judgement:
Civil Appeal Nos.
2072 and 4091 92 of 1985.
From the Judgment and order dated 9.4.1985 of the Allahabad High Court in C.M.W.P Nos 10301 and 2263 of 1983.
with Civil Appeal Nos. 2628, 2696 of 1985 and Special Leave Petition No. 9542 of 1985 From the Judgment and order dated 30.4.1985 of the Allahabad High Court in C.M.W.P Nos 17669, 11027 and 10675 of 1983 S.N. Kacker, R.B Mehrotra, Rajesh, A D. Sanger, Pramod Dayal, Mrs. section Dixit and U.S. Prasad for the Appellants 6 G.L. Sanghi, Shanti Bhushan, Madan Lokur, Prasant Bhushan and A.K. Srivastava for the Respondents.
The Judgment of the Court was delivered by PATHAEK, J.
The principal question in these appeals is whether, in view of the enactment of the U.P. Secondary Education Services Commission and Selection Boards Act, 1982 and the Rules framed thereunder, the provisions contained in section 16 G(2)(c) of the U.P. Intermediate Education Act, 1921 and Regulations 55 to 62 in Chapter III of the Regulations framed under that Act in respect of the transfer of a Principal from one Intermediate College to another continue to be operative and effective.
The Intermediate Education Act, 1921 (shortly referred to as 'the Education Act ') and the Regulations framed thereunder provide inter alia for the conditions of service of Heads and of the teachers of such educational institutions.
The appointment of the Heads and of teachers of educational institutions in the State continued to be governed by the Education Act for several years, but with the passage of time it came to be felt that the selections of teachers under the provisions of that Act and the Regulations were not always free and fair and moreover the field of selection was greatly restricted.
As this adversely affected the availability of suitable teachers and the standards of education the Government of Uttar Pradesh promulgated the U.P. Secondary Education Services Commission and Selection Boards ordinance 1981 on July 10, 1981 with a view to establishing a Secondary Education Services Commission and six or more Secondary Education Selection Boards for the selection of teachers in institutions recognised under the Education Act.
The ordinance was replaced subsequently by the enactment of the U.P. Secondary Education Services Commission and Selection Boards Act, 1982 (conveniently referred to as 'the Services Commission Act ').
Thereafter the State Government framed Rules for carrying out the purposes of the Act.
It was some time before the Services Commission and the Selection Boards could be constituted and therefore a number of Removal of Difficulties orders were made by the State Government pursuant to power conferred under the aforesaid ordinance and thereafter under the Commission Act.
We propose to take the appeal filed by Om Prakash Rana against Swarup Singh Tomar (Civil Appeal No. 2072 of 1985) as representative of the factual context in which the appeals arise.
The Veer Smarak 7 Intermediate College is an educational institution in Baraut in the A district of Meerut.
It is an institution recognised under the provisions of the Intermediate Education Act, 1921.
On June 30, 1982 the post of Principal of the College fell vacant on the retirement of the outgoing Principal, Jai Singh.
The Committee of Management resolved that Bhopal Singh, the then Principal of the Adarsh Vedic Intermediate College, situated in the same district, should be invited to join the post of Principal in the College.
It was intended that the vacancy should be filled in accordance with the provisions of the Education Act and the Regulations made thereunder which permitted the transfer of a Principal from one institution to another.
As the transfer could be affected only with the approval of the District Inspector of Schools, an application was made to the District Inspector of Schools.
He refused to grant approval.
On July 13, 1982 the District Inspector of Schools directed the Committee of Management to give charge of the post of Principal to the respondent Swarup Singh Tomar as officiating Principal.
Three days later, the District Inspector of Schools superseded that order and directed that the respondent Swarup Singh Tomar should be appointed as ad hoc Principal under the Removal of Difficulties order issued under the Services Commission Act.
The Committee of Management of the College filed a writ petition in the Allahabad High Court against the order of the District Inspector of Schools, and during its pendency the High Court made an interim order in which it was recognised that Swarup Singh Tomar was functioning already as ad hoc Principal of the institution.
About this time, the appellant Om Prakash Rana, who was Principal of the B.P. Intermediate College at Bijwara in the district of Meerut, requested the Committee of Management of his College to relieve him in order to enable his transfer as Principal to the Veer Smarak Intermediate College.
On November 22, 1982 the Committee of Management passed a resolution accordingly.
On December 3, 1982 the Committee of Management of the Veer Smarak Intermediate College resolved on accepting the appellant as Principal of the College on transfer from the other institution.
On February 19, 1983, the District Inspector of Schools accorded his approval to the transfer.
Tomar now filed a writ petition in the Allahabad High Court.
He obtained an interim order restraining the Committee of Management from permitting Rana to fill the post of Principal of the College, but the interim order was vacated on March 9, 1983 and Rana has been working as Principal of the College ever since.
On April 9, 1985 the High Court allowed the writ petition and quashed the order dated February 19, 1983 under which the District Inspector of Schools had 8 accorded his approval to the transfer of Rana.
In allowing the writ petition the High Court followed the judgment of a Full Bench of the Court pronounced in Raghunandan Prasad Bhatnagar vs Administrator, Gandhi Vidyalaya Intermediate College, Khekra, (Civil Misc Writ Petition No. 10301 of 1983).
That was a case where the High Court re examined the correctness of the views expressed by two Division Benches of the High Court in Ratan Pal Singh vs Deputy Director of Education, (1983 U.P. Local Bodies and Educational Cases 34) and the Committee of Management, National Intermediate College, Adali Indara District Azamgarh vs The District Inspector of Schools Azamgarh, (1983 U.P. Local Bodies and Educational Cases 198).
The three learned Judges who heard the case were unable to come to a unanimous opinion, and by majority the Full Bench held that it was not permissible for the Committee of Management of an Intermediate College to fill the post of Principal of the College by the transfer of a Principal from one Intermediate College to another after the commencement of the Services Commission Act.
To appreciate the scope and range of the contentions raised before us by the parties it is appropriate to set forth at the outset the relevant provisions of the two statutes and the pertinent Regulations.
Section 16 G of the Education Act provides: "16 G Conditions of service of Head of Institutions, teachers and other employees (1) Every person employed in a recognised institution shall be governed by such conditions of service as may be prescribed by Regulations and any agreement between the management and such employee in so far as it is inconsistent with the provisions of this Act or with the Regulations shall be void.
(2) Without prejudice to the generality of the powers conferred by sub section (1), the Regulations may provide for (a) the period of probation, the conditions of confirmation and the procedure and conditions for promotion and punishment, including suspension pending or in contemplation of inquiry or during the pendency of investigation, inquiry or trial in any criminal case for an offence involving moral turpitude and the emoluments 9 for the period of suspension and termination of service with notice.
(b) the scales of pay and payment of salaries, (c) transfer of service from one recognised institution to another, (d) grant of leave and Provident Fund and other benefits, and (e)maintenance of record of work and service" The Regulations SS to 62 detail the procedure to be followed when a permanent employee of an institution desires his transfer to another institution.
An application for transfer is made to the Inspector of Schools.
All applications for transfer are entered in a register As soon as a substantive vacancy or a temporary vacancy likely to be made permanent and which is to be filled by direct recruitment is advertised, the Manager of the institution has to send a copy of the advertisement to the Inspector.
The Inspector will arrange with the Management to see whether the vacancy can be filled suitably by one of the applicants for transfer.
