judgement:
ivil Appeal No. 4565 of 1989.
85 From the Judgment and Order dated 4.5.1988 of the Cal cutta High Court in Appeal No. 806 of 1987 A.K. Sen, P.L. Sen, Bhaskar Sen, D.K. Sinha, A.N. Chat terjee, N.D.B. Raju and V.K. Jain for the Appellant.
F.S. Nariman, R.C. Nag, S.B. Mukharjee, R.F. Nariman, Kusum Agarwal, O.C. Mathur and D.N. Misra for the Respond ent.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
This appeal by special leave has been preferred against the judgment dated May 4, 1988 of a Division Bench of the Calcutta High Court in Appeal No. 806 of 1987.
Facts in brief necessary for consideration of the submissions made by learned counsel for the parties are that the respondent, Pradip Kumar Sarkar made an application under section 155 of the (hereinafter referred to as the Act) for rectification of the share register of the appellantcom pany by inserting his name therein as a registered share holder of certain shares transferred in his favour.
These shares were fully paid up and the company had no lien over them.
According to the respondent, notwithstanding the shares being duly lodged with the Company along with the transfer deeds and requisite fees for registration being paid the Board of Directors of the Company disapproved of the registration of the said shares.
This disapproval led the respondent to make the application under section 155 of the Act for rectification of the share register.
The case of the respondent was that the shares in question being fully paid up and the company having no lien over them the regis tration of the transfer of the shares in his favour could not be refused under Article 39 of the Articles of Associa tion of the Company which was the article relevant for the purpose.
The application aforesaid was contested by the Company on various grounds.
Overruling the objections raised by the Company a learned single judge allowed the application.
Aggrieved, the Company preferred the appeal aforesaid before a Division Bench of the High Court which has been dismissed by the judgment appealed against.
It has been urged by learned counsel for the appellant that even if the Articles of Association do not make any specific provision in this behalf the Company had residuary inherent power to refuse registra 86 tion of the transfer of the shares for the benefit of the Company and its existing sharesholders.
Power of refusal to register the transfer of shares was also sought to be de rived from the words "or otherwise" used in Article 42 of the Articles of Association and section 111(2) of the Act.
The transferor not being made a party to the application under section 155 of the Act was also pleaded in justifica tion of the submission that the said application deserved to be dismissed.
It was also urged that in view of section 108 of the Act the Company was entitled to go into the question as to whether the consideration for transfer of shares as shown in the transfer deeds was real consideration for purposes of finding out as to whether the transfer deeds were duly stamped and refuse registration of the transfer of the shares if the Company was of the view that the transfer deeds were not duly stamped.
For the respondent on the other hand it was urged by his learned counsel that in view of the specific provision contained in this behalf in Article 39 of the Articles of Association and no residuary power whatsoev er having been conferred on the Company or its Directors to refuse registration of the transfer of shares it did not have the power claimed by it in aid of refusal of registra tion of the shares transferred to the respondent.
Having heard learned counsel for the parties we are of the opinion that unless there is any impediment in the transfer of a share of a public limited company, such as the appellant, a shareholder has the right to transfer his share.
Correspondingly, in the absence of any impediment in this behalf the transferee of a share, in order to enable him to exercise the rights of a sharesholder as against the Company and third parties, which is not possible until the transfer is registered in the company 's register, is enti tled to have a rectification of the share register of the company by inserting his name therein as a registered share holder of the share transferred to him.
To have such recti fication carried out is the right of the transferee and can be defeated by the company or its Directors only in pursu ance of some power vested in them in this behalf.
Such power has to be specified and provided for.
It may even be residu ary but in that case too it should be provided for and traceable either in the Act or the Articles of Association.
Even if the power of refusal is so specified and provided for the registration of a transferred share cannot be re fused arbitrarily or for any collateral purpose, and can be refused only for a bona fide reason in the interest of the company and the general interest of the sharesholders.
If neither a specific nor residuary power of refusal has been so provided, such power cannot be exercised on the basis of the so called undeclared inherent power to refuse registra tion on the ground that the 87 company or its Directors take the view that in the interest of the company and the general interest of the shareholders, registration of the transfer of shares should be refused.
Indeed making a provision in the Act or the Articles of Association etc.
conferring power of refusal would become futile if existence of an inherent power such as claimed by the company in the instant case is assumed, for the simple reason that the amplitude of the so called undeclared inher ent power would itself take care of every refusal to regis ter the transfer of share.
Assumption of such a power would result in leaving the matter of transfer of share and its registration at the mercy and sweet will of the company or its Directors, as the case may be.
In the absence of any valid and compelling reason it is difficult to comprehend such a proposition.
Even the submission based on the words "or otherwise" in subsection (2) of Section 111 of the Act and in Article 42 of the Articles of Association to the effect that these words recognise the existence of an inherent power to refuse registration of the transfer of the share does not commend itself to us.
The words "or otherwise" were inserted in sub section (2) of Section 111 of the Act in 1960 and it is this subsection so amended which is applicable to the facts of the instant case.
Sub section (2) of Section 111 does not confer any right but only casts a duty to give notice of refusal to register the transfer of a share and provides for punishment in case of default in doing so.
Giving of notice is necessary, inter alia, to facilitate the exercise of the right of appeal conferred by sub section (3) and (4) of Section 111.
To introduce a concept of either conferment or recognition of a right to refuse registration of the trans fer of a share in sub section (2) militates against and runs counter to the very texture and purpose of this sub section.
Such an interpretation would have the effect of imputing to the legislature an intention of making an effort to fix a square peg in a round hole, when the purpose, if it was to confer or recognise any inherent power to refuse registra tion of the transfer of a share, could plainly be achieved by inserting the words "or otherwise" after the words "under its articles" and before the words "to refuse to register" in sub section (1) of Section 111 which is the sub section relevant for such purpose.
The words "or otherwise" take colour from the context in which they are used.
In our opinion, the words "under its articles" in subsection (2) of Section 111 of the 'Act have been used in the same sense as is expressed in legal termi nology by the familiar words "conferred by law".
Consequent ly, if the opening part of sub section (2) is read as "If a Company refuses, whether in pursuance of any power conferred by 88 law or otherwise" it would be incongruous to suggest that the legislature in using the words "or otherwise" intended to give recognition to a power to refuse registration of the transfer of a share even otherwise than in accordance with law.
This would be tantamount to putting a premium on taking the law into one 's own hands.
The legislature cannot be imputed with any such intention.
For these reasons, we are of the view that in the context in which the words "or otherwise" have been used in sub section (2) of Section 111, they only purport to cast a duty or impose an obligation of giving notice of refusal to register the transfer of a share irrespective of the fact whether such refusal is under the Articles of Association of the Company or de hors the Arti cles, which would include even a case where such refusal has been made arbitrarily or for any collateral purpose.
A fortiorari, this would be the interpretation of even Article 42 of the Articles of Association of the Company inasmuch as on its plain language which, except for the provision for punishment, is in pari materia with sub section (2) of Section 111 of the Act, the purpose of this Article is the same as of the said sub section (2).
Even the marginal note of Article 42 lends support to this interpretation.
At this place, we may point out that it has not been disputed before us by learned counsel for the appellant that the shares in question having been fully paid up and the Company having no lien over them, Article 39 of the Articles of Association could not be invoked to refuse registration of the transfer of these shares.
We may now advert to the text books and the decided cases on which reliance has been placed by learned counsel for the appellant in support of the submission that the Company had an inherent power to refuse registration of the transfer of the shares.
It was pointed out that the board of directors is now the principal organ of a company.
The management of the affairs of the company is vested in the board of directors and all powers excepting those which are specifically reserved for the general meeting by the act or the articles or memorandum of association or otherwise must now be done by the board of directors vide section 291 of the Act (The New Frontiers of Company Law by S.C. Sen 1971 Edition Page 51).
Whatever may fairly be regarded as inci dental to the objects for which the Corporation was created is not to be taken as prohibited.
The incidental power is one that is directly and immediately appropriate to the execution of the specific power created and not one that has a slight or remote relation to it.
Furthermore, the want of an express enumeration of powers does not exclude such incidental powers as are reasonably 89 necessary to accomplish the corporate purpose.
The mere creation of a corporation was alone sufficient, in the absence of prohibition, to confer upon such corporation all those powers which are regarded as incident to corporate existence.
(Thomsons ' Commentaries on the Law of Corporation 3rd Edition Vol.
3 Pages 820 to 822) As to the relationship between the general meeting and the directors to some extent a more exact analogy would be with the division of powers between the Federal and State Legislatures under a Federal Constitution and the residual powers are in this case with the directors (Gower 's Principles of Modern Company Law 4th Edition Page 147).
Corporate authority (powers) are deter mined by reference to (1) charter, (2) incorporation law or act, (3) general and special corporation statutes relevant, (4) other applicable statutes, (5) case decisions (6) cus tomary practices, and (7) treatises and other discussions.
They include (1) general powers usually recognized in all corporations, (2) general powers usually recognized in corporations of the particular type, (3) powers inherent in or limited by the purposes or business as stated in the charter, and (4) implied powers to do all things reasonably and properly incidental to the specified purpose and busi ness.
(Modern Corporation Law by Howard L. Oleck Vol.
It is a well recognised rule that a Corporation is not restricted to the exercise of the powers expressly conferred upon it by its charter but has the implied or incidental power to do whatever is 'reasonably necessary to effectuate the powers expressly granted and to accomplish the purposes for which it was conferred unless a particular act sought to be done is prohibited by the law or its charter.
(American Jurisprudence 2nd Edition Vol.
Every corpora tion is of course created with certain express powers but in addition to those every corporation has also certain powers which attach to it as an incident to its corporate exist ence.
