judgement:
: Petitions for Special Leave to Appeal (Criminal) Nos. 1090 91 of 1989.
From the Judgment and Order dated 8.5.1989 of the Delhi High Court in Misc.
Appln.
No. 106/89 & 107/1989.
U.R. Lalit, Tushar Shah and B .V.
Desai for the Petitioners.
J.S. Arora and Satish Agarwala for the Respondent.
After filing of the charge sheet the High Court ordered their re arrest by cancelling the bail.
The order of 379 the High Court is now under challenge.
I do not find any merit in these petitions.
But before dismissing, I wish, however, to draw attention to some aspects of the question raised.
The facts: On 23 March, 1988 the petitioners were arrested in Bombay by officers of the Narcotic Control Bureau.
They were ordered to be produced before the competent Magistrate at New Delhi.
They were accordingly produced before the Addi tional Chief Metropolitan Magistrate, New Delhi.
On 29 March, 1988 they were remanded to jail custody till 12 April, 1988.
The remand order was subsequently renewed from time to time.
On 10 May, 1988 the petitioners moved the Chief Metropolitan Magistrate for bail.
When that petition was pending consideration, the prosecution submitted charge sheet.
The charge sheet was filed on 23 June, 1988 for offences under Sections 21, 23 and 29 of the .
On July 22, 1988 the petitioners filed an application for bail under Section 167(2) Cr.
P.C. on the ground that the charge sheet was filed after the expiry of 90 days of their arrest.
On 29 July, 1988 learned Magistrate enlarged them on bail on their furnishing self bonds in the sum of Rupees two lakhs each with two surety bonds in the sum of Rs. 1 lakh each.
The efforts of the prosecution to have the bail can celled could not succeed before learned Magistrate.
So they moved the Delhi High Court under Section 439(2) read with section 482 of the Cr.
In that application, the nature of the offence committed, the part played by the accused, the gravity of the offence etc., were all set out.
1t was also stated that since two of the accused were earlier absconding, the investigation in the case could not be completed within the time frame.
The High Court by following the decision of this Court in Raghubir Singh vs State of Bihar, ; and after considering the material on record cancelled the bail order.
The High Court said: "In the present cases, no doubt an order was passed granting bail because the charge sheet was not filed within the statutory period of 90 days but it was filed on 92 days.
380 There is no doubt that the charge against the respondents is very serious in nature because they are alleged to have entered into a con spiracy to export heroin out of India.
The minimum punishment prescribed in such offence is a sentence of 10 years rigorous imprison ment, and a fine of Rupees one lakh.
I am, therefore, of the view that the authority re ferred above is fully applicable to the facts of the present case.
Respondents are further alleged to have procured services of one H.S. Gala and a lady carrier Manjula Ben who car ried 3 Kg.
heroin from India to USA in Novem ber 1987.
Therefore it was on the basis of the statements made by those persons in USA that the respondents were arrested in India.
I am, therefore, of the view that it is a fit case where order of bail should be cancelled.
" The question is whether the discretion exercised by the High Court is legally sustainable? Whether the accused have a special right to remain on bail merely because they have been enlarged under proviso (a) to Section 167(2) of the Code? It is not disputed and indeed cannot be disputed that when an accused is granted bail, whether under proviso (a) to Section 167(2) or under the general provisions of Chapter XXXIII, the only method by which the bail may be cancelled is to proceed under Section 437(5) or Section 439(2).
That is because the person released on bail under the proviso to Section 167(2) shall be deemed to be so released under the provisions of Chapter XXXIII of the Code.
Sub section (5) of Section 437 provides: "Any Court which has released a person on bail under sub section (1) or sub section (2) may, if it considers it necessary so to do, direct that such person be arrested and commit him to custody." Sub section (2) of Section 439 provides: "A High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody." 381 Under sub section (5) of Section 437, the Court if it considers it necessary, direct that the person on bail be arrested and committed to custody.
The bail may be cancelled by the Court if it comes to the conclusion that there are sufficient grounds that the accused has committed a non bailable offence and that it is necessary that he should be arrested and committed to custody.
This is what this Court observed in Raghubir Singh vs State of Bihar, ; It was said (at 826): "Where bail has been granted under the proviso to section 167(2) for the default of the prosecution in not completing the investiga tion in sixty days, after the defect is cured by the filing of a charge sheet, the prosecu tion may seek to have the bail cancelled on the ground that the accused has committed a non bailable offence and that it is necessary to arrest him and commit him to custody.
In the last mentioned case, one would expect very strong grounds indeed." And said: "The order for release on bail was not an order on merits but was what one may call an order on default, and order that could be rectified for special reasons after the defect was cured.
" An order for release on bail under proviso (a) to Sec tion 167(2) may appropriately be termed as an order on default.
Indeed, it is a release on bail on the default of the prosecution in filing charge sheet within the prescribed period.
The right to bail under Section 167(2) proviso (a) thereto is absolute.
It is a legislative command and not Court 's discretion.
If the investigating agency fails to file charge sheet before the expiry of 90/60 days, as the case may be, the accused in custody should he released on bail.
But at that stage, merits of the case are not to be examined.
Not at all.
In fact, the Magistrate has no power to remand a person beyond the stipulated period of 90/60 days.
He must pass an order of bail and communicate the same to the accused to furnish the requisite bail bonds.
The accused cannot, therefore, claim any special right to remain on bail.
If the investigation reveals that the accused has committed a serious offence and charge sheet is filed, the bail granted under proviso (a) to Section 167(2) could be cancelled.
382 I examined the material on record.
The offences alleged are of serious nature.
I am of the opinion that the discre tion exercised by the High Court does not call for any interference.
The Petitions, are, therefore, rejected.
N.P.V. Petitions dis missed.

summary/full:
The petitioners were arrested on March 23, 1988 and produced before the Chief Metropolitan Magistrate, who remanded them to jail custody.
During the pendency of peti tioner 's application for bail, the prosecution filed charge sheet on June 23, 1988 for offences under Section 21, 23 and 29 of the .
Thereafter, on the petitioners ' application for bail under Section 167(2) Cr.
P.C. on the ground that the charge sheet was filed after the expiry of ninety days of their arrest, the Magistrate enlarged them on bail.
On an application, under sec.
439(2) read with Section 482 of the Cr.
P.C., filed by the prosecution for cancella tion of the bail, stating that since two of the accused were earlier absconding, the investigation in the case could not be completed within the time frame, the High court cancelled the bail order.
Hence, the special leave applications by the petitioners.
On the question: whether the discretion exercised by the High Court was legally sustainable and whether the accused had a special right to remain on bail merely because they had been enlarged under Proviso (a) to Section 167(2) of the Code, 378 Dismissing the Special Leave Petitions, HELD: An order for release on bail under proviso (a) to Section 167(2) of the Code of Civil Procedure may appropri ately be termed as on order on default.
Indeed, it is a release on bail on the default of the prosecution in filing charge sheet within the prescribed period.
The right to bail under the provision is absolute.
It is a legislative command and not Court 's discretion.
If the investing agency fails to file chargesheet before the expiry of 90/60 days, as the case may be, the accused in custody should be released on bail.
At that stage, merits of the case are not to be exam ined.
In fact, the Magistrate has no power to remand a person beyond the stipulated period of 90/60 days.
He must pass an order of bail and communicate the same to the ac cused to furnish the requisite bail bonds.
[381E G] The accused cannot claim any special right to remain on bail.
If the investigation reveals that the accused has committed a serious offence and charge sheet is filed, the bail granted under proviso (a) to Section 167(2) could be cancelled under Sections 437(5) or 439(2) of the Code.
[381H] In the instant case, the offences alleged are of serious nature and the discretion exercised by the High Court does not call for any interference.
[382A] Raghubir Singh vs State of Bihar, ; , referred to.


judgement:
ivil Appeal No. 2942 of 1989.
From the Judgment and Order dated 30.11.
1987 of the Calcutta Central Administrative Tribunal Court in T.A. No. 452 of 1987/C.O. 6078 W. of 1985.
398 G. Ramaswamy, Additional Solicitor General, T.C. Sharma and C.V. Subba Rao for the Appellants.
Girish Chandra for the Respondents.
The following Order of the Court was delivered: ORDER Leave granted.
This appeal is directed against the order of the Central Administrative Tribunal, Calcutta, dated November 30, 1987.
The respondent was posted as Public Relations Officer in the Regional Passport Office, Calcutta.
He was transferred from Calcutta to Jaipur under the order dated 14.3.1985, and he was relieved of his duty from Regional Passport Office, Calcutta w.e.f. 15.3.1985 with the direction to report for duty at Jaipur.
The respondent instead of joining at Jaipur filed a writ petition before the Calcutta High Court and obtained interim injunction.
Later on contempt proceedings were initiated by the respondent against the appellants and the High Court passed an order dated 11.10.1985 directing the appellants to allow the respondent to join at Calcutta office and to pay all arrears of salary to him.
A number of orders were passed by the High Court in respondent 's favour but all those orders have been set aside by this Court in Civil Appeals arising out of Special Leave Petitions Nos.
6835 to 6837 of 1986.
The respondent 's writ petition pending before the Calcutta High Court was subsequently transferred to the Central Administrative Tribunal, Calcutta Bench.
The Tribunal by its order dated November 30, 1987 disposed of the writ petition.
The Tribunal held that the order of transfer was not mala fide or unfair, and there was no ground for interfering with the transfer order.
