judgement:
ivil Appeals No. 1619 to 1622 of 1971.
Appeals by Special Leave from the Award dated the 27th November, 1970 of the Industrial Court, Maharashtra (Nagpur Bench) Nagpur in References (I.C.N.) Nos. 13, 14, 15, and 19 of 1969 communicated to the parties on 14 1 1971.
M.K. Ramamurthi and A.G. Ratnaparkhi for the Appellant.
T.V.S.N. Chari Advocate for the Respondent The Judgment of the Court was delivered by DESAI, J.
Bonus has a tantalizing influence on industrial 756 workers.
They look forward to it with a craving, the degree of which is immeasurable.
And for the employees and form of bonus has such a tremendous attraction that the time honoured concept of its being a profit sharing formula to fill in the gap between the fair wage and the living wage in the case of industrial workmen has been for all practical purposes displaced by the and bonus telescoping into Government service where there being no production and therefore it cannot be an incentive for higher production.
And yet the management of The Model Mills, Nagpur (Employer for short) has most successfully thwarted the meagre expectation of minimum bonus to its workmen for full two decades.
Rashtriya Mill Mazdoor Sangh, appellant herein, ("Union ' for short) as an approved Union made four independent references under Sec.
73A of the Bombay Industrial Relations Act, 1946 ( 'Act ' for short) against Model Mills Nagpur for grant of bonus for the period 1964 65 to 1967 68.
A separate reference was made in respect of each accounting year.
The Union as representative Union of the employees served a notice of change making the demand for bonus.
The matter was taken into conciliation.
The Conciliation Officer recorded a failure on June 23, 1969 and issued a certificate under Sec.
73A of the Act certifying that the dispute was not capable of being settled by conciliation.
Armed with the power of an approved Union the union made the aforementioned four references to the Industrial Court.
The Union demanded bonus for each of the four accounting periods according to the provisions of the (Bonus Act ' for short).
The Union could not make a specific demand for bonus calculated at a certain percentage of the salary alleging that as it has not got the requisite information about financial position and balance sheet of the Employer, the Industrial Court should compute the bonus which becomes payable under the Bonus Act, and award the same to the workmen of the Employer.
The employer resisted the references on diverse grounds.
It was contended that once a notified order is issued under Sec.
18A of the Industries (Development and Regulation) Act, 1951 (IDR Act short) appointing an authorised controller in respect of an industrial undertaking, it is run by the authorised controller under the authority of a Department of the Central Government and therefore, in view of the provision contained in Sec.
32(IV) of the Bonus Act its employees are excluded from the application of Bonus Act and the references must accordingly be rejected.
757 This contention found favour with the Industrial Court.
The learned Member with the consent of the parties directed that the issue with regard to the application of the Bonus Act may be tried as a preliminary issue.
The learned Member upheld the contention on behalf of the employer observing that having regard to the provision contained in Sec.
32(IV) of the Bonus Act read with Sec.
18A of the IDR Act, the workmen employed by the employer are excluded from the operation of the Bonus Act as it is not applicable to the employer.
The learned Member rejected the alternative contention that even if the workmen employed by the employer are not entitled to bonus under the Bonus Act, they are yet entitled to claim bonus apart from the Bonus Act as a norm of industrial relation observing that as the demand was made for bonus under the Bonus Act and the alternative demand was not made before the Counciliator, the scope of the references cannot be extended to cover the same.
Accordingly, all the four references were rejected.
Hence these appeals by special leave.
On the rival contentions following questions arise in these appeals: (1) On the appointment of an authorised controller under Sec.
18A of the IDR Act by the Central Government in respect of an industrial undertaking, does it acquire the status of an establishment engaged in an industry carried on under the authority of the Department of Central Govt.
(2) If the answer to the first question is in the affirmative, whether the employees employed in such industrial undertaking are excluded from the operation of the Bonus Act.
At the outset, a few statutory provisions which will have a bearing and impact on the issues under examination may be noticed.
The Industries (Development and Regulation) Act, 1951 was enacted to provide for development and regulation of scheduled industries.
Chapter III confers power on the Central Government for regulation of scheduled industries. 'Scheduled industry ' is defined in Sec.
2(i) to mean any of the industries specified in the First Schedule.
Textiles constitute a scheduled industry.
Its entry is at plecitum 23 in First Schedule.
15 confers power on the Central 758 Government to cause investigation to be made into scheduled industries or industrial undertaking for the purposes therein set out.
15A confers similar power to direct investigation into the affairs of a company in liquidation owning an industrial undertaking.
This specific power was conferred by introducing Sec.
15A in the Act by the Amending Act 72 of 1971 because a company which is being wound up under the orders of the court cannot be directly dealt with by the Central Government without the intervention of the court.
16 confers power on the Central Government to give directions on completion of an investigation under Sec. 15 to the industrial undertaking for the following purposes: "(a) regulating the production of any article or class of articles by the industrial undertaking or undertakings and fixing the standards of production; (b) requiring the industrial undertaking or undertakings to take such steps as the Central Government may consider necessary to stimulate the development of the industry to which the undertaking or undertakings relates or relate; (c) prohibiting the industrial undertaking or undertakings from resorting to any act or practice which might reduce its or their production, capacity or economic value; (d) controlling the prices, or regulating the distribution, of any article or class of articles which have been the subject matter of investigation.
" Chapter III A which was introduced by Amending Act 26 of 1954 conferred power on the Central Government to assume management or control of an industrial undertaking in certain cases.
