judgement:
ivil Appeal Nos.
97 & 98 of 1981.
From the Judgment and order dated 25.4.1980 of the Punjab and Haryana High Court in C.W. No. 2512 of 1979.
V.M. Tarkunde and N.S. Das Behl for the Appellants.
Kapil Sibal, P. Gaur and Jitendra Sharma for the Respondents.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
These appeals by special leave are directed against the judgment dated April 25, 1980 of the High Court of Punjab & Haryana in civil writ No. 3512 of 1979.
The revised policy of allotment of industrial sites for the establishment of printing presses in Chandigarh has been called into question in the aforesaid writ petition.
The printing presses are now scattered all over Chandigarh.
They are situated either in residential premises or in small shops in different localities.
The Chandigarh administration wanted them to be located in an industrial area.
For that purpose, they earmarked forty three sites in the industrial area phase II.
The sites are comparatively of bigger dimensions.
In 1975, the authorities invited applications for allotment of those sites.
Several persons submitted applications.
The appellants in Appeal No. 97 of 1981 were some of them.
They applied with deposit of earnest money of Rs.1000 each.
That would be ten per cent of the premium payable for the site.
All the applications were processed for final allotment.
In the meantime, it is said that the appellants were called upon to deposit 25 per cent of the premium calculated at the rate of Rs. 15 per square yard.
The appellants appear to have complied with that demand also.
Since there were more applicants than the sites available, the authorities decided to draw the lots.
In October 1977, the lots were drawn and the lady luck smiled at the appellants.
But the authorities did not issue letters of allotment.
The reason was obvious.
The authorities had a second look at the scheme of allotment of sites for printing industries.
The authorities wanted to 161 accommodate as many applicants as possible.
But they could not accommodate all those applicants for want of adequate number of sites in the industrial area phase II.
The authorities were also of the view that for setting up the printing industry, larger sites such as those earmarked earlier, would not be necessary and smaller sites would meet the requirements.
Consequently, the sites proposed in the industrial area phase II were given up and a lay out of smaller sites in the industrial area phase I was formed.
There about 131 of sites were reserved for allotment to printing press owners.
The appellants and other like applicant were intimated by letters that the said sites would be allotted at the rate of RS.35 per square yard.
They were also informed that the allotment would be made by draw of lots on October 3, 1979.
The appellants however, did not participate in the proceedings.
They moved the High Court with a petition under article 226 of the Constitution challenging the revised policy for allotment of smaller sites.
It was contended inter alia that they had a right to take possession of bigger plots in respect of which the lots were earlier drawn in their favour.
The High Court issued rule Nisi in the petition, but allowed the authorities to draw the lots as proposed.
The High Court also permitted the appellants to deposit the premium demanded without prejudice to their rights in the writ petition.
That is all at the preliminary hearing of the writ petition.
In the final hearing the High Court did not give substantial relief to the appellants.
The High Court was of the view that there was nothing illegal in the revised policy adopted by the Chandigarh administration since the appellants did not acquire right to get bigger sites in the industrial area phase II.
The High Court however, felt that the appellants would be liable to pay only at the rate of .
Rs. 15 per square yard and not Rs.35 per square yard.
Accordingly a direction was issued to the authorities.
It is against this judgment that the present appeals have been preferred.
Civil appeal No. 97/81 is by the printing press owners.
Civil Appeal No. 98/81 is by the Chandigarh administration.
The Chandigarh administration is aggrieved by the direction issued by the High Court as to the premium to be recovered from the allottees.
We may first dispose of the appeal preferred by the Chandigarh administration.
We do not find any substance in this appeal.
If the applicants had been allotted sites as per the original proposal and as 162 per the first draw in 1977, they would have been liable to pay only at the rate of Rs. 15 per square yard.
In fact, the other entrepreneurs who were allotted sites from industrial area phase II paid the premium only at the rate of Rs. 15 per square yard.
Why then there should be a higher rate payable by these persons.
They did not ask for sites in the Industrial area phase I. Their applications for sites in the industrial area phase II were not rejected.
The same applications appear to have been considered for sites in the industrial area phase I.
Secondly, the applicants were not responsible for the delay in the allotment of sites.
The delay was entirely due to the change of policy adopted by the Chandigarh administration.
Thirdly, there is no evidence that the Chandigarh administration had to incur more expenditure for forming new sites in phase I.
It is, therefore, not proper that these applicants should be asked to pay the premium at a higher rate.
The High Court, in our opinion, was justified in directing the authorities to recover only at rate of Rs. 15 per square yard.
Before considering the contentions urged in the appeal of printing press owners, we may briefly refer to the relevant provisions of the enactment bearing on the contentions.
The disposal of building sites in Chandigarh has been regulated by the Capital of Punjab (Development and Regulation) Act, 1952 which may be termed as "The Act".
The Chandigarh Lease Hold of Sites and Building Rules, 1973 are the relevant rules which may be referred to as "The Rules".
Section 3 of the Act provides power to the authorities to sell, lease or otherwise transfer any land or building belonging to the Government.
They could be disposed of by auction, allotment or otherwise.
Rule 4 provides that Chandigarh Administration may demise sites and building on lease for 99 years.
The procedure for allotment has been prescribed under rule 8.
Rule 8 so far as it is material provides: "Rule 8.
Lease by allotment Procedure for (1)In case of allotment of site or building the intending lessee shall make an application to the Estate officer in Form 'A '.
(2)No application under sub rule (l) shall be valid unless it is accompanied by 10 per cent of the premium as earnest money in the prescribed form of payment.
(3)When 10 per cent of the premium has been so tendered the Estate officer, shall, subject to such directions 163 as may be issued by the Chief Administrator in this behalf, allot a site of the size applied for or a building or which particulars are given in the application and shall intimate, by registered post the number, sector, approximate area, premium and the rent of the site or building allotted to the applicant.
(4)The applicant shall, unless he refuses to accept the allotment within 30 days of the date of the receipt of the allotment order, deposit within that period and in the prescribed mode of payment, further 15 per cent of the premium.
The remaining 75 per cent of the premium shall be paid as provided in Rule 12.
" The scheme provided under these Rules for allotment of sites is like this: Sub rule (1) of Rule 8 provides for making an application to the Estate officer for allotment of site.
The application shall be accompanied with 10 per cent of the premium as earnest money.
That amount must be tendered to the Estate officer.
The allotment of a site shall be intimated to the applicant by registered letter giving the particulars of number, sector, approximate area, premium and the rent of the site or building allotted to the applicant.
It would be open to the applicant to accept the allotment or not.
If he accepts the allotment he must deposit 15 per cent of the premium and the remaining 75 per cent of the premium shall be paid as provided under Rule.
Relying on these provisions, it was urged that the appellants had a right to obtain transfer of sites in respect of which the lots were first drawn in their favour.
We are unable to accept this contention.
Admittedly, at that stage, there was no intimation of allotment of sites to the appellants.
There was no official communication to them as required under sub rule (3) of Rule 8.
Such intimation alone confers right on the appellants to obtain possession of the sites.
The intimation must be sent by a registered letter giving particulars of the sites allotted and the premium payable in respect thereof.
In the absence of any such communication, the appellants cannot be held to have the right to get transfer of sites in their favour.
The next step in the argument was that the Estate officer ought to have allotted the sites upon the receipt of applications of the appellants.
The reliance was placed and emphasis was put on the word "shall" used in sub rule (3) of Rule 8.
Sub rule (3) of Rule 8 provides 164 that when 10 per cent of the premium has been tendered, the Estate officer shall, subject to such directions as may be issued by the Chief Administrator in that behalf, allot a site of the size applied for.
We do not think that there is much force in this contention also.
Generally the use of the word "shall" prima facie indicates that the particular provision is imperative.
But that is not always so.
The meaning to be given to a word depends upon the context in which it is used.
The word takes the colour depending upon the context.
We must ask what does the word mean in its context? We must examine why the Rule making authority has chosen that word.
After examining the purpose and scope of the rule, we must give such meaning as to render the rule workable in a fair manner.
We must give that meaning which would promote the purpose and object of the rule.
When there is a choice of meanings, there is a presumption that one which produces an unjust or inconvenient result was not intended.
Let us now take a brief look at Rule 8.
If sub rule (3) of Rule 8 is construed as mandatory, then every person who applies for a site with earnest money must be allotted a site.
That means the administration must receive only equal number of applications as there are sites available for allotment.
That would be impracticable.
The administration cannot restrict the number of applications to be received when the public are notified.
Secondly, the sites are required to be disposed by auction or allotment.
If it is by allotment, it should be after considering all applications.
The sites cannot be allotted by private arrangement.
All the applications received must be considered and if there are more applications than the available sites, some reasonable procedure should be adopted for consideration and elimination.
In our opinion, the right of every applicant under sub rule (3) of Rule 8 is only the right to have his application considered.
The acceptance of application does not create a right for allotment of a site.
The word "shall" used in sub rule (3) must, therefore, be considered as not mandatory.
The imperative meaning would defeat the purpose of the rule.
It was next urged that the Chandigarh administration was estopped from revising the policy of allotment after taking several steps for allotment of sites.
The steps taken like demanding 25 per cent of the premium payable and drawing the lots would lead to an assurance that they would be allotted bigger plots.
It was stated that the appellants upon the assurance of getting bigger plots had placed orders for heavy machinaries for their printing presses.
These averments were also made in the writ petition before the High Court.
