judgement:
Appeal No. 81 of 1953.
Appeal under article 132(1) of the Constitution of India from the Judgment and Order, dated the 18th April, 1951, of the High Court of Judicature for the State of Orissa at Cuttack in Judicial Case No. 60 of 1951.
H. J. Umrigar, Sri Narain Andlay and Rajinder Narain for the appellant.
Porus A. Mehta and P. g. Gokhale for the respondent.
November 25.
The Judgment of the Court was delivered by BHAGWATI J.
The appellant who is a legal practitioner residing within the limits of the Kendrapara Municipality and practising as a mukhtar in the criminal and the revenue Courts there filed his nomination paper for election as a Councillor of the Municipality on the 15th March, 1951.
That nomination paper was rejected by the Election Officer on the 25th March, 1951, on the ground that he was employed as a legal practitioner against the Municipality in a case U/S 198 of the Bihar and Orissa Municipal Act which was pending in the Sub Divisional Magistrate Court.
The appellant then filed on the 4th April, 1951, a petition before the High Court of Orissa under article 226 of the Constitution praying that a writ or order of prohibition be issued to the State Government and the Election Officer restraining them from holding the election to the Kendrapara Municipality under the Orissa Municipal Act, 1950 or the Municipal Election Rules, 1950.
This petition was rejected by the High Court but the High Court granted the appellant a certificate under article 132(1) of the Constitution for leave to appeal to this Court.
The Orissa Municipal Act, 1950 (Orissa Act 23 of 1950) was passed by the local Legislature and received the assent of the Governor on the 7th November, 1950, and was published in the official gazette on the 11th November, 1950.
Section I of the Act runs as under 1006 (1) This Act may be called the Orissa Municipal Act, 1950.
(2) It shall extend to the whole of the State of Orissa.
(3) It shall come into force in such area or areas on such date or dates as the State Government may appoint from time to time (5) Any notification, order or rule and any appointment to an office, may be made or election held under this Act, after it shall have received the assent of the Governor and shall take effect on this Act coming into force.
Section 16 of the Act prescribes the disqualifications of candidates for election and provides (1) No person shall be qualified for election to a seat in a Municipality, if such person (ix ) is employed as a paid legal practitioner on behalf of the Municipality or as legal practitioner against the Municipality On the 11th November, 1950, the Secretary to the Government, Local Self Government Department addressed to all District Magistrates of the State letter No. 1336/L.S.G. intimating that the Government had decided that general elections should be held on the basis of adult suffrage as provided in the Act in 12 Municipalities including the Kendrapara Municipality.
Notification No. 2015 L.S.G. was issued on the 13th December, 1950, under section 13 read with section 1 (5) of the Act fixing the 1st day of March, 1950, as the relevant date for voters in the election as regards their residential qualification in the Municipality.
Notification No. 65 L.S.G. issued on the 4th January, 1951, published rules made in exercise of the powers conferred by clauses (1) and (2) of sub section (2) of section 387 of the Act called the "Municipal Election Rules, 1950.
" Redistribution of wards was effected by Notification No. 167 L.S.G. dated the 10th January, 1951, and two Notifications Nos. 519 and 521 L.S.G. were issued on the 24th January, 1951, fixing 1007 the numbers of Councillors and of the reserved seats for each Municipality.
The 15th March, 1951, was fixed as the date for filing the nominations and the 25th March, 1951, for scrutiny of nomination papers.
The 20th April, 1951, was the date fixed for the holding of the election.
All these steps were taken by the Government in anticipation acting under the powers reserved under section 1 (5) of the Act and it was only on the 15th April, 1951, that the Act was extended to the Kendrapara Municipality by a notification under section 1 (3) of the Act.
The appellant contended (1) that the Act had not come into operation in the Kendrapara Municipality till the 15th April, 1951, that the disqualification prescribed by section 16(1) (ix) could not consequently have been incurred by him on the 15th March, 1951, when he filed his nomination paper, that the rejection of his nomination paper therefore on that ground by the Election Officer on the 25th March, 1951, was illegal and no election could be held on the 20th April, 1951, as was sought to be done under the provisions of the Orissa Municipal Act, 1950, or the Municipal Election Rules, 1950, and (2) that in any event the disqualification prescribed under section 16(1) (ix) of the Act violated his fundamentals rights guaranteed under article 14 and article 19(1) (g) of the Constitution.
Both these contentions were in our opinion rightly negatived by the High Court.
Section 1 (5) of the Act in express terms provides that after the Act has received the assent of the Governor elections could be held under the Act but were only to take effect on the Act coming into force, which means the coming into force of the Act in such area or areas on such date or dates which the State Government might appoint from ' time to time under section 1 (3) of the Act.
There is thus contemplated under the very provisions of sec tion 1 (5) the holding of elections under the Act in spite of the fact that the Act had not come into force in a particular area.
Ordinarily the statute enacted by a State Legislature comes into force as soon as it receives 1008 the assent of the Governor.
Section 1 (3) of the Act however postpones the commencement of the Act which means that section 1 (3) came into operation immediately the Governor gave his assent to the Act.
Section 1 (5) is nothing but a proviso to section 1 (3) and must be regarded also to have come into operation simultaneously with section 1 (3).
Section 1 (5) having thus come into force at once on the Act having received the assent of the Governor on the 7th November, 1950, if elections were to be held under the Act before the rest of the Act came into force in any particular area. ' all incidental steps for the holding of such elections were certainly contemplated to be taken and those steps which would be thus taken in anticipation of the Act coming into force in a particular area were certainly authorised by the terms of section 1(5) by necessary implication, because no elections could be held unless all the preliminary steps for holding the same were taken.
It would be necessary for holding elections to prescribe the residential qualification, to distribute the wards, to fix the numbers of Councillors and of reserved seats, to frame election rules with reference to the filing of nominations, the scrutiny of the nomination papers and also the holding of elections.
All these preliminary steps would have to be taken if the elections were to be held and section 1(5) clearly contemplated the taking of these steps in authorising elections to be held under the Act.
No doubt the Act was not to be in force in a particular area until the relevant notification was issued by the State Government and until the Act came into force the disqualifications prescribed in section 16(1) of the Act would not normally attach to candidates for election.
The election rules also would be framed in exercise of the power reserved under the Act and if the Act had not come into force much less could the election rules come into operation and bind the candidates.
This argument could have availed the appellant if the State Legislature had not enacted section 1(5) of the Act and the defect could not have been cured by the provisions of section 23 of the Orissa General Clauses Act (Orissa Act I of 1937) which was relied upon by 1009 the respondent.
That section only enables the making of rules or bye laws or the issue of the preliminary orders in anticipation of the Act coming into force, which rules, bye laws or orders however would not come into effect till the commencement of the Act.
