Satisfactory service conditions postulate that there should be no sense of uncertainty amongst the Government servants created by the writ petitions filed after several years as in this case.
It is essential that any one who feels aggrieved by the seniority assigned to him should approach the court as early as possible as otherwise in addition to the creation of a sense of insecurity in the minds of the Government servants there would also be administrative complications and difficulties.
Unfortunately in this case even after nearly 32 years the dispute regarding the appointement of some of the respondents to the writ petition is still lingering in this Court.
In these circumstances we consider that the High Court was wrong in rejecting the preliminary objection raised on behalf of the respondents to the writ petition on the ground of laches.
The facts of this case are more or less similar to the facts in R.S. Makashi & Ors.v.
I.M. Menon & Ors., ; In the said decision this Court observed at page 100 thus: "In these circumstances, we consider that the High Court was wrong in over ruling the preliminary objection raised by the respondents before it, that the writ petition should be dismissed on the preliminary ground of delay and laches, inasmuch as it seeks to disrupt the vested rights regarding the seniority, rank and promotions which had accrued to a large number of respondents during the period of eight years that had intervened between the passing of the impugned Resolution and the institution of the writ petition.
We would accordingly hold that the challenge raised by the petitioners against the seniority principles laid down in the Government Resolution of March 22, 1968 1001 ought to have been rejected by the High Court on the ground of delay and laches and the writ petition in so far as it related to the prayer for quashing the said Government Resolution should have been dismissed.
" We are in respectful agreement with the above observation.
We may also refer here to the weighty observations made by a Constitution Bench of this Court in Maloon Lawrence Cecil D 'Souza vs Union of India & Ors., [1975] Supp.
S.C.R. 409 at page 413 414 which are as follows: "Although security of service cannot be used as a shield against administrative action for lapse of a public servant, by and large one of the essential requirements of contentment and efficiency in public services is a feeling of security.
It is difficult to doubt to guarantee such security in all its varied aspects.
It should at least be possible to ensure that matters like one 's position in the seniority list after having been settled for once should not be liable to be reopened after lapse of many years at the instance of a party who has during the intervening period chosen to keep quiet.
Raking up old matters like seniority after a long time is likely to result in administrative complications and difficulties.
It would, therefore, appear to be in the interest of smoothness and efficiency of service that such matters should be given a quietus after lapse of some time.
" We feel that in the circumstances of this case, we should not embark upon on and enquiry into the merits of the case and that the writ petition should be dismissed on the ground of laches alone.
We accordingly allow these appeals, set aside the judgment of the Division Bench of the High Court and dismiss the writ petition filed in the High Court.
We also direct that all the promotions made in the Intelligent Bureau shall be reviewed in accordance with the impugned seniority list dated January 28, 1976.
There shall be no order as to costs.
P.S.S. Appeals allowed.

summary:
The Ministry of Home Affairs by its Office Memorandum dated 14th May, 1940 laid down that if a vacancy arose in the cycle meant for a direct recruit, the direct recruit would rank senior to the departmental candidates even though the direct recruit joined the post after the departmental candidate had been promoted and confirmed.
This principle of fixation of seniority was subsequently superseded by Office Memorandum dated 22nd June 1949, which provided that the seniority would be determined on the basis of the length of service.
Another Office Memorandum issued on 22nd December, 1959, in supersession of the 1949 Office Memorandum laid down that the seniority was to be fixed on the basis of the date of confirmation.
Some of the officials, who had been directly appointed as Assistants in a department of the Government of India in the year 1957, filed a writ petition in the High Court in the year 1976 questioning the validity of the appointments of certain other Assistants who had been appointed or absorbed as Assistants prior to the induction of the writ petitioners into service as Assistants, and also the assisgnment of seniority to them over and above the petitioners.
The first draft seniority list of the Assistants in that department was issued in 1958 on the basis of length of continuous service placing the officials who were respondents to the writ petition above the petitioners, and was duly circulated.
No objections were received from the writ petitioners against the seniority assigned to them in the said seniority list.
Subsequently, the seniority lists in the Grade of Assistants were again issued in 1961 and 1965 but again no objections were raised by the writ petitioners.
994 On the basis of the 1959 Office Memorandum the seniroity list, as maintained in the department up to 1965, was revised in March, 1968.
In the revised seniority list the writ petitioners became senior to many of the departmental Assistants, who had a longer length of service, but for one reason or the other had not been confirmed in the post or were confirmed after the confirmation of the writ petitioners.