When the vacancy is not filled by transfer, the Management may proceed to fill it by direct recruitment.
To enable the transfer to take place it is necessary that the Management of the institution where the application is serving should be willing to release him and that the Management of the institution to which the applicant seeks transfer is willing to accept him.
Apparently the appellant Rana relied on these provisions of the Education Act and the Regulations to obtain a transfer as Principal from the B.P. Intermediate College, Bijwara to the Veer Smarak Intermediate College, Baraut.
In anticipation of the promulgation of the Services Commission ordinance the U.P Government issued a radiogram to all District Inspectors in the State directing them to stop all fresh selections and appointments of Principals, Head Masters and teachers including recruitment by promotion in all non Government aided Secondary Schools, except minority institutions, pending further orders .
This was followed on July 19, 1981 by the Services Commission ordinance.
Clause 16 of the ordinance provided that the appointment of a teacher (the expression 'teacher ' being defined to include a Principal) could be made by the Management only on the recommendation of the Commission and any appointment made in contravention of the clause would be void.
Thereafter, the Services Commission Act was enacted 10 Section 3 provides for establishing a Commission to be called the "Uttar Pradesh Secondary Education Services Commission".
It is to be a body corporate and entitled to exercise power throughout the State.
Section 10 provides: "10(1) For the purposes of making appointment of a teacher specified in the Schedule, the management shall notify the vancancy to the Commission in such manner and through such officer or authority as may be prescribed.
(2) The procedure of selection of candidates for appointment to the posts of such teachers shall be such as may be Prescribed; Provided that the Commission shall, with a view to inviting talented persons, give wide publicity in the State to the vacancies notified under sub section (1).
" Section 11 details the procedure to be followed by the Commission after the notification of a vacancy under section 10 for the purpose of holding interviews of the candidates and preparing a panel of those found most suitable for appointment.
The names on the panel are to be forwarded to the Management of the institutions in accordance with the prescribed procedure and the Management is to appoint a candidate accordingly.
Section 16 declares: "16(1) Notwithstanding anything to the contrary contained in the Intermediate Education Act, 1921 or the Regulations made thereunder but subject to the provisions of sections 18 and 33 (a) every appointment of a teacher specified in the Schedule shall, on or after July 10, 1981, be made by the management only on the recommendation of the Commission (b) every appointment of a teacher (other than a teacher specified in the Schedule) shall, on or after July 10, 1981 be made by the management only on the recommendation of the Board: Provided that in respect of retrenched employees, the provisions of section 16 EE of the Intermediate Education Act, 1921 shall apply with the modification that in sub section(2) of the afore 11 said section, for the words 'six months ' the words 'two years ' shall be deemed to have been substituted.
(2) Every appointment of a teacher, in contravention of the provisions of sub section (1), shall be void.
" Where a person is entitled to appointment as a teacher in any institution but is not so appointed by the Management, he is given the right to apply to the Director of Education, Uttar Pradesh for a direction to the Management to appoint him forthwith and to pay him salary from the date specified in the order.
Section 22 provides for the imposition of a penalty on any person appointing a teacher in contravention of the provisions of the Act.
Such contravention constitutes an offence punishable with imprisonment which may extend to three years or with fine up to Rs. 5,000 or with both.
Section 32, of which much will be said hereafter, provides: "32.
The provisions of the Intermediate Education Act, 1921 and the Regulations made thereunder in so far as they are not inconsistent with the provisions of this Act or the rules or regulations made hereunder shall continue to be in force for the purposes of selection, appointment, promotion, dismissal, removal, termination or reduction in rank of a teacher.
" Section 33 enables the State Government to pass orders for a period of two years from the date of commencement of the Act for the purpose of removing difficulties.
The central question is whether the enactment of the Services Commission Act results in the repeal of the provisions of section 16 G(2)(c) of the Education Act and the Regulations made thereunder.
If that is so, no transfer to the office of Principal in Intermediate Colleges can be made except if at all, in accordance with the provisions of the Services Commission Act.
In this connection, one point which arises is whether the transfer of a Principal from one College to another constitutes an appointment to the latter.
It is the case of the appellants that the power relating to appointments conferred on the Commission under the Services Commission Act does not in any way curtail the provisions regarding transfer set forth in the Education Act and its Regulations.
It is urged that the right to apply for transfer is a condition of service of an employee, and neither expressly nor by necessary implication can it 12 be said that the Services Commission Act has abrogated that right.
It is a facility provided to every employee and, it is said, there must be clear language before that right can be taken away.
It is contended that it is perfectly possible to read the Education Act and its Regulations side by side with the Services Commission Act and infer therefrom that the power of transfer continues to co exist under the former with the power relating to appointments conferred on the Commission under the latter.
There is no inconsistency between the two powers, it is submitted, and that is apparent when section 32 of the Services Commission Act deals with the effect of the inconsistency between the provisions of the Education Act, and the Regulations made thereunder, and the provisions of the Services Commission Act, and its rules and Regulations, in regard to the "selection, appointment, promotion, dismissal, removal, termination or reduction in rank of a teacher".
This submission is based on the premises that the power of transfer is not encompassed within the power of appointment.
So it is said that section 16 of the Services Commission Act which provides that the appointment of a Principal can be made by the Management only on the recommendation of the Commission does not bar the transfer of a Principal from one College to another.
As is clear by now the fundamental basis of the contention that the power of transfer under the Education Act and its Regulations continues in force even after the enactment of the Services Commission Act rests on the assumption that the power of appointment does not include the power of transfer.
In our opinion, the assumption is unsustainable.
The scheme under the Education Act envisages the appointment of a Principal in relation to a specific College.
The appointment is in relation to that College and to no other.
Moreover, different Colleges may be owned by different bodies or organisations, so that each Principal serves a different employer.
Therefore, on filling the office of a Principal to a College, a new contract of employment with a particular employer comes into existence.
There is no State level service to which Principals are appointed.
Had that been so, it would have been possible to say that when a Principal is transferred from one College to another no fresh appointment is involved.
But when a Principal is appointed in respect of a particular College and is thereafter transferred as a Principal of another College it can hardly be doubted that a new appointment comes into existence.
Although the process of transfer may be governed by considerations and move through a machinery, different from the considerations governing the appointment of a person ab initio as Principal, the nature of the trans 13 action is the same, namely, that of appointment, and that is so whether the appointment be through direct recruitment, through promotion from the teaching staff of the same institution or by transfer from another institution.
It is pointed out that when section 10 of the Services Commission Act requires that for the purposes of the making of an appointment of a teacher the Management must notify the vacancy to the Commission, it does not speak of "every vacancy", and designedly leaves the possibility open of some vacancies being filled by transfer.
This submission is also without substance.
A survey of the provisions of the Services Commission Act makes it abundantly clear that the entire matter of selecting teachers for recognised institutions is intended to be governed by the Services Commission Act.
As the Preamble of the Act itself suggests, that is the whole purpose of establishing the Services Commission.
Section 3 envisages the Commission as a body corporate, an entity of continuing existence, manned by persons of eminence and distinction from the judicial services and the educational services and selected academicians with a superior level of teaching experience, and armed with a carefully delineated power to select teachers, through a detailed procedure intended to select the best.
No wonder than that section 16(1) mandates that "every appointment" of a Principal can be made by the Management "only on the recommendation of the Commission".
Section 16(2) goes further.
It declares that every appointment made in contravention of section 16(1) shall be void.
