judgement:
ition Nos.
3464 65, 5908 & 3231 of 1980.
(Under Article 32 of the Constitution) section N. Kacker, K. N. Bhatt and Surendara Raju for the Petitioners in W. P. Nos 3464 65/80 and 5908/80.
Soli J. Sorabjee, E. C. Agarwala, R. Satish and V. K. Pandita for the Petitioner in WP 3231,/80.
L. N. Sinha, Att.
and Altaf Ahmed for R. 1.
in WPs 3464 65/80.
Y. section Chitaley and Vineet Kumar for R. 14 in WP 3231/80 and for R. 2 in WPs 3464 65/80.
R. P. Bhatt and N. R. Chaudhary for R. 4 in WP 3464/80.
P. R. Mridul and Naunit Lal for R. 7 in WP 3231/80 and for R. 2 in WP 3464 65/80.
Anil Dev Singh and Ashok Grover for R. 15 in WP 3231/80 and R. 3 in WPs 3464 65/80.
section K. Bhattacharya and Suresh Sethi for R R. 6 and 12 in WP 3464 65/80.
Satish Vij for R. 15 in WP 3464 3465/80.
section Balakrishnan and section K. Bhattacharya for R. 16 in WP No. 3231/80.
The Judgment of the Court was delivered by BAHARUL ISLAM, J.
BY these writ petitions under Article 32 of the Constitution the petitioners have challenged the orders of the 843 first respondent (the State of Jammu and Kashmir) allotting quotas of resin to respondents.
According to the petitioners these orders denying similar treatment to them are arbitrary and violative of Article 14 of the Constitution of India.
The material facts in the four petitions are similar.
The industries of which the petitioners are partners are admittedly small scale industries for the manufacture of resin and turpentine oil.
The industries of the petitioners ' in Writ Petitions Nos.
3465 of 1980 and 3231 of 1980 were provisionally registered but revalidated for short periods.
The industry of the petitioner in Writ Petition No. 3464 of 1980 was provisionally registered, revalidation was applied for but was not granted.
The industry of the petitioner in Writ Petition No. 5908 of 1980 was formally registered.
It appears that the petitioners were applying to the Government for allotment of resin as well as raw material for their industries but the Government referring to their policy decision of March 20, 1978 refused to make any allotment of Oleo resin to them.
The petitioners in Writ Petition Nos.
3464 and 5908 of 1980 have alleged that they purchased raw material from the open market and somehow managed their industries to run for a certain period.
Resin is admittedly a forest product extracted from "Chir trees".
It has been alleged that only three States of India, namely, Himachal Pradesh, Uttar Pradesh and Jammu and Kashmir have Chir forests.
The petitioners have alleged that the State of Himachal Pradesh and Uttar Pradesh stopped selling resin for the last several years in view of establishment of factories in public and joint sectors and that the State of Jammu and Kashmir was selling resin by public auction.
Sometime after October 1978 the State of Jammu and Kashmir, it has been further alleged, virtually created monopoly in favour of three existing industrial units and committed to supply them about 17,000 M. T. of resin for long time to come.
There is a Public sector unit in Jammu which consumes about 3,000 tons of resin per year.
Several small scale industries, according to petitioners, were assured supply of resin even as late as 1979 notwithstanding the Government 's aforesaid industrial policy.
In such a situation, being unable to procure raw materials for their industries, the petitioners approached the relevant authorities including the Deputy Minister of Industry and the Chief Minister of Jammu and Kashmir for allotment of raw materials but to no avail.
(For the sake of convenience we shall hereinafter refer only to the respondents and Annexures in W. P. No. 3231 of 1980).
The petitioners further allege that while they were refused allotment of supply of raw materials, respondent No. 1 made allotments to respondents No. 4 to 16 (hereinafter called "allottee respondents") although most of them 844 were not even formally registered at the time of making the impugned orders of allotment.
The petitioners contend that in the circumstances they were adversely discriminated against while respondents Nos. 4 to 16 were favour ed and as such the impugned orders are liable to be struck down as , violative of Article 14 of the Constitution of India.
The impugned orders have been annexed as Annexures N to Z 1.
The letter of allotment (Annexure 'X ') in favour of M/s. Sud Pine Industries (respondent No. 27) is in the following terms: "Sub: Supply of resin to M/s. Sud Pine Industries Kunwani for their factory at Talab Jammu.
Government Order No. 175 DIC/1980 dated 30 5 1980.
In partial modification of Government order No. 2.
DIC of 1979 dated 20 1 1979 sanction is accorded to the supply of crude (oleo) resin 700 tonnes per annum by the Forest Deptt.
to M/s. Sud Pine Industries for their factory at Kunjwani Talab Jammu on the terms and conditions specified in the above said order.
The supply of resin shall be subject to its being reviewed by the Government with due regards to its availability from year to year.
By order of the Govt.
of J & K. Sd/ (Sheikh Ghulam Rasool) Secretary to Government.
" The orders as per annexures L to W in favour of respondents 17 to 26 are identical in material parts.
It will be sufficient if the material portion of Annexure N is quoted.
It runs thus.
"Sanction is accorded to the supply of crude (oleo) resin by the Forest Department to M/s. Kashmir R & T Works, Srinagar, for their factory at Srinagar, subject to the terms and conditions of the agreement to be entered into between the Forest Department and the party and on the following specific conditions: 1.
The Forest Department will supply Crude (oleo) resin @ 700 TPA to the firm from the date the Unit is formally registered subject to its being reviewed with due regard to its availability from year to year; 845 2.
The resin will be supplied @ Rs. 320/ per quintal, unless otherwise reviewed on year to year basis.
The cost of empty tin will be charged @ Rs. 5/ per tin in addition to the above rate; 4.
By order of the Government at Jammu and Kashmir.
Sd/ Sheikh Ghulam Rasool Secretary to Government." (emphasis added) 5.
It is obvious that the industries of these respondents were not formally registered at the time of the impugned orders of allotment.
The State of Jammu and Kashmir (Respondent No. 1) have filed a counter affidavit.
They have not denied the material allegations of the petitioners but they say that the allocations have been made in order to implement the industrial policy of the State Government as enunciated in a "Report of the Development Review Committee, Jammu and Kashmir" a committee headed by Shri L. K. Jha, the Governor of the State.
Respondent No. 1 has quoted from the report the 'Goals ' of the industrial policy which read: "The balanced economic development of the State will obviously, be one of the foremost concerns of the Government.
They would like to emphasis maximum self sufficiency and self reliance consistently with the need to promote the requisite and desirable degree of inter dependence with other parts of the country. 'The objective will be to secure the most prudent and beneficial utilization of the natural resources and skills peculiar to this State; to achieve the maximum possible F rate of economic growth, consistently with the need to secure a degree of balanced regional development as well as balance between the rural areas and the urban, to maximise State per capita income, and to generate the maximum employment potential.
Many areas of the State are as cut off, isolated and poor as they were at the dawn of independence.
We have to improve the living standards in these specially backward areas for whom in terms of the quickest mode of transportation, Srinagar is more distant than the State is from Kerala.
Many sections of the community similarly, like Scheduled Castes; Gujarat and Bakarwalas and other backward class need to be assisted in their speedy uplift.
846 Ladakh needs a visible acceleration of the tempo of its development so that our people in this far flung and difficult frontier area can realise the full fruits of development in the shortest possible time.
" Respondent No. 1 has given the district wise break up of the applications received from different regions.
It is as follows: Jammu 63 Udaypur 10 Rajouri 1 Poonch 1 Doda 1 Kathua 9 Anantnag 2 Srinagar 11 Outsiders 12 GRAND TOTAL 110 Applications They have also shown the allotments of resin districtwise.
The industries of the respondents No. 4 to 16 are also small scale industries.
