judgement:
Civil Appeals Nos.
76 to 80 of 1971 From the Judgment and orders dated the 17th October, 1968 of the Madhya Pradesh High Court in Misc.
Petitions No. 277, 279 to 282 of 1966.
G. C. Sharma, P. L. Juneja and section P. Nayar, for the appellant.
S, Chowdhury, Leila Seth and U. K. Khaitan, for respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
These appeals are by Income tax officer, 'A ' Ward, Indore, against the judgment of the Madhya Pradesh High Court and involve a question of law regarding the interpretation of section 220 sub sections
(2) and (3) of the Income tax Act, 1961.
In order to understand the scope and ambit of the question involved, it may be necessary to mention a few facts leading to these appeals.
The respondent firm carries on the business of manufacturing cloth.
In 1947 the then Maharaja of Gwalior granted to the firm exemption from tax for a period of twelve years from the date when the firm started its factories.
Under the Part States (Taxation Concessions) Order, 1950 the Commissioner of Income tax of the region concerned approved of the exemption only to the weaving division of the respondent for ten years, but deferred decision regarding the staple fibre division until the ' factory started functioning in 1954.
The Commissioner was approached again for granting exemption but he refused to do so.
The respondent thereafter moved the Hi h Court of Madhya Pradesh for cancelling the order of the 857 Commissioner refusing exemption.
The writ petition before the High Court succeeded and the respondent 's right to exemption was upheld by the High Court.
Thereafter the Revenue filed an appeal to this Court which was allowed and by its order dated April 28, 1964 reported in this Court reversed the decision of the High Court and maintained the order of the Commissioner refusing exemption.
As a result of the cancellation of; the exemption, a huge amount of income tax became due from the respondent, and the provisional assessments made for the years 1959 60 to 1965 65 reached the aggregate amount of over Rs. 6.60 crores which was payable by the firm was actually demanded from the respondent.
In fact the effect of the order of this Court was that the amount exempted became payable at once and was according demanded from the respondent but the respondent instead of paying the amount tried to negotiate with the Revenue for certain concessions.
In this connection a series of correspondence followed between the respondent and the Income tax `Department including a letter which was written by the assessee on December 26, 1964 by which the assessee paid a sum of Rs. 3 crores and wanted the balance of Rs. 3.60 crores to be paid in instalments.
The assessee further undertook to pay interest on the arrears at the rate ' of 5% per annum, even though under sub s (2) of section 220 of the Income tax Act, 1961 hereinafter referred to as 'the Act he was required` to pay interest at the rate of 4% only.
In view of these favourable terms offered by the assessee, the Income tax officer acceded to its request by his letter `dated January 16, 1965.
The assessee had agreed to pay the arrears in the following manner: Rs. 1,00,00,000 by March 15, 1966.
Rs. 1,20,00,000 by March 15, 1967.
Rs. 1,34,76,000 by March 15, 1968.
Soon after the request of the assessee was granted by the Income tax officer, sub section
(2) of section 220 of the Act was amended by the Finance Act, 1965 by which the rate of interest was increased from 4 to 6% per annum.
In view of this amendment, the Income tax Officer by his letter dated January 10,1966 informed the assessee that on the unpaid balance of tax arrears the respondent would be liable to pay interest at the rate of 6% per annum with effect from April 1, 1965 instead of 5% as agreed to by the Income tax officer in his previous letter.
The Income tax officer pointed out that this course was necessitated in view of the amendment made by the Finance Act, 1965.
Consequently a notice of demand under section 156 of the Act was served on the respondent which resulted in his filing writ petitions before the High Court with the result mentioned above.
The main point urged in the petitions before the High Court by the respondent was that the Income tax officer having acceded to the request of the assessee a settlement between the parties was arrived at to pay the balance of arrears at the rate of interest at 5% per annum and it was not open to the Income tax officer to vary that 858 rate to the prejudice of the assessee even in spite of a change in the rate of interest by the Finance Act 1965, because a vested right could not be taken away by a statute which in terms did not apply retrospectively.
This plea appears to have found favour with the High Court, though not on the ground expressly taken by the respondent.
The High Court found that in view of the notice of demand the liability of the assessee to pay the arrears arose only after the expiry of 35 days and this period had expired before the Finance Act, 1965 amending section 220(2) of the Act and therefore the Revenue had no jurisdiction to demand payment of the arrears at the rate of 6% interest.
Thus it would appear that the High Court actually decided the case on a point which was not raised by the respondent in his petition but after making out a new case made out at the time of arguments and without giving any opportunity to the Revenue to rebut the same.
The High Court has written a detailed judgment regarding the time as to when the liability of the assesse to where a notice of demand under section 156 of the Act is issued would arise.
It is, however, not necessary for us to consider the reasons given by the High court in detail because in the view that we take we find that the basis on which the High Court has decided this case is wholly irrelevant and is not at all germane to the issue that was involved.
It was not a case of a notice of demand under section 156 of the Act simpliciter, but the admitted position was that in view of the decision "f the Supreme court the respondent was in arrears of tax and had to pay heavy amounts of over Rs. 6.6 crores.
The respondent voluntarily paid the amount of Rs. 3 crores and requested the Income tax officer to allow it to pay the balance in instalments and Persuaded the Income tax officer to accept the request even by agreeing to pay a higher rate of interest of 5% than the rate prescribed under section 22()(2) of the Act.
The liability to pay the arrears was never disputed and the only dispute between the parties was as to rate of interest that was payable.
Section 22n, sub sections
( '2) and (3) run thus: "(2) If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub section (1), the assessee shall be liable to pay simple interest at four per cent per annum from the day commencing after the end of the period mentioned in sub section (1).
Provided that, where as a result of an order under section 154.
Or section 155, or section 250, or section 254, or section 260 or section 262, or section 264.
the amount on which inter st was payable under this section had been reduced.
the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded.
(3) Without prejudice to the provisions contained in sub section (2), on an application made by the assessee before 859 the expiry of the due date under sub section (1), the Income tax officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.
" The fact that the arrears were demanded from the assessee is not disputed as would appear from the statement made by the respondent in paragraph 2 of the writ petition filed before the High Court where it was averred thus: "Subsequently when assessments for the assessment years 1959 60 to 1964 65 were provisionally made, a huge amount aggregating to over Rupees six and a half crores became payable and was demanded from the petitioner.
" In these circumstances, therefore, the conditions precedent to the application of subs.
(2) of section 220 of the Act were undoubtedly fulfilled, in this case.
It would be seen that before the assessee entered into correspondence with the Revenue, the rate of interest prescribed under sub section
(2) of section 220 was only four per cent and yet the assessee offered to pay a higher rate namely 5% per annum is he was allowed to pay the arrears in instalments.
This request of the assessee was accepted by the Income tax officer on January 16, 1965 when there was no amendment in the provisions contained in section 220(2) of the Act and the order passed by the Income tax officer must be construed as one made under sub section
(3) of section 220 of the Act.
It was suggested before the High Court that the order of the Income tax officer amounted to an irrevocable agreement which could not be varied merely because the rate of interest contained in sub section
(2) of section 220 of the Act was enhanced.
Mr. section C. Choudhry learned counsel for the respondent, however, has fairly conceded that there was no question of an agreement or settlement because section 220(3) does not empower the Income tax officer to enter into agreement or settlement in order to bind the Revenue.
We find ourselves in complete agreement with this view.
Section 220(3) merely empowers the Income tax officer to extend the time for payment or allow payment by instalments on such conditions as he may impose.
In the instant case the Income tax officer merely exercised his powers under sub section
(3) of section 220 by imposing the condition that the assessee shall be allowed to pay the arrears by instalments if he paid interest at the rate of 5% per annum offered by him.
What is important however, is that sub section
(3) is not independent of sub section
(2) but is inter connected with it.
The words 'without prejudice to the provisions contained in sub section (2) ' clearly show that any order passed by the Income Tax officer under sub section
(3) must neither be inconsistent with nor prejudicial to the provisions contained in sub section
In other words, the Position is that although sub section
(3) is an independent provision the power under this sub section has to be exercised subject to the terms and conditions mentioned in sub section
(2) so far as they apply to the facts mentioned in sub section
Thus if sub section
(2) of section 220 provided that the rate of interest chargeable would be 860 four per cent per annum any order passed under sub section (3) could not vary that rate, and if it did, then the order to that extent would stand superseded.
The argument o the assessee.
is that sub sections
(2) and (3) of section 220 were independent provisions which operated in fields of their own.
We are, however, unable to accept this somewhat broad proposition of law.
Sub sections (2) and (3) form part of the same section, namely section 220, and are therefore closely allied to each other.
It is no doubt true that the two sub sections deal with separate issues but the non obstante clause of sub section
(3) clearly restricts the order passed under sub section
(3) to the conditions mentioned in sub section
(2) of section 220 of the Act.
Further more, it is the Finance Act which fixes the rate of interest payable under sub section
(2) of section 220 and it is common knowledge that every year the Finance Act makes important amendments in the rates payable under the various provisions of the Income tax Act.
In these circumstances, therefore, it is not within the competence of the Income tax officer to vary the rate of interest fixed by the Finance Act under sub section
(2) of section 220 from time to time.