The High Court rejected the plea of estoppel on the ground that there was no evidence 165 of heavy investment on machinaries.
Mr. V.M. Tarkunde, learned counsel for the appellants urged that there is no need to produce any such evidence to invoke the doctrine of equitable estoppel.
The counsel is right in this aspect.
The party invoking the doctrine of estoppel need not prove any detriment as such.
It may be sufficient if he has relied upon the assurance made to him.
This court in the Delhi Cloth & General Mills Ltd. vs Union of India, (Civil Appeal No. 223 of 1974 disposed of on October 8, 1987) to which one of us was a member, said: "It is true, that in the formative period, it was generally said that the doctrine of promissory estoppel cannot be invoked by the promisee unless he has suffered 'detriment ' or 'prejudice '.
It was often said simply, that the party asserting the estoppel must have been induced to act to his detriment.
But this has now been explained in so many decisions all over.
All that is now required is that the party asserting the estoppel must have acted upon the assurance given to him must have relied upon the representation made to him.
It means, the party has changed or altered the position by relying on the assurance or the representation.
The alteration of position by the party is the only indispensable requirement of the doctrine.
It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel.
The Court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting.
The entire doctrine proceeds on the promise that it is reliance based and nothing more." And said: "The concept of detriment as we now understand is whether it appears unjust, unreasonable or inequitable that the promisor should be allowed to resile from his assurance or representation having regard to what the promisee has done or refrained from doing in reliance on the assurance or representation.
" It was further said: "It is however, quite fundamental that the doctrine of promissory estoppel, cannot be used to compel the 166 public bodies or the Government to carry out the rep resentation or promise which is contrary to law or which is outside their authority of power." In the first place, we do not know under what provision the authorities asked the appellants to pay 25 per cent of the premium payable in respect of the sites even before allotment.
Apparently that procedure appears to be irregular with no statutory sanction.
Secondly, we do not find any specific assurance or representation made by the authorities promising to allot the sites applied for.
Thirdly, even if there was any such assurance, we do not think that it would give rise to the doctrine of promissory estoppel in the instance case.
The authorities cannot give assurance contrary to the statutory rules.
The sites are required to be disposed of by auction, allotment or sale as per the procedure prescribed.
The authorities who are bound by the rules of procedure cannot make any representation or promise to allot particular sites to the applicants.
Even if they make such promise or assurance, the doctrine of promissory estoppel cannot be invoked to compel them to carry out the promise or assurance which is contrary to law.
The next contention urged for the appellants related to the revised policy adopted by the Chandigarh administration for allotment of smaller sites.
It was said that the sites in phase II ought to have been allotted when there were enough to go round the appellants.
It was also said that the other entrepreneurs who had filed applications along with the appellants had been allotted sites in phase II and there was no good reason to exclude the appellants for being considered for smaller sites in phase I. The procedure followed by the authorities has been assailed as arbitrary and contrary to article 14 of the Constitution.
Of course, if there were enough plots to accommodate all the applicants in the industrial area phase II, it would not be proper for the authorities to revise the policy and allot smaller sites in phase I.
But no material has been placed before us to come to the conclusion that there were enough industrial plots to accommodate as far as possible all those applicants.
It appears from the record that the authorities for want of plots in phase II formed another lay out in phrase I. The action of the authorities appears to be bona fide and we have no reason to doubt it.
This takes us to the question whether the revised policy adopted by the Chandigarh administration to allot smaller sites to these appellants was discriminatory and violative of article 14 of the 167 Constitution.
The true meaning and scope of article 14 has been stated and restated in a string of decisions of this Court.
It is now well established that article 14 forbids class legislation, but does not forbid reasonable classification for the purpose of legislation.
In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and (ii) that the differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification may be founded on different basis, namely, geographical or according to objects or occupations or the like.
What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration.
S.R. Oas, C.J. speaking for this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & others; , has formulated the various aspects of article 14 and out of them, we may refer to the following proposition: (a) article 14 condemns discrimination not only by substantive law but by a law of procedure, (b) article 14 forbids class legislation but does not forbid classification, (c) In permissible classification, mathematical nicety and perfect equality are not required, (d) The classification may be founded on different basis, namely, geographical or according to objects or occupations or the like, (e) If a law deals equally with members of a well defined class, it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons, and (f) Even a single individual may form a class by himself on account of some special circumstances or reason applicable to him and not applicable to others.
This Court speaking through Chandrachud, CJ.
in Re The Special Courts Bill, 1978(19792 SCR 476) reformulated in detail the propositions on article 14.
The following are relevant for the 168 present case and may be extracted: (i) The constitutional command to the State to afford equal protection of its law sets a goal not attainable by the invention and application of a precise formula.
Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things.
The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case.
Classification is justified if it is not palpably arbitrary.
(ii) The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience.
It can recognise even a degree of evil, but the classification should never be arbitrary, artificial or evasive.
(iii) The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation.
There is yet another facet of article 14.
This Court speaking through Bhagwati, J. in E.P. Royappa vs State of Tamil Nadu, and in Maneka Gandhi case (AIR 1978 SC 597) held that the basic principle which informs both articles 14 and 16 is equality and inhibition against discrimination.
Equality and arbitrariness are sworn enemies, one belongs to the rule of law in a republic while the other to the whim and caprise of an absolute monarch.
Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of article 14.
Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
This, in our opinion, is more fundamental.
Article 14 unlike other articles in Part III of the Constitution, is an injunction against the State that it shall not discriminate person to person unless the action is supported by well known principles.
There is thus no doubt or dispute about the principles.
The question is only the application of the principles to a given case.
In the present case, however, we do not find that the revised policy of the Chandigarh administration suffers from any act of arbitrariness 169 either in classifying the appellants as a separate group or in considering them for allotment of smaller sites in phase I. The appellants formed a separate class.
All the persons who have applied for industrial sites for establishing printing presses were grouped together.
They were considered together.
They could not have been accommodated in phase II for want of enough sites.
So another lay out was formed in phase I. We are told that most of the applicants have now been allotted sites and they have since taken possession.
The appellants were also allotted sites in phase I.
We are, therefore.
Of the opinion that the grievance of the appellants about discrimination is not justified on the facts and circumstances of the case.
In the result, both the appeals fail and are dismissed, but we make no order as to costs.
S.L. Appeals dismissed.

summary/full:
% The Chandigarh administration wanted the printing presses, scattered all over Chandigarh in the residential premises or small shops, to be located in an industrial area.
For that purpose, the administration earmarked forty three sites in the industrial area Phase lI, and invited applications for allotment of the sites.
Several persons submitted the applications with deposits of earnest money of Rs.1,000 in each.
That was ten per cent of the premium payable for each site.
The appellants in the C.A. No. 97 of 1981, who were among the said applicants, were called upon to deposit 25 per cent of the premium calculated at the rate of Rs.15 per square yard.
The appellants complied with that demand.
The authorities decided to draw lots as the applicants were more than the number of the sites available.
In October 1977, lots were drawn and the appellants won.
But the authorities did not issue the letters of allotments.
The authorities had a second thought about the scheme of the allotment of the sites.
They wanted to accommodate as many applicants as possible, which, however, could not be done in the industrial area phase II.
The authorities also came to hold the view that for setting up the printing industry, larger sites as earmarked earlier would not be necessary and smaller sites would meet the requirements.
Consequently, the sites proposed in the industrial phase II were given up and a lay out of smaller sites in the industrial area phase I was prepared, wherein about 131 sites were reserved for allotment to the printing press owners.
The appellants as also the other applicants were intimated by letters that the said sites would be allotted at the rate of Rs.35 per square yard, and that the allotment would be made by draw of lots on October 3, 1979.
The appellants did not participate in the proceedings.
They moved the High Court by a writ petition, challenging the 158 revised policy of the allotment of the smaller sites on the ground inter alia that they had a right to take possession of bigger plots in respect which lots were earlier drawn in their favour.
The High Court did not give substantial relief to the appellants, holding that there was nothing illegal in the said revised policy since the appellants did not acquire right to get bigger sites in the phase II, it directed that the appellants would be liable to pay at the rate of Rs.15 and not Rs.35 per square yard.
The appellants appealed to this Court by special leave against the decision of the High Court (C.A 97 of 1981).
The respondents the Chandigarh Administration also moved this Court by special leave (C.A. No. 98 of 1981) against the direction of the High Court as to the reduced premium to be recovered from the appellants.
Dismissing both the appeals, the Court, ^ HELD: There was no substance in the appeal by the respondents.
If the applicants had been allotted sites as per the original plan and as per the first draw in 1977, they would have been liable to pay at the rate of Rs.15 per square yard.
In fact, the other enterpreneurs who were allotted sites in the industrial area phase II paid premium only at the rate of Rs.15 per square yard.
Why then should there be a higher rate payable by the appellants? They had not asked for the sites in the industrial area phase I. Secondly, the applicants were not responsible for the delay in the allotment of sites.
Thirdly, there was no evidence that the Chandigarh Administration had to incur more expenditure in forming the new sites in the phase I. The High Court was right in directing the authorities to recover only at the rate of Rs.15 per square yard.
[161H; 162A C] In the case of the appeal by the appellants/owners of the printing presses, admittedly, at the relevant stage, there was no intimation of the allotment of the sites to the appellants.
There was no official communication to them, as required under sub rule (3) of Rule 8 of the Chandigarh Lease Hold Sites and Building Rules, 1973.
Such an intimation alone could confer the right on the appellants to obtain possession of the sites.
