judgement:
Appeal No. 288 of 1958.
Appeal by Special Leave from the judgment and order dated December 3, 1956, of the Punjab High Court (Circuit Bench) at Delhi in Letters Patent Appeal No. 25 D of 1956, arising out of the judgment and order dated April 9, 1956, of the said High Court (Circuit Bench) at Delhi in Civil Writ No. 8 D of 1955.
N. C. Chatterjee and R. section Narula, for the appellant.
M. C. Setalvad, Attorney General for India, B. Sen and T. M. Sen, for the respondent 1958.
December 12.
The Judgment of the Court was delivered by section K. DAS, J.
This is an appeal by special leave and the only question for decision is if the order of the President dated October 1, 1954, removing the appellant from service with effect from that date is invalid, as claimed by the appellant, by reason of a contravention of the provisions of article 311(2) of the Constitution.
The short facts are these.
The appellant stated that he joined permanent Government service on April 4, 1924.
In 1947, before partition, he was employed as Assistant Secretary, Frontier Corps of Militia and Scouts in the then North Western Frontier Province, under the administrative control of the External Affairs Department of the Government of India.
The appellant stated that the post which be held then was a post in the Central Service, Class 11.
After partition, the appellant opted for service in India and was posted to an office under the Ministry of Commerce in the Government of India in October, 1947.
In December, 1949, he was transferred to the office of the Chief Controller of Imports, New Delhi, to clear off certain arrears of work.
In August, 1951, he was posted as 894 and Deputy Chief Controller of imports, Calcutta, and continued to work in that post till September, 1952.
He then took four months ' leave on average pay and on the expiry of his leave on January 24, 1953, he was transferred as Section officer in the Development Wing of the Ministry of Commerce.
The appellant thought that the order amounted to a reduction of his rank and lie made certain representations.
As these representations bore no fruit, he applied for leave preparatory to retirement on February 6, 1953.
In that application the appellant stated: Normally I am due to retire in April 1956 but I find it difficult to reconcile myself to the new conditions of service under which I am now placed to work.
I find that I would not be wasting only myself but I would also not be doing full justice to the ' interest of my Government and country in my present environment.
Under the circumstances, I pray that I may be permitted to retire from the 1st May, 1953.
" On February 14, 1953, the appellant amended his leave application and said that he had been informed by the I Administrative Branch of the Development Wing that the question of permission to retire was under consideration, because of some difficulty with regard to the inclusion in the service of the appellant the period during which he held the, post of Assistant Secretary, Frontier Corps; therefore be said that he might be granted leave on full average pay for four months with effect from February 15, 1953, if the decision to give him permission to retire was likely to be postponed beyond May 1, 1953.
He amended his leave application by making the following prayer: " Leave may be sanctioned for four months from.
the 15th February, 1953, or up to the date from which I am permitted to retire whichever may be earlier ".
On March 10, 1953, the appellant was informed that he could not be allowed to retire at that stage, but the Ministry had agreed to grant him leave from February 16, 19 3, to April 30, 1953.
The appellant then went on leave and on February 25, 1953, he 895 wrote to Government to say that he was contemplating to join the service of Messrs. Albert David & Co. Ltd., Calcutta, and for that purpose he was accepting a course of training in that Company for two months.
In April, 1953, the appellant accepted service under Messrs. Albert David & Co. Ltd., and he wrote to Government to that effect on April 6, 1953.
On June 16, 1953, the appellant was charged with hav ing violated r. 15 of the Government Servants ' Conduct Rules and Fundamental Rule 11.
Rule 15 of the Government Servants ' Conduct Rules states, inter alia, that a Government servant may not without the previous sanction of Government engage in any trade or undertake any employment other than his public duties.
Fundamental Rule 11 says in effect that unless in any case it be otherwise distinctly provided, the whole time of a Government servant is at the disposal of the Government which pays him.
A. P. Mathur, Joint Chief Controller of Imports, was asked to hold an enquiry against the appellant on the charge mentioned above.
The appellant submitted an explanation and an enquiry was held by A. P. Mathur in due course.
The Enquiring Officer submitted his report on September 12, 1953, in which he found that the appellant had, contrary to the rules governing the conditions of his service, accepted private employment without previous sanction of Government during the period when he was still in Government service.
On April 14, 1954, the appellant was asked to show cause in accordance with the provisions of article 311(2) of the Constitution.
As the whole of the argument in this case centres round this show cause notice, it is necessary to set it out in full Sir, I am directed to say that the Enquiry Officer appointed to enquire into certain charges framed against you has submitted his report ; a copy of the report is enclosed for your information.
On a careful consideration of the report, and in particular of the conclusions reached by the Enquiry Officer in respect of the charges framed against you the President is provisionally of opinion that a 896 major penalty, viz., dismissal, removal or reduction should be enforced on you.
Before he takes that action, he desires to give you an opportunity of showing cause against the action proposed to be taken.
Any representation which you may make in that connection will be considered by him before taking the proposed action.
Such representation, if any, should be made, in writing, and submitted so as to reach the undersigned not later than 14 days from the receipt of this letter by you.
Please acknowledge receipt of this letter.
Yours faithfully, Sd.
section Bhoothalingam, Joint Secretary to the Government of India.
" The appellant then showed cause and on October 1, 1954, the President passed an order in which it was stated that after taking into consideration the report of the Enquiring Officer and in consultation with the Public Service Commission, the President found that the charge had been proved against the appellant and the appellant was accordingly removed from service with effect from that date.
The appellant then moved the Punjab High Court by a petition under article 226 of the Constitution in which his main contentions were (a) that he had no opportunity of showing cause against the action proposed to be taken in regard to him within the meaning of article 311 (2) of the Constitution and (b) that he had asked for leave preparatory to retirement and accepted service under Albert David & Co. Ltd. in the bona fide belief that Government had no objection to his accepting such private employment.
Dulat, J., who dealt with the petition in the first instance, held against the appellant on both points.
He found that there was no contravention of the provisions of article 311 (2) of the Constitution and on the second point, he held that on the facts admitted in the case there was no doubt that the appellant had accepted private employment in contravention of the rules governing the conditions of his service and there was little substance 897 in the suggestion of the appellant that he had no sufficient opportunity to produce evidence.
The second point no longer survives, and the only substantial point for our consideration is the alleged contravention of article 311(2) of the Constitution.
Mr. N. C. Chatterjee, who has appeared on behalf of the appellant, has submitted before us that the show cause notice dated April 14, 1954, stated all the three punishments mentioned in article 311 (2) and inasmuch as it did not particularise the actual or exact punishment proposed to be imposed on the appellant, the notice did not comply with the essential requirements of article 311 (2) of the Constitution; therefore, the final order of removal passed on October 1, 1954, was not a valid order.
In the recent decision of Khem Chand vs Union of India (1) this Court explained the true scope and effect of article 311 (2) of the Constitution.
It was stated in that decision that the reasonable opportunity envisaged by article 311 (2) of the Constitution included (a) an opportunity to the Government servant to deny his guilt and establish his innocence, (b) an opportunity to defend himself, and finally (c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority after the enquiry is over and after applying its mind to the gravity or otherwise of the charges proved against the Government servant tentatively proposes to inflict one of the three punishments and communicates the same to the Government servant.
It is no longer in dispute that the appellant did have opportunities (a) and (b) referred to above.
The question before us is whether the show cause notice dated April 14, 1954, gave the appellant a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
Mr. N. C. Chatterjee has emphasised two observations made by this Court in Khem Chand 's case (1).