We are fortified in this view by a decision of this Court in Esthuri Aswathaiah vs Commissioner of Income tax, Mysore(1) where this Court observed thus "The Income tax officer has no power to vary the rate on which the income of the previous year is to be assessed.
The rate of tax is fixed by the Finance Act every year.
By section 3, the tax is levied at that rate for an assessment year in respect of the income of the previous year.
Once the length of the previous year is fixed and the income of the previous year is determined, that income must be charged at the rate specified in the Finance Act and at no other rate.
" As we have already pointed out sub section
(3) of section 220 of the Act does not empower the officer to enter into and indefeasible settlement with the assessee or to clothe the Income tax officer with any such power so as to vary the statutory inhibition contained in sub section
Any order which is passed under sub section
(3) would be subject to the rate of interest mentioned in sub section
(2) and as soon as the rate mentioned in sub section
(2) is varied or enhanced by the Legislature it would have to be read into sub section
(2) from the date of the amendment and any order passed under sub section
(3) would be subject to the rate so fixed.
In fact if this is not the position, then the order passed under sub section
(3) being prejudicial to sub section
(2) becomes illegal and invalid and the Income tax officer exceeds the limits of his jurisdiction in passing such an order.
In the instant case the Finance Act of 1965 became effective form April 1, 1965 and the Income tax officer in his letter dated (1) ,416.
861 January 10,, 1966, to the assessee had merely given effect to the legal provisions of the Finance Act by insisting that in view of the variation in the rate of interest under sub s (2) of section 220 the assessee would have to pay interest at the rate of 6% per annum only from April 1, 1965.
There was absolutely no question of the Finance Act operating retrospectively, near there was any question of the Finance Act taking away a vested right which had accrued to the assessee because we have already held that the order of the Income tax officer under sub section
(3) of section 220 does not amount to any final settlement or agreement.
There is yet another view of the matter.
In the present case the assessee himself wanted extension of time for being allowed to pay the arrears by instalments.
The assessee could be permitted to seek this indulgence under sub section
(3) of section 220 only within the four corners of the law and not outside the same.
The moment the Finance Act, 1965, came into operation and the rate of interest in sub section
(2) of section 220 was increased from 4% to 6% per annum any order passed by the Income tax officer would automatically operate in accordance with the Finance Act with effect from April 1 1965.
This is what has happened in the present case.
Thus it is manifest that the Income tax Officer could not have passed any order against the statutory provisions of sub section
(2) of section 220 either with or without the consent of the assessee.
Even the order of the Income tax officer dated January 16, 1965, accepting the offer of the assessee to pay interest at the rate of 5% per annum was legally invalid, because if the rate of interest fixed by the statute was 4% the parties could not be allowed to contract out of the statute.
The only relief, therefore, which the assessee could get is that it was liable to pay interest at the rate of 4% and not 5% per annum for the period January to march 1965.
But from April 1, 1965 it was bound to pay interest at the rate of 6% per annum as found by the income tax officer.
Reliance was placed by Mr. G. C. Sharma appearing for me Revenue on a decision of the Orissa High Court in Biswanath Ghosh vs Income tax Officer, Ward and Another(1) where a Division Bench of that Court observed as follows: "As we find, the Income tax officer has charged interest at 6 per cent until the provision was amended to enhance the rate of interest at 9 per cent.
In fact in the counter affidavit given by the Income tax officer in O.J.C. No. 195 of 1972 that position has been clarified.
Mr. Pasayat for the petitioner claims that the rate of interest must he only at 6 per cent in view of the fact that default in this case had occurred prior to the amendment.
It is only here that he relies upon the decision of the Madhya Pradesh High Court in Gwalior Rayon Silk Manufacturing (Weaving) Co. vs Income tax Officer (1) , 374.
862 That was a case in respect of penalty under section 220(2) of the Act and the court took the view that the rate of interest as provided on the date when default occurred would apply to the facts of the case.
We do not agree with the view expressed in the said decision.
It is true that central Act 27 of 1967 has no retrospective effect, but in respect of continuing default after the amendment, in our view, the rate of interest as provided thereunder would apply." The Orissa High court expressly dissented from the view taken by the Madhya Pradesh High Court in the present judgment under appeal and we find ourselves in complete agreement with the view taken by the orissa High court.
We have already pointed out, the Madhya Pradesh High Court did not at all go into the question which really arose in this case with respect to the payment of interest at the rate of 6 per cent in accordance with the Finance Act, 1965 .
For these reasons, therefore, the appeals are allowed and the order of the High Court is set aside with slight modification, namely In that the assessee shall pay interest on the entire amount of arrears the rate of 4 per cent per annum only during the period January to March 1965.
So far as rest of the period is concerned, the order of the Income tax officer directing the assessee to pay interest at the rate of 6 per cent per annum is restored.
In view of the peculiar circumstances of the case, however, we leave the parties to bear their own costs throughout.
P.B.R. Appeals allowed.

summary/full:
Sub section (2) of 9. 220 of the Income tax Act.
1961 makes an assessee liable to pay simple interest at 4% p.a.
if the amount specified in any notice of demand under section 156 was not paid within the period limited under sub section
Sub section (3) states that without prejudice to the provisions contained in sub section
(2) on an application made by the assessee before the expiry of the due date under sub section
(1) the Income tax officer may extend the time for payment or allow payment by instalments, subject to such conditions as he may think fit to impose in the circumstances of the case.
Out of a large sum of money which became payable by the respondent as income tax, half the amount was paid and in respect of the remaining half which was allowed to be paid in three instalments, the respondent had under taken to pay interest at the rate of 5% p.a.
even though section 220(2) of the Income tax Act, 1961 prescribed 4% as the rate of interest payable on such arrears.
The Income tax Officer accepted the term.
By the Finance Act, 1965 the rate of interest payable under this section was raised from 4% to 6% p.a.
On receipt of a notice from the Income tax officer, that on the unpaid balance of the tax arrears the company was liable to pay interest at 6% p.a., the respondent moved the high Court contending that it was not open to the Income tax officer to vary the rate from 5% to 6% even in spite of the change made by the Finance Act, 1965, in that a vested right could not be taken away by a statute which did not apply retrospectively.
The High Court allowed the writ petition.
On appeal to this Court it was contended by the respondent that sub sections
(2) and (3) of section 220 were independent provisions which operated in fields of their own.
Allowing the appeal to this Court, ^ HELD: (1) Sub sections (2) and (3) form part of the same section namely, section 220 and are therefore closely allied to each other.
It is true that the two sub sections deal with separate issues but the non obstante clause of sub section (3) clearly restricts the order passed under sub section
(3) to the conditions mentioned in sub section
(2) of section 220 of the Act.
[860 B] (2) It is the Finance Act which fixes the rate of interest payable under sub section
(2) of section 220.
It is not within the competence of the Income tax officer to vary the rate of interest fixed by the Finance Act under subs.
(2) of section 220 from time to time.
[860C D] Esthuri Aswathaiah vs Commissioner of Income fax Mysore and 416, followed.
(3) Sub section (3) of section 220 does not empower the Income tax officer to enter into any indefeasible settlement with the assessee or to clothe the Income tax officer with any such ,power so as to vary the statutory inhibition contained 856 in sub section
Any order which is passed under sub section
(3) would be subject to the rate of interest mentioned in sub section (2) and as soon as the rate mentioned in sub section
(2) is varied or enhanced by the legislature it would have to be read into sub section
(2) from the date of the amendment and any order passed under sub section
(3 ) would be subject to the rate so fixed.
If this is not the position then the order passed under sub section
(3) being prejudicial to sub section
(2) becomes illegal and invalid and the Income tax officer exceeds the limits of his jurisdiction in passing such an order.
[860F H] In the instant case there was no question of the Finance Act operating retrospectively nor was there any question of the Finance Act taking away a vested right which had accrued to the assessee because the order of the Income tax officer under sub section
(3) of section 220 does not amount to any final settlement or agreement.
The notice had merely given effect to the legal provisions of the Finance Act.
[861 B] (4) In is manifest that the Income tax officer could not have passed any order against the statutory provisions of sub section
( 2) of section 220 either with or without the consent of ' the assessee.
Even the order of the Income tax officer accepting the Offer.
Of the assesse to pay interest at the rate of 5% p.a. was legally invalid because if the rate of interest fixed by the statute was 4% the parties could not be allowed to contract out of the statute.
The only relief which the assessee could get was to pay interest at 4% p.a.
prior to the Finance Act, 1965 and at 6% after 1st April, 1965.
[861D E] Biswanath Ghosh vs Income tax officer, Ward, B. and Another , 374, approved.


judgement:
Civil Appeal No. 1154 of 1972.
Appeal by special leave from the Judgment and order dated 18th December, 1969 of the Allahabad High Court in Special Appeal No. 324 of 1962.
827 Yogeshwar Prasad, section K. Bagga, Mrs. section Bagga and Miss Rani Arora, for the appellant.
G. N. Dikshit and O. P. Rana, for the respondent.
The Judgment of the Court, was delivered by ALAGIRISWAMI, J.
The appellant is a tenant of plot No. 428 in mauza Dehra Khas, pargana Central Doon, district Dehradun.