The powers which are incidental to corporate existence and which are always implied in the absence of express restrictions are: (1) The power to have perpetual succes sion, or succession during the period for which the corpora tion is created which includes the power to elect members in the place of those who are removed by death or otherwise, (2) The power to have a corporate name, (3) The power to purchase and hold land and chattels for authorised corporate purposes, (4) The power to have a common seal, (5) The power to make by laws for the government of the corporation, (6) The power to disfranchisement or removal of members except in the case of modern joint stock corporations.
(Corpus Juris Secundum Vol.
XlX Pages 372 373) Suffice it to say in this behalf that what has been stated above with regard to residuary, implied or incidental powers is calculated to 90 accomplish the objects, the corporate purpose or corporate existence of the corporation.
Refusal to register the trans fer of a share obviously does not fall in this category.
As has been pointed out in Palmer 's Company Law 24th Edition Page 121 the objects or purposes for which a company is created should be distinguished from the powers which it can exercise.
So far as refusal to register the transfer of a share is concerned it is almost the consistent view in decided cases that the power has to be specified and can be exercised only in the manner specified and within the frame work of the said specification.
There is no inherent power in this behalf.
(See: In re Smith, Knight, & Co., IV Chan cery Appeal Cases Page 20; In re National Provincial Marine Insurance Company, V Chancery Appeal Cases Page 559; Moffatt vs Parqunar, V11 Chancery Division Page 59 1; In re Cawley & Co., XLII Chancery Division Page 209; In re Discovers Fi nance Corporation, Limited, [1910] 1 Chancery Division Page 312 and Sadashiv vs Gandhi Sewa Samaj, A.1.R. 1958 Bombay Page 247) Reliance was then placed by learned counsel for the appellant on The Conservators of the River Tone vs Ash, 109 English Reports Page 479.
In that case by an Act for making and keeping the river Tone navigable, it was enacted, that the thirty persons therein named and their successors should be conservators of the river; and should have various powers referred to therein.
By a subsequent Act some more powers were conferred on them.
A question arose as to whether the conservators were entitled to sue in their corporate name for an injury done to their real property.
It was held that as it manifestly appeared from the different clauses of the Acts of Parliament that the conservators should take land by succession and not by inheritance, although they were not created a corporation by express words they were so by implication and that being so they were entitled to sue in their corporate name for an injury done to their real property.
In our opinion, on the basis of this decision it is difficult to cull out any power in the board of directors of the company in the instant case to refuse to register the transfer of a share by implication.
Reliance was also placed on Attorney General vs The Lord Mayor Etc.
of the City of Leeds, [1929] 2 Chancery Division Page 291 where it was pointed out that a corporation incor porated by royal charter stands on a different footing from a statutory corporation, the difference being that the latter species of corporation can do only such acts as are authorised directly or indirectly by the statute creating it whereas the former can, speaking generally, do anything that an ordinary individual can do.
If, however, the corporation by charter be a 91 municipal corporation then it is subject to the restriction imposed by the Municipal Corporations Act, 1882.
The ques tion in connection with which the above observations were made was whether the Corporation of Leeds, a municipal corporation, was entitled to work or run certain omnibuses along any route whether within or without the boundaries of the City of Leeds.
This again was obviously a question relating to the business of the corporation to work or run omnibuses and has no bearing on the question as to whether the directors of the appellant company in the instant case had inherent power to refuse to register the transfer of shares.
In E.M. Muthappa Chettiar vs Salem Rajendra Mills Ltd. XXV Company Cases Page 283 it was held that if a person is of such a character as to throw their company into confusion and if he was not a desirable one, then the Board of Direc tors would certainly be acting in the best interests of the company in refusing to register the shares in his name and such a reason is quite a valid reason.
Suffice it to say so far as this case is concerned that Article 56 which was the relevant article dealing with the refusal to register the transfer of a share itself clearly conferred power on the board of directors to refuse to register the transfer of a share inter alia "if the transferee of the share is not approved".
It was thus a case where power had been conferred by an article and was not a case of refusal to register under any inherent power.
Lastly, reliance was placed on Life Insurance Corpora tion of India vs Escorts Ltd. & Ors., [1985] Supp. 3 S.C.R. Page 909.
In that case with reference to an earlier decision of this Court in Bajaj Auto Ltd. vs N K. Firodia and Anoth er, 41 Company Cases page 1, it was held that where the articles permitted the directors to decline to register the transfer of shares without assigning reasons the court would not necessarily draw adverse inference against the directors but will assume that they acted reasonably and bona fide.
Here again, as is apparent from the decision in the case of Bajaj Auto Ltd. (supra) Article 52 of the appellant company in that case provided that the directors might at their absolute and uncontrolled discretion decline to register any transfer of shares.
This too was, therefore, a case of power being conferred by the articles of association and not a case of exercise of inherent power.
We may also point out that at page 997 of the Reports of Escorts Ltd. (Supra) it was held that even though it was open to the company and indeed it was bound to refuse to register the transfer of shares of an Indian company in favour of a non resident where the requisite permission under the FERA was not ob tained but 92 once permission was obtained whether before or after the purchase the shares, the company could not thereafter refuse to register the transfer of shares.
The third submission made by learned counsel for the appellant that the application under section 155 of the Act was not maintainable as the transferors had not been made parties therein, may now be considered.
A similar submission had been made before the Division Bench of the High Court also and was repelled by holding that the transferor is not a necessary party to an application under section 155 of the Act unless the transfer was disputed by him.
It was pointed out that even though in the instant case the transferors had been served with notice and in any event had knowledge of the proceedings for registration of transfer of shares they had not disputed the transfer of the shares.
We do not find any infirmity in the order of the High Court on this point.
Likewise, we find no substance even in the submission made by learned counsel for the appellant based on section 108 of the Act for the simple reason that after taking into consideration the evidence produced by the parties it has been found as a fact by the High Court that it had not been proved that the respondent had paid higher prices for the shares than those stated in the transfer deeds.
We find no justification for interferring with the said finding of fact in the present appeal.
On this finding the transfer deeds could not be termed as unduly stamped and power to refuse the registration of the transfer of shares contemplated by section 108 of the Act would not be invoked.
In the result, we find no substance in this appeal and it is accordingly dismissed with costs assessed at Rs.2,000.
T.N.A. Appeal dismissed.

summary/full:
The respondent lodged certain fully paid up shares with the appellant company for transfer in his name.
The Board of Directors of the Appellant company disapproved the registra tion of the shares.
The respondent filed an application under section 155 of the for rectifica tion of the share register i.e. for inserting his name in the share register as a registered share holder which was allowed by a single judge of the High Court.
The Company preferred an appeal which was dismissed by the Division Bench of the High Court.
In appeal to this Court it was contended on behalf of the company that (i) the Company had residuary inherent power to refuse the registration of the transfer of shares; (ii) the words "or otherwise" in Article 42 of the Articles of Association and section I 11(2) of the recognise the existence of an inherent power to refuse registration of the transfer of shares; (iii) the applica tion under section 155 was not maintainable as the transfer or had not been made parties therein; and (iv) the company was entitled to examine the correctness of transfer consi 83 deration shown in the transfer deeds and refuse registration of the transfer of shares if the transfer deeds were not duly stamped.
Dismissing the appeal, this Court, HELD: 1.
Unless there is any impediment in the transfer of a share of a public limited company, a shareholder has the right to transfer his share.
Correspondingly, in the absence of any impediment in this behalf the transferee of a share is entitled to have a rectification of the share register of the company by inserting his name therein as a registered shareholder of the share transferred to him.
To have such rectification carried out is the right of the transferee and can be defeated by the company or its Direc tors only in pursuance of some power vested in them in this behalf.
Such power has to be specified and provided for.
It may even be residuary but in that case too it should be provided for and traceable either in the Act or the Articles of Association.
Even if the power of refusal is so specified and provided for the registration of a transferred share cannot be refused arbitrarily or for any collateral purpose, and can be refused only for a bona fide reason in the inter est of the company and the general interest of the share holders.
If neither a specific nor residuary power of refus al has been so provided, such power cannot be exercised on the basis of the so called undeclared inherent power to refuse registration on the ground that the company or its Directors take the view that in the interest of the Company and the general interest of the shareholders, registration of the transfer of shares should be refused.
Indeed making a provision in the Act or the Articles of Association etc.
conferring power of refusal would become futile if existence of an inherent power is assumed, for the simple reason that the amplitude of the so called undeclared inherent power would itself take care of every refusal to register the transfer of share.
Assumption of such a power would result in leaving the matter of transfer of share and its registra tion at the mercy and sweet will of the company or its Directors, as the case may be.
[86E H; 87A B] 2.
The objects or purposes for which a company is creat ed should be distinguished from the powers which it can exercise.
So far as refusal to register the transfer of a share is concerned the power has to be specified and within the framework of the said specification.
There is no inher ent power in this behalf.
[90B] In re Smith Knight & Co., IV Chancery Appeal Cases 20; In re National Provincial Marine Insurance Company, V Chan cery Appeal Cases 559; Moffatt vs Parqunar, VII Chancery Division 591; In re 84 Cawley & Co., XLH Chancery Division 209; In re Discoverers Finance Corporation Ltd., [1910] 1 Chancery Division 312 and Sadashiv vs Gandhi Sewa Samaj, AIR 1958 Bom.
247 followed.
Palmer 's Company Law 24th Edn.
p. 121 referred to.
The Conservators of the River Tone vs Ash, 109 English Reports 479; Attorney General vs The Lord Mayor etc.
of the City of Leeds, [1929] 2 Chancery Division 291; E.M. Muthappa Chettiar vs Salem Rajendra Mills Ltd., XXV Company Cases 283; Life Insurance Corporation of India vs Escorts Ltd. & Ors., [1985] Suppl.3 S.C.R. 909 and Bajaj Auto Ltd. vs N.K. Firodia and Anr., 41 Comp.