He points out that in connection with opportunity (c) aforesaid, this Court observed that a Government (1) ; 113 898 servant can only make his representation if the competent authority after the enquiry is over and after applying its mind to the gravity or otherwise of the charges proved against the Government servant tentatively proposes to inflict one of the three punishments and communicates the same to the Government servant.
Mr. Chatterjee emphasises the observation " one of the three punishments ".
Secondly, he has drawn our attention to the observations made in the judgment of the Judicial Committee in High Commissioner for India and High Commissioner for Pakistan vs I. M. Lall (1), which observations were quoted with approval in Khem Chand 's case (2).
One of the observations made was: " In the opinion of their Lordships no action is proposed within the meaning of the sub section " (their Lordships were dealing with sub section (3) of section 240 of the Government of India Act, 1935) " until a definite conclusion has been come to on the charges, and the actual punishment to follow is provisionally determined on." Mr. Chatterjee emphasises the expression " actual punishment " occurring in the said observations.
It is to be remembered, however, that both in I. M. Lall 's case, (1) and Khem Chand 's case (1) the real point of the decision was that no second notice had been given to the Government servant concerned after the enquiry was over to show cause against the action proposed to be taken in regard to him.
In I. M. Lall 's case (1) a notice was given at the same time as the charges were made which directed the Government servant concerned to show cause " why he should not be dismissed, removed or reduced or subjected to such other disciplinary action as the competent authority may think fit to enforce, etc.
" In other words, the notice was what is usually called a combined notice embodying the charges as well as the punishments proposed.
Such a notice, it was held, did not comply with the requirements of sub section
(3) of section 240.
In Khem Chand 's case (2) also the report of the Enquiring Officer was approved by the Deputy Commissioner, Delhi, who imposed the (1) (1948) L.R. 75 I.A. 225,242.
(2) ; 899 penalty of dismissal without giving the Government servant concerned an opportunity to show cause against the action proposed to be taken in regard to him.
In Khem Chand 's case (1) the learned SolicitorGeneral appearing for the Union of India sought to distinguish the decision in I. M. Lall 's case (2) on the ground that the notice there asked the Government servant concerned to show cause why he should not be dismissed, removed or reduced or subjected to any other disciplinary action, whereas in Khem Chand 's case(1) the notice issued to the Government servant before the enquiry mentioned only one punishment, namely, the punishment of dismissal.
Dealing with this argument of the learned Solicitor General this Court said (at p. 1100): " A close perusal of the judgment of the Judicial Committee in I. M. Lall 's case will, however, show that the decision in that case did not proceed on the ground that an opportunity had not been given to 1.
M. Lall against the proposed punishment merely because in the notice several punishments were included, but the decision proceeded really on the ground that this opportunity should have been given after a stage bad been reached where the charges had been established and the competent authority had applied its mind to the gravity or otherwise of the proved charge tentatively and proposed a particular punishment.
" Therefore, the real point of the decision both in I. M. Lall 's case (2) and Khem Chand 's case (1) was that no opportunity had been given to the Government servant concerned to show cause after a stage had been reached when the charges had been established and the competent authority bad applied its mind to the gravity or otherwise of the charges proved and tentatively proposed the punishment to be given to the Government servant for the charges so proved.
It is true that in some of the observations made in those two decisions the words " actual punishment " or particular punishment " have been used, but those (1) ; (2) (1948) L.R. 75 I.A. 225, 242.
900 observations must, however, be taken with reference to the context in which they were made.
Let us examine a little more carefully what consequences will follow if article 311(2) requires in every case that the " exact " or " actual " punishment to be inflicted on the Government servant concerned must be mentioned in the show cause notice issued at the second stage.
It is obvious, and article 311 (2) expressly says so, that the purpose of the issue of a show cause notice at the second stage is to give the Government servant concerned a reasonable opportunity of showing cause why the proposed punishment should not be inflicted on him; for example, if the proposed punishment is dismissal, it is open to the Government servant concerned to say in his representation that even though the charges have been proved against him, he does not merit the extreme penalty of dismissal, but merits a lesser punishment, such as removal or reduction in rank.
If it is obligatory on the punishing authority to state in the show cause notice at the second stage the " exact " or " particular " punishment which is to be inflicted, then a third notice will be necessary if the State Government accepts the representation of the Government servant concerned.
This will be against the very purpose for which the second show cause notice was issued.
Then, there is another aspect of the matter which has been pointedly emphasised by dulat, J.
If in the present case the show cause notice had merely stated the punishment of dismissal without mentioning the other two punishments, it would still be open to the punishing authority to impose any of the two lesser punishments of removal or reduction in rank and no grievance could have been made either about the show cause notice or the actual punishment imposed.
Can it be said that the enumeration of the other two punishments in the show cause notice invalidated the notice ? It appears to us that the show cause notice in the present case by mentioning the three punishments gave a better and fuller opportunity to the appellant to show cause why none of the three punishments should be inflicted on him.
We desire to 901 emphasise here that the case before us is not one in which the show cause notice is vague or of such a character as to lead to the inference that the punishing authority did not apply its mind to the question of punishment to be imposed on the Government servant.
The show cause notice dated April 14, 1954, stated in clear terms that " the President is provisionally of opinion that a major penalty, namely, dismissal, removal or reduction, should be enforced on you.
" Therefore, the President had come to a tentative conclusion that the charge proved against the appellant merited any one of the three penalties mentioned therein and asked the appellant to show cause why any one of the aforesaid three penalties should not be imposed on him.
We see nothing wrong in principle in the punishing authority tentatively forming the opinion that the charges proved merit any one of the three major penalties and on that footing asking the Government servant concerned to show cause against the punishment proposed to be taken in the alternative in regard to him.
To specify more than one punishment in the alternative does not necessarily make the proposed action any the less definite; on the contrary, it gives the Government servant better opportunity to show cause against each of those punishments being inflicted on him, which he would not have had if only the severest punishment had been mentioned and a lesser punishment not mentioned in the notice had been inflicted on him.
We turn now to certain other decisions on which learned counsel for the appellant has relied.
They are: Jatindra Nath Biswas vs R. Gupta (1), Dayanidhi Rath vs B. section Mohanty (2) and Lakshmi Narain Gupta vs A. N. Puri (3).
In the case of Jatindra Nath Biswas (1) no second show cause notice was given and the decision proceeded on that footing.
Sinha, J., observed, however: "Where there is an enquiry, not only must he have an opportunity of contesting his case before the (1) (2) A.I.R. 1955 Orissa 33.
(3) A.I.R. 1954 Cal.
3.35 902 enquiry, but, before the punishment is imposed upon him, he must be told about the result of the enquiry and the exact punishment which is proposed to be inflicted." Mr. Chatterjee has emphasised the use of the word " exact ".
As we have pointed out, the decision proceeded on a different footing and was not rested on the ground that only one punishment must be mentioned in the second show cause notice.
The decision in Dayanidhi Rath 's case (1) proceeded on the footing that if the punishment that is tenatively proposed against a civil servant is of a graver kind, he can be awarded punishment of a lesser kind; but if the punishment that is tentatively proposed is of a lesser kind, there will be prejudice in awarding a graver form of punish ment.
What happened in that case was that the show cause notice stated that in view of the Enquiring Officer 's findings contained in the report with which the Secretary agreed and in consideration of the past record of the Government servant concerned, it was proposed to remove him from Government service; in another part of the same notice, however, the Government servant concerned was directed to show cause why the penalty of dismissal should not be inflicted for the charges proved against him.