18A(1) is relevant for the present purpose and it may be extracted: "18 A(1): If the Central Government is of opinion that: (a) an industrial undertaking to which directions have been issued in pursuance of Section 16 has failed to comply with such directions, or (b) an industrial undertaking in respect of which an in 759 vestigation has been made under Section 15 (whether or not any directions have been issued to the undertaking in pursuance of Section 16), is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest, the Central Government may by notified order authorise any person or body of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the undertaking such functions, of control as may be specified in the order." Section 18A confers power on the Central Government either to assume management of an industrial undertaking or to control its management.
The power to assume management of an industrial undertaking can be exercised by a notified order appointing an authorised controller to take over the management of the whole or any part of the undertaking.
The Central Government may exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order.
18B provides for the consequences that may ensure on the issue of a notified order under Sec.
18A authorising the taking over of the management of an industrial undertaking.
Two consequences worth noticing are those set out in sub cl.
(b) and (c) of Sec.
18B (1).
They may be extracted: "(b) any contract of management between the industrial undertaking any managing agent or any director thereof holding office as such immediately before the issue of a notified order shall be deemed to have been terminated.
(c) the persons, if any, authorised under Section 18 A to take over the management of an industrial undertaking which is a company shall be for all purposes the directors of industrial undertaking duly constituted under the Indian Companies Act, 1913 (7 of 1913), and shall alone be entitled to exercise all the powers of the directors of the industrial undertaking, whether such powers are derived from the said Act or from the memorandum or articles of association of the industrial undertaking or from any other source.
" 760 Section 18 E provides for continued application of the Companies Act then in force to the industrial undertaking in respect of which an authorised controller is appointed under Sec.
18 A subject to the limitations therein specified as it applied prior to the notified order.
18 F conferred power on the Central Government to cancel the notified order.
Sec 32(iv) of the Bonus Act reads as under: "Nothing in this Act shall apply to . . . . . . . (iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority.
" The question is: whether on the issue of a notified order under Sec.
18 A appointing an authorised controller in respect of an industrial undertaking governed by the IDR Act, the employees of such undertaking are excluded from the application of the Bonus Act for the only reason that they are or have become the employees of an establishment in an industry carried on under the authority of the department of Central Government.
The Bonus Act provides for payment of bonus to persons employed in certain establishments and for matters connected therewith.
Sub Sec.
(3) of Sec. 1 provides that save as otherwise provided in the Bonus Act, it shall apply to (a) every factory; (b) every other establishment in which twenty or more persons are employed on any day during an accounting year.
32 excludes the application of the Bonus Act to the employees therein enumerated.
Excluding Sec. 32 for the time being, it cannot be disputed that the Bonus Act would apply to the industrial undertaking of the employer.
Is the application of Bonus Act excluded on the ground that on the issuance of a notified order appointing an authorised controller under Sec.
18 A of the IDR Act, because the employees of the respondents can be said to have been employed by an establishment engaged in any industry carried on or by or under the authority of any department of the Central Government.
Can it be said that on the appointment of an authorised controller, the industrial undertaking of the respondent acquired the status of an establishment engaged in textile industry carried on by or under the authority of a department of the Central Government ? In order to attract Sec.
32(iv) it must be shown that the employees sought to be ex 761 cluded from the operation of the Bonus Act have been employed by an establishment engaged in any industry carried on by or under the authority of the department of the Central Government.
It was conceded that it cannot be said that on the appointment of an authorised controller, the industrial undertaking acquired the status of an establishment engaged in textile industry carried on by the department of the Central Government It was, however, strenuously urged that it was an establishment engaged in the industry carried on under the authority of the department of the Central Government.
Shorn of embellishment, the question is: whether on the appointment of an authorised controller, did the industrial undertaking acquire the status of an establishment engaged in the industry which is carried on under the authority of the department of the Central Government ? IDR Act was enacted as its long title shows to confer power on the Central Government to provide for development and regulation of scheduled industries.
The Statement of objects and Reasons shows that the object behind the enactment was to provide the Central Government with the means of implementing their industrial policy and for that purpose to extend the control of the Central Government over the development and regulation of a number of important industries the activities of which affect the country as a whole and the development of which must be governed by economic factors of all India import.
The Act amongst others confers power on the Central Government for regulating the production and development of the scheduled industries.
Broad scheme of the Act shows that with a view to regulating the industrial expansion of this country on the threshold of development and to lay the infrastructure for the same, the Central Government was armed with powers to order investigation into the affairs of the industrial undertaking as also.
if necessary of a scheduled industry as a whole.
The investigation may be caused to be made where there has been or likely to be a substantial fall in the volume of production or marked deterioration in the quality of article or an unwarranted rise in the price or for conserving any resources of national importance.
On receipt of the report of investigation, the Central Government could give necessary directions.
These directions are statutory in character and they may be disobeyed on the pain of the management being divested from those incharge and vested in authorised controller, who may be appointed by the Central Government.
Therefore, the Act provides not for taking over of the industrial undertakings.
It provides for control of management by giving 762 directions or for change of management.
Where the industrial undertaking is owned by a company governed by the Companies Act in force at the relevant time, the management would generally vest in the Board of Directors, and or the Managing Director, as the case may be.
Where it is a firm or a proprietary concern the partners or the proprietor, as the case may be, would be in the saddle of management.
On the issue of a notified order appointing an authorised controller, the person in charge of management including persons holding office as Managers or Directors of the industrial undertaking immediately before the issue of the notified order shall be deemed to have vacated their office as such.
(Sec. 18 B(1).
Further the contract of management between the industrial undertaking and any managing agent or any director thereof holding office as such immediately before the issue of the notified order shall be deemed to have been terminated.
