judgement:
Civil Appeal No. 1212 of 1984.
Appeal by Special leave from the Judgment and order dated the 20th October, 1983 of the Bombay High Court in W. Appeal No.779 of 1983.
P.R.Mridul, G. Vishwanath & Parijat Sinha, for the Appellant.
Ram Jethmalani & Soli J. Sorabjee, M.N. Shroff, Talegankar & B.V. Desai.
for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, J.
Special Leave Granted.
This appeal by special leave raises a short question of law as to whether an order of requisition of premises can be continued for an indefinite period of time or it must necessarily be of temporary duration.
The facts giving rise to this appeal are few and may be briefly stated as follows: One Rukmanibai was the owner of a building bearing House No. 65, Police Station Road, Ville Parle West, Bombay.
The ground floor of this building comprised of a flat which was in the occupation of one N.C. Shah as a tenant and since N.C. Shah was going to vacate the flat, Rukmanibai gave intimation of the proposed vacancy to the State Government and requested the State Government to allot the premises to the appellant who was her nearest relative.
The appellant also addressed a letter dated 12th March 1951 to the Chief Officer of the Accommodation Department of the Government of Bombay requesting that he should be allotted the flat which was going to be vacated by N.C. Shah.
It appears however that the request of the appellant was turned down by the State Government and ultimately the flat was requisitioned by an order dated 9th April 1951 made by the State Government in exer 697 cise of the powers conferred under clause (a) of sub section (4) of section 6 of the Bombay Land Requisition Act 1948.
This order of requisition did not set out the public purpose for which the flat was requisitioned.
Now curiously enough, though it was decided by the State Government not to allot the flat to the appellant and his application for allotment was specifically reacted the Assistant Controller of Accommodation passsed an order on 25th April 1951 allotting the requisitioned flat to the appellant and pursuant to the order of allotment, the appellant entered into occupation of the flat.
The appellant thereafter paid rent to Rukmanibai from time to time but the payment of rent was very irregular and the appellant committed several defaults in payment of rent with the result that not less than seven owners had to be passed by the Accommodation Department of the Government of Bombay directing the appellant to vacate the flat because his chronic defaults.
Ultimately, however, each time no action for eviction was taken by the Controller of Accommodation, presumably because the appellant must have paid up the rent.
It is significant to note that in the year 1964 the appellant requested the Controller of Accommodation to derequistion the flat and to allow him to become direct tenant of Rukmani Bai but his application was rejected by letter dated 25th March 1964.
The appellant also thereafter in the year 1979 applied to the Controller of Accommodation for sanction to erect a kitchen platform in the flat but this application was turned down by a letter dated 20th March 1979 addressed by the Controller of Accommodation.
The appellant throughout this period continued to occupy the flat as an allottee under the order of requisition and paid rent to Rukmanibai from time to time.
thought irregularly.
The building in which the requisitioned flat was situate, was purchased by the 3rd respondent from Rukmanibai on 30th May 1973.
The 3rd respondent, after purchase of the building, requested the State Government to derequisition the flat inasmuch as the allotment of the flat in favour of the appellant could not be for a public purpose.
The State Government did not pay any heed to this request of the 3rd respondent with the result that the 3rd respondent was constrained to file writ petition No. 1210 of 1980 in the High Court of Bombay challenging the validity of the order of requisition and contending that it could not survive for such a long period of time and the State Government was therefore bound to derequisition the flat.
698 One of the grounds on which the validity of the order of requisition was challenged was that the order of requisition did not set out the public purpose for which it was made.
This ground of challenge was negatived by the High Court and, in our opinion, rightly, because it is not necessary that the order of requisition must explicitly set out the public purpose for which it is made.
The only requirement of the law is that the requisitioning must be made for a public purpose and so long as there is a public purpose for which an order of requisition is made, it would be valid irrespective whether such public purpose is recited in the order of requisition or not.
It has, in fact, been so held by this Court in State of Bombay vs Bhanji Munji & Anr.
(1) where Bose, J. speaking on behalf of the Court observed: "In our opinion, it is not necessary to set out the purpose of the requisition in the order.
The desirability of such a course is obvious because when it is not done, proof of the purpose must be given in other ways and that exposes the authorities to the kind of charges we find here and to the danger that the courts will consider them well founded.
But in itself an omission to set out the purpose in the order is not fatal so long as the facts are established to the satisfaction of the court in some other way.
" The order of requisition could not therefore be successfully attacked on the ground that it did not set out the public purpose for which it was made.
But, as pointed out by Bose, J. in the above dassage quoted from this judgment in Bhanji Munji 's case (supra), the State Government would have to show that the order of requisition was made for a public purpose and the necessary facts showing the public purpose for which the order of requisition was made would have to be established by the State Government to the satisfaction of the court.
The High Court held in the present case that no material was placed before it to show what was the public purpose for which the order of requisition was made and in fact, there was no denial on the part of the State Government or the appellant of the averment made on behalf of the 3rd respondent that the appellant was neither a government servant nor a homeless person.
This view taken by the High Court appears to be well founded and it is not 699 possible to hold on the material placed before us that the order of requisition was made for a public purpose.
But it was contended on behalf of the appellant that even if the order of requisition was invalid as having been made for a purpose other than a public purpose, the 3rd respondent was not entitled to challenge the same after a lapse of over 30 years and the writ petition should therefore have been dismissed by the High Court.
Now if the only ground on which the order of requisition was challenged in the writ petition was that it was not made for a public purpose and was therefore void, perhaps it might have been possible to successfully repel this ground of challenge by raising an objection that the High Court should not have entertained the writ petition challenging the order of requisition after a lapse of over 30 years.
But we find that there is also another ground of challenge urged on behalf of the 3rd respondent and that is a very formidable ground to which there is no answer.
The argument urged under this ground of challenge was that an order of requisition in the present case therefore ceased to be valid and effective after the expiration of a reasonable period of time and that it could not, under any circumstances, continue for a period of about 30 years and hence it was liable to be quashed and set aside or in any event the State Government was bound to revoke the same and to derequisition the flat.
This contention has, in our opinion, great force and must be sustained.
There is a basic and fundamental distinction recognised by law between requisition and acquisition.
The Constitution itself in Entry 42 of List III of the Seventh Schedule makes a distinction between acquisition and requisitioning of property.
The original Article 31 clause (2) of the Constitution also recognised this distinction between Compulsory acquisition and requisitioning of property.
The two concepts, one of requisition and the other of acquisition are totally distinct and independent.
Acquisition means the acquiring of the entire title of the expropriated owner whatever the nature and extent of that title may be.
The entire bundle of rights which was vested in the original holder passes on acquisition to the acquirer leaving nothing to the former.
Vide: Observations of Mukherjee, J. in Chiranjitlal 's case.
The concept of acquisition has an air of permanence and finality in the there is transference of the title of the original holder to the acquiring authority.
But the concept of requisition involves merely taking of "domain or control over pro 700 perty without acquiring rights of ownership" and must by its very nature be of temporary duration.
If requisitioning of property could legitimately continue for an indefinite period of time, the distinction between requisition and acquisition would tend to become blurred, because in that event for all practical purposes the right to possession and enjoyment of the property which constitutes a major constituent element of the right of ownership would be vested indefinitely without any limitation of time in the requisitioning authority and it would be possible for the authority to substantially take over the property without acquiring it and paying full market value as compensation under the Land Acquisition Act, 1894.
We do not think that the government can under the guise of requisition continued for an indefinite period of time, in substance acquire the property, because that would be a fraud on the power conferred on the government.
If the government wants to take over the property for an indefinite period of time, the government must acquire the property but it cannot use the power of requisition for achieving that object.
The power of requisition is exercisable by the government only for a public purpose which is of a transitory character.
If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and in such a case the order of requisition, if passed, would be a fraud upon the statute, for the government would be requisitioning the premises when really speaking they want the premises for acquisition, the object of taking the premisses being not transitory but permanent in character.
Where the purpose for which the premises are required is of such a character that from the very inception it can never be served by requisitioning the premises but can be achieved only by acquiring the property which would be the case where the purpose is of a permanent character or likely to subsist for an indefinite period of time, the government may acquire the premises but it certainly cannot requisition the premises and continue the requisitioning indefinitely.
Here in the present case the order of requisition was made as far back as 9th April 1951 and even if it was made for housing a homeless person and the appellant at that time fell within the category of homeless person, it cannot be allowed to continue for such an inordinately long period as thirty years.
We must therefore hold that the order of requisition even if it was valid when made, ceased to be valid and effective after the expiration of a reasonable period of time.
It is not necessary for us to decide what period of time may be regarded as reasonable for the continuance of an order of requisition in a given case, because ultimately the answer to this question must depend on the facts and 701 circumstances of each case but there can be no doubt that whatever be the public purpose for which an order of requisition is made the period of time for which the order of requisition may be continued cannot be an unreasonably long period such as thirty years.
The High Court was, therefore, in any view of the matter, right in holding that in the circumstances the order of requisition could not survive any longer and the State Government was bound to revoke the order of requisition and deregulation the flat and to take steps to evict the appellant from the flat and to hand over vacant possession of it to the 3rd respondent.
