judgement:
Civil Appeal No. 2603 2605 of 1987.
From the Judgment and order dated 8.12.1986 of the Rajasthan High Court in D.B. Special Appeal No. 889, 975 and 1135 of 1986.
G.L. Sanghi and Mrs. Rani Chhabra for the Appellants.
Shanti Bhushan and S.K. Jain for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
Special Leave granted.
Appeals are disposed of by this order.
The three appellants had been granted permits on a route from Bhadra to Hissar via Adampur.
This route lay both in the State of Rajasthan and in the State of Haryana and was thus an inter State route.
When the permits were about to expire the petitioners filed applications for their renewal in accordance with the provisions of section 58 of the Motor Vehicles Act (hereinafter called 'the Act ').
At the same time, the Rajasthan State Road Transport Corporation (hereinafter referred to as 'the Corporation ') also moved applications before the Regional Transport Authority, Bikaner, for the grant of fresh permits to it on the same route.
The applications for renewal of permits made by the petitioners as well as the applications for the grant of permits by the Corporation were heard together by the Re gional Transport Authority, Bikaner (R.T.A.) on several dates, the 643 last of which was the 6th of November, 1981.
On that date, orders were reserved by the R.T.A. The R.T.A., however, passed its order only on 27th November, 1982, about a year after the date of the hearing.
It rejected the renewal applications of the petitioners and granted permits to the Corporation in respect of the above route.
Aggrieved by the orders of the R.T.A., the petitioners filed appeals before the State Transport Appellate Tribunal (S.T.A.T.) The STAT dismissed the appeals preferred by the petitioners and confirmed the order of the R.T.A. The petitioners filed writ petitions in the High Court of Rajasthan, which were dismissed by a Single Judge on 2 1st July, 1986.
Further appeals preferred by the petitioners and certain other operators were dismissed by a Division Bench of the High Court of Rajasthan by its judgment and order dated 8th December, 1986.
These Special Leave Petitions have been preferred against the order of the Division Bench dated 8th December, 1986.
We have come to the conclusion that the order of the R.T.A. (and consequently the orders of the STAT and the High Court) should be set aside and the matter should be remitted back to the R.T.A. for fresh consideration on the short ground that the petitioners have not had a fair opportunity of putting forward and being heard on their contentions relevant to the issue before the R.T.A. The principal issue that had to be considered by the R.T.A. was whether the claims of the Corporation for the grant of a permit had precedence over the claims of the petitioners for renewal.
This issue had to be decided in the context of two statutory provisions.
The first is section 47( 1H) of the Act which reads as follows: Notwithstanding anything contained in this section, an application for a stage carriage permit from a State transport undertaking for operating in any inter State route shall be given preference over all other applications: Provided that the authority shall not grant a permit under this sub section unless it is satisfied that the State transport undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in subsection (3) of section 68D where the undertaking operates the service.
644 Explanation For the purposes of this sub section, "inter State route" means any route lying contiguously in two or more States.
The second relevant provision is the third proviso inserted in section 58(2) of the Act by an amendment applicable to the State of Rajasthan.
This sub section, in so far it is material for our present purposes, reads: . "(2) A permit may be renewed on an application made and disposed of as if it were an application for a permit: Provided further that, other conditions being equal, an application for stage carriage permit by a State transport undertaking as defined in section 68(A), shall be given preference over applications from individual owners and cooperative societies.
" The arguments before the R.T.A. primarily ranged round the question whether the terms of the proviso to section 47(1H) were fulfilled in the present case or not.
The petitioners (as well as operators on several other routes whose requests for renewal had also been countered by applications for permits by the Corporation) con tended that the Corporation was not in a position to operate in the inter State routes in question without detriment to its responsibility for providing efficient and adequate road transport service in routes which had already been nationalized under Chapter IV A of the Act.
The R.T.A. has applied its mind to this contention in what may be described as a piecemeal manner.
This was because applications made by several private operators and the corporation in regard to various routes came up for consideration by it in separate meetings held at different places on different occasions.
In fact it is this which also explains the delay in the passing of its order by the R.T.A. in the present case.
In course of the hearing before us, we called upon the respondents to produce the original records.
These show that the mat ter relating to renewal of permits of six operators (including the preG sent petitioners) was heard on 6.11.1981 and orders reserved.
On 30 .11.8 1, the counsel for the Corporation made a request to the R.T.A. that certain other matters pertaining to renewals of permits in the Bikaner region were coming up for consideration on 16.12.81 and that, therefore, the orders in the instant cases may be deferred till after the other matters were also heard by the R.T.A. This request of the counsel for the Corporation was accepted by the R.T.A. The other 645 matters referred to could not be heard on 16.12.1981 but got adjourned from time to time.
The order sheet of the R.T.A. in the present case shows that the decision in the present cases was deferred on three subsequent occasions upto 22.03.1982.
The records do not indicate what happened thereafter but it appears that the decision was postponed on subsequent occasions also for the same reason and ultimately announced by the R.T.A. On the 27th of November, 1982, after the connected matters had been heard.
This is clear from the order of the R.T.A. which, in arriving at its final decision, has followed the orders passed by it on 15.9.82 & 24.11.82 in certain other matters and the orders passed by the R.T.A., Jaipur on 7.4.82 & 10.9.82 in relation to two routes falling within its jurisdiction.
The short grievance of the petitioners was that, by adopting the above procedure, the R.T.A. has imported into its final decision and order various transactions, facts, events and arguments of which they had no notice and which they had not been given a proper opportunity to rebut.
The STAT dealt with the argument by simply observing that "for considering the obtainable facts a fresh opportunity to appellants in my opinion was not very much required, as there would not be any end to it." The learned Single Judge in the High Court recognised that: "If such long spell time has lapsed and such new material has come into existence the proper course for the RTA should have been to get the case listed back for comments of both the parties but did not think that "the case warranted any interference on this aspect.
" The Division Bench observed: "It was urged on behalf of the appellants that the Regional Transport Authority took into account events after hearing and closing the cases without giving any opportunity to the appellants to rebut that material.
It was also urged that out of 83 documents filed by the appellants before the Regional Transport Authority in rebuttal of this material, only 2 were accepted, while remaining 81 were rejected.
There is no merit in this contention.
The mere fact that the appellants filed these documents out of which two were taken into account shows that they had the knowledge of the subsequent material being used for the purpose of deciding these cases and it is for this reason that they filed these documents out of which two were also taken into account.
Moreover, the subsequent events relate only to matters of record pertaining to operation of the existing routes by the 646 State Transport Undertaking.
There is thus no prejudice to A the appellants.
This argument is, therefore devoid of any merit.
In our opinion the approach of the STAT as well as the High Court was erroneous.
There is no doubt that the R.T.A. in deciding the present case has been influenced not merely by the discussions which took place during the hearing of the applications of these petitioners and the Corporation but also the facts circumstances, and arguments that surfaced at the meetings held by it in relation to various other permits in the State.
It is true that the point that arose for consideration viz. whether the Corporation had placed sufficient material on record to satisfy the R.T.A. concerned that the grant of a further permit or further permits to it would not prejudicially affect the nationalised services already run by it was, in a sense, a point common to all the meetings.
Nevertheless, the grant of a permit in each case is a separate issue to be decided on the facts and circumstances placed on record in relation to that case.
In support of their claims for permits, the petitioners had placed some material before the R.T.A. and so also the Corporation.
If, in reaching its decision, the R.T.A. desires to take into account circumstances and facts placed by other petitioners or by the Corporation at other meetings, the petitioners should atleast have had an opportunity of knowing what that material was.
This could have been done either by allowing the petitioners to participate at the other meetings or by giving the substance of that material to the petitioners, and giving them an opportunity of rebutting it before passing the final order.
In this context it is important to remember that the Corporation was a party at all the meetings and was aware of all the materials that had been placed on record by other operators as well as by themselves thereat.
On the contrary, the petitioners were handicapped in that they had no knowledge of the material placed at the other meetings.