Consequent to the decision of this Court in Union of India vs M. Ravi Verma, ; , the said seniority list was again revised in the year 1976 resulting in the respondents in the writ petition, who were governed by the 1949 Office Memorandum, being shown as seniors to the petitioners.
The petitioners questioned the validity of the seniority list published in 1976.
The respondents in the writ petition raised a preliminary objection to the writ petition stating that it was liable to be dismissed on the ground of laches.
The writ petition was dismissed by the Single Judge.
The Letters Patent appeal filed by the petitoners was, however, allowed by the Division Bench, without adverting to the ground of delay.
The ancillary directions given by the Court resulted in the disturbance of the seniority of the above said respondents, who had been working in the department and on the date of the judgment had put in more than twenty five years of service as Assistants.
Allowing the appeals by special leave filed by the Union of India as well as the officials, who had been appointed prior to the date on which the writ petitioners were appointed, the Court, ^ HELD: The High Court was wrong in rejecting the preliminary objection raised on behalf of the respondents to the writ petition on the ground of laches.
[1000E F] It is essential that any one who feels aggrieved by the seniority assigned to him should approach the court as early as possible, as otherwise in addition to the creation of a sense of insecurity in the minds of the Government servants there would also be administrative complications and difficulties.
[1000D E] Satisfactory service conditions postulate that there should be no sense of uncertainty amongst the Government servants created by the writ petitions filed after several years.
A Government servant who is appointed to any post ordinarily should at least after a period of 3 or 4 years of his appointment be allowed to attend to the duties attached to his post peacefully and without any sense of insecurity.
[1000C; 996D E] 995 The respondent petitioners should have in the ordinary course questioned the principle on the basis of which the seniority lists were being issued from time to time from the year 1958 and the promotions which were being made on the basis of the said lists within a reasonable time.
For the first time they filed the writ petition in the High Court in the year 1976 nearly 18 years after the first draft seniority list was published in the year 1958.
The appellants have been put to the necessity of defending their appointments as well as their seniority after nearly three decades.
This kind of fruitless and harmful litigation should be discouraged.
[1000B C; 996 E F] All the promotions made in the department to be reviewed in accordance with the impugned seniority list of 1976.
[1001G] R.S. Makashi & Ors.
vs I.M. Menon & Ors., ; and Maloon Lawrence Cecil D 'Souza vs Union of India & Ors., [1975] Supp.
SCR 409, referred to.


judgement:
tition (Civil) No. 1129 of 1977 Under Article 32 of the Constitution of India.
R. Sharma and Dalveer Bhandari for the Petitioner.
B.Datta Additional Solicitor General, Ms. A.Subhashini, A.K. Goel, T.V.S.N. Chari, R.K. Jain, Dr. N.M. Ghatate, D.N. Mishra and H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
In this writ petition the petitioner, Panipat Woollen & General Mills Co. Ltd., hereinafter referred to as 'the Company ', has challenged the taking over of the management of its two textile mills under the Sick Textile Undertakings (Taking over of Management) Act, 1972 (for short 'Take over Act ') and also the constitutional validity of the Take over Act and the Sick Textile Undertakings (Nationalisation) Act, 1974 (for short 'the Nationalisation Act ').
It appears that the Company had falled on evil days resulting in initiation of liquidation proceedings against the Company and the 940 appointment of a provisional liquidator.
The mills of the Company were closed sometime in May, 1972.
On the application by the Industrial Finance Corporation of India, the Punjab & Haryana High Court directed the Board of Directors of the Company to hand over possession of the two mills to the Corporation to which the Company was indebted for a huge sum of money.
The Corporation was also directed by the High Court to lease out the mills, and it appears that Padmashree Textile Industries Ltd. was granted the lease of the mills, that is to say, the textile undertakings of the Company.
At this stage, it may be mentioned that the lessee, the said Padmashree Textile Industries Ltd., also filed a writ petition before this Court, inter alia, challenging the Take over Act and the Nationalisation Act.
That writ petition has since been disposed of by this Court upon settlement between the parties.
Section 4(1) of the Take over Act provides that on or before the appointed day, the management of the sick textile undertakings specified in the First Schedule shall vest in the Central Government.
Under Section 2(a) "appointed day" means 31st day of October, 1972.
Section 2(d) defines "sick textile undertaking" as follows: "section 2(d).