In the absence of any such communication, the appellants could not be held to have the right to get the sites.
[163F G] Emphasis was laid on the word "shall" used in sub rule (3) of Rule 8, which provides that when 10 per cent of the premium has been tendered, the Estate officer shall, subject to such directions as may be issued by the Chief Administrator in that behalf, allot a site of the size 159 applied for.
There is not much force in this contention.
Generally, the use of the word "shall" prima facie indicates that the particular provision is imperative, but that is not so always.
The meaning to be given to a word depends upon the context in which it is used.
The right of every applicant under sub rule (3) of Rule 8 is only a right to have his application considered.
The acceptance of the application does not create a right for allotment of a site.
The word "shall" used in the sub rule must be considered as not mandatory.
imperative meaning would defeat the purpose of the rule.
[163H; 164A B, F] It is not known under what provision the authorities asked the appellants to pay 25 per cent of the premium payable in respect of the sites even before allotment.
There was no specific assurance or representation made by the authorities, promising to allot the sites applied for.
Even if there was any such assurance, the Court did not think that it would give rise to the doctrine of promissory estoppel in the case.
The authorities cannot give assurance contrary to the statutory rules.
They are bound by the rule of procedure and cannot make any representation or promise to allot particular sites to the applicants.
Even if they make such a promise or assurance, the doctrine of promissory estoppel cannot be invoked to compel them to carry out the promise or assurance which is contrary to law.
[166B D] If there were enough plots to accommodate all the applicants in the industrial area Phase II, it would not be proper for the authorities to revise the policy and allot smaller sites in phase I.
But no material was placed before the Court to come to the conclusion that there were enough industrial plots to accommodate, possibly, all the applicants.
The authorities formed another lay out in phase I for want of plots in phase II.
The action of the authorities was bona fide and there was no reason to doubt it.
[166F G] The revised policy of the Chandigarh Administration did not suffer from any act of arbitrariness either in classifying the appellants as a separate group or in considering them for allotment of smaller sites in phase I. All the persons, who had applied for industrial sites for establishing printing presses were grouped together.
They were considered together.
They could not be accommodated in phase II for want of enough sites.
So, another lay out was formed in phase I. The grievance of the appellants about the revised policy of the Chandigarh Administration to allot smaller sites to them, being discriminatory, was not justified.
[168H; t69A C] 160 Delhi Cloth & General Mills Ltd. vs Union of India, Civil Appeal No. 223 of 1974, disposed of by this Court on October 8, 1987 and Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar and Ors,. ; , referred to.


judgement:
ivil Appeal Nos.
948 950 of 1975.
From the Judgment and order dated 12.9.1974 of the High Court of Patna in Tax Case Nos.
2 to 4 of 1968.
Harish N. Salve, Mrs. A.K. Verma, Ms. section Sethna and Joel Peres for the Petitioner.
D. Goburdhan for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
These three appeals by the Fertiliser Corporation of India Limited (hereinafter referred to as 'the asses see ') arise out of its sales tax assessments for the assessment years 1959 60, 1960 61 and 1961 62 under the Bihar Sales Tax Act, 1959, (hereinafter referred to as 'the Act ').
They raise a very short but interesting question.
regarding the entitlement of the assessee to the rebate of tax provided for in section/5 of the Act.
At the outset, a reference may be made to the salient portions of certain relevant provisions of the Act.
Section 14(1) provides that every registered dealer shall furnish such returns within such period and to such authority as may be prescribed.
The prescribed authority is the Assistant Commissioner of Sales Tax who is also the assessing authority.
Under rule 10 of the Rules framed under the Act, the assessee should file quarterly returns.
Such returns are to be filed within one calendar month of the expiry of the period to which they relate.
Sub section (3) of section 14 provides for an extension of time for the filing of the return.
It reads: "If the prescribed authority is satisfied that a dealer is, for reasonable cause, unable to furnish any return within the prescribed period or the period fixed under the proviso to sub section (1), the said authority may extend the period for submission of the return." Section 20 of the Act requires that, before any registered dealer furnishes a return under the Act, he should pay into a Government Treasury the full amount of tax due under the Act according to such return and should also furnish along with the return a receipt from such Treasury showing the payment of the said amount.
section 15 is the 151 provision entitling the assessee to a rebate.
It reads as follows: "Rebate A rebate at the rate of one per centum of the amount of tax admitted to be due in the return furnished under sub section (1) of section 14 in the prescribed manner and within the prescribed or extended period shall be allowed to a registered dealer who has paid such amount according to the provisions of sub section (2) of section 20.
Provided that where the amount finally assessed on the dealer is less than the admitted amount, rebate at the said rate shall be allowed only on the amount so assessed: C Provided further that the State Government may, by notification, and subject to such conditions or restrictions as may be specified therein, enhance or reduce the rate of rebate in respect of registered dealers generally or any class of such dealers " It may be noted that, under the proviso to section 22 of the Act, a registered dealer is entitled to deduct from the amount of tax due from him under the Act according to his return any amount which may be admissible as rebate under the provisions of section 15.
In the present case, the assessee filed its quarterly returns under section 14(1) of the Act but, except for the second quarter of 196061, the returns were all filed belatedly.
To illustrate, the returns for the second, third and fourth quarters of 1959 60, were filed by the assessee only on the 7th November, 1959, 11th February, 1960 and Ist June 1960.
In other words, the returns were late by a few days.
It is common ground that there was no application made by the assessee to the prescribed authority for extension of the time prescribed under the Act for the filing of the return.
The assessee however, paid the taxes before the due dates of the respective returns, availed itself of the rebate and deducted the same while paying the tax due on the returns filed by it.
The short question that arose before the Tribunal as well as the High Court was whether the assessee was entitled to the rebate under section 15.
The Tribunal held that the rebate is available to an assessee only if 152 (i) the tax on the basis of returns is paid as prescribed in section 20; and (ii) the quarterly returns of the assessee ha d been filed within the prescribed period or extended period.
As the assessee had not filed its returns within the prescribed period and, since the assessee had sought no extension, it was held that the assessee was not entitled to the rebate.
The assessee sought for a reference and, before the High Court, relied on a decision of the same High Court in Jamuna Flour & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1.
The facts of the case were similar to those of the present case and the assessee had been held entitled to the rebate.
It is sufficient to extract the relevant portion of the head note: "For the quarter ending 30th June, 1961, the assessee had paid the tax due before 31st July, 1961, but it actually filed the return only on Ist August, 1961.
The assessee was assessed on the basis of the return submitted by it but its claim for rebate under section 15 of the Bihar Sales Tax Act, 1959, was rejected by the taxing authority on the ground that for the purpose of eligibility for rebate under section 15, the assessee must fulfil two conditions, viz., (1) the tax due for the quarter must be paid before the end of succeeding month, and (2) the return must also be filed by the end of the succeeding month: Held, that the assessee was entitled to the rebate under section 15 for the quarter ending 30th June, 1961.
Although the return was submitted one day late, as the assessee was assessed not under the best of judgment principle but on the return submitted by it, it must be said that, impliedly the period for furnishing the return was extended by one day as permitted by section 14(3).
The passing of an express order by the taxing authority, regarding its satisfaction about the existence of reasonable cause for failure to furnish the return by 31st July 1961, was not necessary.
on a proper construction of section 15 read with section 20, the eligibility for claiming rebate arises if the amount is paid under section 20(2).
That portion of 153 section 15, which refers to the filing of return within the prescribed period, should not be construed as a condition for a right to claim rebate.
The reference to the return in section 15 is for the purpose of ascertaining the amount of tax admitted to be due and it is not meant to restrict the assessee 's right to claim rebate.
" The two judges who heard the case of the assessee were divided in their opinion on the question at issue.
The matter was, therefore, referred to a larger bench.
This Bench (by a majority of 2 to 1) took the same view as Tribunal.
The assessee is in appeal before us, convassing the correctness of the decision of the Full Bench.
We have given careful thought to the contentions of the counsel tor the parties and the differing views expressed by the Judges who heard the above two cases.
We have reached the conclusion that the view taken by the High Court in Jamuna Flour and oil Mills (Pvt.) Ltd. vs State of Bihar, [1968] 22 S.T.C. 1, is the better view on a proper construction of the relevant statutory provisions.
The object of section 15 of the Act is to confer a benefit on an assessee for prompt payment of the tax.
In this case there is no dispute that the assessee had paid the tax before the due dates.
There is also no dispute that the tax paid accords with the tax due on the basis of returns.
The only question is whether the assessee should be penalised by being denied the rebate due to it because there was a short delay in the filing of the returns.
The argument on behalf of the Revenue which has appealed to the High Court is this.
Section 15 is not a taxing provision but one which confers a benefit or concession to assessee.
Settled principles of construction of taxing statutes require that such conditions should be strictly construed.
The section lays down two conditions for the grant of benefit or concession of which one is not fulfilled.
Though the assessee had paid the taxes in time, it had neither filed returns within the prescribed time nor cared to obtain an extension for filing the same.
There is no reason why such an assessee should be shown any leniency and given a benefit which it does not deserve on the language of the statute.
Granting the correctness of the above argument and assuming that it is also a condition precedent for the grant of rebate that the assessee should have filed its return within the prescribed or extended period, we think it can be said that the said condition is fulfilled 154 in the present case.
The return was admittedly not filed within the time prescribed under section 14(1).
Has it been filed, then, within the extended period? In answering this question, certain features of the Act have to be kept in mind.