There was also one other contention urged on behalf of the appellant in a desperate attempt to protect his possession of the flat and that contention was, since he had paid rent of the flat to Rukmanibai and such rent was accepted by her, he had become a direct tenant of Rukmanibai and the order of requisition had become totally irrelevant so far as as his possession of the flat is concerned.
This contention is, in our opinion, wholly unfounded.
The appellant admittedly came into occupation of the flat as an allottee under the order of requisition passed by the State Government and even if any rent was paid by the appellant to Rukmanibai and such rent was accepted by her, it did not have the effect of putting an end to the order of requisition.
The appellant was an allottee of the flat under the order of requisition and he was liable to pay compensation for the use and occupation of the flat to the State Government and the State Government was in its turn liable to pay compensation to Rukmanibai for the requisitioning of the flat and if, therefore, instead of the appellant paying compensation to the State Government and the State Government making payment of an identical amount to Rukmanibai, the appellant paid directly to Rukmanibai with the express or in any event implied assent of the State Government, the order of requisition could not cease to be valid and effective.
It did not matter at all whether the appellant described the amount paid by him to Rukmanibai as rent, because whatever was done by him was under the order of requisition and so long as the order of requisition stood, his possession of the flat was attributable only to the order of requisition and no payment of an amount described as rent could possibly alter the nature of his occupation of the flat or make him a tenant of Rukmanibai in respect of the flat.
We are therefore of the view that the High Court was right 402 in allowing the writ petition and directing the State Government and the Controller of Accommodation to deregulation the flat and to take steps to evict the appellant and to hand over vacant and peaceful possession of the flat to the 3rd respondent.
We accordingly dismiss the appeal, and confirm the order passed by the High Court but in the circumstances of the case, the appellant shall not be evicted from the flat until 28th February, 1985, provided the appellant files an undertaking in this Court within two weeks from today that he will vacate the flat and hand over its vacant possession to the 3rd respondent on or before that date.
There will be no order as to costs of the appeal.
N.V.K. Appeal dismissed.

summary/full:
The appellant applied to the Accommodation Department of the State Government for allotment of a flat.
The State Government urged down the request but requisitioned the flat by an order dated 9th April, 1948 under clause (a) of sub section(4) of section 6 of the Bombay Land Requisition Act, 1948.
This order of requisition, did not set out the public purpose for which the flat was requisitioned.
The Assistant Controller of Accommodation by an order dated 25th April, 1951 allotted the requisitioned flat to the appellant who entered into occupation and paid rent to the landlady from time to time but as he was irregular and committed several defaults the Controller of Accommodation sought to terminate the allotment.
The 3rd respondent, on 30th May, 1973 purchased the building in which the requisitioned flat was situated, and requested the State Government to de requisi 694 tion the flat, as the allotment of the flat in favour of the appellant could not be said to be for a public purposes.
The State Government did not pay any heed to this request.
The 3rd respondent, thereupon filed a Writ Petition in the High Court challenging the validity of the order or requisition, contending that it could not survive for such a long period of time and that the State Government was therefore bound to de requisition the flat.
The High Court allowed the Writ Petition and directed the State Government and the Controller of Accommodation to de requisition the flat, take steps to evict the appellant, and hand over vacant possession.
In appeal this Court, it was contended inter alia on behalf of the appellant tenant that even the order of requisition was invalid as having been made for a purpose other than a public purpose, the 3rd respondent was not entitled to challenge the order of requisition after a lapse of over 30 years and that the Writ Petition should have been dismissed by the High Court.
Dismissing Appeal, ^ HELD: 1.
The order of requisition even if it was valid when made, ceased to be valid and effective after expiration of a reasonable period of time What period of time must be regarded as reasonable for the continuance of an order of requisition depends on the facts and circumstances of each case.
[700 H] In the instant case, the order of requisition was made as far back as 9th April 1951 and even if it was made for housing a homeless person, and the appellant at that time, fell within that category, it cannot be allowed to continue for such an inordinately long period as thirty years.
[700 G] 2.
Requisitioning must be made for a public purpose, and so long as there is a public purpose for which an order of requisition is made, it would be valid irrespective of whether such public purpose is recited in the order of requisition or not.
But if the order is challenged, the State Government would have to satisfy the Court by placing the necessary facts showing the public purpose for which the order of requisition was made.
[698 B,G] 3.
There is a basic and fundamental distinction recognised by law between requisition and acquisition.
The Constitution itself in Entry 42 of List III of Seventh Schedule makes a distinction between acquisition and requisitioning of property.
The original Article 31 clause (2) of the Constitution and recognised this distinction 695 between compulsory acquisition and requisition of property.
The two concepts, one of requisition and the other of acquisition are totally distinct and independent.
Acquisiting means the acquiring of the entire title of the expropriated owner what ever the nature and extent of that title may be.
The entire of rights which was vested in the original holder passes on acquisition to the acquire leaving nothing to the former.
The concept of acquisition as an aim of permanence and finality in that there is a transference of the title of the original holder to the acquiring authority.
But the concept of requisition involves merely taking of "domain or control over property without acquiring rights of ownership" and must by its very nature be of temporary duration.
[699 F H] 4.
If the Government wants to take over the property for and indefinite period of the Government must acquire the property but it cannot use the power of requisition for achieving that object.
The power of requisition is exercisable by the Government only for a public purpose which is of a transitory character.
If the public purpose for which the premises are required is of a perennial or permanent character from the very inception, no order can be passed requisitioning the premises and in such a case the order or requisition, if passed, would a fraud upon the statute.
What ever be the public purpose for which an order of requisition made, it is by its very nature temporary in character and it cannot endure for an indefinite period time.
The period of time for which an order of requisition may be continued cannot be an unreasonably long period such as thirty years and it must therefore be held that the order of requisition, even if valid when made, ceased to be valid and effective.
The Writ Petition challenging the order of requisition after a lapse of over thirty years was therefore maintainable.[700 C F,701 A] 5.
The appellant was an allottee of the flat under the order of requisition and he was liable to pay compensation for the use and occupation of the flat to the State Government and the State Government was in its turn liable to pay compensation for the requisitioning of the flat.
If, instead of the appellant paying compensation to the State Government and the State Government and the State Government making payment of an identical amount to the owner, the appellant paid directly to the owner with the express or implied assent of the State Government, the order of requisition could not cease to be valid and effective.
It did not matter whether the appellant described the amount paid by him to the owner as rent, because whatever was done by him was under the order of requisition and so long as the order of requisition stood, his possession of the flat was attributable only to the order of requisition and no payment of amount described as rent could possible after the nature of his occupation of the flat or make him a tenant in respect of the flat.[701 F H] State of Bombay vs Bhanji Munji & Anr.
[1955] 1 S.C.R. 777; Chiranjital 's case [1950]S.C.R. 869; referred to. 696


judgement:
o. 119 of 1955 with Petition for Special Leave to Appeal No. 140 of 1955.
Petition under Article 32 of the Constitution for the enforcement of fundamental rights and petition under Article 136 of the Constitution for `special leave to appeal from the judgment and order dated March 29, 1955, of the Bombay High Court in appeal No. 63 of 1954.
Hardayal Hardy and R.Jethmalani, for the petitioner.
C. K. Daphtary, Solicitor General of India, Porus A. Mehta and R. H. Dhebar, for the respondent.; 1957.
March 5.
The Judgment of the Court was delivered by SINHA J.
By this petition under article 32 of the Constitution and Petition No. 140 of 1955 for special leave to appeal from the judgment of the Bombay High Court dated March 29, 1955, in Appeal No. 63 of 1954 confirming that of a single Judge of that Court dated April 21, 1954, the petitioner challenges the constitutionality of the Bombay Land Requisition Act (Act XXXIII), 1948, hereinafter referred to as "The Act", and the enforceability 'of the order dated January 27, 1954, made by the Governor of Bombay in pursuance of section 6(4)(a) of the Act.
The petitioner is the widow of one Dharamdas Chellaram, who was a tenant of the premises in question.
The said Dharamdas Chellaram died in November 1953, leaving him surviving his widow and a daughter.
The petitioner alleged that she had been occupying the premises in question as a member of her husband 's family since 1938 and that the tenant aforesaid had at no material date ceased to occupy the premises.
She also alleged that one Narottam Das Dharamsey Patel was a mere lodger who war, occupying a portion of the premises by leave and licence of her husband.
The said Narottamdas had no interest 724 in the premises in question and had, as a matter of fact, vacated the portion in his occupation some time in the year 1953.
On behalf of the State of Bombay, the respondent, it has been stated on affidavit by the Accommodation Officer that it is not a fact that the petitioner resided in the premises in question and that the facts were that the said Dharamdas, the tenant, had vacated the premises in October 1952 and had handed over possession of the premises to the said Narottamdas Dharamsey Patel.
Hence it is alleged that it was not a fact that at the time of her husband 's death in November 1953 the petitioner was residing in the premises in question.