Cases 1, distinguished.
In the context in which the words "or otherwise" have been used in sub section (2) of section 111, they only purport to cast a duty or impose an obligation of giving notice of refusal to register the transfer of a share irre spective of the fact whether such refusal is under the Articles of Association of the Company or de hors the Arti cles, which would include even a case where such refusal has been made arbitrarily or for any collateral purpose.
A fortiorari, this would be the interpretation of even Article 42 of the Articles of Association of the Company inasmuch as on its plain language which, except for the provision for punishment, is in pari materia with sub section (2) of Section 111 of the Act.
The purpose of this Article is the same as of the said sub section (2).
To introduce a concept of either conferment or recognition of a right to refuse registration of the transfer of a share in sub section (2) militates against and runs counter to the very texture and purpose of this subsection.
[88A C; 87E] 4.
The transferor is not a necessary party to an appli cation under section 155 of the Act unless the transfer was disputed by him.
[92B C] 5.
In the instant case, it has been found as a fact by the High Court that it had not been proved that the respond ent had paid higher prices for the shares than those stated in the transfer deeds.
Therefore, there is no justification for interfering with the said finding of fact.
On this finding the transfer deeds could not be termed as unduly stamped and power to refuse the registration of the transfer of shares contemplated by section 108 of the Act could not be invoked.
[92D E]


judgement:
Petition (Criminal) No. 222 of 1989 etc.
(Under Article 32 of the Constitution of India).
Kapil Sibal, Arvind K. Nigam and Ms. Kamini Jaiswal for the Petitioners.
V.C. Mahajan, Subba Rao and P. Parmeshwaran for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
Elaborate submissions have been made by the learned Counsel for both the parties and, accordingly, we proceed to dispose of the case on its merit after granting special leave.
This appeal is directed against the judgment of the High Court of Punjab & Haryana, dismissing the writ petition filed by three detenu including one Madan Lal Anand, the husband of the appellant, challenging the validity of the orders of detention, all dated September 30, 1988, passed by the Joint Secretary to the Government of India, the detain ing authority, under section 3(1) of the , hereinafter referred to as the 'COFEPOSA Act '.
So far as the detenu Madan Lal Anand is concerned, the order of detention was passed 'with a view to preventing the detenu from abetting the smuggling of goods and dealing is smuggled goods otherwise than by engaging in transporting or conceal ing or keeping smuggled goods '.
The order of detention along with the grounds of such detention was served on the detenu on October 18, 1988 and a declaration under section 9 of the COFEPOSA Act was made on November 2, 1988 and served on him on November 3, 1988.
The grounds of detention that were served on the detenu run into several pages.
It is not necessary to reproduce all the grounds, but we may state only the relevant allegations against the detenu as made in the grounds of detention.
737 It is alleged that information was received that polyes ter filament yarn and polyester fibre imported in the name of M/s. Jasmine, B 3/7, Vasant Vihar, New Delhi, and M/s Expo International, C 224, Defence Colony, New Delhi, under the Duty Exemption Entitlement Certificate Scheme (DEEC Scheme).
were being disposed of in the local market without fulfilling export obligations in contravention of the provi sions of the Notification No. 117/CUS/78 dated 9.6.1978 (as amended) and the conditions of Advance Import Trade Control Licences.
M/s. Jasmine obtained five "Actual User" advance li cences in the financial year 1984 85 from the Joint Chief Controller of Imports & Exports, New Delhi, for the import of polyester filament yarn and polyester fibre free of customs duty under the DEEC Scheme.
Under this Scheme, M/s. Jasmine were granted the said licences subject to the condi tions, inter alia, that they would manufacture readymade garments (resultant products) out of the imported polyester filament yarn and polyester spun yarn and export the result ant products abroad within a period of six months from the date of the first clearance of the imported consignment in terms of the conditions of the advance licences and the conditions of the said Notification dated 9.6.1978.
By virtue of the other advance licences, excepting the fifth licence dated 9.1.
1985, the said M/s. Jasmine import ed the polyester filament yarn without payment of import duty amounting to more than Rs. 3 crores.
It is the case of the detaining authority that in respect of the imported yarn M/s. Jasmine have not fulfilled their export obligation in respect of the polyester filament yarn got cleared by them against the above licences thereby violating the provisions of the said Notification dated 9.6.1978 and the conditions of the advance licences and, consequently, the provision of section 111(0) of the .
In the applications made to the Joint Chief Controller of Imports & Exports, New Delhi, for the grant of advance licences, one Naresh Chadha and Madan Lal Chadha were de clared as the Partners of M/s. Jasmine and the address of their factory premises was declared as Khasra No. 694/205, Village Lado Sarai, New Delhi, which on investigation was found to cover the whole village of Lado Sarai.
During the last quarter of 1985 M/s. Jasmine shifted their factory premises to 374, Ram Darbar, Industrial Area, Phase II, Chandigarh.
On enquiry, it came to light that M/s. Jasmine did not manufacture any ready made garments in the said premises.
The raw material imported by the firm 738 was never brought to either of the said two premises for the purposes of manufacture.
They had no intention to manufac ture or export the goods, as there was neither any machinery at the so called factory premises nor power connection.
M/s. Expo International also obtained five "Actual User" advance licences in the financial year 1984 85 from the Joint Chief Controller of Imports & Exports, New Delhi, for the import of polyester filament yarn and polyester fiber, free of customs duty, under the DEEC Scheme.
They were also required to manufacture the resultant products out of the imported polyester filament yarn and polyester fiber and to export out of India resultant products within a period of six months from the date of clearance of the first consign ment of raw material in terms of the conditions of the ad vance licences and the provision of the said Notification dated 9.6.1978.
M/s. Expo International also imported polyester filament yarn under three advance licences without payment of customs import duty amounting to Rs.49.29 lakhs against the first licence dated 29.5.
1984 and Rs.1.17 crores against the second and third licences dated 3.8.
1984 and 11.9.1984, but did not clear the imported material.
The other two licences were not utilised by them.
In ground No. 15, it has been stated that investigations conducted by the Customs and Central Excise Staff, Chandi garh, have revealed that both the said firms have not ful filled their export obligations so far in terms of the advance licences granted to them and also in terms of the provisions of the said Notification dated 9.6.1978 (as amended) issued under section 125 of the .
Inves tigations have also revealed that both the firms have sold the polyester filament yarn cleared by them without payment of duty in contravention of the provisions of the above Notification and conditions of the advance licences.
It is the case of the detaining authority in the grounds of detention and the counter affidavit filed on behalf of the respondents that the said firms, namely, M/s. Jasmine and M/s. Expo International are benami firms of the detenu including the detenu Madan Lal Anand.
Although the said Naresh Chadha and Krishan Lal Chawla are stated to be the Partners of M/s. Jasmine and the said Naresh Chadha to be the Proprietor of M/s. Expo International, they were ciphers and the detenu had been taking out the advance licences in the benami of the said two firms.
Further, the said two firms had no factory anywhere, 739 and that they had no intention to comply with the conditions of the licences, that is, to export the resultant products out of the imported material for which the advance licences were issued.
The detenu Madan Lal Anand was arrested on 21.6.1988 under section 104 of the for his involvement in the import, clearance and sale of polyester filament yarn and polyester fiber in the names of the above two firms and on his application he was released on bail.
Again, the Chief Judicial Magistrate, Chandigarh, granted bail to the detenu on 11.7.
1988 and adjourned the case sine die.
In paragraph 47 of the grounds of detention, it has been stated by the detaining authority that the detenu has played a very active and major role for obtaining advance licences in the names of the said firms, importing the polyester filament yarn and polyester fiber, getting the same cleared from Bombay Customs and also for selling it in the local market in India in violation of the conditions of the said Notification dated 9.6.1978 and also of the advance li cences.
The detenu has been abetting the smuggling of the goods and also has been dealing with smuggled goods other wise than by engaging in transporting or concealing or keeping smuggled goods.
The three detenu including Madan Lal Anand filed a writ petition in the High Court of Punjab & Haryana praying for the issuance of a writ of habeas corpus and challenging the validity of the order of detention on a number of grounds.
The High Court by an elaborate judgment overruled all the contentions made on behalf of the detenu and upheld the order of detention and dismissed the writ petition.
Hence this appeal by special leave.
It has been already noticed that one of the conditions of the advance licences issued to the said firms was that the importer would manufacture ready made garments out of the imported polyester filament yarn and polyester fiber and export the resultant products abroad within a period of six months from the date of first clearance of the imported consignments in terms of the conditions of the advance licences.
With reference to the said conditions in the licences, it is urged by Mr. Sibal, learned Counsel appear ing on behalf of the appellant, that there was no smuggling of goods or any abetment of the smuggling of goods as al leged in the order of detention.
In support of this conten tion, the learned Counsel has placed reliance upon the definition of "smuggling", as contained in section 2(e) of the COFEPOSA Act.
Section 2(e) provides that "smuggling" has the same meaning as in clause (39) of section 2 of the 740 and all its grammatical variations and cognate expressions shall be construed accordingly.
Section 2(39) of the defines "smuggling" in relation to any goods as meaning any act or omission which will render such goods liable to confiscation under section 111 or section 113 of the .
It is not disputed that the relevant provision is clause (0) of is section 111 which provides as follows: "111.
The following goods brought from a place outside India shall be liable to confiscation: (o) Any goods exempted, subject to any condi tion from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which a condition is not observed unless the non observance of the condition was sanctioned by the proper offi cer.
" In view of clause (0) of section 111, if any goods exempted from payment of duty is imported without observing the condition, subject to which the exemption has been made, it will be a case of smuggling within the meaning of section 2(e) of the COFEPOSA Act.