The first is that the Act does not set out any particular procedure for obtaining extension of time.
It does not prescribe any form of application.
It does not say that such application must be filed before the expiry of the prescribed period.
It does not require that the prescribed authority must pass an order recording his satisfaction that the time should be extended and granting time.
The second is that, under the provisions of the Act three consequences are envisaged where a return is not filed within the prescribed time or extended time: (i) the assessee will lose the benefit of rebate under section 15; (ii) the assessee will run the risk of a penalty under section 14(4); (iii)the assessee will also run the risk of a best judgment assessment under section 16(4).
In the present case, the assessing authority has neither levied a penalty nor made a best judgment assessment.
The assessment orders, while adverting to the delay in the filing of the returns, do not record a finding that the delay was without reasonable Cause.
These are circumstances from which, we think, it is reasonable to infer that the returns, though filed belatedly, have been accepted and acted upon by the prescribed authority.
We see no reason why an extension of time cannot be inferred from the attendant circumstances in this case.
Learned counsel for the assessee also suggests a different kind of approach to the issue before us.
He submits that all that section 15 aims at is to grant a tax rebate of 1% of the amount of tax admitted to be due as per the return filed by the assessee.
The further words used in section 15 to describe the return, namely, that it should be a return filed in the prescribed manner and within the prescribed or extended period are merely words descriptive of the procedure of filling a return.
The basic condition necessary for claiming the tax rebate is only that there should be a valid return and that the tax on the basis of the valid return should have been paid by the assessee.
He submits that while the substantive part of the condition should be strictly construed by insisting upon the presence of a valid return, the procedural aspect referred to can well receive a liberal construction.
In the present case, he points out, there is no dispute that the returns 155 filed by the assessee were valid.
In fact the assessments have been made on the basis of the returns filed.
The tax has been paid even before the submission of the returns.
There is no suggestion that the tax paid fell short of the tax due on the return.
This is also not a case where the assessed tax is much higher than the tax admitted on the basis of the return.
In these circumstances, he argues, the assessee must be held to have fulfilled the conditions prescribed in section 15.
Learned counsel for the assessee referred to certain decisions in support of such a rule of construction.
In C.I. T. vs Kulu Valley Transport Co. Pvt. Ltd., [1970] 77 I.T.R. 518 the court had to construe a provision intended to benefit the assessee.
Under section 22 (2A) of the Income Tax Act, 1922, a return of loss had to be filed within the time prescribed for return under section 22(1) if the assessee wanted to carry forward the loss claimed.
It was not so filed but was nevertheless treated as a valid return by reading the provisions of section 22(1) and 22(3) of the Act jointly and giving a liberal interpretation to section 22(2A).
In the case of Gursahai Saigal vs C.I.T., [1963] 48 I.T.R. S.C. 1 the question was regarding the charge of interest section 18A(8) of the same Act.
This provision did reveal a lacuna but reading the provision along with section 18A(6), the Court gave effect to the intendment of the Legislature.
It was explained that section 18A(8) was not a provision creating a charge of tax but only laying down the machinery for its calculation or procedure for its collection.
The dictum of Scott L.J. in Allen vs Trehearne, that machinery provisions should be interpreted largely and generously in order not to defeat the main object of liability laid down by the statute was referred to.
The following observations of the Privy Council in C.I.T. vs Mahaliram Ramjidas, were also relied upon: "The section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment.
In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable.
" Though the above decisions arose under a different enactment and on different statutory language, they dealt with somewhat analogous situations and furnish useful guidance here.
They do lend support to the assessee 's contention.
It does seem that the condition in section 15 referring to a return has a substantive as well as procedural content and it may not be inappropriate to construe the latter 156 somewhat liberally and generously so long as the principal object of the provision is not frustrated.
For these reasons, we are of the opinion that the High Court should have answered the question, as re framed by it, in the negative and in favour of the assessee.
We approve the decision in Jamuna Flour & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1 and reverse the decision in the present case.
The appeal is allowed.
But, in the circumstances of the case, we make no order as to costs.
P.S.S. Appeal allowed.

dataset_name: IN-Abs

summary/full:
% Section 14(1) of the Bihar Sales Tax Act, 1959 requires dealers to furnish returns within such period and to such authority as may be prescribed.
Rule 10(2) of the Bihar Sales Tax Rules, 1959 requires the assessee to file quarterly returns within one calendar month of the expiry of the period to which they relate.
Sub section (3) of section 14 provides for extension of time for submission of the return.
Subsection (2) of section 20 requires dealers to pay into the Government Treasury the full amount of tax due and furnish a receipt along with the return.
Section 15 entitles the assessee to rebate in tax on returns furnished under sub section
(1) of section 14 or within extended period.
The proviso to sub section (2) of section 20 entitles a dealer to deduct from the amount of tax due from him any amount which may be admissible as rebate under the provisions of section 15.
The assessee filed its quarterly returns under section 14(1) of the Act late by a few days.
There was no application made by it to the prescribed authority for extension of time.
The assessee, however, paid the tax before the due date of the respective returns and availed itself of the rebate by deducting the same while paying the tax due.
The Tribunal held that as the assessee did not file its returns within the prescribed period and had sought no extension, it was not entitled to the rebate.
The High Court upheld the view taken by the Tribunal.
Allowing the appeal, 149 ^ HELD: 1.
The assessee was entitled to the rebate of tax provided for in section 15 of the Bihar Sales Tax Act, 1959.
[156B] 2.
The condition in section 15 referring to a return has a substantive as well as procedural content.
The latter should be construed somewhat liberally and generously so long as the principal object of the provision is not frustrated.
[155H; 156A] C.I.T. vs Kulu Valley Transport Co. Pvt. Ltd., ; Gursahai Saigal vs C.l.
T. [1963] 48 I.T.R. S.C. 1; Allen vs Trehearne, and C.I.T. vs Mahaliram Ramjidas, referred to.
3.1 The object of section 15 of the Act is to confer a benefit on an assessee for prompt payment of the tax.
In the instant case, the assessee had paid the tax before the due dates.
The tax paid accords with the tax due on the basis of returns.
There was short delay only in the filing of the returns.
[153D E] 3.2 The Act does not set out any particular procedure for obtaining extention of time.
It does not prescribe any form of application.
It does not require that the prescribed authority must pass an order recording his satisfaction that the time should be extended and granting time.
it envisages three consequences to the assessee for failure to file a return within the prescribed time, or extended time: (i) loss of rebate under section 15, (ii) risk of a penalty under section 14(4), and (iii) risk of a best judgment assessment under section 16(4).
[154A D] 3.3 In the instant case the assessing authority has neither levied a penalty nor made a best judgment assessment nor recorded a finding that the delay was without reasonable cause.
From these circumstances it is reasonable to infer that the returns, though filed belatedly, have been accepted and acted upon by the prescribed authority.
An extention of time can thus be inferred from the attendant circumstances of the case.
[154D F] 3.4 The condition precedent for the grant of rebate that the assessee should have filed its return within the prescribed or extended period, can, therefore, be said to have been fulfilled in the present case.
[153H; 154A] Jamuna Floor & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1, approved.


judgement:
S.L.P. (Civil) No. 7389 of 1987.
146 From the Judgment and order dated 18.3.1987 of the Orissa High Court in Miscellaneous Appeal No. 423 of 1982.
R.K. Mehta for the Petitioners.
Anil B. Divan and Vinoo Bhagat for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is a petition for leave to appeal against the judgment and order of the High Court dismissing an appeal from the order of the learned Subordinate Judge dismissing a challenge to the award.
This is an unreasoned award.
The petitioners challenge the award made in this case and ask for leave in view of the order passed by this Court on 16th July, 1986 in similar matters where the question of the validity of the unreasoned award has been referred to the Constitution Bench for consideration.
Mr. R.K. Mehta, learned counsel for the petitioners submitted that this matter should also be referred for consideration before the Constitution Bench In this matter it appears that the contract was entered into by the parties in 1970 71 and the award was made in 1982.
The High Court disposed of the objections to the award in 1987.
It is true that the grounds of objections were filed before the learned Subordinate Judge and before the High Court.
The ground was taken that it was an unreasoned award, inter alia, amongst many other grounds in the order of the High Court which have been gone into and these were that the arbitrator had misconducted himself and the proceedings and the award did not allow or reject the counter claim made by the appellants and further that the award of interest with effect from a date prior to the date of reference is bad in law.
The High Court in its judgment had gone into all these aspects but it appears from the order of the High Court that this point of unreasoned award though taken in the petition of appeal was not pressed before the High Court.
It also appears that in the grounds of appeal of the special leave petition no grievance has been made on the point although it had been taken by the petitioners.
It appears to us that this point was not pressed before the High Court.
It further appears that the arbitrator had been appointed by the court out of the panels submitted by the contesting parties.
Furthermore in an allied contract, i.e. in respect of a contract of another nat in the same building an award has been made and the same has been made the rule of court subject to certain conditions.
147 It is true that the question of validity of unreasoned award is pending consideration before the Constitution Bench of this Court.
It is for consideration before the Constitution Bench as to whether even if unreasoned award be bad, such award of ancient vintage be bad.
That would be a matter of grave consequence.
In that view of the matter we are not inclined to interfere with the order of the High Court in this case.
In the facts and circumstances of this particular case and the features mentioned hereinbefore, we declined to refer the matter to the Constitution Bench.