Thus, in the same notice two punishments were juxtaposed in such a way that it was difficult to say that the punishing authority had applied its mind and tentatively come to a conclusion as to what punishment should be given.
It was not a case where the punishing authority said that either of the two punishments might be imposed in the alternative; on the contrary, in one part of the notice the punishing authority said that it was proposed to remove the Government servant concerned and in another part of the notice it said that the proposed punishment was dismissal.
In Lakshmi Narain Gupta 's case (2) the notice called upon the petitioner to show cause why disciplinary action, such as reduction in rank, withholding of increments, etc., should not be taken against him.
The learned Judge pointed out (1) A.I.R. 1955 Orissa 33.
(2) A.I.R. 1954 Cal 335.
903 that there were seven items of penalties under r. 49 of the Civil Service (Classification, Control and Appeal) Rules, and the notice did not indicate that the punishing authority had applied its mind and come to any tentative conclusion as to the imposition of any of the punishments mentioned in that rule.
On that footing it was held that there was no compliance with the provisions in article 311(2) of the Constitution.
We do not, therefore, take these decisions as laying down that whenever more than one punishment is mentioned in the second show cause notice, the notice must be held to be bad.
If these decisions lay down any such rule, we must hold them to be incorrect.
We have come to the conclusion that the three decisions on which learned counsel for the appellant has placed his reliance do not really support the extreme contention canvassed for by him, and we are further of the view that the show cause notice dated April 14, 1954, in the present case did not contravene the provisions of article 311 (2) of the Constitution.
The appellant had a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
This disposes of the principal point in controversy before us.
Mr. Chatterjee referred to certain mistakes of reference in the order of the President dated October 1, 1954.
Instead of referring to r. 15 of the Government Servants ' Conduct Rules, r. 13 was referred to.
There was also a reference to para.
5 of a particular Government order which prohibited Government servants from taking up commercial employment within two years of retirement.
Mr. Chatterjee submitted that this particular order did not apply to Government servants in Class 11.
We do not think that the inaccurate references were of any vital importance.
In effect and substance the order of removal dated October 1, 1954, was based on the ground that the appellant violated r. 15 of the Government Servants ' Conduct Rules and r. II of the Fundamental Rules; he accepted private employment without sanction of Government while he was still in Government service.
That was the basis for the enquiry against 904 the appellant and that was the basis for the order of removal passed against him.
For these reasons we hold that there is no merit in the appeal which must accordingly be dismissed with costs.
Appeal dismissed.

summary/full:
The appellant, a Government servant, was charged with having, contrary to the rules governing the conditions of his service, accepted private employment without sanction of Government while he was still in Government service.
The Officer who held an enquiry against him found the charge to be true and submitted a report.
On April 14, 1954, a notice was issued to the appellant asking him to show cause in accordance with the provisions of article 3II(2) of the Constitution in the following terms:. . .
On a careful consideration of the report, and in particular of the conclusions reached by the Enquiring Officer in respect of the charges framed against you, the President is provisionally of opinion that a major penalty, viz., dismissal, removal or reduction should be enforced on you.
Before he takes that action, he desires to give you an opportunity of showing cause against the action proposed to be taken. .
The appellant then showed cause and on October 1, 1954, the President passed an order removing the appellant from service with effect from that date.
It was contended for the appellant, inter alia, that the show cause notice dated April 14, 1954, stated all the three punishments mentioned in article 311(2) and that inasmuch as it did not particularise the actual or exact punishment proposed to be imposed on the appellant, the notice did not comply with the essential requirements of article 311(2) and, therefore, the final order of removal passed on October, 1`954, was not a valid order.
Held, that the show cause notice dated April 14, 1954, did not contravene the provisions of article 311(2) of the Constitution.
There is nothing wrong in principle in the punishing authority tentatively forming the opinion that the charges proved merit any one of the three major penalties and on that footing asking the Government servant concerned to show cause against the punishment proposed to be taken in the alternative in regard to him, because it gives the Government servant better opportunity to show cause against each of those punishments being inflicted on him, which he would not have had if only the severest punishment had been mentioned and a lesser punishment not mentioned in the notice had been inflicted on him.
893 High Commissioner for India and High Commissioner for Pakistan vs I. M. Lall, (1948) L.R. 75 I.A. 225 and Khem Chand vs Union of India, ; , explained.
Jatindra Nath Biswas vs R. Gupta, ; Dayanidhi Rath vs B. section Mohanty, A.I.R. 1955 Orissa 33 and Lakshmi Narain Gupta vs A. N. Puri, A.I.R. 1954 Cal.
335, distinguished.


judgement:
ivil Appeal Nos.
1454 63 & 1642 45 of 1981.
From the Judgment and Order dated 10.4.1981 of the Andhra Pradesh High Court in Writ Petition No. 3720 of 1979.
G. Ramaswamy, M.S Ganesh, section Murlidhar, Sanjeev Ahuja and B. Parthasarthy for the Appellants.
C. Sitaramaiya, T.V.S.N. Chari and Mrs. B. Sunita Rao for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
These appeal are directed against the judgment of the Andhra Pradesh High Court dated 10th April, 1981 rendered in a batch of writ petitions, reported in M/s. Poddar Projects Ltd. (Multi Steels) vs A.P.S.E. Board, AIR 1982 Andhra Pradesh 189.
For the sake of convenience, these appeals are being decided by a common judgment.
In order to appreciate the respective submissions made by learned counsel for the parties necessary facts may be stated in brief.
The appellants are some of the mini steel plants of Andhra Pradesh.
Revised terms and conditions of electricity supply were notified by the Andhra Pradesh State Electricity Board (for short the Electricity Board) in B.P. Ms. No.690 (Coml.) on 17.9.75 to be effec 628 tive from 20 October, 1975, Subsequently, G.O. Ms. No. 832 dated 2nd November, 1977 was issued by the State Government whereby concessional tariff of 0.11 p. per unit for the period of three years commencing from 1st November, 1977 and endings with 31st October, 1980 was applied in respect of the following five consumers: 1.
Andhra Pradesh State Corporation Limited 2.
Poddar Projects Limited 3.
A.K. Corporation Limited 4.
Andhra Steels, Vishakapatnam 5.
A.K. Corporation, Vishakapatnam.
This concessional tariff was subsequently enhanced to 12.5 p. by the State Government vide G.O. Ms. No. 876 dated 26th November, 1977.
The concessional tariff referred to above, however, was not extended to M/s. Andhra Steel Corporation by the Electricity Board by passing a resolution in its meeting held on 26th November, 1977 inasmuch as the Andhra Steel Corporation had already filed a writ petition inter alia claiming that the agreement which it had entered into with the Electricity Board for availing high tension electric supply was no longer in force.
In respect of the remaining four steel plants referred to above the Electricity Board extended the concessional tariff of 12.2 p. subject to escalations and other terms and conditions of supply and fixed minimum consumption of 403.325 units/KVA.
This was done by issuing B.P. Ms. No. 78 dated 20th January, 1978.
These four mini steel plants were, however, subsequently directed by the Electricity Board vide B.P. Ms. No. 436/Coml.
dated 3rd May, 1978 to be charged at a tariff rate of 16 p. per unit instead of 12.2 p. without reference to the maximum demand charges from 1st March, 1978.
The Electricity Board also sought clarification from the State Government vide its letter No. DE (Coml.) 1205 1/76 32 dated 27 November, 1978 with regard to fixation of minimum consumption of 403.325 units/KVA and fixation of concessional tariff at 0.16 p. per unit in view of the new levy of central excise duty and in view of the increased cost of generation.