In our opinion, the requirements of natural justice were flouted by the failure of the RTA to apprise the petitioners, atleast broadly, of what had transpired at the other meetings.
The High Court has observed that the petitioners had not been prejudiced as is seen from the fact that they had placed several documents on record in rebuttal of the Corporation 's case.
It may be, as pointed out by the High Court, that the petitioners were vaguely aware of the nature of the general contentions urged as well as the evidence placed by the Corporation and also tried to put in some documents to controvert the material placed on record by the Corporation but they 647 had no direct knowledge of such material.
Further, the petitioners ' grievance is that out of 83 documents placed by the petitioners only two were considered.
We are not able to appreciate the High Court 's answer to this contention in the extract we have quoted above.
We could have understood it if the other 81 documents which the petitioners relied upon had been found to be irrelevant.
The R.T.A. has not discussed this evidence.
Nor does the STAT appear to have considered the material or given the petitioners an opportunity, atleast at the appellate stage to attempt to substantiate its contentions by reference to these documents.
In the Special Leave Petitions before us, the petitioners have catalogued several circumstances to substantiate a contention that the Corporation was not in a position to undertake the plying of buses on the routes in question without prejudice to the efficiency of the nationalised services already being run by it.
We express no opinion on the correctness of these averments or the effect they can have on the satisfaction to be reached by the Regional Transport Authority but it appears manifest that the impugned order rejecting the renewal applications of the petitioners has been passed without there being reasonable opportunity given to the petitioners to counter the case put forward by the Corporation.
On this short ground that the procedural requirements of natural justice have not been complied with, we think, the impugned order should be set aside and the R.T.A. directed to pass a fresh order after giving the opportunity to the Petitioners to put forward their contentions.
Shri Shanti Bhushan, learned counsel for the Corporation, raised two contentions.
He urged, firstly, that the present case was governed by section 58(2) and not by section 47( 1H) and that the Corporation was rightly granted precedence over the private operators.
We are unable to accept this contention for two reasons.
In the first place the grant of a permit for an inter State route is governed by the special provision contained in section 47( lH) and not by section 58 which is a general provision.
Secondly, even under Section 58, the Corporation is not entitled to a permit automatically by reason of the fact that it is a State Road Transport Undertaking.
It is entitled to a priority over private operators only on "other things being equal".
In other words, even if section 58 is to apply, the RTA has to apply its mind to the relative merits of the private operators on the one hand and the Corporation on the other and it is only if both of them stand on the same footing that the Corporation would be entitled to a preference.
This would necessarily involve a hearing by the RTA of the merits of both the contending parties.
648 The second contention of counsel is based on an interpretation of A section 47(1 H).
The principle and ratio of this provision has been discussed and approved by this Court in Sher Singh vs Union of India, A.I.R. 1984 SC 209.
This provision no doubt enables the Corporation to have a preference over private operators and individuals but this is subject to a condition precedent that it should satisfy the Authority that it E3 would be able to operate the inter State route for which permit is sought without detriment to the efficiency and adequacy of the nationalised services it is already running in the State.
Shri Shanti Bhushan would contend that this is a matter on which the Regional Transport Authority has to reach a subjective satisfaction in the light of such material as it may be able to gather and that it is not necessary that it should be arrived at after giving an opportunity to all the persons appearing before the Authority.
We cannot accept this interpretation.
Like analogous provisions contained in several statutes which require or permit certain action to be taken on the satisfaction of a particular specified authority, the provision in section 47( lH) also requires the R.T.A. to arrive at its satisfaction not subjectively but on an objective consideration of the various facts and circumstances placed before it.
It will at once be obvious that such a satisfaction cannot be reached by the Authority without hearing the various operators.
The matter comes up before the Authority on a contest between an application for a permit or a renewal application of a private operator and an application for permit by the Corporation.
Naturally, the Corporation will place before the Authority some material to satisfy the Tribunal that the condition mentioned in the proviso to section 47(1H) is satisfied.
The R.T.A.
On its own can have no method of assessing the merits of this plea.
It is only the private operators, who are seeking permits for themselves that may be in a position to place material which would show that the Corporation does not have the capacity to take up this additional responsibility of running buses on the inter State route for which it seeks a permit.
It is clearly the duty of the R.T.A. to consider the evidence placed by both the parties, allow each party an opportunity to rebut the material placed by the other and arrive at its satisfaction one way or the other.
The satisfaction contemplated under section 47( lH) is a satisfaction to be arrived at on the basis of such a quasi judicial enquiry conducted by the R.T.A. It is, therefore, not possible to accept the contention that the petitioners were not required to be heard before the R.T.A. reached its conclusion in favour of the Corporation.
For the reasons discussed above, we hold that the petitioners ' applications for renewal of permits as well as the Corporation 's appli 649 cation for fresh permits on the inter State route Bhadra to Hissar via Adampur require to be considered afresh.
We, therefore, set aside the order of Regional Transport Authority dated 27.11.1982, the order of the State Transport Appellate Tribunal dated 20.1. ]983 as well as the order of the Single Judge of the High Court dated 21st July, 1986 and the order of the Division Bench of the High Court dated 8.12.1986.
The matter will stand remanded to the file of the R.T.A., Bikaner, for being disposed of afresh in the light of the above observations.
The appeals are allowed but in the circumstances we make no order as to costs.
S.L. Appeals allowed.

summary/full:
% The appellants filed applications for renewal of their stage carriage permits on a route in Rajasthan, under section 58 of the Motor Vehicles Act.
At the same time, the Rajasthan State Road Corporation(Corporation) moved applications for the grant of fresh permits to it for the same route.
Both the applications for renewal of permits and the applications for fresh permits, were heard together by the Regional Transport Authority (R.T.A.) which reserved its orders thereon.
The R.T.A. passed orders in the matters after a year of the hearing, rejecting the renewal applications of the appellants and granting fresh permits to the Corporation.
The R.T.A. had, during the intervening period of one year, held several other proceedings and meetings in connected matters of which no notice and no opportunity had been given to the appellants whereas the Corporation was a party to all those meetings and discussions before the R.T.A.
Against the orders of the R.T.A., the appellants filed appeals before the State Transport Appellate Tribunal (S.T.A.T.).
The S.T.A.T. dismissed the appeals.
The appellants moved the High Court by writ petitions against the order of the S.T.A.T.
The High Court (Single Judge) dismissed the writ petitions.
Further appeals by the appellants to the Division Bench of the High Court were also dismissed.
The appellants moved this Court by special leave.
Allowing the appeals, the Court, ^ HELD: The principal issue to be decided by the R.T.A. was whether the claims of the Corporation for fresh permits had precedence over the claims of the appellants for the renewal of their permits.
[643E] 642 The appellants have not had an opportunity of putting forward their contentions and of being heard before the R.T.A. in the various proceedings meetings held by the R.T.A. during the period of one year following the reservation of orders by it on the applications of the Appellants and the Corporation.
The principles of natural justice were flouted by the R.T.A. by its failure to apprise the appellants of what had transpired at the meetings/discussions held in their absence.
[646D F] The appellants ' applications and the applications of the Corporation require to be considered and disposed of afresh by the R.T.A. in the light of the observations made by the Court.
[648H, 649A] Sher Singh vs Union of India, AIR 1984 SC 200, referred to.


judgement:
Civil Appeal No. 2904 of 1987.
From the Judgment and order dated 2.9.1986 of the Rajasthan High Court in D.B. (Civil) Special Appeal No. 43 of 1986.
M. Chandrasekhran, V.J. Francis and N.M. Popli for the Appellant.
B.D. Sharma for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
This appeal arises out of the judgment and order of the Division Bench of the Rajasthan High Court dated 2nd September, 1986.
The judgment under appeal was rendered in an appeal under section 82(2) of the (hereinafter called 'the Act ').
The respondent, Ram Chander, was the proprietor of M/s. Commercial Tailors, Sojati Gate, Jodhpur.
At all material times, he used to run a tailoring shop, where clothes were stitched.
The shop employed at the relevant time about 10 or 12 persons as tailors.