These facts had been stated before the High Court also on an affidavit made in opposition to the petitioner 's case in the High Court.
The petitioner 's grievance is that towards the end of January 1954 she found pasted on the outer door of the premises an order dated January 27, 1954, said to have been made by the Governor of Bombay and which is said to be the occasion for her moving the High Court of Bombay for a writ of mandamus against the State of Bombay to refrain from giving effect to the aforesaid Order.
The Order impugned is in these terms: "No. RA (1) M 13067 Office of the Controller of Accommodation, Jehangir Building, Mahatma Gandhi Road, Bombay, January 27, 1954.
Order Whereas, on inquiry it is found that the premises specified below had become vacant in the month of October 1952 ; Now, therefore, in exercise of the powers conferred by clause (a) of sub section (4) of section 6 of the Bombay Land Requisition Act, 1948 (Bombay Act XXXIII of 1948) the Government of Bombay is pleased to requisition the said premises for a public purpose, namely, for housing a Bombay State Government servant.
Premise,s Flat No. 3 on the 1st floor of the Building known as Hem Prabha situated at 68, Marine Drive, Bombay.
By order and in the name of Governor of Bombay.
" This Order was meant to be served on (1) Shri Hirabhai H. Patel, admittedly the landlord of the premises,(2) Shri Narottam Dharamsey Patel aforesaid, and (3) Shri Dharamdas Chellaram, who, as already indicated, was dead at the date the Order was made.
The petitioner challenged the validity of the Order of requisition set out above.
Her petition was heard by Tendolkar J. who by his judgment dated April 21, 1954, dismissed the same.
The petitioner moved this Court for an appropriate writ, direction or order under article 32 of the Constitution, challenging the vires of the Act, as also the legal efficacy of the Order impugned.
She also filed a petition praying for special leave to appeal from the judgment aforesaid of the Bombay High Court.
Both the matters have been heard together and will be governed by this judgment.
Before dealing with the contentions raised on behalf of the petitioner, it is convenient first to set out, in so far as it is necessary, the legislative history of the law impugned and its certain salient features which are relevant for purposes of this case.
This Act was passed by the Provincial Legislature of Bombay on April 11, 1948, on being empowered by the Governor General in exercise of powers conferred on him by section 104 of the Government of India Act, 1935.
Initially it was to remain in force until March 31, 1950.
But by the amending Act, Bombay Land Requisition (Amendment) Act, 1950 (Bombay Act No. 11 of 1950) published on March 28, 1950, its life was extended up to the end of March 1952.
By the amending Act, sections 8 A, 8 B and 9 A were added making substantial changes which need not be set out here, as they do not enter into the controversy.
The life of the Act was subsequently extended further, up to the end of December 1958.
By the Bombay Land Requisition (Second Amendment) Act, 1950 (Act XXXIX of 1950), the Act was further amended so as to substitute the words "the purpose of the State or any other public purpose" for the word,, "any purpose" in section 5 of the Act.
This was obviously done to satisfy the requirements of article 31 of the 726 Constitution.
Consequential changes were also made in sections 6 and 7 of the Act.
By section 6 of the amending Act it was provided that "The amendments made by this Act shall.
be deemed to have been and always to have been made with effect from the 26th January 1950. . . .
Thus the amendment was given retrospective operation.
The provisions of sections 5, 6 and 13 after the amendments aforesaid (omitting the portions not necessary for our purpose) are in these terms : "5.
(1) If in the opinion of the State Government it is necessary or expedient so to do, the State Government may by order in writing requisition any land for purpose, of the State or any other public purpose: Provided that no building or part thereof wherein the owner, the landlord or the tenant, as the case may be, has actually resided for a continuous period of six months immediately preceding the date of the order shall be requisitioned under this section.
(2)Where any building or part thereof is to be requisitioned under sub section (1), the State Government shall make such enquiry as it deems fit and make a declaration in the order of requisition that the owner, the landlord or the tenant, as the case may be, has not actually resided therein for a continuous period of six months immediately preceding the date of the order and such declaration shall be conclusive evidence that the owner, landlord or tenant has not so resided.
6.(1) If any premises situate in ail area specified by the State Government by notification in the Official Gazette, are vacant on the date of such notification and wherever any such premises are vacant or become vacant after such date by reason of the landlord, the tenant or the sub tenant, as the case may be, ceasing to occupy the premises or by reason of the release of the premises from requisition or by reason of the premises being newly erected or reconstructed or for any other reason the landlord of such premises shall give intimation thereof in the prescribed form to an officer authorised in this behalf by the State Government.
727 (4) Whether or not an intimation under sub section (1)is given and notwithstanding anything contained in section 5, the State Government may by order in writing (a) requisition the premises for the purpose of the State or any other public purpose and may use or deal with the premises for any such purpose in such manner as may appear to it to be expedient, or Provided that where an order is to be made under clause (a) requisitioning the premises in respect of which no intimation is given by the landlord, the State Government shall make such inquirv as it deems fit and make a declaration in the order that the promises were vacant or had become vacant, on or after the date referred to in sub section (1) and such declaration shall be conclusive evidence that the premises were or had so become vacant: Explanation For the purposes of this section, (a) premises which are in the occupation of the landlord, the tenant or the sub tenant, as the case may be, shall be deemed to be or become vacant when such landlord ceases to be in occupation or when such tenant or sub tenant ceases to be in occupation upon termination of his tenancy, eviction, assignment or transfer in any other manner of his interest in the premises or otherwise, notwithstanding any instrument or occupation by any other person prior to the date when such landlord, tenant or sub tenant so ceases to be in occupation; 13.(1) Every order made under sections 5, 6, 7, 8 A or 8 B or sub section (7) of section 9 or section 12 shall (a)if it is an order of a general nature or affecting a class of persons, be published in the mariner prescribed by rules made in this behalf (b)if it is an order affecting an individual, corporation, or firm, be served in the manner provided for the service of a summons in Rule 2 of Order XXIX or Rule 3 of Order XXX, as the case may be, in the First Schedule of the Code of Civil Procedure, 1908 ; 728 (c)if it is an order affecting an individual person other than a corporation or firm, be served on the person (i)personally, by delivering or tendering to him the order, or (ii) by post, or (iii) where the person cannot be found, by leaving an authentic copy of the order with some adult male member of his family or by affixing such copy to some conspicuous part of the premises in which he is known to have last resided or carried on business or worked for gain.
(2) Where a question arises whether a person was duly informed of an order made in pursuance of sections 5, 6, 7, 8 A or 8 B or, sub section (7) of section 9 or section 12 compliance with the requirements of subsection (1) shall be conclusive Proof that he was so informed; but failure to comply with the said requirements shall not preclude proof by other means that he was so informed, or affect the validity of the order.(Underlining ours). . . . . . .
At the outset it is necessary to state that the main grounds of attack against the constitutionality of the Act based on such fundamental rights as are recognised by articles 19(1)(f) and 31(2) of the Constitution must be overruled in view of the decision of the Constitution Bench of this Court in State of Bombau vs Bhanji Munji (1).
In that case this Court upheld the validity of the Act with reference to the provisions of the articles aforesaid of the constitution.
But the learned counsel for the petitioner contended that he attacked the vires of the Act on grounds other than those which had been specifically dealt with by this Court in the decision just referred to.
We now proceed to deal with those fresh grounds on their merits.
It was contended that the Act became invalid on January 26, 1950, inasmuch as it was in conflict with article 31(2) of the Constitution.
The Act was, therefore, as good as dead by the time Act 11 of 1950 extending the life of the Act was enacted as aforesaid.
The Act being void, its extension by Act II of 1950 was equally void, (1) [1955] 1 S.C.R. 777.
729 Similarly, it was further argued that the amendments effected by the amending Act II of 1950 and Act XXXIX of 1950 required the assent of the President and that as admittedly no such assent had been given, they had no effect as provided in article 31(3) of the Constitution.
This chain of submissions is founded on the admitted non compliance with the requirements of article 31(3).
It has not been contended that the Act when passed on April 11, 1948, was not good law.
It is also clear that the Act is not covered by the provisions of el.
(6) of article 31.
The Act is thus covered by the saving clause, el. 5(a), being an existing law other than a law to which the provisions of cl.
(6) apply.
The Act, therefore, would be valid even if the provisions of el.
(2) of article 31 are not in terms fully satisfied, in so far as the Act did not before its amendment by Act XXXIX of 1950 contain the expression "for a public purpose".
As already pointed out, this Court in the case of The State of Bombay vs Bhanji Munji (1) has laid it down that the Act was not invalid even after the commencement of the Constitution simply because it is not provided in express terms that the acquisition or requisition had to be for a public purpose, provided that from the whole tenor and intendment of the Act it could be gathered that the requisition was for a public purpose, and for the benefit of the community at large.
The amending Act only made explicit what had been left to be gathered from the whole tenor of the Act, as pointed out by this Court in the case cited above.
, The 'argument that the amending Acts, II of 1950 and XXXIX of 1950, required the assent of the President under el.
(3) of article 31 has, therefore, no force.