The clear provisions of section 1(5) of the Act however expressly empowered the State Government to hold elections and thereby validated all the preliminary steps taken for the purpose of holding such election, the only reservation made being that even though the election under the Act be held such election was not to take effect till the Act came into force in the particular area.
This contention of the appellant therefore fails.
The contention that the disqualification prescribed in section 16(1)(ix) violates the fundamental rights of the appellant under article 14 and article 19(1)(g) is equally untenable.
Article 14 forbids class legislation but does not forbid reasonable classification for the purposes of legislation.
That classification however cannot be arbitrary but must rest upon some real and substantial distinction bearing a reasonable and just relation to the things in respect of which the classification is made.
In other words the classification must have a reasonable relation to the object or the purpose sought to be achieved by the impugned legislation.
The classification here is of the legal practitioners who are employed on payment on behalf of the Municipality or act against the Municipality and those legal practitioners are disqualified from standing as candidates for election.
The object or purpose to be achieved is the purity of public life, which object would certainly be thwarted if there arose a situation where there was a conflict between interest and duty.
The possibility of such a conflict can be easily visualised, because if a Municipal Councillor is employed as a paid legal practi tioner on behalf of the Municipality there is a likelihood of his misusing his position for the purposes of obtaining Municipal briefs for himself and persuading the Municipality to sanction unreasonable fees.
Similarly, if he was acting as a legal practitioner against the Municipality he might in the interests of his client misuse any knowledge which he might have obtained 129 1010 as a Councillor through his access to the Municipal records or he might sacrifice the interests of the Municipality for those of his clients.
No doubt having regard to the best traditions of the profession very few legal practitioners would stoop to such tactics, but the Legislature in its wisdom thought it desirable to eliminate any possibility of a conflict between interest and duty and aimed at achieving this object or purpose by prescribing the requisite disqualification.
The classification thus would certainly have a reasonable relation to the object or purpose sought to be achieved.
It was however urged that besides this category there are also other categories where there would be a possibility of conflict between interest and duty and that in so far as they were not covered by the disqualifications prescribed by section 16(1) of the Act the provision disqualifying the category to which the appellant belonged was discriminatory.
It was particularly pointed out that a client who had a litigation against the Municipality was not prevented from standing as a candidate for election whereas the legal practitioner who held a brief against the Municipality was disqualified, though the ban against both these categories could be justified on ground of avoidance of conflict between interest and duty.
The simple answer to this contention is that legislation enacted for the achievement of a particular object or purpose need not be all embracing.
It is for the Legislature to determine what categories it would embrace within the scope of legislation and merely because certain categories which would stand on the same footing as those which are covered by the legislation are left out would not render legislation which has been enacted in any manner discriminatory and violative of the fundamental right guaranteed by article 14 of the Constitution.
The right of the appellant to practise the profession of law guaranteed by article 19(1) (g) cannot be said to have been violated, because in laying down the disqualification in section 16(1) (ix) of the Act the Legislature does not prevent him from practising his profession of law but it only lays down that if he wants 1011 to stand as a candidate for election he shall not either be employed as a paid legal practitioner on behalf of the municipality or act as a legal practitioner against the Municipality.
There is no fundamental right in any person to stand as a candidate for election to the Municipality.
The only fundamental right which is guaranteed is that of practising any profession or carrying on any occupation, trade or business.
There is no violation of the latter right in prescribing the disqualification of the type enacted in section 16(1) (ix) of the Act.
If he wants to stand as a candidate for election it is but proper that he should divest himself of his paid brief on behalf of the Municipality or the brief against the Municipality in which event there will be certainly no bar to his candidature.
Even if it be taken as a restriction on his right to practice his profession of law, such restriction would be a reasonable one and well within the ambit of article 19 clause 5.
Such restriction would be a reasonable one to impose in the interests of the general public for the preservation of purity in public life.
We therefore see no substance in this contention of the appellant also.
The appeal accordingly fails and stands dismissed with costs.
Appeal dismissed.

summary/full:
The provisions of section 16(1)(x) of the Orissa Municipal Act, 1950, by which a paid legal practitioner on behalf of or against the Municipality is disqualified for election to a seat in such Municipality do not violate the fundamental rights guaranteed to such legal practitioner under article 14 or under article 19(1)(g) of the Constitution of India.
The Orissa Municipal Act, 1950, having received the Gover nor 's assent on November 7, 1950, all preliminary steps specified in section 1(5) of the Act which were taken for the purpose of a Municipal election after such assent are valid even though the Act itself had not then come into force in terms of section 1(3).
Accordingly a nomination filed on March 15, 1951, was validly subjected to the test of disqualification contained in section 16(1) (x) of the Act and the rejection of such nomination on March 25, 1951, was not defective though the Act came into force on April 15, 1951, in the area to which the rejected nomination relates.
Section 23 of the Orissa General Clauses Act, 1937, does not authorise the making of rules or bye laws, which are to come into (1) ; 1005 operation before the commencement of the Act, but they will be valid under the express provision of section 1(5).


judgement:
iminal Appeals Nos. 205 and 206 of 1968.
Appeal from the judgment and order dated February 21 1968 of the Kerala High Court in Criminal Revision Petitions Nos. 415 and 416 of 1967.
D.P. Singh and M. R. K. Pillai, for the appellants (in both the appeals).
712 G.B. Pai, P. N. Tiwari, O. C. Mathur and Bhajar Ram Rakhiani, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Sikri, C.J.
These appeals are on certificates granted by the High Court of Kerala.
The only question in these appeals is whether the workmen doing work in the premises of the res pondent are workers within the meaning of Sec.
2(1) of the .
Section 2(1) of the reads as follows "Worker ' means a person employed, directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process;" The respondent was convicted under Sec.
92 of the for using a building as a factory without obtaining the previous permission in writing of the Chief Inspector of Factories, for failing to apply for registration and grant of licence for the factory and for failing to maintain a muster roll of the workers employed in the factory in one case, and for failing to give attendance cards to every person employed in the factory in the, other case.
The respondent was sentenced to pay a fine of Rs. 20/ in each case.
He was also directed under Sec.102 of the to rectify the defects within a specified period.
The respondent filed a Revision Petition in the High Court.
The High Court held that the work that was being carried out in the premises of the respondent amounted to manufacturing Process.
This question has not been debated before us.
The High Court further held that the workmen working in the premises of the respondent were not 'workers ' within the meaning of Sec. 2 (1) of the .
It is this part of the decision that has been ' challenged in appeal by the State of Kerala.
The nature of the work done was described in a letter pro duced by the prosecution.
