judgement:
ivil Appeal Nos.
3694 3695 of 1989.
From the Judgment and Order dated 22.9.
1987 of the Kerala High Court in O.P. Nos.
4932 of 1983 and 1091 of 1982.
T.S. Krishnamurthy Iyer and E.M.S. Anam for the Appel ants.
P.S. Poti and P.K. Pillai for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Special leave granted.
We have heard learned counsel for the parties.
In disposing of the appeal against a decision of the Forest Tribunal under the provisions of the Kerala Private Forests (Vesting & 39 Assignment) Act, 1971, a Division Bench of the Kerala High Court in MFA No. 401/78 disposed of on 14th of July, 1980, directed: "It follows that out of 102 acres 25 acres over which teak was planted in 1967 and euca lyptus was planted in 1955 will be private forest coming within the Private Forests (Vesting & Assignment) Act.
But since this area is under the personal cultivation of the respondent she will be entitled to 15 acres under Section 3(2) of the Act.
The rest 10 acres will vest with the Government.
In the result the appeal is partly allowed and the order of the lower court is modified as follows: It is declared that 75 acres over which the respondent had planted teak wood, orange and soft wood prior to 14th December, 1949, is held to be not a private forest under the Madras Preservation of Private Forests Act, 1949 and Kerala Private Forests (Vesting & Assignment) Act, 26 of 197 1.
But of the rest 2 acres over which the respondent had planted cashew is declared to be not a private forest under Section 2(f)(1)(i)(A) and (C) of the Act.
Another 15 acres under the personal cultivation of the respondent is also held not to vest under the above Act under Section 3(2) of the Act.
The Custodian shall demarcate this 15 acres in such a manner that it will be convenient for the enjoyment of the respond ent.
The balance 10 acres will vest.
with the Government.
With the demarcation and identifi cation of that 10 acres the case is sent back to the Forest Tribunal.
If the Custodian has taken possession of the area declared not to vest, he will surrender the same to the re spondent forthwith . ." In terms of this judgment 92 acres (being the total of 75 acres + 15 acres + 2 acres) were to be given back to the appellants.
In the process of implementation of this direc tion certain lands were returned to the appellants by the Forest officials.
These lands constituted thick forests and had valuable trees thereon.
This fact was realised by the higher officers of the Department and timber transit permits were not issued to the appellants when applied for.
There upon the appellants filed a writ petition before the High Court for a direction to the State Government and its offi cers to issue the requisite transit permits to enable the appellants to transport the rosewood trees and other 40 timber.
The claim contested.
The High Court came to the conclusion: "It is made clear that the petitioners are not entitled to any relief with regard to rosewood and other trees cut from the lands which do not form part of the lands ordered to be restored to the petitioner in O .P.
No. 4832 of 1983 and are vested in the Government.
With respect to the trees cut from the properties ordered to be restored to the petitioner, respondents 1 to 3 are directed to consider the applications filed by the petitioner for issue of transit permits and pass appropriate orders according to law.
Before determining this question also the respondents may give an opportunity to both the petitioners to put forward their contentions and a final decision may be taken after considering their objec tions.
" This order of the High Court is the subject matter of the present appeal.
In an affidavit filed in this appeal by the conservator and Custodian of Vested Forests it has been accepted that in terms of the judgment of the High Court in MFA No. 40 1/78, 92 acres were found not to vest in the State under the Act.
In the judgment the survey numbers with the respective extents had been furnished.
It is stated that 12 acres had not been taken possession of and, therefore, surrender had to be made of 80 acres only.
A further affidavit has been filed by the said Custodian where it has been said: "Hence only 80 acres are to be restored and out of this 56.31 acres have admittedly been restored already.
For the remaining 23.69 acres, Government are pleased to restore the same as follows vide G.O. Rt.
No. 1345/82/AD dated 24.5.82, in lieu of the land wrongly handed over to the petitioner.
Survey No. Area to be restored.
1518 10.19 acres 1580 6.03 acres 1580 7.47 acres" It has been further stated therein that in case any part of such land is not available, the Government are prepared to pay reasonable compensation for such shortfall as if the same had been acquired by the State for a public purpose.
41 We are of the view that the High Court was right in refusing to act upon the footing that pursuant to the direc tion by the High Court about 36 acres of land containing forest growth had been surrendered to the appellants and, therefore, they were entitled to appropriate the trees.
In fact within the ambit of the writ petition as filed before the High Court, the only question that fell for considera tion was whether timber transit permits should or should not be issued to the appellants to enable them to transport the felled timber from the area which should not have been delivered to the appellants.
Since we do not intend to differ from the High Court on that issue this appeal de serves to be dismissed but with a view to doing complete justice to the parties and give a final verdict in the matter we had enquired from Mr. Poti appearing for the respondent State on 27.3.1989 as to how Government proposed to comply with the binding direction of the High Court given in the first appeal.
The affidavit of 24th of June, 1989 by the Custodian of Vested Forests is in answer to that query.
We would like to reiterate that the appellants are entitled to return of 92 acres of land and not 80 acres.
This is on the ground that the direction of the High Court in the first appeal became final and in terms of such direc tion 92 acres were to go back to the appellants.
Government had no authority to alter the decision by an .administrative order as has been done on 22.5.1982.
There is no dispute that 56.31 acres have been restored to the appellants.
By the affidavit of 24th of June, 1989, 23.69 acres have been offered to be restored from three survey numbers indicated therein.
With the restoration of 23.69 acres the appellants would have got back 80 acres of land.
There would still be 12 acres to be returned to the appellants.
The respondents shall have a direction to trace these 12 acres in the local ity and make over vacant possession to the appellants there of within four months hence.
In case 23.69 acres or any part thereof as indicated in the affidavit cannot be delivered possession and the balance 12 acres are not identified and possession thereof cannot be delivered, the appellants shall be entitled to compensation in respect of the shortfall out of 35.69 acres in all which remain to be delivered and compensation for such shortfall shall be determined as if it were acquisition under the provisions of the Land Acquisi tion Act, the date of the preliminary notification being deemed to be the date of judgment in MFA 401/78.
The direc tions indicated above shall be worked out by the respondents within a total period of six months from today.
The High Court called upon the respondents to consider the appellants ' plea for timber transit permits in respect of trees cut from 42 certain other lands.
There is no material on record as to whether that has been complied with.
In case the respondents have not done the same yet they are directed to comply with the order of the High Court within three months from today.
The appeal is allowed in part.
Parties are directed to bear their respective costs.
Appeal allowed partly.

summary/full:
The High Court, in an appeal against a decision of the Forest Tribunal, under the provisions of the Kerala Forests (Vesting & Assignment) Act, 1971, held that 92 acres of forest land were to be given back to the appellants.
Accord ingly, the Forest Department returned certain lands.
Later on they realised that the lands constituted thick forests and had valuable trees thereon and refused the timber trans it permits applied for by the appellants.
Aggrieved against the decision, the appellants ap proached the High Court by way of a Writ Petition.
The High Court held that the appellants were not entitled to any relief with regard to rosewood and other trees cut from the lands that did not form part of the land ordered to be restored to them.
The High Court directed the Forest Depart ment to consider the application of the appellants and pass appropriate orders after giving an opportunity to the appel lants to put forward their contentions.
This appeal, by special leave, is against the said order of the High Court.
Allowing the appeal in part, HELD: 1.1 The appellants are entitled to return of 92 acres of land and not 80 acres.
This is on the ground that the direction of the High Court in the first appeal became final and in terms of such direction 92 acres were to go back to the appellants.
Government had no authority to alter the decision by an administrative order as has been done in this case.
[41D] 1.2 There is no dispute that 56.31 acres have been restored to the appellants.
By the affidavit of 24th June, 1989, 23.69 acres have been 38 offered to be restored from three survey numbers indicated therein.
With the restoration of 23.69 acres the appellants would have got back 80 acres of land.
There would still be 12 acres to be returned to the appellants.