The number of employees, however, never exceeded 20.
The clothes were .
supplied by the customers and these were stitched according to the different sizes of the customers.
Such stitchings were done at the shop of the respondent herein manually by electric iron which was also used in the process of stitching.
There were ironing of finished clothes also.
The Employers State Insurance Court, Rajasthan came to the conclusion as follows: "The applicant is a tailoring shop which has employed more than 20 persons on one occasion and less on other days and makes use of power in the shape of electric press which is used for ironing of stitched clothes for customers.
The electric iron is also used during the process of stitching in addition to the ironing of finished clothes." 837 The question before the Rajasthan High Court.
was whether such A establishment was covered by the Notification dated 20th September, 1975 and came within the mischief of the Act.
The answer to that question would depend on the relevant notification being the Notification dated 20th September, 1975 issued under section 1(5) of the Act.
The schedule which extends the scheme to different establishments, inter alia, provided by clause (1)(b) as follows: B DESCRIPTlON OF ESTABLISHMENTS AREAS IN WHICH THE ESTABLISHMENTS ARE SITUATED.
Any premises including the precincts thereof 1.Alwar whereon ten or more persons but in any case 2.Ajmer less than twenty persons are employed or were 3.Bikaner employed for wages on any day of the preced 4.Jaipur ing twelve months, and in any part of which a 5.Jodhpur manufacturing process is being carried on with 6.Kota the aid of power or is ordinarily so carried 7.Udaipur on but excluding a mine subject to the operation of the (35 of 1952) or a rail way running shed or an establishment which is exclusively engaged in any of the manufacturing processes specified in clause (12) of section 2 of the (34 of 1948) (emphasis supplied) In order to answer the question whether the establishment of the respondent comes within the mischief of the Act, it is necessary therefore, in view of the facts found as noted before to determine only whether manufacturing process was carried on with the aid of power.
It is manifest that there is use of electric power in the process of stitching.
This is a finding of fact that the establishment of the shop employed more than 10 but less than 20 persons.
It cannot also be disputed that by stitching commercially different goods are brought into existence.
These are known differently, stitched shirt is indubitably a different commodity than unstitched cloth.
It is so commercially known and treated.
If by a process a different entity comes into existence then it can be said that this was manufactured.
See in this connection the observations of this Court in Empire lndustries Limited & H 838 others etc.
vs Union of India & others etc., [ 1985] Suppl.
1 S.C.R. 292.
It was observed therein that manufacture is complete as soon as by the application of one or more process, the raw material undergoes some change.
If a new substance is brought into existence or if a new or different article having a distinctive name, character or use result from particular processes, such process or processes would amount to manufacture.
Whether in a particular case manufacture has resulted by a process or not would depend on the facts and circumstances of the particular case.
There is no doubt that the process must bring into existence a new item or a new commodity known differently in the market as such by people who use or deal with that good.
In that process the ironing of clothes as has been found to be an essential part and for that power is used.
These are facts found and are not disputed.
If that is the position, then in our opinion, it comes clearly within the purview of the Act in view of the other facts noted before and the employees are covered by the Act.
Our attention was drawn by learned counsel appearing on behalf of the respondent to the observations of this Court in Deputy Commissioner, Sales Tax (Law) Board of Revenue (Taxes) Ernakulam vs Pio Food Packers, ; and the decision of this Court in Chowgule & Co. Pvt. Ltd. & Anr.
vs Union of India & others, [ 1981] 2 S.C.R. 271.
The effect of both these decisions have been considered in the aforesaid Empire Industries 's case (supra).
Learned counsel drew our attention to the decision of this Court in Ardeshir H. Bhiwandiwala vs The State of Bombay, , where the question arose under the Factory Act.
It was held therein that the salt works was a factory within the definition given in the Act and the appellant therein was rightly convicted for working it without a licence.
The decision is of no assistance to the respondent in resolving the contentions involved in this appeal.
Our attention was also drawn to the decision of this Court in M/s. Hindu Jea Band, Jaipur vs Regional Director, Employers ' State Insurance Corporation, Jaipur, ; , where it was held that it was not that a place where goods were sold was only a shop.
A place where services were sold on retail basis was also a shop.
The facts of that case were entirely different from these in this case.
But the ratio of that decision is apposite to the issue in dispute here.
There this Court reiterated that it was not that a place where goods were sold was only a shop.
But a place where services were sold on retail basis was also a shop.
The place of business of a firm carrying on the business of playing music on occasion such as, marriages and 839 Other social functions which made available on payment of the stipulated price the services of the members of the group of musicians employed by it on wages was a shop to which the Act was applicable by virtue of the notification.
The fact that the services were rendered by the employees engaged by the firm intermittently or during marriages did not entitle the firm to claim any exemption from the operation of the Act.
In Metro Readywear Company vs Collector of Customs, [ 1978] 2 Excise Law Times 520 of the High Court of Kerala at Ernakulam it was held that the brassieres were undoubtedly undergarments falling within the description "articles of ready to wear apparel (known commercially as ready made garments) and therefore was classified under Item 22D of Central Excise Tariff.
Ironing with electric iron amounted to a process of manufacture with the aid of power.
It was held that ironing of stitched brassieres is incidental or ancillary to their manufacture since the said process was intended to give a finishing, touch in order to render them marketable.
In our opinion the ratio or the reasoning of the said decision is applicable to the facts of this case.
Our attention was drawn to the unreported decision of the Andhra Pradesh High Court in Employees State Insurance Corporation vs M section New Empire Tailors and others, where the aforesaid reasoning was accepted by the High Court.
In the light of the aforesaid, we are of the opinion that the High Court in the instant case was in error and the decision of the E.S.I. Court must be upheld.
The appeal is accordingly allowed and the judgment and order of the High Court are set aside and the order of the E.S.I. Court restored.
In the facts and circumstances of the case the parties will pay and bear their own costs.
This judgment will apply to the facts as pertinent to the facts in the relevant year in question.
S.L. Appeal allowed.

dataset_name: IN-Abs

summary/full:
% The respondent Ram Chander ran a tailoring shop, employing about 10 to 12 tailors.
The number of his employees never exceeded 20.
At the shop, clothes were stitched and electric iron was used in the process of stitching and also for ironing the finished goods.
The dispute that arose for decision in the case was whether by virtue of Notification dated September 20, 1975, issued under Section 1(5) of the Employees ' State Insurance Act, 1943, the respondent 's establishment came within the purview of the Act.
Allowing the Appeal by special leave against the judgment and order of the High Court, and restoring the decision of the Employees ' State Insurance Court the Court, ^ HELD: Stitching process is carried on in the respondent 's establishment.
By stitching commercially, different goods with distinctive names, characters and uses are brought into existence.
If by a process, a different entity comes into existence, the process is a manufacture, as held by this Court in Empire Industries Limited & Ors. etc.
vs Union of India & Ors. etc.
, [1985] (Suppl.
1) SCR 292.
In the stitching process, ironing is an essential part, and for that electric power is used.
Also the respondent 's shop employed more than ten but less than 20 persons.
The respondent 's establishment clearly falls within the purview of the Employees ' State Insurance Act.
[837G H;838C] Deputy Commissioner, Sales Tax (Law) Board of Revenue (Taxes), Ernakulam vs Pio Food Packers, ; ; Chowgule & Co. Pvt. Ltd & Anr.
vs Union of India and others; , ; Ardeshir H. Bhiwandiwala vs The State of Bombay, [1961] 3 H 836 SCR 592; M/s. Hindu Jea Band, Jaipur vs Regional Director, Employees ' State Insurance Corpn.
Jaipur, ; ; Metro Readywear Company vs Collector of Customs, [1978] 2 Excise Law Times 520 and Employees ' State Insurance Corporation vs M/s. New Empire Tailores and others, (unreported) referred to.


judgement:
ivil Appeal No. 115 of 1950.
Appeal from the Judgment and Decree of the Bombay High Court (Macklin and Rajadhyaksha JJ.) dated 14th March.