It is strenuously urged on behalf of the appellant that as an abeyance order was passed against M/s. Expo Interna tional on March 27, 1985 before the expiry of six months from the date of first clearance of the goods imported by it on December 6, 1984, the said firm was prevented from com plying with the condition of the advance licence, namely, that the ready made garments were to be manufactured out of the imported polyester filament yarn and polyester fiber and the resultant products were to be exported abroad within a period of six months from the date of the first clearance.
It is submitted on behalf of the appellant that as the detenu was prevented from complying with the condition of the advance licence within six months of the first clearance by the issuance of an abeyance order by the Dy.
Chief Con troller of Imports & ' Exports, the provision of section 111(0) of the was not violated, for the goods could not be confiscated and, accordingly, there was no question of smuggling within the meaning of section 2(e) of the COFEPOSA Act read with section 2(39) of the .
It is urged that the detaining authority should have taken into consideration the above fact and should not have passed the impugned order of detention.
Attractive though the contention is, we regret we are unable to 741 accept the same.
It is true that before the expiry of six months from the date of the first clearance of the imported goods, an abeyance order was passed against M/s. Expo Inter national.
The question is whether by such abeyance order the said firm or the detenu was prevented from manufacturing the ready made garments and exporting the same within six months from the date of.
the first clearance.
In the grounds of detention, it has been clearly stated with all relevant particulars that the said two firms had really no existence and they did not have any factory whatsoever or any manufac turing device for the purpose of manufacturing ready made garments.
It is apparent from the grounds of detention and the counter affidavit filed on behalf of the respondents that with a view to procuring the licences for the purpose of importation of the goods without payment of any duty and for selling the same in the market, the said firms were created and/or set up by the detenu including the detenu Madan Lal Anand.
In these circumstances, no exception can be taken to the passing of the abeyance order against M/s. Expo International and, as it was more than certain that the imported goods would not and could not be utilised in ac cordance with the condition of the advance licence, the provision of section 111(0) of the was violated on the very importation of the goods.
There is, therefore, no substance in the contention made on behalf of the appel lant that there was no smuggling in this case and, as such, the order of detention was not at all justified.
The conten tion is rejected.
Next it is urged on behalf of the detenu that certain documents/ orders relating to the firm M/s. Expo Interna tional, which could influence the subjective satisfaction of the detaining authority in favour of the detenu, were not placed before him at the time he passed the order of deten tion.
The said documents/orders are as follows: (1) Abeyance Order No. 120/84 85/II dated the 27th March, 1985 issued by the Dy Chief Controller of Imports & Exports to M/s. Expo International under clause 8D of the Imports Control Order, 1955 as amended, placing the firm under abeyance for a period of six months w.e.f.
the date of the issue of the order (Annexure E to Cr.
Writ 545/88) . (2) Order dated the 29th March, 1985 issued by the office of the Chief Controller of Imports & Exports, New Delhi, to M/s. Expo Interna tional suspending the operation of the said five advance import licences granted to them (Annexure G to Cr.
Writ 545/88).
742 (3) Show cause notice dated the 26th December, 1985 issued by the office of the Chief Con troller of Imports & Exports to M/s. Expo International under section 4 L for action under section 4 I of the Imports and Exports (Control) Act, 1947 as amended, and under clause 8 of the Imports (Control) Order, 1985 (as amended) Annexure II to Cr.
Writ 545/88).
(4) Show cause notice dated the 27th March, 1985 issued by the office of the Chief Con troller of Imports & Exports to M/s. Expo International under clause 10 for action under clause 9(1)(a) & (d) of the IMPORTS (Control) Order, 1955 as amended as to why the five import licences should not be cancelled and rendered ineffective (Annexure F to Cr.
Writ 545/88).
Even assuming that the above documents/orders were not placed before the detaining authority, we fail to understand how the same could have influenced the subjective satisfac tion of the detaining authority in favour of the detenu.
As has been discussed above, the abeyance order was passed on the detenu when the authorities concerned found that the above two firms had no factories and, therefore, there was no question of their manufacturing ready made garments from the imported material and exporting them within a period of six months from the date of first clearance in accordance with the conditions under the advance licences.
The show cause notices issued to the said firm, M/s. Expo Interna tional, also would reveal that the detenu had failed to comply with the condition of the licences and, indeed, there was no chance of the conditions being complied with inasmuch as there was no manufacturing devices of the said firms.
We are of the view that even if the documents/orders had not been placed before the detaining authority that could not, in the least, affect the subjective satisfaction of the detaining authority.
At this stage, we may state a few more facts.
M/s. Expo International filed a civil revision petition, being C.R. No. 306 of 1986, under Article 227 of the Constitution of India in the Punjab & Haryana High Court through its alleged Proprietor, Naresh Chadha.
In this petition, M/s. Expo International prayed for the quashing of the show cause notices dated December 26, 1985 referred to above.
Another civil revision petition, being C.R. No. 3694 of 1985, was filed by M/s. Jasmine through its alleged Partner, Krishan Lal Chawla, inter alia, praying for release of certain documents to the said firm so as to 743 enable it to have its goods released from the Bombay Port.
It is significant to notice that in C.R. No. 306 of 1986, copies of all the said show cause notices dated December 26, 1985 and a copy of the said abeyance order dated December 27, 1985 were annexed.
Further, in C.R. No. 3694 of 1985 three miscellaneous applications were filed, namely, C.M. Applications Nos. 3199, 3498 and 3702 of 1988.
These appli cations have been mentioned in paragraphs 41, 42 and 43 of the grounds of detention.
Again, in paragraph 28 of the grounds of detention the said C.R. No. 306 of 1986 has been referred to as follows: "As per Civil Revision No. 306 of 1986 filed in the Punjab & Haryana High Court at Chandi garh, the factory premises were shifted some where in Mohali, but specific address of the factory was not declared either to the Joint Chief Controller of Imports & Exports, New Delhi, or to any other department.
" It is apparent from the facts stated above that the detaining authority had before him the petitions numbered as C.R. No. 306 of 1986 and C.R. No. 3694 of 1985, for he had referred to these civil revision petitions in the paragraphs mentioned above.
The grievance of the detenu that the said abeyance order and the show cause notices were not placed before the detaining authority has no factual foundation whatsoever inasmuch as the copies of the same were annexed to the petition in C.R. No. 3694 of 1985.
Another complaint has been made by the detenu that while the detaining authority had referred to the said C.R. No. 306 of 1986 and C.R. No. 3694 of 1985, he should have for warded copies of the said civil revision petitions to the detenu so that he could make an effective representation against the order of detention.
So far as C.R. No. 306 of 1986 is concerned, it has been already noticed in what context the same was referred to in paragraph 28 of the grounds of detention.
In C.R. No. 3694 of 1985, three civil miscellaneous applications were filed and the detaining authority had forwarded to the detenu copies of all the said three civil miscellaneous applications.
But, he did not forward to the detenu a copy of the civil revision petition.
The learned Counsel for the appellant has placed much reliance on a decision of the Delhi High Court in Kirpal Mohan Virmani vs Tarum Roy and others, In that case, the Delhi High Court has taken the view that the copies of important documents and circumstances which have a material bearing or could have 744 influenced the subjective satisfaction of the detaining authority should be supplied to the detenu.
It has been observed that if such documents are not supplied to the detenu, the detaining authority will then base his subjec tive satisfaction to detain a person without the help of the material documents even though to some extent or to a large extent the same go in favour of that person and that, ac cordingly, such a situation cannot be allowed to exist nor the liberty of an individual can be put to peril at the whims of the detaining authority.
In taking that view, the Delhi High Court also noticed the following observation made by this Court in Vakil Singh vs State of Jammu & Kashmir and another, " 'Grounds ' within the contemplation of Section 8(1) means materials on which the order of detention is primarily based.
Apart from the conclusions of facts 'grounds ' have a factual constituent also.
They must contain the pith and substance of primary facts but not subsid iary facts or evidential details.
" Although the Delhi High Court has referred to the above observation of this Court, it has not considered the effect of such observation.
The above observation lends support to the contention made on behalf of the respondents that only copies of documents on which the order of detention is primarily based should be supplied to the detenu and not any and every document.
We must not, however, be understood to say that the detaining authority will not consider any other document.
All that has to be shown is that any document which has bearing on the subjective satisfaction of the detaining authority but not relied upon by him was before the detaining authority at the time he passed the order of detention.
In the instant case, the detaining authority had placed reliance upon three civil miscellaneous applications filed in the said C.R. No. 3694 of 1985 and supplied to the detenu copies of the said three civil miscellaneous applications.
We do not find any substance in the contention made on behalf of the detenu that a copy of the civil revision petition should have also been supplied to him.
The decision of this Court in Kirti Kumar Chaman Lal Kundaliya vs Union of India, does not, in our opinion, help the contention of the detenu.
In the instant case, really the three civil miscellaneous applications have been re ferred to in the grounds of detention and not the civil revision petition, mentioning of which is necessary in order to identify the civil miscellaneous applications.
745 As regards C.R. No. 306 of 1986, the detaining authority has in paragraph 28 of the grounds of detention referred to the shifting of the factory premises by M/s. Expo Interna tional somewhere in Mohali, but no specific address of the factory was declared by the firm either to the Joint Chief Controller of Imports & Exports or to any other authority.
Mentioning of that fact in the grounds of detention does not, in our opinion, necessarily require the detaining authority to supply a copy of the civil revision petition in C.R. No. 306 of 1986.
At the same time, it has to be pre sumed that the petition in the said civil revision case was before the detaining authority and he had to go through it otherwise he could not mention in the grounds of detention the fact of the shifting of the factory premises without disclosing any specific address of the same.
In the circum stances, we are of the view that the detenu was not preju diced for the non supply to him of the copies of the docu ments mentioned 'above and, accordingly, there is no sub stance in the contention that there was non application of mind by the detaining authority.