The respondents shall have a direction to trace these 12 acres in the local ity and make over vacant possession to the appellants there of within four months.
[41E] 1.3 In case 23.69 acres or any part thereof as indicated in the affidavit Cannot be delivered possession and the balance 12 acres are not identified and possession thereof cannot be delivered, the appellants shall be entitled to compensation in respect of the shortfall out of 35.69 acres in all which remain to be delivered and compensation for such shortfall shall be determined as if it were acquisition under the provisions of the Land Acquisition Act, the date of the preliminary notification being deemed to be the date of judgment of the Division Bench in MFA 401/78.
The direc tions indicated above shall be worked out by the respondents within a total period of six months.
[41F G] 2.
The High Court called upon the respondents to consid er the appellants ' plea for timber transit permits in re spect of trees cut from certain other lands.
There is no material on record as to whether that has been complied with.
In case the respondents have not done the same yet, they are directed to comply with the order of the High Court within three months.
[41H; 42A]


judgement:
ivil Appeal No. 408 of 1980.
From the Judgment and Order dated 21.12.79 of the Alla habad High Court in Second Appeal No. 1235 of 1974.
Mrs. section Swaran Mahajan and Arun Madan for the Appellants.
S.K. Mehta for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is a tenants ' appeal by special leave from the judgment and order of the High Court of Allahabad.
The question involved in this appeal.
as is usual, in all these cases, is what is just in the circum stances and events that have happened.
The premises in question is in the village and P.O. Dhampur in the District of Bijnor in the State of Uttar Pradesh.
The suit was filed in 1967.
The suit for the evic tion of the appellants was filed on the ground that tenants had made material alteration in the property and as such became liable for ejectment in view of section 3(1)(c) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (hereinafter referred to as 'the Act of 1947 ').
The said section 3 in the said provision enjoins that no suit without the permission of the District Magistrate shall be filed in any civil court against a tenant for his eviction from any accommodation, except on one or more of the grounds enumerated therein and clause (c) of sub section (1) of section 3 was as follows: 11 "that the tenant has, without the permission in writing of the landlord, made or permitted to be made any such construction as, in the opinion of the court, has materially altered the accommodation or is likely substantially to diminish its value;" It appears that the constructions on the basis of which eviction of the tenants was claimed were not in dispute and were not disputed at any stage.
These were (i) that the tenants have placed a khaprail in place of khasposh; (ii) Kuchha kothas had been converted into pucca ones which were six in number; (iii).
an open place had been enclosed and included in the accommodation in question.
The action was contested.
It was asserted by the tenants that these con structions had been made in order to save the buildings from rain water and fire and that these constructions were not such as would make the tenants liable for ejectment within the meaning of section 3 of the Act of 1947.
It was further contended that these constructions had been made with the knowledge and consent of the landlord.
The learned trial Judge, which in this case was the court of learned Munsif at Nagina, by its order dated 17th December, 1968 and the first Appellate Court, which is the Civil Judge, by its order dated 16th February, 1984 have found that the constructions had been made by the tenants without the consent and knowl edge of the landlord and that the constructions in question amounted to "material alterations".
On these grounds, the landlord 's suit was decreed and the appeal by the tenants was dismissed.
The tenants went in second appeal before the High Court.
The High Court found that these alterations had been made, namely, the conversion of six kuchha kothas into pucca one and this was done after demolition of the old constructions.
After the old construction had ceased to exist, entirely new constructions had come up in their place.
This, according to the High Court, came within the meaning of structural alterations in the building.
The High Court further found that the accommodation had been increased by enclosing the nearby open space and that again must have been done by raising walls either connecting the various kothas or in some other way.
In either case, the High Court found, the shape and the extent and preparation of the accommodation had been increased and was thereafter differ ent than what it was before.
In those circumstances, the High Court came to the conclusion that the alterations admittedly made by the tenants were "material alterations" and as such came within the mischief of section 3(1)(c) of the Act of 1947.
In the aforesaid view of the matter, the High Court dismissed the second appeal and granted two months ' time 12 to the tenants to vacate.
The judgment and the order of the High Court was passed on 21st December, 1979.
Leave was granted by this Court under Article 136 of the Constitution on 18th February, 1990.
Since then, this appeal is before this Court.
As mentioned hereinbefore, the action was instituted under the aforesaid Act of 1947, which was the temporary Act.
We have set out the relevant provisions of the Act.
It is apparent from the said provisions that the ground for eviction could be either such construction which materially altered the accommodation or in the alternative is likely to substantially diminish its value.
These are the disjunctive requirements.
This Court had occasion to construe section 3(1)(c) of the Act of 1947 in Babu Manmohan Das Shah & Ors.
vs Bishun Das; , and was confronted with the question whether the landlord was entitled to evict the tenant if the alterations were material alterations only or whether proof was also necessary of the diminished value of the property as a result of such alteration.
This Court had also occasion to consider what amounted to 'material altera tions ' under the said Act.
This Court noted that the lan guage of the clause (c) of section 3(1) of the Act of 1947 made it clear that the legislature wanted to lay down two alter natives which would furnish ground to the landlord to sue without the District Magistrate 's permission, that is, where the tenant has made such construction which would materially alter the accommodation or which would be likely to substan tially diminish its value.
Therefore, these are disjunctive or alterative requirements.
This Court further held that although no general definition can be given of what "materi al alterations" mean, as such a question would depend on the facts and circumstances of each case, the alterations in that case amounted to "material alterations" as the con struction carried out by the tenant had the effect of alter ing the form and structure of the accommodation.
In the facts and circumstances of the instant appeal before us, all the courts have accordingly found that construction carried out by the tenants have the effect of altering the form and structure of the accommodation.
In view of the contentions urged by Mrs. Swaran Mahajan, it has to be borne in mind that the trial court passed its order on 17th December, 1968 well before the time when the Act of 1972 being the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (13 of 1972) (herein after referred to as 'the Act of 1972 ') came into force.
The said Act came into force on 20th September, 1972.
The rights of the parties have crystallised after the institution of the suit which was during the continuance of Act of 1947, and before the Act 13 of 1972.
The appellants in this appeal could not dispute that there were material alterations.
It could not also be disputed before us by Mrs. Mahajan counsel on behalf of the tenants that under the law as it stood and the law as ex plained in Babu Manmohan Das Shah 's case (supra), it was not necessary at that time to further prove that the alteration has or is likely to diminish the value of the property.
But what Mrs. Mahajan has sought to canvass before us is that under section 20(2)(c) of the Act of 1972, the ground is that the tenant has without the permission in writing of the landlord made or permitted to be made any such construction or struc tural alteration in the building as is likely to diminish its value or utility or to disfigure it.
Mrs. Mahajan there fore contends that now to make the tenants liable to be evicted it is necessary to allege and prove not only that construction has resulted in material alteration in the building but also that such construction is likely to dimin ish either the value or the utility of the building or disfigure it.
In this case, according to counsel for the appellants, that being in the possession, the eviction cannot any longer be sustained.
She drew our attention to section 20(2)(c) of the Act of 1972.
She relied on the observations of this Court in Qudrat Ullah vs Municipal Board, Barejify, ; In that case, this Court had to deal with the Act of 1947 as well as Act of 1972.
Krishna Iyer, J. speaking for this Court observed that the general principle regarding the consequence of repeal of a statute is that the enactment which is repealed is to be treated, except as to transactions past and closed, as if it had never existed.
The operation of this principle is subject to any savings which may be made expressly or by implication by the repeal ing enactment.
If the repealing enactment makes a special provision regarding pending or past transactions it is this provision that will determine.
Whether the liability arising under the repealed enactment survives or is extinguished.
Section 6 of the Uttar Pradesh General Clauses Act, 1904 applies generally, in the absence of a special saving provi sion in the repealing statute.
It was further observed that where a repeal is followed by a fresh legislation on the subject, the Court has to look to the provisions of the new Act to see whether they indicate a different intention.