This land along with some other pieces of land was notified under section 4(1) of the Land Acquisition Act on February 8, 1962 for acquisition for the purpose of setting up an industrial estate at Dehradun.
By the same notification, under section 17(4) of the Act it was directed that the provisions of section 5A shall not apply on the ground that the provisions of section 17(1) were applicable to the facts of the case.
He filed a writ petition out of which this appeal arises for the issue of a writ of certiorari for quashing the notification dated 8th February, 1962.
He made various allegations which it is not necessary to go into for the purpose of this appeal.
A learned single Judge of the Allahabad High Court dismissed the petition and an appeal filed by him was dismissed by a Division Bench of the same High Court.
The only point argued before us was that there was a pucca construction on plot No. 436 which was also notified for acquisition under the impugned notification and consequently the provisions of s.17(4) would not be applicable to that land as it was not arable or waste land which could be acquired by dispensing with the enquiry under s.5A and as such the whole notification is bad and should be quashed.
Admittedly the appellant 's land is a waste and arable land and thus falls under s.17 (1) .
There was therefore no objection to the Government dispensing with the provisions of s.5A by resorting to the power conferred by s.17(4).
The person who could have taken objection to the enquiry under section 5A being dispensed with was the owner of plot No. 436.
He has not objected to the acquisition.
He has taken the compensation awarded to him and walked out.
It is, therefore? not open to the appellant to question the validity of this notification.
If possibly the owner of the land sought to be acquired but any person in the locality derations might arise.
The appellant who is only the owner of plot No. 428 in relation to which section 17(1) and 17(4) are applicable and therefore enquiry under s 5A could properly be dispensed with, cannot object to the same notification because the notification also relates to another land to which s.17(1) and 17(4) are not applicable when the owner of that land has not chosen to challenge the notification.
on behalf of the appellant, however, reliance was placed on certain observations of this Court in Sarju Prasad vs State of U.P.(1) to.
the following effect: "It was contended by Mr. section P. Sinha appearing on behalf of the Municipal Board, Basti, that a part of the land notified for acquisition was waste or arable and in support of his contention, counsel referred us to certain revenue record.
But (1) A. I. R. 828 if only a part of the land is waste or arable and the rest is not, notification under section 17(4) dispensing with compliance with the requirements of section 5 A would be invalid.
It would not be open to the Court to regard the notification as partially good and partially bad, for if the State had no power to dispense with the inquiry in respect of any part of the land notified under section 4(1), an inquiry must be held section 5 A giving an opportunity to persons interested in the land notified to raise the objections to the proposed acquisition and in that inquiry the persons interested cannot be restricted to raising objections in respect of land other than waste or arable land " That case is the converse of the present case.
The appellant therein was a person who was entitled to object to the notification.
Under those circumstances the question whether the notification is to be quashed completely or only partially might well arise.
But such a question cannot arise where a person like the appellant has no right to impugn the notification.
It was, however, urged that under section 5 A(1) it is not only the owner of the land sought to be acquired but any person in the locality may object and his objections will have to be heard.
Section 5 A(l) reads as follows: "5A.(1) Any person interested in any land which has been notified under section 4, sub section (1), as being needed or likely to be needed for a public purpose or for a Company may, within thirty days after the issue of the notification, object to the acquisition of the land or of any land in the locality.
as the case may be. "This section should be understood in the background of the provisions of section 4(1) which reads as follows s "4.(1) Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the official Gazette, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.
" It may be noticed that under this section what is necessary is that only the locality the land in which appears to the appropriate Government as needed or as likely to be needed for any public purpose need be specified in the notification under that section.
But in actual practice always the survey numbers of the lands sought to be acquired are given in such notifications.
The question of notifying the locality might probably arise when all the lands in a village are sought to be acquired otherwise the word 'locality ' is a word of such indefinite import that it is difficult to conceive of any locality in any particular village being notified for acquisition.
Therefore when a locality in the sense of a village or perhaps a group of villages is notified for acquisition any person interested in any 829 land in that locality would be entitled to be heard under section 5A.
But where the land proposed to be acquired is specifically mentioned in the notification it is only the person interested in that land who is entitled to be heard under section 5A.
That is why s.5A provides that any person interested in any land which has been notified under s.(1) may object to the acquisition of the land or of any land in the locality as the case may be.
The latter part would apply to a case where lands in any locality are notified under section 4(1).
That is the significance of the use of the words "as the case may be".
To give and other interpretation to this section would mean that any person interested in any land which has been notified may object to the acquisition of his land or to the acquisition of any land ill the locality.
This cannot be correct because he would not be a person interested in any land in the locality which is a pre requisite before a person can object to the acquisition of any land.
In other words in the background of section 4 (1), section 5A provides that where land in any locality is notified under section 4(1) any person who is interested in any land in the locality may object to the acquisition of his land or any land in the locality as the case may be.
We are therefore of opinion that there are no merits in this appeal.
It is accordingly dismissed with costs P.H.P. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant is a tenant or Plot No. 428.
A notification was issued under Section 4 (1) of the Land Acquisition Act for setting up an industrial estate in respect of Plot No. 428 and Plot No. 436.
By a notification under Section 17 (4) the provisions of section 5A were dispensed with in the ground that provisions of section 17(1) (Urgency) were applicable.
The appellant filed a Writ Petition in Hugh Court challenging the said notification issued under section 17 (4) The Single judge dismissed the Writ Petition.
An appeal filed to the Division Bench was also dismissed.
On an appeal by Special Leave, it was contended by the appellant that there was a pucca construction on Plot No. 436 which was also notified for acquisition under the impugned notification and consequently the provisions of Section 17 (4) would not be applicable to that land as it was not arable or waste land and could not be acquired by dispensing with the enquiry under section 5A and as such, the whole notification is bad and should be quashed.
Dismissing the appeal, ^ HELD: 1.
Admittedly the appellant 's land is a waste and arable land and thus falls under section 17(1).
The person who could have taken objection to the enquiry under section 5A being dispensed: with was the owner of Plot No. 436.
He has not objected to the acquisition it is, therefore, not open to the appellant to question the validity of the notification.
If the owner of Plot No. 436 had objected to the notification different considerations might arise.
Sarjoo Prasad vs State of U.P. (AIR distinguished.
[1827E F] 2.
Section 5A should be understood in the back ground of section 4(1).
Section 4 ( I ) requires only the locality in which the land is situate, to be mentioned in the notification.
But in actual practice the survey numbers of the lands sought to be acquired are given in such notifications.
The question of notifying the locality might probably arise when all the lands in village are sought to be acquired.
Otherwise.
the word locality is a word of such indefinite import that it is difficult to conceive of any locality in any particular village being notified for acquisition.
When a locality in the sense of a village or a group of villages in notified for acquisition any person interested in any land in that locality would be entitled to be, heard under section 5A.
But where land proposed to be acquired is specifically mentioned in the notification it is only the person interested in that land who is entitled to be heard under section 5A.
That is why section 5A provides that any person interested may object to the acquisition of land or of any land in the locality as the case may be.
The latter part would apply to a case where lands in.
any locality are notified under section 4 ( 1 ) .
That is the significance of the use of the words "as the case may be.
" Any person unconnected with land cannot object to the acquisition of the land in the locality since he would not be a person interested.
[828 F H 829A C]


judgement:
Civil Appeal Nos. 1359 to 1365 of 1973.
From the Judgment and order dated the 15th day of December, 1972 of the Mysore High Court in Writ Petitions Nos. 192,193.
478, 670, 940, 1303 and 1809 of 1972.
H. Gururaj Rao and section Markendeya, for the appellants in all the appeals.
F. section Nariman and Narayan Nettar, for respondent No. 1 in all the appeals.
section section Javali, K. R. D. Karanth, A. K. Srivastava and B. P. Singh, for Respondents Nos. 2, 3, 5, 6, 13 and 15 in C.A. 1359/73 The Judgment of the Court was delivered by RAY, C.J.
: These appeals are by special leave against the judgment dated 15 December, 1972 of the High Court of Mysore.
The appellants in the writ petition asked for quashing the Gradation List of Officers published by the State on 13 January, 1972.
The consequential prayer is for assigning correct ranks to the appellants.
The principal question is the relative seniority between direct recruits and promotees to the cadre of Assistant Commissioners of Mysore Administrative Service Class I (Junior Scale).
By a notification dated 13 January, 1972 the Government published the Gradation List which was prepared as on 1 January, 1972.
In the Gradation List respondents No. 2 to 24 were placed at serial No. 214 to 236.
The appellants are placed in the Gradation List at serial No. 273 to 280.
The appellants challenge the seniority of the respondents in the Gradation List.
On 2 December, 1957 the Mysore Administrative Service (Recruitment) Rules 1957 (hereinafter referred to as the 1957 Recruitment Rules) framed under Article 309 of the Constitution came into force and the previous Rules were superseded.
Under the 1957 Recruitment Rules Class I posts were divided into two categories.
One was the senior scale post and the other was the junior post.
The junior scale 818 posts were to be filled up in the proportion of 66.2/3 per cent by pro motion from Class II officers and 33.1/3 per cent by direct recruitment be competitive examination to be held by the Public Service Commission.