1945, in First Appeal No. 274 of 1941 which arose out of a decree dated 15th March, 209 1941, of the First Class Subordinate Judge of Satara in Civil Suit No. 890 of 1938.
G.R. Madbhavi (K. R. Bergeri, with him) for their appellant.
H.J. Umrigar for respondent No. 1.
M.C. Setalvad, Attorney General for India (K. G.Datar, with him) for respondent No. 2. 1951.
December 17.
The Judgment of the Court was deliv ered by MUKHERJEA J.
This appeal is directed against a judgment and decree of a Division Bench of the Bombay High Court dated the 14th of March, 1945, which affirmed, on appeal, the decision of the First Class Subordinate Judge, Satara, passed in Civil Suit No 890 of 1938.
The appellants before us filed the suit as plaintiffs in the original court, for establishment of their title to the property in dispute which is known as Chikurde Estate, on the allegation that they were, under the Hindu Law, the nearest heirs of one Bhimabai, who was admittedly the last holder of the estate.
The suit was brought initially against one defendant, name ly, the Court of Wards, Satara, and admittedly the Court of Wards took possession of the property of Bhimabai, while she was alive, and is continuing in possession of the same even now after her death.
Later on, defendants 2, 3 and 4, who put forward rival claims of succession to the estate, were allowed to intervene in the suit and were added as parties defendants.
The Court of Wards, which now figures as defend ant No. 1, took up, all through, a neutral attitude and expressed its willingness to hand over the estate to any person who would be declared to be rightfully entitled to it by the Court.
The Courts below have negatived the claims of defendants 2 and 3 and they have not come up to press.
their claims in the appeal before us.
The two rival claim ants, who are now on the scene, are the plaintiffs on one side and defendant No. 4 on the other, and the whole contro versy in this appeal centres round the 210 point as to who amongst them have the preferential right to succeed to the disputed estate after the death of Bhimabai.
To appreciate the material facts of the case and the conten tions that have been raised by the parties, it will be convenient to refer to the following genealogy which is not disputed by either side.
Vithalrao (died 1896) Ganpatrao (died 1914) Nilkanthrao Anandrao Tangawa alias (died 1899) (died 1913) Anandibai (Deft. 2) Krishnabai Adopted Deft.
3 Vithalrao (Deft. 4) Babasaheb on adopted by 3 2 1939.
Krishnabai on 4 11 1924 Respdt.
Firangojirao (died Tanakka (predeceas angabai (died 15 11 1919.) ed her sister Gangabai on 14 2 1924) without any issue).
Nathgauda Annagauda Balgauda (Plff. 2) Bhimabai (daughter) (Plff. No. 1) Appellant No. 2. (died on 27 1 1932).
Appellant No. 1 It is the case of both the parties that Vithalrao, whose name appears at the top of the pedigree table, and who was the common ancestor of the parties, held the disputed property as watan property appertaining to the hereditary office of Deshmukhi service.
Vithalrao was the recipient of a Sanad dated 28th November, 1892, under what was called the Gordon Settlement, the object of which was to commute serv ices of certain watandars in that part of the country and relieve them from liability to perform the services attached to their office on certain terms and conditions which were agreed upon between the Government on the one hand and the watandars on the other.
The terms of the settlement were generally embodied in Sanads and one such Sanad was granted to Vithalrao in 1892.
It is not disputed that after this settlement Vithalrao continued to be watandar as defined by Bombay Act III of 1874, and that the watan in dispute was an impartible estate governed by the rule of 211 primogeniture.
In 1896 Vithalrao died and he was succeeded by his eldest son Ganpatrao under the law of primogeniture.
Ganpatrao died childless in 1914, leaving behind him his two widows Anandibai and indirabai, of whom the senior widow Anandibais defendant No. 2 in the present suit.
Both the two brothers of Ganpatrao, namely, Nilkanthrao and Anan drao had predeceased him.
Nilkanthrao left behind him one son named Firangojirao and two daughters, while Anandrao died childless, leaving him surviving his widow Krishnabai, who later on adopted Vithalrao, who is defendant No. 4 in the suit.
Ganpatrao had left a will bequeathing all his watan and nonwatan properties to Firangojirao and the latter succeeded to the estate both under the will as well as under the law of lineal promogeniture, he being the only male member of the family at that time.
Firangojirao died in 1919, leaving Bhimabai, his only daughter, who was a minor at that time.
On 23rd September, 1921, the name of Bhimabai was entered in the village records as watandar in place of Firangojirao and in the year following the Court of Wards, Satara, assumed superintendence of Bhimabai 's estate.
On 11th October, 1923, the Government of Bombay by their Reso lution No. A 471 declared the Chikurde Deshmukh watan as lapsed to Government, presumably on the ground that there was no male heir in the watan family after the death of Firangojirao.
A new entry was then made in the village register which recorded Bhimabai not as watandar, but as heir of Firangojirao and the lands were described as being converted into ryotvari lands after forfeiture by Govern ment and subjected to full assessment.
On 4th of November, 1924, Krishnabai, the widow of Anandrao, adopted defendant No. 4 as a son to her husband.
On 27th January, 1932, Bhima bai died unmarried and her estate continued under the man agement of the Court of Wards.
The appellants before us, who are the sister 's sons of Firangojirao, brought this suit on 5th of August, 1938, and their case, in substance, is that after the Resolution of the Government passed on 11th 212 of October, 1923, the Chikurde estate ceased to be a watan property and the succession to such estate was governed by the ordinary rules of Hindu Law and not by the provisions of Act V of 1886 which postpone relations claiming through a female to a male member of the watan family.
It was urged that the property being the absolute property of Bhimabai and she having died while still a maiden, the plaintiffs, being the nearest heirs of her father, were entitled to succeed under the general rules of Hindu Law.
As said al ready, the defendant No. 4, who is respondent No. 2 in this appeal, was added as a party defendant sometime after the suit was filed and the contention raised on his behalf was that by reason of his having been duly adopted.
to Anandrao on 4th of November, 1924, he was the nearest heir to the property in suit which was a watan property and prayed that a declaration in his favour might be made by the court.
The defendant No. 3 claimed to have been adopted as a son to her husband Ganpatrao by Anandibai, the defendant No. 2, some time in February 1939.
The trial court on a consideration of the evidence came to the conclusion that the Chikurde estate was an impartible property governed by the rules of primogeniture.
It was held that, it being an impartible joint estate, the rule of survivorship still applied and consequently on the death of Ganpatrao, without leaving any son, the estate passed by survivorship to the next senior branch which was that of Firangojirao.
The view taken by the Subordinate Judge is that after Firangojirao 's death Bhimabai took only a provi sional interest in the property which was liable to be divested by the emergence of a male member by adoption in the family and in fact she was legally divested of her interest in the property when defendant No. 4 was adopted by Anandrao 's widow.
In the opinion of the Subordinate Judge the resolution of the Government treating the Chikurde estate as lapsed was premature and could not be made legally so long as there were widows living, who were capable of adopting sonS.
The trial judge held further that even 213 if Bhimabai was taken to have held the property as watan till her death, the next heir to succeed under the Bombay Act V of 1886 would be defendant No. 4 and not the plain tiffs.
The result was that the plaintiffs ' suit was dismissed.
The plaintiffs then took an appeal to the High Court of Bombay and this appeal was heard by a Division Bench consisting of Macklin in and Rajadhyaksha JJ.
The learned Judges dismissed the appeal and confirmed the deci sion of the trial court, though the reasons given by them are not the same as those given by the trial judge.
It was held by the High Court, on a construction of the Sanad granted to Vithalrao in 1892, that the order of lapse or forfeiture of the watan estate passed by the Government in the year 1923 on the ground of failure of male heirs was not a valid and legal order and although under the relevant clause of the Sanad the Government could, in the absence of male heirs, resume the watan in the sense that they could make the property liable to full assessment, the other incidents of the watan estate still continued.
Consequently, Act V of 1886 would still govern succession to such property and defendant No. 4 had preferential rights over the plain tiffs under section 2 of that Act.