Act 11 of 1950, in so far as it affects the present controversy, only extended the life of the Act by two years and Act XXXIX of 1950 only made explicit what was not so in the Act as originally passed, and are not such laws as come within the purview of cl.
(3) of article 31 inasmuch as those Acts are merely an extension or explanatory of the substantive Act which is an existing ,law within the meaning of the Constitution.
Clause (3) (1) [1955] 1 S.C.R. 777.
91 730 of article 31 in terms applies to a law made by the legislature of a State, after the commencement of the Constitution; whereas the Act had been passed in its substantive form in April 1948.
Hence, there is no difficulty in holding that the Act which was good law before the commencement of the Constitution did not become void under article 13 of the Constitution, because there was nothing in the Act which was inconsistent with the provisions of Part III of the Constitution.
If the Act was good law after the commencement of the Constitution, it follows that the amendments aforesaid made in 1950, were equally good law, even though the assent of the President had not been obtained.
Secondly, the decision of this Court in The State of Bombay vs Bhanji Munji (1) (supra) itself has ruled to the contrary with reference to the provisions of article 31 (2).
We cannot, therefore, go back upon our decision in the case aforesaid.
On these considerations the petition under article
32 of the Constitution must fail on the ground that no fundamental rights of the petitioner as would entitle her to seek redress from this Court, have been contravened.
It remains to consider the other arguments advanced on behalf of the petitioner which have a bearing on the petition for special leave to appeal from the judgment of the Bombay High Court.
It has been contended that sections 5 and 6 of the Act quoted above and underlined by us have made certain matters conclusive, so that the High Court or even this Court could not go behind the order of the State Government holding that the tenant had not resided in the premises for a continuous period of six months immediately preceding the date of the order (section 5), or that the premises had become vacant in the month of October 1952, as stated in the Order impugned in this case.
It is contended that the legislature had, by making those provisions rendering those matters conclusively proved, impaired the powers of the High Court under article 226 and of this Court under article 32 of the Constitution.
Another branch of the argument is that the declaration of vacancy is dependent upon a collateral fact which has (1) [1955] 1 S.C.R. 777. 731 to be found by the Government on such enquiry as it may deem fit and proper and its conclusion on such a collateral fact could not be placed by the Act beyond scrutiny by the High Court or by this Court.
In this connection it was also argued that on the question of vacancy the finding of the State Government may be conclusive on the "factual aspect" but not on the "legal aspect" of the matter.
In other words, it was contended that it was still open to the courts to find whether the facts found constituted in law "vacancy" as defined in the Act.
In this connection strong reliance was placed on the following observations of the Judicial Committee of the Privy Council in the case of Hubli Electricity Co. Ltd. vs Province of Bombay(1) at pages 65 and 66: " The question what obligations are imposed on licensees by or under the Act is a question of law.
Their Lordships do not read the section as making the government the arbiter on the construction of the Act or as to the obligations it imposes.
Doubtless the government must, in expressing an opinion for the purpose of the section, also entertain a view as to the question of law.
But its view on law is not decisive.
If in arriving at a conclusion it appeared that the government had given effect to a wrong apprehension of the obligations imposed on the licensee by or under the Act the result would be that the Government had not expressed such an opinion as is referred to in the section.
" There are several answers to this contention.
In the first place, it is well settled that observations made with reference to the construction of one statute cannot be applied with reference to the provisions of another statute which is not in pari materia with the statute which forms the subject matter of the previous decision.
The Judicial Committee was dealing with the provisions of section 4(1) of the , which did not contain the words "conclusive evidence" or any words to that effect.
That decision of the Judicial Committee, if it can at all be applied to the Act now before us, is against the petitioner in so far as (1) [1948] L.R. 76 I.A. 57.
732 it has construed the words "opinion of the Provincial Government".
Those words or words of similar import appear in the beginning of section 5.
In the words of the Judicial Committee, those words signify the subjective opinion of the Government and not an opinion subject to objective tests.
The observations quoted above only show that on a proper construction of the provisions of the statute then before the Judicial Committee, the opinion of the Government, if it was made nonjusticiable, was confined to the question of whether there had been a willful and unreasonably prolonged default, but did not cover the question of the opinion of Government relating to the obligations imposed by the statute on the licensee, by or under the Act.
Hence those observations are absolutely of no assistance to the petitioner on the question of the full implication of the rule making certain matters "conclusive evidence" under the provisions of sections 5 and 6 of the Act.
This question appears to have been canvassed in a number of cases in the High Court of Bombay.
In the case of Jagatchandra vs Bombay Province( ') Tendolkar J. had ruled that the declaration made by the Government shall be conclusive evidence with regard to all facts involved in the determination of vacancy but that it was not conclusive with regard to the inferences to be drawn from or the legal consequences of such facts.
The correctness of that proposition was questioned in another case before another learned, Judge of that Court, Shah J., who referred it to be determined by a larger Bench.
Chagla C.J. and Gajendragadkar J. (now one of us) examined that question in some detail and overruled the decision of Tendolkar J. (Vide Mohsinali Mohomed Ali vs The State of Bombay(2).
The Bombay High Court in the last mentioned case held that on a declaration being made by the State Government that there was a vacancy, it was conclusive both as to the facts and the constituent elements of "vacancy", as understood under the Act.
The High Court relied in this connection on the observations of the Judicial (1) A.I.R. 1950 Bom.
(2) [1951] 53 Bom.
L.R. 94; A.I.R. 1951 Bom, 303.
733 Committee of the Privy Council in Moosa Goolam Ari vs Ebrahim Goolam Ariff(1) and of Lord Cairns in Peel 's case(2), and of Lord Parker of Waddington in Bowan vs Secular Society Ltd.(3).
In this connection the learned counsel for the petitioner also pressed in aid of his argument the well known distinction between the jurisdiction of a court or authority to decide a certain fact as one of the issues in the controversy and certain collateral facts on which the jurisdiction to determine the controversy could arise.
It was argued that the finding on the question of vacancy by the State Government was a "jurisdictional fact" in the sense that unless it was found that there was a vacancy, the jurisdiction of the State Government to make the declaration and to requisition the permises could not arise.
This aspect of the matter has been considered by this Court in the case of Rai Brij Raj Krishna vs section K. Shau & Brothers(4).
That case concerned the construction of the provisions of the Bihar Buildings (Lease, Rent and Eviction) Control Act (Bihar Act 111) of 1947.
This Court held that, the Controller had been vested with the jurisdiction to determine all questions including the question whether or not there was non payment of rent and on finding that there was default in the payment of rent, with the jurisdiction to order eviction of the tenant.
The finding of the question of default was not a jurisdictional finding in the sense in which learned counsel for the petitioner asks us to hold with reference to the finding of the State Government in this case that there has been a vacancy.
In the reported case this Court held further that even if the Controller had wrongly decided the question of default in the payment of rent, his effective order oil the question of eviction could not be challenged in a court of law.
Mr. Justice Fazl Ali delivering the judgment of the court made reference to the well known observations of Lord Esher, M.R. in the case of Queen vs Commisssioners for Special Purposes of the Income tax(") and to (1) [1912] L.R 39 I.A. 237.
(2) (3) (4) ; (5) , 319.
734 the observations of the Privy Council in the case of the Colonial Bank of Australasia vs Willan(1).
After referring to those observations and to the provisions of the statute then before the Court, this Court held that the Act empowered the Controller alone to decide whether or not there was 'non payment of rent and that decision was essential to his order for eviction of the tenant under section 11.
That decision of the Controller, the Court further held, could not be challenged in a court of law.
The decision of this Court just referred to is an apt illustration of the rule which applies with equal force to the provisions of the Act now before us.
The Act has made a specific provision to the effect that the determination on the questions referred to in sections 5 and 6 of the Act by the State Government shall be conclusive evidence of the declaration so made.
But that does not mean that the jurisdiction of the High Court under article 226 or of this Court under article 32 or on appeal has been impaired.
In a proper case the High Court or this Court in the exercise of its special jurisdiction under the Constitution has the power to determine how far the provisions of the statute have or have not been complied with.
But the special powers aforesaid of this Court or of the High Court cannot extend to reopening a finding by the State Government under section 5 of the Act that the tenant has not actually resided in the premises for a continuous period of six months immediately preceding the date of the order or under section 6 that the premises bad become vacant at about the time indicated in the order impugned.
Those are not collateral matters which could on proper evidence be reopened by the courts.
of law.
The legislature in its wisdom has made those declarations conclusive and it is not for this Court to question that wisdom.
As an offshoot of the argument that we have just been examining it was contended on behalf of the petitioner that Explanation (a) to section 6 quoted above contemplates a vacancy when a tenant omitting other words not necessary) " ceases to be in occupation upon (1) [1874]5 P.C. 417,443.
735 termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises or otherwise ".
The argument proceeds further to the effect that in the instant case admittedly there was no termination, eviction, assignment or transfer and that the words " or otherwise " must be construed as ejusdem generis with the, words immediately preceding them: and that therefore on the facts as admitted even in the affidavit filed on behalf of the Government there was in law no vacancy.