"sick textile undertaking" means the textile undertaking which falls within one or more of the following categories, namely: (i) which is owned by a textile company which is being wound up, whether voluntarily or by or under the supervision of any Court, or in respect of which a provisional liquidator has been appointed by a Court, (ii) which had remained closed for a period of not less than three months immediately before the appointed day and the closure of which is prejudicial to the textile industry, and the condition of the undertaking is such that it may, with reasonable inputs, be re started in the interests of the general public, (iii) which has been leased to Government or any other person or the management of which has been taken over by Government or any other person under any leave or licence granted by any Receiver or Liquidator by or under the orders of, or with the approval of, any Court, 941 (iv) the management of which was authorised by the Central Government, by a notified order made under section 18A, or in pursuance of an order made by the High Court under section 18FA, of the Industries (Development and Regulation) Act, 1951, to be taken over by a person or body of persons, but such management could not be taken over by such person or body of persons, before the appointed day, (v) the management of which ought to be [according to the report made after investigation by any person or body of persons appointed after the 1st day of January, 1970, under section 15 or section 15A of the Industries (Development and Regulation) Act, 1951] taken over under section 18A of that Act, but in relation to which no notified order authorising any person or body of persons to take over the management of such undertaking was made before the appointed day, (vi) in respect of which an investigation was caused to be made, before the appointed day, by the Central Government under section 15 or section 15A of the Industries (Development and Regulation) Act, 1951, and the report of such investigation was not received by the Central Government before the appointed day; and includes any textile undertaking which is deemed, under sub section (2) of section 4, to be a sick textile undertaking;" In view of sub clause (i) of section 2(d), as a provisional liquidator was appointed in respect of the textile undertakings of the Company, they were sick textile undertakings.
Moreover, the sick textile undertakings of the Company have been specified in the First Schedule to the Take over Act and by virtue of section 4(1) of the Take over Act, the undertakings of the Company have vested in the Central Government as sick textile undertakings.
It is vehemently urged by Mr. Sharma, learned Counsel appearing on behalf of the petitioners, that before actually taking possession of the undertakings of the Company, the Company should have been given an opportunity of being heard.
It is submitted that if such an 942 opportunity had been given, the Company could have shown that its undertakings were not sick undertakings.
Counsel submits that the intention of the Legislature to give such an opportunity of being heard is apparent from the provisions of clauses (iv), (v) and (vi) of section 2(d) of the Take over Act which relate to the taking over of manage ment of an undertaking under the Industries (Development and Regulation) Act, 1951.
In support of this contention, the learned Counsel has placed reliance upon three decisions of this Court in A. K. Kraipak & Ors.
vs Union of India & Ors.
, , Maneka Gandhi vs Union of India, [1978] 2 SCR 621, and Smt.
Indira Nehru Gandhi vs Shri Raj Narain, In our opinion, none of the above decisions is applicable to the facts and circumstances of the instant case.
In the First Schedule to the Take over Act, the undertakings of the Company have been specified as sick textile undertakings.
In other words, the Legislature has itself decided the undertakings of the Company to be sick textile undertakings.
Indeed, in the First Schedule all the sick textile undertakings have been specified.
Thus, it is apparent that the Legislature has not left it to the Executive to decide whether a particular textile undertaking is a sick textile undertaking or not.
If under the Take over Act the question whether a textile undertaking is a sick textile undertaking or not had been directed to be decided by the executive authorities, the owner of such undertaking could claim an opportunity of being heard.
But when an undertaking has been specified in the First Schedule to the Take over Act as a sick textile undertaking, the question of giving an opportunity to the owner of the undertaking does not at all arise.
We are unable to accept the contention of the petitioners that sub clauses (iv), (v) and (vi) of section 2(d) indicate that principles of natural justice should be complied with.
The provisions of these sub clauses are some of the categories under any one of which the undertaking may fall and, in that case, it will be a sick textile undertaking.
There is, therefore, no substance in the contention made on behalf of the petitioners that the Company should have been given an opportunity of being heard before the management of its undertakings was taken over as sick textile undertakings.
It is next urged by the learned Counsel for the petitioners that the Legislature having itself decided the question whether an under taking is a sick textile undertaking or not without giving any opportunity to the owner of such undertaking to make a representation, has damaged the basic structure of the Constitution of India, namely, 943 separation of power between the Legislature, the Executive and the Judiciary.
Our attention has been drawn to the observations made by Sikri, CJ, in Kesavananda Bharati vs State of Kerala, [1973] 2 Supp.