The State Government vide G.O. Ms. No. 697 dated 5th December, 1978 issued a clarification that the aforesaid G.O. Ms.
Nos. 832 and 876 did not preclude the Electricity Board from applying the normal terms and conditions of supply and prescribing the monthly minimum charges and the working out of the escalated rate from time of time.
Subsequently the State Government vide G.O. Ms. No. 146 dated 12th March, 1979 withdrew the concessional tariff contemplated by G.O. Ms. Nos. 832 and 876 referred to above.
This was done on the representation of the Electricity Board which in its turn through its B.P. Ms. No. 830 dated 2nd April, 1979 cancelled B.P.Ms.
Nos. 78 and 436 with effect from 12th March, 1979.
The State Government 629 subsequently also issued G.O. Ms. No. 10 dated 16th January., 1980 whereby it was clarified that its intention in issuing the earlier G.O. Ms. No. 697 dated 5th December, 1978 was to allow the concessional tariff rate notified in G.O. Ms. no 876 without limiting the concession by imposition of minimum consumption charges till the end of March, 1979.
The Electricity Board felt aggreived by this G.O. and requested the Government to cancel it for the reasons set out in its letter dated 28th January, 1980.
One of the grievances of the Andhra Steel Corporation in its writ petition before the High Court was that the Electricity Board while applying the concessional tariff to the other mini steel plants was not justified in refusing the said concession to it merely because it had filed a writ petition.
The action of the Electricity Board is singling it out was, according to the Andhra Steel Corporation, discriminatory and mala fide.
This plea has been reiterated before us also and is confined to the appeal preferred by the Andhra Steel Corporation.
The pleas common to all the appellants which were raise before the High Court as also before us may now be enumerated.
It has been asserted that in view of the direction issued by the State Government fixing concessional tariff for the appellants it was not open to the Electricity Board to have levied minimum charges and it was bound to supply electricity to the appellants on the concessional tariff alone as fixed by the state Government.
As regards the order of the State Government dated 5th December, 1978 which clarified that its earlier orders fixing concessional tariff did not preclude the Electricity Board from levying inter alia minimum charges it has been asserted that the said order is illegal.
In the alternative, it is asserted that if clarificatory orders could be issued by the State Government with regard to its orders fixing concessional tariff the subsequent clarification made by order dated 16th January, 1980 had to prevail over the earlier clarification dated 5th December, 1978.
The order of the State Government dated 12th March, 1979 withdrawing the concessional tariff with effect from that date had also been assailed on the ground that it was passed on the representation of the Electricity Board without giving any opportunity to the appellants to show cause against the said representation and consequently the said order was in violation of principles of natural justice.
Pleas of promissory estoppel and right based on the doctrine of legitimate expectation have also been raised.
630 As regards the submission made on behalf of the Andhra Steel Corporation about singling it out in the matter of grant of concessional tariff on the basis of the order issued by the State Government for the period ending 12th March, 1979 Shri Shanti Bhushan, learned counsel for the Electricity Board has very fairly stated that the Electricity Board would extend to the Andhra Steel Corporation also the same benefit which was extended to the other four mini steel plants in the matter of grant of concessional tariff for the said period ending 12th March, 1979.
In this view of the matter it is not now necessary to deal with this plea.
As regard the plea that in view of the direction issued by the State Government fixing concessional tariff for the appellants it was not open to the Electricity Board to have levied minimum charges as it was bound to supply electricity to the appellants on the concessional tariff alone as fixed by the State Government it was submitted by learned counsel for the appellants that not only it was specifically stated in the G.O. dated 26th November, 1977 that the directions contend there were issued under section 78A of the Act, it was accepted even by the Electricity Board to be a direction under Section 78A of the Act as is apparent from its proceedings dated 20th January, 1978.
According to learned counsel for the appellants a direction issued under Section 78A of the Act was of a compulsive nature and was binding on the Electricity Board.
The only dispute which the Electricity Board could raise was as envisaged and in the manner provided by Sections 78A(2) of the Act about the direction being a matter of policy.
The Electricity Board according to learned counsel not having taken raucous to the procedure contained in Section 78A(2) of the Act was precluded from asserting before the High Court that the Government orders granting concessional tariff to the appellants did not fall within the purview of Section 78A of the Act.
The contention of the learned counsel for the Electricity Board on the other hand has been that a direction under Section 78A of the Act can be only with regard to a matter of policy vis a vis the consumers generally or of a particular class or category as distinguished from individual consumers and even such a direction does not have a binding force and is calculated only to guide the Electricity Board in the discharge of its statutory functions.
Learned counsel for the parties were at variance even on the question as to whether the power of fixing tariff under Section 49 of the Act could be regulated by a direction under Section 78A thereof.
In support of the submission that a direction issued by the Government is compulsive in nature learned counsel appearing for the appellants and the State of Andhra Pradesh drew or attention to 631 certain decisions and principles of administrative laws laying down the scope of a direction.
Having considered the respective submissions of learned counsel for the parties on this point we are of the opinion thaton the facts of the instant appeals it is not necessary to go into the rival contentions referred to above on this point.
Here, the Electricity Board as is apparent from its proceedings dated 20th January, 1978 proceeded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated 26th November, 1977.
It, however, took the further view in the said proceedings that the directions issued by the Government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the Government Orders in question.
Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever.
It is in this context that we are of the opinion that the question with regard to the nature of a direction issued under section 78A of the Act is only of academic value in these appeals.
The basic question which falls for our consideration, however, is as to whether the obligation of the appellants to pay minimum charges under the agreement executed by them ceased to be operative on account of the directions issued by the State Government fixing concessional tariff as has been asserted by learned counsel for the appellants.
As indicated earlier the case of the electricity Board in this behalf has been that the directions in question did not have any bearing on the obligation of the appellants to continue to pay minimum charges, of course, to be calculated on the basis of the concessional tariff of 12.2 p. per unit.
A plain reading of the Government Orders dated 2nd Movement, 1977 and 26th November, 1977 makes it clear that there is no specific direction contained therein that the appellants would not be bound to pay minimum charges or that the obligation to pay minimum charges under the agreements executed by them would remain suspended during the period when the concession tariff would be operative.
What was, however, urged by learned counsel for the appellants was that the very purpose of fixing concessional tariff by the State Government would be frustrated if the appellants are held to be bound to continue to pay minimum charges in pursuance of the agreements entered into by them.
With regard to this submission it is at the outset necessary to appreciate the genesis of 632 prescription of minimum charges.
To put it succinctly the purpose of prescribing minimum charges is to ensure that no undue loss is caused to the Electricity Board because the absence of minimum charges is likely to create a tendency in a prospective consumer to have connection for an inflated requirement and having agreed to meet such requirement the Electricity Board would be under an obligation to maintain the supply upto that requirement even if no or very little energy is consumed.
In Amalgamated electricity Co. vs Jalgaon Borough Municipality, [1975] 2 SCC Page 508 it was held in paragraph 9 of the Report: "Moreover it is obvious that if the plaintiff company was to give bulk supply of electricity at a concessional rate of 0.5 anna per unit it had to lay down lines and to keep the power ready for being supplied as and when required.
The consumers could put their switches on whenever they liked and therefore the plaintiff had to keep everything ready so that power is supplied the moment the switch was put on.
In these circumstances it was absolutely essential that the plaintiff should have been ensured the payment of the minimum charges for the supply of electrical energy whether consumed or not so that it may be able to meet the bare maintenance expenses.