This letter is not printed on the record but the High Court summaries the document as follows "This document shows that as and when catches of prawns are made, a consignment of prawns is brought to the premises in a lorry at any time of the day or the night, that the women and girls of the locality, who form a "casual, heterogeneous, miscellaneous and irre gular group" come at their convenience and do the peeling, washing etc., at piece rates; and that there are no specified hours of work, nor is there any control by the Petitioner over the irregularity and attendance or of the nature, manner or quantum of their work.
The same workers after finishing the work in the premises of the petitioner, go to other similar premises in the locality where other lorry loads of prawns are taken.
In other words, if more prawns are caught at a particular time, they are brought and distributed among several premises are brought and distributed among several premises like the Petitioner 's and the local women and girls collect at the several premises and do the work at piece rates.
The same workers do not go to the same premises on different occasions, and the owners of the several.
premises do not have any control over the manner or quantum of work these women and girls do ' The rates of remuneration naturally depend upon the quantity of prawns available, the number of women and girls that come to do the work , the hour of the day or the night when the catches arrive, etc.
Sometimes, for days no work is done in the premises.
" The High Court after referring to the decisions of this Court in Dharangadhara Chemical Works Ltd. V. State of Saurashtra(1), a decision under the Industrial Disputes Act, Chintaman Rao & Another V. The State of Madhya Pradesh(1) and.
State of Kerala vs V. M. Patel(1).
decisions under the , held "It will be apparent that the women and girls who assemble and do the work when a catch of prawns is brought to the premises of the petitioner are not 'workers ' coming within the definition of the .
The Petitioner does not insist a,% to who should do the job or how it should be done; he only wants the work to be done for the agreed remuneration without spoiling the prawns i.e. within a short time.
(A quantity of prawns is taken for peeling, cleaning, washing etc.
by a particular individual for a fixed remuneration, and that individual, with the assistance of others whom she employs, finishes the job as quickly as possible. " The learned Counsel for the appellant contended that it was erroneous on the part of the High Court to have applied the (1) ; (2) ; (3) [1960] K.L.J. 1524 714 decision of this Court in Dharangadhara Chemical Works Ltd. Disputes Act, to the definition of 'worker ' in the .
He fairly pointed out that another Division Bench applied the same test in a dispute arising under the .
(see Birdhkhand Sharma vs First Civil Judge Nagpur) (2) .
But, nevertheless, he urged that we should refer the case to a larger Bench.
We see nothing wrong in the decision of this Court in Chintaman Rao & Another vs The State of Madhya Pradesh(3).
On the contrary, we are of the opinion that the case has been rightly decided.
The scheme of the clearly shows that the test adopted by this Court is the correct one.
It would be impossible to apply many provisions of the to the 'workers ' of the type we are concerned with here if we were to hold that they were workers ' within the definition of the .
We are really surprised that the High Court certified this case to be a fit case for appeal to this Court.
After this Court had laid down a test to be applied for determining who were 'workers ' within the meaning of the , the High Court should have treated the question of principle as no longer open.
The High Court had certified the case to be fit for appeal as it felt that the question involved is of general importance in the State.
If the question of principle has been settled by this Court, the application of the principle to the facts of a particular case does not make the question a fit one for the Supreme Court within Article 134(1)(c) of the Constitution.
In the result the appeals fail and are dismissed.
R K. P. section Appeals dismissed.

dataset_name: IN-Abs

summary/full:
After catches of prawns made from time to time were brought to the respondent 's premises, a casual and irregular group of women and girls of the locality came at their convenience to do the peeling, washing, etc.
at piece rates.
There were no.specified hours of work and after finishing their work, the workers would go on to do similar work at other premises in the locality.
The respondent 's conviction under section 92 of the FactoriesAct for, inter alia, using his premises as a factory without obtainingregistration, etc.
was set aside in revision by the High Court on the viewthat the workers in question were not "workers" within the meaning of the .
On appeal to this Court, HELD:The High Court had rightly decided that the workers in the present case were not "workers" covered by section 2(1) of the .
[714 C] Dharangadhara Chemical Works Ltd. vs State of Saurashtra, A.I.R. , Chintaman Rao & Another vs The State of Madhya Pradesh, ; ; State of Kerala vs V. M. Patel, [1960] K. L. J. 1524 and Birdhichand Sharma vs First Civil Judge, Nagpur; , ; applied.
Obiter : After this Court had laid down a test to be applied for determining who were "workers" within the meaning of the , the High Court should have treated the question of principle as no longer open.
The High Court had certified the case to be fit for appeal as it felt that the question involved is of general importance in the State.
If the question of principle has been settled by this Court, the application of the principle to the facts of a particular case does not make the question a fit one for the Supreme Court within Article 134(1) (c) of the Constitution.
[714 D]


judgement:
Appeal No. 2128 of 1969.
Appeal by special leave from the Award dated July 19, 1969 of the Ninth Industrial Tribunal, West Bengal, Calcutta in case No. VIII 396 of 1968.
C. K. Daphtarv.
Santosh Chatterjee and D. N. Mukherjee, for the appellant.
section C. Gupta, Manju Gupta and section C. Agarwala, for the respondents.
The Judgment of the Court was delivered by Bhargava, J.
The appellant, Messrs Alloy Steel Project, is an undertaking owned, controlled and managed by a Government Company, viz., Messrs Hindustan Steel Ltd. Alloy Steel Project was started in the year 1961 and it went into production in the year 1964 65.
No profit was earned at least right up to the year '1967 68.
The workmen, however, claimed bonus at the minimum rate prescribed under the Payment of Bonus Act No. 21 of 1965 (hereinafter referred to as "the Act") in respect of the year 1965 631 1966 on ' the plea that this Alloy Steel Project was a / part of the Hindustan Steel Ltd. and could not be treated as a new establishment for purposes of section 16 of the Act.
Hindustan Steel Ltd. was itself an establishment which had been in existence for a long period and had been even earning profits, so that exemption could not be granted to this Company in respect of payment of bonus under section 16 of the Act.
This claim of the workmen was resisted, by the Company on the plea that Alloy Steel Project was a separate establishment in respect of which separate balance sheets and profit and loss accounts were maintained, so that no bonus was payable until either this Project itself earned profits, or from the sixth accounting year following the year 1964 65 when this Project went into production.
The dispute between the work men and the Company.
could not be resolved amicably and, consequently, a reference was made under the which came up before the Ninth Industrial Tribunal, West Bengal.
The Tribunal held that Alloy Steel Project could not be treated as a separate establishment because, under the Act, a Company is itself an establishment, so that all units of a Company like Hindustan Steel Ltd. will constitute one establishment.
Since this Project had not been earning any profits the Tribunal directed payment of bonus at the minimum rate of 4 per cent of wages prescribed by the Act.