It is only in exceptional cases, where the Commission has failed to recommend the name of a suitable candidate for appointment within one year from the date of notification of the vacancy, or the post has actually remained vacant for more than two months then, under section 18(1), the Management may appoint, by direct recruitment or promotion, a teacher on a purely ad hoc basis from amongst the persons possessing qualifications prescribed under the Education Act or the Regulations made thereunder.
Section 22 demonstrates how absolute is the ban on appointing a teacher through a procedure outside the provisions of the Services Commission Act, for the section provides that any person who appoints a teacher in contravention of the provisions of that Act shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine which may extend to Rs 5000 or with both.
Any doubt remaining is removed completely by section 32 of the Services Commission Act which permits the provisions of the Education Act and its Regulations to continue in force in so far only as they are not inconsistent with the provisions of the Services Commission 14 Act, its Rules and its Regulations in the matter of the selection and appointment, among other things, of a teacher.
We are firmly of opinion that no duality in the source of power is contemplated in the matter of filling the office of Principal of a College.
It is not possible to contemplate that transfers can be affected with the approval of the District Inspectors of Schools under the Education Act and its Regulations, while appointments (other than by transfer) can be made upon the recommendation of the Commission.
The control over all appointments is exercised by a single source of power, namely, the Commission under the Services Commission Act.
It is no longer possible to invoke section 16 G(2)(c) of the Education Act and its Regulations and transfer a Principal from one institution to another.
The context in which those provisions operate, the authority conferred for that purpose and the conditions subject to which it can be exercised stand completely superseded by the corresponding provisions of the Services Commission Act, its Rules and Regulations.
That is amply demonstrated by the declaration in section 16 of the Services Commission Act which mandates that the appointment of a Principal shall be made only on the recommendation of the Commission "notwithstand ing anything to the contrary contained in the Intermediate Education Act, 1921 or the Regulations made thereunder.
" The scheme set forth in the Services Commission Act enacts a complete code in the matter of selection of teachers, and resort is no longer permissible to the provisions of the Education Act and its Regulations for that purpose.
Where the Services Commission Act intended that any provision of the Education Act pertaining to the appointment of a teacher should continue in force, it expressly provided for such saving.
For example, the proviso to section 16(1) of the Services Commission Act enacts that the provisions of section 16 EE of the Education Act which provide for the absorption of retrenched employees against permanent vacancies shall apply with certain modifications.
A submission on behalf of the appellant is that the power to transfer the service of a teacher from one institution to another under section 16 G(2)(c) of the Education Act is a condition of service and should not be identified with the power of appointment.
We have already explained that in its essential nature the transfer of a teacher from one institution to another implies the cessation of his appointment in the former institution and his appointment to the latter.
It will also be noticed that the selection of teachers of the categories mentioned in the Schedule to the Services Commission Act has been considered by 15 the State Legislature of such manifest importance that a high powered A Commission has been envisaged for discharging that function.
It is a Commission consisting of persons holding positions of eminence in the Judicial Services or in the State Education Services or with teaching experience as University Professors and College Principals.
It is intended that whenever a vacancy arises in the post of a teacher the Commission must be notified of it.
In the selection of a teacher the Commission has been charged with the responsibility of inviting talented persons and selecting the best from among them.
The selection has to be made in the context of the particular needs and requirements of the College.
It is a responsibility of grave magnitude, the appointment of the head of an educational institution, and therefore most appropriately entrusted to the vision, wisdom and experience of a high powered body, the Commission.
To contemplate that a vacancy can be filled by transfer, even subject to the approval of the District Inspector of Schools, is to admit the possibility of an appointment which does not measure up to the high standards and norms which the Commission can, having regard to its composition and statutes, be expected to apply.
The Commission, as we have mentioned earlier, is envisaged as a corporate body constituted for the entire State, and in the selection of teachers as Principals and Lecturers of Intermediate Colleges and as Headmasters of High Schools and Trained Graduate Grade teachers of Higher Secondary Schools (the categories of teachers detailed in the Schedule), it can also be expected to bear in mind the needs and standards of education designed for the entire State.
The object of the Services Commission Act would be defeated if vacancies to posts of such responsibility and obvious importance in the field of education can be filled by bypassing the Commission and making appointments by transfer under section 16 G(2)(c) of the Education Act.
As the Services Commission Act stands today, no appointment by such transfer can be envisaged to those vacancies which fall within the responsibilities of the Commission.
Our attention has been invited to the circumstance that even after the coming into force of the Services Commission Act the State Government has made amendments to the Regulations under the Education Act relating to the transfer of service under section 16 G(2)(c) of the Education Act.
It is urged that the making of such amendments indicates the belief in the State Government that section 16 G(2)(c) of the Education Act continues to be operative.
It is permissible to say, we think, that the making of those amendments cannot alter the true construction of the scope of the enactments under consideration.
It 16 may have been another thing altogether if an amendment had been made to section 16 G(2)(c) of the Education Act itself, from which an inference may have been possible that the State Legistlature, when amending that provision on the basis that it continues in operation, has given clear indication thereby that it was never intended that the provisions of the Services Commission Act should supersede section 16 G(2)(c) of the Education Act.
In view of the aforesaid considerations, we hold that upon the constitution of a Commission under the Services Commission Act it is no longer possible for a vacancy in the post of Principal, Headmaster or teacher of the categories mentioned in the Schedule to the Services Commission Act to be filled by the process of transfer under section 16G(2)(c) of the Education Act and its Regulations.
On this point we find ourselves in agreement with the majority opinion of the Full Bench of the High Court in Raghunandan Prasad Bhatnagar (supra) and are unable to agree with what has been said by the Division Benches of that Court in Ratan Pal Singh (supra) and The Committee of Management, National Intermediate College, Adali Indara District Azamgarh (supra).
As the mandate imposed by section 16(1)(a) of the Services Commission Act that the appointment of a Principal of an Intermediate College shall, on or after July 10, 1981 be made only on the recommendation of the Commission, and inasmuch as the appointment by transfer of the appellant as Principal of the Veer Smarak Intermediate College took place after that date, the appointment of the appellant must be regarded as void.
The majority in Raghunandan Prasad Bhatnagar (supra) has ob served that section 16 G(2)(c) of the Education Act should be limited to cases of mutal transfer of services between teachers serving in different institutions.
We find it difficult to accept the accuracy of that observation, having regard to the view taken by us that section 16 G(2)(c) of the Education Act cannot be pressed into service at all now in regard to vacancies intended to be filled on the recommendation of the Commission under the Services Commission Act An attempt was made by the appellant to show that the respondent Tomar is not entitled to continue as Principal of the Veer Smarak Intermediate College and our attention was invited to the provisions of successive U.P. Secondary Education Services Commission (Removal 17 of Difficulties) orders.
Having regard to the finding that the appellant A can have no claim to the office of Principal of that College on the basis of the transfer affected in his favour, we do not think it is open to him to challenge the continuation of the respondent Tomar in that office.
Civil Appeal No. 2072 of 1985 fails and is liable to be dismissed.
Civil Appeal Nos. 4091 4092 of 1985 have been filed by the District Inspector of Schools, Meerut in support of the claim of Om Prakash Rana and as they raise the same questions as Civil Appeal No. 2072 of 1985 filed by Om Prakash Rana, learned counsel for the District Inspector of Schools adopts the submissions made by learned counsel for Om Prakash Rana.