" In Bihar State Electricity Boara vs Green Rubber Industries, [1990] 1 S.C.C. Page 731 while dealing with the question whether the stipulation to pay minimum guarantee charges irrespective of whether energy was consumed or not is reasonable and valid it was inter alia held that considered by the test of reasonableness it cannot be said to be unreasonable inasmuch as the supply of electricity to consumer involves incurring of overhead installation expenses by the Board which do not very with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not.
The purpose of prescribing minimum charges being, as stated above, can it be said that while issuing the direction to the Electricity Board to supply electricity to the five mini steel plants at concessional rate the State Government was oblivious of the said purpose and required the Electricity Board not only to supply electricity on the concessional rate but also incur undue loss in maintaining the required bulk of energy stipulated in the various agreements even if the concerned mini plants either used no energy or used very little energy.
633 In our opinion, on the material placed before us it is not possible to take the view that such was the intention of the State Government in directing supply to be made to the appellants on concessional tariff.
That it was not the intention of the State Government to do so was subsequently clarified by the State Government itself vide Government Order dated 5th December, 1978.
In this view of the matter the submission made on behalf of the appellants that with the grant of concessional tariff the agreements in so far as they required the appellants to pay minimum charges ceased to be operative or that the purpose of granting concessional tariff was likely to be frustrated if they were required to continue to pay minimum charges cannot, therefore, by accepted.
In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring losses in the manner stated above.
The only purpose in directing supply of energy at concessional rates was reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate.
In this view of the matter it is apparent that the direction of the State Government to the Electricity Board to supply electricity to the appellants at concessional rate did not either expressly or by necessary implication grant immunity to the appellants from payment of of minimum charges.
In support of the plea that the order of the State Government dated 5th December, 1978 which clarified that its earlier orders fixing concessional tariff did not preclude the Electricity Board from levying minimum charges and the subsequent order dated 12th March, 1979 withdrawing the concessional tariff were invalid it was submitted by learned counsel for the appellants that those orders were in violation of principles of natural justice as also the doctrine of promissory estoppel.
In so far as this submission is concerned what is of significance is that by the Government Order dated 2nd November, 1977 and 26th November, 1977 concession was granted to the appellants.
This is manifest from the aforesaid Government Orders themselves which expressly used the expression "concessional power tariff" or "concessional tariff.
At no stage, does it appear to have been disputed by the appellants that what was extended to them by the said Government Orders was by way of concession.
In the context of granting exemption from sales tax certain observations were made by this Court in Shri Bakul Oil Industries vs State of Gujarat, [1987] 1 S.C.C. Page 31 which would, keeping in view the principle laid down therein with regard to 634 the grant of concession, be, in our opinion, useful in considering the above stated submission made by the learned counsel for the appellants.
It was held: "Viewed from another perspective, it may be noticed that the State Government was under no obligation to grant exemption from sales tax.
The appellants could not, therefore, have insisted on the State Government granting exemption to them from payment of sales tax, What consequently follows is that the exemption granted by the government was only by way of concession.
Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withdrawn.
The notifications of the government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of the revised notification issued on July 17, 1971, the concession had been withdrawn.
As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification.
This is an additional factor militating against the contentions of the appellants.
" It was further held: "The exemption granted by the government as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession.
We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel.
In other words, the government can withdrawn an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule.
If the government grants exemption to a new industry and if on the basis of the representation made by the government an industry is established in order to avail the benefit to exemption, it may then follow that the new industry can legitimately raise a grievance that 635 The exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute.
" This being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice.
Who only question in this connection which survives is that of promissory estoppel.
With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two Government Orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants.
The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants.
To take it by way of an illustration reference may be made to the special leave petition giving rise to Civil Appeal Nos.
1454 1463 of 1981 filed by M/s. Andhra Steel Corporation Ltd. The plea with regard to promissory estoppel is to be found in ground no.(i) which reads : "Whether in view of the fact that the Petitioner had acted upon the Government orders dated 2.11.1977 and 26.11.1977 and thus altered its position (as without the concessions being granted to the Petitioner they would not have possibly run the industry, since it was bound to suffer huge (losses) is the State Government stopped from revoking, or modifying the same before the full period of concession had run out of efflux of time that is, by 31 10 1980?" (emphasis supplied) Almost identical is ground no.(i) in the special leave petition giving rise to Civil Appeal Nos. 1642 1645 of 1981.
The use of the word "possible" is obviously indicative of lack of specific averment with regard to principle of estoppel.
Even such an averment has not been made qua the Electricity Board.
With regard to the plea based on the doctrine of legitimate expectation suffice if to say that except invoking the said doctrine nothing substantial was brought to our notice on the basis of which the appellants could be held entitled to any relief.
In so far as the Government Order dated 16th January, 1980 on which reliance has been placed by learned counsel for the appellants in 636 The alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earlier order of clarification dated 5th December, 1978, states nothing as to why the clarification contained in the order dated 5th December, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier Government Orders granting concessional tariff.
As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated 5th December, 1978 there was apparently no basis for issuing the second clarificatory order dated 16th January, 1980.
Further, the said order dated 16th January, 1980 had been issued on some representation made on behalf of the mini steel plants at a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was subjudice.
In such a situation , apart from the propriety of issuing the second clarificatory order datd 16th January, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in replay to the writ petitions filed on behalf of the appellants.
In our opinion, in the circumstances poinited out above the order dated 16th January, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff.
In view of the foregoing discussion, we do not find any substance in these appeals.
They are accordingly dismissed.
No. costs.

dataset_name: IN-Abs

summary/full:
The appellants owning mini steel plants have been getting supply of electricity from the Respondent Board.
The Board revised its terms and conditions for supply of electricity, and concessional tariff of 11 paise per unit for 3 years from 1.11.1977 was applied to five steel plants.
This tariff was subsequently enhanced to 12.5 paise per unit.
However, the concessional tariff was not extended to one of the appellants viz. M/s. Andhra Steel Corporation since a Writ Petition had been filed by it claiming that the agreement entered into with the Respondent Board for availing high tension electric supply was no longer in force.
In respect of the other steel plants, the Bard extended the concessional tariff subject to escalations and other terms and conditions and fixed a certain minimum consumption.
However, the tariff was revised to 16 paise without reference to the maximum demand charges from 1.3.1978.
In reply to a clarification sought by the Respondent Board, the State Government clarified that the Government order did not preclude the Board from applying the normal terms and conditions of supply and prescribing the monthly minimum charges and the working out of the escalated rate from time to time.
Subsequently the State Government withdrew the concessional tariff.
The State Government made a further clarification that its intention was to allow the concessional tariff without limiting the concession by imposition of minimum 625 consumption charges till the end of March, 1979.
Aggreived by the withdrawal of the concessional tariff, the mini steel plants filed Writ Petitions before the High Court contending that it was not open to the Electricity Board to have levied minimum charges and it was bound to supply electricity to them at the concessional tariff fixed by the State Government.
It was also contended that State Government 's subsequent clarification should prevail over the earlier one.
Violation of principales of natural justice, doctrine of promissory estoppel and right based on doctrine of legitimate expectation were also contended.
It was further contended that the directions were issued under section 78A of the Electricity Supply Act and hence they were of a compulsory nature and binding on the Board.
The Andhra Steel Corporation contended that while applying the concessional tariff to other mini steel plants, the Electricity Board was not justified in refusing the same to it thereby singling it out and hence its action was discriminatory and male fide.
The High Court rejected the various contentions and dismissed the Writ Petitions.