Aggrieved by this award of the Tribunal, the Company has come up in this appeal to this Court by special leave, though the name of the appellant is shown as Alloy Steel Project, because it was under this name that the reference was dealt with by the Tribunal.
The main basis of the decision of the Tribunal is that 'the word establishment ' has been used in this Act to indicate a "Company" as called in common parlance.
" It was on this view that the Tribunal further Proceeded to consider whether this Alloy Steel Project could be held to be an establishment separate from Hindustan Steel Ltd., or it had to be treated as a part of the parent establishment, viz., Hindustan Steel Ltd. In this approach, it is clear that the Tribunal committed an obvious error, as it ignored the indications which are manifest from the language used in the Act.
In section 2, sub section (15) and (16), establishments have been divided into two classes and their meaning has been defined.
In clause (16), "establishment in public sector ' is defined as meaning an establishment owned, controlled or managed by (a) a Government company as defined in section 617 of the ; (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by 632 (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or ' the Reserve Bank of India.
In clause (15) of section 2, "establishment in private sector" is defined to mean any establishment other than an establishment in public sector.
Thus, between these two clauses, all establishments are covered.
If an establishment is in public sector, it is covered by the definition in clause (16).
If the establishment is not in public sector, it will be covered by the definition of "establishment in private sector" in clause (15).
The significant words are those contained in clause (16) which show that an establishment in a public sector hag to be owned, controlled or managed by a Government company, or by a corporation of the nature described in that clause.
Obviously, therefore, an establishment in a private sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corpora tion of the nature described in clause (16).
In this view, an establishment cannot be identified with a company.
It would be absurd to say that a company is owned, controlled or managed by a Government company or a corporation.
Obviously, the word "establishment" is intended to indicate something different from a company as defined in the .
This is further clarify by the provisions of sub section
(3) of section I which lays down the applicability of the Act.
The Act has been made applicable to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year.
Supposing a company has a factory in one premises and has another workshop entirely distinct and separate from that factory, in which the number of persons employed is less than 20.
The Act itself will apply to the factory, but will not apply to the other establishment in which the number of employees is less than 20.
This applicability of the Act will be independent of the other provisions of the Act.
Learned counsel for the respondent workmen relied on section 3 of the Act to urge that even the establishment employing less than 20 persons will be a part of the parent establishment consisting of the factory.
Section 3 is as follows : "3.
Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act 633.
Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
" It is to be noted that the principal part of section 3 lays down that different departments or undertakings or branches of an establishment are to be treated as part of the same establishment only for the purpose of computation of bonus under the Act.
They cannot be treated as part of one establishment for purposes of subsection (3) of section 1 of the Act.
In fact, section 3 cannot be, resorted to at all when the Act itself is inapplicable in view of the provision contained in section 1, sub section
It is, thus, quite clear that the Tribunal went entirely wrong in holding that simply because Alloy Steel Project is owned, controlled and managed by Hindustan Steel Ltd., it has to be treated as a part of Hindustan Steel Ltd. which is itself an establishment.
Hindustan Steel Ltd. cannot be described as an establishment.
The facts appearing on the record show that Hindustan Steel Ltd. has a number of. establishments.
These include Alloy Steel Project besides the Head Office, Rourkela Steel Plant, Bhilai Steel Plant, Durgapur Steel Plant, Coal Washeries Project and Bokaro Steel Project.
The Company, Hindustan Steel Ltd., cannot be equated with any one of these units.
They are all separate undertakings, departments or branches owned, controlled and managed by one single Company and, consequently,.
the point raised has to be decided on the basis whether, under the proviso to section 3 the Alloy Steel Project is to be treated as a separate establishment, or is to be treated as part of the main establishment owned by Hindustan Steel Ltd. Learned counsel for the respondent workmen, however, advanced a new argument which was not put forward before the Tribunal.
His submission was that, if an establishment of a Company consists of a number of departments, undertakings or branches, the principal part of section 3 will apply and all such departments, undertakings or branches must be treated as parts of one single establishment for purposes of computation of bonus under the Act, but the proviso to section 3 will not apply in such a case.
According to him, the proviso to section 3 will apply to establishments consisting of different departments, undertakings or branches which are owned, controlled or managed by persons other 634 than companies.
This argument was based on the reasoning that, in order to calculate available surplus for distribution of bonus in the case of a company the Act lays down in section, 6 (d) read with the Third Schedule that the deductions to be made from net _profits will also include dividends payable on , preference share ,capital, and 8.5 per cent of its paid up equity share, capital as at the commencement of the accounting year.
This provision cannot be given effect to in respect of separate units of a Company, .because the paid up capital or the preference share capital is not ,allocated between different units.
In the case of the present Company, viz., Hindustan Steel Ltd., the entire paid up capital is shown in the accounts of the Head Office.
The money needed for working of the various units, including the Alloy Steel Project, is shown as remittance received from the Head Office and not as.
paid up capital of the Alloy Steel Project etc.
The result is that, if Alloy :Steel Project or other units of the Hindustan Steel Ltd. are treated as separate establishments and available surplus is calculated separately for each unit, there will be no deduction @ 8.5 per cent ,of the paid up equity share capital as envisaged by section, 6(d) ,and the Third Schedule of the Act.
We do not think that there is any force in this argument.
First, it would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments, undertakings and "branches of a company, while it will not do so in the proviso to 'the same section.
Such different meanings in the same section in respect of the same words or expression cannot be accepted.
Secondly, it seems to us that no difficulty of the nature pointed out by learned counsel can arise in calculating available surplus. 'Wherever the Act lays down that certain deductions are to be made, it is obvious that those deductions will only be effective if, in fact, circumstances do exist justifying such deductions.
In the 'Third Schedule itself, the first ' deduction envisaged is dividend payable on preference share capital.
A number of companies do not have preference share capital.
In such cases, clearly, no ,occasion would arise for making such a deduction.
Very similar is the position with regard to certain other deductions which are permissible under the Second Schedule which principally lays down the method of calculation of available surplus.
There is, therefore, no reason for interpreting the proviso to section 3 in the manner urged by learned counsel simply because, in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5 per cent of the paid up equity share capital.
In the present case, there is very clear evidence that, though the Company, Hindustan Steel Ltd., has a number of undertakings, 635 Separate accounts are kept for each separate undertaking.
The annual reports for three years were produced before the Tribunal.
They clearly indicate that separate balance sheet was prepared for each unit and separate profit and loss account was worked out for each unit, except that, for the Head Office, though a separate balance sheet was prepared, the profit and loss was worked out on the basis of the consolidated accounts.