18 B(1)(b).
But the most important consequence that ensues on the issue of a notified order is to confer by a deeming fiction the position and powers of a director as duly constituted under the Companies Act on the authorised controller and he alone shall be entitled to exercise all the powers of the directors of the industrial undertaking, whether such powers are derived from the Companies Act or from the memorandum or article of association of the industrial under taking or from any other source.
(Sec. 18 B(1) (e).
Further subject to the limitation specified in Sec.
18 E, the Companies Act in force at the relevant time will continue to apply to such undertaking in the same manner as it applied thereto before the issue of the notified order under Sec.
Thus the significant consequence that ensues on the issue of a notified order appointing authorised controller is to divert the management from the present managers and to vest it in the authorised controller.
Undoubtedly, the heading of Chapter III A appears to be slightly misleading when it says that the Central Government on the issue of a notified order assumes direct management of the industrial undertaking.
In effect on the issuance of a notified order, only the management of the industrial undertaking undergoes a change.
This change of management does not tantamount to either acquisition of the industrial undertaking or a take over of its ownership because if that was to be the intended effect of change of management, the Act would have been subjected to challenge of article 31 and 19(1)(f) of the Constitution.
One can say confidently that was not intended to be the effect of appointment of an authorised controller.
The industrial undertaking continues to be governed by the 763 Companies Act or the Partnership Act or the relevant provisions of law applicable to a proprietary concern.
The only change is the removal of managers and appointment of another manager and to safeguard his position restriction on the rights of shareholders or partners or original proprietor.
This is the net effect of the appointment of an authorised controller by a notified order.
Can it then be said that on the issue of a notified order appointing an authorised controller, the industrial undertaking is engaged in the industry carried on under the authority of the department af the Central Government.
The expression `under the authority of any department of the Central Government ' would in ordinary parlance mean that the department is directly responsible for the management of the industrial undertaking.
This responsibility may cover, amongst others, financial responsibility as well.
Power to regulate management or control the management is entirely distinguishable from the power to run the industry under the authority of the department of the Central Government.
The substitution of the management ordered under Sec.
18 A does not tantamount to the industrial undertaking being taken over by the department of the Central Government.
Nor could it be said to be run under the authority of the department of the Central Government.
In fact.
as the authorised controller enjoys all the powers of directors conferred by the relevant provisions of the Companies Act, he can exercise that power subject of course to any restriction or limitation on his power specified in the notified order or under the general supervision of the Central Government.
But this power is subject to the in built limitation that it can be exercised for regulating the management of the industrial undertaking.
Neither its identity nor its ownership is affected in any manner.
This change in personal of management of the industrial undertaking for a specified period can never make the industrial undertaking one engaged in an industry carried on under the authority of the Central Government.
On a pure grammatical construction, of the expression 'establishment engaged in an industry carried on under the authority of the department of the Central Government ' cannot take in one in respect of which the Central Government in exercise of the power conferred by IDR Act directed a change of management.
The conclusion in the preceding paragraph can be reached by a different route.
Under Sec.
16 of the IDR Act, the Central government enjoys wide powers to issue directions to the industrial undertaking as may 764 be appropriate in the circumstances for all or any of the purposes set out in various sub clauses of Sec.
16(1).
The scheme of the Act shows that while retaining the original management, the Central Government gives necessary directions for the aforementioned purposes to achieve a certain result.
If the desired result is not achieved, the Central Government enjoys a consequential power of changing the management by appointing an authorised controller so as to achieve the same result.
This power to give directions without appointing an authorised controller or to appoint an authorised controller giving him specified directions is of a regulatory nature to be exercised with a view to regulating the managerial functions of the management of an industrial undertaking so as to achieve certain objects or to rectify the mismanagement in larger national interest without in any manner affecting the identity, the status or the ownership of industrial undertaking.
It could by no stretch of imagination be urged that on the exercise of the power to give directions under Sec. 16, the industrial undertaking could be said to be engaged in any industry carried on under the authority of the department of the Central Government.
Ipso facto the appointment of an authorised controller would not make the industrial undertaking one run under the authority of the department of the Central Government.
While exercising power of giving directions under Sec.
16 the existing management is subjected to regulatory control, failing which the management has to be replaced to carry out the directions.
In either case the industrial undertaking retains its identity, personality and status unchanged.
On a pure grammatical construction of sub sec.
(4) of Sec. 32, it cannot be said that on the appointment of an authorised controller the industrial undertaking acquires the status of being engaged in any industry carried on under the authority of the department of the Central Government.
Viewed from a slightly different angle, it appears that the expression 'carried on by or under the authority of any department of the Central Government 'qualifies the expression 'industry ' and not the expression 'establishment ' as used in sub sec.
(4) of Sec. 32 of the Bonus Act.
Again on a pure grammatical construction it appears that where an industry is being carried on under the authority of any department of the Central Government, the employed in an establishment in such an industry would be excluded from the operation of the Bonus Act.
The underlying purpose of Sec.
32(iv) is not to exclude the employees of somestary establishment from the operation Act but to exclude all employees of all establishment in any industry which is carried on under the authority of the department of the 765 Central Government.
If the expression `carried on by or under the authority of the department of the Central Government ' qualifies the expression `establishment ' it would lead to a startling result unintended by the framers of the Bonus Act.
Let us illustrate it.
There are two industrial undertakings engaged in the same industry situated side by side.
In one case the management being incompetent or remiss, an authorised Controller is appointed, If the construction canvassed for on behalf of the respondent is accepted the employees of one would be excluded from the application of the Bonus Act and not the other though both are industrial undertaking engaged in the same industry.