We must note that the award inasmuch as the interest which had been awarded is set aside to the extent that the award of interest from the commencement of the proceedings before the Arbitrator to the date of the award.
Subject to this modification the special leave petition is dismissed.
The award will stand modified by deletion of interest for that period namely from the commencement of reference before the arbitrator to the date of award.
This is in consonance with the views expressed by this Court in the case of Executive Engineer Irrigation Galimala & Ors.
vs Abaaduta Jena, ; The special leave Petition is dismissed as indicated before.
S.L. Petition dismissed.

summary/full:
% A contract was entered into by the parties in 1970 71.
The award was made by the Arbitrator in 1982.
The award was challenged before the subordinate Judge who upheld the same.
Appeal to the High Court against the order of the Subordinate Judge was dismissed.
The petitioners moved this Court by special leave against the order of the High Court and contended inter alia that since a similar matter of unreasoned award had been referred by the Court to a Constitution Bench of the Court, this petition for special leave be also similarly referred to the Constitution Bench.
Dismissing the petition with a modification of the award, the Court, ^ HELD: In the facts and circumstances of this peculiar case, the matter is not referred to the Constitution Bench.
[147B] It appears from the order of the High Court that the point of unreasoned award, though taken in the petition of appeal, was not pressed before the High Court.
Further, the Arbitrator had been appointed by the Court out of the panels submitted by the contesting parties.
Also, in the case of an allied contract in respect of another flat in the same building, an award had been made and the same had been made the rule of the Court subject to the certain conditions.
[146G H] The award is modified to the extent that the interest awarded from the commencement of the reference before the Arbitrator to the date of the award, is set aside, which is in consonance with the views expressed by this Court in Executive Engineer Irrigation Galimala and Ors.
vs Abaaduta Jena, ; [147C D]


judgement:
Civil Appeal No. 3921 (NL) of 1987.
From the Award dated 15.5.1987 of the Industrial Tribunal No. III.
Delhi in Industrial Dispute No. 157 of 1981/312 of 1987.
P.N. Gupta for the Appellants.
R.B. Datar and Ranjit Kumar for the Respondents.
The following order of the Court was delivered: O R D E R Special leave granted.
The appeal is heard.
The appellant is the union of employees in the Delhi Municipal Corporation.
Some of the members of the appellant union have been working as Vaccinators/Immunisors on daily wages under the Delhi Municipal Corporation for more than eight years whereas many others who have been regularly appointed and are doing same kind of work are being paid higher salary and allowances every month.
Even though the Vaccinators /Immunisors who have been working on daily wages have been working for a long number of years no action has been taken by the Delhi Municipal Corporation for regularising their services.
In view of the disparity in the payment of wages and the neglect on the part of the Corporation regarding the regularisation of the services of the daily rated workmen there arose an industrial dispute and the dispute was referred by the competent authority for adjudication to the Industrial Tribunal No. 3, Delhi under a notification dated 23.11.
The question which was referred to the Tribunal was: "Whether the workmen mentioned in Annexure 'A ' need to be regularised as Vaccinators/lmmunisors in the scale of Rs.260 430 and if so, from what date and what directions are necessary in this matter?" 176 After hearing the matter the Tribunal agreed with all the contentions of the appellants but it held that no relief could be granted to them and that they should approach either the High Court or the Supreme Court for that purpose.
Accordingly the Tribunal passed an award nearly six years after the date of the reference that the workmen concerned were not entitled to be regularised as Vaccinators/Immunisors in the scale of Rs.260 430.
Aggrieved by the award of the Tribunal the appellant has filed this appeal by special leave.
After hearing the learned counsel for the parties we find that the Delhi Municipal Corporation has practically no tenable defence to the claim made by the workmen.
There is no justification for the Corporation extracting the same amount of work from the workmen concerned on payment of daily wages at rates lower than the minimum salary which is being paid to other workmen who have been recruited regularly even though the workmen involved in this case have been working for a number of years.
Nearly six years have elapsed from the date of the reference but without any change in the attitude of the Corporation.
Following the decision of this Court in Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India Ors.
,[1987] 2 SCALE, page 844 and our decision in U.P. Income tax Department Contingent Paid Staff Welfare Association vs Union of India & Ors., (Writ Petition No. 1870 of 1986 decided on December 4, 1987 we direct the respondent Delhi Municipal Corporation to pay the Vaccinators/ Immunisors involved in this appeal wages at the rate equivalent to the minimum pay in the pay scale of regularly employed Vaccinators/ Immunisors without any increments with effect from the date of the reference i.e. 23.11.1981.
The workmen concerned are also entitled to the corresponding dearness allowance.
We also direct the Delhi Municipal Corporation to prepare a scheme on a rational basis for absorbing as far as possible the workman involved in this case as regular Vaccinators/Immunisors.
This order is made in substitution of the award passed by the Tribunal.
The arrears of salary and allowance payable under this order shall be paid within four months.
The scheme for absorption shall be prepared within six months and the process of absorption shall be completed within eight months from today.
The appeal is accordingly allowed with no order as to costs.
P.S.S. Appeal allowed.

summary/full:
% The daily rated Vaccinators/lmmunisors working under the Delhi Municipal Corporation for more than eight years sought regularisation of their services and payment of wages at par with regularly appointed incumbents doing the same kind of work.
On a reference the Industrial Tribunal took the view that the workmen concerned were not entitled to be regularised.
Allowing the appeal by special leave, ^ HELD: The Vaccinators/lmmunisors involved in the appeal are entitled to be regularised.
[176G] There was no justification for the respondent Corporation extracting the same amount of work from the workmen concerned on payment of daily wages at rates lower than the minimum salary which was being paid to other workmen who have been recruited regularly even though the workmen involved in the case have been working for a number of years.
[176C D] The respondent Corporation to pay them wages at the rate equivalent to the minimum pay in the pay scale of regularly employed Vaccinators/lmmunisors without any increments with effect from the date of reference.
They are also entitled to the corresponding dearness allowance.
[176F] The respondent Corporation to prepare a scheme on a rational basis for absorbing as far as possible the workmen involved in the case 175 as regular Vaccinators/lmmunisors within six months.
Process of absorption to be completed within eight months.
Arrears of salary and allowance to be paid within four months.
1 5 [176G H] Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., and U.P. Income tax Department Contingent Paid Staff Welfare Association vs Union of India & Ors.
,(W.P. No. 1870 of 1986), followed.


judgement:
Civil Appeal No. 3966 of 1987.
From the Judgment and Order dated 20.1.1987 of the High Court of Orissa of O.J.C. No. 3300 of 1986.
A.K. Panda for the Appellant.
J.
R. Das for the Respondent The Judgment of the Court was delivered by SHARMA, J. Special leave granted.
Arguments heard.
The respondent A.C. Jena was a Sarpanch of Padanipal Grama Panchayat, Orissa.
He was removed from the office under section 115 of the Orissa Grama Panchayat Act, 1964 by the order of the State Government (petitioner No. I before us) dated 24.10.86, as contained in Annexure D to the special leave petition, which has been quashed by the impugned judgment of the Orissa High Court dated 20.1.1987 in o.
J.c No. 330()/86.
The relevant provisions of section 115 of the Act read as follows: "115(1).
If on the report of the Sub Divisional 179 Officer the Collector is of the opinion that circumstances exist to show that the Sarpanch or Naib Sarpanch of a Grama Panchayat wilfully omits or refuses to carry out or violates the provisions of this Act, or the rules or orders made thereunder or abuses the powers, rights and privileges vested in him or acts in a manner prejudicial to the interest of the inhabitants of the Grama and that the further continuance of such person in office would be detrimental to the interest of the Grama Panchayat or the inhabitants of the Grama, he may, by order, suspend the Sarpanch or Naib Sarpanch, as the case may be, from office and report the matter to the State Government.
(2) The State Government, on the report of the Collector under sub section (1) shall, or if the State Government themselves are of the opinion that the circumstances specified in the said sub section exist in relation to a Sarpanch or Naib Sarpanch, then on their own motion, may, after giving the person concerned a reasonable opportunity of showing cause, remove him from the office of Sarpanch or Naib Sarpanch, as the case may be.
(3). . . . . . . . . . . . . . (4) A Sarpanch or Naib Sarpanch on removal from office under sub section (2) shall also cease to be a member of the Grama Panchayat, and such person shall not be eligible for election as a member for a period not exceeding four years as the State Government may specify.
(5). . . . . . . . . . . . . .
The Collector, Cuttack, petitioner No. 2, before us, received a report (Appendix to Annexure A) from the Sub Divisional officer, Kendra Pada, stating the facts and circumstances which clearly satisfy the conditions mentioned in section 115 of the Act, for the suspension and removal of the respondent.
The Collector, Cuttack, thereupon suspended the Sarpanch by his order dated 24.4.1985 (Annexure A) and while so doing he expressly mentioned that on going through the 180 report of the Sub divisional officer he was satisfied that the Sarpanch acted in a manner as detailed in the Appendix and "his further continuance in office would be detrimental to the interest of the said Grama Panchayat as also of the inhabitants of the Grama." Accordingly a notice as required by sub section (2) was served on the Sarpanch, who filed his detailed reply and was also personally heard.
His explanation however was not considered satisfactory and an order dated 24.10.1986 bearing No. 19032/GP was passed removing him from the office of the Sarpanch.
A second notification of the same date bearing No. 19039/GP was issued under sub section (4).
The Sarpanch in these circumstances moved the High Court under Article 226 of the Constitution.