After re cording that finding the Tribunal directed the appellants to pay all arrears of salary with allowances to the respondent with a further direction that no release order should be issued to the respondent unless all his emoluments are paid to him.
After hearing learned counsel for the parties we find that the Tribunal acted in excess of its jurisdiction in issuing impugned direction.
The Tribunal recorded positive findings that the transfer order was legal and valid and it was not vitiated by any unfairness, or mala fide, thereupon it should have dismissed the writ petition.
It had no 399 jurisdiction to issue further directions regarding the release order and the payment of emoluments.
The Tribunal lost sight of the fact that the respondent had already been released from the Calcutta office w.e.f. 15.3.
198S, there fore, there was no question of issuing any fresh release order.
We accordingly allow the appeal and set aside the impugned directions of the Tribunal.
There will be no order as to costs.
P.S.S. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The respondent, a Central Government officer was trans ferred from Calcutta to Jaipur by an order dated 14th March, 1985 and relieved of his duty the next day.
He, however, filed a writ petition before the High Court and obtained an interim injunction.
The writ petition was subsequently transferred to the Central Administrative Tribunal, which held that the order of transfer was not mala fide or unfair, and there was no ground for interfering with it.
It, however, directed the appellants to pay all arrears of salary with allowances to the respondent and not to issue the release order unless all his emoluments were paid.
Allowing the appeal, HELD: The Tribunal having recorded positive findings that the transfer order was legal and valid and it was not vitiated by any unfairness or mala fide, should have dis missed the writ petition.
It had no jurisdiction to issue further directions regarding the release order and the payment of emoluments.
[398H] The respondent had already been relieved from the Cal cutta office with effect from 15th March, 1985.
Therefore, there was no question of issuing any fresh release order.
[399A]


judgement:
ivil Appeal No. 2873 of 1987.
From the Judgment and Order dated 5.8.1987 of the Punjab & Haryana High Court in Civil Revision No. 2209 of 1979.
Harbans Lal, S.K. Mehta, Dhruv Mehta and Aman Vachher for the Appellant.
Rajinder Sachhar, K.C. Dua and Ms. Manju Chopra for the Respondent.
N.S. Das Behl, (Not present) The Judgment of the Court was delivered by 425 RANGANATH MISRA, J.
This is a tenant 's appeal by special leave challenging his eviction from a business premises located at Jallandhar.
Under a rent note (Exh.
A I), the appellant had taken the premises on rent from the respondent landlord.
The use to which the premises was intended to be put was running of a cycle and rickshaw repairing shop.
As far as relevant, on the allegation that the tenant had put the premises to different use, an application for his eviction was made under section 13(2)(ii)(b) of the East Punjab Urban Rent Restric tion Act, 1949.
The Controller found that the appellant had continued the business of repairing of cycles and rickshaws but side by side had for a period of about seven months been selling televisions in the premises but he stopped the same as it was not viable.
According to the Controller, this did not constitute user for a purpose other than that for which the premises was leased and he accordingly rejected the peti tion.
The appellate authority at the landlord 's instance held that the statutory condition was satisfied and granted eviction.
The High Court when moved by the tenant declined to interfere.
The short question that arises for consideration is whether there has been a violation of the terms of tenancy by using the premises for a purpose other than that for which the premises had been leased.
The tenant did not dispute that he had taken the premises for running a repair shop of cycles and rickshaws.
In his statement he said that he had commenced the business of selling the televisions side by side in view of the slump in the cycle and rickshaw repairing business.
He also accepted the position that he had not obtained the consent of the landlord when he started the TV business.
The landlord has accepted the position that in the rent note it was not written that the respondent would not do any business in the shop in dispute except the cycle or rickshaw repairs.
On these facts it has now to be decided as to whether the premises has been used for a purpose other than that for which it had been leased.
Reliance was placed on the Full Bench decision of the Punjab High court in Des Raj vs Sham Lal, AIR 1980 P & H 229 where the question for consideration was as to whether when the lease was for the purpose of a shop without anything more specific, user thereof as a godown amounted to change of user.
The High Court in course of the discussion in the judgment rightly drew the distinction between resi 426 dential and non residential premises and also classified non residential buildings into known categories like shop, godown, restaurant, cinema, hotel etc.
In course of the discussion the Full Bench referred to the decision of this Court in Moti Ram vs State of Madhya Pradesh, ; and came to the conclusion that when the letting out purpose was location of a shop and it .was exclusively used as a godown, it amounted to a change of user.
Not much of support is directly available for the resolution of the present dispute from that judgment.
Reliance was also placed on a decision of this Court in the case of Mohan Lal vs Jai Bhagwan, ; where the very provision of the East Punjab Act was considered in a case of eviction.
The decision of this Court in the case of Maharaj Kishan Kesar vs Milkha Singh, (C.A. No. 1086/64 decided on November 10, 1965) was referred to therein.
That again was a decision under the very Act and the dispute related to the allegation of change of user when petrol was sold as an allied business of the avowed purpose of locating the workshop.
The Court found.
that location of a petrol pump could not be regarded as not being a part of motor workshop business.
Rightly, our learned brother Mukharji, J. indicated that the ratio in Maharaj Kishan Kesar 's case did not provide any guideline of general nature.
What was said in pars 9 of his judgment is perhaps useful.
Our learned Brother quoted the observations of Lord Diplock, J. in Duport Steels Ltd. vs Sirs, and said: "While respectfully agreeing with the said observations of Lord Diplock, that the; Par liament Legislates to remedy and the judiciary interprets them, it has to be borne in mind that the meaning of the expression must be found in the felt necessities of the time.
In the background of the purpose of rent legisla tion and inasmuch as in the instant case the change of the user would not cause any mis chief or detriment or impairment of the shop in question and in one sense could be called an allied business in the expanding concept of departmental stores, in our opinion, in this case there was no change of user which at tracted the mischief of section 13(2)(ii)(b).
" On that conclusion, the order of eviction was reversed.
Letting of a premises can broadly be for residential or commercial purpose.
The restriction which is statutorily.
provided in section 13(2)(ii)(b) of the Act is obviously one to protect the interests of the landlord .and is intended to restrict the use of the landlord 's premises 427 taken by the tenant under lease.
It is akin to the provision contained in section 108(0) of the dealing with the obligations of a lessee.
That clause pro vides: 'The lessee may use the property and its products, if.
any, as a person of ordinary prudence would use then if they were of his own; but be must not use or permit another to use the property for a purpose other than that for which it was leased . ' A house let for residential purpose would not be available for being used as a shop even without structural alteration.
The concept of injury to the premises which forms the foundation of cl.
(o) is the main basis for providing cl.(b) in section 13(2)(ii) of the Act as a ground for the tenant 's eviction.
The Privy Council in U Po Naing vs Burma Oil Co., AIR 1929 PC 108 adopted the same considera tion.
The Kerala High Court has held that premises let out for conducting trade in gold if also used for a wine store would not amount to an act destructive of or permanently injurious to the leased property Simi larly, the Bombay High Court has held that when the lease deed provided for user of the premises for business of fret work and the lessee used the premises for business in plas tic goods, change in the nature of business did not bring about change of user as contemplated in section 108(o) of the The landlord parts with possession of the premises by giving a lease of the property to the tenant for a consider ation.
Ordinarily, as long as the interest of the landlord is not prejudiced, a small change in the user would not be actionable.
In this case, the premises was let out for running of a repair shop.
Along with the repair business, sale of televi sions was temporarily .carried on.
We do not think this constituted a change of user within the meaning of section 13(2)(ii)(b) of the Act so as to give a cause of action to the landlord to seek eviction of the tenant.
The appeal is allowed and the order of eviction passed by the appellate authority and affirmed by the High Court is vacated and the order of the Controller is restored.
Parties are directed to bear their own costs throughout.
T.N.A. Appeal allowed.

summary/full:
The appellant had taken the premises on rent from the respondent landlord for running a cycle and rickshaw repair ing shop.
In the rent note there was no stipulation that the appellant would not do any business in the shop except the cycle or rickshaw repairs.
Along with the repair business the appellant temporarily carried on sale of televisions also in the premises.
The landlord filed an application for eviction under section 13(2)(ii)(b) of the East Punjab Urban Rent Restriction Act, 1949 alleging that the tenant had put the premises to different use.
The Rent Controller rejected the application by holding that the temporary sale of televisions did not constitute user for a purpose other than that for which the premises was leased.
On an appeal filed by the landlord the appellate authority granted eviction by holding that the statutory condition was satisfied.
The appeal filed by the tenant against the decision of the appellate authority was dis missed by the High Court.
Hence this appeal by the tenant.
Allowing the appeal and setting aside the order of eviction, HELD: Letting of a premises can broadly be for residen tial or commercial purpose.
The restriction which is statu torily provided in section 13(2)(ii)(b) of the Act is obvi ously one to protect the interests of the landlord and is intended to restrict the use of landlord 's premises taken by the tenant under lease.
It is akin to the provision con tained in section 108(o) of the dealing with the obliga 424 tions of a lessee.
A house let for residential purpose would not be available for being used as a shop even without structural alteration.
The concept of injury to the premises which forms the foundation of clause (o) is the main basis for providing clause (b) in section 13(2)(ii) of the Act as a ground for the tenant 's eviction.
[426H, 427A B] The landlord parts with possession of the premises by giving a lease of the property to the tenant for a consider ation.
Ordinarily, as long as the interest of the landlord is not prejudiced, a small change in the user would not be actionable.
In the instant case, the premises was let out for running of a repair shop.