The framers of the Bonus Act which went to the length of making payment of bonus obligatory on industrial undertakings incurring losses could not have intended to treat the employees with such gross discrimination.
On the contrary, it appears that the intention was to exclude employees employed in an establishment engaged in any industry which is carried on by or under the authority of the department of the Central Government.
It cannot be said that textile industry is being carried on under the authority of the department of the Central Government.
There may be employees in an industrial undertaking engaged in textile industry which may have been established under the authority of the department of the Central Government.
Ordinarily the Central Government would not like to treat an establishment set up by it in an industry in which there are other private sector establishments to differentiate and discriminate between employees of establishments engaged in the same industry.
It, therefore, appears that the exception that is being carved out by Sec.
32(4) is in respect of employees of an industrial undertaking engaged in an industry carried on by or under the authority of any department of the Central Government as a whole and not individual establishments.
All establishments in that industry which is carried on by or under the authority of the department of the Central Government would be excluded from the operation of the Bonus Act.
Having examined the matter on principle, let us turn to some precedents to which our attention was drawn.
Sec. 2(a) of the defines `appropriate Government ' to mean (leaving aside the words which are not relevant for our purpose `in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government,. .the Central Government. ' The expression used is any industry carried on by or under the authority of the 766 Central Government.
This expression came up for consideration before this Court in the context of an industrial dispute between a Government Company as comprehended within the meaning of the expression in Sec.
617 of the Companies Act.
Government Company is defined to mean `any company in which not less than fifty one per cent of the paid up share capital is held by the Central Government, or by any State Government of Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government Company as thus defined. ' An interesting question that came up for consideration before this Court was whether in respect of an industrial dispute between such Government Company and its workmen, which is the appropriate Government which can make a reference of the industrial dispute for adjudication under Sec.
10 (1) of the .
In respect of such Government Company this Court in Heavy Engineering Mazdoor Union vs The State of Bihar & Ors.(1) interpreting the expression `under the authority of ' held that the expression means `pursuant to the authority ' such as where an agent or a servant acts under or pursuant to the authority of his principal or master.
The Court proceeded to examine the personality of an incorporated company which the law recognises as juristic person, separate and distinct from its members.
The Court concluded that `a commercial corporation acting on its behalf, even though it is controlled wholly or partially by a Government department, will be ordinarily presumed not to be a servant or agent of the State.
In reaching this conclusion, the Court approved the view of the Calcutta High Court in Carlsbad Mineral Water Mfg. Co. vs
P. K. Sarkar wherein the Calcutta High Court had held that a business which is carried on by or under the authority of the Central Government must be a Government business.
The High Court had further held that in an industry to be carried on under the authority of the Central Government, it must be an industry belonging to the Central Government that is to say its own undertaking.
Recalling here what is stated hereinbefore that on the change of management by appointment of an authorised controller, the industrial undertaking retains its identity and continues to be governed by the Companies Act or the Partnership Act, as the case may be, and there merely take place only a change in the personnel of management but the substitute management, say the authorised controller 767 appointed by the Central Government is to be presumed to be a Director for the purposes of the Bonus Act, the conclusion is inescapable that the business remains that of the industrial undertaking and does not become one of the Central Government.
The fact that the authorised controller is appointed by the Central Government and that he has to work subject to the directions of the Central Government does not render the industrial undertaking an agent of the Central Government and therefore, could not be said to be an establishment engaged in an industry carried on by or under the authority of the Central Government.
In fact, this decision should conclude the point.
However, as our attention was drawn to some recent decisions wherein the same expression came up for consideration, we may briefly refer to them.
In Workmen, Karnataka P.F. Employees Union vs Additional Industrial Tribunal & Anr.(1) the Karnataka High Court held that even if the Provident Fund organisation is an instrumentality of the State and therefore answers the definition of the expression `State ' in article 12 of the Constitution, it cannot be said that it is an industry carried on by or under the authority of the Central Government, for the purpose of determining which is the appropriate Government in respect of an industrial dispute between such instrumentality of the State and its workmen.
In M/s Swadeshi Cotton Mills Thoznialar Shemalana Padukaypu Union vs M/s National Textile Corporation Ltd. & Ors.(2) the Union in its writ petition contended that as the National Textile Corporation a Government of India Undertaking was appointed as the authorised controller of the Swadeshi Cotton Mills under Sec.
18 A of the IDR Act on April 13, 1978 the appropriate Government in respect of such mill would be the Central Government and the State Government had no power to appoint the Conciliation Officer under the .
Repelling this contention, it was held that appointment of an authorised controller under Sec.
18 A by a notified order would not make the industrial undertaking an undertaking of the Central Government because by the appointment of the authorised controller, the management of the industrial undertaking is changed to achieve a certain purpose and that too is a temporary phase.
It was held that at any rate the appointment of an authorised controller does not vest the ownership of the industrial undertaking in the Central Government.
Owner 768 ship is something more than management.
Control of the whole or of a part of the industrial undertaking by the Central Government will not make the industrial undertaking an undertaking of the Central Government itself.
In The Management of Bihar Khadi Gramodyog Sangh Mazaffarpur vs State of Bihar & Ors.(1) Patna High Court held that even though the Sangh was set up under the Khadi and Village Industries Commission, yet it is not an industry carried on under the authority of the Central Government and the appropriate Government would be the State Government.