The next contention of the detenu is that while the detaining authority had relied upon and referred to the confessional statement of the detenu as recorded by the Collector under section 108 of the , in the grounds of detention, the retraction made by the detenu was not placed before the detaining authority for his considera tion.
It is urged that if the retraction had been considered by the detaining authority, his subjective satisfaction could have been in favour of the detenu and against making an order of detention.
It is desirable that any retraction made should also be placed before the detaining authority.
But, that does not mean that if any such retraction is not placed before the detaining authority, the order of detention would become, invalid.
Indeed, this question came up for consideration before a Three Judge Bench of this Court in Prakash Chandra Mehta vs Commissioner and Secretary, Government of Kerala, ; In that case, a similar contention was made.
This Court in overruling the contention has re ferred to section 5 A of the COFEPOSA Act and has observed as follows: "Section 5 A stipulates that when the deten tion order has been made on two or more grounds, such order of detention shall be deemed to have been made separately on each of such grounds and accordingly that if one irrelevant or one inadmissible ground had been taken into consideration that would not make the detention order bad.
" 746 In the instant case, even assuming that the ground relating to the confessional statement made by the detenu under section 108 of the was an inadmissible ground as the subsequent retraction of the confessional statement was not considered by the detaining authority, still then that would not make the detention order bad, for in the view of this Court, such order of detention shall be deemed to have been made separately on each of such grounds.
Therefore, even excluding the inadmissible ground, the order of detention can be justified.
The High Court has also overruled the contention of the detenu in this regard and, in our opinion, rightly.
In this Court, the counter affidavit that has been filed on behalf of the respondents had been affirmed by Shri Kuldip Singh, Under Secretary to the Government, and not by the detaining authority himself.
It is urged by Mr. Sibal, learned Counsel for the detenu, that the counter affidavit not having been sworn by the detaining authority himself, the averments made therein should not be taken notice of.
One of the averments made in the counter affidavit is, inter alia, as follows: "The said Revision Petition No. 306/86 does find mentioning in para 28 of the grounds of detention.
Therefore, the said C.R. along with the above said four documents which were part thereof, was before the detaining authority, though the same were not relied upon in the grounds of detention.
" The four documents referred to in the above statement are the said abeyance order and the show cause notices referred to hereinbefore.
It is submitted that the deponent of the affidavit not being the detaining authority was not competent to say that the said documents were not relied upon by the detaining authority.
It is true that the depo nent could not say whether the said documents were relied upon or not, but in the facts stated in the counter affida vit this part of the statement of the deponent, namely, that the said documents were not relied upon by the detaining authority, should be taken to be his submission.
There can be no doubt that a deponent who has no personal knowledge about any fact may, on the basis of some other facts, make his submissions to court.
We do not think that any impor tance should be attached to the said statement made by the deponent in the counter affidavit.
No personal allegation of mala fide or bias has been made by the 747 detenu against the detaining authority.
If such an allega tion had been made, in that case, the detaining authority should have himself sworn the counter affidavit either in this Court or in the High Court.
In P.L. Lakhanpal vs Union of India & Ors., , it has been observed by this Court that since no allegation of malice or dishonesty has been made in the petition personally against the Minis ter, it is not possible to say that his omission to file an affidavit in reply by itself would be any ground to sustain the allegation of mala fides or nonapplication of mind.
That observation also applies to the instant case where no per sonal allegation has been made against the detaining author ity.
In Asgar Ali vs District Magistrate Burdwan and Others, , the District Magistrate of Burdwan, who passed the order of detention, did not file his affidavit and this Court observed as follows: "Although normally the affidavit of the person actually making the detention order should be filed in a petition for a writ of habeas corpus, the absence of such an affidavit would not necessarily be fatal for the case of the respondents.
It would indeed depend upon the nature of allegations made by the detenu in the petition for determing whether the absence of affidavit of the person making the deten tion order introduces a fatal infirmity.
In case an allegation is made that the officer making the detention order was actuated by some personal bias against the detenu in making the detention order, the affidavit of the person making the detention order would be essential for repelling that allegation.
Likewise, such an affidavit would have to be filed in case serious allegations are made in the petition showing that the order was mala fide or based upon some extraneous considera tions.
In the absence of any such allegation in the petition, the fact that the affidavit filed on behalf of the respondents is not that of the District Magistrate but that of the Deputy Secretary, Home (Special) Department of the Government of West Bengal would not by itself justify the quashing of the detention order.
" Again, in Suru Mallick vs State of West Bengal, , the affidavit was not filed by the detaining au thority and in spite of that this Court upheld the validity of the order of detention.
Thus, merely because the detaining authority has not sworn an 748 affidavit, it will not in all circumstances be fatal to the sustenance of the order of detention.
The contention in this regard is, therefore, unsound and is rejected.
The next ground of attach to the order of detention is the delay in considering the representation of the detenu.
It is not disputed that the representation of the detenu dated January 17, 1989 which was received by the Ministry of Finance, COFEPOSA Cell, New Delhi, on 18.1.1989 was rejected and the rejection memo was communicated to the detenu on 20.2.1989.
Prima facie it appears that there has been a long gap between the receipt of the representation, the consider ation thereof and the communication of the result of such consideration to the detenu.
In paragraph XXIV of the coun ter affidavit filed on behalf of the respondents, it has been stated as follows: "The representation dated 17.1.1989 was re ceived in COFEPOSA Unit of the Ministry on 18.1.1989 under cover of letter dated 17.1.1989 of Central Jail, Tihar.
The repre sentation was sent to CCE Chandigarh for comments on 19.1.1989.
Comments of Collector were received on 18.2.1989.
Under cover of Collector 's letter dated 9.2.1989.
The repre sentation along with comments were analysed by the Under Secretary and put up to the detain ing authority and JS on 13.2.1989.
11.2.1989 & 12.2.1989 were holidays.
The detaining author ity rejected the representation addressed to him on 13.2.
1989 and marked the file to MOS (R)/FM for consideration of representation addressed to Central Government.
MOS (R) rejected the representation subject to approv al by FM on 17.2.1989.
FM rejected the repre sentation on 17.2.1989.
The rejection memo was issued on 20.2.1989.
18.2.1989 and 19.2.1989 were holidays." At the hearing of this appeal, the learned Counsel for the respondents handed over to us a list of dates showing that a number of holidays intervened between one date and another and hence the apparent delay.
It appears that the Collector of Central Excise & Customs received the represen tation for his comments on 23.11.
1989 and handed over the same to the dealing officer for comments on 24.1.
1989 and the Collector 's comment was made on 9.2.1989.
Between 25.1.1989 and 8.2.1989 a number of holidays intervened, namely, 26.1.1989 (Republic Day), 28.1.1989 and 29.1.1989 (Saturday and Sunday), and 4.2, 1989 and 5.2.1989 (Saturday and Sunday).
On 749 9.2.
1989, it was sent to the Ministry of Finance (COFEPOSA CELL), New Delhi, and was received by that Ministry on 10.2.
1989.11.1. 1989 and 12.2.1989 being Saturday and Sunday were holidays.
On 13.2.
1989, it was put up before the Joint Secretary, COFEPOSA, and was sent to the Minister of State (Revenue).
The file was received back after the rejection of the representation and such rejection was communicated to the detenu on 20.2.1989.
The two intervening dates, namely, 18.2.1989 and 19.2.1989 being Saturday and Sunday were holidays.
It is clear from the above statement that there was no laches or negligence on the part of the detaining authority or the other authorities concerned in dealing with the representation of the detenu.
In Mst.
L.M.S. Ummu Saleema vs Shri B.B. Gujaral and Another, ; it has been observed that the time imperative can never be absolute or obsessive, and that the occasional observations made by this Court that each day 's delay in dealing with the representa tion must be adequately explained are meant to emphasise the expedition with which the representation must be considered and not that it is a medical formula, the slightest breach of which must result in the release of the detenu.
In the instant case, the detaining authority has explained the delay in the disposal of the representation made by the detenu and, accordingly, the order of detention cannot be rendered invalid on that ground.
Lastly, it is argued that the life of each of the ad vance licences has long expired and, therefore, there is no chance of the detenu in involving himself in smuggling activities, as he would not be in a position to import any goods by virtue of the advance licences.
It is submitted that the object of such detention is not punitive, but is preventive.
As there is no chance for the detenu to act in violation of the provisions of the COFEPOSA Act, the deten tion order should be quashed on that ground.
In support of that contention strong reliance has been placed on behalf of the detenu on a decision of the Delhi High Court in Achla Kakkar vs Administrator, Union Territory of Delhi and Others, [1988] Crl.
Law Journal 1896, where it has been observed that the recurrence of breach of such economic offence can be effectively prevented by black listing the person concerned, his detention under the COFE POSA Act was in the nature of punishment liable to be quashed.
In that case also, the detenu imported polyester zips and sold the same in the market without complying with the conditions of the advance li 750 cences.
There is, however, an important point of distinction between the facts of that case and those of the instant case before us.
In that case, the licences were issued in the name of the detenu himself.
But here the licences were issued not in the name of the detenu, but to the name of the said two firms which, according to the detaining authority, had really no existence and were the benami concerns of the detenu.
It is contended by Mr. Mahajan, learned Counsel appearing on behalf of the respondents, that if the detenu is released, he may indulge in such economic offences in setting up fictitious firms and taking out advance licences in the name of such firms.
We have taken into consideration the allegations made in the grounds of detention and in the counter affidavit and it appears that in the names of the said two firms huge amount of export duty has been evaded and the imported goods, which have been allowed to be cleared, have been sold in the market.
We are unable to accept the contention made on behalf of the detenu that the goods were cleared and sold under the orders of the High Court.
It has been rightly observed in the impugned order of the High Court that, surely, the High Court did not permit the detenu to sell the goods in the market.