Civil Appeal Nos.
2628 and 2696 of 1985 arise out of substantially similar facts, and those appeals will also be governed by the view taken in the appeal preferred by Om Prakash Rana.
A Special Leave Petition (S.L.P.(C) No. 9542 of 1985) has been filed by Shashi Pal Singh praying for special leave to appeal against the judgment and order of the Allahabad High Court in which the High Court, following its view in Raghunandan Prasad Bhatnagar (supra) has quashed the appointment of the transferee Principal Upon the considerations which have found favour with us, the aforementioned appeals and the special leave petition must fail.
In the result, all these appeals and the special leave petition are dismissed.
There is no order as to costs.
P.S.S. Appeals and Petition dismissed.

summary/full:
Section 16 G(2)(c) of the U.P. Intermediate Education Act, 1921 and regulations 55 to 62 in Chapter III of the Regulations framed thereunder provided for the transfer of service of Head of Institutions, teachers and other employees from one recognised institution to another.
The State Government promulgated the U.P. Secondary Education Services Commission and Selection Boards ordinance on July 10, 1981 with a view to establish a Secondary Education Services Commission and Secondary Education Selection Boards for selection of teachers in institutions recognised under the Education Act.
The ordinance was subsequently replaced by an Act in 1382 with retrospective effect.
Section 16(1)(a) of that Services Commission Act, 1982 provides that notwithstanding anything to the contrary contained in the Intermediate Education Act, 1921 or the Regulations made thereunder, every appointment of a teacher, sepcified in the Schedule thereto shall, on or after July 10, 1981, be made by the management only on the recommendation of the Commission.
However, before the Services Commission and the Selection Boards could be constituted the State Government had to make a number of Removal of Difficulties orders pursuant to the powers conferred under the aforesaid ordinance thereafter under the Services Commission Act.
The respondent in Civil Appeal No. 2072 of 1985 was directed by 2 the District Inspector of Schools to be appointed as an ad hoc Principal of an Intermediate College under the Removal of Difficulties order issued under the Services Commission Act.
The Committee of Management of the College which intended to fill the vacancy by transfer of a Principal from some other Intermediate college under the Education Act filed a writ petition in the High Court against that order of the District Inspector of Schools.
During the pendency of that petition, in an interim order the Court recognised that the respondent was working as an ad hoc Principal of that institution.
About this time the appellant, a Principal of another Intermediate College, sought his release from that college and the Committee of Management through a resolution dated December 3, 1982 accepted him as Principal of their college on transfer.
The District Inspector of Schools accorded approval to this transfer on February 19, 1983.
The respondent thereupon filed a writ petition in the High Court against the appointment of the appellant by transfer under the Education Act.
The High Court allowed the writ petition of the respondent on April 9, 1985 by a majority following the Full Bench decision in Raghunandan Prasad Bhatnagar vs Administrator, Gandhi Vidyalaya lntermediate College, Khekra, (Civil Misc.
Writ Petition No. 10301 of 1983), wherein it had re examined the correctness of the views expressed by the Division Bench in Ratan Pal Singh vs Deputy Director of Education, (1983 U.P. Local Bodies & Educational Cases 34) and the Committee of Management, National Intermediate College Adali Indara, District Azamgarh vs The District Inspector of Schools, Azamgarh, (1983 U.P. Local Bodies & Educational Cases 198), holding that it was not permissible for the Committee of Management of an Intermediate College to fill the post of Principal of the College by transfer of a Principal from another Intermediate College after the commencement of the Services Commission Act.
The appellant appealed to this Court.
Civil Appeal Nos.
41)91 92 of 1985 were filed by the District Inspector of Schools in support of the claim of the appellant.
Civil Appeal Nos.
2628 and 2696 of 1985 and Special Leave Petition No. 9542 of 1385 arise out of substantially similar facts.
It was contended for the appellants (1) that s.16(1)(a) of the Services Commission Act, which provides for the appointment of a Principal by the management only on the recommendation of the Commission, did not in any way curtail the provisions regarding transfer of 3 a Principal from one college to another set forth in section 16 G(2)(c) of the A Education Act, (ii) that the right to apply for transfer from one institution to another under section 16 G(2)(c) of the Education Act was a condition of service of an employee which neither expressly nor by necessary implication could be said to have been abrogated by the Services Commission Act, and (iii) that the power of transfer under section 16 G(2)(c) should not be identified with the power of appointment.
It was further contended that making of amendments to the Regulations relating to transfer of service under the Education Act by the State Government even after the coming into force of the Services Commission Act indicates that section 16 G(2)(c) of the Education Act continues to be operative.
On the question: Whether in view of the enactment of the U.P. Secondary Education Services Commission and Selection Boards Act, 1382, the provisions of section 16 G(2)(c) of the U.P. Intermediate Education Act, 1321 and the Regulations made thereunder in respect of the transfer of a Principal from one Intermediate College to another continues to be operative and effective.
Dismissing the appeals and the special leave petition, the Court ^ HELD: 1.(i) Upon the constitution of a Commission under the U.P. Secondary Education Services Commission and Selection Boards Act, 1982 it is no longer possible for a vacancy in the post of Principal, Headmaster or teacher of the categories mentioned in the Schedule to that Act to be filled by the process of transfer under section 16 G(2)(c) of the U.P. Intermediate Education Act, 1921 and its Regulations.
[16 B C] Raghunandan Prasad Bhatnagar vs Administrator, Gandhi Vidyalaya Intermediate College, Khekra, Civil Misc.
Writ Petition No. 10301 of 1983, approved.
Ratan Pal Singh vs Deputy Director of Education, (1983) U.P. Local Bodies and Educational Cases 34 and the Committee of Management, National Intermediate College Adali Indara District Azamgarh vs The District Inspector of Schools Azamgarh, (1983) U.P. Local Bodies and Educational Cases 198, overruled.
(ii) The context in which section 16 G(2)(c) of the Education Act and its Regulations operated, the authority conferred for that purpose and 4 the conditions subject to which it could be exercised stood completely superseded by the corresponding provisions of the Services Commission Act, its Rules and Regulations.
No duality in the source of power is contemplated.
The control over all appointments is exercised by a single source of power, namely, the Commission under the Services Commission Act.
[ 14 C D] (iii) The accuracy of the observation of the majority in Raghunandan Prasad Bhatnagar 's case that section 16 G(2)(c) of the Education Act should be limited to cases of mutual transfer of services between teachers serving in different institutions cannot be accepted having regard to the view taken that section 16 G(2)(c) cannot be pressed into service in regard to vacancies intended to be filled on the recommendation of the Commission under the Services Commission Act.
[16 F G] 2.
The scheme set forth in the Service Commission Act enacts a complete code in the matter of selection of teachers.
Section 10(I) requires the management to notify the vacancy to the Commission.
Section 16(1)(a) mandates that the appointment of a teacher specified in the Schedule to the Act shall be made only on the recommendation of the Commission notwithstanding anything to the contrary contained in the Intermediate Education Act, 1921 or the regulations made thereunder.
Section 16(2) declares that every appointment made in contravention of section 16(1) shall be void.
Section 22 provides for punishment for contravention of the provisions of the Act.
Section 32 permits the provisions of the Education Act and its Regulations to continue in force in so far only as they are not inconsistent with the provisions of the Services Commission Act, its Rules and its Regulations.