It is against this decision that the plaintiffs have come up on appeal to this court.
The learned Counsel appearing on behalf of the plain tiffs appellants has raised a two fold contention in support of the appeal.
It has been contended in the first place that the High Court was in error in holding that the Chikurde estate retained its watan character even after it was re sumed by the Government by its Resolution of 11th October, 1923; and if it was non watan, the plaintiffs would be nearer heirs to Bhimabai than defendant No. 4.
The other contention raised is that even if the property remained watan in the hands of Bhimabai, the latter would have to be regarded as a watandar in the true sense of the word and would be a fresh stock of descent.
In that view the plain tiffs would come within the family of 28 214 watandar as defined in Bombay Act V of 1886, whereas the defendant No. 4 would be outside the family.
The points undoubtedly are interesting, but having regard to the view which we have decided to take, it would not be necessary to investigate the merits of either of them.
It may be pointed out that the learned Judges of the High Court proceeded throughout on the assumption that the plaintiffs would have preferential rights of succession if the property was regarded as non watan in the hands of Bhimabai.
It is only if the property was watan that the Bombay Act of 1886 will apply and the plaintiffs, who were descended through females, would be postponed to defendant No. 4 who by adop tion became a male member of the family.
Mr. Setalvad, appearing for defendant No. 4 who is respondent No. 2 in this appeal, contended before us that this assumption is wrong, and that even if the property was regarded as nonwa tan property and belonging absolutely to Bhimabai as her stridhan, still as heir of Bhimabai 's absolute property the defendant No. 4 would have higher rights than the plain tiffs.
As this point was not touched upon in the judgments of either of the courts below, we heard the learned Counsel on both sides at great length upon it and the conclusion that we have reached is that the contention of the learned AttorneyGeneral is well founded and must prevail.
For the purpose of this argument we would assume that the property in suit was non watan stridhan property of Bhimabai and the only question is, as to who amongst the rival claimants would be the nearer heir after her death according to the Hindu Law of inheritance ? It is admitted that Bhimabai died while she was a maiden and that a maid en 's property under the Hindu Law goes in the first place to her uterine brothers, in default of them to the mother and then to the father.
This is according to the text of Baudhayana (1)which is accepted by all the commenta tors.
Viramitrodaya adds to this that "on failure of mother and father it goes to their (1) See Mitakshara, Chap.
II, sec.
XI, para 30.
215 nearest relations"(1).
It has been held in a large number of cases that the expression "nearest relations of the parents" means and refers to the sapindas of then, father and in their default the sapindas of the mother both in order of propinquity(2).
In the case c before us, both the plain tiffs and defendant No. 4 are sapindas of Firangojirao, the plaintiffs being the sister 's sons of Firangojirao, while the latter is his paternal uncle 's son.
It is not dis puted that apart from the changes introduced by the Hindu Law of Inheritance (Amendment) Act, (Act II of 1929), the place of the paternal uncle 's son in the line of heirs under the Mitakshara Law of Succession is much higher than that of the sister 's son and the Mayukha Law, which prevails in the State of Bombay, does not make any difference in this re spect.
Under the Mitakshara Law, the paternal uncle comes just after the paternal grandfather and his son follows him immediately.
By Act II of 1929, however, four other rela tions have been introduced between the grandfather and the paternal uncle and they are the son 's daughter, daughter 's daughter, sister and sister 's son, and the paternal uncle and his son are thus postponed to these four relations by the Hindu Law of Inheritance Act of 1929.
The question is, whether the provisions of this Act can at all be invoked to determine the heirs of a Hindu female in respect of her stridhan property.
The object of the Act as stated in the preamble is to alter the order in which certain heirs of a Hindu male dying intestate are entitled to succeed to his estate; and section 1 (2) expressly lays down that "the Act applies only to persons who but for the passing of this Act would have been subject to the Law of Mitakshara in respect of the provisions herein enacted, and it applies to such persons in respect only of the property of males not held in coparcenary and not disposed of by will".
Thus the scope of the Act is limited.
It governs succession only to the separate property of a Hindu male who dies intestate.
It does (1) See Viramitrodaya, Chap.
V, Part II, Sec. 9.
(2) See Mayne 's Hindu Law, 11th edition, article 621, page 741.
216 not alter the law as regards the devolution of any other kind of property owned by a Hindu male and does not purport to regulate succession to the property of a Hindu female at all.
It is to be noted that the Act does not make these four relations statutory heirs under the Mitakshara Law under all circumstances and for all purposes;it makes them heirs only when the propositus is a male and the property in respect to which it is sought to be applied is his separate property.
Whether this distinction between male and female propositus is at all reasonable is another matter, but the language of the Act makes this distinction expressly and so long as the language is clear and unambiguous, no other consideration is at all relevant.
This is the view which has been taken, and in our opinion quite rightly, in a number of cases of the Madras, Patna and Nagput High Courts(1).
We are not unmindful of the fact that a contrary view has been expressed in certain decisions of the Bombay, Lahore and Allahabad High Courts (2).
The line of reasoning that is adopted in most of the decisions where the contrary view is taken can be thus stated in the language of Mr. Justice Somjee (3):__ "The Act is not sought to be applied to determine the succession to the stridhan of a Hindu maiden but is sought to be used by the petitioner to ascertain the fourth class of heirs to the stridhan of a Hindu maiden mentioned at page 139 of Mulla 's Hindu Law.
The heirs of the father at the time of her death have to be ascertained in accordance with the Hindu Law as it existed at the time of the death of Bai Champubai.
Thus the Act comes into operation for ascer taining the order in which the heirs of her father would be entitled to succeed to his estate, because the heirs of the father (1) Vide Manda Mahalakshmamma vs Mantravadi (I.L.R. ; Shakuntalabai vs Court of Wards (I.L.R. 1942 Nag. 629); Talukraj Kuer vs Bacha Kuer (I.L.R. 26 Pat.
150); Kuppuswami v Manickasari (A.I.R. (2) Shamrao vs Raghunandan (I.L.R. ; Mst.
Charjo vs Dinanath (A.I.R. ; Kehar Singh vs Attar Singh (A.I.R. 1944 Lah.
442); Indra Pal vs Humangi Debi (I.L.R. 1949 All. 816).
(3) Vide Shamrao vs Raghunandan (I.L.R. at 230).
217 in the order of propinquity who would be entitled to succeed to him if he died on August 3, 1937, would be the heirs of Bai Champubai in the absence of the uterine brother, the mother and the father.
" It is true that we have got to ascertain who the heirs of the father are at the date when the daughter dies, but the enquiry is for the purpose of finding out who the suc cessor to the estate of the daughter is.
This being the subject of the enquiry, the operation of Act II of 1029 is excluded by its express terms and for that purpose the Act is to be treated as non existent.
In other words, the stridhan heirs are to be ascertained with reference to the general provisions of the Hindu Law of Inheritance ignoring the statutory heirs who have been introduced by the Act.
The fallacy in the line of approach adopted in these cases seems to be that they treat the Inheritance Act of 1929 as amending or altering the Mitakshara Law of succession in all cases and for all purposes, whereas the Act has absolutely no operation when succession to the separate property of a male is not the subject matter of investigation.
The result is that in our opinion the plaintiffs are not the nearest heirs of Bhimabai even assuming that the property was non watan and belonged to her absolutely.
The appeal will thus stand dismissed.
We make no order as to costs in this appeal except that defendant No. 1, the Court of Wards, would have its costs as between attorney and client out of the estate.
The order for costs made by the courts below will stand.
Appeal dismissed.
Agent for respondent No. 1: P.A. Mehta.
Agent for respondent No. 2: K.J Kale.

summary/full:
The Hindu Law of Inheritance (Amendment) Act (Act II of 1929) which introduced the son 's daughter, daughter 's daugh ter, sister and sister 's son between the grandfather and the paternal uncle in the order of succession applies only to the separate property of a Hindu male who dies intestate.