SCR 1, and that of Mathew, J, in Smt.
lndira Nehru Gandhi vs Shri Raj Narain, at page 503 to the effect, inter alia, that separation of powers among the Legislature, the Executive and the Judiciary, is one of the basic structures of the Constitution.
It is, accordingly, submitted on behalf of the petitioners that the doctrine of separation of powers implies that the Legislature should define civil or criminal wrong or a default and create an independent machinery, judicial or quasi judicial, to determine the liability of the status of an individual.
Further, the Legislature itself cannot give a judgment and, in any case, if such a judgment is given by the Legislature, it must act in accordance with the principles of natural justice.
The above submissions of the petitioners, in our opinion, are misconceived.
There can be no doubt that in respect of each sick textile undertaking, a Take over Act and a Nationalisation Act could be passed and, in that case, a large number of enactments would come into existence to the inconvenience of all concerned.
In order to avoid such cumbersome course and for the sake of convenience, the Legislature has mentioned in the First Schedule in both the Take over Act and the Nationalisation Act the names of all sick textile undertakings in the country.
By including certain textile undertakings as sick textile E undertakings in the First Schedule to the Take over Act, the Legislature has not made any judicial or quasi judicial determination, nor has the Legislature given any judgment, as contended on behalf of the petitioners, although such inclusion is sometimes loosely expressed as 'legislative judgment '.
In section 2(d), the Legislature has laid down the criteria for a sick undertaking.
The sick textile undertakings have been specified in the First Schedule on the basis of the tests laid down in section 2(d).
In including the sick textile undertakings in the First Schedule, the Legislature has not acted arbitrarily, for, it has also laid down the criteria or tests for such inclusion.
If any undertaking which has been so specified in the First Schedule does not satisfy the tests under section 2(d) of the Take over Act, the owner of it is entitled to t challenge such inclusion or take over in a court of law, although such challenge has to be founded on a strong ground.
Thus, there is no finality or conclusiveness in the legislative determination of an under taking as a sick textile undertaking.
Such determination is neither judicial nor quasi judicial.
Therefore, the question of damaging or altering the basic structure of the Constitution, namely, separation of 944 powers among the Legislature, the Executive and the Judiciary, does not at all arise.
So also the question of the validity of the constitutional amendments by which the Take over Act and the Nationalisation Act have been included in the Ninth Schedule on the ground that by such amendments the basic structure of the Constitution is damaged, as contended on behalf of the petitioners, does not arise.
The contentions are misconceived and are rejected.
As a last resort, the petitioners have challenged the validity of the Nationalisation Act on the ground of inadequacy of compensation.
The Company had two undertakings, namely, Panipat Woollen Mills and Kharar Textile Mills.
In the third column of the First Schedule to the Nationalisation Act, a sum of Rs. 6,40,000 has been specified for the Panipat Woollen Mills and a sum of Rs. 12,89,000 has been specified for the Kharar Textile Mills by way of compensation for the acquisition of these two undertakings.
It is the contention of the petitioners that the amounts of compensation, which have been specified for the acquisition of these two undertakings, are inadequate.
We are afraid, as on the date the Nationalisation Act had come into force, Article 31 of the Constitution was not repealed, the validity of the Nationalisation Act cannot be challenged on the ground of inadequacy of compensation.
In Minerva Mills Ltd. & Ors.
vs Union of India & Ors., Writ Petition Nos.
356 361 of 1977, decided on September 9, 1986, it has been already held by us that the Nationalisation Act gives effect to the policy of the State towards securing the ownership and control of the material resources of the community which are so distributed as best to subserve the common good, as contained in Article 39(b) of the Constitution.
In the circumstances, the Nationalisation Act falls within the provision of Article 31C of the Constitution before it was amended by the Constitution (Forty Second Amendment) Act, 1976.
Even assuming that the Nationalisation Act violates the provision of Article 31, no challenge to its validity can be made on that ground.
Apart from that, we are of the view that the compensation that has been awarded to the Company is neither inadequate nor illusory as contended on behalf of the petitioners.
It is not in dispute that the paid up share capital of the Company was Rs.60 lakhs and it paid dividend up to 1965.
Thereafter, the Company did not pay any dividend from 1965 to 1970.
It will not be unreasonable to presume that in specifying the compensation, the Legislature has taken these facts into consideration.
There is, therefore, no substance in the contention of the petitioners that the compensation specified in First Schedule to the Nationalisation Act in respect of the undertakings of 945 the Company is illusory.