Krishna Iyer, J. further observed in that case that Sec. 43(2)(h) of the Act of 1972 makes it clear that even if the power for recovery of possession be one under the earlier Rent Control Law, the later Act will apply and necessary amendments in the pleadings can be made.
This indicates that it is the later Act which must govern pending proceedings for recovery of possession or recovery or fixation of rent.
In that case, the suit was not even one under the Act but proceeded on the footing that the contractor was only a licencee and so none of the savings clauses in section 43(2) applied.
The provision relating to effect of 14 repeal under U.P. General Clauses Act was set out at p. 539 of the report.
section 43(2) of the Act of 1972 is, therefore, relevant.
Sub section (1) of section 43 of the Act of 1972 lays down that Act of 1947 is hereby repealed.
Sub section (2) makes provision for pending proceedings in different clauses.
Clause (h) of Sub section (2) provides as follows: "any court or authority before which any suit or other proceeding relating to the recovery or determination or fixation of rent of, or eviction from, any building is pending immedi ately before the commencement of this Act may, on an application being made to it within sixty days from such commencement, grant leave to any party to amend its pleading in conse quence of the provisions of this Act;" This clause was the subject matter of construction in the decision of this Court in Qudrat Ullah 's, case (supra).
Referring to the said clause, Mr. Justice Krishna Iyer observed at p. 540 of the report that it is clear that even if the statute for recovery of possession be one under the earlier Rent Control Law, the later Act will apply and necessary amendments in the pleadings can be made.
This definitely indicates, according to that decision, that it is the later Act that must govern pending proceedings for recovery of possession or recovery or fixation of rent.
But these observations made therein would not help Mrs. Mahajan, as contended by Mr. Mehta that the rights of the parties have crystallised before the coming into operation of the 1972 Act, and vested rights of the landlord had not been divested by clause (h) of section 43(2) of the Act of 1972.
On the other hand, section 43(2)(s) saves the right that have ac crued in favour of the landlord.
The said clause (s) reads as follows: "any suit for the eviction of a tenant insti tuted on any ground mentioned in sub section (1) of section 3 of the old Act, or any proceeding out of such suit (including any proceeding for the execution of a decree passed on the basis of any agreement, compromise or satisfaction), pending immediately before the commencement of this Act, may be continued and concluded in accordance with the old Act which shall, for that purpose, be deemed to continue to be in force;" Therefore, the suit which was filed on the ground that there was material alterations simplicitor under section 3(1)(c) of the Act of 1947 would continue to be valid after the coming into operation of Act of 15 1972 in view of clause (s) of sub section (2) of section 43 thereof.
That is the consequence of the language used.
The observations of this Court in Qudrat Ullah 's, case (supra) do not in any way suggest to the contrary.
Mrs. Mahajan tried to urged that the Act of 1947 was a temporary Act.
Therefore, it could not create any right in favour of the landlord after the expiry of the time.
This argument is under a misconception.
Neither the Act of 1947 nor the Act of 1972 gives any right to the landlord.
The landlord 's right to evict tenant is guided by the Transfer of Property Act.
The Act of 1947 gives protection to the tenants under certain conditions and at the time when the suit was filed, the rights of the parties had been crystallised.
On the facts as alleged and proved and found by the Court, the tenants were liable to be evicted.
The question of temporary rights in favour of the landlord does not arise.
Mrs. Maha jan further submitted that the new provisions of the Act should enlighten us to determine what is just in this case.
She submitted that it will be unjust in the facts and the circumstances of the case to permit eviction of the tenants on the ground of constructions which do not in any way alter or diminish the value of the premises in question.
She, on the other hand pleaded that the constructions made have improved the building.
Therefore, instead of being liable to be evicted, the tenants should be protected.
These are, of course, submissions not sustainable in law.
The rights of the parties must be determined in accordance with the provi sions of law.
What justice of the case entails, and what is just, due and the law says, is to be given to each one whether being a landlord or a tenant.
"The Judge is not to innovate at pleasure.
He is not a knigh errant roaming at will in pursuit of his own ideal of beauty or of goodness.
" Cardozo (The Nature of the Judicial Process, page 141).
If that is the position on the date when the rights crystallised and in view of sub section (s) of sec tion 43(2) of the Act of 1972, those rights will continue as if they were under the old Act.
The fight had accrued to the landlord to get the eviction even if the alteration had not in any way affected or diminished the value of the premises.
That right cannot be deprived.
But justice also consists in balancing the rights of the parties.
The tenants in this case, it.is said, are poor.
There was nothing to dispute this submission.
It is further said that these have been there for a long time.
In the aforesaid view of the matter, we dismiss the appeal but we direct that the tenants will not be evicted until 30th September, 1990 provided the tenants give the usual undertaking containing the usual terms and stating, inter alia, that they are in possession, within four weeks of this date.
The undertaking must be given by each of the 16 appellants.
In default of filing undertaking, the decree will be executable forthwith.
We must further observe that in view of the condition of the tenants if an application is made for allotment of any other area by these parties to the appropriate authority, and if the appellants are not in possession or occupation of other property, such authority should consider the feasibil ity of giving them fresh allotment of some other property.
The appeal is, therefore, dismissed.
In the facts and the circumstances of the case, the parties will bear and pay their own costs.
Y. Lal Appeal dis missed.

dataset_name: IN-Abs

summary/full:
The appellants are the tenants of premises situated in the District of Bijnor.
The suit for their eviction was filed in 1967 on the ground that they (tenants) had made material alteration in the property and as such were liable for ejectment under section 3(1)(c) of the U.P. (Temporary) Control of Rent 'and Eviction Act 1947.
The appellants did not dispute the constructions in the demised premises, but asserted that the constructions in question had been made with a view to save the building from rain water and fire and the constructions were not such which would render them liable for eviction as contemplated under section 3 of the Act of 1947.
The appellants also pleaded that the construc tions were effected with the permission of the landlord.
The learned Munsif, who tried the suit held that the construc tions had been made by the tenants appellants without the consent/knowledge of the landlord and that the constructions amounted to "material alterations".
He accordingly decreed the landlord 's suit.
The First Appellate Court, which is the Civil Judge affirmed the decree of eviction by his order dated 16th Feb. 1984.
Thereupon the appellants went in second appeal before the High Court.
The High Court too dismissed the appeal.
It found that the constructions have been made by demolishing the old structures, by conversion of six Kuchha Kothas into pucca ones and an entirely new constructions had come up in their place.
It further found that the accommodation had been increased by enclosing the open space which must have been possible only by raising walls etc.
In any case, ac cording to the finding of the High Court, the property looked different from what originally it was.
Thus the alterations made by the appellants were material alterations and as such came within the mischief of section 3(1)(c) of the Act 1947.
9 Hence this appeal by the appellants tenants.
Dismissing the appeal, this Court, HELD: Under Section 3(1)(c) of the Act it is apparent that the grounds for eviction could be either such construc tion which materially altered the accommodation or alterna tively is likely to substantially diminish its value.
These are the disjunctive requirements.
In the facts and circum stances of the instant appeal, all the Courts have found that constructions carried out by the tenants have the effect of altering the form and structure of the accommoda tion.
[12B C; F] The suit which was filed on the ground that there were material alterations simpliciter under section 3(1)(c) of the Act of 1947 would continue to be valid after the coming into operation of Act of 1972 in view of clause (s) of Sub section (2) of section 43 thereof.
This is the consequence of the language used.
Neither the Act of 1947, nor the Act of 1972 gives any right to the landlord.
The landlord 's right to evict tenant is guided by the Transfer of Property Act.
The Act of 1947 gives protection to the tenants under certain conditions and at the time when the suit was filed, the rights of the parties had been crystallised.
On the facts as alleged and proved and found by the Court, the tenants were liable to be evicted.
The question of temporary rights in favour of the landlord does not arise.
[14H; 15A C] The rights of the parties must be determined in accord ance with the provisions of law.