The Tribunal, in support of its view that Alloy Steel Project is a part of the establishment constituted by the Company, Hindustan Steel Ltd., relied on the circumstance that a consolidated balance sheet is prepared for the Company in respect of all its units and after such consolidation, profit and loss is also worked out for all the establishments together so as to find out the actual profit and loss earned or incurred by the Company itself.
From this, the tribunal sought to infer that there were no separate accounts in respect of each unit as are required to be maintained before they can be treated as separate establishments under the proviso to section 3.
The Tribunal has obviously gone wrong in ignoring the fact that separate balance sheets and profit and loss accounts are in fact maintained for each separate unit and the consolidated accounts are prepared only for the purpose of complying with the requirements of the companies Act.
The does lay down the requirement that a consolidated balance sheet and profit and loss account for all the units of the Company must be prepared and, for, that purpose, quarterly statements of accounts have to be sent by each unit to the Head Office.
There is, however, no provision even in the containing a prohibition to maintenance of separate balance sheets and separate profit and loss statements for each unit for purposes of the Act.
That accounts are separately maintained for each unit is not only established from the various annual reports filed before the Tribunal and the evidence of, the Company 's witness Umapada Chakraborty, but is also admitted by Suprakash Kanjilal, the only witness examined on behalf of the workmen.
The latter also admitted that separate bonus calculation is made in respect of each unit and bonus was declared separately in each unit.
No bonus was, however, declared in respect of the Alloy Steel Project.
That declaration was not made because of the claim that Alloy Steel Project was exempt from payment of bonus under section 16 of the Act.
Section 16 runs as follows: "16.
(1) Where an establishment is newly set up, whether before or after the commencement of this Act, ,the employees of such establishment shall be entitled to be paid bonus under this Act only (a) from the accounting year in which the employer derives profit from such establishment; or 918Sup CI/71 636 (b) from the sixth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, whichever is earlier Provided that in the case of any such establishment the employees thereof shall not, save as otherwise provided in section 33, be entitled to be paid bonus under this Act in respect of any accounting year prior to the accounting year commencing on any day in the year 1964.
Explanation I. For the purpose of this section, an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management, name or ownership.
Explanation II.
For the purpose of clause (a), an employer shall not be deemed to have derived profit in any accounting year unless (a) he has made provision for that year 's depreciation to which he is entitled under the Income tax Act or, as the case may be, under the agricultural income tax law; and (b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits.
Explanation III.
For the purpose of clause (b), sale of the goods produced or manufactured during the course of the trial run of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority.
(2) The provisions of sub section (1) shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments 6 3 7 Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up, at different periods has, before the 29th May, 1965, been paying bonus_to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of consolidated profits computed as aforesaid.
" Sub section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years, following the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative, up, to the year when the new establishment results in profit, whichever is earlier.
If the Alloy Steel Project is treated as an establishment newly set up for purposes of section 16(1), the exemption claimed would be fully justified.
Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments, undertakings or branches set up by existing establishments.
Consequently, even if Alloy Steel Project is treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd., the exemption under section 16(1) would be avail able to it.
The proviso to sub section
(2) of section 16 also does not stand in the way of this claim, because there is no evidence at all that in any year, after Alloy Steel Project was set up bonus was paid to the employees of all the units on the basis of consolidated profits of all such units.
The only exception has been in the case, of workmen of the Head Office where no separate profit and loss was worked out and the bonus was paid on the basis of the consolidated Profits of all the units belonging to Hindustan Steel Ltd. That, of course, was fully justified, because the Head Office was working for all the units, though as a separate unit.
It was in the accounts of the Head Office that the entire paid up capital was credited and advances were made by the Head Office to the various units out of this capital or out of loans taken by the Head Office.
In the case of the Head Office, therefore, the calculation of bonus on the basis of consolidated accounts was Justified; but that does not affect the principle to be applied to the separate units for which separate accounts, separate balance sheets and separate profit and loss statements are maintained.
The proviso to sub 638 section (2) of section 16 only comes in the way it bonus is paid in any year to the employees of all the units on the basis of consolidated accounts.
That has never been done in the case of the Hindustan Steel Ltd. Consequently, the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961.
It went into production in 1964 65 and did not, earn any profits at all till 1967 68.
Therefore, no bonus was payable, to, the workmen of this undertaking for the year 1965 66 in view ,of the provisions of section 16(1) of the Act.
The appeal is allowed, the order of the Tribunal is set aside, and the reference of the dispute is answered accordingly.
In the circumstances of this case, we direct parties to bear their own ,costs of the appeal.
G.C. Appeal allowed.

summary/full:
The Alloy Steel Project was an undertaking controlled and managed by a government company, namely, the Hindustan Steel Ltd. Alloy Steel was started in 1961 and went into production in 1964 65.
No profit was earned up to 1967 68.
The workmen claimed bonus at the minimum rate prescribed under the Payment of Bonus Act, 21 of 1965 in respect of the year 1965 66.
On behalf of the Alloy Steel Project exemption from payment of bonus was claimed under section 16(1) of the Act on the ground that it was a new establishment and had not made profits.
The Industrial Tribunal to which reference was made held that Alloy Steel could not be treated as a separate establishment because under the Act a company is itself an establishment so that all units of a company like Hindustan Steel Ltd. will constitute one establishment.
However, since Alloy Steel had not been earning profits the Tribunal directed payment of bonus at the minimum rate of 4% of wages as prescribed by the Act.
Aggrieved by this Award of the Tribunal the company appealed.
HELD : The Tribunal erred in holding the word 'establishment ' to be synonymous with 'company '.
In doing so it ignored the indications which are manifest from the language of the Act.
The significant words are those contained in section 2(16) which show that an establishment in a public sector has to be owned, controlled or managed by a Government company or by a corporation of the nature described in the clause.
Obviously therefore an 'establishment in private sector ' defined in section 2(15) to mean an establishment not in the public sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corporation of the nature described in section 2(16).
In this view an establishment cannot be identified with a company.
It would be absurd to say that a company is owned, controlled or managed by a Government company or corporation Obviously, the word 'establishment ' is intended to indicate something different from a company as defined in the Companies Act.
[631 F 632 D] (ii) Alloy Steel was a separate establishment by virtue of the proviso to section 3 of the Act because for each of the undertakings of Hindustan Steel Ltd. including Alloy Steel separate accounts were kept though for the purpose of compliance with the provisions of the Companies Act a consolidated balance sheet and profit and loss account were also prepared.
There was no substance in the contention that the proviso to section 3 applies only to departments undertaking or branches controlled and managed by persons 630 other than companies.
It would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments undertakings and branches of a company, while it will not do so in the proviso to the same section.
There is no reason for interpreting the proviso to section 3 in this manner simply because in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5% of the paid up equity share capital.