The break up of the small scale industries as given in Annexure R.II (in W.P. No. 3464) shows that Jammu has the largest number of units namely, 10, Second comes Srinagar with 4, then come Udampur with 3, Kathua (in Jammu Division), Anantnag and Baramulla (in Kashmir Division), with one each.
Rajouri in Jammu Division has none.
It appears that the industries of the present applicants are also in the Jammu region and those of respondents No. 4 to 16 also appear to have been located in the Jammu region.
In their affidavit at para 3 respondent No. 1 has stated that all the applications for allocation of resin were considered from time to time at various levels by the State Government and it was decided on May 30, 1980 as follows: (a) The allotment of resin to the existing unit should be rationalised; (b) Applications received from various districts be considered for allotment of resin.
The State Government have submitted that they made no promise of supply of raw material in favour of any of the petitioners.
The petitioners have submitted, in our opinion, correctly, that as there were already 10 units functioning in small scale sector in the Jammu region and inasmuch as the allottee respondents ' industries were also located in the Jammu region, allocations in their favour would be inconsistent with the Government 's industrial policy.
847 7.
In the instant case, respondent No. 1 as well as the other parties has taken reliance on their industrial policy statement as stated above.
We have already quoted the relevant portions of the State Industrial policy statement.
The Government have stated that they have considered all the 110 applications including those of the petitioners coming from industrialists of different parts of the country.
They have stated, and their statement is corroborated by the documents, that there is preponderance of industries in the Jammu region and industries of the petitioners as well as respondents No. 4 to 16 were also functioning in the same region.
Respondent No. 1 has not explained as to how and on what basis, if any, the allotments were made by the impugned orders in favour of the new allottees whose industries were located in the Jammu region.
Pawan Kumar Sharma, the petitioner in W.P. No. 3231 of 1980 states that his industry was provisionally registered under the Provisional Registration Certificate dated 29 1 1976.
It was further extended for further short periods.
He says that as there was assurance from the authorities that raw materials will be allotted to him after he completed the installation of requisite machinery.
The J. K. Resin and Turpentine Industries of petitioner Om Prakash Sud, was provisionally registered in the year 1975.
He was also approaching the Government from time to time to get allotment of the raw materials but got no favourable reaction from the Government.
He states that he had already established his factory and got it insured for a sum of Rs. 6.80 lakhs.
He obtained raw material from the open market and was running his industry.
Petitioner, Ravindra Dutt of M/s. Dinesh Resin and Turpentines in W.P. No. 3465 of 1980 alleges that his industry was provisionally registered on 25 10 1975 which was extended upto April, 1979.
Letter of 31st May, 1979 shows that his industry was later on formally registered as a small unit.
This factory was producing resin and turpentine out of the resin which he purchased from open auction He was approaching the Government from time to time to get requisite quantity of raw materials but failed to get it.
Petitioner, Shamlal Kapoor, Director of Jammu Resin Enterprises Private Limited, alleges that his industry was formally registered with the Government of J & K.
He alleges that his industry was functioning for a long time and trying to get necessary quota of raw materials from respondent No. 1.
He was approaching the Government to get requisite quota.
Sud Pine Industries, was provisionally registered on 10 3 1978 and formally registered on 10 10 1978.
It appears from Annexure N, in respect of respondent M/s Kashmir R & T Works 848 (respondent No. 17), Annexure O in respect of M/s. Sun Shine R & T Industries (respondent No. 18), Annexure P in respect of M/s. Woolan Paints and Chemicals Scopore (respondent No. 19) Annexure Q in respect of M/s. Pine Wood Products Company (respondent No. 20), Annexure R in respect of M/s. Haji Mast Ali Slaria (respondent No. 21), Annexure S in respect of M/s. Phyto Chemicals (respondent No. n 22), Annexure T in respect of M/s. New Himalayan Paints and Chemicals (respondent No. 23), Annexure U in respect of M/s. section K. Chemical (respondent No. 24), Annexure V in respect of M/s. Rajindra R & T (respondent No. 25) and Annexure W in respect of M/s. Bharat Paints and Chemicals (respondent No. 26) that the allotments were made in their favour "from the date the unit is formally registered" which shows that industries were not even registered at the time of the impugned orders of this allotment.
Respondent M/s. Rajindra R & T Industries, Udhampur, appears to stand on a different footing.
He appears to have fulfilled all the conditions required for allocation of resin in accordance with the policy of the State of J & K. The industry is an experienced one and the factory started production of resin and turpentine at Hoshiarpur since 1948.
It is a firm registered under the Indian Partnership Act and has long experience in the business including resin and turpentine since 1948.
The industry set up a factory in 1970 in the rural industrial estate near Udhampur which is a backward area.
The industry was provisionally registered in 1970 and formal registration was granted on 29 2 1974.
It applied for adequate quantities of raw materials and was allotted only 200 tons although it had been sanctioned 1500 per ton per annum since 1975.
Respondent M/s. Sud Pine Industries, M/s. Kashmir R & T Works, Bakshi Resin & Turpentine and M/s. K. C. Soni Bakshi also appear to be on different footings.
It appears from Annexures 'X ' and 'Y ' that the first two industries have already been formally registered.
They are existing units having already started production.
So far as respondent M/s Bakshi Resin and Turpentine is concerned, it had already set up factory and started production.
It was provisionally registered as early as 1976 and the unit is located in a backward area.
So far as respondent K. C. Soni Resin & Turpentine is concerned, it was formally registered on 19 4 79.
This unit is located in a remote backward area of the State.
"Equality before the Law" or "equal protection of the laws" within the meaning of Article 14 of the Constitution of India means absence of any arbitrary discrimination by the law or in their administration.
No undue favour to one or hostile discrimination to another should be shown.
A classification is reasonable when it is not an arbitrary selection but rests on differences pertinent to the subject 849 in respect of which the classification is made.
The classification permissible must be based on some real and substantial distinction, a just and reasonable relation to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis. . (See State of West Bengal vs Anwar Ali.
The classification must not be arbitrary but be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out.
Those qualities or characteristics must have a reasonable relation to the object of the law.
In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others, and (2) that differentia must have a rational relation to the object sought to be achieved by the Act.
The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them.
We are not unaware that the rule of equality does not mean mathematical equality and that it permits of practical inequalities.
But what is needed is that the selection of quota seekers as in the case in hand should have a rational relation to the object sought to be achieved in the industrial policy decision of the State.
If the selection or differentiation is arbitrary and lacks a rational basis it offends Article 14. 9.
In the instant case, although the State Government has taken reliance on the State Industrial Policy decision referred to above, they do not appear to have followed it in practice, except in the cases of the five respondents referred to above.
In fact no reasonable basis has been adopted in making the allotments in favour of the new allottees and denying allotments to the petitioners.
In the circumstances the petitions are partly allowed, the impugned orders of allotments except in favour of respondents, M/s Rajindra Resin and Turpentine Industries, M/s Sud Pine Industries, M/s Kashmir R & T Works, M/s Bakshi Resin & Turpentine and M/s K. C. Soni Resin & Turpentine are quashed.
The petitions are partly allowed.
The Rules are made absolute except as against these five respondents.
The respondent.
No. 1, the State of Jammu and Kashmir, is directed to make the other allotments of the raw materials to the applicants in the light of the observations made above.
Respondent No. 1 shall pay costs of Rs. 100.00 to each of the petitioners.
N.V.K. Petition partly allowed.

summary/full:
The petitioners in their writ petitions to this Court alleged that they were carrying on small scale industries for the manufacture of resin and turpentine oil and that they applied to the Government for allotment of resin for their industries but the Government referring to their policy decision of March 20, 1978 refused to make any allotment, and that they purchased raw material from the open market and managed to run their industries.