What justice of the case entails and what is just, due and the law says, is to be given to each one whether being a landlord or a tenant.
"The Judge is not to innovate at pleasure.
He is not a knight errant roaming at will in pursuit of his own ideal of beauty or of goodness" (Cardozo The Nature of the Judicial process page 141).
If that is the position on the date when the rights crystallised and in view of clause (s) of section 43 (2) of the Act of 1972, those rights will continue as if they were under the old Act.
The right had accrued to the landlord to get the eviction even if the alteration had not in any way affected or diminished the value of the premises.
That right cannot be deprived.
[15D F] Considering the fact that the tenants are poor and in possession since long, the Court directed that the tenants will not be evicted until 30th September 1990 provided the tenants give 'the usual undertaking containing the usual terms stating, inter alia, that they are in possession, within four week of this date.
The undertaking must be given by 10 each of the appellants.
default of filing of undertak ing, the decree will be executable forthwith.
[15H; 16A] The Court further observed that in view of the condition of the tenants, if an application is made for allotment of any other area by these parties to the appropriate authori ty, and if the appellants are not in possession or occupa tion of other property, such authority should consider the feasibility to give them fresh allotment of some other property.
[16B] Babu Manmohan Das Shah & Ors.
vs Bishun Das, ; and Qudrat Ullah vs Municipal Board, Bareilly, ; , referred to.


judgement:
l Appeal Nos.
2436 37 of 1987 etc.
From the Judgment and Order dated 2.4.1983 of the Cus toms, Excise and Gold Control Appellate Tribunal, New Delhi in Appeal No. ED (T)/SB/64/76 D and ED(SB)(T) A. No. 61/76 D in Order Nos.
D 169 and 170 of 1983.
V.C. Mahajan, A. Subba Rao and C.V. Subba Rao for the Appellant.
Soli J. Sorabjee, P.H. Parekh, M.K. Pandit and J.P. Pathak for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
These are three appeals by the Collector of Central Excise.
Two of them relate to Ahmedabad and one to Bombay.
The Ahmedabad appeals are in the case of M/s Ashoka Mills Ltd. and the Bombay appeal is in the case of M/s Mafatlal Fine Spinning and Manufacturing Co. Ltd. These appeals raise a very interesting question.
88 The assessee respondents are companies manufacturing yarn and cotton fabrics, the manufacture of yarn being a step in the process of.
the manufacture of cotton fabrics.
Cotton fabrics (which expression included all fabrics con taining more than 40% by weight of cotton) were subject to excise duty on an ad valorem basis under item 19 of the tariff in the First Schedule to the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ').
"Yarn, all sorts, not elsewhere specified . . "became liable to duty under item 18E of the First Schedule under the Finance Act, 1972 w.e.f. 17.3.72.
The consequence was that, from 17.3.72, the yarn which was being produced by the appellants became liable to duty under item 18E while the fabric manu factured by them was dutiable under item 19.
The Central Government decided to give two categories of assessees the benefit of the provisions of Rules 96 V & W of the Central Excise Rules: (i) assessees manufacturing woollen yarn; and (ii) assessees manufacturing cotton yarn or yarn falling under item 18E and using the same wholly or partly, in the manufacture of fabrics in their own factory.
These rules appeared in Chapter V of the Rules as Section E. VI, headed "Cotton yarn, woollen yarn, yarn falling under tariff item 18E Special Procedure".
This Section in the rules was inserted by notification No. 110/61 dated 20.4.61 and omitted by notification No. 146/77 dated 18.6.77.
They read thus: "96 V Application to avail of special proce dure , (1) Where a manufacturer who manufactures cotton yarn, yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) or woollen yarn and in the case of cotton yarn of yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 to 1944) uses the whole or part of the yarn manufac tured by him in the manufacture of cotton fabrics in his own factory, makes in the proper form an application to the Collector in this behalf the special provisions contained in this section shall, on such application being granted by the Collector, apply to such manufacturer in substitution of the provisions contained elsewhere than in this section for the period in respect of which the application has been so granted.
(2) Such application shall be made so as to cover a period of not less than six consecutive calendar months, but may 89 be granted for a shorter period in the discre tion of the Collector.
(3) If at any time during such period, the manufacturer does not want to avail himself of the special provisions contained in this section, he shall give a notice in writing to the proper officer of his intention at least one week in advance; and if he fails to give such notice he shall be precluded from avail ing himself of such provisions for a period of 6 months from the date of such failure.
96 W. Discharge of liability for duty on payment of certain Sum, (1) Having regard to the average production of cotton fabrics from one kilogram of cotton yarn or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1. to 1944) or the average prevail ing prices of woollen yarn the Central Govern ment may, by notification in the Official Gazette, fix from time to time a rate per square metre of the cotton fabrics produced or per kilogram of the woollen yarn produced, as the case may be, subject to such conditions and limitations as it may think fit to impose, and if a manufacturer whose application has been granted under rule 96V pays a sum calcu lated according to such rate, in the manner hereinafter laid down, such payment shall be a full discharge of his liability for the duty leviable on the quantity of cotton yarn of yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) manufactured by him and used in the manufacture of fabrics in his factory or the quantity of woollen yarn produced by him: 1.
Provided that if there is an alteration in the rates of duty and/or in the limit of exemption, the sum payable shall be recalcu lated on the basis of the revised rates and/or exemption limit from the date of alteration and liability for duty leviable on the quanti ty of cotton yarn or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 to 1944) used in the manufacture of cotton fabrics or woollen yarn produced shall not be discharged unless differential duty is paid.
90 (a) in the case of such cotton yarn, or yarn falling under item 18E of the First Schedule to the Central Excises & Salt Act, 1944 (1 of 1944) as on the date of clearance of the aforesaid cotton fabrics, and (b) in the case of woollen yarn, as on the date of clearance of such woollen yarn from the factory of the manufacturer; should, however, the amount of duty so recalculated be less than the sum paid, the balance shall be refunded to the manufacturer.
(2) The rate specified under sub rule (1) shall be separately and distinctly notified, and shall be separately and distinctly ap plied, in respect of (i) cotton yarn and (ii) woollen yarn.
(3) The sum payable under sub rule (1) in respect of cotton yarn shall be paid by the manufacturer along with the duty on fabrics in the manner prescribed in rule 52.
Provided that where cotton fabrics are allowed to be removed in bond under rule 96 D from one factory to another (hereinafter referred to as the processing factory) for processing and the cotton fabrics also processed are cleared from the processing factory, the duty payable under sub rule (1) shall be paid by the licencee of the processing factory.
A notification as envisaged by Rule 96V was issued, being notification No. 62/72, on 17.3.72.
It reads as follows: "In pursuance of rule 96 W of the Central Excise Rules, 1944, the Central Government hereby directs that the rate of duty in re spect of yarn containing partly more than 40 per cent by weight of cotton and partly any other fibre or fibres, the wool or silk con tent being less than 40% by weight of such yarn (where such yarn contains wool or silk) and falling under Item No. 18E of the First Schedule to the and of the description specified in column (2) of the Table hereto annexed, shall be the rate specified in the corresponding entry in column (3) of the said Table.
91 THE TABLE section No. Description of yarn Rate (1) (2) (3) Paise per square metre of the fabric made.
Yarn used in making super 20.00 fine fabrics.
Yarn used in making fine fabrics.
12.00 3.
Yarn used in making medium 6.00 fabrics.
Yarn used in making 4.40 medium fabrics.
Yarn used in making coarse fabrics.
2.20 6.
Yarn used in the manufacture 4.40 of cotton fabrics generally described as Malimo type fabrics or fabrics in which warp and weft yarns are connected and fastened together by chain stiches baned against each other.
Yarn used in making embriodery The duty for the in the place in steps or in time being leviable motifs.
on yarn contained in the base fabrics if not already paid.
Yarn used in making fabrics do impregnated or coated with preparation of cellulose derivations or of other artificial plastic materials.