By notification dated 23 January, 1958 issued under Article 309 of the Constitution the Governor constituted the Mysore Administrative Service (Cadre) Rules with effect from 1 November, 1956 (hereinafter referred to as the Cadre Rules).
The cadre consisted only of permanent posts comprising 12 Senior Scale posts and 135 Junior Scale Posts.
The Cadre did not include temporary posts.
It may be stated here that the initial cadre strength of Assistant Commissioners Class I Junior Scale posts was filled by persons allotted to the new State of Mysore on 1 November, 1956 when the new State of Mysore was formed.
The allottees exceeding the strength of the cadre were gradually adjusted against substantive vacancies.
Till 2 December, 1957 the Government did not frame special rules of recruitment applicable to the Mysore Administrative Service.
Consequently all the vacancies arising until 2 December, 1957 were filled by promotion.
On 2 December, 1957 the 1957 Recruitments Rules came into existence for filling 66.2/3 per cent posts by promotion and 33.1/3 per cent posts by direct recruitment.
In September, 1959 the Government issued the Mysore Recruitment of Gazetted Probationers Rules, 1959 (hereinafter referred to as the 1959 Probationers Rules) whereby the quota for direct recruitment to the Mysore Administrative Service was increased from one third to two thirds for a period of five years and the quota for promotion was reduced from two thirds to one third.
Pending finalisation of the inter State seniority lists of Officers allotted to the new State of Mysore on 1 November, 1956 to the cadre of Assistant Commissioners the Government could not by reason of pending proceedings in courts in respect thereof confirm officers working as Assistant Commissioners for a long time.
In order to meet the exigencies of service.
_, officers in Class II service were promoted on officiating basis as Assistant Commissioners in Class I service (Junior Scale) from time to time Under Rule 17(b) of the 1957 Recruitment Rules the Government could fill up posts temporarily by promotion in vacancies reserved for direct recruits but such promotees became liable to be reverted after appointment of officers by direct recruitment.
The Government permitted many officers from Class II including the appellants to officiate as Assistant Commissioners in Class I service subsequent to 1 November 1956.
The earliest to be promoted on officiating basis among those promotees was Narsingharao Kallurkar on 30 November, 1959 who is numbered 268 in the Gradation List as on 1 January, 1972.
In September, 1959 the Government initiated steps for the first time for appointment of officers by direct recruitment to fillup the vacancies within the quota prescribed for direct recruits.
The advertisement referred to 20 vacancies for the posts of Assistant Commissioners Class I and two vacancies for Assistant Controllers in the State Accounts 819 Service.
These vacancies for direct recruits had arisen (luring the period immediately prior to the issue of the notification.
These vacancies arose between 2 December, 1957 when the 1957 Recruitment Rules came into existence and 11 September, 1959 when the 1959 Probationers Rules came into force.
The notification made it clear that the appointment of probationers by direct recruitment was subject to the 1957 Recruitment Rules the Mysore Government Servants Probation Rules, 1957, and the 1959 Probationers Rules.
The Public Service Commission conducted the competitive examination and selected 17 among respondents No. 2 24 for appointment as Assistant Commissioners Class I (Junior Scale) on probation.
It may be stated here that the other six respondents were allotted to the service as a result of judgment of this Court.
There is no dispute that all the 23 persons being respondents No. 2 to 24 are treated as direct recruits.
Respondents No. 2 to 24 were appointed on probation by order dated 26 October 1962.
They were required to undergo training and probation for a period of two years.
During the said period their appointments were provisional and liable to termination on one month 's notice, as was the case of recruitment of probationers.
In order to cause minimum prejudice to the officiating promotees and in order to meet the audit objections by reason of lack of provision in the 1957 Recruitment Rules for training reserves the Government sanctioned 20 temporary posts to accommodate the probationers for the period of their training.
On completion of the period of probation the Government issued a declaration under Rule 5 of the Mysore Government Servants Probation Rules 1957 that the respondents had satisfactorily completed the period of probation on 26 October, 1964.
Consequent upon such declaration each of the respondents became entitled under Rule 9 of the Government Servants Probation Rules, 1957 to be confirmed as a full member of the service in the class or category for which he was selected at the earliest opportunity to any substantive vacancy which may exist or arise in the permanent cadre of such class or category.
Respondents became entitled to be full members of the service and to confirmation in the permanent cadre against vacancies existing within their quota since the promulgation of the 1957 Recruitment Rules.
The Government action declaring respondents to have satisfactorily completed the probation under Rule S of the Probation Rules resulted in the confirmation of the respondents in substantive vacancies with effect from 26 October, 1964.
The creation of temporary posts for the duration of the training of respondents No. 2 to 24 as probationers was not renewed in 1964.
The actual confirmation was delayed because of the finalisation of inter State seniority lists of the allottees.
The appellants contended first that the word "vacancies occurring in the 1957 Recruitment Rules means not only vacancies in the permanent posts but also in temporary posts, and, therefore, the quota rule applies to vacancies in all posts whether permanent or temporary.
Or what construction it is said that upto 10 September, 1959 there were 59 vacancies and though the quota was for 39 promotions and 20 for 820 direct recruitment there were in fact 59 promotions and no direct recruitment with the result that 59 promotees filled up all the vacancies permanent or temporary.
The second contention of the appellants was that the respondents were directly recruited as Assistant Commissioners on 26 October, 1962 against temporary vacancies created with effect from 26 October, 1962 are not entitled to claim seniority over the appellants who had been promoted earlier than them and whose promotion was within the quota of 59 vacancies.
The third contention was that the direct recruits were not entitled to count their seniority from a date anterior to the date of their recruitment by taking advantage of the fact that the vacancies required to be filled up by direct recruitment had not been actually filled up by direct recruitment.
but had been filled up actually by promotion.
The fourth contention was that all the Assistant Commissioners who were directly recruited or promoted to the posts of Assistant Commissioners formed one class and their inter seniority in the cadre of Assistant Commissioners has to be determined on the basis of length of service rendered by them in the category in order to have equality.
The fifth contention was that the respondents who were appointed on temporary basis and the appellants who were promoted on officiating basis were entitled to have their seniority determined in accordance with the provisions of Rule 2(c) of the Mysore Government Servants (Seniority) Rules 1957, Rule 2(c) is as follows: "Seniority inter se of persons appointed on temporary basis will be determined by the dates of their continuous officiation in that grade and where the period of officiation is the same the seniority inter se in the; lower grade shall prevail".
The sixth contention was that the respondents were appointed on temporary basis with effect from 26 October, 1962 against temporary posts created for them and they could not claim seniority to appellants for these reasons.
Under Rule 5 of the Mysore Government Servants Probation Rules, 1957 the probationers are deemed to have satisfactorily completed their probation on the issue of an order to that effect.
The respondents who were confirmed in substantive vacancies could be confirmed only in vacancies which might exist or arise after 26 October, 1964 and not earlier.
The respondents were confirmed against substantive vacancies which arose from 12 September, 1960 onwards.
Both the 1957 Recruitment Rules and the 1959 Probationers Rules contemplate observance of quota rule at the time of appointment and promotion.
The question of enforcement of quota rules does not apply at the time of confirmation.
The quota rule will only apply when the vacancies are filled up either by direct recruitment or promotion.
The appellants are promoted prior to the direct recruitment of the respondents, and therefore, they are entitled to claim seniority.
One of the most important matters to be kept in the forefront is that the permanent cadre strength of the Mysore Administrative Service is 147 of which senior duty posts are 12 and the junior posts 135.
821 The substantive vacancies which arose between 2 December, 1957 and 10 September, 1959 were classified into vacancies which were required to be filled up by direct recruitment and by promotion, in the ratio of 1/3 and 2/3 respectively in accordance with the 1957 Recruitment Rules which came into force on 2 December, 1957.
The substantive vacancies which arose from 11 September, 1959 to 26 October 1964, the date when the direct recruits were confirmed were classified as direct recruitment and promotional vacancies on two thirds and one third basis respectively in accordance with the 1959 Probationers rules which came into existence on 11 September, 1959.
The substantive vacancies which arose between 26 October 1964 upto 1 September, 1965 have been classified as direct recruitment and promotional vacancies on two thirds and one third basis respectively in accordance with the 1959 Probationers Rules which continued to be operative upto 11 September, 1965.
From 11 September, 1965 to 8 October, 1971 the quota for direct recruitment became one third and for promotional vacancies it was two third.
The contention of the appellants that the respondents were recruit ed to temporary vacancies is wrong for these principal reasons.
First, the cadre here consists only of permanent posts.
the cadre does not consist of any temporary post.
The total number of vacancies between 2 December, 1957 and 10 September, 1959 were 59 under the quota 39 were promotional vacancies and 20 were direct recruitment vacancies.
There were in fact 59 promotees.
They were 20 in excess of their quota.
There was however no direct recruitment during that period.
Again, between 11 September, 1959 and 10 September, 1965 the total number of vacancies were 208.
Under the quota system 71 were promotional vacancies and 137 were direct recruitment vacancies.
There were in fact 168 promotees during the period.
Therefore 97 promotees were in excess of their quota.
Out of the 137 direct recruitment quota only 20 were filled up during the period.