[14E, 13B, 14D E, 13G H] 3.(i) The provision to apply for transfer under section 16 G(2)(c) of the Education Act could not be said to be a condition of service.
The scheme under that Act envisages the appointment of a Principal in relation to a specific college.
There is no State level service to which Principals can be appointed.
When a Principal is appointed in respect of a particular college and is thereafter transferred as a Principal of another college a new appointment comes into existence.
His appointment then is in relation to that college alone and to no other.
Different colleges may be owned by different bodies or organisations, so that each Principal serves a different employer.
Therefore, on filling the office of a Principal of a college a new contract of employment with a particular employer comes into existence.
[12 E G] 3.(ii) The power of transfer is encompassed within the power of 5 appointment in as much as in its essential nature the transfer of a teacher from one institution to another implies the cessation of his appointment in the former institution and his appointment to the latter.
Although the process of transfer may be governed by considerations different from those for the appointment of a person ab initio as Principal and move through a different machinery, the nature of the transaction remains the same, namely, that of appointment, and that is so whether the appointment be through promotion from the teaching staff of the same institution or by transfer from another institution.
[14 G H, 13A] 4.
The amendments made to the Regulations framed under the Education Act relating to the transfer of service even after the coming into force of the Services Commission Act cannot alter the true construction of the scope of the enactments under consideration.
If section 16G(2)(c) of the Education Act itself had been amended an inference would have been possible that the State Legislature when amending that provision never intended that the provisions of the Services Commission Act should supersede section 16 G(2)(c) of the Education Act.
[15G H, 16A B] In the instant case, the appointment of the appellant in Civil Appeal No. 2072 of 1985 as Principal by transfer having been made after July 10, 1981, was governed by the provisions of s.16(1)(a) of the Services Commission Act and was thus void.
It is, therefore, not open to him to challenge the continuation of the respondent in that office.


judgement:
DICTION: Writ Petition No. 199 of 1986 Under Article 32 of the Constitution of India.
with Civil Appeal No. 664 of 1986 From the Judgment and Order dated 20th January, 1986 of the Bombay High Court in Writ Petition No. 183 of 1986.
V.M. Tarkunde and Rajiv Datta, for the Petitioner in W.P. No. 199 of 1986.
B. Datta, Additional Solicitor General, Soli J. Sorabji and K.K. Venugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, Harish Salve, K.R. Nagaraja, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in W.P. No. 199 of 1986 F.S. Nariman and A.B. Diwan, P.H. Parekh and Uday Lalit, for the Appellants in C.A. No. 664 of 1986 B. Datta, Additional Solicitor General, K.K. Venlugopal, A.G. Ganguli, A. Subba Rao, Miss Kutty Kumarmangalam, C.V. Subba Rao, B.R. Agarwala, M.M. Jayakar and Miss V. Menon, for the Respondents in C.A. No. 664 of 1906.
The Judgment of the Court was delivered by PATHAK, J.
The petitioners, M/s Indo Afghan Chambers of Commerce and its President, Sundar Lal Bhatia, are aggrieved by the grant of additional licences to the respondents, M/s Rajnikant Brothers and M/s Everest Gems for the import of dry fruits.
The petitioner, M/s Indo Afghan Chambers of Commerce, is an association of dealers engaged in the business of selling dry fruit in North India.
The dry fruit is purchased by them either locally or through imports from outside India.
The respondents, M/s Rajnikant Brothers and M/s Everest Gems, are diamond exporters who have been issued additional licences pursuant to an order of the Court in the following circumstances.
92 The respondents diamond exporters had applied for the grant of Export House Certificates under the Import Policy 1978 79 and had been denied the Certificates on the erroneous ground that they had not diversified their exports.
In writ petitions filed in the Bombay High Court, they were held entitled to the Export House Certificates.
Special leave petitions filed by the Union of India against the order of the High Court were dismissed by this Court by its order dated April 18, 1985 which, while confirming the order of the High Court directed the appellants to issue the necessary Export House Certificates for the year 1978 79, and further that: "Save and except items which are specificially banned under the prevalent Import Policy at the time of import, the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the relevant rules.
" The respondents diamond exporters and other like diamond exporters were granted Additional Licences, and started importing goods on those Additional Licences.
It is the case of the petitioners that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy.
The diamond exporters commenced the Import of acrylic ester monomers.
This was challenged by M/s Raj Prakash Chemicals Ltd., an Indian company manufacturing acrylic ester monomers in India, by a writ petition in the Bombay High Court seeking a clarification of the order dated April 18, 1985 of this Court mentioned earlier.
The High Court rejected the writ petition, and an appeal by Special Leave filed by the Indian company was disposed of by this Court by its order dated March 5, 1986.
The Court held that it was not permissible for the diamond exporters to import acrylic ester monomers under the Additional Licences granted to them during the period of the Import Policy 1985 88, but having regard to the circumstance that the High Courts had already passed orders permitting such import and further that the Import Control Authorities had specifically allowed such import this Court permitted such imports to be completed in respect of which irrevocable Letters of Credit had been opened and established before October 18, 1985, the date on which for the first time an order was made by the Court imposing a restriction on the clearing of acrylic ester monomers by the Customs authorities.
The Court regarded the date, October 18, 1985 as a critical date because the diamond exporters could be said to have been warned on and from that date that the Court could possibly take a different view from that prevailing during the period before that date when, because of the orders of the High Courts and the conduct of the Import Control Authorities, the diamond exporters could have legitimately believed that they were 93 entitled to effect such imports.
It was made clear by the Court that cases in which irrevocable Letters of Credit had been opened and established after October 18, 1985 would not be entitled to the benefit of that order.
The petitioners contend that the principle which was applied to the import of acrylic ester monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances.
It is asserted that the respondents diamond exporters and other like diamond exporters began to import dry fruit under their Additional Licences.
It is contended that having regard to the terms of the order of this Court dated April 18, 1985 as construed and clarified by its order dated March 5, 1986 the diamond exporters are not entitled to import dry fruit.
By order dated March 5, 1986 the Court construed its order dated April 18, 1985 to mean that only such items could be imported by diamond exporters under the Additional Licences granted to them as could have been imported under the Import Policy 1978 79, the period during which the diamond exporters had applied for Export House Certificates and had been wrongfully refused, and were also importable under the Import Policy prevailing at the time of import, which in the present case is the Import Policy 1985 88.
These were the items which had not been "specifically banned" under the prevalent Import Policy.
The items had to pass through two tests.
They should have been importable under the Import Policy 1978 79.
They should also have been importable under the Import Policy 1985 88 in terms of the order dated April 18, 1985.
The case of the petitioners is that under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence.
Dry fruits (excluding cashewnuts), is mentioned at item 22 of Appendix 10 of the Import Policy 1978 79 as open to import under the Open General Licence.
There was no need to obtain an Additional Licence for importing them in the year 1978 79, and therefore, the wrongful denial of Additional Licences to diamond exporters in the year 1978 79, could not justify any restitution subsequently in regard to the import of dry fruits (other than cashewnuts).
There is substance in the contention.
Under the Import Policy 1978 79 dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence.
No Additional Licence was required.
If an Additional Licence was wrongfully denied to diamond exporters at time when dry fruits (excluding cashewnuts) were importable under the Open General Licence no 94 damage can be said to have been suffered by diamond exporters who had been refused Export House Certificates, and consequently Additional Licences, under the Import Policy 1978 79.