They further alleged that while they were refused allotment of supply of raw materials, the State, respondent No. I made allotments to respondent nos.
4 to 16 n although most of them were not even formally registered at the time of making the impugned orders of allotment and that they were consequently adversely discriminated against, while respondent nos.
4 to 16 were favoured and as such the impugned orders of allotment were liable to be struck down " violative of Article 14 of the Constitution of India.
The State, respondent No. 1 contested the writ petition, denied the material allegations of the petitioners and alleged that the allocations were made in conformity with the State Industrial Policy decision of securing the balanced economic and regional development of the State that there was a preponderance of industries in the Jammu Region, and that the industries of the petitioners as well as respondent nos.
4 to 16 were also functioning in that region.
Allotments of resin were made districtwise, 110 applications were received and considered and allotment was made to respondents nos.
4 to 16.
On the question whether the orders of the 1st respondent allotting quotas of resin to respondent nos.
4 to 16 were arbitrary and violative of Article 14 of The Constitution.
^ HELD : 1(i) Respondent No. 1 has not explained as to how and on what basis if any, the allotments were made by the impugned orders in favour of the new allottees respondent nos.
1 to 16 whose industries were located in the Jammu region.
[847 C] (ii) Although the State Government has taken reliance on the State Industrial Policy decision, it does not appear to have followed it in practice, except in the cases of five respondents.
No reasonable basis had been adopted in making the allotments in favour of the new allottees and denying the allotments to the petitioners.
[84913 F] 842 2.
The rule of equality does not mean mathematical equality.
It permits of practical inequalities.
What is needed is that the selection of quota seekers as in the instant case should have a rational relation lo the object sought lo be achieved in the industrial policy decision of the State.
If the selection or differentiation is arbitrary and lacks a rational basis it offends Article 14.
[849 D] 3.
"Equality before the Law" or "equal protection of the laws` ' within the meaning of Article 14 of the Constitution of India means absence of any arbitrary discrimination by the law or in their administration.
No undue favour to one or hostile discrimination to another should be shown.
A classification is reasonable when it is not an arbitrary selection but rests on differences pertinent to the subject in respect of which the classification is made.
The classification permissible must be based on some real and substantial distinction, a just and reasonable relation to the objects sought to be attained and cannot be made arbitrary and without any substantial basis.
[848 H 849 A] State of West Bengal vs Anwar Ali, [19521 SCR 284 referred to.


judgement:
Civil Appeal No. 3351 of 1979.
Appeal by Special Leave from the Judgment and Order dated 27 2 1979 of the Delhi High Court in Civil Writ No. 1139/78.
Abdul Khader, section P. Nayar and Miss A. Subhashini for the Appellant.
P. R. Mirdul and P. N. Gupta for Respondents 1 5.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The question for consideration in this appeal is whether the Delhi Development Authority is a 'local Authority ' whose employees are taken out of the purview of the , by Sec.
32(iv) of that Act, which provides that I nothing in the Act shall apply to employees employed by an establishment engaged in any industry carried on by or under the authority of any Department of the Central Government or State Government or 857 a Local Authority.
It appears that for about ten years prior to 197374 bonus was paid to the employees of the Delhi Development Authority but it was stopped thereafter on the advice of the Ministry of Law.
The employees questioned the stoppage of the payment of bonus by filing Civil Writ Petition No. 1139/79 in the Delhi High Court.
The High Court allowed the Writ Petition and the Union of India and the Delhi Development Authority have preferred this appeal, after obtaining special leave of this Court under article 136 of the Constitution.
The expression 'Local Authority ' is not defined in the payment of Bonus Act.
One must, therefore, turn to the General Clauses Act to ascertain the meaning of the expression.
S.3(31) defines Local Authority as follows: "Local Authority shall mean a Municipal Committee, District Board, Body of Port Commissioners or other authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund". 'Local Fund ' is again not defined in the General Clauses Act.
Though the expression appears to have received treatment in the Fundamental Rules and the Treasury Code, we refrain from borrowing the meaning attributed to the expression in those rules as it is not a sound rule of interpretation to seek the meaning of words used in an Act, in the definition clause of other statutes.
The definition of an expression in one Act must not be imported into another.
"It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone" (per Loreburn L.C. in Macbeth vs Chislett.
For the same reason we refrain from borrowing upon the definition of 'Local Authority ' in enactments such as the Cattle Trespass Act 1871 etc.
as the High Court has done.
Let us, therefore, concentrate and confine our attention and enquiry to the definition of 'Local Authority ' in Sec.3(3) of the General Clauses Act.
A proper and careful scrutiny of the language of Sec.3(31) suggests that an authority in order to be a local Authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissioners, possessing, therefore, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management.
Of a municipal or local fund.
What then are the distinctive attributes 858 and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies.
They must not be mere Governmental agencies but must be legally independent entities.
Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area.
Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them.
The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be.
Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services etc.
Broadly we may say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions.
Finally, they must have the power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes, rates, charges, or fees.
This may be in addition to moneys provided by Government or obtained by borrowing or otherwise.
What is essential is that control or management of the fund must vest in the authority.
In Municipal Corporation of Delhi vs Birla Cotton, Spinning & Weaving Mills Delhi & Anr., Hidayatullah, J., described some of the attributes of local bodies in this manner: "Local bodies are subordinate branches of governmental activity.
They are democratic institutions managed by the representatives of the people.
They function for public purposes and take away a part of the government affairs in local areas.
They are political sub divisions and agencies which exercise a part of State functions.
As they ale intended to carry on local self government the power of taxation is a necessary adjunct to their other powers.
They function under the supervision of the Government".
In Valjibhai Muljibhai Soneji and Anr.
vs The State of Bombay (Now Gujarat) & Ors.
one of the questions was 11 whether the State Trading Corporation was a local Authority as 859 defined by Sec. 3(31) of the .
It was held A that it was not, because it was not an authority legally entitled to or entrusted by the Government with, control or management of a local fund.
It was observed that though the Corporation was furnished with funds by the Government for commencing its business that would not make the funds of the Corporation 'local funds '.
Keeping in mind what we have said above, we may now take a close look at the provisions of the Delhi Development Act.
The Delhi Development Act, 1957, is 'an Act to provide for the development of Delhi according to plan and for matters ancillary thereto '.
The act extends to the whole of the Union Territory of Delhi.
2(d) defines "development" as meaning, with its grammatical variations "the carrying out of building, engineering, mining or other operations in, on, over or under land or the making of any material change in any building or land and includes redevelopment '. ' Sec.
3 empowers the Central Government to constitute an authority to be called the Delhi Development Authority.
The Authority is to be a body corporate having perpetual succession and a common seal, with the usual corporate attributes.
The authority is to consist of a chairman, a Vice Chairman and a certain number of official and nonofficial members.
The non official members are to include two representatives of the Municipal Corporation of Delhi to be elected by the Councillors and aldermen of the Municipal Corporation from among themselves and three representatives of the Metropolitan Council for the Union Territory of Delhi to be elected by the members of the Metropolitan Council from among themselves.
The objects of the authority as set out in Sec. 6 are "to promote and secure the development of Delhi according to plan" and for that purpose to "have the power to acquire, hold and dispose Of land and other property", and "to carry out building, engineering, mining and other operations, to execute works in connection with supply of water and electricity, disposal of sewage and other services and amenities and generally to do anything necessary or expedient for purposes of such development and for purposes incidental thereto".
Sec.7 requires the Authority to carry out a civic survey of, and prepare a master plan for, Delhi.
The master plan is to define various zones into which Delhi may be divided for the purposes of development and indicate the manner in which the land in each zone is proposed to be used (whether by the carrying out thereon of development or otherwise) and the stages by which any such development shall be carried out.
The master plan may also provide for any other matter which is necessary for the proper development of Delhi.