It does not alter the law as regards the devolution of any other kind of property owned by a Hindu male and does not purport to regulate succession to the property of a Hindu female at all.
The Act cannot therefore be invoked to determine the heirs of a Hindu female in respect of her stridhan property.
The property of a Hindu female who dies as a maiden goes in the first place to her uterine brothers, then to the mother and then to the father, and on failure of the mother and father, it goes to the nearest relations, that is to say, to the sapindas of the father and in their default the sapindas of the mother, both in the order of propinquity.
Under the Mitakshara law of succession as well as the Mayukha law the paternal uncle 's son is entitled to succeed to the property of a Hindu in preference to sister 's sons.
Manda Mahalakshmamma vs Mantravadi (I.L.R. 1947 Mad. 23), Shakuntala Bai vs Court of Wards (I.L.R. 1942 Nag.
629), Taluhraj Kuar vs Bacha Kuar (I.L.R. 28 Pat.
150), Kuppuswami vs Manickasari (A.I.R. approved.
Shamrao vs Raghunandan (I.L.R. , Mst.
Charjo vs Dinanath (A.I.R. , Kehar Singh vs Attar Singh (A.I.R. , Indra Pal vs Humangi Debi (I.L.R. 1949 All.
816) not approved.


judgement:
vil Appeals Nos. 46 to 48 of 1956.
Appeals from the judgment and order dated November 16, 1951, of the former Nagpur High Court in Misc.
Petitions Nos.
45,1568 and 1569 of 1951.
H. J. Umrigar, D. L. Jayawant and Naunit Lal, for the appellants in C. A. Nos. 46 and 47 of 56.
D. L. Jayawant and Naunit Lal, for the appellant in C. A. No. 48 of 56.
1054 R. Ganapathi Iyer and R. H. Dhebar, for the respon dent (In all the appeals).
December 3.
The following Judgment of the Court was delivered by VENKATARAMA AIYAR J.
These appeals are directed against the orders of the High Court of Nagpur dismissing the writ petitions filed by the appellants herein, and as they arise out of the same facts and raise the same points for determination, they were heard together, and will be disposed of by a common judgment.
The facts in Civil Appeal No. 46 of 1956 the facts in the connected appeals are similar and do not require to be stated are that the appellant was employed in 1939 in the Bengal Nagpur Railway as a clerk in the workshop at Nagpur.
In 1946 when the State took over the administration of the Railway, it gave option to the employees to continue in service on the terms set out in a document dated July 5, 1946.
The appellant accepted those terms and continued in service on the conditions mentioned in that document.
Acting in exercise of the powers conferred by sections 241(2), 247 and 266(3) of the Government of India Act, 1935, the Governor General promulgated certain rules called the Railway Services (Safeguarding of National Security) Rules, 1949, hereinafter referred to as the Security Rules, and they came into force on May 14, 1949.
It will be convenient at this stage to set out the Security Rules, in so far as they are material for the purpose of these appeals, as it is the validity of these rules that is the main point for determination by us.
Rules 3, 4, 5 and 7 are as follows: 3. " A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in 1055 lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be so retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained.
Where in the opinion of the competent authority, there are reasonable grounds for believing that a member of the Railway Service is liable to compulsory retirement from service or to have his service terminated under Rule 3, it shall (a) by an order in writing, require the said member of Railway service to proceed on such leave as may be admissible to him and from such date as may be specified in the order; (b) by a notice in writing inform him of the action proposed to be taken in regard to him under Rule 3; (c) give him a reasonable opportunity of showing cause against that action ; and (d) before passing a final order under Rule 3, take into consideration any representation made by him in this behalf.
Nothing contained in the Rules in Chapter XVII of the State Railway Establishment Code, Volume 1, shall apply to, or in respect of, any action taken or proposed to be taken under these rules.
Any person compulsorily retired from service or whose service is terminated under Rule 3 shall be entitled to such compensation, pension, gratuity and/ or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service or post on the date of such retirement or termination of service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided.
" On July 6, 1950, the General Manager of the Bengal Nagpur Railway issued a notice to the appellant 1056 under R. 3 of the Security Rules stating that in view of the facts recited therein, there was reason to believe that the appellant was engaged in subversive activities and calling upon him to show cause why his services should not be terminated.
He was also placed under suspension from that date.
On July 29, 1950, the appellant sent his explanation denying the allegations contained in the notice dated July 6, 1950.
The matter was then referred to the Committee of Advisers, who held an enquiry on September 8,1950, and after hearing the appellant found that the charges against him mentioned in the notice were true.
Acting on this report, the General Manager terminated the services of the appellant on April 3, 1951, giving him one month 's salary instead of notice.
Meantime, on February 3,1951, the appellant had filed the writ petition, out of which Civil Appeal No. 46 of 1956 arises, in the High Court of Nagpur challenging the validity of the notice dated July 6, 1950, and the order of suspension following thereon.
The order of dismissal dated April 3, 195 1, having been passed during the pendency of this Petition, the appellant had his petition amended by adding a prayer that that order also was bad.
The grounds urged in support of the petition were that the Security Rules under which action was taken were in contravention of articles 14, 19 (1)(c) and 311 of the Constitution, and that, in consequence, the orders passed in exercise of the powers conferred thereby were void.
The respondents resisted the application on the ground that the rules in question were valid, and that the orders passed thereunder were not open to attack.
The petition was heard along with others, in which the same questions were raised, and by their judgment dated November 16, 1951, the learned Judges held that it was unnecessary to decide whether the Security Rules were void as, assuming that they were, the orders terminating the services of the petitioners could be sustained under R. 148 of the Railway Establishment Code.
Sub rules (3) and (4) of R. 148 which bear on this point, are as follows: 1057 R. 148(3) Other (non pensionable) railway servants : "The service of other (non pensionable) railway servants shall be liable to termination on notice on.
either side for the periods shown below.
Such notice is not, however, required in cases of summary dismissal or discharge under the provisions of service agreements, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Admi nistration to terminate the service of a Railway servant by paying him the pay for the period of notice." The learned Judges held that the appellants were non pensionable railway servants within sub r.(3), that they had been paid one month 's wages instead of notice under sub r.(4), and that, accordingly, the impugned orders were intra vires the powers of the respondents under R. 148, sub r.
In the result, the petitions were dismissed, and the present appeals have been preferred against these orders on a certificate under article 132 (1) and article 133(1)(c) of the Constitution.
The appellants complain that the ground on which the judgment proceeds was not put forward by the respondents in their pleadings and should not have been allowed to be taken by them, and that on the points actually in issue, it should have been held that the Security Rules were repugnant to articles 14, 19(1) (c) and 311 of the Constitution, and, therefore, void.
They further contend that even if the Security Rules were valid, the orders terminating the services were not justified by them, and that further, those orders were bad for the reason that they had not been made by the competent authorities.
The appellants also sought to raise the contention that the enquiry conducted by the authorities was defective, and that there was no proper hearing as provided by the rules, but we declined to hear them on that point, as that was not raised in their petitions.
1058 The points for decision in these appeals are: (I) Whether the orders terminating the services of the appellants can be upheld under R. 148 of the Railway Establishment Code; (II)Whether the Security Rules are bad as infringing (a) article 14, (b) article 19(1)(c) and (c) article 311 of the Constitution; (III)Whether the impugned orders are not valid, even according to the Security Rules; and (IV) Whether those orders were not passed by the competent authorities.
On the first question, it appears clearly from the record that the authorities purported to take action only under the Security Rules.
The notice dated July 6, 1950, was avowedly issued under R. 3 of those rules.
It was in the scrupulous observance of the procedure prescribed therein that the explanations of the appellants in answer to the charges were taken, and the matters were referred to the Committee of Advisers for enquiry.
And above all, the orders terminating the services of the appellants, in terms, recite that they were made under R. 3 of the rules, as for example, the notice dated April 3, 1951, given to the appellant in Civil Appeal No. 46 of 1956, which runs as follows: "I have considered your representation to me in reply to this office letter No. Con/T/2 I /MP/82 dated 6 7 1950 and am of the opinion that you are engaged and associated with others in subversive activities in such mariner as to raise doubts about your reliability and am satisfied that your retention in public service is prejudicial to national security.