Along with the repair busi ness, sale of televisions was temporarily carried on.
This did not constitute a change of user within the meaning of section 13(2)(ii)(b) of the Act so as to give a cause of action to the landlord to seek eviction of the tenant.
[427E, F] Mohan Lal vs Jai Bhagwan, ; , applied.
Des Raj vs Sham Lal, A.I.R. 1980 P & H 229, held inapplica ble.
Moti Ram vs State of Mahdya Pradesh, A.I.R. 1978 S.C. 1594; Maharaj Krishan Kesar vs Milkha Singh, Civil Appeal No. 1086 of 1964 decided on November 10, 1965 (S.C.); Dup port Steel Ltd. vs Sirs, ; U.P. Naing vs Burma Oil Co., A.I.R. 1929 P.C. 108; Raghavan Pillai vs Sainaba Beevi, [1977] Kerala L.T. 417 and Dattatraya vs Gulab Rao, , referred to.


judgement:
vil Appeal Nos.
1930 33 of 1989.
From the Judgment and Order dated 24.9.87 of the Patna High Court in C.W.C. Nos. 489,501,502 and 1173 of 1982 (R).
G. Ramaswamy, Additional Solicitor General, Girish Chandra and C.V.S. Rao for the Appellants.
M.C. Bhandare, R.S. Meratia, S.S. Johar and A. Mariarpu tham for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The coal resources in the country have been brought under State ownership and control by The Cook ing Coal Mines (Nationalisation) Act, 1972 (hereinafter called 'the Cooking Act ') and the Coal Mines (Nationalisa tion) Act, 1973 (hereinafter called 'the Coal Act ').
These Acts completely divest the ownership rights in the mines from the owners to the Central Government.
The Acts provide for payment of specified amount to each of the owners in lieu of 458 take over.
Out of the said amount the claims of the credi tors of the owner and other liabilities against him are to be satisfied and the balance, if any, is to be paid to the owner.
The Acts further provide for accrual of interest on the payable amount for the procedural period.
Section 18(5) of the Coal Act and Section 21(5) of the Cooking Act provide that the interest accruing on the amount shall enure to the benefit of the owners of coal mines.
The short question for consideration in these appeals is whether the amount of interest which accrues under the Act is to be paid in its entirety to the owner or the same is also available along with the principal amount for disburse ment to the claimants of the owner.
The provisions of the Cooking Act and the Coal Act are identical.
Both the Acts were enacted with the same object and purport, one relating to the Cooking Coal mines and the other to the coal mines.
The Learned Counsel at the hearing referred to the Coal Act.
We may briefly notice the scheme of the said Act.
Section 2 gives definitions.
Section 3 transfers the rights, title and interest of owners in relation to the coal mines and vests tile same in the Central Government.
Section 5 empowers the Central Government to direct vesting of such rights in a Government company.
Section 6 makes the vesting of all properties in the Central Government free from mort gage, charge, lien or any other incumbrance.
Section 7 provides that the Central Government or Government company shall not be liable for liabilities incurred by the owners prior to the take over.
Under Section 8 the owner of every coal mine shall be given by the Central Government in cash and in the manner specified under the Act the amount men tioned in the Schedule to the Act.
Section 9(2) provides for payment of simple interest at the rate of 4% from the date on which the Coal Act received the assent of the President upto the date when the amount is paid by the Central Govern ment to the Commissioner.
Section 17 provides for appoint ment of Commissioner of payments by the Central Government for the purpose of disbursing the amounts payable to the owner of each coal mine.
Section 18(1) lays down that the Central Government shall within 30 days from the specified date pay in cash to the Commissioner for payment to the owner of a coal mine, an amount specified in the Schedule and also other amount payable to the owner under Section 9.
Section 18(2) provides further amount due to the owner in lieu of management of the coal mine by the Central Govern ment and simple interest at the rate of 4% on such amount.
Under Section 18(3) a deposit account is to be opened by the Central Govern 459 ment in favour of the Commissioner in the Public Account of India and every amount paid under the Act to the Commission er has to be deposited by him to the credit of the said deposit account which is to be operated by the Commissioner.
Section 18(4) directs the Commissioner to maintain separate records in respect of each coal mine in relation to which payments have been made to him under the Act.
Section 18(5) provides that interest accruing on the amounts standing to the credit of the deposit account shall enure to the benefit of the owners of coal mines and shall also be payable to the Commissioner in addition to the sum referred to in sub section (1).
Under Section 20 every person having a claim against the owner of a coal mine has to prefer such claim before the Commissioner within thirty days from the speci fied date.
Sections 21 and 22 give first priority to the claims to arrears of wages, provident fund, pension fund, gratuity fund or any other fund established for the welfare of the persons employed by the owner of a coal mine.
Next come the secured creditors of the owners.
Under Section 23 the Commissioner adjudicates the claims and can accept or reject the same.
Section 24A provides that where any amount is payable in respect of a claim admitted under the Act, the interest payable on such amount for any period shall be at such rate not exceeding the rate of interest accruing on any amount deposited by the Commissioner under Section 18.
Finally under Section 26 if out of the moneys paid to the Commissioner in relation to a coal mine, there is a balance left after .meeting the liabilities of all the secured and unsecured creditors, he shall disburse such balance to the owner of such coal mine.
Relevant provisions of the Coal Act are reproduced hereinaf ter. "Section 3 Acquisition of rights of owners in respect of coal mines (1) On the appointed day, the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and shall vest absolutely in, the Central Government free from all incumbrances.
" "Section 8 Payment of amount to owners of coal mines(1) The owner of every coal mine or group of coal mines specified in the second column of the Schedule, shall be given by the Central Government, in cash and in the manner specified in Chapter VI, for the vesting in it, under Section 3, of the right, title and interest of the amount specified against it in the corresponding entry in the fifth 460 column of the Schedule." "Section 17 Commissioner of Payments to be appointed (1) For the purpose of disbursing the amount payable to the owner of each coal mine or group of coal mines, the Central Government shall appoint such person as it may think fit to be the Commissioner of Payments." "Section 18 Payment by the Central Government to the Commissioner. (1) The Central Govern ment shall, within thirty days from the speci fied date, pay, in cash, to the Commissioner for payment to the owner of a coal mine, an amount equal to the amount specified against the coal mine in the Schedule and shall also pay to the Commissioner such sums as may be due to the owner of a coal mine under Section 9.
(2) In addition to the sum referred to in sub section (1), the Central Government shall pay, in cash, to the Commissioner, such amount as may become due to the owner of a coal mine in relation to the period during which the management of the coal mine remains vested in the Central Government, and simple interest at the rate of four per cent per annum on such amount for the period commencing on the 1st day of July, 1975 and ending on the date of payment of such amount to the Commis sioner.
(3) A deposit account shall be opened by the Central Government, in favour of the Commissioner, in the Public Account of India, and every amount paid under this Act to the Commissioner shall be deposited by him to the credit of the said deposit account in the Public Account of India, and thereafter the said deposit account shall be operated by the Commissioner.
(4) Separate records shall be main tained by the Commissioner in respect of each coal mine in relation to which payments have been made to him under this Act.
Amended (5) Interest accruing on the amounts standing to the credit of the deposit account referred to in sub section (3) shall enure to the benefit of the owners of coal mines and shall also be payable to the Commissioner in addition 461 to the sum referred to in sub section (1).
Unamended (5) Interest accruing on the amounts standing to the credit of the deposit account referred to in subsection (3) shall enure to the benefit of the owners of the coal mines.
(6) Reference in this section to the owner of a coal mine shall, in relation to a group of coal mines specified in the Schedule, be construed as references to the owner of that group of coal mines.
" "Section 24 Disbursement of money by the Commissioner to claimants Where, after meet ing the claims admitted by him, of secured creditors, and unsecured creditors having priority under sub section (2) of Section 22, the total amount of claims of other unsecured creditors admitted by the Commissioner, does not exceed the total amount of the money cred ited to the account of a coal mine, every such admitted claim shall be paid in full and the balance, if any, shall be paid to the owner, but where such amount is insufficient to meet in full the total amount of the admitted claims, all such claims shall abate in equal proportions and be paid accordingly ." "Section 24A Interest on admitted claims Notwithstanding any award, decree or order of any court, tribunal or other authori ty, passed before the appointed day, in rela tion to any coal mine, where any amount is payable in respect of a claim admitted under this Act, the interest payable on such amount for any period after the appointed day shall be at such rate not exceeding the rate of interest accruing on any amount deposited by the Commissioner under Section 18." "Section 26 Disbursement of amounts to the owners of coal mines (1) If out of the moneys paid to him in relation to a coal mine or group of coal mines specified in the second column of the Schedule, there is a balance left after meeting the liabilities of all the secured and unsecured creditors, the Commis sioner shall disburse such balance to the owner of such coal mine or group of coal mines.
" 462 The scheme of the Coal Act and the bare reading of its provisions make it clear that the Commissioner has to adju dicate the claims of creditors of the mine owners in accord ance with the priorities.
The claims accepted by the Commis sioner, are to be satisfied out of the amount payable to the mine owners and the balance left after meeting the claims of all the secured and unsecured creditors, is to be paid to the owners of the coal mines.
The High Court has accepted the contention of the mine owners and has held that the interest accrued under the Coal Act cannot be made available to the Commissioner for meeting the claims of the creditors of the mine owner or to satisfy their other liabilities.