The High Court at the stage of admission by a short order quashed the notification issued against the petitioner "on the sole and simple ground that the order does not specify one of the mandatory requirements, i.e., his further continuance in the office would be detrimental to the interest of the Gram Panchayat or the inhabitants of the Gram".
Elaborating the point the High Court observed as follows: ".
One of the circumstances mentioned in sub section ( I) is just indicated above.
As the existence of the circumstances mentioned in sub section (1) is condition precedent for passing an order of removal by the State Government, its absence makes the order wholly illegal and without jurisdiction . , .".
As has been stated earlier, the Collector, while passing the order of suspension under sub section (1) of section 115 expressly stated that the further continuance of the petitioner in office would be detrimental to the interest of the Grama Panchayat and the inhabitants of the Grama.
He relied upon the report of the Subdivisional officer mentioning serious allegations against the Sarpanch which undoubtedly, if true, satisfied the conditions for exercise of the power.
Since it has not been suggested before us otherwise, we do not consider it necessary to deal with them except mentioning that besides many serious allegations, the report also said that certain money belonging to the Grama Panchayat which had been received at an auction was not deposited.
In the order of removal, the State Government after mentioning the allegations stated that the explanation of the Sarpanch was not acceptable and he was, therefore, being removed from the office.
The allegations made against him, 181 thus were accepted as correct.
In other words the State Government was of the opinion that the circumstances specified in sub section ( I) existed.
It will be noticed that the language of sub section (2) does not require a repetition of the necessary satisfaction in the same language as referable to sub section (1).
Besides, the section cannot be interpreted to mandatorily lay down a rule for the authority concerned to express his conclusion in relation to the fulfilment of the conditions mentioned therein in a particular form using a particular set of words.
What is contemplated by the section is the formation of an opinion in this regard after giving a reasonable opportunity to the sarpanch in question to meet the allegations suggested and to announce the conclusion in unambiguous and express terms.
All that has been done in this case.
We do not.
therefore, see any justification in the High Court quashing the orders impugned before it.
Accordingly the appeal is allowed, High Court 's judgment is set aside and the writ application filed before the High Court is dismissed.
N.P.V. Appeal allowed.

summary/full:
% The respondent was a Sarpanch of a Gram Panchayat.
Consequent upon a report made by the Sub Divisional officer, against the respondent stating the facts and circumstances which satisfied the conditions mentioned in section 115 of the orissa Gram Panchayat Act, 1964 for his suspension and removal, the second appellant, by his order dated 22.4.85, suspended the respondent.
A notice, as required by sub section (2) of section 151, was served on the Sarpanch who filed his detailed reply and was also personally heard.
As the explanation was not considered satisfactory, an order dated 24.10.86 removing him from the office of the Sarpanch was passed, in which it was mentioned that the appellant 's further continuance in office would be detrimental to the interest of the Gram Panchayat as also of the inhabitants of the Grama.
A second notification dated 24.10.86 under sub section (4) was also passed.
The Sarpanch challenged the above notifications before the High Court.
The High Court quashed the notifications on the sole and simple ground that the order did not satisfy one of the mandatory requirements, i.e. the appellant 's further continuance in the office would be detrimental to the interest of the Gram Panchayat or inhabitants of the Grama.
Allowing the appeal, ^ HELD: The language of sub section (2) does not require a repetition of the necessary satisfaction in the same language as referable to sub section (1).
Besides, the section cannot be interpreted to mandatorily lay down a rule for the authority concerned to express his conclusion in relation to the fulfilment of the conditions mentioned therein in a particular form using a particular set of words.
[181B] 178 What is contemplated by the section is the formation of an opinion in this regard after giving a reasonable opportunity to the Sarpanch in question to meet the allegations suggested and to announce the conclusion in unambiguous and express terms.
All that has been done in the instant case.
1 [181B C] The second appellant, while passing the order of suspension under sub section (l) of section 115, expressly stated that further continuance of the appellant in the office would be detrimental to the interest of the Gram Panchayat and the inhabitants of the Grama.
The State Government was of the opinion that the circumstances specified in sub section (1) existed.
In the order of removal, the State Government after mentioning the allegations, stated that the explanation of the Sarpanch was not acceptable and he was, therefore, being removed from the office.
The allegations made against him thus were accepted as correct.
The High Court was, therefore, not justified in quashing the impugned orders.[180 H; 181A,C]


judgement:
ION: Civil Appeal No. 4096 of 1987.
From the Judgment and order dated 2.6.1987 of the Calcutta High Court in Appeal NQ.
344 of 1980.
332 A.K. Sen, S.k. Gambhir and Vivek Gambhir for the Appellant.
Dr. Shankar Ghosh and Rathin Das for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
Special leave granted.
The respondent was appointed a transport and handling contractor by the appellant subject to the terms and conditions mentioned in three successive agreements in writing entered into by both the parties.
After disputes arose between the parties, as per the terrns of arbitration clause an arbitrator was appointed to adjudicate upon the disputes.
Both the respondent and the appellant filed their respective claims and counter claims before the arbitrator.
After considering the documents and evidence filed before the arbitrator, he made and published an award which was a speaking one.
The arbitrator did not allow the appellant 's claim for demurrage and wharfage charges paid to Railways amounting to Rs.15,63,863.02 by reason of the alleged wrongful conduct of respondent but the arbitrator awarded only 55% of the claim.
The arbitrator also did not allow the appellant 's claim for shortage in transit but reduced the claim by 40% and allowed only 60% of it amounting to Rs.52,971.99.
By the award the arbitrator awarded to the respondent Rs.12,64,175.97 and pendente lite interest at 6% per annum.
The appellant filed objections in the High Court of Calcutta under sections 30 and 33 of the (hereinafter called 'the Act ') for setting aside the award.
On 18th September, 19.80, the learned single judge of the High Court by his judgment and order set aside the award.
There was an appeal to the Division Bench of the High Court.
On 2nd June, 1987 the Division Bench of the High Court allowed the respondent 's appeal by its judgment and order and set aside the judgment of the learned single judge and upheld the award.
Being aggrieved thereby the appellant has come up before this Court by special leave under Article 136 of the Constitution.
While issuing notice on the application under Article 136 of the Constitution it was indicated that only three questions will be adjudicated upon in this appeal viz. Rs.13,94,982.46 which was the amount allowed on account of demurrage and wharfage charges mentioned in the award and secondly, the sum of Rs.2,35,769.46 and lastly on the question of interest.
So far as the second question of the matter is concerned Sree A.K. Sen, counsel appearing for the appellant has not made any sub 333 mission before us.
We also cannot find any substance in this aspect.
Therefore, it is not necessary for us to deal with this aspect of the matter.
So far as the amount of Rs. 13,94,982.46 on account of demurrage and wharfage is concerned, which was allowed, the award dealt with the question as set out in the paper book.
It appears that the total demurrage and wharfage charges paid by the Corporation to the Railways, in respect of the wagons cleared by the claimant firm, respondent herein, after obtaining such waiver as the Railways were persuaded to make was for Rs.15,63,863.21.
The charges were alleged to have been paid under Credit Notes which were produced before the arbitrator.
There was no dispute about the actual payment of the charges.
The appellant 's case was that it was entitled to recover the entire amount it had to pay on account of the demurrage and wharfage charges from the respondent under clause 9(a) of the agreement.
Clauses 9, 9(a) and 9(b) of the agreement are as follows: 9.
The Agent shall commence to load and/or unload all the wagons and trucks as well as all streamers, flats, barges and boats or any other conveyance on the day of these arrival and shall carry out the orders and directions of the Manager with all possible despatch and shall be responsible for and make good all demurrage or other waiting charges and expenses that may accrue and all other charges that may in the opinion of the Manager be payable because of or through any reasonable detention or delay." "9(a) The Agent shall be responsible for unloading/loading the wagons within the free period allowed by the Railways and also for loading/unloading for trucks/carts or any other transport vehicles expeditiously.
The Agent shall be liable to make good any compensation/demurrage/wharfage as per Railway rules in force during the period of contract other charges or expenses that may be incurred by the Corporation on account of delay in loading/unloading of truck/carts and unloading/loading of Wagons unless the delay is for reason beyond the Agents ' control.
The decision of the manager in this respect shall be final and binding on the Agent." "9(b) The Agent be present himself or send his duly 334 authorised representative to be present at all weighments A with which the Agent is concerned under this Agreement and in case he fails or chooses not to do so, no claim what soever shall lie against the Corporation in this regard.
" Under clause 9(a), according to the appellant, the Agent was liable to make good any compensation/demurrage/wharfage as per Railway rates in force during the period of contract, other charges or expenses that might be incurred by the Corporation on account of delay in loading/unloading of trucks/carts and unloading/loading or wagons unless the delay was for reasons beyond the Agent 's control.
It appears that the appellant and periodically served notices upon the respondent firm calling upon it to pay demurrage and wharfage charges with liberty to prefer objections.
Such objections as the respondent firm preferred were heard and disposed of by the District Manager.
This procedure continued till the end of November, 1975.
Then the respondent firm went to the Civil Court and obtained discontinuance of all proceedings for recovery of demurrage and wharfage charges.
The arbitrator noted that as a result of the hearings by the Corporation upto November, 1975 relief to the tune of Rs.1,21,884.55 was granted to the respondent firm and recovery of Rs.46,996.20 was made from the respondent firm 's bills.
The Corporation, therefore, claimed before the arbitrator recovery of remaining of the claim of Rs.13,94,982.46.