In the circumstances, no question of restitution could be said to arise for the wrongful denial of the Additional Licences.
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (excluding cashewnuts).
It is urged by the respondents diamond exporters that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial).
It has not been shown to us that dry fruits were placed on Open General Licence specificially for Actual Users (Industrial).
Under the Import Policy 1978 79 their import was open to all persons.
We may assume for the purpose of this case that a diamond exporter is legitimately entitled to obtain an Additional Licence under the Import Policy 1978 79 for an item which is different from the item he may have intended to import had the Additional Licences been rightly granted to him originally.
In that event, the diamond exporter can succeed only if the item could have been imported under the Import Policy 1978 79 and also under the Import Policy 1985 88 in accordance with the terms of the order of this Court dated April 18, 1985 as construed by this Court by its judgment dated March 5, 1986.
The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity.
As has been mentioned, dry fruits (excluding cashewnuts) could be imported by all persons under the Open General Licence under the Import Policy 1978 79.
But under the Import Policy 1985 88, when the dry fruits (excluding cashewnuts and dates) are now sought to be imported, dry fruits (excluding cashewnuts and dates) are no longer open to import under the Open General Licence.
The sanction for importing them must be found under some other provision of the Import Policy.
If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) in Chapter XIII of the Import Policy 1985 88.
Paragraph 181(3) declares that import of dry fruits (excluding cashwenuts and dates) will be allowed against licences issued to dealers engaged in this trade, the value of the import licence in each case being equal to 20 per cent of the C.I.F. value of the best year 's imports of the applicant in respect of dry fruits (excluding 95 cashewnuts and dates) during any of financial years from 1972 73 to the preceding Licencing year, subject to a minimum of Rs.5000.
Admittedly the diamond exportes cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates).
They are, therefore, not entitled to the advantages of paragraph 181(3) of the Import Policy 1985 88.
But the case of the respondents diamond exporters, is that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing or manufacturing into a variety of products, such as almond oil, Ayurvedic drugs and medicines, Unani drugs and medicines, processed and package foods, sweets and confectionary, and we are referred to item 1 in Appendix 6 of the Import Policy 1985 88.
Now item 1 of Appendix 6 speaks of: "1.
Raw materials, components and consumables (non iron and steel items) other than those included in the Appendices 2, 3 Part A, 5 and 8.
" The petitioners point out that the item is covered in Appendix 2 Part B of the Import Policy 1985 88 and, therefore, the respondents diamond exporters are not entitled to resort to item 1 of Appendix 6.
Appendix 2 Part B (List of Restricted Items) contains item 121 which reads: "(121) All consumer goods, howsoever described, of industrial, agriculatural or animal origin, not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence.
" There can be no dispute that dry fruits must be regarded as consumer goods of agricultural origin.
The words "agricultural origin" are used in the broadest sense.
It is also clear that dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under the Open General Licence under the Import Policy 1985 88.
Inasmuch as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial).
It is urged by the respondents diamond exporters that item 121 is not attracted because it refers to "consumer goods", and consumer goods are not raw material for the purposes of item 1 of Appendix 6.
There is a fallacy here.
It will be noticed that "consumables" are referred to in item 1 of 96 Appendix 6 of goods meant for Actual Users (Industrial).
We are not satisfied that "consumer goods" in item 121 of Appendix 2 Part B cannot refer to dry fruits imported for supply to Actual Users (Industrial).
In construing the order dated April 18, 1985 of this Court, the judgment dated March 5, 1986 of this Court explained the singificance of the words "specifically banned" occurring in the former order.
The expression determines the range of the items open to import by diamond exporters holding Additional Licences.
It was declared that the items exluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy.
Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of Import Policy 1978 79.
A question arose before us whether Appendix 2 Part B of Import Policy 1985 88 could also be regarded as a successor of Appendix 4.
It appears from the material placed before us that Appendix 2 Part B (List of Restricted Items) was also successor of Appendix 4 (List of Absolutely Banned Items).
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List.
In the Import Policy 1982 83, the same Appendix 4 is described as List of Non Permissible Items (Banned).
The same description of Appendix 4 continued in the Import Policy 1983 84.
During that year Beef Tallow was added in Appendix 4.
In the Import Policy 1984 85, Appendix 4 became Appendix 2 Part A and Appendix 2 Part B. Appendix 2 Part A was described as a List of Banned Items and Appendix 2 List B was described as List of Restricted Items.
In the Contents of the Import Policy 1985 88 the list of Appendices makes clear that Appendix 4 of Import Policy 1983 84 became Appendix 2 Part A and Appendix 2 Part B of the Import Policy 1984 85.
The same description of Appendix 2 Part A and Appendix 2 Part B was continued in the Import Policy 1985 88.
Therefore, it is apparent that the present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79.
On the reasoning which found favour with the Court in its judgment dated March 5, 1986 we hold that diamond exporters holding Additional Licences were not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.
On that ground also the respondents diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits.
As held by this Court in its judgment dated March 5, 1986, holders of Additional 97 Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88.
Dry fruits are not included in that List and therefore they cannot be imported under Additional Licences.
In our opinion the respondents diamond exporters are not entitled to import dry fruits under the Import Policy 1985 88 under the Additional Licences possessed by them.
They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exportes who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985.
It appears from the record before us that the respondents diamond exporters opened and established the irrevocable Letters of Credit after that date.
One more contention of the respondents diamond exporters remains to be noticed.
It is urged that the writ petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated.
It is pointed out that no appeal has been filed by the Customs authorities or by the Import Control authorities against the interim order dated January 8, 1986 of the Bombay High Court directing the Customs authorties to permit M/s Everest Gems to clear the imported consignment of almonds.
We do not think that an interim order can defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs authorities or the Import Control authorities.
The writ petition is allowed and the respondents Nos. 10 and 11, M/s Rajni Kant Brothers and M/s Everest Gems are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
In the circumstances there is no order as to costs.
Civil Appeal No. 664 of 1986 is directed against the judgment and order of the Bombay High Court rejecting the appellants ' writ petition challenging the import of dry fruits by the respondent, M/s Everest Gems under Additional Licences granted under the Import Policy 1978 79.
The questions raised in this appeal are identical with those raised in the writ petition disposed of earlier.
In the result this appeal is allowed, the judgment and order dated January 28, 1986 of the Bombay High Court are set aside and the writ 98 petition filed in the High Court is allowed.
The respondent, M/s Everest Gems is restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
There is, however, no order as to costs.
A.P.J. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The petitioner, an associations of dealers engaged in the business of selling dry fruit in North India, who purchase dry fruits either locally or through imports from outside India, challenged the grant of additional licences to the respondents diamond exporters, under Article 32 of the Constitution.
On behalf of the petitioners, it was contended: (i) that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy; (ii) that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and, therefore, the diamond exporters are not entitled to import dry fruit; and (iii) that the import of dry fruit is covered by item 121 in Appendix 2 Part B (List of Restricted Items) of the Import Policy 1985 88 and, therefore, the respondents are not entitled to resort to Item 1 of Appendix 6.
On behalf of the respondents, it was contended: (i) that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users (Industrial); (ii) that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86; (iii) that item 121 of Appendix 2 Part B (List of Restricted Items) is not attracted because it refers to "consumer goods", and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6; and (iv) that the petition under Article 32 is not maintainable because the petitioners ' fundamental rights are not violated, in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8, 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds.