According to the High Court whole of the interest amount is to be exclusively given to the mine owners and the claims and liabilities are to be satis fied only out of the principal amount payable to the mine owners under the Coal Act.
To support these conclusions the High Court has given three reasons which we may presently examine.
The High Court 's conclusions are primarily based on the interpretation of Section 18(5) of the Coal Act.
The High Court has quoted the meaning of words "enure" and "benefit" from various dictionaries.
No dictionary or any out side assistance is needed to understand the meaning of these simple words in the context and scheme of the Coal Act.
The interest has to enure to the benefit of the owners of the coal mines.
The claims before the Commissioner under the Coal Act are from the creditors of the owners and the li abilities sought to be discharged are also of the owners of the coal mines.
When the debts are paid and the liabilities discharged, it is only the owners of coal mines who are benefited.
Taking away the interest amount by the owners without discharging their debts and liabilities would be unreasonable.
They have only to adopt delaying tactics to postpone the disbursement of claims and consequently earn more interest.
Due to such delay the owner would get huge amount of interest though ultimately he may not get a penny out of principal amount on the final settlement of claims.
It would amount to conferring unjust benefit on the owners which can never be the intention of the Parliament.
We do not agree with the interpretation given by the High Court and hold that the interest accruing under the Coal Act is the money paid to the Commissioner in relation to the coal mine and the same has to be utilised by the Commissioner in meeting the claims of the creditors and discharging other liabilities in accordance with the provisions of the Coal Act.
The High Court noticed that apart from providing priorities for 463 claims the Parliament has also indicated the accounts from which such claims are to be satisfied.
According to the High Court since no mention has been made therein with regard to the recovery of any amount of claim out of the interest the same cannot be used for that purpose and has to be exclu sively paid to the owners.
We do not agree with the reason ing.
Under Section 18(5) of the Coal Act the interest accru ing on the amount standing to the credit of the deposit account shall also be payable to the Commissioner in addi tion to the sum referred to in sub section (1) of Section 18.
Section 26 further provides that out of the moneys paid to the Commissioner in relation to the coal mine if there is a balance left after meeting the liabilities of all the secured and unsecured creditors, such balance shall be disbursed to the owner of the coal mine.
It cannot be dis puted that the interest paid to the Commissioner under Section 18(5) is money paid to him in relation to a coal mine and as such it has to be utilised in meeting the claims of the creditors of the mine owners and their other liabili ties.
Even otherwise interest amount in the present context has no separate entity.
As the lamb belongs to the owner of the sheep, the interest goes with the principal.
The inter est accrued under the Coal Act is thus, part of the kitty out of which the claims and liabilities are to be met.
The High Court has further held that under Section 26 of the Coal Act moneys paid to the Commissioner in relation to a coal mine do not include the money accrued by way of interest.
There is no basis for this interpretation.
The plain reading of Section 26 read with Section 18(5) of the Coal Act makes it clear that moneys paid to the Commissioner in relation to a coal mine are to be used for satisfying the debts and liabilities.
Interest amount accrued under the Coal Act is undoubtedly money in relation to coal mine and as such it squarely comes within the ambit of Section 26 of the Coal Act.
The amended Section 18(5) of the Coal Act which escaped the notice of the High Court provides that the amount of interest accruing on the amounts standing to the credit of the deposit account is also payable to the Commissioner.
Section 22(3) of the Coal Act makes the assets, in the hands of Commissioner, available for satisfying the debts in order of priorities.
The assets of the erstwhile owner lying in the hands of the Commissioner of payment would include the interest which has been paid to the Commissioner under Section 18(5).
Similarly Section 24 of the Coal Act says that unsecured creditors will be paid out of the money credited to the account of coal mine.
Moneys credited to the account of coal mine also include interest.
It is thus clear from the scheme and plain reading of various provisions of the 464 Coal Act that the interest amount has to be made available to the Commissioner to meet the debts and liabilities.
We may refer to Section 24A of the Coal Act which fixes the maximum interest payable to the successful claimants.
It is provided that interest shall be paid at such rate not exceeding the rate of interest accruing on any amount depos ited by the Commissioner under Section 18.
Had the Parlia ment intended to give interest to the owners, there would have no necessity for fixing the maximum limit of interest payable to the claimant with reference to the rate of inter est accruing to the scheduled amount.
The two acts being identical whatever we have said about the Coal Act is equally applicable to the Cooking Act.
We, therefore, see no legal or equitable grounds to sustain the judgment of the High Court.
The appeals are accepted, judgment of the High Court is set aside and the writ petitions of the respondents filed in the High Court are dismissed.
There shall be no order as to costs.
G.N. Appeals allowed.

summary/full:
The (Coke Act) and the (Coal Act) divested the ownership rights in the mines from the owners to the Central Government.
The Acts provided for payment in lieu of take over.
The payment was to be made to the respective owners after discharging their liabilities.
The Acts also provided for accrual of interest on the amount payable, for the procedural period.
Some of the owners filed writ petitions before the High Court claiming that the interest accrued exclusively be longed to owners and the same was not available for dis bursement to the claimants of the owners.
The High Court allowed the writ petitions, and held that the interest accrued under the Coal Act Cannot be made available to the Commissioner for meeting the claims of the creditors of the mine owners and it is to be exclusively given to the mine owners.
The present appeals, by special leave, challenge the said decision of the High Court.
Allowing the appeals, HELD: 1.
It is clear from the scheme and plain reading of the various provisions of the Coal Act that the interest amount has to be made available to the Commissioner to meet the debts and liabilities.
The Commissioner has to adjudi cate the claims of creditors of the mine owners in accord ance with the priorities.
The claim, accepted by the Commis sioner, are to be satisfied out of the amount payable to the mine owners and the balance left after meeting the claims of all the 456 secured and unsecured creditors, is to be paid to the owners of the coal mines.
[462A, B] 2.1.
The High Court 's conclusions are primarily based on the interpretation of Section 18(5) of the Coal Act.
The High Court has quoted the meaning of the words "enure" and "benefit" from various dictionaries.
No dictionary or any outside assistance is needed to understand the meaning of these simple words in the context and scheme of the Coal Act.
The interest has to enure to the benefit of the owners of the coal mines.
The claims before the Commissioner under the Coal Act are from the creditors of the owners and the liabilities sought to be discharged are also of the owners of the coal mines.
When the debts are paid and the liabili ties discharged, it is only the owners of coal mines who are benefited.
Taking away the interest amount by the owners without discharging their debts and liabilities would be unreasonable.
They have only to adopt delaying tactics to postpone the disbursement of claims and consequently earn more interest.
Due to such delay the owner would get huge amount of interest though ultimately he may not get a penny out of principal amount on the final settlement of claims.
It would amount to conferring unjust benefit on the owners which can never be the intention of the Parliament.
[462D, E, F] 2.2.
Section 24A of the Coal Act provided that interest shall be paid at such rate not exceeding the rate of inter est accruing on any amount deposited by the Commissioner under Section 18.
Had the Parliament intended to give inter est to the owners, there would have been no necessity for fixing the maximum limit of interest payable to the claimant with reference to the rate of interest accruing to the scheduled amount.
1464B] 3.1.
A plain reading of Section 26 read with Section 18(5) of the Coal Act makes it clear that moneys paid to the Commissioner in relation to a coal mine are to be used for satisfying the debts and liabilities.
Interest amount ac crued under the Coal Act is undoubtedly money in relation to coal mine and as such it squarely comes within the ambit of Section 26 of the Coal Act.
[463E] 3.2.
The amended Section 18(5) of the Coal Act which escaped the notice of the High Court provides that the amount of interest accruing on the amounts standing to the credit of the deposit account is also payable to the Commis sioner.
Section 22(3) of the Coal Act makes the assets, in the hands of Commissioner available for satisfying the debts in order of priorities.
The assets of the erstwhile owner lying in the 457 hands of the Commissioner of payment would include the interest which has been paid to the Commissioner under Section 18(5).Similarly Section 24 of the Coal ,Act says that unsecured creditors will be paid out of the money credited to the account of coal mine.
Moneys credited to the account of coal mine also include interest.
[463F, G] 3.3.
Under Section 18(5) of the Coal Act the interest accruing on the amount standing .to the credit of the depos it account shall also be payable to the Commissioner in addition to the sum referred to in sub section (1) of Sec tion 18.
It cannot be disputed that the interest paid to the Commissioner under Section 18(5) is money paid to him in relation to a coal mine and as such it has to be utilised in meeting the claims of the creditors of the mine owners and their other liabilities.
Even otherwise interest amount in the present context has no separate entity.
As the lamb belongs to the owner of the sheep, the interest goes with the principal.
The interest accrued under the Coal Act, is, thus, part of the kitty out of which the claims and liabili ties are to be met.
[463A D] 4.
The Coal Act and the Coke Act being identical, this decision in the Coal Act is equally applicable to the Coking Act.
[464C]


judgement:
ivil Appeal No. 5736 of 1985 & C.A. No. 508/1986.
From the Judgment and Order dated 14.8.1985 of the Bombay High Court in Civil Writ Petition No. 3420 of 1983.
N.N. Keswani and R.N. Keswani for the Appellants.
G. Ramaswamy Additional Solicitor General, S.K. Dhola kia, Shishir Sharma, P.H. Parekh, A.S. Bhasme and V.B. Joshi for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The case involved in these two appeals, with leave, seems indeed straight forward enough, but the High Court of Bombay made it, as we venture to think, unsatisfactory and in a sense against judicial pro priety and decorum.