Provided that if the manufacturer elects to avail himself of the special provisions con tained in rule 96 W aforesaid, the procedure set out in that rule in this behalf shall uniformly apply to all the yarn of the de scription specified in the above table and used by him in the production of cotton fab rics in his factory.
92 Explanation: For the purpose of this notification (i) "base fabrics" shall have the same meaning as assigned to it in tariff item No. 19 of the first schedule to the Central Excises & Salt Act, 1944 (1 to 1944) (ii) the average count of yarn in a fabric shall be deemed to be the count of all yarn contained in such fabric.
" Rules 96 V & W, it will be noticed, deal with two items: cotton yarn or yarn falling under item 18E of the First Schedule and woollen yarn.
Normally, under the Schedule to the Act, woollen yarn was being charged to excise duty on an ad valorem basis while cotton and other yarn was being assessed on weight basis.
The rules cited above and the notification referred to, however, provided an alternative, on the application of the assessee.
On a notification being issued and the assessee 's option being exercised, duty on woollen yarn became payable on the basis of weight at the rates prevalent at the time of clearance of the yarn from the factory.
If the rates had gone up in the meantime, the assessee had to pay the differential duty and if the rates had gone down, the assessee would be entitled to a refund.
Thus the assessee was given the option of paying the duty on the woollen yarn on weight basis at the rates prevalent on the date of their clearance.
We are not concerned with this here.
So far as cotton and other yarn is concerned, the duty, in cases governed by a notification and application under this Section, would be levied not on the weight of the yarn manufactured but on the extent of fabric manufactured from such yarn.
Naturally, this duty could be calculated only after the fabric had been manufactured, on the basis of the area of cloth or fabric manufactured.
This would create a doubt whether the duty on yarn under the scheme is payable on the production of yarn or on the date of clearance of the fabrics.
Sub section (3) of section 96 W clears this doubt.
It provides that the duty would be paid along with the duty payable on the fabrics under rule 52.
This clearly shows that it is not the incidence of liability that is shifted but only the collection of the duty.
The purpose of the rules and notifications may be briefly set out thus.
As already mentioned both yarn and fabrics are individual items exigible to duty.
Two levies on the yarn as well as on the cotton fabrics, on different bases, may not only impose an undue burden on 93 the manufacturer but may also unnecessarily complicate the process of collection of duty at two stages.
The Act, there fore, envisages what has been described as a scheme of "compounded levy".
Under this scheme, the excise duty on the yarn is collected only as and when the manufactured goods, namely, cotton fabrics are cleared from the factory and no duty is collected at the stage of the production or manufac ture of yarn.
The duty paid as per this notification is treated as a full discharge of the assessee 's liability for the duty leviable on the yarn used by the assessee for manufacture of fabrics in its factory.
To sum up briefly, rules 96 V and 96 W, together with the notification issued thereunder are concerned only with the issue of the excise duty leviable in respect of yarn and what they seek to achieve are: (a) the alteration of the basis of duty from a rate calculated on the weight of yarn produced to a calculation on the basis of the area of fabric manufactured therefrom; (b) the postponement of the collection of the duty till the point of clearance of the fabrics; and (c) the levy of the duty at rates prevalent not on the date of production of the yarn but on the date of clearance of the fabric.
If the notification of 17.3.1972 had continued in force, there would have been no difficulty in its application.
However, on 24.7.1972, the Government issued Notification No. 169 of 1972, the result of which was that the special procedure referred to above was made inapplicable to the type of yarn manufactured, used for weaving and cleared by the appellants.
The short question in these appeals is as to the effect of this omission in respect of yarn produced after 17.3.72 and cleared for captive consumption before 24.7.72 but lying in various departments at various stages of manufacture or in the form of cotton fabrics not yet cleared as on 24.7.72.
The Department has taken the view that in respect of the yarn manufactured between 17.3.72 and 23.7.72 the assessee is liable to pay the normal duty pay able on yarn under Item 18E so long as the fabrics manufac tured out of such yarn remained uncleared from the factory as on 24.7.72.
On the other hand, the assessee 's contention is that excise duty on yarn is attracted as soon as it is produced and cleared for captive consumption though kept in abeyance and collected, so long as the notification was in force, till the corresponding fabrics were cleared.
The assessee is not liable to pay any higher duty in respect thereof unless one could bring it within the terms of the proviso to the notification.
The short contention is that 94 the proviso applies only in a case where the notification under section 96 W continues to be in force and there is a change in rates under the scheme of compounded levy intro duced by the notification but not where the difference in rates is one between those prevailing on the date of produc tion of yarn under the scheme and the date of clearance of the goods after the abandonment of the scheme.
The Customs, Excise & Gold Control Appellate Tribunal (CEGAT) accepted the contention of the assessee following its earlier decision dated 2.4.1983 in M/s Raipur Manufac turing Co. vs Collector of Central Excise, Ahmedabad, It held that the yarn cleared for captive consumption during the period from 17.3.
1972 to 23.7.
1972 in terms of the special procedure was entitled to the bene fit of the rates fixed under Notification No. 62/72 CE dated 17.3.1972 and that no further duty was payable on that quantity of the yarn.
A consequential refund to the appel lants was directed.
We notice that this order of the Tribu nal was followed by another Bench of the Tribunal in its order dated 20.7.1983 and this decision had been reported much earlier as Crown Spinning & Manufacturing Co. Ltd. vs Collector, The Collector, Central Excise has preferred these appeals.
We have come to the conclusion that the view taken by the Tribunal has to be upheld. 'Yarn ' is an excisable com modity and it is common ground before us that, normally and but for the special procedure and notification, duty thereon is leviable at the point of production and clearance for captive consumption.
On that view, the duty attaches itself at the point of production and clearance of the yarn.
The notification does not alter this position.
it does not shift the incidence of duty from yarn to the woven fabric.
It still talks only of the liability of the yarn to duty and proceeds to provide only for its postponed collection.
If we are right on this, the duty on such yarn produced between 17.3.72 and 24.7.72 has to be determined in accordance with the rates specified in the notification, though such rates may have to be calculated in terms of the area of the fabric cleared on or after 24.7.1972.
The duty cannot be determined at the rates specified for yarn under item 18E as applicable on the dates of clearance of the fabric manufactured by using the yarn.
To hold otherwise would really mean holding that the incidence of duty on the yarn under the notifica tion arises only on the date of clearance of the manufac tured fabric.
This, in our view, is not the effect of the notification.
The proviso to Rule 96 W does not help the revenue.
It only 95 contemplates cases where there is a change in the rates prescribed under the notification between the date of pro duction of the yarn and the date of clearance of the fabric.
In such a case, an assessee may well contend, but for the proviso, that the duty having attached itself on the date of production of the yarn, it has to be calculated only at the rates then prevalent and should not be recalculated at the rates prevalent on the dates of clearance of the fabrics.
The proviso precludes such an argument.
It would be entirely superfluous and redundant if, as contended for by the reve nue, the liability to pay duty on the yarn itself arises only on the date of clearance of the fabrics.
It is intended to provide specifically that it is the intention of the Government that in such a case, the rates prevalent on the date of clearance of the fabric should govern.
The word 'recalculated ' used in the proviso also supports such a conclusion.
This word would be inappropriate if the notifi cation envisaged the levy of duty at the point of clearance of the fabrics, as contended for by the Revenue, for in that event, there would be only one calculation as at that point of time and no question of recalculation would arise.
In other words, the notification grants a concession but only subject to change in these concessional rates that may occur until the fabrics made out of the yarn are cleared.
We do not think that the words of the proviso can be extended to cover a case where the notification itself has ceased to apply by the date of clearance of the fabric.
To apply the proviso to such a case would result in its ap plicability to a totally different situation.
It would involve a comparison of unlikes.
It would mean the substitu tion of one set of rates prescribed in connection with a special procedure on the basis of the area of cloth by another set of rates applicable to yarn in the normal course which is to be worked out on the basis of weight.