It may be that a part of the imported goods has not been allowed to be cleared and stands forfeit ed to the Government, but that is no ground in favour of the detenu.
The Government may realise a part of the duty by selling those goods, but that is neither here nor there.
The fact remains that the detenu got the goods cleared and sold the same in the market.
We find no reason not to accept the contention of the respondents that the licences were pro cured by the detenu with a view to importing the goods duty free and selling the same in the market and thereby making a huge profit to the loss and detriment of national economy.
After giving our anxious consideration to all aspects of the case, we uphold the judgment of the High Court.
and dismiss the appeal.
Writ Petition (Criminal) No. 222 of 1989.
The disposal of the above appeal means the disposal of the writ petition.
The writ petition is, accordingly, dis missed.
R.S.S. Appeal and Petition dismissed.

dataset_name: IN-Abs

summary/full:
The petitioner, Madan Lal Anand, was detained alongwith two other persons, under section 3(1) of the , 1974 COFEPOSA ACT.
In the grounds of detention it was inter alia alleged that the detenu had imported polyester filament yarn and polyester fibre in the names of M/s Jasmine and M/s Expo International on the basis of "Actual User" advance licences obtained under the Duty Exemption Entitlement Certificate Scheme on the condition that they would manufac ture ready made garments out of the imported polyester filament and export the same; that they had no intention to manufacture or export the manufactured goods, as there was neither any machinery at their so called factory nor any power connection; that investigations had revealed that both the firms had sold the imported polyester filament yarn in contravention of the orders and conditions of the advance licences; and that the said firms were benami firms and Madan Lal Anand had played a very active and major role for obtaining advance licences in the names of the said firms, importing the yarn and selling it in the local market.
The three detenu, including Madan Lal Anand, filed a petition in the High Court of Punjab and Haryana praying for the issuance of a writ of habeas corpus and challenging the validity of the order of detention.
The High Court dismissed the petition.
Before this Court it was contended on behalf of the detenu that: 734 (i) as the detenu was prevented from complying with the condition of the advance licence within six months of the first clearance by the issuance of an abeyance order by the by.
Chief Controller of Imports & Exports, the provision of section 111(0) of the Customs Act was not violated, for the goods could not be confiscated and, accordingly, there was no question of smuggling within the meaning of section 2(e) of the COFEPOSA ACT read with section 2(39) of the Customs Act, 1962; (ii) certain documents/orders, including the abeyance order, which could influence the subjective satis faction of the detaining authority in favour of the detenu were not placed before him; (iii) while the detaining au thority had relied upon and referred to the confessional statement of the detenu, the retraction made by the detenu was not placed before the detaining authority; (iv) the counter affidavit not having been sworn by the detaining authority himself, the averments made therein should not be taken notice of; (v) there was delay in considering the representation of the detenu; and (vi) the life of each of the advance licences having expired, there was no chance of the detenu now involving himself in smuggling activities.
Dismissing the appeal as well as the writ petition this Court, HELD: (1) In view of clause (0) of section 111 of the if any goods exempted from payment of duty is imported without observing the condition, subject to which the exemption has been made, it will be a case of smuggling within the meaning of section 2(e) of the COFEPOSA ACT, [740D] (2) It was more than certain that the imported goods would not and could not be utilised in accordance with the condition of the advance licence, the provision of section 111(0) of the was violated on the very importa tion of the goods.
There was, therefore, no substance in the contention that there was no smuggling in this case.
[741D] (3) Even if certain documents/orders had not been placed before the detaining authority that could not, in the least, affect the subjective satisfaction of the detaining authori ty.
[742D] Kirpal Mohan Virmani vs Tarun Roy, ; Vakil Singh vs State of Jammu & Kashmir, and Kirit Kumar Chaman Lal Kundaliya vs Union of India, , referred tO. (4) The detenu was not prejudiced for non supply to him of the 735 copies of certain documents and accordingly there was no substance in the contention that there was non application of mind by the detaining authority.
[745C] (5) Even assuming that the ground relating to the con fessional statement made by the detenu under section 108 of the was an inadmissible ground as the subsequent retraction of the confessional statement was not considered by the detaining authority, still then that would not make the detention order bad, for, in the view of this Court, such order of detention shall be deemed to have been made separately on each of such grounds.
Therefore, even exclud ing the inadmissible ground, the order of detention can be justified.
[746A B] Prakash Chandra Mehta vs Commissioner & Secretary, Government of Kerala, ; , referred to.
(6) There can be no doubt that a deponent who has no personal knowledge about any fact may, on the basis of some other facts, make his submission in court.
[746G] (7) Merely because the detaining authority has not sworn an affidavit, it will not in all circumstances be fatal to the sustenance of the order of detention.
[747H] P.L. Lakhanpal vs Union of India & Ors.
, ; Asgar Ali vs District Magistrate Burdwan & Ors., and Suru Mallick vs State of West Bengal, , referred to.
(8) There was no laches or negligence on the part of the detaining authority or the other authorities concerned in dealing with the representation of the detenu.
The observa tions made by this Court that each day 's delay in dealing with the representation must be adequately explained are meant to emphasize the expedition with which the representa tion must be considered and not that it is a magical formu la, the slightest breach of which must result in the release of the detenu.
[749C D] Mst.
L.M.S. Ummu Saleema vs Shri B.B. Gujaral, ; , explained.
(9) The said two firms had really no existence and were the benami concerns of the detenu, and the detenu if re leased, may indulge in such economic offences in setting up fictitious firms and taking out 736 advance licences in the name of such firms.
[750B] Achla Kakkar vs Administrator, Union Territory of Delhi


judgement:
ivil Appeal No. 5 19521 of 1975.
From the Judgment and Order dated 9.5.1974 of the Punjab and Haryana High Court in I.T. Reference Nos. 30 to 32 of 1973.
G.C. Sharma, Ms. A. Subhashini and K.C. Dua for the Appellant.
Dr. Y.S. Chitale, R.K. Jain, Rakesh Khanna and Ms. Abha Jain for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
These appeals by special leave are directed against a judgment of the High Court of Punjab and Haryana disposing of an Income tax Reference in favour of the re spondent assessee.
The assessee manufactures strawboard.
For the assessment years 1965 66, 1966 67 and 1967 68 (the relevant previous years being the respective calendar years 1964, 1965 and 1966), the assessee claimed concessional rates of income tax, development rebate at higher rate and deduction under section 80 E of the Income Tax Act, 1961 on the 774 ground that the manufacture of strawboard was a priority industry.
For the assessment year 1965 66 the total income assessed was Rs. 17,71,334 and against the basic rate of 80 per cent the assessee claimed rebate at the rate of 35 per cent up to Rs. 10,00,000 and on the balance at 26 per cent.
The Income Tax Officer allowed the rebate at 30 per cent up to Rs. 10,00,000 and at 20 per cent on the balance.
For the assessment year 1966 67 the assessee claimed development rebate under section 33 of the Income Tax Act at the rate of 25 per cent on the value of the machinery installed after 1 April, 1965 worth Rs.34,287, but rebate was allowed at 20 per 'cent only.
The assessee also claimed benefit under section 80 E (inserted by the Finance Act, 1966 with effect from 1 April, 1966) to the extent of the income determined by the Income Tax Officer at Rs.8, 17,485 received from the manu facture of strawboard.
This industry is mentioned at item No. 16 in the Fifth Schedule to the Income Tax Act as sub stituted by the Finance Act, 1965.
The claim of the assessee was.
rejected by the Income Tax Officer.
For the assessment year 1967 68 the total income of the assessee was determined at Rs. 11,00,885.
The assessee claimed relief under section 80 E to the extent of Rs.7,50,316 received as income from the manufacture of strawboard.
This claim was similarly rejected by the Income Tax Officer on the ground that the assessee could not be described as a priority industry.
The Income Tax Officer took the view that the manufacture of Strawboard was not covered by the words 'paper and pulp ' in the rele vant Schedules pertaining to the assessment 1966 67 and 1967 68.
The assessee appeared to the Appellate Assistant Commis sioner of Income Tax in respect of the three assessments, but the appeals were dismissed.
In second appeals filed in all the three cases, the assessee 's plea that the manufac ture of strawboard was a priority industry was accepted and the Appellate Tribunal held that the assessee was entitled to the statutory rebates claimed by it.
At the instance of the Revenue, the Tribunal referred the following questions to the High Court for its opinion: "Assessment year 1965 66 Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that 'strawboard ' is covered by the term 'paper and pulp ' appearing in paragraph F of Part I read with Part III of the First Schedule to the Finance Act, 1965 (Act No. X of 1965)? 775 Assessment years 1966 67 and 1967 68 Whether on the facts and in the circumstances of the case, the Appellate Tribunal was fight in law in holding that 'strawboard ' is covered by the term 'paper and pulp ' appearing at item 16 of the Fifth Schedule to the Income Tax Act, 1961 and in allowing the assessee 's claim under section 80 E of the Act?" The High Court has held that the strawboard industry is covered within the expression 'paper and pulp ' appearing in the relevant Schedules of the Income Tax Act and has, there fore, answered the questions referred to it in the affirma tive, in favour of the assessee and against the Revenue.
The sole question before us is whether strawboard can be said to fall within the expression 'paper and pulp ' men tioned in the Schedules relevant to the respective assess ment years.
To resolve the question it is necessary, first to examine the significance and scope of the Schedules.
The provision for rebate has been made for the purpose of en couraging the setting up of new industries, and the indus tries are those described in the relevant Schedules.
It seems to us clear that when the Schedules refer to 'paper and pulp ' they in fact intend to refer to the paper and pulp industry.
That being so, the next question is whether the strawboard industry can be described as forming part of the paper and pulp industry.
We have no doubt in our mind that it does.
The expression has been used comprehensively.