Sec.8 provides for the preparation of zonal development plans and Sec.8(2) prescribes what a zonal deve 860 lopment plan may contain or specify.
Sec.9 provides for the submission of all plans to the Central Government by the Authority for approval.
12 empowers the Central Government to declare any area in Delhi to be a 'development area ' for the purposes of the Act.
It further provides that after the commencement of the Act no development of land shall be undertaken or carried out, without the permission of the Authority, if the area is a development area, and without the approval or sanction of the local authority concerned if the area is an area other than a development area.
Sec.13 prescribes the procedure to be followed.
IT provides for a fee (to be prescribed by the Rules) to accompany every application to obtain permission under Sec.
empowers the Central Government to acquire any land which is required for the purpose of development or for any other purpose under the Act.
After acquiring the land the Central Government may transfer the land to the Authority or any local authority on payment by the Authority or the local authority of the compensation awarded under the Land Acquisition Act and all the charges incurred by the Government.
Thereafter, subject to any directions given by the Central Government the Authority or, as the case may be, the local authority concerned may dispose of the land, after or without undertaking or carrying out any development thereon, to such persons, in such manner any subject to such` terms and conditions as it considers expedient for securing the development of Delhi according to plan.
22 authorises the Central Government to place at the disposal of the Authority all or any developed and undeveloped lands in Delhi vested in the Union for the purpose of development in accordance with the provisions of the Act.
23 obliges the Authority to have and maintain its own fund to which are to be credited "(a) all moneys received by the Authority from the Central Government by way of grants, loans, advances or otherwise: (aa) all moneys received by the Authority from sources other than the Central Government by way of loans or debentures: (b) all fees and charges received by the Authority under this Act; (c) all moneys received by the Authority from the disposal of lands, buildings and other properties, movable and Immovable; and (d) all moneys received by the Authority by way of rents and profits or in any other manner or from any other source.
" 861 The fund is required by S.23(2) to be applied towards meeting the expenses incurred by the Authority in the administration of the Act and for no other purposes.
24 enjoins a duty on the authority to prepare a budget in respect of the financial year next ensuing showing the estimated receipts and expenditure.
Copies of the budget are to be forwarded to the Central Government.
25 requires the accounts of the Authority to be audited annually by the Comptroller and Auditor General of India.
26 requires the Authority to prepare a report of its activities and submit the same to the Central Government.
27 provides for the constitution of pension and Provident Funds.
28 empowers the authority to authorise any person to enter into or upon any land or building with or without assistance of workmen for the purposes specified in the Section.
Sec. 29 provides for penalties for persons undertaking or carrying out development in contravention of the master plan or zonal development plan or without permission, approval or sanction required by Sec.
provides for the making of an order of demolition of a building where development has been commenced or completed in contravention of the master plan, zonal plans or the permission, approval or sanction referred to in Sec.
enables the Authority to make an order requiring development to be discontinued where development has been commenced in contravention of the master plan or zonal development plan or without obtaining permission, approval or sanction as required by Sec.
33 provides that all fines realised in connection with prosecutions under the Act shall be paid to the Authority or, as the case may be, the local authority concerned.
36 empowers the Authority to require the local authority within whose local limits an area has been developed to assume responsibility for the maintenance of amenities which have been provided in the area by the Authority and for the provision of the amenities which have not been provided by the Authority.
37 empowers the Authority to levy upon the owner of a property or any person having an interest therein a betterment charge in respect of the increase in value of the property as a consequence of any development having been executed by the Authority in any development area or as a consequence of any area other than a development area having been benefited by the development, Sec.
38 provides for the assessment of betterment charge by the Authority and Sec.
39 provides for the settlement of betterment charges by Arbitrators to be appointed by the Central Government.
Sec.40(2) authorises the recovery of any arrear of betterment charge as an arrear of land revenue.
40A further provides that any money due to the Authority on account of fees or charges, or from the disposal of lands, buildings or other properties 862 to be recovered by the Authority as arrears of land revenue.
41 obliges the Authority to carry out such directions as may be issued to it from time to time by the Central Government.
42 requires the Authority to furnish reports, returns and other information to the Central Government as may be required from time to time.
46 provides for the authentication of permissions, orders, decisions, notices and other documents by the Secretary or any other officer authorised by the Authority in that behalf.
47 declares every member and every officer and other employee of the Authority to be a public servant within the meaning of Sec.
21 of the Indian Penal Code.
52 enables the Authority to delegate any power exercisable by it under the Act except the power to make regulations to such officer or local Authority as may be mentioned in the notification.
56 empowers the Central Government to make rules and Sec.
57 enables the Authority, with the previous approval of the Central Government to make regulations consistent with the Act and the rules made thereunder to carry out the purposes of the Act.
Every rule and every regulation made under the Act is required to be laid before each House of Parliament by Sec.
empowers the Central Government to dissolve the authority if it is satisfied that the purposes for which the authority was established have been substantially achieved so as to render unnecessary its continued existence.
We see that the Delhi Development Authority is constituted for the specific purpose of 'the development of Delhi according to plan '.
Planned development of towns is a Governmental function which is traditionally entrusted by the various Municipal Acts in different States to municipal bodies.
With growing specialisation, along with the growth of titanic metropolitan complexes, legislatures have felt the need for the creation of separate town planning or development authorities for individual cities.
The Delhi Development Authority is one such.
It is thus an authority, to which is entrusted by Statute a Governmental function ordinarily entrusted to municipal bodies.
An important feature of the entrustment of Governmental function is the power given to the Authority to make regulations (which are required to be laid before Parliament).
The power to make regulation is analogous to the power usually given to municipalities to frame bye laws.
The activities of the Authority are limited to the local area of the Union Territory of Delhi.
The High Court appears to have assumed that the Delhi Development Authority has extra territorial powers extending to peripheral areas in the adjoining States.
There is no basis in the Statute for the assumption made by the High Court.
863 There is then an element of popular representation in the constitution of the Authority.
Representatives of the inhabitants of the locality, three elected from among the members of the Delhi Municipal Corporation and two elected from among the members of the Delhi Metropolitan Council, figure among its members.
What of autonomy? The Master Plan and the Zonal plans prepared by the Authority have to be approved by the Central Government, the budget has to be forwarded to the Central Government, annual returns have to be submitted to the Government and the directions that the Central Government may give have to be carried out.
But within these bounds, the Authority enjoys a considerable degree of autonomy, as is seen from the summary of the provisions of the Act which has been set out by us.
The powers of the Central Government over the Delhi Development Authority are the usual supervisory powers which every State Government exercises over municipalities, district boards etc.
Such powers of supervision do not make the municipalities disautonomous and mere satellites.
We finally come to the important question whether the legislature has vested any power of taxation in the Authority.
One of the submissions of the learned counsel for the respondent was that the fund of the Authority, required to be maintained by Sec. 23 of the Delhi Development Act, was not a local fund as no part of it flowed directly from any taxing power vested in the Delhi Development Authority.
The submission of the learned counsel was that the fees collected under Sec.
12 of the Act and the charges levied under Sec.
37 of the Act did not part take the character of tax but were mere fees which were the quid pro quo for the services which were required to be performed by the Delhi Development Authority under the Act.
We were referred to Hingir Rampur Coal Co. Ltd. & Ors.
vs The State of Orissa & Ors.
We are unable to agree with the submission made on behalf of the respondents.
In the first place when it is said that one of the attributes of a local authority is the power to raise funds by the method of taxation, taxation is to be understood not in any fine and narrow sense as to include only those compulsory exactions of money imposed for public purpose and requiring no consideration to sustain it, but in a broad generic sense as to also include fees levied essentially for services rendered.
It is now well recognised that there is no generic difference between a tax and a fee; both are compulsory exactions of money by public authority.