This involves a mix up of two totally different schemes of levy of duty on yarn.
We do not think it is correct to place this construction on these provisions.
In our opinion, the normal rates de hors the notification will apply only in respect of yarn produced on or after 24.7.72 and not to yarn produced between 17.3.72 and 23.7.72.
The assessees having paid at the normal rates in respect of the latter period were right ly held entitled to seek a refund.
We may also point out that the best that can be said for the department is that the system of compounded levy ceased only on 24.7.1972.
This means that the normal rules will become applicable.
But the normal duty on yarn, effective from 24.7.72, cannot be retrospectively applied to the yarn which had been authorisedly removed from the spindles for captive consumption prior to that date.
The fact that 96 the clearance of the fabrics made of such yarn was, after.
24.7.72 would be irrelevant in computing such normal duty for, yam.
There is no principle or statutory language that compels an assessee to be deprived of the concessional rate that has been made available to it, under a special proce dure, in respect of the yam produced by it and utilised for captive consumption.
For these reasons, we agree with the view taken by the Tribunal and dismiss these appeals.
We, however, make no order as to costs.

summary/full:
The department took the view that in respect of the yarn manufactured between 17.3.72 and 23.7.72 the assessee is liable to pay the normal duty payable on yarn under Item 18E so long as the fabric manufactured out of such yarn remained uncleared from the factory as on 24.7.1972.
On the other hand the assessee 's contention was that excise duty on yarn is attracted as soon as it is produced and cleared for captive consumption.
The Customs, Excise & Gold Control Appellate Tribunal (CEGAT) accepted the contention of the assessee and held that the yarn cleared for captive consumption during the period from 17.3.72 to 23.7.72 in terms of the special procedure was entitled to the benefit of the rate fixed under Notification No. 62/72 CE dated 17.3.72 and that no further duty was payable on that quantity of the yarn and a consequential refund to the appellants was directed.
Ag grieved by the order of the Tribunal the department pre ferred these appeals to this Court.
While dismissing the appeals and upholding the view taken by the Tribunal, this Court, HELD: Rules 96 V & W of the Central Excise Rules, deal with two items: cotton yarn or yarn falling under item 18E of the First Schedule and woollen yarn.
Normally, under the schedule to the Act, woollen yarn was being charged to excise duty on an ad valorem basis while cotton and other yarn was being assessed on weight basis.
[92C] Yarn is an excisable commodity and but for the special procedure 87 and notification, duty thereon is leviable at the point of production and clearance for captive consumption.
The duty attached itself at the point of production and clearance of the yarn.
The notification does not alter this position.
It does not shift the incidence of duty from yarn to the woven fabric.
[94E F] The proviso to Rule 96 W does not help the Revenue.
It only contemplates cases where there is a change in the rates prescribed under the notification between the date of pro duction of the yarn and the date of clearance of the fabric.
[94H; 95A] The words of the proviso can be extended to cover a case where the notification itself has ceased to apply by the date of clearance of the fabric.
To apply the proviso to such a case would result in its applicability to a totally different situation.
It would involve a comparison of un likes.
[95E] Crown Spinning & Manufacturing Co. Ltd. vs Collector, , referred to.


judgement:
ivil Appeal No. 207 of 1984.
From the Judgment and Order dated 12.3.
1982 of the Madhya Pradesh High Court in Misc Civil Case No. 539 of 1981.
Ranjit Kumar and Subhash Sharma for the Appellant.
Prithvi Raj and S.K. Agnihotri for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal is by special leave and is directed against the judgment of the High Court of Madhya Pradesh by which the High Court has in second appeal upheld the dismissal of the plaintiff 's suit on the plea of limita tion.
The plaintiff, a Government servant of Madhya Pradesh, was dismissed from service by the Collector on 13th of January, 1966.
He preferred an appeal to the Divisional Commissioner and that appeal was dismissed on 31.8.1966.
The order of dismissal of the appeal was communicated to the plaintiff on 19.9.1960.
The plaintiff gave notice under s.80 of the Code of Civil Procedure on 17.6.1969 and filed his suit on 30th of September, 1969, asking for a declaration that the order of dismissal was inoperative and he continued to be in service.
This 46 suit has been dismissed in the Courts below on acceptance of the defence plea that it had not been filed within three years from the date when the cause of action first arose, as required under Article 58 of the First Schedule of the .
When this appeal came up for hearing before a Division Bench, reliance was placed on the decision of this Court in Sita Ram Goel vs The Municipal Board, Kanpur & Ors., ; in support of the contention that the suit was barred by limitation.
The Division Bench extracted a passage from Goel 's judgment where it said: 'The result is no doubt unfortunate for the appellant, because the trial court found in his favour in regard to his plea of wrongful dismissal.
If he had only brought the suit within the period prescribed by section 326 of the Act, he might possibly have got some relief from the Court.
He, however, chose to wait till the decision of the State Govern ment on his appeal and overstepped the limit of time to his own detriment.
We are unable to come to any other conclusion than the one reached above and the appeal must, therefore, stand dismissed; but in the peculiar circum stances of the case we make no order as to costs ', and observed: "Such unfortunate results should be avoided, if it is possible to do so.
We are of the view that the decision in Sita Ram Goel 's case which has been decided by a Bench of five Judges requires to be reconsidered . . " (See That is how this appeal has come before the Seven Judge Bench.
The plaintiff 's suit was one to obtain a declaration that the order of dismissal was bad and he continued to be in service.
To such a suit the Courts below have rightly applied Article 58 of the First Schedule of the .
That Article runs thus: "58.
To obtain any Three When the right to other declaration.
years sue first accrues.
" Appellant 's counsel placed before us the residuary Article 113 and has referred to a few decisions of some High Courts where in a 47 situation as here reliance was placed on that Article.
It is unnecessary to refer to those decisions as on the authority of the judgment of this Court in the case of Pierce Leslie & Co. Ltd. vs Violet Ouchterlony Wapshare & Ors.
vice versa; , , it must be held that Article 113 of the Act of 1963, corresponding to Article 120 of the old Act, is a general one and would apply to suits to which no other Article in the schedule applies.
The fate of this appeal, therefore, rests upon the finding as to when the right to sue first accrued.
All the three Courts have accepted the position that on 1.3.1966 when the order of dismissal was made by the Collector, the right to sue first accrued.
Admittedly, the suit was not filed within a period of three years from that date.
The appeal was dismissed on 31.8.1966.
The sixty days ' time spent for complying with the requirement of notice under section 80 of the Code of Civil Procedure was available to the plaintiff in addition to the period of three years.
If the date, therefore, counts, from the date of the appellate order, the suit would be within time.
In Goel 's case the question of merger of the order of the lower authority in the order of the higher authority was considered.
Adverting to this aspect, Bhagwati, J. who spoke for the Court, said: "The initial difficulty in the way of the appellant, however, is that departmen tal enquiries even though They culminate in decisions on appeals or revision cannot be equated with proceedings before the regular courts of law." Reliance was placed on the observations of this Court in State Uttar Pradesh vs Mohammad Nooh, ; , where it has been said: . an order of dismissal passed on a departmental enquiry by an officer in the department and an order passed by another officer next higher in rank dismissing an appeal therefrom and an order rejecting an application for revision by the head of the department can hardly be equated with any propriety with decrees made in a civil suit under the Code of Civil Procedure by the Court of first instance and the decree dismissing the appeal therefrom by an appeal court and the order dismissing the revision petition by a yet higher court, . . because the de partmental 48 tribunals of the first instance or on appeal or revision are not regular courts manned by persons trained in law although they may have the trapping of the courts of law , ' and the Court proceeded to say: "The analogy of the decisions of the courts of law would, therefore, be hardly available to the appellant." Alternately, the Court also examined the question as to whether when the appeal of the appellate court affirming the decree of the trial court was made, the original decree had ceased to be operative.