Allowing the Writ Petition and the Appeal, ^ HELD: 1.
Respondents Nos. 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79.
[97F] 2.
Under the Import Policy 1978 79, dry fruits (excluding cashewnuts) could be imported by all persons for whatever purpose under the Open General Licence.
No Additional Licence was required.
By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could, therefore, be said to arise.
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits (exluding cashewnuts).
The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users (Industrial).
Under the Import Policy 1978 79 their import was open to all persons.[94F,C] 3.
The position in regard to the import of dry fruits (excluding cashewnuts) is simple and suffers from no complexity.
Dry fruits (excluding cashewnuts) could be imported by all persons under Open General Licence under the Import Policy 1978 79.
But under the Import Policy 1985 88 dry fruits (excluding cashewnuts and dates) are no longer open to import under Open General Licence.
If dry fruits (excluding cashewnuts and dates) are regarded as items for stock and sale, the import is governed by paragraph 181(3) is Chapter XIII of the Import Policy 1985 88, which declares that import of dry fruits (excluding cashewnuts and dates) will be allowed against licences issued to dealers engaged in this trade.
[94E H] 4.
The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits (excluding cashewnuts and dates).
They are, therefore, not entitled to the advantage of paragraph 181(3) of the Import Policy 1985 88.
[95A B] 5.
Dry fruits must be regarded as consumer goods of agricultural 90 origin.
The words "agricultural origin" are used in the broadest sense.
Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88.
In as much as they fall within item (121) of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6, and cannot be imported as raw materials and consumables for sale to Actual Users (Industrial).
"Consumables" are referred to in item 1 of Appendix 6 as goods meant for Actual Users (Industrial) "Consumer goods" in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users (Industrial).[95F H; 96A] 6.
The expression "specifically banned" occurring in the order dated April 18, 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences.
The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy.
Appendix 2 Part A is the successor of Appendix 4 (List of Absolutely Banned Items) of the Import Policy 1978 79.
Appendix 2 Part B (List of Restricted Items) was also the successor of Appendix 4 (List of Absolutely Banned Items).
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List.
[96B E] The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 (List of Absolutely Banned Items) under the Import Policy 1978 79.
The diamond exporters holding Additional Licences were, therefore, not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88.[96F G] 7.
The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits.
The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88.
Dry fruits are not included in that List and, therefore, they cannot be imported under Additional Licences.
They are also not entitled to the benefit extended by the judgment of this Court dated March 5, 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18, 1985.
[97B C] 8.
An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities.
[97E] 91


judgement:
Civil Appeal No. 1935 (NL) of 1974.
From the Award dated 8.5.1974 of the Ninth Industrial Tribunal of West Bengal, Durgapur in Case No. X 4 of 1973.
Dr. Shankar Gkosh and D.N. Gupta for the Appellants.
S.K. Nandy for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
This appeal by Special Leave has been preferred against the Award dated May 8, 1974 made by the Ninth Industrial Tribunal of West Bengal, Durgapur in Case No. X 4 of 1973 on its file.
The appellants are two companies incorporated 187 under the Indian Companies Act, 1913 having their registered office in Calcutta.
Both the appellants are engaged in the business of generation, transmission, distribution and sale of electricity in certain areas of Bengal and Bihar under licences granted by the concerned Governments.
Appellant No. 1 has a power station at Dishergarh and Appellant No. 2 has its power station at Sibpore.
In connection with their aforesaid business the two appellants were having at the relevant time 400 and 250 workmen respectively employed under them.
For the years 1965 66 to 1970 71 (inclusive) bonus was paid to the workmen on the basis of agreements entered into each year under Section 34(3) of the (hereinafter referred to as the 'Act ').
Concerning the bonus payable for the year 1971 72, a dispute was raised by the workmen of the two companies and it was referred to conciliation under Section 12(1) of the .
The contention of the workmen before the Conciliation officer was that they were entitled to bonus equivalent to three months ' basicwages as on March 31, 1972 as customary bonus or in any event as bonus payable under the provisions of the Act.
The appellant companies, on the other hand, contended that the workmen were entitled to only minimum bonus as provided under the Act on a computation being made in the manner laid in the said Act.
The said dispute was ultimately settled before the Conciliation officer inter alia on the following terms: "(1) Subject to usual adjustments made in 1969 70 and 1970 71, each eligible workmen will be paid an amount equal to three months ' basic wages as on 31.3.1970 .
(2) A sum of Rs.20,000 will be distributed equally among all workmen who were on the rolls on 15.8.1972 and have worked for at least 30 days.
This will be 'Silver Jubilee Year ' payment.
(3) The demand of the Union for bonus this year will be referred to as Tribunal for adjudication.
(4) The payment should be made by 12.10.1971 Eligible workmen under terms(1) of this settlement (a) Permanent and probationers.
Rest of workmen will be paid bonus under the .
" 188 Although the said settlement was an agreement under section 34(3) of the Act since under its very terms as incorporated in clause (3), the parties had stipulated for a reference of the question for adjudication by a Tribunal.
The issue was accordingly referred by the Government of West Bengal for adjudication to the Ninth Industrial Tribunal of West Bengal by an order of reference dated January 15, 1973.
In the written statement filed by the workmen before the Ninth Industrial Tribunal they claimed three months ' basic wages as on March 31, 1972 as customary bonus or in the alternative 20 per cent of the salary or wages as bonus payable under the Act.
The appellants reiterated before the Tribunal the same contentions which they had put forward before the Conciliation officer.
The Tribunal allowed the parties to adduce evidence.
After a detailed discussion of the evidence produced before it, the Tribunal recorded a clear finding that the workmen had failed to make out the claim of customary bonus put forward by them and that the said plea had therefore to fail.
It was further found by the Tribunal that the plea put forward by the appellant companies that there was no available surplus during the year in question and that only the minimum bonus was payable under the provisions of the Act had to be upheld.
The Tribunal, therefore, held that the unions representing the workmen had failed to make out the case put forward by the workmen that the workmen were entitled to maximum bonus of 20 per cent as provided under the Act.
After having recorded the aforesaid findings, the Tribunal, however, proceeded to accept the contention advanced before it by the Counsel appearing for the workmen that it was legally open to it to substitute for the agreement entered into between the parties before the Conciliation officer a new contract and pass an award on that basis, if such a step would be conducive to industrial peace.
On this reasoning the Tribunal proceeded to observe: "In my opinion, there would not be material alteration in the financial liability of the companies in case the agreement was modified by substituting for the words that the workmen will be paid the amount equal to three months ' basic wages as on 31.3.1970 by the words an amount equal to basic wages as on 31.3.1972.
I am, therefore, in agreement with this contention of the learned lawyer for the unions that the Tribunal should create a new contract and that is pass an award of three months ' basic wage as on 31.3.1972.
This is in my opinion would be con 189 ducive to industrial peace and it would not violate any existing industrial law.
" Accordingly, the Tribunal passed an award directing the appellant companies to pay to the workmen the balance amount by way of bonus as per the rates calculated by the Tribunal within a month from the date of publication of the award in the Calcutta Gazette.
It is the legality of this award that is under challenge in this appeal.
It has to be remembered that the claim of the workmen which the Tribunal was considering while making the aforesaid observations was one for Profit bonus only since the claim for customary bonus had been rejected by it.