Aggrieved by the dismissal of their Writ Petitions, the mini steel plants filed appeal before this Court, raising the same contentions as were advanced before the High Court.
Dismissing the appeals, this Court, HELD: 1.
In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring loses.
The only purpose in directing supply of energy at concessional rates was to reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate.
Though the order dated 16.1.80 in substance amounts to a clarification of the earlier order of clarification dated 5th December,1978, it states nothing as to why the clarification contained in the order dated 5th December, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier Government orders granting concessional tariff.
The orders 626 granting concessional tariff, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated 5th December, 1978 there was apparently no basis for issuing the second clarificatory order dated 16th January, 1980.
It was issued on some representation made by the mini steel plants at a point of time when Writ Petition on their behalf had already been filed in the High Court and matter was sub judice.
In such a situation, apart from the propriety of issuing the second clarificatory order on 16th January, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the Writ Petitions filed on behalf of the appellants and it has no bearing in finding out the true import of the orders of the State Government granting concessional tariff.
[633C D;636A E] Amalgamated Electricity Co. vs Jalgaon Borough Municipality, ; and Bihar State Electricity Board vs Green Rubber Industries, [1990] 1 SCC 731, referred to.
By the Government Orders dated 2nd November, 1977 and 26th November, 1977 concession was granted to the appellants.
This is manifest from the government Orders themselves which expressly used the expression "concessional power tariff" or "concessional tariff".
At no stage, the appellants disputed that what was extended to them by the said Government Order was by way of concession.
In view of the settled law.
Neither of the two orders viz., order dated 5.12.78 and 12.3.79 can be said to be illegal on the ground that they were passed in violation of principles of natural justice.[633F H] Shri Bakul Oil Industries vs State of Gujarat, ; ; relied on.
With regard to the plea of promissory estoppel, it is not the case of the appellants that they established their mini plants after the grant of concessional Tariff by the said two Government Orders and but for the grant of such concessional tariff they would not have established their mini steel plants.
The necessary facts so as to sustain the plea of promissory estoppel are not pleaded or established by the appellants.
[635B D] 4.
There is nothing on record to substantiate the plea of doctrine of legitimate expectation on the basis of which the appellants could be held entitled to any relief.[635G] 627 5.
On the facts of the present appeals it is not necessary to go into the question whether the power of fixing tariff under section 49 of the Electricity Supply Act could be regulated by a direction under section 78A thereof.
The electricity Board proceded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated 26th November, 1977.
It, however, took the further view that the directions issued by the Government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the Government Orders in question.
Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever.
[631B D]


judgement:
Civil Appeal Nos.
1450 1458 of 1990.
From the Judgment and Order dated 21.11.1988 of the Madras High Court in W.A. Nos. 864 to 870 of 1988 and W.P. Nos. 1600 and 1601 of 1986.
Narayanswamy, N. Balasubramaniam and A.T.M. Sampath for the Appellant.
M. Ramamurthy, Mrs. C. Ramamurthy, M.A. Krishnamoorthy, 639 for the Respondents.
R.C. Paul appeared in person.
These are appeals by special leave and are directed against a common judgment of the Madras High Court delivered in a group of writ appeals and a writ petition.
E.I.D. Parry (India) Ltd. (hereinafter referred to as `the employer ') has one of its units located at Ranipet in Tamil Nadu State where sanitary ware, super phosphate and insecticides are manufactured.
Some of its retiring employees filed applications under section 33 C(2) of the (`1947 Act ' for short) before the Labour Court at Madras claiming pension by alleging that payability of pension was a condition of service and the employer had stopped it without any justification and without giving notice under section 9 A of the .
The President Officer of the 2nd Additional Labour Court, Madras, allowed the same by his order dated 30th May, 1983, after computing the amounts.
The employer preferred six writ petitions.
In the meantime the same dispute had been referred to the Industrial Tribunal and it answered the reference against the employees by award dated 13th February, 1985.
The award was assailed before the High Court by the Union by filing of the seventh writ petition.
All the seven writ petitions were heard by a learned Single Judge who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the labour union challenging the award of the Industrial Tribunal.
Writ appeals were carried against the Single Judge 's decision.
The main controversy before the Division Bench was as to whether pension, or as is referred to by the parties, "retiring allowance" was payable to the employees.
This dispute has a historical backdrop to which we may now advert.
Under General Office Order No. 26 dated Ist December, 1943 "retiring allowances" were provided for.
The Office Order provided that normally only employees with thirty years ' service or more would be eligible to receive "Retiring Allowance".
The Board reserved the right to alter the scale of "retiring allowance".
either generally or in respect of individual employees and had the authority to sanction `retiring allowance ' when first granted and subsequent payment became a routine matter subject to annual review.
640 Gratuities were also provided under the Office Order by saying that all permanent employees (other than workers who qualify for gratuities as per Factory Certified Standing Order) who were in the Company 's service prior to 1.1.1947 and who do not qualify for Retiring Allowance on retirement, will be eligible for gratuity on finally leaving the Company 's service subject to one or other of the prescribed conditions being fulfilled.
In all four alternatives were provided.
Clause (4) indicated that employees recruited on or after 1.1.1947 would not be entitled to any gratuity.
There was a Memorandum of Settlement between the parties which may be referred to as the settlement of 1956.
Clause (6) thereof related to gratuity and provided: "Gratuity shall in future be payable by the company in accordance with the following rules: (a)(i) Where, irrespective of the length of his past service, an employee dies in service, or is retired on a medical certificate acceptable to the company, or is retired by the company on reaching the age of superannuation, he shall be entitled to gratuity calculated at the rate of one month 's basic salary for each completed year of service, and pro rata for any partly completed year of his service ,subject to a maximum of 15 months ' basic salary if his service is less than 30 years, together with half of one month 's basic salary for each completed year of service in excess of 30 years and pro rata for any partly completed year of service in excess of 30 years. . . (d) Employees in service prior to Ist January, 1947 may opt, at the time of leaving service, either for: (i) Gratuity calculated in accordance with these rules or in accordance with the current provisions of General Office Order No. 26, whichever he prefers, or (ii) in lieu of gratuity, a retiring allowance calculated in accordance with the current provisions of General Office Order No. 26.
" This settlement as a fact incorporated the relevant part of the Office Order.
641 The came into force with effect from September, 1972 and payment of gratuity became statutory.
When that Act came into force, the Employer and the Employees ' Union jointly applied to the Government for exemption from the provisions of the statute.
The exemption was, however, not granted.
Payability of gratuity is no longer in dispute.
What is challenged is the claim of the workmen to retiring allowance (pension) under Office order No. 26.
The stand of the employees has been that the retiring allowance under General Office Order No. 26 has not been substituted by the 1956 settlement and they are, subject to being qualified, entitled to the benefit of pension and the statutory advantage of gratuity.
It is a fact that the settlement does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6(d) above.
It is not in dispute that the retiral benefit (pension) was payable to all qualified employees as a matter of practice.
If under the settlement that was not done away with, the benefit arising out of General Office Order No. 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension.
The Appellate Bench of the High Court has found that gratuity provided under the settlement was not a substitute of pension.
Mr. Narayanaswamy, learned senior counsel appearing in support of the appeals took us through the various documents and placed the matter at considerable length and with lucidity.
He even relied on what he described as the prevailing practice between 1956 and 1972 the settlement and the Gratuity Act when no retiral benefit was either claimed or paid.
We have, however, not been able to see any defect in the reasoning of the Division Bench decision of the High Court where it has ultimately come to the conclusion that the settlement had not substituted gratuity for pension.