Same view was also taken by the Bombay High Court in Abdul Rehman Abdul Gafur & Anr.
vs Paul (Mrs. E.) & Ors.(2) In Bharat Glass Works (Pvt.) Ltd. vs State of West Bengal & Ors(3).
the Calcutta High Court after following the earlier decision in Carlabad Mineral Water Manufacturing Co. repelled the contention that even though the appellant was a controlled undertaking in a scheduled industry under the IDR Act, it was not an industry carried on under the authority of the Central Government and therefore, the appropriate Government in respect of it would be the State Government.
It is not necessary to multiply the decisions any more.
But the same view appears to have been taken in the Indian Naval Canteen Central Board vs Industrial Tribunal, Ernakulam & Anr.(4) A different note was sounded by the Bombay High Court in D.P. Kelkar, Amalner vs Ambadas Keshav Bajaj & Ors.(5) In that case the employees of the India United Mills Ltd. approached the authority under the Payment of Wages Act for directing the employer to pay minimum bonus under the Bonus Act.
It was contended on behalf of the employer that the employer mill was managed by an authorised controller appointed under Sec.
18 A of the IDR Act and therefore, the workmen of the employer are employees employed by an establishment engaged in an industry carried on under the authority of the Central Government and consequently they were excluded from the operation of the Bonus Act in view of the provision contained in Sec.
32(iv).
The authority under the payment of Wages Act negatived the contention.
The matter came up before the High Court in two writ petitions under article 226 of the Constitution.
The High Court rejected the construction canvassed before it that the 769 expression `carried on by or under the authority of any department of the Central Government qualified the expression `industry ' and not an `establishment ' engaged in an industry.
After rejecting this plain grammatical construction for reasons which do not commend to us, the High Court held that where the Central Government appointed an authorised controller under the IDR Act, the industrial undertaking could be said to be engaged in an industry carried on under the authority of the Central Government.
The High Court distinguished the decision of this Court in Heavy Engineering Mazdoor Union(1) observing that in the facts before the Supreme Court, the company was one registered under the Companies Act and that it being an incorporated company, it has an independent existence while where the authorised controller is appointed, the management is taken over by the Central Government.
We are unable to appreciate this view of the High Court for the reason that the High Court completely overlooked the purpose and intendment of appointing an authorised controller, its effect on the continued existence of the industrial undertaking and the deeming fiction enacted in Sec.
18 B and the limitation on the powers of the shareholders placed by Sec.
The High Court failed to notice the provision contained in sub section
(2) of Sec. 18 E which clearly provides that subject to the provisions contained in sub section (1) and to the other provisions contained in the Act and subject so such other exceptions, restrictions and limitations, if any, as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Indian Companies Act, 1913 shall continue to apply to such undertaking in the same manner as it applied thereto before the issue of the notified order under Sec.
18 A. ' This very important provisions which gives the clue to the expression `carried on under the authority of the Central Government ' was not taken note of by the High Court.
Therefore, the said view of the Bombay High Court does not commend to us and must be overruled.
If on the issue of a notified order appointing an authorised controller under Sec.
18 A, the management of the industrial undergoes a change, yet it does not become an establishment engaged in an industry carried by the department of the Central Government, its employees would not be excluded from the operation of the Bonus Act as provided in Sec.
32(4).
The Tribunal therefore, was clearly in error in rejecting the references holding that the workmen of the respondent were excluded from the operation of the Bonus Act.
The Award of the Tribunal rejecting the references will have to be quashed and set aside 770 and the matter remitted to the Industrial Tribunal for disposing of the same on merits.
An incidental argument was that the National Textile Corporation which has taken over the respondent Company would not be liable for the period when the authorised controller was incharge of the management of the respondent company.
This contention has merely to be stated to be rejected.
5(1) of the Sick Textile Undertaking (Nationalisation) Act, 1974 provides that `every liability ' other than the liability specified in sub section (2) of the owner of a sick textile undertaking, in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him and not against the Central Government or the National Textile Corporation.
`Sub cl.
(c) of Sub sec.
(2) of Sec.
5 provides that `wages ' salaries and other dues of employees of the sick textile undertaking, in respect of any period after the management such undertaking had been taken over by the Central Government, shall, on and from the appointed day, be the liability of the Central Government and shall be discharged, for and on behalf of that Government, by the National Textile Corporation as and when payment of such loans or amounts becomes due or as and when such wages, salaries or other dues become due and payable. ' The appointed day has been specified as the 1st day of April, 1974.
The expression `wages, salaries and other dues of the employees ' would without a doubt include statutory bonus payable under the Bonus Act.
This liability arose for the period after the management of the undertaking had been taken over by the Central Government by appointing an authorised controller under Sec.
Therefore, the liability to pay the bonus if awarded would be of the National Textile Corporation.
The contention of the National Textile Corporation that it is not liable to pay bonus must be rejected.
Accordingly, these appeals succeed and are allowed and the four awards of the Industrial Court, Maharashtra, Nagpur Bench dated 27th November, 1970 in all the four references are quashed and set aside and all the four matters are remitted to the Industrial Court for disposal according to law on merits.
As the cases are very old, the Industrial Court is directed to dispose of the same within the period of four months from the receipt of this order.
The respondent shall pay the costs of the appellant quantified at Rs. 2,000.
N.V.K. Appeal allowed.

summary/full:
The appellant Union served a notice of demand for the grant of bonus for the period 1964 65 to 1967 68.
The matter was taken into conciliation.
The Conciliation Officer recorded a failure, issued a certificate under Section 73A of the Bombay Industrial Relations Act, 1946 certifying that the dispute was not capable of being settled by conciliation.