I have decided with the prior approval of the President that your services should be terminated under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949.
" It should be added that while the appellants stated in their petitions that action had been taken against them under the Security Rules, and that those rules were ultra vires, the respondents did not plead that 1059 action was taken under R. 148 of the Railway Establishment Code.
They only contended that the Security Rules were valid.
In view of the above,the criticism of Mr. Umrigar for the appellants that the judgment under appeal proceeds on a ground which was, not merely, not in the contemplation of the authorities When they passed the orders in question, but was not even raised in the pleadings in Court, is not without substance.
It is argued that when an authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong pro.
vision if it can be shown to be within its powers under any other rule, and that the validity of an order should be judged on a consideration of its substance and not its form.
No exception can be taken to, this proposition, but it has not been the contention of the respondents at any stage that the orders in question were really made under R. 148(3) of the Railway Establishment Code, and that the reference to R. 3 of the Security Rules in the proceedings might be disregarded as due to mistake.
In the Court below, the learned Judges rested their conclusion on the ground that cl.
(10) of the service agreement dated July 5, 1946, provided that in respect of matters other than those specifically dealt with therein discharge is one of such other matters the Railway rules applicable to persons appointed on or after October 1, 1946 were applicable, that R. 148(3) was one of such rules, and that the appellants who were non pensionable railway servants were governed by that rule, and were liable to be discharged in accordance therewith.
But this reasoning ignores that under cl.
(10) of the service agreement, the Security Rules stand on the same footing as the rules in the Railway Establishment Code and constitute equally with R. 148 the conditions of service on which the appellants held the employment, and there must be convincing reasons why orders passed statedly under R. 3 should be held not to have been passed under that rule.
Before us, a different stand was taken by the respondents.
They did not 1135 1060 dispute that the action was really taken under R. 3 of the Security Rules, but they argued that the power to terminate the service under r. 3 was not something ;different from and independent of the power to discharge, conferred by R. 148, and that an order passed under R. 3 was, on its own terms, one made under R. 148(3).
The basis for this contention is the provision in R. 3 that the service may be terminated in accordance with the service agreement, after giving due notice or.
pay in lieu of such notice.
The appellants controvert this position.
They contend that the power to terminate the service under the Security Rules is altogether different from the power to discharge under R. 148, that the reference in R. 3 to the service agreement is only in respect of the notice to be given, there being different periods fixed under the rules in relation to different classes of employees, and that, in other respects, the Security Rules run on their own lines, and that action taken thereunder cannot be shunted on to R. 148.
We find 'considerable difficulty in acceding to the argument of the respondents.
The Security Rules apply to a special class of employees, those who are engaged or are likely to engage in subversive activities, and in conjunction with the instructions which were issued when they were promulgated, they form a self contained code prescribing a special and elaborate procedure to be followed, when action is to : be taken thereunder.
We see considerable force in the contention of the appellants that the of the service agreement in R. 3 has reference only to the nature of the notice to be given.
If the interpretation which the respondents seek to put on the Security Rules is correct, then it is difficult to see what purpose at all they serve.
Mr. Ganapathy Iyer for the respondents argues that they are intended to afford protection to persons who might be charged with being engaged in subversive activities.
If that is their purpose, then if action is taken thereunder but the procedure prescribed therein is not followed, the Order must be held to be bad, as the protection intended to be given has been denied to the employee, 1061 and R. 148 cannot be invoked to give validity to such order.
Indeed, that has been held in Sambandam vs General Manager, section I. Ry.
(1) and Prasadi vs Works Manager, Lillooah (2) ; and that is also conceded by .Mr.
Ganapathy Iyer.
If then the power to terminate the service under the Security Rules is different from the power to discharge under R. 148 when the procedure prescribed therein is not followed, it must be equally so when, as here, it has been followed, for the complexion of the rules cannot change according as they are complied with or not.
That means that the Security Rules have an independent operation of their own, quite apart from R. 148.
We do not, however, desire to express any final opinion on this question, as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules, without reference to R. 148.
That renders it necessary to decide whether the Security Rules are unconstitutional, as contended by the appellants.
(Ila).
The first ground that is urged against the validity of the Security Rules is that they are repugnant to article 14.
It is said that these rules prescribe a special procedure where action is proposed to be taken against persons suspected of subversive activities, and that when the services of an employee are terminated under these rules, the consequence is to stamp him as unreliable and infamous, and there is thus discrimination, such as is hit by article 14.
It is admitted that if the persons dealt with under these rules form a distinct class having an intelligible differentia which bears a reasonable relation to the purposes of the rules, then there would be no infringement of Art.14.
But it is argued that the expression " subversive activities" which forms the basis of the classification is vague and undefined in that even lawful activities could be roped therein, and that such a classification cannot be said to be reasonable.
Reference was made to the charges which were served on the appellant in Civil Appeal No. 46 of 1956 as showing how even lawful activities (1) I.L.R. (2) A.I.R. 1957 Cal.
4. 1062 could be brought under the impugned rules.
The notice, so far as it is material, runs as follows: " Whereas in the opinion of the. .
General ,Manager, you are reasonably suspected to be a member and office secretary of the B. N. Rly.
Workers ' Union (Communist sponsored) and were thickly associated with communists such as Om Prakash Mehta, B.N. Mukherjee, R. L. Reddy, etc., in subversive activities in such manner as to raise doubts about your reliability and loyalty to the State in that, though a Government employee, you attended private meetings of the Communists, carried on agitation amongst the Railway workers for a general strike from November 1948 to January 1949 evidently to paralyse communication and movement of essential supplies and thereby create disorder and confusion in the country and that, consequently, you are liable to have your services terminated under rule 3 of the said Rules.
" It is argued that it is not unlawful to be a member of the Communist Party or to engage in trade union activities, and if this could form the basis of action under the rules, the classification must be held to be unreasonable.
Reliance was placed on the decision of this Court in The State of West Bengal vs Anwar Ali Sarkar (1), wherein it was held that a power conferred on the executive to select cases for trial by special courts under a procedure different from that of the ordinary courts with the object of ensuring " speedy trial " could not be upheld under article 14 as a valid classification, and on the decision of the Madras High Court in Ananthanarayanan vs Southern Railway(2), wherein it was hold that the words " subversive activities " in R. 3 lacked definiteness.
Now, the principles applicable for a determination whether there has been a proper and valid classification for purposes of article 14 have been the subject of consideration by this Court in a number of cases, and they were stated again quite recently in Budhan Choudhry and others vs The State of Bihar(3), and there is no need to repeat them.
The only point that (1) ; (2) A.I.R. 1956 Mad. 220.
(3) [1955]1 S.C.R. 1045, 1049.
1063 calls for decision in these appeals is whether the classi fication of persons on the basis of subversive activities is too vague to be the foundation of a valid classification.
Mr. Umrigar insists that it is, but his elaborate argument amounts to no more than this that the expression " subversive activities " may take in quite a variety of activities, and that its contents are therefore wide.
It may be that the connotation of that expression is wide, but that is not to say that it is vague or indefinite.
But whatever the position if the words "subversive activities " had stood by them selves, they are sufficiently qualified in the Security Rules to be definite.
Those rules have, for their object, the safeguarding of national security as recited in the short title.
That is again emphasised in R. 3, which provides that a member of the Railway service is not to be retired or his services terminated unless the authorities are satisfied " that his retention in public service is prejudicial to national security ".
In our judgment, the words " subversive activities " in the context of national security are sufficiently precise in their import to sustain a valid classification.
We are unable to agree with the opinion expressed in Ananthanarayanan vs Southern Railway (supra) at p. 223 that the language of R. 3 is indefinite, even when read with the words " national security".
We are also unable to agree with the argument of the appellants based on the charges made against the appellant in Civil Appeal No. 46 of 1956 in the notice dated July 6, 1950, that the expression "subversive activities " is wide enough to take in lawful activities as well, and must therefore be held to be unreasonable for purposes of classification under article 14.