The respondent on the other hand claimed refund of the amount already deducted from the bills on the ground that it was not liable for any part of the demurrage and wharfage charges.
The claim of the respondent was that the demurrage and wharfage charges accrued invariably in circumstances beyond its control and accordingly under clause 9(a) of the agreement it could not be made liable for such charges.
The arbitrator noted that the respondent firm had impressive documentary evidence in support of its case.
It had produced numerous letters in which it fully explained to the authorities concerned the difficulties it was experiencing in timely clearance of goods from railway wagons and sheds.
It was claimed that it had produced month wise report of its work accounting for nearly all cases of demurrage and wharfage.
On 9th of October, 1975 the respondent had informed the Corporation by a letter Exhibit 128 which inadvertently was not marked exhibit that it was resuming work (there had been a break in his contract) on the condition that it would not be required to clear more than 10 c.c.
Or 4 box wagons, i.e. 200 m.t.
approximately daily.
This is a belated and rather grudging acceptance of this condition by the letter, Exhibit 44 dated 3rd of August, 1976.
335 The Arbitrator noted that from the letters and reports it appeared that timely clearance was hampered, and often made impossible by arrival of too many wagons at a time, congestion at the sidings and at the weighbridges with consequent detention of lorries, labour unrest and chronic want of space in the Corporation 's godowns and by others.
The arbitrator noted that there was insistent complaint about this want of space in the Corporation 's godown, which led to the goods being left in railways sheds for days together incurring unusually heavy wharfage charges.
The Corporation sometimes prepared over ambitious programmes of work for the contractors, as if unaware.
Of the existing situation.
The arbitrator noted that the appellant had examined several witnesses from the sidings.
But they did not according to the Arbitrator, prove anything beyond the procedure of work generally adopted at the sidings.
The arbitrator further noted about the foregoing explanations that the very often the objection of the railway shed staff to the claimant regarding not clearing of the wagons timely from the railway shed because of non space there owing to heavy stock kept therein remaining uncleared, and further that the claimant under the direction and order of the respondent being given limited programme because of non space in the receiving depots/ godowns were causes of delay.
The arbitrator noted that it would be fair to make the claimant firm liable for only 25% of the demurrage and wharfage charges sought to be recovered by the Corporation, leaving the remaining 75% to be borne by the Corporation itself.
Therefore, out of Rs.13,94,982.46 the Corporation, according to the arbitrator, could recover only Rs.3,48,745.61.
The appellant felt aggrieved thereby and challenges this grant of 25%.
So far as respondent 's claim for refund of Rs.46.996.20 already recovered, the arbitrator felt that there was no ground for interference.
The arbitrator noted that after hearing the claimant firm 's objections the deductions had been made.
The claimant firm had been granted relief in respect of Rs.1,21,884.55.
The arbitrator had not been able to ascertain precisely the total claim of the appellant till the end of November, 1975 but he noted that the sum of Rs.46,996.20 represented not much more than 25% of the total claim.
Therefore, the arbitrator noted that the claimant, namely, the respondent was not entitled to any refund and that the appellant could recover only Rs.3,48,745.61 on account of demurrage and wharfage charges.
As mentioned hereinbefore that is the main contention in this challenge before this Court.
The appellant claimed that it should have been entitled to the benefit of Rs.13,94,982.46 and not to 25% of the same.
Sree Sen, counsel for the appellant drew out attention to clauses 336 9(a) and (b) as set out hereinbefore and submitted that the respondent was only entitled to the amount as determined by the Manager which was described as final.
Sree Sen submitted that according to clause 9(a) aforesaid the adjudication made by the manager was final and there was no dispute thereafter and therefore, there could be no determination beyond 25%.
He drew our attention to that part of the 13 clause 9(a) to the following effect "the decision of the manager in this respect shall be final and binding on the Agent." So according to Sree Sen apart from what had been granted by the Manager for determination on account of demurrage and wharfage charges, no further deduction was possible nor was it arbitrable because it was final.
He drew our attention to certain observation in Wadsworth vs Smith, L.R. Vol.
Vl Q.B. 332.
There by a written agreement the plaintiff therein had agreed to build four houses on land of defendant and the defendant to grant plaintiff a lease when the houses were completed; the architects of the defendant for the time being were to certify as to the progress of the work, and if there should be any unnecessary delay or unsatisfactory conduct on the part of the plaintiff with regard to the erection of the buildings, on any matter or thing connected therewith "the fact of such delay or unsatisfactory conduct to be ascertained and decided in writing by the architects, against whose decision there shall be no appeal", then it should be lawful for defendant to employ other persons to execute the works, and to sell the buildings and lease the land to other persons.
On an application to make the agreement a rule of court under section 17 of the Common Law Procedure Act, 1854 of England, it was held by Cockburn, C.J., Blackburn and Mellor, JJ.
that assuming the agreement to be "an agreement or submission to arbitration" within the section, the clause that there was to be no appeal against the decision of the architects amounted to "words purporting that the parties intended that it should not be made a rule of court.
" The question was raised whether the agreement was not a submission to arbitration.
Cockburn, C.J. Observed that this clause was certainly more like a submission to arbitration ' it was on the confines of the two classes ' but on the whole it seems to His Lordship to savour more of a mere architect 's certificate than of a judicial proceeding.
Moreover, even if this were a submission within section 17, the Chief Justice thought that it could not be made a rule of court, because it was clear that the parties intended that the matter should be left to the decision of the architects without appeal; but to make it a rule of court would be to submit the decision to the jurisdiction of the Court.
Blackburn, J. agreed.
His Lordship observed that where by an agreement the right of one of the parties to have or to do a particular thing was made to depend on the determination of a third person, that 337 was not a submission to arbitration, nor was the determination an award; but where there was an agreement that any dispute about a particular thin shall be enquired into and determined by a person named, that might amount to a submission to arbitration, and the determination though in the form of a certificate, be an award.
Hannen, J. was of the view that this is not an agreement or submission to arbitration; the clause in question appeared to be no more than an extension of the ordinary clause in building contracts, that the certificate of the architect should be conclusive as to work done and the mode of doing it.
If we proceed on this basis then the logical conclusion of this would be that where there is a decision by the manager as in the instant case that would be final.
Where a dispute has been adjudicated by the manager in this aspect there was nothing for the arbitrator to decide.
It appears to us on the facts as recorded by the arbitrator in his award that there was adjudication really by the Manager of the claims upto November, 1975.
Thereafter there could be no adjudication as a result of injunction obtained from the court.
Therefore, it appears to us that there was really, in fact, no adjudication of all the disputes.
The remaining points were arbitrable because of the amplitude of the arbitration clause.
The relevant arbitration clause in this case contained, inter alia, as follows: .
"In the event of any question or dispute arising under this Agreement regarding the construction thereof or any clause herein or in respect of any act, matter or thing relating to this agreement the same shall be referred to the Sole Arbitration of any person appointed by the Managing Director of the Food Corporation of India . . .
The Award of such Arbitrator shall be final and binding on the parties to this Agreement . ." The point there having been decision before the Manager, that disallowance of the claim beyond 25% was beyond the jurisdiction of arbitration was not agitated before the High Court.
Prabir Kumar Majumdar, J. speaking for the Division Bench of the High Court of Calcutta observed at page 24 of the paper book as follows: "It has not been brought to our notice whether there has been any such decision by the Manager.
Further, taking all the relevant materials into consideration, the learned arbitrator has made a finding in respect of the appellant 's 338 claim and respondent 's counter claim in respect of demur rage and wharfage charges.
" It has not been brought to our notice that there has been any such decision by the Manager beyond the claim for the period of November, 1975 as mentioned hereinbefore.
Therefore, in our opinion, the arbitrator was not in error in proceeding in the manner as he did.
There was no other aspect of law on this aspect of the matter to which our attention was drawn.
The submission on this aspect is, therefore, negatived.
The challenge to the award on this aspect must, therefore, fail.
So far as the grant of interest pendente lite in the award is concerned, reliance was placed on various decisions of this Court.
Reliance was placed on State of Orissa and others vs Construction India, (J.T. where the award of interest from the commencement of the proceedings before the Arbitrator to the date of the award was disallowed in consonance with the views expressed by this Court in the case of Executive Engineer Irrigation Galimala & Ors.
vs Abaaduta Jena,) J.T.
Our attention was drawn by Dr. Ghosh counsel for the respondent firstly, to the decision in the case of Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd., Indore, ; There the respondent had filed a suit against the appellant claiming two sums as losses in respect of two items and interest on the same.
The disputes were referred to an arbitrator, before whom the respondent did not press for interest prior to the institution of the suit, but pressed its claim for the two sums and interests from the date of the institution of the suit till recovery.
Bachawat, J. speaking for the three learned Judges of this Court held that though in terms, section 34 of the Code of Civil Procedure did not apply to arbitrations, it was an implied term of the reference in the suit that the arbitrator would decide the dispute according to law and would give such relief with regard to pendente lite interest as the Court could give if it decided the dispute.
This power of the arbitrator, it was held, was not fettered either by the arbitration agreement or by the .
Our attention was also drawn to the decision in the case of State of Madhya Pradesh vs M/s. Saith & Skelton (P) Ltd., ; There disputes had arisen between the appellant and the respondent with reference to the performance of a contract which provided for arbitration.
Steps were taken to appoint arbitrators and an umpire.
339 The appellant filed a petition in the District Judge 's Court, having jurisdiction over the matter for Setting aside the nominations.