In deciding the question whether an authority is a local authority, our concern is only to find out whether the public 864 authority is authorised by Statute to make a compulsory exaction of money and not with the further question whether the money so exacted is to be utilised for specific or general purposes.
In the second place the Delhi Development Authority is constituted for the sole purpose of the planned development of Delhi and no other purpose and there is a merger, as it were, of specific and general purposes.
The statutory situation is such that the distinction between tax and fee has withered away.
In the third place we see no reason to hold that the charge contemplated by Sec.
37 is a fee and not a tax.
The case cited: The Hingir Rampur Coal Co. Ltd. & Ors.
vs The State of Orissa & Ors., has no application.
That was a case where the Government was empowered to levy a cess for the purpose of the development of the mining areas in the State.
The cess levied was not to become a part of the consolidated fund and was not subject to an appropriation in that behalf; it went into the special fund earmarked for carrying out the purpose of the Act.
There was a definite correlation between the proposed services and the impost levied and it could e legitimately claimed that the rate payer in substance was compensating the State for the services rendered by it to him.
In the present case there is no consolidated fund and no separate development fund.
There is only one fund, the Fund of the Delhi Development Authority.
What is more important, nor is there any question of any co relation between the betterment charge and the expenditure incurred by the Authority in carrying out the purposes of the Act.
The charge is not levied on the basis of the expenditure incurred.
It is levied on the basis of the increase in the value of the property consequent on the development of the area; one may say the charge is on the accrued capital gain; it may bear no proportion whatsoever to the cost of development.
A submission of the learned counsel was that the Delhi Development Act itself referred in several places to local authorities as distinguished from Delhi Development Authority.
It is true that in Sections 12, 15, 30, 31, 34, 36, 42 and some other provisions we find a reference to 'local authority concerned ' meaning thereby the ordinary local authority functioning in the area discharging a multiplicity of civic functions.
The Delhi Municipal Corporation for example is one such local authority.
The Delhi Development Authority is constituted for performing one of the several functions which a local authority may perform.
That the local authorities performing other functions are referred to as 'local authorities ' in the Act by which the Delhi Development Authority is created, while the Delhi Development Authority is referred to as the Authority, is no ground for holding 865 that the Delhi Development Authority is not a 'local authority ' as defined by Sec.3(31) of the .
The Delhi Development Authority is endowed with all the usual attributes and characteristics of a 'local authority ' and there is no reason to hold that it is not a 'local authority '.
Another submission of the learned counsel which was pressed upon us was that every statute dealing with municipalities and providing for their supersession and/or dissolution invariably provided for reconstitution of the municipality after a stipulated period whereas dissolution in the case of the Delhi Development Authority meant a complete extinction of the authority since the Act did not provide for its reconstitution.
Our attention was drawn to the municipalities Acts of various States.
We are unable to see the force of the submission.
The very nature of the work entrusted by the legislature to the development authority is such that its life can be but transient.
When the work is accomplished and there is no need for its continued existence it is dissolved and its life becomes extinct.
It is by what it is during its life and not by the consideration whether there is life after death and whether it can have many lives, that we determine whether the Delhi Development Authority is a local authority as defined in S.3(31) of the .
On a consideration of all the aspects of the matter placed before us we are of the opinion that the Delhi Development Auhority is a Local Authority and therefore, the provision of the are not attracted.
The result, therefore, is that the appeal is allowed and the Writ Petition filed in the High Court is dismissed.
However, we do wish to observe that the Delhi Development Authority may not only be a model for development activities but may strive to be a model employer too.
Bonus was paid to the employees for over ten years and we were not told of any reason for withdrawing this benefit from the employees.
Merely because the Law Department advised that they were not bound to pay bonus, they were not obliged to withdraw the benefit.
The question which ought to have been considered was not whether they were legally bound to pay bonus but whether in the context of sound management labour relations, bonus should continue to be paid.
It is a matter which we earnestly desire the Delhi Development Authority may reconsider.
There is no order as to costs.
P.B.R. Appeal allowed.

dataset_name: IN-Abs

summary/full:
Section 32(iv) of the Payment of Bonus Act provides that nothing in the Act shall apply to employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or State Government or a local authority.
The Delhi Development Authority, a statutory body created under the Delhi Development Act, 1957 for the development of Delhi according to plan, paid bonus to its employees for a period of ten years upto the year 1973 74, but later discontinued payment of bonus on the advice of the Ministry of law.
The employees ' petition impugning the action of the Authority in stop ping the payment of bonus was allowed by the High Court.
On the question whether the Delhi Development Authority is a "local authority" and whether the provisions of the Payment of Bonus Act are attracted: Allowing the appeal, ^ HELD: The Delhi Development Authority is endowed with all the usual attributes and characteristics of a 'local authority ' and therefore the provisions of the Payment of Bonus Act are not attracted.
[865 A] The expression 'local authority ' is not defined in the Payment of Bonus Act.
The General Clauses Act defines it to mean a municipal committee or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund.
It is not a sound rule of interpretation to import the definition of an expression in one Act into another.
The definition of 'Local Fund ' in the Fundamental Rules, Treasury Code and elsewhere cannot be imported into the definition of Local Authority in the General Clauses Act and thus into the Delhi Development Act.
An authority, in order to be a local authority, must be of like nature and character as a municipal committee etc.
possessing among others many, if not all, of the distinctive attributes and characteristics of a municipal committee.
It must possess one essential feature, namely, that it is legally entitled to or entrusted by the Government with the control and management of a municipal or local fund.
[857 B H] The distinctive attributes and characteristics of a local authority are: (i) It must have separate legal existence as a corporate body; (ii) it must not be a mere governmental agency but a legally independent entity; (iii) it must function in a defined area and must ordinarily be elected wholly or partly, 855 directly or indirectly by the inhabitants of the area; (iv) it must enjoy a certain degree of autonomy, which, though not complete, must be appreciable; (v) the statute must entrust the authority with such governmental functions and duties as are usually entrusted to a municipal body for providing such amenities, as health and education services, water and sewerage, town planning and development, roads, markets, transportation etc.
to the inhabitants; (vi) it must have power to raise funds in the furtherance of its activities and the fulfillment of the projects entrusted to it by levying takes, rates, charges, fees etc.
all of which may be in addition to the moneys provided by Government.
What is essential is that the control and management of the fund must vest in the authority.
Municipal Corporation of Delhi vs Birla Cotton, Spinning Weaving Mills Delhi & Anr. ; @ 288 and Valjibhai Muljibhai Soneji and Anr.
vs The State of Bombay (Now Gujarat) & Ors. , referred to.
The Delhi Development Authority is a body corporate.
It consists of a chairman, vice chairman and a certain number of official members and non official members who are representatives of the Municipal Corporation Delhi to be elected by the Councillors and the aldermen of the Municipal Corporation and three representatives of the Metropolitan Council to be elected by that Council.
The object with which the Authority is established is "to promote and secure the development of Delhi according to plan" in accordance with the provisions of the Act.
[859 D F] The Authority is required to maintain its own Fund which was not a Consolidated Fund or a separate Development Fund but is the Fund of the Development Authority.
To this Fund are to be credited all the moneys received from the Central Government by way of grants, loans, advances or otherwise; all moneys received by way of loans of debentures; all fees and charges received by the Authority, all moneys received from the disposal of lands, buildings and other properties, all moneys received by way of rents and profits or in any other manner.
The fund is required to be applied towards meeting the expenses incurred by the Authority in the administration of the Act and for no other purposes.
The Act empowers the Authority to impose penalties on persons for undertaking or carrying out development in contravention of the master plan or without permission approval or sanction required to be given l? by the Authority.