Bhagwati, J. quoted with approval another part of the judgment in Moharnmad Nooh 's case, where it was said: "In the next place, while it is true that a decree of a court of first instance may be said to merge in the decree passed on appeal therefrom or even in the order passed in revision, it does so only for certain pur poses, namely, for the purposes of computing the period of limitation for execution of the decree as in Batuk Nath vs Munni Dei, 41 Indian Appeals 104, or for computing the period of limitation for an application for final decree in a mortgage suit as in Jowad Hussain vs Gendan Singh, 53 Indian Appeals 197.
But as pointed out by Sir Lawrence Jen kins in delivering the judgment of the Privy Council in Juscurn Soid vs Pirthichand Lal, 40 indian Appeals 52, whatever be the theory under other systems of law, under the Indian law and procedure an original decree is not suspended by the presentation of an appeal nor is its operation interrupted where the decree on appeal is merely one of dismissal.
There is nothing in the Indian law to warrant the suggestion that the decree or order of the court or tribunal of the first instance be comes final only on the termination of all .proceedings by way of appeal or revision.
The filing of the appeal or revision may put the decree or order in jeopardy but until it is reversed or modified it remains effective. ' Bhagwati, J. then said: "The original decree being thus operative what we are really concerned with is the commence ment of the period of limitation as prescribed in the relevant statute and if the 49 statute prescribes that it commences from the date of the accrual of the cause of action there is no getting behind these words in spite of the apparent inequity of applying the same." In Mohammad Nooh 's case the question for consideration was whether the impugned order in the proceedings under Article 226 of the Constitution before the High Court was an order prior to the Constitution and, therefore, the High Court could not exercise its jurisdiction or was it one pending at the commencement of the Constitution and the revisional order being after the Constitution came into force, the writ petition would be maintainable.
The majori ty, as also Bose, J. who otherwise differed, agreed that jurisdiction under Article 226 of the Constitution was not retrospective.
The majority opinion, however, was that it would not be correct to say that the order of dismissal made on April 20, 1948, merged in the appellate order dated May 7, 1949, and both the orders in due course merged in the revisional order of April 22, 1950.
The original of dismiss al was operative on its own strength.
Bose, J. however, observed: "I see no reason why any narrow or ultra technical restrictions should be placed on them.
Justice should, in my opinion, be administered in our Courts in a common sense liberal way and be broad based on human values rather than on narrow and restricted consider ations hedged round with hairsplitting techni calities . .
The final order was passed after the Constitution on April 22, 1950.
It is true that if it had been passed before the Constitution came into force on January 26, 1950, the petitioner would have had no remedy in the Courts.
But the Constitution breathed fresh life into this land and conferred pre cious rights and privileges that were not there before.
Why should they be viewed nar rowly? Why should not that which would have been regarded as still pending for present purposes, if all had been done after the Constitution, be construed in any different way when the final act, which is the decisive one for these purposes, was done after it?" The problem in Mohammad Nooh 's case, therefore, was differ ent from what was for consideration in Goel 's case.
In Madan Gopal Rungta vs Secretary to the Government of Orissa, [1962] Suppl.
3 SCR 906, a Constitution bench of this Court was 50 examining the correctness of the finding of the High Court that it had no jurisdiction to entertain a petition under Article 226 of the Constitution as the revisional order was that of Government of India located outside its territorial jurisdiction.
Rungta 's case took into consideration the judgment in Mohammad Nooh 's case and stated: "We are of opinion that the principle of Mohammad Nooh 's case cannot apply in the circumstances of the present case.
The ques tion there was whether the High Court could issue a writ under article 226 in respect of a dismissal which was effective from 1948, simply because the revision against the order of dismissal was dismissed by the State Gov ernment in April, 1950 after the Constitution came into force.
It was in these circumstances that this Court held that the dismissal having taken place in 1948 could not be the subject matter of an application under article 226 of the Constitution for that would be giving retro spective effect to that Article.
The argument that the order of dismissal merged in the order passed in appeal therefrom and in the final order of revision was repelled by this Court on two grounds.
It was held, firstly, that the principle of merger applicable to decrees of courts would not apply to orders of departmental tribunals, and, secondly, that the original order of dismissal would be operative on its own strength and did not gain greater efficacy by the subsequent order of dismissal of the appeal or revision, and therefore, the order of dismissal having been passed before the Constitution would not be open to attack under article 226 of the Constitu tion.
We are of opinion that the facts in Mohd. Nooh 's case were of a special kind and the reasoning in that case would not apply to the facts of the present case.
" The view expressed by Wanchoo, J. in Rungta 's case meets with our approval.
In Rungta 's case this Court ultimately held that the order of the State Government had merged into the order of the Central Government and the High Court was, therefore, right in its view that it had no jurisdiction.
The next Constitution Bench decision of this Court is that of Collector of Customs, Calcutta vs East India Commer cial Co. Ltd., where this Court observed: "The question, therefore, turns on whether the order of 51 the original authority becomes merged in the order of the appellate authority even where the appellate authority merely dismisses the appeal without any modification of the order of the original authority.
It is obvious that when an appeal is made, the appellate authori ty can do one of three things, namely, (i) it may reverse the order under appeal, (ii) it may modify that order, and (iii) it may merely dismiss the appeal and thus confirm the order without any modification.
It is not disputed that in the first two cases where the order of the original authority is either reversed or modified it is the order of the appellate authority which is the operative order and if the High Court has no jurisdiction to issue a writ to the appellate authority it cannot issue a writ to the original authority.
The question therefore is whether there is any difference between these two cases and the third case where the appellate authority dismisses the appeal and thus confirms the order of the original authority.
It seems to us that on principle it is difficult to draw a distinction between the first two kinds of orders passed by the appellate authority and the third kind of order passed by it.
In all these three cases after the appellate authori ty has disposed of the appeal, the operative order is the order of the appellate authority whether it has reversed the original order or modified it or confirmed it.
In law, the appellate order of confirmation is quite as efficacious as an operative order as an appel late order of reversal or modification.
" A 3 Judge Bench decision in the case of Somnath Sahu vs The State of Orissa & Ors., is an authority in support of the position as accepted by the two Constitu tion Bench judgments referred to above.
There, it was held in the case of a service dispute that the original order merged in the appellate order of the State Government and it is the appellate decision which subsisted and became opera tive in law and was capable of enforcement.
That judgment relied upon another decision of this Court in support of its view being C.I.T .v.
Amrit Lal Bhagilal & Co., [1959] SCR 713.
The distinction adopted in Mohammad Nooh 's case between a court and a tribunal being the appellate or the revisional authority is one without any legal justification.
Powers of adjudication ordinarily vested in courts are being exercised under the law by tribunals and other constituted authori ties.
In fact, in respect of many disputes the 52 jurisdiction of the court is now barred and there is a vesting of jurisdiction in tribunals and authorities.
That being the position, we see no justification for the distinc tion between courts and tribunals in regard to the principle of merger.
On the authority of the precedents indicated, it must be held that the order of dismissal made by the Collec tor did merge into the order of the Divisional Commissioner when the appellant 's appeal was dismissed on 31.8.
In several States the Conduct Rules for Government servants require the administrative remedies to be exhausted before the disciplinary orders can be challenged in court.
Section 20(1) of the provides: "20(1).
A Tribunal shall not ordinarily admit an application unless it is satisfied that the applicant had availed of all the remedies available to him under the relevant service rules as to redressal of grievances.
" The Rules relating to disciplinary proceedings do pro vide for an appeal against the orders of punishment imposed on public servants.
Some Rules provide even a second appeal or a revision.
The purport of section 20 of the is to give effect to the Disciplinary Rules and the exhaustion of the remedies available thereunder is a condition precedent to maintaining of claims under the .
Administrative Tribunals have been set up for Government servants of the Centre and sever al States have already set up such Tribunals under the Act for the employees of the respective States.
The law is soon going to get crystallised on the line laid down under section 20 of the .