When the matter came up to this Court in appeal, this Court appointed a sole arbitrator with consent of the parties.
Thereafter in the presence of counsel for both the parties, this Court gave directions in the appeal that the arbitration records be sent to the sole arbitrator and later extended the time for making the award and gave directions regarding the venue.
The arbitrator gave his award, directing the payment of a certain sum by the appellant to the respondent with simple interest at 9% from the date anterior to the reference and filed the award in the Court the next day.
One of the question that arose before this Court was whether the arbitrator had any jurisdiction to award the interest from a date anterior to the date of award or reference.
This Court held that the claim for the payment of interest had been referred to the arbitrator.
The contract did not provide that no interest was payable on the amount that might be found due.
Therefore, the respondent was entitled under section 61(2) of the , to claim interest from the date on which the price became due and payable.
The arbitrator had found that the price had become payable from a date anterior to the date of the award.
Therefore, the award of interest from the anterior date was justified.
The Court further held that the award of interest at 9% was also not exorbitant because the parties themselves claimed interest at 12%.
Our attention was also drawn to M/s. Ashok Construction Company vs Union of lndia, where a bench of three learned Judges at page 68 of the report held that the terms of the arbitration agreement did not exclude the jurisdiction of the arbitrator to entertain a claim for interest, on the amount due under the contract and on this ground this Court upheld the grant of interest.
Our attention was drawn by Dr. Ghosh to the observations in the case of M/s. Alopi Parshad & Sons, Ltd. vs The Union of India; , This Court reiterated the well settled principle that an award was liable to be set aside because of an error apparent on the face of the award.
An arbitration award may be set aside on the ground of an error on the face of it when the reasons given for the C, decision, either in the award or in any document incorporated with it, are based upon any legal proposition which is erroneous.
In a recent decision, Chinnappa Reddy, J. speaking for a bench of three learned Judges in Executive Engineer Irrigation Galimala 's case (supra) at paragraph 15 of the judgment considered the ques ll 340 tion of award of interest by an arbitrator.
The learned Judge noted the decisions in Firm Madanlal Roshanlal Mahajan vs Hukamchand Hills Ltd. (supra) Ashok Construction Company vs Union of India, (supra.
and the State of Madhya Pradesh vs M/s. Saith & Skelton Private Limited, (supra) and expressed the view that these were cases in which the references to arbitration were made by the court or in court proceedings of the disputes in the suit.
It was held that the arbitrator must be assumed in these cases to have the same power to award interest as the court.
Therefore, the grant of pendente lite interest on the analogy of section 34 of the Civil Procedure Code was permissible.
In regard to interest prior to the suit, it was held in most of these cases that since the Interest Act, 1839 was not applicable, interest could be awarded if there was an agreement to pay interest or a usage of trade having the force of law.
This Court held in the last mentioned case that they are not entitled to claim interest for the period prior to the commencement of the arbitration proceedings for the reason that the Interest Act did not apply to their case and there was no agreement to pay interest or any usage of trade.
It was further held that the claimants were not entitled to claim pendente lite interest as the arbitrator was not a court nor were the references to arbitration made in suits.
In deference to the latest pronouncement of this Court which is a pronouncement of three learned Judges, we must hold that the grant of pendente lite interest in this case was not justified.
Though the award in this case is a speaking award, it was not made clear on what basis the interest was awarded.
We are of the opinion that the arbitrator was in error in granting the interest in the manner he did.
It is true that in specific term there was no denial of this right to grant interest but there was denial as to get it in accordance with law.
In the aforesaid view of the matter so far as the interest of the award is concerned we are of the opinion that in awarding the interest the arbitrator committed an error of law.
With this modification the judgment and order of the High Court are confirmed.
The appeal is disposed of in these terms without any order as to costs.
S.L. Appeal disposed of.

summary/full:
% The respondent was appointed a transport and handling Contractor by the appellant subject to the terms and conditions mentioned in three successive written agreements entered into by both the parties.
After disputes arose between the parties, an arbitrator was appointed as per the arbitration clause to adjudicate upon the disputes.
The arbitrator made and published an award which was a speaking one.
He did not allow the appellant 's claim for demurrage and wharfage charges paid to the Railways amounting to Rs.15,63,863.02 by reason of the alleged wrongful conduct of the respondent but awarded only 25% of the claim.
The arbitrator also did not allow the appellant 's claim for shortage in transit but reduced the claim by 40% and allowed only 60% of it amounting to Rs.52,971.99.
The arbitrator awarded to the respondent Rs.12,64,175.97 and pendente lite interest at 6% per annum.
The appellant filed objections in the High Court under sections 30 and 33 of the ( 'The Act ') for setting aside the award.
The High Court (Single Judge) set aside the award.
The respondent filed an appeal to the Division Bench of the High Court which allowed the same, setting aside the judgment of the learned single judge and upholding the award.
Being aggrieved by the decision of the High Court, the appellant appealed to This Court for relief by special leave under Article 136 of the Constitution.
Disposing of the appeal, this Court, ^ HELD: While issuing notice on the application under Article 136 of the Constitution, it was indicated that only three questions would be adjudicated upon in this appeal, viz, Rs.13,94,982.46 being the amount allowed on account of demurrage and wharfage charges mentioned in the award, secondly, the sum of Rs.2,35,769.46 and lastly, the question of interest.
[332G] 330 So far as the second question was concerned, counsel for the appellant did not make any submission before the Court.
The Court also could not find any substance in this aspect.
Therefore, it was not necessary to deal with this aspect of the matter.
[332H; 333A] So far as the amount of Rs.13,94,982.46 on account of demurrage and wharfage was concerned, which was allowed, it appeared that the total demurrage and wharfage charges paid by the Corporation to the Railways in respect of the wagons cleared by the claimant firm, respondent herein, after obtaining such waiver as the Railways were persuaded to make were Rs.15,63,863.21.
There was no dispute about the actual payment of the charges.
The appellant 's case was that it was entitled to recover the entire amount it had to pay on account of the demurrage and wharfage charges from the respondent under clause 9(a) of the agreement.
[333B C] Under clause 9(a) according to the appellant, the Agent was liable to make good any compensation/demurrage/wharfage as per Railway rates in force during the period of contract and other charges or expenses that might be incurred by the Corporation on account of delay in loading/unloading of trucks/carts and unloading/loading of wagons unless the delay was for reasons beyond the Agent 's control.
It appeared that the appellant had periodically served notices upon the respondent of firm calling upon it to pay demurrage and wharfage charges with liberty prefer objections.
Such objections as the respondent firm preferred were disposed of by the District Manager.
This procedure continued till the end of November, 1975.
Then the respondent firm went to the Civil Court and obtained discontinuance of all proceedings for the recovery of demurrage and wharfage charges.
The arbitrator noted that as a result of the hearings by the Corporation upto November, 1975, relief to the tune of Rs.1,21,884.55 was granted to the respondent firm and the recovery of Rs.45,996.20 was made from the respondent firm 's bills.
The Corporation, therefore, claimed before the arbitrator recovery of the remaining or the claim of Rs.13,94,982.46.
Counsel for the appellant drew this Court 's attention to clauses 9(a) and (b) of the agreement and submitted that the adjudication made by the Manager was final and there was no dispute thereafter.
According to him, no further deduction was possible from what had been granted by the Manager for determination on account of demurrage and wharfage charges, nor was it arbitrable because it was final.
[334B E] It appears on the facts as recorded by the arbitrator in his award that there was adjudication really by the Manager of the claims upto 331 November, 1975.
Thereafter, there could be no adjudication as a result of injunction obtained from the Court.
Therefore, it appeared that there was in fact no adjudication of all the disputes.
The remaining points were arbitrable because of the amplitude of the arbitration clause.
It was not brought to the notice of the Court that there was an adjudication by the Manager of the claim for the period beyond November, 1975, as mentioned hereinbefore.
Therefore, the arbitrator was not in error in proceeding in the manner he did.
There was no other aspect of law on this aspect of the matter to which the attention of the Court was drawn.
The submission on this aspect was, therefore, negatived and the challenge to the award on this aspect must fail.
[337C D; 338B] So far as the grant of interest pendente lite in the award was concerned, reliance was placed on various decisions of this Court.
In deference to the latest pronouncement of this Court, which is a pronouncement of three learned Judges, in Executive Engineer Irrigation Galimala & Ors.
vs Abaadute Jena, (J.T. , the Court held that the grant of pendente lite interest in this case was was not justified.
Though the award in this case was a speaking award, it was not made clear on what basis the interest was awarded.
The arbitrator was in error in granting the interest in the manner he did .
It was true that in specific terms there was no denial on this right to grant interest, but there was denial as to get it in accordance with law.[338C D; 340E F] In awarding the interest the arbitrator committed an error of law.
With this modification, the judgment and order of the High Court were affirmed.
[340F G] Wadsworth vs Smith, L.R. Vol.
VI Q.B. 332; State of Orissa and others, vs Construction India, J.T. [1987] 4 S.C. 588; Executive Engineer Irrigation Galimala & Ors.
vs Abaaduta Jena, J.T. , Firm Madan lal Roshanlal Mahajan vs Hukumchand Mills Ltd., Indore, [1987] 1 S.C.R. 105; State of Madhya Pradesh vs M/s. Saith & Skelton (P) Ltd., ; ; M/s. Ashok Construction Company vs Union of India, and M/s. Alopi Parshad referred to.