The Union thereupon made four independent references to the Industrial Court, for the grant of bonus for each of the four accounting years 1964 65 to 1967 68.
The Union further alleged that it could not make a specific demand for bonus calculated at a certain percentage of the salary as it had not got the requisite information about the financial position and the balance sheet of the Employer, and that the Industrial Court should compute the bonus which becomes payable under the Bonus Act, and award the same to the workmen.
The employer resisted the references contending that once a notified order was issued under Section 18A of the Industries (Development and Regulation) Act, 1951 appointing an authorised controller in respect of an industrial undertaking, it was run by the authorised controller under the authority of a Department of the Central Government and therefore, in view 752 of the provisions contained in Section 32(IV) of the Bonus Act its employees were excluded from the application of the Bonus Act and the references must consequently be rejected.
The Industrial Court upheld the aforesaid contention on behalf of the employer that having regard to the provisions contained in Section 32(IV) of the Bonus Act read with Section 18A of the IDR Act, the workmen employed by the employer were excluded from the operation of the Bonus Act as it was not applicable to the employer.
The Industrial Court however rejected the alternative contention that even if the workmen employed by the employer were not entitled to bonus under the Bonus Act, they were yet entitled to claim bonus apart from the Bonus Act as a norm of industrial relations by observing that as the demand was made for bonus under the Bonus Act, and the alternative demand was not made before the Conciliation Officer, the scope of the references could not be enlarged to cover the same.
In the appeals to this Court on the questions: (1) On the appointment of the authorised controller under Section 18A of the IDR Act by the Central Government in respect of an industrial undertaking whether the undertaking acquires the status of an establishment engaged in an industry carried on under the authority of the Department of the Central Government, and (2) Whether the employees employed in such an industrial undertaking were excluded from the operation of the Bonus Act.
Allowing the Appeals, ^ HELD: 1(a) If on the issue of a notified order appointing an authorised controller under Sec.
18A Industries (Development and Regulation) Act 1951, the management of the industrial undertaking undergoes a change, yet it does not become an establishment engaged in an industry carried on by the department of the Central Government, and therefore its employees would not be excluded from the operation of the as provided in Sec.
32(IV).
[768 E G] Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., and M/s. Swadeshi Cotton Mills Thozhilalar Shemalana Padukappu Union vs M/s. National Textile Corporation Ltd. & Ors. , referred to.
Carlsbad Mineral Water Mfg. Co. vs P. K. Sarkar, ; Workmen, Karnataka P.F. Employees Union vs Additional Industrial Tribunal & Anr., [1983] II L.L.J. 108; The Management of Bihar Khadi Gramodyog Sangh, Muzaffarpur vs The State of Bihar & Ors.
, ; Abdul Rehman Abdul Gafur & Anr.
vs Paul (Mrs. E.) & Ors., ; Bharat Glass Works (Pvt.) Ltd. vs State of West Bengal & Ors; and Indian Naval Canteen Control Board vs Industrial Tribunal, Ernakulam & Anr., [1965] II L.L,J. 366, approved.
D.P. Kelkar, Amalner vs Ambadas Keshav Bajaj & Ors., A.I.R. 1971 Bom.
124, over ruled.
753 1.
(b) The Industrial Tribunal was clearly in error in rejecting the references holding that the workmen of the respondent were excluded from the operation of the Bonus Act.
[769 H] 1.(c) The Award of the Industrial Tribunal rejecting the references is quashed and set aside and the matter remitted to the Industrial Tribunal for disposal on merits.
[769 H] 2.(a) The Industries (Development and Regulation) Act, 1951 was enacted to confer power on the Central Government to provide for development and regulations of scheduled industries.
With a view to regulating the industrial expansion of the country and to lay the infrastructure for the same, the Central Government armed itself with the powers to order investigation into the affairs of an industrial undertaking as also, if necessary of a scheduled industry as a whole.
The investigation may be caused to be made where there has been or likely to be a substantial fall in the volume of production or marked deterioration in the quality of an article or an unwarranted rise in the price or for conserving any resources of national importance.
On receipt of the report of investigation, the Central Government could give necessary directions.
These directions are statutory in character.
[761 E G] 2.
(b) The Act provides not for taking over of the industrial undertaking.
It provides for control of management by giving directions or for change of management.
Where the industrial undertaking is owned by a company governed by the Companies Act in force at the relevant time, the management would generally vest in the Board of Directors, and/or the Managing Director, as the case may be.
Where it is a firm or a proprietary concern the partners or proprietors as the case may be, would be in the saddle of management.
[761 H; 762 A B] 2.(c) On the issue of a notified order appointing an authorised controller, the person in charge of management including persons holding office as Managers or Directors of the industrial undertaking immediately before the issue of the notified order shall be deemed to have vacated their office as such.
The contract of management between the industrial undertaking and any managing agent or any director thereof holding office immediately before the issue of the notified order shall be deemed to have been terminated.
Subject to the limitation specified in Sec.
18E, the Companies Act in force at the relevant time will continue to apply to such undertaking in the same manner as it applied thereto before the issuance of the notified order under Sec.
18A. [762 B E] 2.
(d) The significant consequence that ensues on the issue of a notified order appointing an authorised controller is to divert the management from the present managers and to vest it in the authorised controller.
This change of management does not tantamount to either acquisition of the industrial undertaking or a take over of its ownership.
The industrial undertaking continues to be governed by the Companies Act or the Partnership Act or the relevant provisions of law applicable to a proprietary concern.
The only change is the removal of managers and appointment of another manager and 754 to safeguard his position restriction on the rights of shareholders or partners or original proprietor.