The notice, it is true, refers to the appellant being a member of the Communist Party and to his activities in the trade union.
It is also true that it is not unlawful to be either a Communist or a trade unionist.
But it is not the necessary attribute either of a Communist or a trade unionist that he should indulge in subversive activities, and when action was taken against the appellant under the rules, it was not because he was a 1064 Communist or a trade unionist, but because he was engaged in subversive activities.
We hold that the Security Rules are not illegal as being repugnant to ,a article 14.
(IIb).
It is next contended that the impugned orders are in contravention of article 19(1)(c), and are therefore void.
The argument is that action has been taken against the appellants under the rules, because they are Communists and trade unionists, and the orders terminating their services under R. 3 amount, in substance, to a denial to them of the freedom to form associations, which is guaranted under article 19(1)(c).
We have already observed that that is not the true scope of the charges.
But apart from that, we do not see how any right of the appellants under article 19(1)(c) has been infringed.
The orders do not prevent them from continuing to be Communists or trade unionists.
Their rights in that behalf remain after the impugned orders precisely what they were before.
The real complaint of the appellants is that their services have been terminated; but that involves, apart from article 31 1, no infringement of any of their Constitutional rights.
The appellants have no doubt a fundamental right to form associations under article 19(1)(c), but they have no fundamental right to be continued in employment by the State, and when their services are terminated by the State they cannot complain of the infringement of any of their Constitutional rights, when no question of violation of article 311 arises.
This contention of the appellants must also be rejected.
(IIc).
'it is then contended that the procedure pres cribed by the Security Rules for the hearing of the charges does not satisfy the requirements of article 311, and that they are, in consequence, void.
But article 311 has application only when there is an order of dismissal or removal, and the question is whether an order terminating the services of the employees under R. 3 can be said to be an order dismissing or removing them.
Now, this Court has held in a series of decisions that it is not every termination of the services of an employee that falls within the operation of article 311, 1065 and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article.
Vide Satish Chandra Anand vs Union of India (1), Shyam Lal vs The State of Uttar Pradesh and the Union of India (2), State of Bombay vs Saubhagchand M. Doshi (3), and Parshotam Lal Dhingra vs Union of India (4).
The question as to what would amount to punishment for purposes of article 311 was also fully considered in Parshotam Lal Dhingra 's case (supra).
It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a permature termination of his services would be a punishment.
And, likewise, if the order would result in loss of benefits already earned and accrued, that would also be punishment.
In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of permature termination arises.
Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules.
Thus, there is no forfeiture of benefits already acquired.
It was stated for the appellants that a person who was discharged under the rules was not eligible for re employment, and that that was punishment.
But the appellants are unable to point to any rule imposing that disability.
The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311.
This contention also must be overruled.
(111) It is next contended by Mr. Umrigar that the charges which were made against the appellant in Civil Appeal No. 46 of 1956 in the notice dated July 6, 1950, have reference to events which took place prior to the coming into force of the Security Rules, which was on May 14, 1949, and that the order terminating the services of the appellant based thereon is bad as giving retrospective operation to the rules, (I) ; (2) ; , (3) Civil Appeal No. 182 Of 1955.
(4) Civil Appeal No. 65 of 1957.
1066 and that the same is not warranted by the terms there of.
Now, the rules provide that action can be taken under them, if the employee is engaged or is reason;ably suspected to be engaged in subversive activities.
Where an authority has to form an opinion that an employee is likely to be engaged in subversive activities, it can only be as a matter of inference from the course of conduct of the employee, and his antecedents must furnish the best materials for the same.
The rules are clearly prospective in that action thereunder is to be taken in respect of subversive activities which either now exist or are likely to be indulged in, in future, that is to say, which are in esse or in posse.
That the materials for taking action in the latter case are drawn from the conduct of the employees prior to the enactment of the rules does not render their operation retrospective.
Vide the observations of Lord Denman C. J. in The Queen vs St. Mary, Whitechapel (1) and The Queen vs Christchurch (2).
This contention must also be rejected.
(IV) Lastly, it was contended that the impugned orders were not passed by the competent authorities under the Security Rules, and that they were, therefore, void.
This contention is based on the fact that the authority competent to pass the orders under R. 3 is, as regards the present appellants, the General Manager, and that the impugned orders were actually communicated to them by the Deputy Manager.
But it has been found as a fact that the orders had been actually passed by the General Manager, and that finding must be accepted.
In the result, the appeals fail, and are dismissed with costs.
The appellants who were permitted to file the appeals in forma pauperis will also pay the court fees payable to the Government.
Appeals dismissed.
(1) ; ; 116 E.R.811.
(2) ; ; , 825.

summary/full:
The Services of the appellants who were Railway servants, were terminated for reasons of national security under section 3 of the Railway Services (Safeguarding of National Security) Rules, 1949.
Notices served on them under that section to show cause charged them as follows: "Whereas in the opinion of the.
General Manager, you are reasonably suspected to be a member and office secretary of the B. N. Rly., Workers ' Union (Communist sponsored) and were thickly associated with communists such as Om Prakash Mehta, B. N. Mukherjee, R. L. Reddi, etc., in subversive activities in such manner as to raise doubts about your reliability and loyalty to the State in that, though a Government employee, you attended private meetings of the Communists, carried on agitation amongst the Railway workers for a general strike from November 1948 to January 1949 evidently to paralyse communication and movement of essential supplies and thereby create disorder and confusion in the country and that, consequently, you are liable to have your services terminated under rule 3 Of the said Rules".
Orders of suspension were passed on them.
They made their representations.
The committee of Advisers on enquiry and after examining them found that the charges were true and the General Manager acting on its report terminated the services of the appellants, giving them a month 's salary in lieu of notice.
The appellants moved the High Court under article 226 of the Constitution and contended that the Security Rules contravened articles 14, 19(1)(c) and 311 of the Constitution and as such the orders terminating their services were void.
The High Court did not decide the Constitutional validity of the Security Rules and dismissed the petitions on other grounds.
Held, that the words 'subversive activities 'occurring in Rule 3 Of the Railway Services (Safeguarding of National Security) Rules, 1949, in the context of the objective of national security which they have in view, are sufficiently precise in import to 1053 sustain a valid classification and the Rules are not, therefore,invalid as being repugnant to article 14 of the Constitution.
Ananthanarayanan vs Southern Railway, A. I. R. 1956 Mad. 220, disapproved.
The charge shows that action was taken against the appellants not because they were Communists or trade unionists but because they were engaged in subversive activities.
The orders terminating their services could not,.
therefore, contravene article 19(1)(c) of the Constitution since they did not infringe any of the rights of the appellants guaranteed by that Article which remained precisely what they were before.
Article 311 of the Constitution can apply only when there is an order of dismissal or removal by way of punishment.
As the terms of employment of the appellants provided that their services could be terminated on a proper notice and R. 7 Of the Security Rules preserved such rights as benefits of pension, gratuities and the like to which an employee might be entitled under the service rules, there was neither premature termination nor forfeiture of benefits already acquired so as to amount to punishment.
The order ' terminating the services under R. 3 Of the Security Rules stood on the same footing as an order of discharge under R. 148 of the Railway Establishment Code and was neither one of dismissal nor removal within the meaning of article 311 of the Constitution.
Article 311 had, therefore, no application.
Parshotam Lal Dhingra vs Union of India, Civil Appeal No. 65 Of 1957, relied on.
Satish Chandra Anand vs Union of India, [1953] section C. R. 655, Shyam Lal vs The State of Uttar Pradesh and the Union of India, ; and State of Bombay vs Saubhagchand M. Doshi, Civil Appeal No. 182 Of 1955, referred to.
Although the Rules are clearly prospective in character, materials for taking action against an employee thereunder may be drawn from his conduct prior to the enactment of the Rules.
The Queen vs St. Mary, Whitechapel, ; and The Queen vs Christchurch, ; , referred to.