We find that by way of an interim measure this Court by an order dated 5th May, 1989 had directed the employer to pay the pension to the employees in accordance with the order of the High Court with effect from Ist May, 1989 and that from the record appears to have been paid.
A petition had been filed in this Court on 23rd April, 1990 by the employer for modification of the condition indicated in the order granting special leave and we had heard counsel for both the sides on the said petition.
We had made it clear at the hearing of the petition for modification of the order granting special leave that the question as to payability of retirement benefit after the 1956 settlement would be examined.
The total number of employees involved in this dispute was 642 about 347.
Many of them had not only retired but had also died and in respect of those who were dead it would be a question of the benefits up to the date of death of the respective employees to be paid to their legal representatives.
Mr. Narayanaswamy had emphatically contended that what was being decided was not a claim of 347 employees but it had its repercussion on the industrial peace between the employer and the employee at other places.
We would like to make it clear that we have gone into the question confined to the claim to the employees of the Ranipet factory and not the liability of the employer generally, Besides, Mr. Narayanaswamy had also told us at the hearing that there are special features in the arrangement in regard to employees elsewhere.
We are satisfied that the Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and, therefore, the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956, The High Court rightly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petitions under section 33 C(2) of the .
We uphold the judgment of the High Court and dismiss these appeals.
The employees had asked for award of interest on their dues.
The challenge of the employer was not groundless and we do not think in the facts of these cases the employees or their legal representatives would be entitled to interest.
We hope and trust that the employer would not liquidate its liability without delay by satisfying the orders of the Labour Court and the claims of the workmen or their legal representatives as and when made.
A sum of Rs. 10,000 had been given by the employer to Sri Pant for the Union to contest these matters and he has been paid the amount under this Court 's order.
No order for further courts.
T.N.A. Appeals dismissed.

summary/full:
The General Office Order No. 26 dated 1.12.1943 of the Appellant Company provided that employees with 30 years ' service or more would be eligible to receive "Retiring Allowance" (pension).
The said office order also provided that all permanent employees who were in the Company 's service prior to 1.1.1947 and who do not qualify for retiring allowance on retirement, will be eligible for gratuity on finally leaving the Company 's service subject to the prescribed conditions being fulfiled.
In 1956 a memorandum of settlement was signed by the appellant company and the Employees ' Union under which the employees in service prior to 1.1.47 were required to opt at the time of leaving service either for gratuity or in lieu of the gratuity the retiring allowance.
Later the came into force and the payment of gratuity became statuory.
The employer and the Employees ' Union jointly applied to the Government for exemption from the provisions the statue which was refused.
Some of the retiring employees of company filed applications under Section 33 C(2) of the before the Labour Court claiming pension by alleging that payability of pension was a condtion of service and the employer had stopped it without any Justification.
The Labour Court allowed the applications.
Against the 638 order of the Labour Court the employer preferred six writ petitions.
In the meantime the same dispute was referred to the Industrial Tribunal and by an award the Tribunal answered the reference against the employees.
The Employees ' Union challenged the award by filling a writ petition in the High Court.
All the writ petitions were heard by a learned single judge of the High Court who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the Labour Union challenging the award of the Tribunal.
Writ appeals were carried against the single Judges ' decision.
The Appellate Bench of the High Court held that gratuity provided under the settlement was not a substitute of pension and the claim of pension was available to employees notwithstanding the settlement.
Hence this appeal by the employer company.
Dismissing the appeals, this Court, HELD: The 1956 settlement between the parties does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6(d) of the settlement.
The retiral benefit (pension) was payable to all qualfied employees as a matter of practice.
If under the settlement that was not done away with, the benefit arising out of General Office order No. 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension.
The Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and, therefore, the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956.
The High Court rigtly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petition under section 33 C(2) of the 1947 Act.
[641C D, 642C D]


judgement:
ivil Appeal No. 2225 of 1991.
From the Judgment and Order dated 12.10.1990 of the Himachal Pradesh High Court in R.S.A. No. 134 of 1979.
692 C.K. Mahajan and Ashok Grover for the Appellants.
J. Special leave is granted.
The appeal is directed against the judgment of the High Court setting aside the decree passed by the trial court and the first appellate court in favour of the plaintiffs appellants, and dismissing their suit, on the ground of being barred by limitation.
The subject matter of the present case is agricultural land in Himachal Pradesh belonging to one Sham Sunder, the original plaintiff since dead, who was the father of the appellant No. 1 and the grand father of the appellants No.2 and 3.
The defendant respondent, Moti, alleging to be a sub tenant cultivating the land, claimed the benefits under Section 27(4) of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953, hereinafter referred to as the Act.
Notice was issued to Sham Sunder which according to his case was not served on him.
The claim of Moti was accepted, amount of compensation payable under Section 27(4) of the Act was determined by the Compensation Officer and consequential orders were passed in his favour.
The present suit was filed by Sham Sunder challenging the aforesaid orders on the allegation that Moti was merely a labourer employed by him and he never cultivated the disputed land and he, therefore, was not entitled to the acquisition of the proprietory right under Section 27 (4) of the Act.
The Suit was resisted by the defendant.
Both the trial court and the appellate court, accepted the plaintiff 's case and concurrently held that Moti was not a sub tenant and hence, the order passed by the Revenue Officer in his favour under Section 27(4) of the Act was without jurisdiction.
The plea of limitation was rejected and the suit was decreed holding that Sham Sunder being the tenant in possession was entitled to the right under Section 27(4) of the Act.
In a further appeal under Section 100 of the Code of Civil Procedure, the defendant contended before the High Court that the suit having been filed after a period of more than three years from the day of the order under Section 27(4) of the Act, was barred by limitation.
The Court agreed with him and dismissed the suit by the impugned judgment.
The High Court did not deal with any other aspect in the case, stating that the defendant had not urged any other point in support of the second appeal.
693 4.
In the impugned judgment the High Court has held that "as a consequence of the Order of the Compensation Officer under Section 27(4), the title in the land stood vested in the appellant", and merely because a longer period of limitation is provided for recovery of possession under Article 65 of the , the suit can not be said to be within the period of limitation.
Accordingly either one year period under Article 100 or in the alternative the three years ' rule under Article 113 has been held applicable.
We do not think that the High Court is right.
The principle for deciding the question of limitation in a suit filed after an adverse order under a Special Act is well settled.
If the order impugned in the suit is such that it has to be set aside before any relief can be granted to the plaintiff the provisions of Article 100 will be attracted if no particular Article of the is applicable the suit must be governed by the residuary Article 113, prescribing a period of three years.
Therefore, in a suit for title to an immovable property which has been the subject matter of a proceeding under a Special Act if an adverse order comes in the way of the success of the plaintiff, he must get it cleared before proceeding further.
On the other hand if the order has been passed without jurisdiction, the same can be ignored as nullity, that is, non existent in the eye of law and it is not necessary to set it aside; and such a suit will be covered by Article 65.
In the present case the controversial facts have been decided in favour of the plaintiff appellant and the findings were not challenged before the High Court.
The position, thus, is that the plaintiff was the owner in cultivating possession of the land and the defendant Moti was merely a labourer without any right of a tenant or sub tenant.
The question is as to whether in this background it is necessary to set aside the order passed in favour of the respondent under Section 27(4) of the Act before the suit can be decreed or whether the plaintiff can get a decree ignoring the said order as void, in which case the suit undoubtedly will be governed by Article 65. 6.