The contention is rejected.
No other point has been urged on behalf of the petitioners.
For the reasons aforesaid, the writ petition is dismissed and the rule nisi is discharged.
There will, however, be no order as to costs.
M.L.A. Petition dismissed.

summary:
A provisional liquidator was appointed in respect of two textile undertakings of the petitioner company since they had gone into huge loss and had to be closed sometime in May 1972.
As the textile undertakings of the petitioner company were 'sick textile undertakings ' within the meaning of sub clause (i) of section 2(d) of the Sick Textiles Undertakings (Taking over of Management) Act 1972 (for short, Take over Act) and have also been specified in the First Schedule to the Take over Act, they vested in the Central Government as 'sick textile undertakings ' by virtue of section 4(1) of the Take over Act.
The petitioner company challenged before the Supreme Court the taking over of the management of the aforesaid two textile mills under the Take over Act and also the constitutional validity of the Take over Act and the Sick Textile Undertakings (Nationalisation) Act 1974 on the grounds (a) that the Company should have been given an opportunity of being heard before the management of its undertakings was taken over as 'sick textiles undertakings ' and if such an opportunity had been given, the company could have shown that its undertakings were not sick undertakings; (b) that the legislature, having itself decided the question whether an undertaking is sick textile undertaking or not without giving any opportunity to the owner of such undertaking to make a representation, has damaged the basic structure of the Constitution 938 namely separation of power between the legislature, the executive and the judicially; and (c) that the Nationalisa tion Act is consititutionally invalid on the ground of inadequacy of compensation.
Dismissing the petition, ^ HELD 1.1 In the First Schedule to the Take over Act, the undertakings of the company have been specified as sick textile undertakings.
In other words, the Legislature has itself decided the undertakings of the Company to be sick textile undertakings.
Indeed, in the First Schedule all the sick textile undertakings have been specified.
Thus, it is apparent that the Legislature has not left it to the Executive to decide whether a particular textile undertaking is a sick textile undertaking or not.
If under the Take over Act the question whether a textile undertaking is a sick textile undertaking or not had been directed to be decided by the executive authorities, the owner of such undertaking could claim an opportunity of being heard.
But when an undertaking has been specified in the First Schedule to the Take over Act as a sick textile undertaking, the question of giving an opportunity to the owner of the undertaking does not at all arise.
[942C F] 1.2 In including the sick textile undertakings in the First Schedule, the Legislature has not acted arbitrarily, for it has also laid down the criteria or tests for such inclusion.
If any undertaking which has been so specified in the First Schedule does not satisfy the tests under section 2(d) of the Take over Act, the owner of it is entitled to challenge such inclusion or take over in a court of law, although such challenge has to be founded on a strong ground.
Thus, there is no finality or conclusiveness in the legislative determination of an undertaking as a sick textile undertaking.
Such determination is neither judicial nor quasi judicial.
Therefore, the question of damaging or altering the basic structure of the Constitution namely, separation of powers among the Legislature, the Executive and the Judiciary, does not at all arise.
So also the question of the validity of the constitutional amendments by which the Take over Act and the Nationalisation Act have been included in the Ninth Schedule on the ground that by such amendments the basic structure of the Constitution is damaged, as contended on behalf of the petitioners, does not arise.
[943F H; 944A B] 2.
The Nationalisation Act gives effect to the policy of the State towards securing the ownership and control of the material resources of the community which are so distributed as best to subserve the common 939 good, as contained in article 39(b) of the Constitution.
It falls within the provision of article 31C of the Constitution before it was amended by the Constitution (Forty Second Amendment) Act, 1976.
Even assuming that the Nationalisation Act violates the provision of article 31, no challenge to its validity can be made on that ground.
[944E G] Minerva Mills Ltd. & Ors.
vs Union of India & Ors., Writ Petition Nos.
356 361 of 1977, decided on September 9, 1986, relied upon.
In the instant case, the compensation that has been awarded to the Company is neither inadequate nor illusory.
It is not in dispute that the paid up share capital of the Company was Rs.60 lakhs and it paid dividend from 1965 to 1970.
It will not be unreasonable to presume that in specifying the compensation, the Legislature has taken these facts into consideration.
There is, therefore no substance in the contention of the petitioners that the compensation specified in First Schedule to the Nationalisation Act in respect of the undertakings of the Company is illusory.
[944G H; 945A]