[860 E G] An equally important feature with which the Authority is clothed is its power to make regulations a power which is analogous to the power given to municipalities to frame bye laws.
[862 G] The salient features of the Act show that the Delhi Development Authority is constituted for the specific purpose of planned development of Delhi which is a governmental function ordinarily entrusted to municipal bodies.
It has an element of popular representation though some of the members are indirectly elected.
It enjoys a considerable degree of autonomy within the bounds prescribed by the Act.
The fact that some supervision is exercised by the Central Government does not detract from the autonomy because the supervision exercised is the usual supervisory power which every State Government exercises over municipalities, District Boards etc.
[863 A D] The term "taxation" used with reference to the power of a local authority to raise funds is to be understood not in any fine and narrow sense to include 856 only compulsory exactions but in a broad generic sense to include fees levied essentially for services rendered.
Today the distinction between a tax and a fee his withered away both being compulsory exactions of money by a public authority.
The crucial test is to see whether the public authority is authorised by statute to make a compulsory extension of money and not to see whether the money so exacted is to be utilised for specific or general purposes.
[863 G H] There is no valid reason to hold that the betterment charge which the Authority can impose upon an owner of a property in respect of the increase in the value of the property is a fee and not a tax.
The charge is not levied on the basis of the increase in the value of property consequent on the development of the area.
In other words it is a charge on the accrued capital gain which may bear no proportion whatsoever to the cost of development.
[864 E] The fact that the Delhi Development Act refers in several sections to "local authority concerned" meaning thereby the ordinary local authority (as for example the Delhi Municipal Corporation) functioning in the area discharging a multiplicity of civic functions as distinguished from the Delhi Development Authority, which performs one of the several functions that a local authority performs, is no ground for holding that The Delhi Development Authority is not a local authority.
The Authority is endowed with all the usual attributes and characteristics of a local authority.
[864 H] Nor does the fact that other Municipal Acts provide for the reconstitution of a dissolved or superseeded municipality while the Delhi Development Act does not provide for such reconstitution of the Authority after it fulfills its assigned functions make it any the less a local authority.
By the very nature of the work entrusted to it its life is transient; when the work is accomplished and there is no need for its continued existence it is dissolved.
It is by what it is during its life and not by what its shape would be after it has performed its assigned functions that it can be determined whether the authority is a local authority as defined in the General Clauses Act [865 B D]


judgement:
Appeal No. 105 of 1954.
Appeal by special leave from the judgment and order dated November 6, 1952, of the Labour Appellate Tribunal, Calcutta in Appeal No. Cal 3 of 1952 773 arising out of the award dated September 25, 1951, of the Court of District Judge, Industrial Tribunal, Calcutta in Case No. VIII 23 of 1951.
section C. Isaacs, A. K. Datt and Sukumar Ghose, for the appellants.
M. C. Setalvad, Attorney General for India, D. B. Das and section N. Mukherji, for the respondent.
B. Sen and P. k. Bose, for Intervener (State of West Bengal).
October 11.
The Judgment of the Court was delivered by GOVINDA MENON J.
This appeal is by special leave against the decision of the Labour Appellate Tribunal of India, Calcutta, which modified the award, passed by the Industrial Tribunal, Calcutta, in the matter of a dispute referred to it by the Government of West Bengal, for adjudication with regard to the rates of dearness allowance for clerks and Depot cashiers, employed by the Calcutta Tramway 's Coy.
Ltd., numbering about 600, out of a total of 10,000 workmen.
Disputes having arisen between the workmen of the Calcutta Tramways Coy, Ltd. (which may hereafter be called 'The Company ') on the one hand, and the employers on the other, relating to the dearness allowance payable to the workmen, there were two previous awards, one dated May 16, 1947, by Sri section N. Guha Roy, and the other dated October 27, 1948, by Sri P. K. Sircar.
Both of these awards related to all the employees of the Company and not to the clerks and Depot cashiers alone.
Subsequently a reference was made by the West Bengal Government on June 13, 1951, concerning a dispute relating to the dearness allowance of the workmen of the Company, excluding clerks and Depot cashiers.
There was an award and an appeal, and in that appeal the Appel.
late Tribunal increased the dearness allowance by Rs. 7/8/ for workmen in the pay ranges below Rs. 50 and up to the pay range of Rs. 250 and by a flat rate 774 of Rs. 5 in the higher pay ranges taking the cost of living index of the workmen class at 370 points.
In the present award, which relates to the clerks and the Depot cashiers alone, the Industrial Tribunal gave Rs. 47/8/ as dearness allowance for a pay range of Rs. 51 to Rs. 100 and provided for a progressive increase of Rs. 5 for each slab of Rs. 50 in the pay range.
The Appellate Tribunalincreasedthe amounts so awarded by Rs. 2/8/ more than what was granted to the other workmen of the Company.
The cost of living index for the middle class families had been fixed by an investigating body of the Bengal Chamber of Commerce during the relevant year at 382 points, whereas the index in the case of working class was fixed at 370 points.
The increased amount awarded for the various pay ranges and shown in the decision of the Labour Appellate Tribunal which need not be repeated again, was founded on these cost of living indices though the amount was not the same as recommended by the Bengal Chamber of Commerce.
Before the Labour Appellate Tribunal, as well as the Industrial Tribunal, the claim put forward on behalf of the clerks and Depot cashiers was that the dearness allowance should be on the same rates as decided upon by the Bengal Chamber of Commerce of which the company is a member and no difference should have been made between the dearness allow ance recommended by the Bengal Chamber of Commerce and that to be awarded by the Industrial Tribunal.
In fact, what was urged was that the recommendation of the Bengal Chamber of Commerce ought to have been accepted in its entirety for the reason not only that the Company is a first class member of the Chamber but also that the class of persons, namely the middle classes for whom the recommendation was intended, includes clerks and Depot cashiers of the Company as well, and the same having been accepted ,by the Mercantile Tribunal which dealt with the dearness allowance payable to the employees of the mercantile firms in Calcutta, the Industrial Tribunal, as well as the, Labour Appellate Tribunal, should have 775 followed the same.
The learned Judges of the Appellate Tribunal held that those recommendations were made to the mercantile firms where the workmen consist practically of the clerical and subordinate staff as opposed to Tramways Company where the large percentage of workmen belong to other categories, the clerks and Depot cashiers being only a small minority, though they found that the cost of living index found by the Bengal Chamber of Commerce should be accepted as the criterion for awarding the increased dearness allowance in the case of the employees of the Company as well.
On behalf of the appellants it is urged before us that a different mode of treatment than the one recommended by the Bengal Chamber of Commerce should not have been resorted to in the case of the appellants, for the reason that those recommendations are intrinsically reasonable, considering the uniformity of life and modes of habit of the middle classes to which the clerks and Depot cashiers belong.
The, respondent Company being a member of the Bengal Chamber of Commerce should, instead of ignoring the recommendation have acted upon it as a mandate, so that its action as a member should not be inconsistent with that followed by others especially since there have been no valid reasons alleged for the non acceptance of the recommendation.
It is further urged that there is no acceptable defence put forward that the abovementioned recommendation will not apply to institutions having a mixed staff as the Company in question.
On the other hand, what is stated in the written statement of the Company is that according to the previous award it had been paying a uniform sliding scale of dearness allowance for all categories of workmen as detailed in Paragraph 6(b).
It is, therefore, contended that what the Industrial as well as the Appellate Tribunal should have done was to have evolved a principle to fix the dearness allowance in relation to the ' basic salaries and the cost of living index, as that alone would satisfy the recom mendations of the Bengal Chamber of Commerce.
776 ,We have, therefore, to see whether in following the course now adopted by the Tribunals below they have ignored any legal principle or acted in violation of any statute.