This is the net effect of the appointment of an authorised controller by a notified order.
[762 F H; 763 A B] 3.
The expression 'under the authority of and department of the Central Government ' would in ordinary parlance mean that the department is directly responsible for the management of the industrial undertaking.
This responsibility may cover amongst others, financial responsibility as well.
Power to regulate management or control the management is entirely distinguishable from the power to run the industry under the authority of the Central Government.
[763 C D] 4.
The substitution of the management ordered under Sec.
18 A does not tantamount to the industrial undertaking being taken over by the department of the Central Government.
Nor could it be said to be run under the authority of the department of the Central Government.
As the authorised controller enjoys all the powers of directors conferred by the relevant provisions of the Companies Act, be can exercise that power subject of course to any restriction or limitation on his power specified in the notified order or under the general supervision of the Central Government.
But this power is subject to the in built limitation that it can be exercised for regulating the management of the industrial undertaking.
Neither its identity nor its ownership is affected in any manner.
The change in personnel of management of the industrial undertaking for a specified period can never make the industrial undertaking one engaged in an industry carried on under the authority of the Central Government.
[763 E G] 5.
Under Sec.
16 of the IDR Act, the Central Government enjoys wide powers to issue directions to the industrial undertaking as may be appropriate in the circumstances for all or any of the purposes set out in the various sub clauses of Sec.
16(1).
This power to give directions without appointing an authorised controller or to appoint an authorised controller giving him specified directions is of a regulatory nature to be exercised with a view to regulating the managerial functions of an industrial undertaking so as to achieve certain objects or to rectify the mis management in larger national interest without in any manner affecting the identity, the status or the ownership of the industrial undertaking.
The appointment of the authorised controller would not make the industrial undertaking one run under the authority of the department of the Central Government.
While exercising power of giving directions under Sec.
16 the existing management is subjected to regulatory control, failing which the management has to be replaced to carry out the directions.
In either case the industrial undertaking retains its identity, personality and status unchanged.
[763 H; 764 B E] 6.
The underlying purpose of Sec.
32(IV) of the Bonus Act is not to exclude the employees of some stray establishment from the operation of the Act but to exclude all employees of all establishments in any industry which is carried on under the authority of the department of the Central Government.
[764 H] 7.
The expression 'carried on by or under the authority of any department of the Central Government ' qualifies the expression industry and not 755 the expression 'establishment ' as used in sub sec.
(iv) of Sec. 32 of the Bonus Act.
[765 A] 8.
The intention of the framers of the Bonus Act was to exclude employees employed in an establishment engaged in any industry which is carried on by or under the authority of the department of the Central Government.
It cannot be said that textile industry is being carried on under the authority of the department of the Central Government.
There may be employees in an industrial undertaking engaged in textile industry which may have been established under the authority of the department of the Central Government.
Ordinarily the Central Government would not like to treat an industrial establishment set up by it in an industry in which there are other private sector establishments to differentiate and discriminate between employees of establishments engaged in the same industry.[765 C E] 9.
The exception that is being carved out by Sec.
32(IV) is in respect of employees of an industrial undertaking engaged in an industry carried on by or under the authority of any department of the Central Government as a whole and not individual establishments.
[765 E] 10.
The expression 'wages ', salaries and other dues of the employees ' occurring in sub cl.
(c) of sub sec.
(2) of Sec. 5 of the Sick Textile Undertaking (Nationalisation) Act, 1974 would without doubts include statutory bonus payable under the Bonus Act.
[770 E] In the instant case, the liability arose for the period after the management of the undertaking had been taken over by the Central Government by appointing an authorised controller under Sec.
18A of the IDR Act.
Therefore, the liability to pay the bonus if awarded would be of the National Textile Corporation.
[770 E]


judgement:
Civil Appeal No. 8491 of 1983.
From the Judgment and Order dated 5th October, 1982 of the Patna High Court at Patna in C.W.J.C. No. 1420 of 1982.
P.R. Mridul, and M.P. Jha, for the Appellant.
B.B. Singh, for the Respondents The Judgment of the Court was delivered by VENKATARAMIAH, J.
This is an appeal by special leave against the order dated October 5,1982 in C.W.J.C. No.1420 of 1982 on the file of the High Court of Patna dismissing the petition filed by the appellant under Article 226 of the Constitution.
The facts of the case are these: The appellant was directly recruited and appointed as a Deputy Superintendent of Police in the Police Department of the State of Bihar in the year 1964.
In 1973 he was eligible to be considered for appointment as a member of the Indian Police Service under the provisions of the Indian Police Service 301 (Recruitment) Rules, 1954 (hereinafter referred to as 'the Rules ') read with the Indian Police Service (Appointment by Promotion) Regulations, 1955 (hereinafter referred to as 'the Regulations ') framed under sub rule (1) of Rule 9 of the Rules.
His case was placed before the Committee constituted under Regulation 4 of the Regulations for the purpose of preparation of the list of suitable officers for promotion to the Indian Police Service Cadre of the State of Bihar in 1973, 1974, 1975 and 1976.
In the years 1973, 1974 and 1975, he could not be included in the select list as he was junior to those who were included in the select list.
In the year 1976 his name was not included in the select list as there was an adverse entry in his confidential roll of 1973 74.
The reasons given by the Committee for superseding the appellant based on the confidential roll were these: "Delayed disposal of pending papers and supervision notes.
Inadequate control over office, judgment, initiative, sense of responsibility and management reported to be just fair.
Censured by State Govt.
order dt.
20th Oct., 1975.