It is necessary to remember that when a provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity a liberal construction should be put upon the language of the statute.
From the material before us, which we have carefully consid ered, that is the only reasonable conclusion to be reached in.
these case.
The High Court has referred to the licence dated 31 May, 1954 issued to the assessee that the undertak ing of the assessee was registered in terms of section 10 of the Industries (Development and Regulation) Act, 195 1, and the details given in the licence declare that it relates to a Schedule industry which includes newsprint, paperboard and strawboard.
The High Court has also referred to the circum stances that the process of manufacturing strawboard is identical with that of manufacturing paper.
The expression 'paper and pulp ' in the Industries (Development and Regula tion) Act includes paperboard; and strawboard.
Our attention has been drawn to the Entry relevant to the assessment year 1964 65 which speaks of 'paper and pulp including 776 paper products ' and, it is said, strawboard is evidently not within the natural meaning of the word 'paper '.
We do not think that the submission merits serious consideration.
Newsprint, paperboard and strawboard have been specifically mentioned in the entry in order to make it clear that they are included within the meaning of the word 'paper '.
In our judgment, the High Court is fight in taking the view which it has, and therefore, the appeals must be dis missed.
The appeals are dismissed with costs.
N.P.V. Appeals dismissed.

summary/full:
The assessee, manufacturer of strawboard, claimed con cessional rates of income tax, development rebate at higher rate under section 33 and deduction under section 80 E of the Income Tax Act, 1961, for the assessment years 1965 66, 1966 67 and 1967 68, on the ground that the manufacture of strawboard was a priority industry.
The claim was rejected by the Income Tax Officer on the ground that the assessee could not be described as a priority industry and that the manufacture of strawboard was not covered by the words 'paper and pulp ' in the relevant Schedules pertaining to the assessment years 1966 67 and 1967 68.
The assessee 's appeals were dismissed by the Appellate Assistant Commissioner.
In second appeals, the Appellate Tribunal accepted the assessee 's plea that the manufacture of strawboard was a priority industry and held that the assessee was entitled to the statutory rebates claimed by it.
On a reference made at the instance of the Revenue, the High Court held that the strawboard industry was covered within the expression 'paper and pulp ' appearing in the relevant Schedules of the income Tax Act.
Dismissing the appeals by the Revenue, this Court, HELD: When provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity, a liberal construction should be put upon the language of the statute.
[775E F] 773 The provision for rebate has been made for the purpose of encouraging the setting up of new industries, and the industries are those described in the Schedules relevant to the respective assessment years.
When the Schedules refer to 'paper and pulp ', they, in fact, intend to refer to the paper and pulp industry.
The expression has been used com prehensively.
[775D E] The expression 'paper and pulp ' in the Industries (Development and Regulation) Act, 1951 includes paperboard and strawboard.
Newsprint, paperboard and strawboard have been specifically mentioned in the relevant entry in order to make it clear that they are included within the meaning of the word 'paper '.
The process or ' manufacturing straw board is identical with the process of manufacturing paper.
[775G H; 776A] In the circumstances, there is no doubt that the straw board industry is part of the paper and pulp industry and the assessee, whose undertaking was registered in terms of section 10 of the Industries (Development and Regulation), 1951 is entitled to the rebates claimed by it.
[775E]


judgement:
Civil Appeal No. 4567 of 1989.
From the Judgment and Order dated 22.12.1988 of the Punjab & Haryana High Court in C.R. No. 1327 of 1987.
Gopal Subramanium, N.D. Garg and Rajiv K. Garg for the Appellant.
J.K. Nayyar, Rajeev Sharma and S.K. Bisaria for the Respondent.
The short question for consideration in this appeal at the instance of the landlord in a proceeding for eviction under the East Punjab Urban Rent Restriction Act is as to whether the appellant before us is a specified landlord as defined in section 2(hh) of the Act.
The High Court has decided against the landlord by relying upon the decision of this Court in the case of D.N. Malhotra vs Kartar Singh, [1988] 1 SCC 656.
When this matter came before a 2 Judge Bench on 16.8.1988 the following order was made: "This matter may be listed before a Bench of three Hon 'ble Judges two weeks hence for consideration of the question in the light of the decision of this Court in D.N. Malhotra vs Kartar Singh, [1988] 1 SCC 656." Section 2(hh) of the Act defines 'specified landlord ' to mean: 95 "a person who is entitled to receive rent in respect of a building on his own account and who is holding or has held an appointment in a public service or post in connection with the affairs of the Union or of a State.
" It is not disputed that the appellant was Reader to the Sessions Judge of Sangrur from where he retired on 30th of September, 1981.
He was thus holding a post in connection with affairs of a State.
He was member of a Mitakshara family and the house in question was tenanted out to the respondent by his father in July, 1982, and upon his father dying in the following month the tenant attorned to the appellant.
Section 13 A of the Act provides: "Where a specified landlord at any time, within one year prior to or within one year after the date of his retirement or after his retirement but within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985, whichever is later, applies to the Controller along with a certificate from the authority competent to remove him from service indicating the date of his retirement and his affidavit to the effect that he does not own and possess any other suitable accommodation in the local area in which he intends to reside to recover posses sion of his residential building or scheduled building, as the case may be, for his own occupation, there shall accrue, on and from the date of such application to such specified landlord, notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force or in any contract (whether expressed or implied), custom or usage to the contrary, a right to recover immediately the possession of such residential building or scheduled building or any part or parts of such building if it is let out in part or parts: . . ." The amendment came into force with effect from 16.11.1985.
The appellant applied for eviction on 13.5.1986.
Thus, within one year of the enforcement of the Amending Act of 1985, the application for eviction was filed following the procedure laid down under the Act.
Appellant 's conten tion which has been rejected in the Courts below has been that all the ingredients of the definition of 'specified landlord ' are satisfied and he should, therefore, have been admitted to be a 96 specified landlord and given the benefit of the special procedure.
The High Court relied upon the following observa tions in Malhotra 's case: "It has been urged before us on behalf of the respondent at the relevant time i.e. after retirement of the respondent from service within one year of the date of commencement of the said Act he is the landlord of the appel lant and as such he falls within the defini tion of section 2(hh) of the said Act and he becomes a specified landlord.
This submission, in our view, cannot be sustained inasmuch as the words 'specified landlord ' as used in section 2(hh) refer to the person in service of the Union who is a landlord at the time of his retirement from the public service or post in connection with the affairs of the Union or of State.
It cannot in any manner include an ex serviceman who was not a specified landlord qua the tenant and the premises on or before the date of his retirement from the service of the Union.
This has been very succinctly held by this Court in the case of Mrs. Winifred Ross vs Mrs. Ivy Fonseca, which has been referred to hereinbefore.
" Malhotra 's case in terms relied upon an earlier decision of this Court in Mrs. Winifred Ross vs Mrs. Ivy Fonseca, [1984] 1 SCC 288 in support of its view.
It is not disputed that on the ratio laid down by this Court in the two decisions referred to above the High Court had come to the correct conclusion that on the facts the appellant could not be a specified landlord.
It is now for consideration whether the cases of Winifred Ross and D.N. Malhotra, have been correctly decided.
Winifred Ross, case was considering section 13A of the Bombay Rents, Hotel & Lodging Houses Rates Control Act of 1947.
Section 13A had been brought into the Act in 1975.
The said section provided: "Notwithstanding anything contained in this Act, (a) a landlord who is a member of the armed forces of the Union, or who was such member and is duly retired (which term shall include premature retirement), shall be enti tled to recover possession of any premises, on the ground that the premises are bona fide required by him for occupation by himself or any member of his family (which 97 term shall include a parent or other relation ordinarily residing with him and dependent on him); and the Court shall pass a decree for eviction on such ground if the landlord, at the hearing of the suit produces a certificate signed by the Head of his Service or his Commanding Officer to the effect that (i) he is presently a member of the armed forces of the Union or he was such member and is now a retired ex serviceman; (ii) . . . . (b) . . . . " Dealing with this provision this Court said: "The essential requirement is that he should have leased out the building while he was a member of the Armed Forces.
His widow can also recover the premises of which she is or has become the landlord under clause (b) subject to fulfilment of the conditions.
Having regard to the object and purposes of the Act and in particular Section 13 A 1, it is difficult to hold that Section 13 A 1 can be availed of by an ex member of the Armed Forces to recover from a tenant possession of a building which he acquires after his retirement.
Acceptance of this argument will expose the very Section 13 A 1 of the Act to a successful challenge on the ground of violation of Article 14 of the Constitution for it that were so, a retired military officer who has no house of his own can purchase any building in the occupation of a tenant after his retirement, successfully evict a tenant living in it on the ground that he needs it for his use, then sell it for a fancy price and again because he has no house of his own, he can again acquire another building and deal with it in the same way.
There appears to be n0 restriction on the number of times he can do so.
It was argued that he would not be able to get the requisite certificate under the Act more than once.
A reading of Section 13 A 1 of the Act shows that the certificate should show that the person concerned has been a member of the Armed Forces and that he does not possess any other suitable residence in the local area where he or members of his family can reside.
Those 98 conditions being satisfied the certificate cannot be refused.
A liberal construction of Section 13 A1 of the Act as it is being pressed upon us, would also enable unscrupu lous landlords who cannot get rid of tenants to transfer their premises to ex military men, as it has been done in this case in order to avail of the benefit of the said section with a private arrangement between them.
It is also possible that a person who has retired from the Armed Forces may after retirement lease out a premises belonging to him in favour of a tenant and then seek his eviction at his will under Section 13 A 1 of the Act . . . " A little later in the same decision this Court said: "Since a liberal interpretation of Section 13 A 1 of the Act is likely to expose it to a successful challenge on the basis of Article 14 of the Constitution, it has to be read down as conferring benefit only on those members of the Armed Forces who were landlords of the premises in question while they were in serv ice even though they may avail of it after their retirement.