There can be no doubt whatever that if the scheme adumbrated by the Bengal Chamber of Commerce is adopted in the case of clerks and Depot cashiers, they would get amounts far in excess and out of all proportion to what were awarded to the other workmen whose appeal had already been disposed of by the Appellate Tribunal though it has to be recognized that the cost of living index in the case of the appellants has to be considered to be more than the index of workmen whose avocations are the result of physical labour rather than of mental faculties.
In short, the clerks and Depot cashiers should be considered as the white collared fraternity.
In these circumstances, we have to find out whether the procedure followed by the Labour Appellate Tribunal, namely leaving out 20 points un neutralised and allowing Rs. 5 per 20 points rise in the living cost index but taking into consideration a higher living cost index of 382 in the case of the appellants as compared with the average index of the workmen of 370, is a justifiable method to be adopted.
It is difficult to hold that the middle classes in this country can be said to form a separate stratum of society even in a city like Calcutta having the same mode of life, the same necessities, uniform requirements and comforts.
There are different grades even among the middle classes and it is unwise to predicate the same degrees of comforts and necessities for everyone who is said to belong to the middle classes.
Such being the case, to say that the clerks in the mercantile firms can be considered equal in all respects to the 600 clerks and Depot cashiers of the Company, is an argument which cannot be accepted as sound.
The Labour Appellate Tribunal has not completely ignored the recommendations of the Bengal Chamber of Commerce, for it is seen that in raising the amount awarded by the Industrial 777 Tribunal the Appellate Tribunal has based its conclusion on the higher cost of living index in the case of middle class employees.
Such being the case, the point for consideration is whether any question of principle is involved, so that this court might interfere with the conclusions arrived at by the Labour Appellate Tribunal.
Wide and undefinable with exactitude as the powers of the Court are (see Dhakeswari Cotton Mills Ltd. vs Commissioner of Income Tax, West Bengal(1)), it is now well settled that generally the necessary pre requisites for this court 's interference to set right decisions arrived at by Tribunals whose conclusions on questions of fact are final can be classified under the following categories, namely, (1) where ' the Tribunal acts in excess of the jurisdiction conferred upon it under the statute or regulation creating it or where it ostensibly fails to exercise a patent jurisdiction; (ii) where there is an apparent error on the face of the decision and (iii) where the Tribunal has erroneously applied well accepted principles of jurisprudence.
It is only when errors of this nature exist, that interference is called for.
In the present case the appellants have not been able to show that there is any deviation from those principles.
If the Tribunal below had failed to resort to a basic principle, then something might have been said but what has been done is, that in computing the dearness allowance it has considered various methods and adopted one of them.
That being the case, it is ' difficult to say that there is any question of principle at all.
The report of the Central Pay Commission at page 46, in Paragraph 71, made the following recommendation: "Without adopting such a complicated procedure, we think it sufficient to provide by slabs for persons on different levels of pay, as shown in the accompanying table which also provides for diminishing rates of dearness allowance as the cost of living index falls, taking the stages by 20 points at a time".
(1) ; , 949.
778 It refrained from recommending the neutralisation of the entire higher cost of living by means of dearness allowance.
The report of the Committee on Fair Wages appointed by the Government of India in Chapter IV, dealing with Wage Adjustments considered in paragraph 43 the various modes and methods of granting relief to meet the burden of increased cost Of living and came to the conclusion that there is no practice of uniformity in the extent of compensation given to employees to meet the increased cost of living.
It observed as follows: "The Pay Commission has accepted, the principle that the lowest paid employee should be reimbursed to the full extent of the rise in the cost of living and that, higher categories of employees should receive a diminishing but graduated scale of dearness allowance.
The Pay Commission has rejected the principal of a flat rate for all categories of employees, irrespective of their basic salaries".
Finally it came to the conclusion "that for the lowest categories of employees the target should obviously be compensation to the extent of 100 per cent.
of the increase in the cost of living.
For categories above the lowest we agree that the same consideration will not apply.
A flat rate equal to the rate allowed to the leastskilled worker is not likely to satisfy higher categories".
In the analysis regarding the Industrial Awards, issued by the Government of India, Ministry of Labour, the question of dearness allowance is considered somewhat elaborately.
At page 33 there is a discussion regarding the linking of dearness allowance to the cost of index numbers and as to whether a flat rate of dearness allowance irrespective of the income group should be allowed or not.
They further considered the linking of dearness allowance to the cost of living index numbers on the scale of income groups, but at rates diminishing with the income received.
A perusal of the fairly elaborate discussion in Chapter 779 III shows that there cannot be a hard and fast rule applicable to all kinds of employees.
Very much will depend upon the conditions of labour, the nature of the locality and the mode of living.
In Buckingham and Carnatic Company Ltd., Madras vs Workers of the Company(1) the Tribunal considered the question of neutralisation of the rise of the cost of living by the grant of dearness allowance and was of the opinion that cent per cent neutralisation cannot be allowed, as it would lead to a vicious circle and add fillip to the inflatory spiral.
It further held that there was no reason why the Industrial worker should not make sacrifices line all other citizens.
We can now take it as settled that in matters of the grant of dearness allowance except tothe very lowest class of manual labourers whose income is just ' sufficient to keep body and soul together, it is impolitic and unwise to neutralise the entire rise in the cost of living by dearness allowance.
More so in the case of the middle classes.
The criterion to be adopted in the fixation of dearness allowance is also considered in Mahomad Rai Akbarali Khan vs The Associated Cement Companies Limited(2) where similar principles are discussed.
On behalf of the appellants our attention was invited to certain observations contained in The Millowners ' Association, Bombay vs The Rashtriya Mill Mazdoor Sangh(3), but we do not think that any different principle is enunciated there at all.
Mr. Isaacs, the learned counsel for the appellants, laid great stress on the decision in Workmen of the Firestone Tyre and Rubber Company of India Ltd., Bombay vs Firestone Tyre and Rubber Company of India Ltd., Bomba(4) where the Tribunal expressed the opinion that dearness allowance is intended to neutralise rise in the cost of living and as there is a well recognised difference between the clerical staff and other workmen in their cost of living, the latter are not entitled.
(1) , 519, 520.
(2) (3) (4) 101 780 to claim the allowance on the same basis.
From this the learned counsel contends that the recommendations of the Bengal Chamber of Commerce should be accepted in toto.
In our opinion, the decision does not help the point of view put forward on behalf of ' the appellants.
In fact, the Labour Appellate Tribunal has made a distinction between the physical labourers and the clerks and Depot cashiers in whose work it is not alone the physical exertion that is essential but some kind of mental and brain work as well and accordingly the higher cost of living index taken into account.
In such circumstances, it seems to us that the Labour Appellate Tribunal has, after considering the various points of view, come to the correct conclusion in awarding the dearness allowance it did.
There is no question of law or principle involved and the appeal has to be dismissed with costs of the Calcutta Tramways Coy.
Ltd. The State of West Bengal, which has intervened during the appeal, will bear its own costs.

summary/full:
It is well settled that the decisions of a Tribunal on questions of fact are final and that the Supreme Court would interfere only in cases where (1) the Tribunal acts in excess of the jurisdiction conferred upon it under the statute or regulation creating it or where it ostensibly fails to exercise a patent jurisdiction; (2) there is an error apparent on the face of the decision; (3) the Tribunal has erroneously applied well accepted principles of jurisprudence.
The Bengal Chamber of Commerce of which the respondent Company was a member, had made an investigation into the cost of living index for the middle class families and, fixed the dearness allowance payable to the employees of the mercantile firms in Calcutta.
Before the Industrial Tribunal as well as the Labour Appellate Tribunal the claim was put forward on behalf of the appellants (the clerks of the respondent Company) that the dearness allowance for them should be at the same rates as those decided upon by the Bengal Chamber of Commerce in respect of the middle classes to which the appellants belonged and they contended that the procedure adopted by the Labour, Appellate Tribunal leaving out 20 points of the living cost index un neutralised was not justifiable.