In this background it appears that when in 1962 direct recruitment was made there were 20 direct recruitment vacancies in the quota which were not filled up.
The promotees however, being 20 in excess were not entitled to confirmation, against the vacancies within the quota of the direct recruits.
The promotees were promoted on officiating basis.
Therefore, when the respondents were appointed by direct recruitment on probation under order dated 26 October, 1962 they were required to undergo training and probation? for a period of two years.
In order to meet the audit objections by reason of lack of provisions in the Recruitment Rules for training reserves the Government sanctioned 20 temporary posts to accommodate the probationers for the period of their probation.
On the completion of the period of training there was no renewal of the temporary posts.
Therefore the temporary posts which were created for the direct recruits during their period of probation cannot be taken into account in working out the.
quota rule and for adjustment of seniority.
It may also be stated here that the promotees had not been deprived of their appointment and they had not been subjected to any reversion.
The implementation of the quota rule has resulted in the adjustment of 822 seniority consistent with the quota.
The confirmations had been issued in the case of promotees and direct recruits having regard to the permanent strength of the cadre and the quota.
Second, the advertisement of the Public Service Commission inviting direct recruits stated that the posts "are likely to be made permanent".
The order of appointment of the respondents as gazetted Probationers on selection be the Public Service Commission stated that the respondents were appointed as probationer Assistant Commissioners.
The order of appointment refers obviously to the 1959 Probationers Rules.
Third, Rule 9 of the Mysore Government Servants Probation Rules states that a probationer who has been declared to have satisfactorily completed his probation has to be confirmed as a full member of the service at the earliest opportunity in any substantive vacancy which may exist or arise in the permanent cadre of the service in respect of which he has been recruited as a probationer.
This Rule excludes temporary posts from the cadre.
It is, therefore, impossible to hold that the direct recruits were temporary employees outside the permanent cadre of the service.
Counsel on behalf of the appellants contended that the quota rule applies to vacancies in all posts, whether permanent or temporary and relied on the decisions of this Court in Bishan Sarup Gupta vs Union of India (1), G. R Luthra, Additional District Judge Delhi vs Lt. Governor, Delhi & Ors.(2) and A. K. Subraman vs Union of India(3).
In all these cases the cadre comprised of both permanent and temporary posts.
In Bishan Sarup 's case (supra) the cadre consisted of permanent and temporary posts.
In Luthra 's case (supra) cadre post as defined in the Rules includes a temporary post.
In Subraman 's case (supra) it was said that a cadre might consist only of permanent posts or sometimes also of temporary posts.
In the present case Rule 9 of the Probation Rules of 1957 provides for confirmation of a probationer as a full member of the service in any substantive vacancy in the permanent cadre of such class.
This rule establishes the exclusion of temporary posts from the cadre.
In E. P. Royappa vs State of Tamil Nadu(4) this Court said on the construction of Rule 4(2) of the relevant Cadre Rules in that case that the State Government might add for a period to the cadre one or more posts.
But the posts 53 added could not become cadre posts.
The temporary posts which are created due to exigencies of the service are posts which are outside the cadre.
In working out the, quota rule, these principles are generally followed.
First, where rules prescribe quota between direct recruits and promotees confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre.
Second, confirmed persons are senior to those who are officiating.
Third, as between persons appointed in officiating capacity, seniority is (1) A. r. R. (2) A.I.R. 1974 section C. 1908.
(3) A. 1.
R. (4) [1974] 2 section C. R. 348. 823 to be counted on the length of continuous service.
Fourth, direct recruitment is possible only by competitive examination which is the prescribed procedure under the rules.
In promotional vacancies, the promotion is either by selection or on the principle of seniority cum merit.
A promotion could be made in respect of a temporary posts or for a specified period but a direct recruitment has generally to be made only in respect of clear permanent vacancy either existing or anticipated to arise at or about the period of probation is expected to be completed.
Fifth, if promotions are made to vacancies in excess of the promotional quota, the promotions may not be totally illegal but would be irregular.
The promotees cannot claim any right to hold the promotional posts unless the vacancies fall within their quota.
If the promotees occupy any vacancies which are within the quota of direct recruits, when direct recruitment takes place the direct recruits will occupy the vacancies within their quota.
Promotees who were occupying the vacancies within the quota of direct recruits will either be reverted or they will be absorbed in the vacancies within their quota in the facts and circumstances of a case.
The quota between promotees and direct recruits is to the fixed with reference to the permanent strength of 135 Junior Duty posts.
Persons who were allotted the Junior Duty posts under the States Reorganisation Act are to be accommodated within the permanent cadre strength of 135 posts.
If they are in excess of the number then the excess will have to be accommodated in the promotional vacancies during the sub sequent period commencing from 2 December, 1957 to 10 September, Persons No. 1 to 164 in the Gradation List consist of persons who were allotted under the States Reorganisation Act on 1 November, 1956.
the ranks of those 164 persons were determined in accordance with the final inter State Seniority List.
Persons No. 165 to 184 are promotees who were allotted to substantive vacancies arising from 1 November, 1956 to 1 December, 1957 on the basis of their continuous service in the cadre.
There was no quota rule for the period 1 November" 1956 to 1 December 1957.
Therefore, neither the promotions of those persons nor their relative seniority can be disturbed.
Persons No. 185 to 213 are promotees.
Persons No. 214 to 236 are direct recruits.
Persons No. 237 to 280 are also promotees.
From 2 December, 1957 when the 1957 Recruitment Rules came into existence till 1 September, 1959 when the 1959 Probation Rules came into force the State promoted many persons from Class II.
Two thirds of the total vacancies for the period 2 December, 1957 to 10 September, 1959 were promotional vacancies.
Therefore all persons promoted to those two thirds vacancies cannot be disturbed.
Those promotees who are in excess of the two thirds vacancies will be pushed down to the vacancies in the subsequent period.
The remaining one third vacancies were for direct recruitment.
Direct recruits equal in number to those one third vacancies should be placed; next after the promotees placed in the first two thirds vacancies 824 between 2 December, 1957 and 10 September 1959.
If direct recruits are in excess of the quota they will similarly be shifted to the subsequent period.
The next period is from 11 September, 1959 to 26 October, 1964.
From 11 September, 1959 the promotional vacancies became one third and direct recruitment vacancies became two thirds.
The excess promotees during the previous period will be first absorbed in the promotional vacancies and thereafter promotees during the period will be absorbed.
Again, if there would be excess promotions they will be shifted to the following period.
The important principle is that as long as the quota rule remains neither promotees can be allotted to any of the substantive vacancies of the quota of direct recruits nor recruits can be allotted to promotional vacancies.
The result is that direct recruitment vacancies between 11 September, 1959 and 26 October, 1964 cannot be occupied by any promotees.
The fact that direct recruits were confirmed on 26 October, 1964 will not rob the direct recruits of their quota which remained unfilled from 2 December, 1957.
The Government confirmed the direct recruits and the appellants by adjustment of vacancies within their respective quota and determined their seniority in accordance with Rule 2(b) of the Seniority Rules.
Seniority is based on confirmation as full member of the service ill the substantive vacancy.
In section C. Jaisinghani vs Union of India (1) it was said that when the quota was fixed for the two sources of recruitment the quota could not be altered according to exigencies of the situation.
It was held there that the promotees who had been promoted in excess of the prescribed quota should .
be held to have been illegally promoted.
In Bishan Sarup 's case (supra) it was held that when it was ascertained that not more than 1/3 of the vacancies were to go to the promotees and the rest to the direct recruits, the ratio was not made dependent on whether any direct recruit was appointed in any particular year or not the promotees were entitled to 1/3 of the vacancies in any particular year, whether or not there was direct recruitment by competitive examination in that year.
Two principles are established in the decision referred to.
One is that quotas which are fixed are unalterable according to exigencies of situation.
quotas which are fixed can only be altered by fresh determination of quotas under the relevant rule.
The other is that one group cannot claim the quota fixed for the other group either on the ground that the quotas are not filled up or on the ground that because there has been a number in excess of quota the same should be absorbed depriving the other group of quota.
In Bachan Singh & Anr.
vs Union of India & ors.(2) t he two appellants were promoted in the years 1958 and 1959.
The respon (1) ; (2) [1972] 3 section C. R. 898.825 825 dents were appointed by direct recruitment in 1962, 1963 and 1964 the respondents were confirmed in their posts before the appellants.
The appellants contended that the respondents who were directly appointed after the appellants had been promoted were not to be confirmed in permanent posts before the appellants.
It was held that the direct recruits were confirmed against permanent vacancies within their quota.
The earlier confirmation of direct recruits though appointed later was upheld on the ground that they fell within their quota of permanent vacancies.
Subraman 's case (supra) on which the appellants relied also held that each quota would have to be worked independently on its own force.
In that case the Assistant Executive Engineers who were initially entitled to 3/4th and subsequently to 2/3rd of the vacancies while Assistant Engineers who were entitled initially to 1/4th and subsequently to l/3rd of such vacancies were held to be entitled to their respective quotas independent of the fact whether any person from one class or the other was promoted or not.