In this background if the original order of punishment is taken as the date when cause of action first accrues for purposes of Article 58 of the , great hardship is bound to result.
On one side, the claim would not be maintainable if laid before exhaustion of the remedies; on the other, if the departmental remedy though availed is not finalised within the period of limitation, the cause of action would no more be justiciable having become barred by limitation.
Redressal of grievances in the hands of the departmental authorities take an unduly long time.
That is so on account of the fact that no attention is ordinarily bestowed over these matters and they are not considered to be governmental business of substance.
This approach has to be deprecated and authorities on whom power is vested to dispose of appeals and revisions under the Service Rules must dispose of such matters as 53 expeditiously as possible.
Ordinarily, a period of three to six months should be the outer limit.
That would discipline the system and keep the public servant away from a protract ed period of litigation.
We are satisfied that to meet the situation as has arisen here, it would be appropriate to hold that the cause of action first arises when the remedies available to the public servant under the relevant service Rules as to re dressal are disposed of.
The question for consideration is whether it should be disposal of one appeal or 'the entire hierarchy of reliefs as may have been provided.
Statutory guidance is available from the provisions of sub sections
(2) and (3) of section 20 of the .
There, it has been laid down: "20(2).
For the purposes of sub section (1), a person shall be deemed to have availed of all the remedies available to him under the rele vant service rules as to redressal of griev ances, (a) if a final order has been made by the Government or other authority or offi cer or other person competent to pass such order under such rules, rejecting any appeal preferred or representation made by such person in connection with the grievances; or (b) where no final order has been made by tee Government or other authority or officer or other person competent to pass such order with regard to the appeal preferred or representation made by such person, if a period of six months from the date on which such appeal was preferred or representation was made has expired.
(3) For the purposes of sub sections (1) and (2), any remedy available to an appli cant by way of submission of a memorial to the President or the Governor of a State or to any other functionary shall not be deemed to be one of the remedies which are available unless the applicant had elected to submit such memorial.
" We are of the view that the cause of action shall be taken to arise not from the date of the original adverse order but on the date when the order of the higher authority where a statutory remedy is provided 54 entertaining the appeal or representation is made and where no such order is made, though the remedy has been availed of, a six months ' period from the date of preferring of the appeal or making of the representation shall be taken to be the date when cause of action shall be taken to have first arisen.
We, however, make it clear that this principle may not be applicable when the remedy availed of has not been provided by law.
Repeated unsuccessful representations not provided by law are not governed by this principle.
It is appropriate to notice the provision regarding limitation under section 21 of the .
Sub section (1) has prescribed a period of one year for making of the application and power of condonation of delay of a total period of six months has been vested under sub section (3).
The Civil Court 's jurisdiction has been taken away by the Act and, therefore, as far as Government serv ants are concerned, Article ' 58 may not be invocable in view of the special limitation.
Yet, suits outside the purview of the shall continue to be gov erned by Article 58.
It is proper that the position in such cases should be uniform.
Therefore, in every such case only when the appeal or representation provided by law is disposed of, cause of action shall first accrue and where such order is not made, on the expiry of six months from the date when the appeal was filed or representation was made, the right to sue shall first accrue.
Submission of just a memorial or representation to the Head of the establishment shall not be taken into considera tion in the matter of fixing limitation.
In view of what we have said above, Goel 's case must be taken to have not been correctly decided.
Reliance was placed by appellant 's learned counsel on a recent decision of a Two Judge Bench in the case of Raghubir Jha vs State of Bihar & Ors., The conclusion reached is in accord with what we have held but the legal position was not at all referred to or examined.
It is unnecessary to make any further reference to that judgment.
Now coming to the facts of the present appeal.
Since the claim has been dismissed on the plea of limitation and our conclusion is that the suit was within time, the judg ments of the trial Court, the First 55 Appellate Court and the High Court are set aside and the matter is remitted to the trial Court for disposal in ac cordance with law.
Too long a period has now intervened between the dismissal of the suit and our order of remand.
We, therefore, direct the learned trial Judge to take all effective steps open to him in law to ensure that the suit is disposed of finally before the 15th of December, 1989.
Costs shall abide the event.
Y.Lal.
Appeal allowed.

summary/full:
The plaintiff appellant was dismissed from service by the Collector on 13.1.1966.
His departmental appeal was dismissed by the Divisional Commissioner on 31.8.1966.
Thereupon the appellant instituted a suit on 30.1.1969 asking for a declaration that the order of dismissal was inoperative and that he continued to be in service.
The suit was dismissed by the trial court and that order was upheld by the appellate courts.
In dismissing the suit the courts below accepted the defence plea that it had been filed beyond the period of limitation prescribed therefore under Article 58 of the first Schedule of the Limitation Act.
Hence this appeal.
This appeal initially came up for hearing before a Division Bench of this Court.
At the hearing reli ance was placed before a decision of this Court in Sita Ram Goel vs The Municipal Board, Kanpur & Ors., ; in support of the contention that the suit was barred by limitation.
The Division Bench took the view that the deci sion of this Court rendered by five Judge Bench in Sita Ram Goel 's aforesaid required reconsideration.
This is how the appeal has come up before a Seven Judge Bench.
The question that fell for determination by the Court was 'When was the right to sue first accrued ' to the appellant i.e. whether from the date when the original adverse order of dismissal was passed against him or when the departmental/statutory appeal was finally disposed of.
The appellant 's contention is that the original order having merged in the final order whereby his departmental appeal was disposed of, the right to sue accrued from that date and on this reckoning, the suit filed by him was within time.
44 Allowing the appeal and remanding the matter to trial Court, this Court, HELD: Powers of adjudication ordinarily vested in courts are being exercised under the law by tribunals and other constituted authorities.
[51H] In respect of many disputes the jurisdiction of the court is now barred and there is a vesting of jurisdiction in tribunals and authorities.
That being the position, there is no justification for the distinction between courts and tribunals in regard to the principle of merger.
[51H; 52A] It must be held in the instant case, that the order of dismissal made by the Collector did merge into the order of the Divisional Commissioner when the appellant 's appeal was dismissed on 31.8.1966.
[52B] The cause of action first arises when the remedies available to the public servant under the relevant service Rules as to redressal are disposed of.
[53B] The cause of action shall be taken to arise not from the date of the original adverse order but on the date when the order of the higher authority where a statutory remedy is provided entertaining the appeal or representation is made.
Where no such order is made, though the remedy has been availed of, a six months ' period from the date of preferring of the appeal or making of the representation shall be taken to be the date when cause of action shall be taken to have first arisen.
[53H; 54A] In every such case until the appeal or representation provided by a law is disposed of, accrual of the cause of action shall first arise only when the higher authority makes its order on appeal or representation and where such order is not made on the expiry of six months from the date when the appeal was filed or representation was made.
[54D] Redressal of grievances in the hands of the departmental authorities taken an unduly long time.
That is so on account of the fact that no attention is ordinarily bestowed over these matters and they are not considered to be governmental business of substance.
This approach has to be deprecated and authorities on whom power is vested to dispose of ap peals and revisions under the service Rules must dispose of such matters as expeditiously as possible.
[52G H] 45 Ordinarily, a period of three to six months should be the outer limit.
That would discipline the system and keep the public servant away from a protracted period of litiga tion.
[53A] Sita Ram Goel vs The Municipal Board, Kanpur & Ors., ; , overruled.
Madan Gopal Rungta vs Secretary to the Government of Orissa, [1962] Supp.
3 SCR 906, followed.
Pierce Leslie Co. Ltd. vs Violet Ouchterlony Wapshare & Ors., and vice verse; , ; State of Uttar Pradesh vs Muhammad Nooh, ; ; Collector of Customs, Calcutta vs East India Commercial Co. Ltd., ; Somnath Sahu vs State of Orissa & Ors., ; C.I.T.v.
Amrit Lal Bhagilal & Co., [1959] SCR 713 and Raghuvir Jha vs State of Bihar & Ors., , referred to.