In the first place, as already indicated, we cannot go behind the declaration made by the Government that there was a vacancy.
In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application.
The legislature has been cautious and thorough going enough to bar all avenues of escape by using the words " or otherwise ".
Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur.
Generally speaking, a tenant 's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant 's interest.
But the legislature, when it used the words " or otherwise ", apparently intended to cover other cases which may not come within the.
meaning of the preceding clauses, for example, a case where the tenant 's occupation has ceased as a result of trespass by a third party.
The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever.
Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the legislature used those words in an all inclusive sense.
No decided case of any court, holding that the words "or otherwise" have ever been used in the sense contended for on behalf of the petitioner, has been brought to our notice.
On the other hand, by way of illustration of decisions to the contrary may be cited the case of Skinner & Co. vs Shew & Co. (1).
In that case the Court of Appeal (1) [1893] 1 Ch.
D 4I3, 736 had to consider the words of section 32 of the Patents Designs & Trade Marks Act, 1883 (46 & 47 Vict.
c. 57), to the following effect: "Where any person claiming to be the patentee of any invention, by circulars, advertisements or otherwise threatens any other person With any legal proceedings. .
Their Lordships repelled the contention that the words "or otherwise" occurring in that section had to be read ejusdem generis with "circulars", and "advertisements".
They observed that by so doing they will be cutting down the intendment of the provisions of the statute when clearly the word,,; "or otherwise" had been used with a contrary intention.
The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense; that is to say, as belonging to the same genus as the particular and specific words.
Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it.
But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the courts to give those words their plain and ordinary meaning.
In our opinion, in the context of the object and mischief of the enactment there is no room for the application of the rule of ejusdem generis.
Hence it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise".
The only other contention which remains to be dealt with is that the order impugned in this case is not enforceable because it was directed against the petitioner 's husband, who was dead at the date of the order, besides the other two persons indicated in it who were not concerned with the premises.
In our opinion, there is no substance in this contention either.
An order like the one passed under section 6(4)(a) of the Act 737 is not in the nature of an order in judicial proceedings between the Government on the one hand and other parties named.
If the proceedings were intended by the Act in the sense of judicial or quasi judicial proceedings between named parties, it may have been legitimately argued that an order passed against a dead man is a complete nullity.
But the order proceeds on the basis that the tenant had ceased to be in occupation of the premises in October 1952, apparently by reason of the fact that he had handed over possession of the premises to the so called "lodger" or "paying guest".
Admittedly the petitioner 's husband died after October 1952.
The occupation by the said Narottamdas Dharamsey Patel was in the nature of an unauthorised occupation.
The fact that the petitioner 's husband was dead on the date of the order impugned has only this effect that in so far as it mentions his name as one of the persons to be served under section 13 of the Act should be erased from the order But even so, it does not affect the enforceability of the same.
section 13 lays down the different modes of service of an order passed under the Act according as the order is of a general nature or affecting a class of persons or an individual, corporation or firm.
We are here concerned with the case of an individual and the section lays down that it can be served either personally by delivering or tendering the order to him or by post or where he cannot be found, by affixing a copy of the order to some conspicuous part of the premises in which he is known to have last resided.
As the petitioner 's husband had died before the date of the order impugned, it could affect only the so called "lodger" who had been, on the findings, left in occupation of the premises after October 1952.
He has not made any complaint about non service.
The only other person who could be affected by the order, if at all, is the petitioner herself.
She has admitted that she came to know of the order in question at about the time it had been made, because she found a copy of the order affixed at the outer door of the premises.
Thus admittedly, the petitioner had timely notice of 95 738 the order impugned.
Hence in the instant case there is no need to apply the rule of conclusive proof as laid down in sub section
(2) of section 13.
In any event, as the concluding words of the section have provided, any irregularity or failure to comply with the requirements of the section cannot "affect the validity of the order".
As all the grounds urged in support of the petitions fail, they are dismissed with costs, one set.
Petitions dismiss`ed.

dataset_name: IN-Abs

summary/full:
By these two petitions, the petitioner challenged the constitutional validity of the Bombay Land Requisition Act, 1948, as amended by the two amending Acts of 1950, and the enforceability of an order of requisition made by the Governor of Bombay under section 6 (4) (a) of the Act.
The petitioner as the widow of the tenant claimed to be in possession, while the case made on behalf of the Government was that the tenant had before his death vacated the premises and handed over possession to a lodger.
A copy of the order of requisition was affixed to the premises and the petitioner moved the High Court for a writ of mandamus, but the petition was dismissed.
The Act was passed by the State Legislature on April 11, 1948, and by the first amending Act its life was extended for two years and by the second the words " the purpose of the State or any other public purpose" were substituted for the words ,,any purpose" occurring in section 5 of the Act with retrospective effect from the date of the Constitution.
The Act came up for consideration in a previous decision of this Court and arguments were confined to grounds other than those specifically covered by that decision.
It was contended on behalf of the petitioner that the Act was in conflict with article 3I (2) and became invalid at the commencement of the Constitution and the amending Acts, for which the assent of the President had admittedly not been obtained, were ineffective under article 31 (3) of the Constitution.
It was further contended that sections 5 and 6 of the Act which made the relevant findings of the Government conclusive had the effect of impairing the powers of the Court, that it was nevertheless open to the Court to judge whether the facts found constituted vacancy in law and, lastly that the order in question was ineffective as the tenant was dead on the date it was made.
Held, that the contentions raised on behalf of the petitioner must be negatived.
93 722 The constitutional validity of the Act was no longer open to question under articles 19 (1) (f) and 31 (2) of the Constitution in view of the decision of this Court in State of Bombay vs Bhanji Munji (1955) 1 S.C.R. 777.
The Act, which did not obviously come within the mischief of cl.
(6) of article 31, fell within the saving clause, cl. 5 (a), of the Article and was an existing law within the meaning of the Constitution and, therefore, valid at the commencement of the Constitution, although it did not contain the expression " for a public purpose " as required by cl.
(2) of the Article.
Clause (3) of the Article, which in terms applied to laws made after the commencement of the Constitution, had no application to the amending Acts which were in no way concerned with the main substantive provisions of the Act already passed, and the want of the President 's assent in no way affected their validity.
As the Act was valid at the commencement of the Constitution and continued to be so thereafter, not being in any way inconsistent with the provisions of Part III of the Constitution so as to attract the operation of article 13, the Amending Acts were equally valid in law.
Held further, that although in a proper case the High Court or this Court in the exercise of their special jurisdictions under the Constitution had power to determine how far the provisions of the Act had or had not been complied with, the finding of the State Government under section 5 Of the Act that the tenant had not actually resided in the premises for a continuous period of six months immediately preceding the date of the order,and that under s.6, the premises had become vacant at about the time indicated in the order, are conclusive and not collateral so as to be liable to be re opened and could not, therefore, be questioned either in this Court under article 32 or in the High Court under article 226 of the Constitution.
Rai Brij Raj Krishna vs section K. Shaw, ; applied.
Hubli Electricity Co. Ltd. vs Province of Bombay, (1948) L.R. 76 I.A. 57, held inapplicable.
Mohsinali Mohomed Ali vs The State of Bombay, (1951) 53 Bom.
L.R. 94: A.I.R. 1951 Bom.
303, referred to.
The words " or otherwise " occurring in explanation (a) to section 6 of the Act could not be construed as ejusdem generis with the words immediately preceding them and must be held to cover all possible cases of vacancy due to any reason whatsoever.
Skinner & Co. vs Shaw & Co., (I893) , referred to.
An order of requisition passed under section 6 (4) (a) of the Act was not of the nature of an order passed in a judicial proceeding and the death of one of the parties could not make it wholly ineffective, the only consequence being that his name as one of 723 the parties to be served under section 13 Of the Act must be removed from the order.


judgement:
Civil Appeals Nos.
2855 56 of 1982.
Appeals by special leave from the Judgment and Order dated the 9th April, 1982 of the Patna High Court in C.W.J.C. No. 3503/ 81 & 504 of 1982.
WITH Civil Appeals Nos.
2857 58 & 2859 60 of 1982 Appeals by Special leave from the Judgment and Order dated the 9th/10th February, 1982 of the Patna High Court in C.W.J.C. Nos. 1026/82,1855/81,1516/81(R), 1355/81(R).
, AND Special Leave Petition (Civil) No. 2904 of 1982.
From the Judgment and Order dated the 8th December, 1981 of the Patna High Court in Civil Writ Jurisdiction Case No. 1237 of 1981.
Dr. Shankar Ghosh, Parveen Kumar, Padam Khaitan, C.A. Vaidyanathan N.R. Khaitan for the Appellants in C.A. 2855 56/82.
62 A.K. Sen, Padam Khaitan, Parveen Kumar and N.R. Khaitan for the Appellants in C.A. Nos.
2857 58/82.
C.S. Vaidyanathan, Anil Kumar Sharma, and Mr. Parveen Kumar for the Appellants in CA.
2859 60/82.