It was illustrated by saying that if there were three vacancies in a year, two would go to the Assistant Executive Engineers and one would go to the Assistant Engineers and even if there were not eligible Assistant executive Engineers who could be promoted to fill in two vacancies belonging to their quota, one vacancy is to be filled up by promotion of an Assistant Engineer, if he was eligible.
Similarly, if two vacancies belonging to the quota of Assistant Executive Engineers are to be filled by Assistant Engineer for want of availability of eligible Assistant Executive Engineers the appointment of Assistant Engineers to fill in those two vacancies would be irregular because they would have to be pushed down to later years when their appointment could be regularised as a result of absorption in their lawful quota for those years.
For the foregoing reasons, we hold that the respondents No. 2 to 24 were entitled to the vacancies within their quota which had not been filled up and they are senior to the appellants.
We affirm the judgment of the High Court and dismiss the appeals.
Parties will pay and bear their own costs in these appeals.
P. R. Appeals dismissed.

summary/full:
The Mysore Administrative Service (Recruitment) Rules, 1957 classified class I posts into two categories: senior scale posts and the junior.
scale posts.
Two thirds of the junior class I post were filled by promotion from Class II ' ' Officers and the balance of one third by direct recruitment by the Public Services Commission.
The Mysore Administrative Service (Cadre) Rules, 1958 fixed the cadre strength at 12 senior scale posts and 1 35 junior scale posts, all of which were permanent.
By the Mysore Recruitment of Gazetted Probationers Rules, 1959 the quota for direct recruitment to the Mysore Administrative Service was increased from one third to two thirds for a period of five years consequence of which the quota for promotees had been reduced to one third.
Rule 17(b) of the 1957 Recruitment Rules empowered the Government to fill up posts temporarily by promotion against vacancies for direct recruits but such promotees were liable to be reverted after the appointment of direct recruits.
In exercise of this power, the eight appellants along with 51 other were promoted to officiate as junior Class I officers in the 59 vacancies (39 for promotees and 20 for direct recruits).
In 1962, the Government appointed direct recruits to 20 of the junior Class I posts but to avoid any hardship to the officiating promotees and to avoid audit objections, the Government sanctioned 20 temporary posts to accommodate the probationer for the two year period of their training.
At the end of two years, and on completion of probation, in 1964 the Government terminated the probation of the direct recruits, as a result of which they became entitled, under Rule 9 of the Government Service Probation Rules.
to be confirmed as full members of the service.
They were accordingly confirmed in the 20 substantive vacancies exist in within their quota.
The Government, however, did not renew the temporary vacancies after the direct recruits had been confirmed in the permanent vacancies.
In January, 1972, a Gradation List was published in which the direct recruits (respondents) were shown as senior to the appellants.
The numbers of the respondents in the list were 214 to 236 whereas those of the appellants were 273 to 280.
The appellants challenged the seniority of the respondents in writ petitions on the ground mainly that the respondents were recruited only to the 20 temporary posts created and that the appellants and 51 others were appointed to 59 permanent vacancies.
The High Court dismissed the writ petitions.
Dismissing the appeal to this Court, ^ HELD: The contention of the appellant that the respondents were recruited to temporary vacancies is wrong.
Respondents (direct recruits ) were entitled to the vacancies within their quota which had not been filled up and they were senior to the appellants.
[821D; 825F] (1) The principles generally followed in working out the quota rule are, (i) Where rules prescribe quota between direct recruits and promotees confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre.
(ii) confirmed persons are senior to those who are officiating; (iii) as between person appointed in officiating capacity.
seniority is to be counted on the length of continuous service: (iv) direct recruitment is possible only by competitive examination which is the Prescribed procedure under the rules In promotional vacancies the Promotion is either 4 L1127SCI/75 816 by selection or on the principle of seniority cum merit.
A promotion could be made in respect of a temporary post or for a specified period, but direct recruitment has generally to be made only in respect of a clear permanent vacancy, either existing or anticipated to raise at or about the period of probation is expected lo be completed; (v) if promotions are made to vacancies in excess of the promotional quota, the promotions may, not be totally illegal but would be irregular.
the promotees cannot claim any right to hold promotional posts unless the vacancies fall within their quota.
If the promotees occupy any vacancies which are within the quota of direct recruits, when the direct recruitment takes place, the direct recruits will occupy the vacancies within their quota.
Promotees who are occupying the vacancies within the quota of direct recruits will either be reverted or they will be absorbed in the vacancies within their quota.
in the facts and circumstance of the case and (vi) as long as the quota rule remains neither promotees can be allotted to any of ' the substantive vacancies of the quota of direct recruits nor direct recruits can be allotted to promotional vacancies.
and (vii) quotas which are fixed are unalterable according to exigencies of the situation.
They can only be altered by fresh determination of quotas under the relevant rules.
One group cannot claim the quota fixed for the other group either on the ground that the quotas are not filled up or that because there had been a number in excess of the quota the same should be absorbed depriving the other group of quota.
[822H, 823A C; 824 C&G] Bishan Sarup Gupta vs Union of India ; ; section Jaisinghani vs Union of India [1967] 2 S.C.R. 703; A.K. Subraman vs Union of India and Bachan Singh & Anr.
vs Union of India & ors.
[ ; referred to.
(2) The cadre, in the present case, consisted only of permanent posts through out the period.
After the rules came into force the promotees were in excess of ' the quota but when in 1962 direct recruitment was made there were 20 direct recruitment vacancies in the quota which were not filled up.
The promotees, however, being 2 in excess were not entitled to confirmation against the vacancies within the quota of the direct recruits.
The promotees were promoted on officiating basis.
On the completion of the period of training of the 20 direct recruits there was no renewal of the temporary posts and, therefore.
the temporary posts which were created for the direct recruits during their period of probation could not be taken into account ill working out the quota rule and for adjustment of seniority.
In fact, they were created due to certain exigencies and were outside the cadre.
[821 D G] (3) The promotees had not been deprived of their appointment and they had not been subjected to any reversion.
The implementation of the quota.
rule has resulted in the adjustment of seniority consistent with the quota.
The confirmations had been issued having regard to the permanent strength of the cadre and the quota.
[821H; 822A] (4) It is impossible to hold that the direct recruits were temporary employees outside the permanent cadre of the service.
Rule 9 of the Mysore Government Servant 's Probation Rules excludes temporary posts from the cadre.
It also provides for confirmation of a probationer as full member of the service in any substantive vacancy in the permanent cadre of such class.[822C D] Bishan Sarup Gupta vs Union of India A.T.R. G. R. Luthra Additional District Judge Delhi vs Lt.
Governor Delhi & Ors. ; and A. K. Subman vs Union of India , referred to.
(5) There was no quota rule for the period between I November.
1956 and 1 December., 1957.
During the period from 2 September, 1957 and 10 September, 1959 (the dates on which the 1957 and 1959 Rules came into force) many persons were promoted from Class II.
Since two thirds of the vacancies during this period were promotional vacancies, persons promoted to those vacancies could not be disturbed.
However, those promotees who were in excess of the two third vacancies would be pushed down to the vacancies in the subsequent 817 period Again, during the same period direct recruits equal in number to those one third vacancies should be placed next after the promotees placed in the first set of two thirds vacancies.
If the direct recruits were in excess of the quota they would be shifted to the subsequent period.
[823G H: 824A] (b) During the period II September, 1959, to 26 October, 1964, (direct recruitment vacancies became two third and the promotional vacancies one third, as a result of which the excess promotees during the previous period would be first absorbed in the promotional vacancies and subsequent promotees would hereafter be absorbed.
The resulting position was that direct recruitment vacancies between 11 September 1959 and 26 October, 1964, the date of confirmation of the respondents (direct recruits) could not be occupied by the promotees.
The fact that direct recruits were confirmed would not, therefore, rob them of their quota which remained unfilled from 2 December, 1957 onwards.
The Government, therefore, rightly confirmed the direct recruits and the appellate by adjustment of vacancies within their respective quotas and determined their seniority in accordance with Rule 2(b) of the Seniority Rules.
[824 B.D.]


judgement:
Civil Appeal No. 675 of 1968.
From the judgment and order dated the 19th January, 1967 of the Bombay High Court in S.C.A. No. 16 of 1967.
section J. Deshpande and A. G. Ratnaparkhi, for the appellant.
M. C. Bhandare and M. N. Shroff, for respondent nos.
1, 2 and 4. D. V. Patel, K. Laxmanrao and section Gopalakrishnan, for respondent No. 3 876 The Jugement of the Court was delivered by KRISHNA IYER, J. Brevity will do no inequity in this appeal where three points were urged but only one survives for serious scanning.
The subject matter is the validity of land acquisition proceedings whereby a Municipality compulsorily purchased the appellant 's land for the stated public purpose of running a country fair or market (mondha) under the Hyderabad Land Acquisition Act (for short, the Act) which is closely similar to the Land Acquisition Act, 1923 (Central Act).
The first charge is that the High Court dismissed the Writ Petition in limine.
Seven years after the 1968 event, we cannot consider sending back the case even if there be justice in the submission.
We have therefore heard counsel Shri Deshpande on his substantive grievances.
The second contention is that there is no 'public purpose ' to support the acquisition which is allegedly ultra a vires the Municipality 's powers.