[635 C D; 633 G 634 H] (iii) Sub Section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years following ,the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative; upto the year when the new establishment results in profit, whichever is earlier.
If the Alloy Steel Project was treated as an establishment newly set up for the purposes of section 16(1) the exemption claimed would be fully justified.
Section 16(2) of the Act makes it clear that the provisions of sub section
(1) are to apply even to new departments, undertakings, or branches set up by existing establishment.
Consequently, even if Alloy Steel Project was treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd. the exemption under section 16(1) would be available to it.
[637 D E] The proviso to Sub section
(2) of section 16 only comes in the way if bonus is paid in any year to the employees of all the units on the basis of the consolidated accounts.
That had never been done in the case of the Hindustan Steel Ltd. Consequently the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961.
, It went into production in 1964 65 and did not earn any profits at all till 1967 68.
Therefore no bonus was payable to the workmen of this undertaking for the year 1965 66 in view of the provisions of section 16(1) of the Act.
[638 A B]


judgement:
Appeal No. 2338 of 1968.
Appeal from the judgment and order dated March 31, 1965 of the Patna High Court in Misc.
Judicial Case No. 1207 of 1964.
Jagadish Swarup, Solicitor General and B. K. P. Sinha, for the appellants.
B. C. Ghosh, P. K. Chatterjee and Rathin Das, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
The question in this appeal is, whether the order of suspension passed on the respondent on July 31, 1964 was properly struck down by the Patna High Court.
The facts are as follows.
The respondent is a member of the Indian Police Service appointed on 25th January, 1937 and at the material time he was holding the substantive rank of Deputy Superintendent of Police in Bihar.
In June 1962 he was posted at Ranchi.
He was transferred to Patna and appointed as Special Officer, Political, General and Transport Department on July 23, 1964.
The order of which the validity is in question ran as follows : "Whereas serious allegations of corruption and malpractices have been made against Shri T. N. Ghosh, 1. P., Deputy inspector General of Police, Southern Range, Ranchi; And whereas the said Shri T. N. Ghosh is also reported to have contravened certain provisions of the All India Services (Conduct) Rules, 1954; And whereas the enquiries made by the Government of Bihar ;Into these allegations have revealed that there is a prima facie case made out against him; And whereas disciplinary proceedings in respect of these matters are contemplated against the said Shri T. N. Ghosh; 717 And whereas the Government of India, after carefully consi dering the available material, and having regard to the nature of the charges and circumstances of the case, are satisfied that it is necessary and desirable to place the said Shri T. N. Ghosh under suspension Now, therefore, the Government of India hereby place the said Shri T., N. Ghosh, under suspension with immediate effect, until further orders, and direct that the said Shri T. N. Ghosh shall, during the period of suspension be paid such subsistence allowance as is admissible under the rules.
By order and in the name of the President of India.
Sd./ K. Sivaraj Deputy Secretary to the Government of India.
" The respondent addressed a memorial to the Secretary to the Government of India, Ministry of Home Affairs on 24th August 1964 complaining against the above order on the ground that it was not sanctioned by the rules i.e. All India Service (Conduct) Rules, 1954.
In particular his grievance was that as there were only allegations against him which had not crystallised into charges an order of suspension could not be made before departmental proceedings were actually started and while they were merely contemplated.
He also asked for communication of the nature of the departmental proceedings which had been started against him within 14 days with a request that the order of suspension be withdrawn in default thereof.
It appears that there was no response to this.
The respondent filed his writ petition on September 14, 1964 praying for the quashing of the order particularly on the above grounds raised in his memorandum.
A counter affidavit to the petition was filed on behalf of the Chief Secretary to the Government of Bihar who was the third respondent in the petition.
The averments in the said affidavit were that a report had been made to the Central Government against the petitioner on July 6, 1964 and having regard to the activities of the petitioner it had become necessary to remove him from the field of activities and as such he had been transferred to, Patna after being relieved of his post on July 1 3, 1964.
It was said further that even before the receipt of the suspension order the petitioner had been actually questioned by section P. Verma, the then Inspector General of Police, Bihar as early as February 8, 1964 apprising the petitioner that his activities had attracted the attention of Government.
It was admitted that departmental enquiry and investigation into the conduct of the petitioner were still going on and as such charges had not been framed against 718 him.
Finally, it was said that the order was not by way of punishment and had been passed pending departmental enquiry into his conduct.
Another counter affidavit was filed on behalf of the Government of India and the Deputy Secretary to the Government of India, respondents 1 and 2 in the petition wherein substantially the same averments were made as in the counter affidavit on behalf of respondent No. 3.
A large number of points were canvassed before the High Court which examined the provisions of different sets of rules and relying particularly on the difference in wording of rule 12 of the Central Civil Services Rules which empowered the appointing authority to place an officer under suspension inter alia, where a disciplinary proceeding against him was contemplated or was pending and rule 7 of the All India Services Rules (quoted in extensor hereinafter) it came to the conclusion that the order of suspension was not proper.
Further, according to one of the Judges of that Court: "To allow a member of that (the AR India) service to be placed under suspension without the formal proceeding in started may cause humiliation to an officer of such high rank without any justification whatsoever.
" According to the other learned Judge who took substantially the same view the order of suspension only indicated that disciplinary proceedings against the petitioner were in contemplation and this was not provided for in rule 7.
In our view it would not be proper to interpret the provisions of the All India Service (Discipline and Appeal) Rules 1955 by reference to the provisions of other rules even if they were made by or under the authority of the President of India.
The All India Services (Discipline and Appeal) Rules 1955 as they stood at the relevant time were a self contained code and we have to examine the provisions thereof to find out whether the order passed on the petitioner was justified.
These rules were promulgated in exercise of the powers conferred by sub section
( 1 ) of section 3 of the All India Services Act 1951 by the Central Government after consultation with the Governments of the States concerned.
They were applicable to members of the Indian Administrative Service and those of the Indian Police Service.
3 of the Rules provided for penalties which might for good and sufficient reasons be imposed on a member of the service.
Suspension is not a penalty covered by this clause.
Cl. 4 indicated the authorities who would institute proceedings and impose penalty against mem 719 bers of the Services.
Cl. 5 which generally dealt with the procedure for imposing penalties provided by the first three sub clauses as follows "(1) Without prejudice to the provisions of the Public Servants Inquiry Act, 1850, no order shall be passed imposing any of the penalties specified in rule 3 on a member of the Service unless he has been informed in writing of the grounds on which it is proposed to take action and has been afforded an adequate opportunity of defending hims elf.
(2) The grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the member of the Service charged together with a statement of the allegations on which each charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case.