The rights and liabilities of the parties regarding Profit bonus were governed by the provisions of the Act which are exhaustive on the subject and the adjudication had to be conducted by the Tribunal strictly in accordance with those provisions See Sanghi Jeevraj Ghewar Chand and Ors.
vs Secretary, Madras Chillies, Grains Kirana Merchants Workers ' Union and Anr., ; and Mumbai Kamgar Sabha, Bombay vs M/s Abdulbhai Faizullabhai & Ors., [1976] 3 S.C.R. 591.
As already noticed, the Tribunal has categorically found on a consideration of the evidence adduced before it that there was no "available surplus" in respect of the two companies for the year in question on a computation made under Section S of the Act.
The settlement entered into before the Conciliation officer constituted an agreement under Section 34(3) of the Act and but for the said agreement the liability of the appellants under the provisions of Act would have been only to pay minimum bonus under Section 10 of the Act.
Since the parties were at variance on the question of existence of liability for payment of customary bonus in the establishments as well as on the question regarding the existence of available surplus, provision was made in clause (3) of the agreement for reference under the industrial adjudication.
If the Tribunal found that the claim for payment of customary bonus was substantiated it could have passed an order in favour of the workmen for payment of such bonus.
That claim had been negatived.
The only question which remained for determination for the Tribunal was whether the claim of the workmen for payment of 20 per cent of the salary or wages as bonus payable under the Act was tenable or not.
That depended essentially on the question of existence of available surplus and its quantum, if any surplus was available.
In view of the finding recorded by the Tribunal accepting 190 the plea put forward by the appellant companies that the result of the working of the companies during the concerned year was a loss and there was no available surplus, the Tribunal could not have legally proceeded to make an award directing payment of bonus at any rate higher than the minimum bonus specified in Section 10 of the Act.
As pointed out by this Court in The New Maneck Chowk Spinning and Weaving Company Ltd. Ahmedabad and others vs The Textile Labour Association, Ahmedabad, ; , while "it is certainly open to an industrial court in an appropriate case to impose new obligations on the parties before it or modify contracts in the interest of industrial peace or give awards which may have the effect of extending Agreement or making new one, but this power is conditioned by the subject matter with which it is dealing and also by the existing industrial law and it would not be open to it while dealing with a particular matter before it to overlook the industrial law relating to that matter as laid down by the legislature.
" It is manifest that the impugned award made by the Tribunal is clearly inconsistent with the provisions of the which contemplate the imposition of an obligation for payment of only the minimum bonus where the employer has no allocable surplus in the concerned accounting year.
However, in as much as the appellant companies had entered into the settlement before the Conciliation officer agreeing to pay bonus at a rate higher than the minimum bonus, the said settlement would constitute an agreement under Section 34 of the Act and the terms of the settlement will govern the liability for bonus for the year in question.
It follows from the foregoing discussion that the impugned award passed by the Ninth Industrial Tribunal is not legally sustainable.
The appeal is accordingly allowed and the Award of the Industrial Tribunal will stand set aside.
The rights of the workmen for payment of bonus for the year in question will be governed by the terms of the agreement enterd into before the Conciliation officer on October 9. 1972.
In view of the condition imposed by the order of this Court dated November 21, 1974 while granting Special Leave, the appellants are directed to pay the costs of the respondents in this appeal.
M.L.A. Appeal allowed.

summary/full:
A dispute regarding bonus payable to the workmen respondents of the two companies appellants for the year 1971 72 was referred to conciliation under section 12(1) of the .
The workmen contended before the Conciliation officer that they were entitled to bonus equivalent to three months ' basic wages as on 31st March, 1972 as customary bonus or in any event as bonus payable under the provisions of the Act.
The appellant companies, on the other hand, argued that the workmen were entitled to only minimum bonus as provided under the Act.
The said dispute was ultimately settled before the Conciliation officer on the terms: (a) that each eligible work man will be paid an amount equal to three months ' basic wages as on 31.3.1970; and (b) that the demand of the Union for bonus this year will be referred to a Tribunal for adjudication.
Accordingly, the Government referred the dispute for adjudication to the ninth Industrial Tribunal of West Bengal.
After a detailed discussion of the evidence produced before the Tribunal, it found (i) that the workmen had failed to make out the claim of customary bonus or that they were entitled to maximum bonus of 20 per cent as provided under the Act; and (ii) that there was no available surplus during the year in question and that only the minimum bonus was payable under the provisions of the Act.
However, after having recorded the aforesaid findings, it proceeded to hold that it was legally open to it to substitute for the agreement entered into between the 185 parties before the Conciliation officer a new contract and pass an award on that basis, if such a step would be conducive to industrial peace.
On this basis the Tribunal, held that there would not be material alteration in the financial liability of the companies in case the agreement was modified by substituting for the words "that the workmen will be paid the amount equal to three months ' basic wages as on 31.3.1970" by the words "an amount equal to basic wages as on 31.3.1372" and accordingly it passed an award in those terms.
In appeal to the Supreme Court, the appellants companies challenged the legality of this award.
Allowing the appeal, ^ HELD: 1.
The impugned award passed by the Ninth Industrial Tribunal is not legally sustainable and has to be set aside.
The rights of the workmen for payment of bonus for the year in question will be governed by the terms of the agreement entered into before the Conciliation officer on October 9, 1972.
[190F] 2.
The rights and liabilities of the parties regarding profit bonus are governed by the provisions of the payment of Bonus Act, 1965 which are exhaustive on the subject and the adjudication had to be conducted by the Tribunal strictly in accordance with those provisions.
[189C D] In the instant case, the Tribunal has categorically found that there was no "available surplus" in respect of the two companies for the year in question on a computation made under section 5 of the Act.
The settlement entered into before the Conciliation officer constituted an agreement under section 34(3) of the Act and but for the said agree ment, the liability of the appellants under the provisions of the Act would have been only to pay minimum bonus under section 10 of the Act.
[189E F] Sanghi Jeevraj Chewar Chand and Ors.
vs Secretary Madras Chillies, Grains Kirana Merchants Workers ' Union and Anr., [ ; and Mumbai Kamgar Sabha.
Bombay vs M/s Abdulbhai Faizullabhai & Ors., [ ; referred to.
It is certainly open to an Industrial Court in an appropriate case to impose new obligations on the parties before it or modify contracts in the interest of industrial peace or give awards which may have the effect 186 of extending the agreement or making new one, but this power is conditioned by the subject matter with which it is dealing and also by the existing industrial law and it would not be open to it while dealing with a particular matter before it to overlook the industrial law relating to that matter as laid down by the legislature. " [190B D] The New Maneck Chowk Spinning and Weaving Company Ltd. Ahmedabad and others vs The Textile Labour Association, Ahmedabad, ; relied upon.
In the instant case, in view of the finding recorded by the Tribunal that the result of the working of the companies during the concerned year was a loss and there was no available surplus, the Tribunal could not have legally proceeded to make an award directing payment of bonus at any rate higher than the minimum bonus specified hl section 10 of the Act.
Therefore, the impugned award made by the Tribunal is clearly inconsistent with the provisions of the Payment of Bonus Act which contemplate the imposition of an obligation for payment of only the minimum bonus where the employer has no allocable surplus in the concerned accounting year.
However, inasmuch as the appellant companies had entered into the settlement before the Conciliation Officer agreeing to pay bonus at a rate higher than the minimum bonus, the said settlement would constitute an agreement under section 34 of the Act and the terms of the settlement will govern the liability for bonus for the year in question.
[190D E]