We disagree.
Providing a village market is an obvious public purpose and a municipal facility.
The last plea which has been pressed strenuously is that the acquisition exercise is bad being mala fide an uphill task to make out against a public body.
Was this colourable exercise of power ? Striking down any act for mala fide exercise of power is a judicial reserve power exercised lethally, but rarely.
The charge of mala fides against public bodies and authorities is more easily made than made out.
It is the last refuge of a losing litigant.
Even so, we will examine the merits of the contention here from the point of view of the serious factors placed for our consideration.
Was this acquisition done colore officii ? The circumstances relied on may be examined from this standpoint.
Section 5(3) of the Act provides for declaration of the public purpose, like section 6(3) of the Central Act.
This declaration was made in 1960 and covered at least 28 acres of land belonging to the appellant.
His counsel contends that there in no public purpose mentioned in the notification because what is stated is 'government purpose '.
There is no force in this terminological deviation.
The purpose has been set down as for a 'mondha ' or 'country fair ' which is obviously a public purpose.
So counsel shifted to another shade of the same argument and state that 'mondha ' is not a word known to law and has not been defined anywhere and so such a purpose cannot be taken cognizance of by the law.
We cannot agree to the linguistic game masquerading as a legal point.
It is plain that a 'mondha ' is a country fair or village market. 'Market ' is defined in section 2(20) of the Hyderabad District Municipalities Act in wide terms, and section 72 of the said Act enumerates the purposes for which property may be vested in a municipality.
This includes 'markets '.
It inexorably follows from a joint reading of sections 2(20) and 72(a) that the purpose of providing a market for the townsfolk falls within the powers of a municipality.
Failing here, counsel finally stressed that in any case no market for a small municipal town requires 28 acres of land, especially because the Master Plan prepared for the Municipality had allotted 877 only 15 acres for this purpose.
lt is not for the Court to investigate into the area necessary for running a market.
Moreover there is no mala fides emerging from this circumstance.
What has to be established is mala fide exercise of power by the State Government the acquiring authority although the beneficiary of the acquisition is eventually the Municipality.
There is no scintilla of evidence suggestive of malus animus in Government.
At this state Shri Deshpande complained that actually the Municipal Committee had sold away the excess land marking them out into separate plots for a housing colony, apart from the fact that a housing colony is a public necessity, once the original acquisition is valid and title has vested in the Municipality, how it uses the excess land is no concern of the original owner and cannot be the basis for invalidating the acquisition.
There is no principle of law by which a valid compulsory acquisition stands voided because long later the requiring authority diverts it to a public purpose other than the one stated in the section 5(3) declaration.
There is no merit in the appeal which is dismissed without costs.
P.B.R. Appeal dismissed.

summary/full:
Certain lands belonging to the appellants were compulsorily acquired under the Hyderabad Land Acquisition Act for running a country fair or market (mondha).
After the acquisition, the municipality parcelled out the excess land and sold it for a housing colony.
The High Court dismissed the appellants ' writ petition, in limine.
On appeal to this Court it was contended that the acquisition was not for a public purpose and that it was mala fide.
Dismissing the appeal, ^ HELD: (1)(a) Providing a village market is an obvious public purpose.
[876C D] (b) A mondha is a country fair or village market.
Market is defined in section 2(20) of the Hyderabad District Municipalities Act in wide terms and section 72 of the said Act enumerates the purposes for which property may be vested in a municipality.
This includes markets.
It inexoorably follows from a joint reading of Ss. 2(20) and 72(a) of the District Municipalities Act that the purpose of providing a market for the townsfolk falls within the powers of the municipality.
[876G H] (2)(a) Striking down any Act for mala fide exercise of power is a judicial resered power exercised lethally, but rarely.
The charge of mala fides against public bodies and authorities is more easily made than made out.
It is the last refuge of a losing litigant.
[876D] (b) What has to be established is mala fide exercise of power by the State Government although the beneficiary is the municipality.
There is no evidence of malus animus in Government.
[877B] (c) Apart from the fact that a housing colony is a public necessity, once the original acquisition is valid and title has vested in the municipality how it uses the excess land is no concern of the original owner and cannot be the basis for invalidating the acquisition.
There is no principle of law by which a valid compulsory acquisition stands voided because long later the requiring authority diverts it to a public purpose other than the one stated in the declaration.
[877C]


judgement:
Civil Appeal No. 2473 of 1972.
Appeal by Special Leave from the Judgment and order dated the 30th October 1972 of the Madhya Pradesh High Court in Misc.
Second Appeal No. 33/72.
section N. Andley, H. B. Mangal, Rameshwar Nath and Rajinder Narain for the appellant.
G. B. Pai, section K. Bagga, Mrs. section Bagga, R. K. Mehta and V. C. Parashar for respondents.
The Judgment of the Court was delivered by UNTWALIA, J.
This appeal by special leave has been filed by the tenant defendants.
The plaintiff respondents, the landlords, filed a suit against the appellants in the Court of Second Civil Judge, Class II, Gwalior for a decree for eviction from the suit premises and for certain other reliefs.
The appellants ' eviction was sought on statement of facts mentioned in paragraph 3 of the plaint which squarely fell within clause (f) of sub section (1) of Section 12 of the Madhya Pradesh Accommodation Control Act, 1961 (hereinafter referred to as 'the Act ').
The appellants filed a written statement and in paragraph 3, they denied the respondents ' assertion in plaint, paragraph 3.
It appears that the suit which was filed in the year 1966 proceeded to trial in October, 1967 and some evidence was adduced.
But eventually, the parties entered into a compromise, filed a petition to that effect in the Trial Court which passed a decree for eviction and other reliefs in January, 1968 in accordance with the terms of the compromise.
Pursuant to the said compromise decree the appellants were to vacate the shop the suit promises by 31 12 1970.
On their failure to do so, execution was levied by the respondents.
The appellants objected to the execution on the ground that the compromise decree was void and inexecutable as being against the provisions of the Act.
The execution court accepted the appellants ' objection to the execution of the decree and dismissed the execution case.
A miscellaneous appeal filed by the respondents was dismissed by the Third Additional District Judge Gwalior.
They preferred a second miscellaneous appeal before the Madhya Pradesh High Court.
A learned single Judge following the Bench decision of that Court in Smt.
Chandan Bai vs Surja,(1) came to the conclusion that the decree was not a 880 nullity and was executable.
Hence this appeal by the tenant judgment deobtors.
The point which fails for determination in this appeal is not resintegra and has been the subject matter of consideration in several decisions of this Court.
In Bahadur Singh & Anr.
vs Muni Subrat Dass & Anr.(1) a decree for eviction based on an award without anything more was found to be a nullity as it was held to have been passed against the prohibitory mandate of section 13(1) of the Delhi and Ajmer Rent Control Act, 1952.
Following the said decision the compromise decree was also held to be a nullity in the case of Kaushalya Devi & Ors.
vs Shri K. L. Bansal.(2) The earlier two decisions were followed again in Ferozi Lal Jain vs Man Lal and Anr.(3) In all these three cases the decrees were found to have violated section 13(1) of the Delhi Act of 1952.
The law was reviewed exhaustively by this Court in K. K. Chari vs R. M. Seshadri.(4) Vaidialingam, J. delivering the judgment on his behalf as also on behalf of Dua, J. pointed out that under the terms of the compromise under consideration in that case the defendant had withdrawn all his defence to the application filed by the landlord and submitted to a decree for eviction unconditionally.
The three earlier cases of this Court were distinguished and it was said at page 704.
"The true position appears to be that an order of eviction based on consent of the parties is not necessarily void".
And finally it was held "it is no doubt true that before making an order for possession the Court is under a duty to satisfy itself as to the truth of the landlord 's claim, if there is a dispute between the landlord and tenant.
But if the tenant in fact admits that the landlord is entitled to possession on one or other of the statutory grounds mentioned in the Act, it is open to the Court to act on that admission and make an order for possession in favour of the landlord without further enquiry".
One of us (Alagiriswami, J.) while agreeing with Vaidialingam, J. added a few words of his own.
In the separate judgment it has been pointed out that the view taken by Grover, J. of the Punjab High Court in Vas Dev vs Milkhi Ram(5) was exactly the position in K. K. Chari 's case.
Sarkaria, J. delivering the judgment on behalf of the Court in Nagindas Ramdas vs Dalpatram Inchharam @ Brijram and Otheres(6) took pains to go into the matter elaborately once more and said at page 552: "From a conspectus of the cases cited at the bar, the principle that emerges is, that if at the time of the passing of the decree, there was some material before the Court, on the basis of which, the Court could be prima facie satisfied, about the existence of a statutory ground for eviction, it will be presumed that the Court was so satisfied and the decree for eviction, though apparently passed on the basis 881 of a compromise, would be valid.
Such material may take the shape either of evidence recorded or produced in the case, or it may partly or wholly be in the shape, of an express or implied admission made in the compromise agreement, itself.
" On facts of the case of Nagindas Ramdas was found to fall in line with that of K. K. Chari.
Distinguishing the earlier cases, Chari 's case was followed.
Before we state the principles of law governing such a case we would like to point out that the language of Section 12 of the Act is somewhat different from many similar State Statutes.