The facts which are of central importance may be stated as follows.
On June 19, 1982, the Government of Maharashtra issued a draft notification under sec.
3(3) of the Bombay Provincial Municipal Corporation Act, 1949 (the "Act").
The draft notification proposed the formation of what is termed as "Kalyan Corporation" (the "Corporation").
It suggested the merging of Municipal areas of Kalyan, Ambarnath, Domoivali and Ulhasnagar.
Against this proposal, there were many objections and representations from persons, companies and the authorities.
Ambarnath and Ulhasnagar Municipal bodies and also some of the residents therein submitted their represen 409 tations.
They objected to the merger of their municipal areas into the Corporation.
It is said that in Ulhasnagar Municipal area, Sindhies are predominant.
In 1947, they were the victims of partition of the country.
Being uprooted from their home land, they have since settled down at Ulhasnagar.
They have formed union or federation called the All India Sindhi Panchayat Federation.
It is interested in having a separate identity for Ulhasnagar.
The Federation challenged the said draft notification by a writ petition before the Bombay High Court.
The writ petition was not disposed of on merits.
It was permitted to be withdrawn on an assurance given by the Government.
The Government gave the assurance that the representatives of the Federation would be given an opportunity of being heard before taking a final decision.
As per the assurance, they were given personal hearing on their representations.
The others who have filed similar representations were not heard.
But their objections or representations were duly considered.
Thereupon, the Govern ment decided to exclude Ulhasnagar from the proposed Corpo ration.
Accordingly, a notification under sec.
3(2) of the Act was issued.
The Corporation was thus constituted without Ulhasnagar.
That was the only alteration made in the propos al earlier notified.
All other areas indicated in the draft notification were merged in the Corporation.
The residents of Ambarnath Municipal areas were not satisfied.
They were, perhaps, more worried by the exclusion of Ulhasnagar than the inclusion of their own area.
They moved the High Court under Article 226 of the Constitution challenging the notification issued under sec.
3(2) of the Act.
They inter alia, contended that the action of the Government affording an opportunity of being heard only to the Federation and not to other objectors was contrary to Article 14.
It was a hostile discrimination to hear only one of the objectors.
They asserted that the establishment of the Corporation without Ulhasnagar Municipal area, having regard to the geographical contiguity was unintelligible and incomprehensible.
It was arbitrary and opposed to the object of the Act.
They also contended that there ought to have been a fresh draft notification after taking a decision to exclude Ulhasnagar from the proposal.
With similar conten tions and for the same relief, there was another writ peti tion before the High Court.
It was filed by the National Rayon Corporation Limited which is a company located within the Municipal limits of Ambarnath.
The Sindhi Panchayat Federation was not a party to the writ petitions.
It was, however, allowed as an intervener.
Some other persons who were interested in the outcome of the writ petitions were 410 also permitted to intervene in the proceedings.
They sup ported the stand taken by the Government which was the main respondent in the writ petitions.
The State in its counter affidavit resisted the peti tioners ' claim raising several grounds.
The first point to be noted in this context is this: "That the formation of Municipal Corporation under sec.
3 of the Act is an extension of the legislative process and, therefore, sec.
3 is nothing but a piece of conditional legisla tion.
The principles of natural justice will not apply to such legislative function nor it could be imparted into it even by necessary implication.
The petitioners have not chal lenged the validity of the sub section (2) of sec.
8 of the Act and even otherwise the said validity has been upheld by a Division Bench of this Court (Shah and Deshpande, J J) in writ petition No. 706 A of 1982 (The Village Panchayat Chikalthane and Anr.
vs The State of Maharashtra and Anr.
decided on 23/24 Decem ber, 1982.
Therefore, it cannot be said that the notification issued in exercise of the said legislative power is vitiated by non complaince with the principles of natural justice.
The conditions laid down by sec.
3 are fully complied with; a preliminary notifi cation was issued as contemplated by sub section (4) of sec.
3 of the Act; the objec tions and suggestions made by the various citizens and persons were duly considered by the State Government and thereafter the final notification was issued.
In the very nature of things there is bound to be difference and variance between the preliminary notification and the final notification.
Only because the Ulhasnagar Municipal Council is excluded from the final notification, it cannot be said that there was any major departure from the prelim inary notification or it was necessary to issue a preliminary notification over again before the final notification was issued in that behalf.
" The second factual point to be noted is this: "Due to partition of India in 1947, the Sindhi people have been uprooted from their homeland and with hard labour they have settled them selves in different parts of the country.
One can appreciate their feelings about their anxi 411 ety to maintain their separate entity.
If such a large part is forcibly included in the Corporation ignoring their sentiments and wishes, it may not result in smooth working of the proposed Corporation which is necessary for proper development.
It is, therefore, desirable to constitute the new Kalyan Corpo ration without including Ulhasnagar for the time being." The High Court was not impressed with the above reason ings.
The High Court said that the decision to exclude Ulhasnagar was taken by the Government abruptly and in an irrational manner.
The decision was arbitrary and against the purpose of the Act.
On the legality of the procedure followed by the Government, the High Court said: "Once that decision was taken, it was obliga tory on the part of the Government to recon sider the proposal as a whole so far as the rest of the areas are concerned." Reference was also made to the report of the "Sathe Commission" to fortify the conclusion that Ulhasnagar could not have been isolated.
The "Sathe Commission" was a one man Commission appointed by the State Government to enquire and report on the establishment of new Municipal Corporations.
The Commission in its report among others, seems to have indicated that Kalyan, Ulhasnagar and Ambarnath are one contiguous stretch of territory with a length of about 8 kms.
from North West to South East.
The High Court then made some general observations as to the purpose for which Municipal Corporations should be constituted went on: "It was the avowed policy after independence to change the socio economic map of the vil lage and town.
A corporate life can only be ensured if there is a corporate conscience and an attitude to live together.
City is an epitome of the social world where all belts of civilization interest along its avenues.
A Municipal Corporation is . . in nature, where people belonging to different castes, creeds, religious and language want to live with each other.
Town planning cannot be denominational or fractional.
It is not a museum of human beings otherwise Harijan Bastis, Mominpures and such other Mohallas will have to be preserved to maintain its separate identity and the socio 412 economic map of the village or city will never change.
It cannot be forgotten that we are heading towards a global village.
By saying this, we do not want to belittle the achieve ments of sacrifice of the Sindhi Community.
However, that is not very relevant for decid ing the question of the establishment of a Municipal Corporation.
Its main object is to ensure better municipal government of the city.
It appears that Government was also aware of this and this seems to be the reason why the decision "for the time being is perti nent and clearly indicates that the Government wanted to reconsider the issue at a later stage.
However, unfortunately till today Government has not taken any decision in that behalf.
" The High Court, however, felt that it was not necessary to quash the notification establishing the Corporation.
This is how the conclusion was reached: "It will not be fair to quash the notification as a whole and unsettle the Municipal Adminis tration.
In our view, that is also not neces sary since from the affidavit of the Govern ment, it is clear that the decision taken in that behalf was tentative, i.e., for the time being and it is not all time permanent deci sion.
Under sub section (3) of sec.
3 of the act, the State Government has power to exclude or include any area specified in the notifica tion issued so far as Ambarnath Town is con cerned, reconsideration of the present case of the whole matter was absolutely necessary when the decision to exclude the Ulhasnagar Munici pal Council from the proposed Municipal Corpo ration, ,though tentative in nature, was taken.
" Finally, the operative portion of the Order was put in the following terms: "Therefore, without setting aside the final notification, we direct the State Government to reconsider the proposal under sub sec.
(3) of sec.
3 of the Bombay Provincial Municipal Corporations Act either to exclude or include any area, within a period of six months from today.
The writ of mandamus to be issued accordingly.
It is needless to say that after the necessary steps are taken under sec.
3(3) of the Act, the State Government shall make the necessary 413 amends in the notification issued.
XXX XXX XXX XXX XXX XXX XXX XXX "In the result, therefore, the rule is made partly absolute and the State Government is directed to exercise its power under sec.
3 sub sec.
(3) of the Act in accordance with law within a period of six months.
It is needless to say that the petitioners will be entitled to raise objections and make their suggestions in that behalf after a notification under sub sec (3) read with sub sec (4) of sec.
3 of the Act is issued.
Since the popular local self Government is not in existence in any of the Municipal Councils or even in the newly established municipal corporation and having regard to the peculiar facts and circumstances of the case, in our view, this is a fit case where the petitioners of these two petitions and All India Sindhi Panchayat Federation should be given a reasonable opportunity of being heard before any final decision in the matter is taken.
" Against the judgment of the High Court, the State Gov ernment has not preferred any appeal.
The Kalyan City Corpo ration though vitally concerned with the matter, has also not appealed to this Court.
The present appeals are only by those who were impleaded as interveners in the writ peti tions.
We have heard counsel for all parties and gave our best attention to the questions raised by the appellants.
Counsel for the appellants reiterated the stand taken by the Govern ment before the High Court.
He urged that the State has a wide discretion in the selection of areas for constituting the Corporation and the Court cannot interfere with such discretion.
The Court has no jurisdiction to examine the validity of the reason that goes into the decision of the Government.
The power to constitute Municipal Corporations under sec.
3 of the Act is legislative in character.
It is an extension of legislative process for which rules of natural justice have no application.
He said that the Gov ernment in the instant case has complied with the statutory requirements and it was not expected to do anything more in the premises.
And, at any rate, it is wholly unnecessary according to the counsel to go through that exercise again as the High Court has suggested.