K.K. Venugopal, C.S. Vaidyanathan for the Petitioner in SLP Nos. 2904/82.
L.N. Sinha, Att.
General, Ram Balak Mehto, Pramod Swaru and P.P. Singh for the Respondents in all the appeals & SLP.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
These appeals (by special leave) and the Special Leave Petition involve common questions concerning the validity of the supplementary bills issued to the appellants by the 1st respondent Bihar State Electricity Board for "fuel surcharge" as per the revised tariff dated 1st April, 1979, and hence they were heard together.
Having regard to the fact that by reason of interlocutory orders passed by this Court, the realisation of large amounts demanded from the appellants by the respondent by way of charges for electric energy supplied by it stood stayed and the consequent urgency in passing final orders in these cases, as soon as the hearing was completed we passed the following order announcing the conclusion reached by us: "All these Civil Appeals and Special Leave Petition are dismissed with costs in each case.
All interim orders made in each of these matters at various stages are vacated.
Reasons will follow".
We now proceed to state the reasons in support of the said conclusion.
The Bihar State Electricity Board hereinafter called 'the Board ') is incorporated under Section 12 of the (hereinafter referred to as 'the Act ').
The general powers and duties of the Board are set out in Section 18.
Thereunder the Board has the duty, inter alia, to arrange for the supply of electricity that may be required within the State and for the transmission and distribution of the same in the most efficient and economic manner, with particular reference to those areas which are not, for the time being, supplied or adequately supplied with electricity.
Section 49 of the Act makes provision for the sale of electricity by the Board to persons other than the licensees and to frame uniform 63 triffs for the purposes of such supply.
That section is in the following a terms: "49.
(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs.
(2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely : (a) the nature of the supply and the purposes for which it is required; (b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas.
(3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which such supply is required and any other relevant factors.
(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person.
" In exercise of the power conferred by the above section, the Board has been, from time to time, issuing notifications fixing the 64 tariff and the terms and conditions for the supply of electricity to the various classes of consumers.
In supersession of the, tariff rates till then obtaining under an earlier notification, the Board by its "tariff notification 1979" published in the Bihar Gazette Extraordinary No.355 dated 6.4.1979, issued a revised tariff for all categories of consumers served by it.
The said tariff was to take effect from 1st April, 1979.
The appellants are companies having factories in different parts of the State to Bihar and they have entered into agreements with the Board for supply of high tension electric current.
The agreements so executed are in a standard form containing substantially identical terms.
Annexure I in the Writ Petition C.W.J.C. No. 1855/81 out of which C.A. 28 58/82 arises in a copy of the agreement entered into by M/s Usha Martin Black (Wire Rods) Ltd. with the Board on 18.8.1961.
In clause 4 of the agreement, it is stipulated that the consumers shall pay to the supplier (Board for) the energy supplied and registered by the meters "at the rates from time to time in force and paid by similar consumers".
It has been further provided in clause 11 that the agreement should be read and construed as subject in all respects to the provisions of the and the rules for the time being in force there under.
After the introduction of the revised tariffs, 1979, all the appellants continued to draw and consume high tension electric energy in their factories.
Para 16.7 of the Tariff Notification, 1979, provides that the consumers of low tension industrial service, high tension service, extra high tension service, and railway traction service shall be liable to pay 'fuel surcharge ' at a rate to be determined every year In accordance with the formula set out in sub para (2) of the said paragraph (16.7.2).
This levy of fuel surcharge was in addition to the other charges specified in the tariff schedule.
During the course of the year 1979, fuel surcharge a provisional rate of one paise per unit was initially levied and that was subsequently increased to three paise per unit, again on a provisional basis.
In the final bills issued for the financial year 1979 80 the fuel surcharge was levied at 6.242 paise per unit.
Along with the final bill of fuel surcharge for the year 1979 80, a provisional bill of fuel surcharge for the year 1980 81 was also issued to the appellant companies demanding payment of surcharge at the rate of eight paise per unit 65 Thereupon the appellants filed Writ Petitions in the High Court of Patna contending that the provision contained in Paragraph 16.7 in the Tariff Notification of 1979 for the levy fuel surcharge is devoid of legal sanction and is arbitrary and void.
The charge of arbitrariness levelled against the imposition of fuel surcharge was based on the ground that only consumers of low tension industrial service, high tension service, extra high tension service, and railway traction service had been singled out for being subjected to a levy of surcharge, while consumers of electricity for domestic, commercial and irrigation purposes were left unaffected by any such burden.
A further contention was also raised that the bills issued to the petitioners were not even in accordance with the provisions of the tariff notification and the demands made against the appellants were in excess of what was warranted even by the impugned notification.
Eight writ petitions, of which C.W.J.C. 1237 of 1981, filed by M/s Shriram Bearings Ltd., Ranchi (Petitioner in SLP No. 2904/1982) was apparently treated by common consent as the main case, and were heard together as one single batch by a Division Bench of the High Court.
By a detailed and well considered judgment, the Division Bench rejected all the contentions raised by the petitioners and dismissed the Writ Petitions after recording an undertaking given by the Board that certain small amounts which were found to have been charged in the bills in excess of what was payable by the appellants on a correct computation of the surcharge would be adjusted in the next bills to be issued to them.
Writ Petitions subsequently filed in the High Court by the appellants in the other appeals were later dismissed in limine by separate short judgments, following the decision of the Divisional Bench in C.W.J.C. 1237 of 1981.
Hence these appeals and special leave petitions by the appellant companies.
At the outset, we may dispose of the contention urged on behalf of some of the appellants that the levy of fuel surcharge under the impugned tariff notification (paragraph 16.7) is discriminatory and hence violative of Article 14 of the Constitution.
Sub section 3 of Section 49 expressly authorises the Board to fix different tariffs for the supply of electricity to any person not being a licensee, having regard, inter alia, to the nature of the supply, the purpose for which the supply is required and other relevant factors.
The power to classify the consumers into different into categories and to fix differen 66 tial tariffs has thus been conferred on the Board by the Section itself.
The Constitutional validity of this Section has been upheld by this Court in Maharashtra State Electricity Board vs Kalyan Borough Municipality & Another( ').
The expression "licensee" means a person licensed under Part II of the , to supply energy or a person who has obtained licence under Section 28 of that Act to engage in the business of supplying energy through definition in Section 2 (6).
Admittedly, the appellants before us are not licensees.
They are consumers receiving high tension supply to their factories.
For the purpose of tariff fixation, the Board has classified the consumers into 10 categories, viz. "domestic", "commercial (i)", commercial (ii)", "street light", "irrigation", "light tension industrial" (small scale industrial upto 100 h.p.),"11 k.v. h.t.s.", "33 k.v.h.t.s.", "132 k.v. h.t.s." and "railway traction (25 k.v.)".
It is seen from the materials on record for us that the industries between themselves consume nearly 65% of the total quantity of energy supplied by the Board.
Apparently with a view to encouraging the establishment of industries in the State, the general tariff rate applicable in respect of high tension supply to industries and factories has been fixed at rates which are much lower when compared to those applicable to other types of consumers.
While the general rate applicable for supply of high tension electric energy for industries of the class to which the appellants belong was 22 paise per unit, consumers belonging to "commercial" categories were charged at rates ranging between 48 paise to 58 paise per unit, "agricultural" consumers at 29 paise per unit, "low tension" consumers at 34 to 38 paise per unit and "domestic" consumers at rates ranging between 38 to 43 paise per unit.
Thus, in the fixation of the general tariff rate, a substantial concession has been shown in favour of industrial low tension and high tension consumers.
The appellants have no case that any illegality was involved in treating the industrial consumers, as a separate class and granting them the benefit of a preferential treatment for the purpose of fixing the basic rate of levy for supply of electricity.
The stand taken by the Board is that it was found absolutely necessary at the time of the revised tariff fixation effected in 1979 to augment its revenue by levying of the additional fuel surcharge in order to offset the heavy increase in expenditure and after taking into account all relevant facts and circumstances, it was decided to distribute that burden amongst the privileged class of 67 consumers, namely those belonging to categories of low tension industrial service, high tension service, extra high tension service and railway traction service.
Even after taking into account the fuel surcharge so levied under 1979 tariff, the rates applicable to high tension consumers like the petitioners range between 40.31 paise and 58.80 paise per unit only, while the commercial (ii) consumer has to pay 71.33 paise per unit and even the domestic consumer has to pay 48 paise per unit.
The position that obtains under the 1981 tariff which also has been challenged by some of the appellants is substantially similar.
In our opinion, the Board was perfectly within its rights in deciding to restrict the levy of fuel surcharge to those categories of consumers who were enjoying the benefit of a concession in the general rate and in sparing smaller type of consumers such as the agricultural, irrigation and commercial consumers from being subjected to that burden, in view of the fact that they were already being subjected to a basic levy at substantially higher rates.
The true consequence of the action so taken by the Board is only to effect a reduction in the quantum of concession that was being enjoyed by the consumers belonging to the industrial and railway traction categories.