Section 12(1) says: "Notwithstanding anything to the contrary contained in any other law or contract, no suit shall be filed in any Civil Court against a tenant for his eviction from any accommodation except on one or more of the following grounds only, namely :" Thereafter grounds (a) to (p) have been enumerated.
On a superficial reading of the provision aforesaid it would appear that the inhibition related to the filing of the suit only.
No suit can be filed for eviction of a tenant except on one or more of the grounds enumerated in Section 12(11).
In sub sections (2) to (11) of Section 12 certain conditions have been engrafted to show under what circumstances an order for the eviction of tenant cannot be passed in relation to some of the grounds enumerated in sub section (1).
Reading the section as a whole and remembering the beneficial object of the Act for the protection of a tenant based upon public policy, we do not find much difficulty in bringing the section at par with other similar State Statutes and holding as a matter of construction that no decree for the eviction of a tenant from any accommodation can be passed except on one or more of the grounds mentioned in Section 12(1).
A Bench of the Madhya Pradesh High Court in Smt.
Chandan Bai 's case (supra) seems to have taken too literal a view of the section when in paragraph 5 of the judgment it says "There is nothing in Section 12 of the Act or any other provision which prevents the tenant in vacating the accommodation in spite of the fact that none of the grounds mentioned in Section 12 exists.
Similarly, there is nothing in the Act which may prevent the tenant in agreeing to vacate the accommodation in future".
It says further in paragraph 10 "Merely enumeration of grounds on which relief can be claimed does not either expressly or impliedly exclude the operation of Order 23, rule 3, because grounds for claiming relief are always limited whether the relief be claimed under the general law or a statute".
A similar argument advanced in the case of Nagindas Ramdas (supra) with reference to the relevant provisions of Bombay Rent Act, 1947 was repelled at page 550 and the view taken by a Bench of the Gujarat High Court in the case of Shah Rasiklal Chunilal vs Sindhi Shyamlal 882 Mulchand (1) "that in spite of the fact that there is no express provisions in the Bombay Rent Act prohibiting contracting out, such a prohibition would have to be read by implication consistently with the public policy underlying this welfare measure" was approved.
In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the suitor must make out a case for eviction in accordance with the provisions of the Act.
When the suit is contested the issue goes to trial.
The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established.
Even when the trial proceeds ex parte, this is so.
If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigating expenses, it is open to them to do so.
The Court can pass a decree on the basis of the compromise.
In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law.
In other words, parties cannot be permitted to have a tenant 's eviction merely by agreement without anything more.
The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances is entitled to have such a decree under the law.
It is too late in the day to contend that the provisions of Order 23, Rule 3 of the Code of Civil Procedure cannot apply to eviction suits governed by the special statutes.
Undoubtedly, a compromise of such suit is permissible under the said provision of law.
The protection of the tenant is inherent in the language of Order 23, Rule 3 when it says "Where it is proved to the satisfaction of the Court that a suit has been adjusted by any lawful agreement or compromise. the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit".
If the agreement or compromise for the eviction of the tenant is found, on the facts of a particular case, to be in violation of a particular Rent Restriction or Control Act, the Court would refuse to record the compromise as it will not be a lawful agreement.
If on the other hand, the Court is satisfied on consideration of the terms of the compromise and, if necessary, by considering them in the context of the pleadings and other materials in the case, that the agreement is lawful, as in any other suit, so in an eviction suit the Court is bound to record the compromise and pass a decree in accordance therewith.
Passing a decree for eviction on adjudication of the requisite facts on or their admission in a compromise, either express or implied, is not different.
We now proceed to consider the facts of the case in hand.
The ground for eviction from the accommodation let for non residential purposes mentioned in clause (f) of section 12(1) of the Act is that the accommodation "is required bona fide by the landlord for the purpose of continuing or starting his business. . and that the land 883 lord. . has no other reasonably suitable non residential accommodation of his own in his occupation in the city or town concerned".
In paragraph 3 of the plaint the respondents ' necessity was pleaded both in the positive and the negative aspects of clause (f).
Both were denied in paragraph 3 of the written statement of the appellants.
Paragraph 1 of the compromise petition says: "That due to the necessity of the plaintiffs for their own business opening grocery shop, decree for ejectment may be granted to them against the defendants".
In this case it is not necessary to refer to any piece of evidence adduced at the inconclusive trial.
The meaning of paragraph 1 of the compromise petition is clear and definite especially in the background of the pleadings of the parties and in our opinion it squarely makes out a case of eviction within the meaning of Section 12(1) (f) of the Act on admission of the appellants.
We reject the argument of Mr. Andley, learned counsel for the appellants, that paragraph 1 of the compromise petition was an admission in respect of only the first part, namely, the positive aspect of clause (f) and not of the second part, namely, that the landlord has no other reasonably suitable nonresidential accommodation.
The admission, by necessary implication, was in respect of both.
In the order recording the compromise the Court said: "On a perusal of the joint compromise it was found that the same is legal and is within the purview of the plaint.
Therefore, plaint verification is accepted and the case is decreed in accordance with the conditions of the compromise as under: 1.
That the defendants shall vacate the shop in dispute by 31 12 1971".
The order so recorded in our judgment was in full compliance with the requirement of Order 23, Rule 3 of the Code of Civil Procedure.
The Court found that the compromise was legal, that is to say, lawful and was in accordance with the plaint.
The averment in the plaint was, therefore, accepted and the suit was decreed.
It is regrettable that though the appellants got about three years ' time to vacate the shop in dispute from the date of the compromise decree, they were ill advised to fight the litigation further and thus cause delay in the vacating of the shop by another five years.
We have no doubt in our mind that on the facts and in the circumstances of this case the compromise decree was clearly valid and executable.
We uphold the decision of the High Court but on a slightly different basis.
For the reasons stated above, the appeal fails and is dismissed with costs.
P.H.P. Appeal dismissed.

summary/full:
The respondent landlord filed a suit for eviction against the appellant tenant on the ground of bona fide personal requirement and that he has no other resonably suitable accommodation of his own which is one of the grounds of eviction under the Madhya Pradesh Accommodation Control Act.
The appellant filed a Written Statement denying the claim of the respondent.
After some evidence was recorded the parties entered into a compromise and filed it in the Court.
The compromise deed mentioned that "due to the necessity of the plaintiffs for their own business opening grocery shop, the decree for ejectment may be granted to them against the defendant".
The Trial Court passed a decree in terms of the compromise after coming to the conclusion that the compromise was legal.
the appellant was given 3 years ' time to vacate the premises under the compromise.
On the appellant 's failure to vacate after the expiry of three years, the respondent filed Execution Application.
The appellant objected to the execution on the ground that the compromise decree was void and inexecutable as being against the provisions of the Act.
The Execution Court accepted the appellant 's objection and dismissed the Execution Case.
The District Judge dismissed the appeal filed by the respondent.
The High Court allowing the Second Miscellaneous Appeal came to the conclusion that the decree was not a nullity and that it was executable.
In an appeal by Special Leave the Appellant contended that the decree was nullity since the Court was not satisfied that the eviction was in accordance with the provisions of the Act.
The counsel further contended that even if what is stated in the compromise deed might be accepted as admission, the admission is only about the bona fide requirement and that there is no admission about the landlord not having any other suitable accommodation. ^ HELD: dismissing the appeal: 1.
In order to get a decree or order for eviction against a tenant whose tenancy is governed by any Rent Restriction or Eviction Control Act the Suitor must make out a case for eviction in accordance with the provisions of the Act.
When the suit is contested the issue goes to trial.
The Court passes a decree for eviction only if it is satisfied on evidence that a ground for passing such a decree in accordance with the requirement of the Statute has been established.
Even when the trial proceeds ex parte, this is so.
If, however, parties choose to enter into a compromise due to any reason such as to avoid the risk of protracted litigation, expenses it is open to them to do so.
The Court can pass a decree on the basis of the compromise.
In such a situation the only thing to be seen is whether the compromise is in violation of the requirement of the law.
In other words, parties cannot be permitted to have a tenant 's eviction merely by agreement without anything more.
The compromise must indicate either on its face or in the background of other materials in the case that the tenant expressly or impliedly is agreeing to suffer a decree for eviction because the landlord, in the circumstances, is entitled to have such a decree under the law.
The case of K. K. Chari vs P. M. Seshadri, followed [882 A D] 2.
It is too late in the day to contend that the provisions of order 23 rule 3 of the Code of Civil Procedure cannot apply to eviction suits governed by the special statutes.
A compromise of suit is permissible under the said provisions of law.
[882 E F] 879 3.
If the compromise for the eviction of the tenant is found on the facts of a particular case to be in violation of a Rent Control Act, the Court would refuse to record the compromise as it would not be a lawful agreement.
If the Court is satisfied on consideration of the terms of the compromise and if necessary by considering them in the context of the pleadings and other materials in the case that the agreement is lawful as in any other suit in an eviction suit the court is bound to record the compromise and pass a decree in accordance therewith.
[882 F G] 4.
The meaning of the term the bona fide requirement in the compromise deed is clear and definite specially in the background of the pleadings of the parties and it makes out a case of eviction within the meaning of the Act.
[883 C]