(3) The member of the Service shall be required within such time as may be considered by the Government reasonably adequate in the circumstances of the case, to put in a written statement of his defence and to state whether he desires to be heard in person.
(4) to (10) It was only after the written statement was received from the member that the Government might, if it considered necessary, appoint a Board of Enquiry or an Enquiry Officer to enquire into the charges framed against him.
Other sub clauses of this rule laid down generally the procedure which was to be adopted in the enquiry.
Rule 7 provided as follows : "Suspension during disciplinary proceedings. (1) If having regard to the nature of the charges and the circumstances in any case the Government which initiates any disciplinary proceedings is satisfied it is necessary or desirable to place under suspend the member of the Service against whom such proceedings are started that Government may (a) if the member of the Service is serving under it pass an order placing him under suspension, or (b)if the member of the Service is serving under another Government, request that Government to place him under suspension, pending the conclusion of the inquiry and the, passing of the final order in the case 100SupCI/71 7 2 0 Provided that in cases where there is a difference of opinion between two State Governments, the mater shall be referred to the Central Government whose decision thereon shall be final.
(2) A member of the Service who is detained in official custody whether on a criminal charge or otherwise, for a period longer than forty eight hours, shall be deemed to have been suspended by the Government concerned under this rule.
(3) A member of the Service in respect of or against whom an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge. ' if the charge is connected with his position as a Govt.
servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude.
Under rule 8 a member of a Service who was placed under sus pension was to be entitled to receive payment from the Government suspending his subsistence allowance as specified therein.
The crucial question in this case is, whether suspension of a member of the Service can only be ordered after definite charges have been communicated to him in terms of sub cl.
(2) of rule 5 or whether the Government is entitled to place an officer under suspension even before that stage has been reached after a preliminary investigation has been made into the conduct of the officer concerned following allegations of corrupt or malpractice levelled against him.
To determine this it is necessary to find out the object of placing a Government officer under "suspension" in terms of the said rule. 'Suspension ' according to the Oxford Dictionary means "the :action of suspending or condition of being suspended; the action of debarring or state of being debarred, esp.
for a time, from a function or privilege; temporary deprivation of one 's office or position".
A master can, subject to the contract of service, ask his servant not to render any service without assigning any reason but this would not be by way of punishment and the master would have to pay the servant his full wages or remuneration in such an eventuality.
As Halsbury puts it : "Whether or not the master has power to suspend a servant during the duration of the contract of service depends upon the construction of the particular contract.
In the absence of any express or implied term to the contrary, the master cannot punish a servant for alleg 72 1 ed misconduct by suspending him from employment and stopping his wages for the period of the suspension.
" (See Halsbury 's Laws of England, Third Edition, Vol.
25, article 989 page 518).
Rule 7 of the Service Rules expressly provides for suspending of a member of the Service for the purpose of disciplinary proceedings.
When serious allegations of misconduct are imputed against a member of a Service normally it would not be desirable to allow him to continue in the post where he was functioning.
If the disciplinary authority takes note of such allegations and is of opinion after some preliminary enquiries that the circumstances of the case justify further investigation to be made before definite charges can be, framed, it would not be improper to remove the officer concerned from the sphere of his activity inasmuch as it may be necessary to find out facts from people working under him or look into papers which are in his custody and it would be embarrassing and inopportune both for the officer concerned as well as to those whose duty it was to make the enquiry to do so while the officer was present at the spot.
Such a situation can be avoided either by transferring the officer to some other place or by temporarily putting him out of, action by making an order of suspension.
Government may rightly take the view that an officer against whom serious imputations are made should not be allowed to function anywhere before the matter has been finally set at rest after proper scrutiny and holding of departmental proceedings.
Rule 7 is aimed at taking the latter course of conduct.
Ordinarily when serious imputitions are made against the conduct of an officer the disciplinary authority cannot immediately draw up the charges : it may be that the Imputations are false or con cocted or gross exaggerations of trivial irregularities.
A considerable time may elapse between the receipt of imputations against an officer and a definite conclusion by a superior authority that the circumstances are such that definite charges can be levelled against the officer.
Whether it is necessary or desirable to place the officer under suspension even before definite charges have been framed would depend upon the circumstances of the case and the view which is taken by the Government concerned.
There would be nothing improper per se if the rules were to provide for suspension even before definite charges of misconduct had been communicated to the officer concerned.
The question is whether the language of rule 7 is so correlated to that of rule 5 as to lead us to hold that the word "charges" in sub cl.
(1) of rule.
7 must mean a definite charge as mentioned in subcl.
(2) of r. 5.
It may be that even a case where definite charges have been raised against an officer he may satisfactorily explain the circumstances and the grounds alleged against him in his 722 written statement.
It is also possible that after.
the enquiry is conducted it is found that the charges are all baseless.
In principle we can see no difference between the position of an officer against whom definite charges have been framed to which he is required to put in his written statement and a situation where on receipt of allegations of grave misconduct against him the Government is, of opinion that it would not be proper to allow the officer concerned to function in the ordinary way.
The matter is however not res integra and there is a series of decisions of this Court which throw considerable light on the power of a master including a Government to suspend a servant or an officer under rules of service or even de hors such rules.
The law of master and servant including Government servants with regard to suspension of an employee was discussed at some length in The Management of Hotel Imperial V. Hotel Workers ' Union(1).
However rules of service of Government officers did not fall for consideration there.
Champak Lal Chimanlal Shah vs The Union of India(1) was a case where a temporary Government servant 's services were terminated.
The case shows, as is well known, that even More a formal departmental enquiry is launched a preliminary enquiry is usually held to find out whether a prima facie case is made out against a Government servant.
This preliminary enquiry is directed to the collection of facts in regard to the work and conduct of a Government servant in which he may or may not be associated so that the authority concern may decide whether or not to subject the servant concerned to the enquiry under article 311 for inflicting one of the three major punishments mentioned therein and such a preliminary enquiry may even be held ex parte.
In R. P. Kapur vs Union of India & another(3) the general principles governing a master and servant were discussed in some detail and it was said "If there is no express term in the contract relating to suspension and payment during such suspension or if there is no statutory provision in any law or rule, the employee is entitled to his, full remuneration for the period of his interim suspension; on the other hand if there is a term in this respect in the contract or there is a provision in the statute or the rules framed thereunder providing for the scale, of payment during suspension, the payment would be in accordance there with.
On general principles therefore the authority entitled to appoint a public servant would be entitled to suspend him pending a departmental enquiry (1) ; , 482.
(2) (3) ; , 445.
72 3 into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him.
" There is however a direct authority of this Court in section Govinda Menon vs The Union of India(1).
The appellant before this Court was a member of the Indian Administrative Service.