The provisions of Section 27(4) of the Act as also the other provisions are limited in their scope.
The preamble indicates that the object of the Act is to provide for the abolition of the big landed estates and to reform the law relating to tenancies in the Himachal Pradesh.
The expressions 'tenant ', 'sub tenant ' as also other similar expressions have to be understood in the sense they have been used in the other statutes dealing with the relationship of landlord and tenant in agricultural lands.
Section 27 of the Act provides for a transfer by the law of the right title and interest of the land owner to the State 694 Government under sub section (1) Sub section (2) is by way of an exception with respect to land under the personal cultivation of the land owner.
Sub section (4) directs that the right, title and interest of the land owner thus acquired, shall be transferred by the State, On payment of compensation, to the tenant who cultivates such land.
Under this provision, the order in the present case was passed in favour of Moti.
If Moti was not a tenant or sub tenant he was not entitled to the benefits under the sub section.
If the land was in cultivating possession of the plaintiffs, as held in the present suit, the Compensation Officer did not have the jurisdiction to pass any order in defiance of sub Section (2) and the land did not vest in the State at all.
Further, for the additional reason that Moti was not a tenant of the land the order passed in his favour under Section 27(4) was again without jurisdiction.
In absence of the conditions necessary for the exercise of power under Section 27(4) the Officer lacked jurisdiction to act and it was not necessary for the civil court to formally set aside his order before passing a decree.
What necessitated the plaintiff to come to the civil court was the challenge to his title, and the suit must be held to be covered by Article 65, and, therefore, not barred by shorter periods of limitation either under Article 100 or Article 113. 7.
The cases relied upon by the High Court do not support the impugned judgment.
In State vs Sadh Ram, I.L.R. (Himachal Pradesh) 1973 (2) 235, the Compensation Officer had passed an order under Section 27(4) of the Act, transferring the proprietory right to the cultivating tenants of the land, excluding the trees standing thereon.
The transferee tenants filed a suit in respect of the trees, and the High Court held that the suit was barred by limitation either under Article 100 or Article 113.
The grievance of the tenant was not against the exercise of the power of the Compensation Officer under Section 27 (4) of the Act, rather he relied upon the same.
The observations, mentioned below, from the judgment of Pathak, C.J. (as he then was) are enlightening and supporting the view expressed by us.
"This is not a case where the order made by the Compensation Officer is a nullity.
If the Compensation Officer had ab initio no jurisdiction to take the proceeding and make an order therein, he would have no jurisdiction to make any order at all.
In that event, the entire order made by him, including that part of it which is in favour of the plaintiffs, would be a nullity.
" In the full Bench judgment of the Lahore High Court in Gangu and 695 Others vs Mahanraj Chand and Others, A.I.R. 1934 Lahore 384 the decision on the question of limitation went against the plaintiff on account of the special facts an circumstances of the case, as is clear from the enunciation of the proposition (at page 389, column 2) to the effect that if it is necessary for a plaintiff to get rid of an order made by an Officer of the Government, which stands in his way before he can obtain a certain relief and in order to obtain that relief he does not specifically ask for the setting aside of the order but merely for a declaratory decree still the suit should be deemed to be one to set aside an order falling within the ambit of Article 14.
It is material to note that in that case, it was essential for the plaintiff to have got the order of the Collector set aside, before asking for a decree.
Two cases of this Court, although not identical in facts nor governed by the present Act, support the view which we are taking.
In Sheo Lal and Ors.
vs Sultan & Ors.
, ; the plaintiff filed a suit for a decree for redemption after unsuccessfully moving the Assistant Collector for similar relief under the Redemption of Mortgages (Punjab Act 2 of 1913) 1913, and a plea of limitation by virtue of Article 14 of the Limitation Act, 1908, was raised.
Agreeing with the High Court this Court rejected the defence argument based on Article 14 on the ground that in the facts of the case it was not necessary to set aside the order of the Assistant collector before granting a redemption decree.
The other decision in Mohd. Murtiza Khan vs state of M.P. and Others, [1966] M.P.L.J. 933 arose out of a suit in which the interpretation of the provisions of the Bhopal Land Revenue Act was involved.
In similar situation as in the present appeal before us, this Court held that Article 14 of the Limitation Act, 1908, had no application to the suit as the order under the Bhopal Land Revenue Act had been passed without jurisdiction and could be ignored without getting it set aside.
Article 142 of the Limitation Act was applied.
For the reasons mentioned above we set aside the impugned judgment of the High Court and restore the decree passed by the first appellate court.
the appeal is accordingly allowed with costs through out.
T.N.A. Appeal allowed.

summary/full:
The respondent defendant claimed the benefits under Section 27(4) of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953 alleging that he was a sub tenant cultivating the disputed land.
The Compensation Officer accepted his claim and passedan order in his favour under Section 27(4).
The appellants ' father, Plaintiff, challenged the order of Compensation Officer contending that the defendant was not entitled to the acquisition of the proprietary right under section 27(4) because he was merely a labourer employed by him and he had never cultivated the disputed land.
Both the Trial and the Appellate court accepted the plaintiff 's case and concurrently held that the defendant was not a sub tenant and consequently the order passed in his favour under Section 27(4) was without jurisdiction.
The plea of Limitation was rejected and the plaintiff 's suit was decreed by holding that he being the tenant in possession was entitled to the right under section 27(4) of the Act.
On further appeal the High Court dismissed the plaintiff suit on the ground that the suit having been filed after a period of more than three years from the date of the order under section 27(4) it was barred by limitation.
Hence this appeal against the decision of the High Court.
Allowing the appeal and setting aside the judgment of the High court, this Court, HELD: 1.
The principle for deciding the question of limitation in 691 a suit filed after an adverse order under a Special Act is well settled.
If the order impugned in the suit is such that it has to be set aside before any relief can be granted to the plaintiff the provisions of Article 100 will be attracted and if no particular Article of the is applicable the suit must be governed by the residuary Article 113, prescribing a period of three years.
therefore, in a suit for title to an immoveable property which has been the subject matter of a proceeding under a Special Act if an adverse order comes in the way of the success of the plaintiff, he must get it cleared before proceeding further.
On the other hand if the order has been passed without jurisdiction, the same can be ignored as nullity, that is, non existent in the eye of law and it is not necessary to set it aside; and such a suit will be covered by Article 65 [693C D] 1.1 In the instant case the concurrent findings were that the plaintiff was the owner in cultivating possession of the land and the defendant was merely a labourer without any right of the tenant or a sub tenant.
If the land was in cultivating possesion of the plaintiff, the compensation Officer did not have the jurisdiction to pass any order in defiance of section 27(2) and the land did not vest in the State at all.
Further, for the additional reason that defendant was not a tenant of the land the order passed in his favour under Section 27(4) was again without jurisdiction.
Therefore, in absence of the conditions necessary for the exercise of power under Section 27(4) of Officer lacked jurisdiction to act and it was not necessary for the Civil Court to formally set aside his order before passing a decree.
What necessitated the plaintiff to come to the civil court was the challenge to his title, and the suit must be held to be covered by Article 65, and, therefore, not barred by shorter period of limitation either Article 100 or Article 113.
[693E, 694B C D] Sheo Lal and Ors.
vs Sultan & Ors.
, ; and Mohd. Murtiza Khan vs State of M P. and Ors., [1966] M.P.L.J., referred to.
State vs Sadh Ram, I.L.R. (HP) 1973 (2) 235 and Gangu and Ors.
vs Mahanraj Chand and Ors., A.I.R. 1934 Lahore 384, held inapplicable.