Held, that in matters of the grant of dearness allowance there cannot be a hard and fast rule applicable to all kinds of employees and except in the very lowest class of manual labourers it is not proper to neutralise the entire rise in the cost of living by dearness allowance.
There are different grades among the middle classes and the appellants cannot claim to have the same rates of dearness allowance as those fixed for the clerks of the mercantile firms by the Bengal Chamber of Commerce.


judgement:
Civil Appeal No. 2994 of 1979.
Appeal by Special Leave from the Judgment and Decree dated 11 7 1979 of the Patna High Court in Civil Writ Petition No. 1936 of 1979.
Dr. Y. section Chitale and P. P. Singh for the Appellant.
R. B. Datar and Miss A. Subhashini for the Respondent.
The Collector of Central Excise & Customs, Patna, invited, by an advertisement dated 30th July, 1975, applications for filling up some posts of Inspector of Central Excise.
Among those eligible for selection were "sportsmen who have represented the Universities in the Inter University Tournament conducted by the Inter University Sports Board.
" The appellant, who was studying in the M. A. (Political Science) in the Mithila University, was one of the applicants and he was directed to appear for a physical test and an interview.
On 12th December, 1975 the Collector of Central Excise and Customs issued a letter informing the appellant that he had been selected for appointment in a temporary vacancy of Inspector, and that he would be on probation for a period of two years.
The appellant joined the post and continued therein.
On 30th April, 1976 he received a letter from the Assistant Collector (Headquarters) Central Excise pointing out that he had submitted attested copies only of the sports certificates along with his application for appointment and he was directed to submit the original certificates.
The appellant forwarded the original certificates.
Nothing happened for some time, and the appellant continued in the post without any objection.
It was almost a year later that the Assistant Collector (Headquarters) wrote to the appellant to supply details of the tournament at 732 which he had represented the University.
On 27th February, 1978 the appellant referred to the Sports certificate date 28th July, 1975 issued by the Deputy Registrar of the L. N. Mithila University, Darbhanga.
The original certificate had been sent by him to the Collector, along with the other certificates on 5th May, 1976.
The appellant explained that he had qualified and was selected, to represent the Mithila University in the Inter University Tournament to be held at Banaras Hindu University, Varanasi, in the year 1972 but that a serious illness had intervened and prevented him from actually participating in the tournament.
He pointed out that this had been made clear by him during the interview for selection before the Appointments Committee and that as he had been discharging his duties to the satisfaction of his superior officers ever since December, 1975 and had, in fact, captained the sports team on behalf of the Excise Department at Calcutta for two years, he was astonished that the question should be raised now.
Another fourteen months later, on 16th June, 1979, the Assistant Collector (Headquarters) made an order, purporting to be under the proviso to sub rule (1) of Rule 5 of the Central Civil Service (Temporary Service) Rules 1965, terminating the services of the appellant.
The appellant then applied for relief under Article 226 of the Constitution to the High Court against the order, but the High Court has summarily dismissed the writ petition.
In this appeal, the appellant contends that he fulfiled the conditions of eligibility and that there was no justification for terminating his services.
The case of the respondents is that the appellant was appointed under a mistake inasmuch as the condition of eligibility required actual representation of a University in an Inter University Tournament conducted by the Inter University Sports Board and that, therefore, the appellant was not entitled to any relief against the termination of his services.
Having given the matter our careful consideration, it seems to us that the respondents have proceeded on a technical view of the matter wholly unjustified by the intent behind the condition of eligibility.
The condition required that the applicant should have been a sportsman who had represented his university in an Inter University Tournament conducted by the Inter University Sports Board.
There is no dispute before us that the appellant did qualify, and was selected, for representing the Mithila University in the Inter University Tournament at the Banaras Hindu University in the year 1972.
All that remained was that he should have participated in the tournament.
Unfortunately, for him, he fell ill and was unable to do so.
The fact that he fell ill, 733 and for that reason was unable to represent his university, is not disputed.
There is nothing to show that but for that illness he would not have actually taken part in the tournament.
It seems to us that on a reasonable view of the facts the appellant should be taken to have fulfilled the condition of eligibility.
The terms and conditions of service are intended to be construed reasonably, and too technical a view can defeat the essential spirit and intent embodied in them.
The intention was to appoint meritorious sportsmen to the posts, and that object is served if a person who had qualified and was selected for representing his university in an Inter University Tournament conducted by the Inter University Sports Board is appointed, notwithstanding that he was actually prevented from participating because of reasons beyond his control.
We have no doubt that on the interpretation which has found favour with us the appellant will be entitled to a certificate of eligibility, a requirement postulated by the terms of his appointment.
The appeal is allowed, the order dated 16th June, 1979 made by the Assistant Collector (Headquarters) is quashed and the respondents are directed to treat the appellant as continuing in service.
The appellant is entitled to his costs throughout.
S.R. Appeal allowed.

summary/full:
The appellant was selected for and appointed in a temporary vacancy of Inspector of Central Excise, as he was found to be a "sportsman who has represented the Universities in the Inter University Tournament conducted by the Inter University Sports Board".
He joined duty and continued therein.
On 30 4 1976 the Assistant Collector (Head Quarters) Central Excise called for the original sports certificate on the ground that only attested copies were furnished by the appellant earlier.
The appellant furnished the original documents on 5 7 76.
After a year, he was directed to supply the details of the tournament at which he had represented the University.
On 27 2 78, the appellant referred to the sports certificate dated 28th July 1975 issued by the Deputy Registrar of Mithila University, Darbhanga.
The appellant explained that he had qualified and was selected, to represent the Mithila University in the Inter University Tournament to be held at the Banaras Hindu University, Varanasi, in the year 1972 but that a serious illness had intervened and prevented him from actually participating in the tournament.
He pointed out that this had been made clear by him during the interview for selection before the Appointments Committee and that as he had been discharging his duties to the satisfaction of his superior officers ever since December, 1975 and had, in fact, captained the sports team on behalf of the Excise Department at Calcutta for two years, he was astonished that the question should be raised later.
Another fourteen months thereafter, on 16th June, 1979, the Assistant Collector (Headquarters) made an order purporting to be under the proviso to sub rule (1) of Rule 5 of the Central Civil Service (Temporary Service) Rules 1965, terminating the services of the appellant.
The appellant then applied for relief under Article 226 of the Constitution to the High Court against the order, but the High Court has summarily dismissed the writ petition.
Allowing the appeal on special leave, the Court ^ HELD: The terms and conditions of service are intended to be construed reasonably, and too technical a view can defeat the essential spirit and intent embodied in them.
The intention was to appoint meritorious sportsmen to the posts, and that object is served if a person who had qualified and was selected for representing his university in an Inter University Tournament conducted by the Inter University Sports Board is appointed, notwithstanding that he was actually prevented from participating because of reasons beyond his control.
[733 A C] In the instant case, the respondents have proceeded on a technical view of the matter wholly unjustified by the intent behind the condition of eligibility.
731 The condition required that the applicant should have been a sportsman who had represented his university in an Inter University Tournament conducted by the Inter University Sports Board.
The appellant did qualify, and was selected, for representing the Mithila University in the Inter University Tournament at the Banaras Hindu University in the year 1972.
All that remained was that he should have participated in the tournament.
Unfortunately, for him, he fell ill and was unable to do so.
The fact that he fell ill, and for that reason was unable to represent his university, is not disputed.
There is nothing to show that but for that illness he would not have actually taken part in the tournament.
On a reasonable view of the facts the appellant should be taken to have fulfilled the conditions of eligibility.
[732 G H, 733 A]