A classification which is legally valid and permissible for the grant of a concession in the basic rates will equally hold good for the purpose of a subsequent scheme of distribution of the burden in the form of fuel surcharge.
In this context, it is also relevant to remember that the levy of surcharge was necessitated by reason of the extra expenditure which the Board had to incur in the generation of electricity in the two power stations run by the Board and in the purchase of power from the two outside sources, namely, the D.V.C. and the U.P. State Electricity Board and 65% of the total quantity of energy supplied by the Board is consumed by the industrial and railway traction consumers.
A classification of these bulk consumers has a rational nexus with the object and purposes of the levy of surcharge.
Having regard to all these facts and circumstances, we find no substance in the contention advanced by some of the appellants that the imposition of fuel surcharge under paragraph 16.7 of the 1979 tariff is arbitrary and violative of article 14 of the Constitution.
The next argument advanced on behalf of the appellants was that even if the Board is legally entitled to levy the fuel surcharge, that can only be for the purpose of recouping the amounts actually paid by the Board by way of 'fuel surcharge ' to the Damodar Valley Corporation and the U.P. State Electricity Board for the quantities of energy purchased by the Board from these sources and the extra cost 68 that the Board had actually to incur on fuel consumed in those two generating stations at Patratu and Barauni.
From the counter affidavit filed on behalf of the Board, it is seen that in respect of the increase in the cost of production of electricity in the two generating stations of the Board, the fuel surcharge has taken into account only that part of the increase in cost which is relatable to the increased price of the coal and oil i.e. fuel alone.
The increase in expenditure referable to the enhancement in cost of the energy generated on other accounts such as wages, maintenance, etc.
has not been taken into account in the fuel surcharge.
Such increase in cost of production on account of those other factors has been offset by a revision of the basic general tariff by 16.5 per cent payable not only by the industries but by all classes except the agriculturist class.
In respect of the energies purchased by the Board from outside sources, namely, the Damodar Valley Corporation and the U.P. State Electricity Board, the increase in cost per unit incurred by the Board has been included in the computation of the fuel surcharge.
We see no substance whatsoever in the contention advanced by the appellants that only such amounts, if any, as might have been paid by the Board to the D.V.C. and the U.P. State Electricity Board as and by way of fuel surcharge can go into the computation of the fuel surcharged levied by the Board under paragraph 16.7 of the 1979 tariff.
Though the nomenclature given to the levy is "fuel surcharge" it is really a surcharge levied to meet the increased cost of generation and purchase of electricity and this is made absolutely clear in the formula given in para 16.7.2.
The formula for determining the fuel surcharge set out in paragraph 16.7.2 reads: "S = [A1XA3+B1XB3+C1XC3+D1XD3+E1XE3/ [A2+B2+C2+D2+E2]".
This is followed by detailed explanation as to what the different alphabets used in the numerator and denominate or signify.
The explanation given in respect of C1 is "Increase in the average unit rate of purchase of energy from D.V.C. during the year for which the surcharge is to be calculated.
The said increase to be calculated with respect to the base year 1977 78.
" C3 stands for "units purchased from D.V.C. during the year".
Likewise, E1 and E3 have been explained as "Increase in the average unit rate of 69 purchase of energy from Uttar Pradesh State Electricity Board during the Year for which surcharge is to be calculated, the said increase to be calculated with respect to the base Year 1977 78" and "units purchased from Uttar Pradesh State Electricity Board" respectively.
We see no force in the contention put forward on behalf of some of the appellants that the words" increase in the average unit rate of purchase of energy" used in C1 below paragraph 16.7.2 should be interpreted as taking their colour from the contents of paragraph 16.7.3.
From a reading of these provisions it is abundantly clear that the entire increase in cost incurred in the purchase of energy from the D.V.C. and the U.P. State Electricity Board has to go into the computation of the surcharge leviable under paragraph 16.7.
The contention to the contrary advanced by the appellants is therefore, only to be rejected.
There is no ambiguity whatever in the words used in C1 so as to require us to take light from paragraph 16.7.3 for the purpose of understanding their scope and meaning.
It was strongly urged on behalf of the appellants that the provision in Cl for increase in the average rate of price of energy from the D.V.C. to be calculated with respect to the base year 1977 78 is arbitrary in as much as in fixing the basic tariff as per the 'impugned notification ' of 1979, the difference in cost between Year 1977 78 and the current Year 1979 80 has already been taken into account.
From the counter affidavit and the statements filed in the High Court on behalf of the respondent Board which form part of the record before us in these appeals, it is seen that only the fuel surcharge accrued during the Year 1977 78 had been merged while fixing the revised rates for energy and it was specifically mentioned in paragraph 2.5 of the resolution of the Board containing the proposals for the tariff revision, 1979, which the Board forwarded to the State Government that only the fuel surcharge that had accrued during 1977 78 was being merged in the revised tariff rates and that "the subsequent increase or decrease in the cost of fuel or the cost of imported energy will, therefore, reflect in the fuel surcharge hereafter".
Similar is the position with respect to the tariff revision effected in 1981.
Hence there is no factual foundation for the argument that there has been a double neutralisation of the increase in the fuel surcharge in respect of the energy purchased by the Board from outside sources.
Paragraph 16.7.4 of the tariff notification states that the fuel surcharge for a financial year shall be calculated by the Board after 70 the expiry of the financial year and until such calculation is actually made, fuel surcharge may be levied during each financial year at a rate provisionally calculated on monthly or quarterly or half yearly basis as decided by the Board, and in case of short or excess realisation, the same is to be adjusted in the next bill to be served on the consumer.
Based on these provisions, it was faintly argued on behalf of some of the appellants that the Board was under an obligation to issue provisional bills in respect of fuel surcharge during the course of each financial Year and on account of its failure to do so, the appellants were unable to include the said element in their price structure in respect of cement, paper and vanaspati produced in the factories of some of the appellants.
This contention has to be rejected for two reasons: firstly, the provision contained in the aforesaid paragraph of the notification is purely an enabling one and it dose not cast any mandatory obligation on the Board to issue any provisional bills for fuel surcharge, monthly, quarterly, or half yearly during the course of each financial year; secondly apart from merely putting forward such a plea in the course of arguments before us the appellants have not furnished any factual data as to how and in what manner they had fixed the price structure for the different products produced in the appellants ' factories.
Yet another point urged on behalf of the appellants was that under Section 49 of the Act, while exercising the power of framing uniform tariffs, the Board was under a duty to apply its mind to all relevant factors but there had been an omission to discharge the said mandatory duty inasmuch as the capacity of the concerned industry to pay for the energy at the rate proposed to be fixed, which is a highly relevant factor, had not been taken into account at all.
Clauses (a) to (d) of sub section 2 of Section 49 enumerated the various matters which the Board shall have regard to in fixing the uniform tariffs and the capacity of any particular industry to bear the energy charge at the proposed rate of levy is not included in the said enumeration.
Under the scheme of the tariff fixation incorporated in the section, the tariff is to be uniform subject to the classification of consumers into different categories Under sub section 3 of the said section, the classification of the consumers into such different categories is to be made only with reference to the nature of the supply, the purpose for which supply is required the geographical position of any area and other like relevant factors.
It is not contemplated by the said section or any of the other provisions of the Act that as amongst 71 consumers falling within a specified category different rates are to be charged depending upon the financial capacity of the particular consumer to pay.
On the other hand, the very core of the scheme of Section 49 is that the tariff should be uniform in respect of each class or category.
Hence the attack levelled against the tariff fixation on the aforesaid ground, that a relevant factor, namely, that the financial capacity of individual industrial consumers had not been taken into account, is devoid of force.
The appellants in some of the appeals have challenged the subsequent tariff fixation of 1981 also on grounds that are substantially the same as those which we have dealt with above.
For the reasons already indicated by us, none of those grounds can be accepted as correct or tenable.
It was urged on behalf of the appellants that the supply of electricity being a monopoly service conducted by an agency of the State, namely, the Board, it must be carried out reasonably and not arbitrarily, that such reasonableness should be reflected in the price fixation and if the prices fixed are arbitrary, they are liable to be called in question before the Courts on the said ground.
In support of the above contention, reliance was placed by counsel for the appellants on the decisions of this Court in Akadasi Padhan vs State of Orissa(1), Rashbihari Panda, etc.
vs State of Orissa,(2) Vrajlal Manilal & Co. & Ors.
vs State of Madhya Pradesh & Ors.
,(3) Ramana Dayaram Shetty vs The international Airport Authority of India and Ors.(4) It is well established that where a corporation is an instrumentality or an agency of Government it would, in the exercise of its powers and function, be subject to the same Constitutional or Public Law limitations as apply to the Government and the principle of law inhibiting arbitrary action by Government would apply equally where such a corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and enter into relationship with any person in any manner it likes according to its sweet will.
The acts of such a corporation must be in conformity with some principle which meets the test of reasonableness and relevance.
In the case before us, the appellants have totally failed to establish that the rates specified in the impugned tariff notifications of 1979 and 1981 are arbitrary and unreasonable.