414 The other limb of the argument of counsel for the appel lants relates to the manner in which the High Court disposed of the matter.
it was said that a decision of this Court has been disregarded and a binding decision of a co ordinate Bench of the same Court has been ignored.
The grievance of the appellants ' counsel, in our opin ion, is not wholly unjustified.
At the beginning of the judgment, we have said that the High Court rendered the judgment in a sense against the judicial propriety and decorum.
We were not happy to make that observation, but constrained to say so in the premise and background of the case.
It may be noted that the result of the writ petitions before the High Court turns on the nature and scope of the power conferred on the Government under sec.
3 of the Act.
A Division Bench of the High Court has taken the view that that power is in the nature of legislative process.
That judgment was rendered on 23/24 December, 1982, by a Bench consisting of Shah and Deshpande, JJ.
It was in writ peti tion No. 706 A of 1982 The Village Panchayat Chikalthana and Another vs The State of Maharashtra and Another, In that case, the challenge was to the validity of sec.
3(2) of the Act on the ground that it suffers from the vice of excessive delegation for want of guidelines for the exercise of power.
Repelling the contention, it was held that sec.
3 is in the nature of a conditional legislation and, therefore, laying down the policy or guidelines to exercise the power was unnecessary.
It was emphasized that the exercise of power under sec.
3(2) is conditioned by only two requirements, viz., (1) previous publication as contemplated by sub sec.
(4) of sec.
3 of the Act, (2) issuance of a notification by the Government after such previous publication.
Once the Government publishes such a notification, the legislation becomes complete and the other provisions of the Act are ipso facto attracted to the Corporation so constituted.
This was the view taken by the High Court in Chikalthane case.
To reach that conclusion, the learned judges relied upon the decision of this Court in Tulsipur Sugar Company, case ; The attention of the High Court in the present case was drawn to the decision in Chikalthane, case.
Counsel for the State and interveners seemed to have argued that the present case really fell fairly and squarely within what was said there.
They were indeed on terra firma since the decision in Chikalthane case was a clear authority against every conten tion raised by the petitioners.
Faced with this predicament, counsel for the petitioners urged before the High Court that their case should be referred to a larger Bench to reconsid er the deci 415 sion m Chikalthane, case.
But learned Judges, (Dharmadhikari and Kantharia, J J) did not heed to that submission.
They neither referred the case to a larger Bench nor followed the view taken in the Chikalthane, case.
It was not as if they did not comprehend the issue to be determined and the prin ciple to be applied.
They were very much aware of it when they remarked: "In our opinion, once it is accepted that this is a piece of conditional legislation, then it will have to be held that the principle of natural justice would not apply to such a case as held by the Division Bench of this Court in village Panchayat Chikalthane 's case nor it could be said that because under a mistaken notice the Federation was heard, the denial of such a right to the petitioners will amount to hostile discrimination within the contempla tion of Article 14 of the Constitution of India.
" After referring to these simple legal principles, it is unfortunate that the issue at stake was little explored.
The key question raised in the case was side tracked and a new strategy to interfere with the decision of the Government was devised.
The learned Judges directed the Government to publish again a draft notification for reconsideration of the matter.
They gave liberty to the writ petitioners and the interveners to submit their representations.
They ob served that "this is a fit case where the parties should be given a reasonable opportunity of being heard.
" They did not quash the impugned notification, but told the Government to make necessary changes in the light of fresh consideration.
All these directions were issued after recording a positive finding that the exclusion of Ulhasnagar from the Corpora tion was arbitrary and irrational.
The net result of it is that there is now no discretion with the Government to keep Ulhasnagar away from the Corporation.
It would be difficult for us to appreciate the judgment of the High Court.
One must remember that pursuit of the law, however glamorous it is, has its own limitation on the Bench.
In a multi judge court, the Judges are bound by precedents and procedure.
They could use their discretion only when there is no declared principle to be found, no rule and no authority.
The judicial decorum and legal pro priety demand that where a learned single judge or a Divi sion Bench does not agree with the decision of a Bench of co ordinate jurisdiction, the matter shall be referred to a larger Bench.
It is a subversion of judicial process not to follow this procedure.
416 Deprecating this kind of tendency of some judges, Das Gupta, J., in Mahadeolal Kanodia vs The Administrator Gener al of West Bengal, AIR 1960 SC 926 said (at 941): "We have noticed with some regret that when the earlier decision of two Judges of the same High Court in Deorajin 's case, 1954 Cal 119) was cited before the learned Judges who heard the present appeal they took on themselves to say that the previ ous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring no less than legal propriety form the basis of judicial procedure.
If one thing is more necessary in law than any other thing, it is the quality of certainty.
That quality would totally disappear if Judges of co ordinate jurisdiction in a High Court start overruling one another 's decision.
" The attitude of Chief Justice, Gajendragadkar, in Lala Shri Bhagwan and Anr.
vs Ram Chand and Anr.
, ; was not quite different (at 1773): "It is hardly necessary to emphasize that considerations of judicial propriety and decorum require that if a learned single judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a single, Judge, need to be reconsidered, he should not embark upon that enquiry sitting as a single judge, but should refer the matter to a Divi sion Bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question.
That is the proper and traditional way to deal with such matters and it is rounded on healthy principles of judi cial decorum and propriety.
It is to be re gretted that the learned Judges departed from this traditional way in the present case and choose to examine the question himself.
" The Chief Justice Pathak, in a recent decision stressed the need for a clear and consistent enunciation of legal principle in the decisions of a Court.
Speaking for the Constitution Bench Union of India vs Raghubir Singh, ; learned Chief Justice said (at 766): "The doctrine of binding precedent has the merit of pro 417 moting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transac tions forming part of his daily affairs.
And, therefore, the need for a clear and consistent enunciation of legal principle in the deci sions of a Court.
" Cardozo propounded a similar thought with more emphasis: "1 am not to mar the symmetry of the legal structure by the introduction of inconsisten cies and irrelevancies and artifical excep tions unless for some sufficient reason, which will commonly by some consideration of history or custom or .policy or justice.
Lacking such a reason, I must be logical just as I must be impartial, and upon like grounds.
It will not do to decide the same question one way between one set of litigants and the opposite way between another" (The Nature of the Judicial Process by Benjamin N. Cardozo p.33) In our system of judicial review which is a part of our Constitutional scheme, we hold it to be the duty of judges of superior courts and tribunals to make the law more pre dictable.
The question of law directly arising in the case should not be dealt with apologetic approaches.
The law must be made more effective as a guide to behaviour.
It must be determined with reasons which carry convictions within the Courts, profession and public.
Otherwise, the lawyers would be in a predicament and would not know how to advise their clients.
Subordinate courts would find themselves in an embarrassing position to choose between the conflicting opinions.
The general public would be in dilemma to obey or not to obey such law and it ultimately falls into disrepute.
Judge learned Hand has referred to the tendency of some judges "who win the game by sweeping all the chessmen off the table".
(The Spirit of Liberty by Alfred A. Knopf, New York (1953) p. 131).
This is indeed to be deprecated.
It is needless to state that the judgment of superior courts and Tribunals must be written only after deep travail and posi tive vein.
One should never let a decision go until he is absolutely sure it is right.
The law must be made clear, certain and consistent.
But certitude is not the test of certainty and consistency does not mean that there should be no word of new content.
The principle of law may develop side by side with new content but not 418 with inconsistencies.
There could be waxing and wanning the principle depending upon the pragmatic needs and moral yearnings.
Such development of law particularly, is inevita ble in our developing country.
In Raghubir Singh, case, learned Chief Justice Pathak had this to say ; at 767: "Legal compulsions cannot be limited by exist ing legal propositions, because, there will always be, beyond the frontiers of the exist ing law, new areas inviting judicial scrutiny and judicial choice making which could well affect the validity of existing legal dogma.
The search for solutions responsive to a changed social era involves a search not only among competing propositions of law, or competing versions of a legal proposition, or the modalities of an indeterminacy such as "fairness" or "reasonableness" but also among propositions from outside the ruling law, corresponding to the empirical knowledge or accepted values of present time and place, relevant to the dispensing of justice within the new parameters.
And he continued: The universe of problems presented for judi cial choicemaking at the growing points of the law is an expanding universe.
The areas brought under control by the accumulation of past judicial choice may be large.
Yet the areas newly presented for still further choice, because of changing social, economic and technological conditions are far from inconsiderable.
It has also to be remembered, that many occasions for new options arise by the mere fact that no generation looks out on the world from quite the same vantage point as its predecessor, nor for that matter with the same perception.
A different vantage point or a different quality of perception often re veals the need for choicemaking where formerly no alternatives, and no problems at all, were perceived.
" Holmes tells us: "The truth is, that the law is always ap proaching, and never reaching, consistency.
It is forever adopting new principles from life at the end, and it always retains old ones from history at the other, which have not yet been absorbed or 419 sloughed off.
It will become entirely consist ent only when it ceases to grow." (Holmes the Common Law, p. 36 (1881).
Apart from that the judges with profound responsibility could iII afford to take stolid satisfaction of a single postulate past or present in any case.
We think, it was Cicero who said about someone "He saw life clearly and he saw it whole"; The judges have to have a little bit of that in every case while construing and applying the law.
Reverting to the case, we find that the conclusion of the High Court as to the need to reconsider the proposal to form the Corporation has neither the attraction of logic nor the support of law.
It must be noted that the function of the Government in establishing a Corporation under the Act is neither executive nor administrative.