Such a construction would save it from the criticism that it is discrim inatory and also would advance the object of enacting it, namely, that members of the Armed Forces should not while they are in service feel worried about the difficulties of a long drawn out litigation when they wish to get back the premises which they have leased out during their service.
" In Malhotra 's case, this Court was called upon to con sider section 13A of the very Act with which we are now con cerned.
On the basis of the ratio in Winifred Ross ' case, this Court came to the conclusion that until the landlord satisfied the test that he was a landlord qua the premises and the tenant at the time of his retirement or discharge from service, he would not be entitled to the benefit of section 13A of the Act.
It is not disputed that the appellant retired on 30th of September, 1981.
On the finding the appellant is right in his submission that this was not a case of transfer with an oblique motive but as the property belonged to a Mitakshara father, upon his death the property has come to his hands.
This feature which is different from the facts appearing in the two reported decisions, however, would not persuade us to give a different meaning to the definition in section 2(hh).
In both the cases, for good reason this Court came to the conclusion that the public officer 99 should have been a landlord of the premises in question while in service.
Admittedly, the appellant was not the landlord before he superannuated.
We are of the view that the opinion of this Court in Winifred Ross ' case is unassailable and, therefore, the appellant would not be entitled to the benefit of the spe cial procedure in section 13A of the Act.
The appeal fails and is dismissed.
Parties are directed to bear their own costs.
P.S.S. Appeal dismissed.

summary/full:
Section 13A of the East Punjab Urban Rent Restriction Act, 1949 lays down the procedure for a 'specified landlord ' to seek immediate recovery of possession of his residential building at any time within one year prior to or within one year after the date of his retirement or after his retire ment but within one year of the date of commencement of the East Punjab Urban Rent Restriction (Amendment) Act, 1985, whichever is later.
Section 2(hh) of the Act defines 'speci fied landlord ' to mean a person who is entitled to receive rent in respect of a building on his own account and who is holding or has held an appointment in a public service or post in connection with the affairs of the Union or of a State.
The appellant, who was holding a post in connection with the affairs of the State, had retired on September 30, 1981.
He was member of a Mitakshara family.
The house in question was tenanted out to the respondent by his father in July 1982 and upon his father dying in the following month the tenant attorned to the appellant.
The amendment came into force with effect from November 16, 1985.
The appellant applied for eviction on May 13, 1986.
He sought benefit of the special procedure laid down in section 13A of the Act on the ground that all the ingredients of the definition of 'speci fied landlord ' were satisfied.
The courts below rejected the contention.
The High Court relying on the ratio laid down by this Court in D.N. Malhotra vs Kartar Singh, [1988] 1 SCC 656 and Mrs. Winifred Ross vs Mrs. Ivy Fonseca, [1984] 1 SCC 288 held that the appellant could not be a 'specified land lord '.
Dismissing the appeal by special leave, HELD: Until the landlord satisfies the test that he was a landlord qua the premises and the tenant at the time of his retirement or dis 94 charge from service.
he can not be a 'specified landlord ' as defined in section 2(hh) of the East Punjab Urban Rent Restric tion Act, 1949.
[98F, 94F] In the instant case, the appellant was not the landlord of the premises in question before he superannuated.
He would not, therefore, be entitled to the benefit of the special procedure laid down in section 13A of the Act.
[99A B] D.N. Malhotra vs Kartar Singh, [1988] 1 SCC 656 and Mrs. Winifred Ross vs Mrs. Ivy Fonseca, [1984] 1 SCC 288, ap plied.


judgement:
tition No.369 of 1989.
(Under Article 32 of the Constitution of India).
K. Madhava Reddy, B. Rajeswar Mehta Dave and Ms. Neelam for the Petitioners.
M.K. Ramamurthi, M.A. Krishnamurthy, Mrs. C. Ramamurthy, GVS Surayanarayana Raju in person TVSN Chari, Jagan Rao, DRK.
Reddy, GVS Surayanarayana for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Promotee Engineers of the Roads & Buildings Wing of the Andhra Pradesh Engineering Service are the petitioners in this application under article 32 of the Constitution and challenge is to the Government circular of 12.8.1988 (Annexure A) fixing the guideline for the drawing up of the seniority list pursuant to a direction issued by this Court in a batch of writ petitions, decision whereof is reported in Siva Reddy & Ors.
vs State of Andhra Pradesh & Ors.
While petitioners are promotees, the respondents are direct recruits.
Petitioners allege that they had put in continuous service of 6 7 years by 1982 and their services having been regularised in the post of Deputy Executive Engineer in the year 1974 75, direct recruits appointed in the year 1982 cannot under any law be placed above them.
As noticed in Siva Reddy 's case (supra), substantive vacancies in the category of Assistant Engineers had to be filled up from two sources 37 1/2% by direct recruitment and the remaining 62 1/2% by transfer of Supervisors and Draughtsmen and by promotion of Junior Engineers.
Direct recruits had complained that notwithstanding this prescrip tion, there had been no recruitment of Assistant Engineers and the promotees from the other two modes had come into the cadre far in excess of the limit provided by the Rules.
The Chief Engineer by his order dated June 8, 1984 regularised the temporary service of promotees of the years 1972 73, 1973 74 and 1974 75 in the cadre of 142 Assistant Engineers (later designated as Deputy Executive Engineers).
They had, therefore, asked the quashing of the regularisation and drawing up of a seniority list on the basis of the ratio fixed under r. 3(1) of the Special Rules.
This Court in paragraph 5 of the judgment stated: "Reopening of the question of inter se senior ity on the basis of non enforcement of the rules from the very beginning may create hardship and that would be difficult to miti gate but we see no justification as to why the benefit of the scheme under the rules should not be made available to direct recruits at least from 1982.
When the State Government by rules duly framed prescribed the method of re cruitment and put the scheme into operation it had the obligation to comply with it.
The explanation offered by the State Government for non compliance of the 'requirements of the rules does not at all impress us.
We there fore, direct that as on December 31, 1982, the State Government must ascertain the exact substantive vacancies in the category of Assistant Engineers in the service.
On the basis that 37 1/2 per cent of such vacancies were to be filled up by direct recruitment, the position should be worked out.
Promotees should be confined to 62 1/2 per cent of the substantive vacancies and in regard to 37 1/2 per cent of the vacancies the shortfall should be filled up by direct recruitment.
General Rules shall not be applied to the posts within the limits of 37 1/2 per cent of the substan tive vacancies and even if promotees are placed in those posts, no seniority shall be counted.
The State Government shall take steps to make recruitment of the shortfall in the direct recruitment vacancies within the limit of 37 1/2 per cent of the total substantive vacancies up to December 31, 1987 within four months from today by following the normal method of recruitment for direct recruits.
The seniority list in the cadre of Assistant Engineers shall be redrawn up, as directed by the Tribunal by the end of September 1988, keeping the directions referred to above in view . " With a view to implementing this direction the State Govern ment came out with the impugned order dated 12.8.1988 marked Annexure 'A '.
In Siva Reddy 's case this Court found that promotees had exceeded the quota and even got regularised in respect of the posts in 143 excess of the limit.
Taking into consideration the fact that regularisation had been done after the promotees had put in some years of service and disturbing regularisation would considerably affect the officers concerned, regularisation was not interfered with.
This Court 's intention obviously was not to take away the benefit of regularisation in re spect of the officers belonging to the promotee group in excess of their quota but the Court did not intend to allow such regularised officers in excess of the quota to also have the benefit of such service for purposes of seniority.
A reading of the judgment in Siva Reddy 's case clearly indicates that this Court intended what the Government have laid down by way of guideline.
We see no justification to interfere with the Government direction.
A draft seniority list on the basis of such direction has already been drawn up and has been circulated.
We are told that objections have been received and would be dealt with in usual course by the appropriate authorities.
This writ petition had been enter tained in view of the allegation that the Government direc tion was on a misconception of what was indicated in the judgment and in case there was any such mistake the same should be rectified at the earliest.
Now that we have found that the Government order is in accord with the Court direc tion, this writ petition must be dismissed and individual grievances, if any, against the draft seniority list would, we hope, be considered on the basis of objections filed by the competent authority.
There shall be no order as to costs.
N.P.V. Petition dismissed.

summary/full:
Pursuant to this Court 's direction in K. Siva Reddy & Ors.
vs State of Andhra Pradesh & Ors.
, ; , the State Government issued Circular dated 12.8.1988, fixing the guideline for drawing up of inter se seniority list of direct recruit and promotee Deputy Executive Engi neers in Andhra Pradesh Engineering Service.
This Circular was challenged by the petitioners.
Promotee Engineers, in a Writ Petition filed in this Court, contending that since they had put in continuous service of 6 to 7 years by 1982 and their services had been regularised in the post of Deputy Executive Engineer in the year 1974 75, direct re cruits appointed in the year 1982 could not, under any law, be placed above them.
Dismissing the writ petition, this Court, HELD: Promotees had exceeded the quota and even got regularised in respect of the posts in excess of the limit.
Taking into consideration the fact that regularisation had been done after the promotees had put in some years of service and disturbing regularisation would considerably affect the officers concerned, regularisation was not inter fered with.
This Court 's intention was not to take away the benefit of regularisation in respect of the officers belong ing to the promotee group in excess of their quota but the Court did not intend to allow such regularised officers in excess of the quota to also have the benefit of such service for purposes of seniority.
[142 H; 143A B] A reading of the judgment in Siva Reddy 's case clearly indicates that this Court intended what the Government have laid down by way of guideline.
Therefore, there is no justi fication to interfere with the Government direction. [143B] 141 K. Siva Reddy & Ors.
vs State of Andhra Pradesh & Ors.
, ; , referred to.