72 Section 59 of the Act as it now stands after the amendment of 1978 is in the following terms: "59.
(1) The Board shall, after taking credit for any subvention from the State Government under section 63, carry on its operations under this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus, as the State Government may, from time to time, specify.
(2) In specifying the surplus under sub section (1), the State Government shall have due regarding to the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave.
(a) reasonable sum to contribute towards the cost of capital works; and (b) where in respect of the Board, a notification has been issued under sub section (1) of section 12A, a reasonable sum by way of return on the capital provided by the State Government under Sub section (3) of that section and the amount of the loans (if any) converted by the State Government into capital under sub section (1) of section 66A." Under the above provision, the Board is under a statutory obligation to carry on its operations and adjust its tariffs in such a way as to ensure that the total revenues earned in any year of account shall, after meeting all expenses properly chargeable to revenue, leave such surplus as the State Government may, from time to time, specify.
The tariff fixation has, therefore, to be so made as to raise sufficient revenue which will not merely avoid any net loss being incurred during the financial year but will ensure a profit being earned, the rate of minimum profit to be earned being such as may be specified by the State Government.
The learned Attorney General appearing on behalf of the Board has placed before us tabulated statements showing the working results (financial) of the Board in the years subsequent to 1977 78.
It is found therefrom that the net 73 result of the Board 's working in each of the year 1978 79 to 1981 82 was a substantial deficit or loss.
The deficit in 1978 79 was Rs. 15.31 crores, in 1979 80 Rs. 10.21 crores, in 1980 81 Rs. 32.69 crores and in 1981 82 Rs. 18.60 crores.
The statement also shows that the revenue earned per unit of electric energy sold was much lower than the actual cost of production incurred by the Board per unit.
The cost of production per unit in the four years aforementioned was 51.10 p., 65.10 p., 73.86 p., and 87.16 p. respectively, whereas the revenue per unit was only 3848 p., 47.17 p., 53.07 p., and 66.39 p. respectively.
It is thus found that notwithstanding has the mandatory provision contained in Section 69 the Act, the Board been selling energy at rates which are lower than of the actual cost incurred by it per unit of production.
Such being the factual situation, there is absolutely no basis for the contention urged on behalf of the appellants that the tariff fixation effected by the Board suffers from the voice of arbitrariness and is liable to be interfered with by the Court on the ground.
As pointed out by this Court in Prag Ice & Oil Mills and another vs Union of India, 1 in the ultimate analysis, the mechanics of price fixation is necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of persons, the processual basis of price fixation is to be accepted in the generality of cases as valid.
Some of the appellants have endeavored to persuade us to go into the minutest details of the mechanism of the tariff fixation effected by the Board in an endeavour to demonstrate in relation thereto that a factor here or a factor there which ought to have been taken into account has been ignored.
We have declined to go into those factors which are really in the nature of matters of price fixation policy and the Court will be exceeding its jurisdiction if it to embark upon a scrutiny of matters of this kind which are essentially in the domain of the executive to determine, subject, of course, to the Constitutional limitations.
The conclusion that emerges from the foregoing discussion is that the High Court was perfectly right in upholding the validity of the impugned tariff notifications of 1979 and 1981, and these appeals and the S.L.P. have only to be dismissed.
H.S.K. Petitions & Appeals Dismissed.

summary/full:
Section 49 of the provided for the sale of electricity by the electricity Board to any person not being a licensee and to frame uniform tariffs for the purposes of such supply having regard, inter alia, to the nature of the supply, the purpose for which the supply is required and other relevant factors, In exercise of the powers conferred by section 49 of the Act, the respondent Bihar State Electricity Board had classified the consumers into ten categories and had been, from time to time, issuing notifications fixing the tariff and the terms and conditions for the supply of electricity to those consumers.
With a view to encouraging the establishment of industries in the State, the general tariff rate applicable in respect of high tension supply to industries and factories had been fixed at rates which were much lower when compared to those applicable to other types of consumers.
On 6.4.1979 the respondent Board, in supersession of its earlier notification fixing the tariff, issued a notification revising the tariff for all categories of consumers served by it.
Para 16.7 of the said Tariff Notification provided that the consumers of low tension industrial service, high tension service, extra high tension service, and railway traction service shall be liable to pay fuel surcharge ' at a rate to be determined every year in accordance with the formula set out in sub para 2 of that paragraph.
The appellants who had entered into agreements with the respondent Board for the supply of high tension electric current for their factories and were admittedly not licensees, filed writ petitions in the High Court challenging the levy of fuel surcharge on the ground that it was arbitrary and devoid of legal sanction.
A Division Bench of the High Court dismissed the writ petitions.
Hence these appeals and special leave petitions.
The appellants ' charge of discrimination was based on the ground that only consumers of low tension industrial service high tension service, extra high tension service, and railway traction service had been singled out for being subjected to a levy of surcharge, while consumers of electricity for domestic, commercial and irrigation purposes were left unaffected by any such burden.
Dismissing the appeals and special leave petitions, ^ HELD; It is well established that where a corporation is an instrumentality or an agency of Government it would, in the exercise of its powers and function, 60 be subject to the same Constitutional or public law limitations as apply to the Government and the principle of law inhibiting arbitrary action by Government would apply equally where such a corporation is dealing with the public, whether by way of giving jobs or entering into relationship with any person in any manner it likes according to its sweet will.
The acts of such a corporation must be in conformity with some principle which meets the test of reasonableness and relevance.
[71 F H] The contention that the imposition of fuel surcharge under paragraph 16.7 of the 1979 tariff notification is arbitrary and violative of article 14 of the Constitution has no force.
The Board was perfectly within its rights in deciding to restrict the levy of fuel surcharge to those categories of consumers who were enjoying the benefit of a concession in the general rate and in sparing smaller type of consumers such as the agricultural irrigation and commercial consumers from being subjected to that burden, in view of the fact that they were already being subjected to a basic levy at substantially higher rates.
The true consequence of the action taken by the Board is only to effect a reduction in the quantum of concession that was being enjoyed by the consumers belonging to the industrial and railway traction categories.
The appellants had no case that any illegality was involved in treating the industrial consumers, as a separate class and granting them the benefit of a preferential treatment for the purpose of fixing the basic rate of levy for supply of electricity.
A classification which is legally valid and permissible for the grant of a concession in the basic rates will equally hold good for the purpose of a subsequent scheme of distribution of the burden in the form of fuel surcharge.
A classification of these bulk consumers has a rational nexus with the object and purposes of the levy of surcharge.
[65 G, 67 B D, 66 G, 67 D F] The argument that levy of fuel surcharge can only be for the purpose of recouping the amounts actually paid by the Board by way of 'fuel surcharge ' to the D.V.C. and the U.P. State Electricity Board for the quantities of energy purchased by the Board from these sources and the extra cost that the Board had actually to incur on fuel consumed in those two generating stations at Patratu and Barauni has no force.
From the counter affidavit filed on behalf of the Board, it is seen that in respect of the increase in the cost of production of electricity in the two generating stations of the Board, the fuel surcharge has taken into account only that part of the increase in cost which is relatable to the increased price of the coal and oil i.e. fuel alone.
In respect of the energies purchased by the Board from outside sources, namely, the Damodar Valley Corporation and the U.P. State Electricity Board, the increase in cost per unit incurred by the Board has been included in the computation of the fuel surcharge.
Though the nomenclature given to the levy is "fuel surcharge" it is really a surcharge levied to meet the increased cost of generation and purchase of electricity and this is made absolutely clearly in the formula given in para 16.7.2.
[67 H, 68 A F] There is no force in the contention that the words "increase in the average unit rate of purchase of energy" used in C1 below paragraph 16.7.2 should be interpreted as taking their colour from the contents of paragraph 16.7.3.
From a reading of these provisions it is abundantly clear that the entire increase in costs incurred in the purchase of energy from the D.V.C. and the U.P. State 61 Electricity Board has to go into the computation of the surcharge leviable under paragraph 16.7.
There is no ambiguity whatever in the words used in Cl so as to require the court to take light from paragraph 16.7.3 for the purpose of understanding their scope and meaning.
[69 B D] The contention that the financial capacity of individual industrial consumers had not been taken into account while fixing the revised tariff is devoid of force.
It is not contemplated by section 49 or any of the other provisions of the Act.
that as amongst consumers tailing within a specified category different rates are to be charged depending upon the financial capacity of the particular consumer to pay.
On the other hand, the very core of the scheme of section 49 is that the tariff should be uniform in respect of each class or category.
[70 H, 71 A B] It is found that notwithstanding the mandatory provision contained in s.59 of the Act obliging the Board to carry its operations and adjust its tariffs in such a way as to ensure that the total revenues earned in any year of amount shall, after meeting all expenses properly chargeable to revenue leave, such surplus as the State Government may, from time to time, specify, the Board has been selling energy at rates which are lower than the actual post insured by it per unit of production.
Such being the factual situation, there is absolutely no basis for the contention that the tariff fixation effected by the Board suffers from the vice of arbitrariness and is liable to be interfered with by the Court on that ground.
[73 B, 72 A C, 73 C]