He was the First Member of the Board of Revenue, Kerala State and was holding the post of Commissioner of Hindu Religious and Charitable Endowments.
On the basis of certain _ complaints containing allegations of misconduct against the appellant in the discharge of his duties as such Commissioner the Kerala Government instituted certain preliminary enquiries and thereafter started disciplinary proceedings against him and also placed him under suspension under rule 7 of the All India Services (Discipline and Appeal) Rules.
One of the grounds urged by the appellant was that the order of suspension which was dated March 8, 1963 was not in compliance with rule 7 inasmuch as definite charges were framed against him only on 6th June, 1963.
On the basis of rule 5(2) it was argued that the word "charges" which occurred in 'this rule and in rule 7 should be given the same meaning and no ,order of suspension could be passed under rule 7 before the ,charges in terms of r. 5(2) were tramed against him.
This was turned down by this Court observing (at p. 582) : "Rule 5(2) prescribes that the grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges.
The framing of the charge under Rule 5(2) is necessary to enable the member of the Service to meet the case against him.
The language of rule 7(1) is however different and that rule provides that the Government may place a member of the Service under suspension "having regard to the nature of the charge/charges and the circumstances in any case" if the Government is satisfied that it is necessary to place him under suspension.
In view of the difference of language in rule 5(2) and rule 7 we are of the opinion that.
the word charges ' in rule 7(1) should be given a wider meaning as denoting the accusation or imputation against the member of the Service.
" It is worthy of note, that in the order of suspension it was stated as follows "The Government have received several petitions containing serious allegations of official misconduct (1) [1967]2 S.C.R. 565. 724 against Shri section Govinda Menon .
Prelimi nary enquiries caused to be conducted into the allegations have shown prima facie that the officer is guilty of corruption.
The Kerala High Court has also occasion to comment on the conduct of the officer in their judgment in O.P. 2306 of 1962 delivered on, 12th February 1963. .
The judgment in the above case and the preliminary report of the X Branch police have disclosed the following grave charges of serious irregularity and official misconduct on the part of the accused officer The detailed enquiry into 'the charges by the XBranch is in progress.
The evidence in the case has to be collected from a large number of officers who are.
subordinate to the accused officer in his capacity as First Member of the Board of Revenue.
In the interest of the proper conduct of the enquiry it is necessary that the officer should not be allowed to continue in that post.
Having regard to the nature of the charges against the officer and the circumstances the proper course would be to place him under suspension.
Shri section Govinda Menon I.A.S. . is therefore placed under suspension under Rule 7 of the All India Services (Discipline and Appeal) Rules 1955 till the disciplinary proceedings initiated against him are completed. ', It was urged before us that the order of suspension there was different from the one before us.
While there is no doubt that the order against the appellant in the above case was far more detailed both with regard to the nature of the charges and to the necessity of placing him under suspension, in substance there is little difference for the purpose of rule 7 of the Service Rules.
The order in this case dated 31st July 1964 shows that serious allegations of corruption and malpractices had been made against the respondent and he was also reported to have contravened the provisions of the All India Service Conduct Rules and enquiries made by the Government of Bihar into the allegations had revealed that there was a prima facie case made out against him.
Merely because the order mentioned that disciplinary proceedings were contemplated against the respondent, as compared to rule 7 which contains phrases like "the initiation of disciplinary proceedings" and the "starting of such proceedings" we cannot hold that the situation in the present case had not reached a stage which called for an order of suspension.
In substance disciplinary proceedings can be said to be started against an 7 25 officer when complaints about his integrity or honesty are entertained and followed by a preliminary enquiry into them culminating in the satisfaction of the Government that a prima facie case has been made out against him for the framing of charges.
When the order of suspension itself shows that Government was of the view that such a prima facie case for departmental proceedings had been made out the fact that the order also mentions that such proceedings were contemplated makes no difference.
Again the fact that in other rules of service an order of suspension may be made when "disciplinary proceeding ', were, contemplated" should not lead us to take the view that a member of an All India Service should be dealt with differently.
The reputation of an officer is equally valuable no matter whether he belongs to the All India Service or to one of a humbler cadre.
It is the exigency of the conditions of service which requires or calls for an order of suspension and there can be no difference ,in regard to this matter as between a member of, an All India Service and a member of a State Service or a Railway Service.
In the result the appeal is allowed but in the circumstances, of the case we direct the parties to pay and bear their own costs.
V.P.S. Appeal allowed.

summary/full:
Serious allegations of corruption and malpractices had been made against the respondent, a member of the Indian Police Service, serving in the State of Bihar.
Inquiries made by the State Government revealed that there was a prima facie case made out against him.
He was suspended by an order which stated that disciplinary proceedings were contemplated against the respondent.
On the question whether the suspension of a member of the service can only be ordered after definite charges have been communicated to him in terms of r. 5(2) of the All India Services (Discipline and Appeal) Rules, 1955, or whether the Government is entitled to place him under suspension even before that stage has been reached after a preliminary investigation, HELD : (1) The fact that in other rules of service there is specific provision for an order of suspension even when disciplinary proceedings were contemplated, does not mean that a member of the All India Service should be dealt with differently.
It would not be proper to interpret the Rules, which from a self contained Code, by reference to the provisions of other rules even if they were made by or under the authority of the President of India.
[718 F G] (2) Rule 7 expressly provides for suspension of a member of the service, having regard to the nature of the charges, for the purpose of disciplinary proceedings.
The word 'charges ' in the rule means accusations or amputations against a member of the service.
If the disciplinary authority takes note of the allegation and is of the opinion after preli minary inquiries that the circumstances of the case justify further investigation to be made before definite charges can be framed it would not be improper to remove the officer from the sphere of his activity either by transfer or suspension inasmuch as it may be necessary to find out facts from people working under him or look into papers which are in his custody.
Ordinarily when serious imputations are made against the conduct of an officer, the disciplinary authorities cannot immediately draw up the charges and in some cases a considerable time may elapse before the superior authority can come to a conclusion that definite charges can be levelled against the officer.
Merely because the order mentions that the disciplinary proceedings were contemplated it cannot be held that the situation in the present case had not reached the stage which called for an order of suspension.
In substance, disciplinary proceedings can be said to have been started when complaints about the integrity of an officer are entertained, followed by a preliminary inquiry into them culminating 716 in the satisfaction of the Government that a prima facie case has been made out against him for the framing of charges.
When the order of suspension itself shows that the Government was of the view that such a prima facie case for launching departmental proceedings has been made out the fact that the order also mentions that such proceedings were contemplated makes no difference.
1721 B F; 723 G; 724 G H; 725 B C] section Govinda Menon vs Union of India, ; , followed.