Counsel for the appellants was right in his submission that it is legisla tive process indeed.
No judicial duty is laid on the Govern ment in discharge of the statutory duties.
The only question to be examined is whether the statutory provisions have been complied with.
If they are complied with,, then, the Court could say no more.
In the present case the Government did publish the proposal by a draft notification and also con sidered the representations received.
It was only thereaf ter, a decision was taken to exclude Ulhasnagar for the time being.
That decision became final when it was notified under Section 3(2).
The Court cannot sit in judgment over such decision.
It cannot lay down norms for the exercise of that power.
It cannot substitute even "its juster will for theirs.
" Equally, the rule issued by the High Court to hear the parties is untenable.
The Government in the exercise of its powers under Section 3 is not subject to the rules of natu ral justice any more than is legislature itself.
The rules of natural justice are not applicable to legislative action plenary or subordinate.
The procedural requirement of hear ing is not implied in the exercise of legislative powers unless hearing was expressly prescribed.
The High Court, therefore, was in error in directing the Government to hear the parties who are not entitled to be heard under law.
Megarry, J., in Bates vs Lord Hailsham of St. Marylebone and Ors., while dealing with the legisla tive process under Section 56 of the Solicitors Act, 1957 said (at 1378): "In the present case, the committee in ques tion has an entirely different function: it is legislative rather than 420 administrative or executive.
The function of the committee is to make or refuse to make a legislative instrument under delegated powers.
The order, when made, will lay down the remu neration for solicitors generally and the terms of the order will have to be considered and construed and applied in numberless cases in the future.
Let me accept that in the sphere of the so called quasi judicial the rules of natural justice run, and that in the administrative or executive field there is a general duty of fairness.
Nevertheless, these considerations do not seem to me to affect the process of legislation, whether primary or delegated.
Many of those affected delegated legislation, and affected very substantially, are never consulted in the process of enacting that legislation; and yet they have no remedy.
Of course, the informal consultation of repre sentative bodies by the legislative authority is a commonplace; but although a few statutes have specifically provided for a general process of publishing draft delegated legisla tion and considering objections (see, for example, the Factories Act 1961 Schedule 4), I do not know of any implied right to be con sulted or make objections, or any principle upon which the courts may enjoin the legisla tive process at the suit of those who contend that insufficient time for consultation and consideration has been given.
I accept that the fact that the order will take the form of a statutory instrument does not per se make it immune from attack, whether by injunction or otherwise; but what is important is not its form but its nature, which is plainly legisla tive.
" There are equally clear authorities on this point from this Court.
The case in Tvlsipur Sugar Co. Ltd. vs The Notified Area Committee, Tulsipur, ; was indeed a hard case.
But then, this Court did not make a bad law.
There a notification dated August 22, 1955 was issued under Section 3 of the U.P. Town Area covering the petition er 's factory.
Consequently, the octroi was levied on goods brought by the factory management into the limits of Town Area Committee.
The Company questioned the validity of that notification.
The case pleaded was that the company had no opportunity to make representation regarding the advisabili ty of extending the limits of the Town Area Committee.
Venkataramiah, J., as the present learned Chief Justice then was, while rejecting the contention observed (111920): 421 "The power of the State Government to make a declaration under Section 3 of the Act is legislative in character because the applica tion of the rest of provisions of the Act to the geographical area which is declared as a town area is dependent upon such declaration.
Section 3 of the Act is in the nature of a conditional legislation.
Dealing with the nature of functions of a non judicial authori ty, Prof. S.A. De Smith in Judicial Review of Administrative Action (third edition) observes at page 163: "However, the analytical classi fication of a function may be a conclusive factor in excluding the operation of the audi alteram partem rule.
It is generally assumed that in English law the making of a subordi nate legislative instrument need not be pre ceded by notice or hearing unless the parent Act so provides." In Baldev Singh vs State of Himachal Pradesh, a similar question arose for consideration.
An attempt was made to constitute a notified area as provided under Section 256 of the Himachal Pradesh Municipal Act, 1968, by including portions of the four villages for such purposes.
The residents of the villages who were mostly agriculturists challenged the validity of the notification before the High Court on the ground that they had no oppor tunity to have their say against that notification.
The High Court summarily dismissed the writ petition.
In the appeal before this Court, it was argued that the extension of notified area over the Gram Panchayat limits would involve civil consequences and therefore, it was necessary that persons who would be affected thereby ought to be given an opportunity of being heard.
Ranganath Misra, J., did not accept that contention, but clarified (at 515): "We accept the submission on behalf of the appellants that before the notified area was constituted in terms of Section 256 of the Act, the people of the locality should have been afforded an opportunity of being heard and the administrative decision by the State Government should have been taken after con sidering the view of the residents.
Denial of such opportunity is not in consonance with the scheme of the rule of law governing our socie ty.
We must clarify that the hearing contem plated is not required to be oral and can be by inviting objections and disposing them of in a fair way.
" The principles and precedents thus enjoin us not to support the 422 view taken by the High Court.
We may only observe that the Government is expected to act and must act in a way which would make it consistent with the good administration.
It is they, and no one else who must pass judgment on this mat ter.
We must, therefore, leave it to the Government.
In the result and for the reasons stated, we allow the appeals and set aside the judgment of the High Court.
In the circumstances of the case, we make no order as to costs.
Y. Lal Appeals allowed.

summary/full:
On June 19, 1962, the Government of Maharashtra issued a draft notification under Section 3(3) of the Bombay Provin cial Municipal Corporation Act, 1949 and thereby proposed the formation of "Kalyan Corporation", by merging of munici pal areas of Kalyan, Ambarnath, Domoivali and Ulhasnagar.
The proposal was resented to by the residents of the said areas and many objections and representations by persons, companies and authorities including the municipal bodies of Ambarnath, and Ulhasnagar were made.
So far as Ulhasnagar was concerned it was stated that Sindhi Community after partition has settled at Ulhasnagar and to keep the identity of Sindhies distinct, they had formed All India Sindhi Panchayat Federation.
The said Federation challenged the draft notification by a Writ Petition before the High Court.
On an assurance being given by the Government before the High Court that the representation made by the Federation would be duly considered, the Writ Petition was allowed to be withdrawn.
As per the assurance, the Federation was given personal hearing on their representation.
Only the Federa tion was heard, none of the other representationists was afforded any hearing though their objections were duly considered.
After considering the matter in the manner aforesaid, the Government decided to exclude Ulhasnagar from the proposed Corporation and accordingly a notification under section 3(2) of the Act was issued.
The Corporation was thus Constituted excluding Ulhasnagar.
Save as aforesaid no other alteration was made in the notification.
406 The Residents of Ambarnath municipal area were not satisfied.
They moved the High Court challenging the validi ty of the notification issued under section 3(2) of the Act.
Their main contention was that there has been hostile dis crimination in the matter as only the Federation was heard and none else.
They also asserted that the establishment of a Corporation without Ulhasnagar, keeping in view the geo graphical contiguity was unintelligibe and incomprehensible.
According to them it was arbitrary and opposed to the object of the Act.
Federation and others interested in the proceedings were allowed to intervene and they supported the stand taken by the Government which was the main respondent.
The State pleaded that the formation of Corporation was an extension of the legislative process and as such section 3 was a piece of conditional legislation, and the notifica tion issued in exercise of that power cannot be said to have been vitiated by non compliance with the principles of natural justice.
According to the State it was not obligato ry for the State to issue a preliminary notification over again before the final notification excluding Ulhasnagar was issued.
The High Court took the view that the decision to ex clude Ulhasnagar was taken by the State abruptly and in an irrational manner and that the decision was against the object of the Act.
On the legality of the procedure followed by the Government, the High Court held that once a decision was taken, it was obligatory on the part of the Government to reconsider the proposal as a whole so for as the rest of the areas were concerned.
The High Court without quashing the impugned notifica tion directed the State Government to reconsider the propos al under subsection (3) of the Act either to exclude or include any area and accordingly make amends in the notifi cation.
It was also directed that the Petitioners and the Federation be given a reasonable opportunity of being heard before any final decision in the matter is taken.
Against the aforesaid decision of the High Court only interveners have preferred these appeals.
The State and Kelyan City Corporation have not appealed.
Counsel for the appellants reiterated the stand taken by the Government before the High Court and urged that the State had a wide discretion in the selection of areas for constituting the Corporation and the Court cannot interfere with such discretion.
State 's power to consti 407 tute a corporation is legislative in character and rules of natural justice have no application.
It was urged that the state had complied with all the statutory requirements and it was not necessary for the state to go through that exer cise again.
It was further urged that the decision of this Court has been disregarded and a binding decision of a co ordinate bench of the same Court in Village Panchayat Chi kalthane & Anr.
vs State of Maharashtra has been ignored.
Allowing the appeals, this Court, HELD: In our system of judicial review which is a part of our constitutional scheme, this Court holds it to be the duty of Judges of superior Courts and tribunals to make the law more predictable.
The question of law directly arising in the case should not be dealt with apologetic approaches.
The law must be made more effective as a guide to behaviour.
It must be determined with reasons which carry convictions within the Courts, professions and public otherwise the lawyers would be in a predicament and would not know how to advise their clients.
Subordinate Courts would find them selves in an embarrassing position to choose between the conflicting opinions.
The general public will be in a dilem ma to obey or not to obey such law and it ultimately fails into disrepute.
[417D F] It is needless to state that the judgment of superior Courts and Tribunals must be written only after deep travail and positive vein.
One should never let a decision go unless he is absolutely sure it is right.
The law must be made clear, certain and consistent.
But ceritude is not the test of certainty and consistency does not mean that there should be no word of new content.
The principle of law may develop side by side with new content but not in consistencies.
There could be waxing and waning the principle depending upon the pragmatic needs and moral yearings.
Such develop ment of law particularly is inevitable in our developing country.
[417G H; 418A B] The rules of natural justice are not applicable to legislative activity plenary or subordinate.
The procedural requirement of hearing is not implied in the exercise of legislative powers unless hearing was expressly prescribed.
[419F] The High Court, therefore, was in error in directing the Government to hear the parties who are not entitled to be heard in law; section 3 of the Bombay Provincial Municipal Corporation Act 1949.
[419F G] The Government in the exercise of its powers under section 3 is 408 not subject to the Rules of natural justice any more than is legislature itself.
[419F] Mahadeolal Kanodia vs The Administrator General of West Bengal, A.I.R. (1960) S.C.p. 926; Sri Bhagwan and Anr.
vs Ram Chand and Anr.
, ; at 1773; Union of India vs Raghbir Singh, ; ; The Nature of Judicial Process by Benjamin N. Cardozo; Bates vs Lord Heilsham of St. Marylebone and Others, 1, W.L.R. 1373; Tulsipur Sugar Co. Ltd. vs The Notified Area Committee, Tulsipur, ; and Baldev Singh vs State of Himachal Pradesh, , referred to.


judgement:
vil Appeal Nos. 1403 to 1406 of 1974.
From the Judgment and Order dated 23.12.
1971 of the Madras High Court in W.P. Nos.
1053 54, 4679 & 4715 of 1968.
Anil Dev Singh, Ms. Indu Malhotra and C.V. Subba Rao for the Appellant.
467 R.P. Bhat, G.L. Sanghi, M.N. Krishnamani, Vineet Kumar, R. Mohan, K.C. Dua and R.A. Perumal for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
These appeals are directed against the judg ment and order of a Division Bench of the High Court of Madras dated 2.8. 1974, quashing the notices issued by the Deputy Commercial Tax Officer, Madras.
The respondents manufacture various medicinal prepara tions and in that process they use tincture containing alcohol.
On the enforcement of the (hereinafter referred to as 'the Act ') the respondents became liable to pay duty.in accordance with Section 3 of the Act read with Schedule to the Act.
They 'further became liable to obtain licence, but they neither paid duty nor obtained licence.
The Commercial Tax Officer issued notices to the respondents in exercise of his powers under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 directing them to pay duty on all medicinal preparations manufactured by them after 1.6.1961.
The notices were in the shape of notice of demand requiring the respondents to pay the duty which they had failed to pay in accordance with the Act and the Rules on the use of tincture in manufacturing medicinal preparations.
The respondents filed writ petitions under Article 226 of the Constitution of India before the High Court of Madras challenging the notices and the proceedings initiated in pursuance thereof for the recovery of duty from them.
A Division Bench of the High Court allowed the writ petitions on the sole ground that Rule 12 under which the impugned notices were issued was ultra vires the Act, conse quently, proceedings initiated in pursuance thereof, were without jurisdiction.
On these findings the writ petitions were allowed and the notices as well as the proceedings were quashed.
The sole question which arises for consideration in these appeals relates to the validity of Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956.
The High Court has declared the Rule ultra vires on the ground that the Act was silent on the question of levy of duty on escaped turn over and hence Rule 12 which pro vides for the recovery of escaped duty was outside the purview and scope of the Act.
The Act was enacted to provide for the levy and collection of 468 duty of excise on medicinal and toilet preparations contain ing alcohol, opium, Indian hemp or other narcotic drugs as the preamble states.
Section 3 provides for levy and collec tion of duties.
It reads as under: "3(1).
There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India.
(2) The duties aforesaid shall be leviable (a) where the dutiable goods are manufactured in bond, in the State in which such goods are released from a bonded warehouse for home consumption, whether such State is the ,State of manufacture or not; (b) where the dutiable goods are not manufac tured in bond, in the State in which such goods are manufactured.
(3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such manner as may be prescribed.
" Excise duty is imposed by Section 3 on the manufacture of dutiable goods at the rates specified in the Schedule.
Sub section (2) indicates the stage at which the duty is to be levied.
Section 3(3) provides for collection of duty, lays down that it shall be collected in such manner as may be prescribed by Rules made under the Act.
Section 3, there fore, imposes duty on the manufacture of medicinal prepara tions and it lays down the rates and it also indicates the stage at which the duty is to be levied.
So far as collec tion of duty is concerned the Act leaves the same to the rule making authority.
Section 19 confers power on the Central Government to make rules to carry out the purposes of the Act.
The relevant provision of Section 19 is as under: "19(1).
The Central Government may, by notifi cation in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particulars, and without prejudice to the generality of the foregoing power, such rules may (i) provide for the assessment and collection of duties levied under this Act, the authori ties by whom functions 469 under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duties shall be payable and the recovery of duty not paid.
" Section 19(1) read with Section 3(3) confer wide powers on the Central Government to make rules which may be necessary for carrying out the purpose of the Act.
Such rules may provide for the assessment and collection of duties, and, the manner in which the duty is to be paid as well as for the recovery of duty not paid at all.
The Central Government in exercise of its power under Section 19 of the Act has framed the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 which were enforced on 9th March 1957.
Chapter III of the Rules provide for levy and refund of, and, exemp tion from duty.
Rules 6 to 17 relate to recovery, exemption and refund of duty.
Rule 6 requires every person who manu factures any dutiable goods, or who stores such goods in a warehouse to pay the duty on such goods, at such time and place as may be designated.
Rule 9 prescribes time and manner of payment of duty.
According to this Rule no dutia ble goods shall be removed from any place where they are manufactured either for consumption or for export, outside such place until the excise duty leviable thereon is paid at such place and in such manner as prescribed in the Rules or as the Excise Commissioner may require.
Rule 11 provides for recovery of duty or charges which may have been shortlevied through inadvertence, error, collusion, or mis construction on the part of an Excise Officer and through mis statement on the part of the owner and it also provides for recovery of any refund erroneously made to the manufacturer, owner of the goods on written demand made within six months from the date of payment of duty.
Rule 12 confers residuary power for the recovery of sums due to the Government.
Rule 12 reads as under: "12.
Residuary powers for recovery of sums due to Government Where these rules do not make any specific provision for the duty has for any reason been short levied, or of any other sum of any kind payable to the collecting Government under the Act or these rules, such duty, deficiency in duty or sum shall, on written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" 470 As already noted Rules contained in Chapter III of the Rules particularly Rules 6, 9, 10 and 11 provide for payment and recovery of duty and also the time and manner of its payment.
Rule 12 is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid.
If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by Rule 12.
Rule 12 provides for recovery of duty, as well as any other sum payable to the collecting Government under the Act if the same is not paid on account of short levy or deficiency or for any reason.
In substance Rule 12 contains additional safeguard for recovery of duty, it does not create any additional charge or liability on the manufacturer for the payment of the duty.
The liability to pay tax is created by the charging Section 3 and Rule 12 confers, on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason.
Rule 12 is referable to section 19(2)(i) of the Act.
The Rule carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by Section 3(3) of the Act.
The High Court committed error in holding that the Rule provides for recovery of escaped duty although the Act is silent on the question of escaped assessment and therefore Rule 12 is ultra vires the Act.
Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty.
He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time.
we find no substance in the submission.
While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution.
In the absence of any period of limitation it is settled that every author ity is to exercise the power within a reasonable period.
What would be reasonable period, would depend upon the facts of each case.
Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasona ble 471 period.
No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case.
In view of the above discussion, we allow the appeals and set aside the judgment and order of the High Court of Madras dated 2.8.
There will be no order as to costs.
T.N.A. Appeals allowed.

summary/full:
The respondents were manufacturing various medicinal preparations and in that process were using tincture con taining alcohol.
On the enforcement of the they became liable to pay duty and also to obtain licence but they continued their manufacture without doing so.
The Commercial Tax Officer issued demand notices under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 requiring payment of the duty which the respondents had failed to pay.
The respondents filed writ petitions in the High Court challenging the aforesaid notices, and the proceedings for recovery of duty.
Allowing the writ petitions the Division Bench quashed the notices as well as the proceedings for recovery on the ground that the Act was silent on the ques tion of levy of duty on escaped turnover, and hence Rule 12 which provides for recovery of escaped duty was outside the purview and scope of the Act and, therefore, ultra vires.
In these appeals it was contended that Rule 12 was invalid and 466 unreasonable and violative of Article 14 of the Constitution because it does not provide for any period of limitation for the recovery of duty.
Allowing the appeals and setting aside the judgment of the High Court, this Court, HELD: 1.
The liability to pay tax is created by the charging section 3 and Rule 12 confers, power on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason.
Rule 12 is referable to section 19(2)(i) of the Act and carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by section 3(3) of the Act.
It is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid.
If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by this Rule.
This Rule does not create any additional charge or liability on the manufacturer for the payment of the duty.
The High Court Committed error in holding that the Rule is ultra vires the Act.
[470C D, 470A B] 2.
Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasona ble or violative of Article 14 of the Constitution.
In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period.
What would be reasonable period, would depend upon the facts of each case.
Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period.
No hard and fast rules can be laid down in this regard as the determination of the ques tion will depend upon the facts of each case.
[470F, G, H, 471A]