" The Selection Committee took the decision to supersede the appellant at its meeting held on December 22, 1976 in view of the above entry in the confidential roll of the appellant.
It is not disputed that the said adverse entry was communicated to the appellant in the year 1977 after the above meeting was over.
It appears that there were also adverse entries in the annual confidential roll of the appellant for the year 1974 75.
They were communicated to the appellant in the year 1976.
The appellant made representations in respect of both the adverse entries in time.
His main grievance was that they had been made by his official superior who was biased against him.
The adverse entry made in the confidential roll for the year 1973 74 was expunged by the State Government on December 3, 1980 and the adverse entries in the confidential roll for the year 1974 75 were expunged by two orders dated February 21, 1978 and October 7, 1980.
There was no meeting of the Selection Committee from 1977 to 1980.
It, however, met on March 11/12, 1981.
On this occasion the appellant represented to the Committee that the adverse entries in his confidential rolls had been removed by the State Government by various orders and requested them to consider his case for promotion to the Indian Police Service Cadre.
On this occasion the Committee did not look into the confidential rolls of the appellant for the years 1979 80 and 1980 81 which contained entries very favourable to the appellant for no fault of the appellant.
The Committee, however, 302 classified him as 'good ' but did not include him in the select list while some of his juniors were included.
The appellant represented to the Committee and the State Government against the decision taken by the Committee.
The Committee again met on October 14, 1981.
When nothing came out of the representations made by him, the appellant filed a writ petition questioning the validity of the decisions of the Selection Committee before the High Court of Patna.
The petition was dismissed at the stage of admission.
This appeal is filed by special leave against the order of the High Court.
The main point urged before us is that the Selection Committee had committed an illegality in rejecting the claim of the appellant for being included in the select list in the year 1976 by relying upon the adverse entries which had been made in his confidential rolls which had not been either communicated to him or against which he had made representation which had remained undisposed of and which had been subsequently expunged.
The true legal position governing such cases is laid down by this Court in Gurdial Singh Fijji vs State of Punjab & Ors,( ') which was a case arising under the Indian Administrative Service (Appointment by Promotion) Regulations, 1955 which more or less correspond to the Regulations applicable to the Indian Police Service.
In the above case Chandrachud, C.J. has observed thus: "The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report.
Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified.
Unfortunately, for one reason or another, not arising out of any fault on the part of the appellant, though the adverse report was communicated to him, the Government has not been able to consider his explanation and decide whether the report was justified.
In these circumstances it is difficult to support the non issuance of the integrity certificate to 303 the appellant.
The chain of reaction began with the adverse report and the infirmity in the link of causation is that no one has yet decided whether that report was justified.
We cannot speculate, in the absence of a proper pleading, whether the appellant was not found suitable otherwise, that is to say, for reasons other than those connected with the nonissuance of an integrity certificate to him.
" It is not disputed that the classification of officers whose cases are taken up for consideration into 'outstanding ', 'very good ', 'good ' or 'bad ' etc.
for purposes of promotion to the Indian Police Service Cadre is mainly based upon the remarks in the confidential rolls.
On December 22, 1976, when the Selection Committee met, the adverse remarks in the confidential roll for 1973 74 had not been communicated and the appellant 's representation regarding adverse remarks in the confidential roll for the year 1974 75 and censure against him had not been disposed of although it is alleged that one Shri Yamuna Ram against whom also adverse remarks had been made was included provisionally in the select list.
When the Selection Committee met on March 11 and 12, 1981 despite State Government 's suo motu decision not to retain adverse remarks for the year 1976 77 on records, the same had not been removed from the confidential roll.
This must have influenced the decision of the Selection Committee.
It is also seen that the confidential rolls of the appellant for the year 1979 80 and 1980 81 which contained entries favourable to the appellant were not placed before the Selection Committee.
On October 14,1981 when the Selection Committee met, it does not appear to have considered the representation made by the appellant against his non selection.
In addition to all these, the State Government has expunged the adverse remarks by its orders made from time to time.
These facts are not controverted by the respondents.
The facts of this case are distinguishable from the facts involved in the decision of this Court in R.L. Butail vs Union of India & Ors.
which is relied on by the respondents.
In that case the confidential report of the appellant therein for the year 1964 contained an adverse entry and he had made a representation regarding it, When the Departmental Promotion Committee met in March, 1966, the appellant 's representation regarding the adverse entry of 1964 was not placed before it and a decision adverse to the appellant was taken by the Committee without reference to the said representation.
The 304 appellant contended before this Court that the omission to consider his representation before the date of meeting of the Committee vitiated its decision.
The Court held that the omission either to place the said representation before the Committee or its non consideration before the date of the meeting had no effect on the decision of the Committee as the representation had actually been rejected subsequently with the result that the confidential report for the year 1964 remained unchanged.
The position in the case before us is different.
Here the adverse entries in question have in fact been expunged by the State Government subsequently.
It may be pertinent to state here that the practice of the Departmental Promotion Committee referred to in Butail 's case (supra) was that if in such a case a representation were to be accepted and in consequence the confidential report was altered or the adverse entries were expunged the Committee would have to review its recommendations in the light of such a result.
The appellant in the present case has pressed before us for a similar relief as the adverse entries made against him have been since expunged.
After giving our anxious consideration to the uncontroverted material placed before us we have reached the conclusion that the case of the appellant for promotion to the Indian Police Service Cadre has not been considered by the Committee in a just and fair way and his case has been disposed of contrary to the principles laid down in Gurdial Singh Fijji 's case (supra).
The decisions of the Selection Committee recorded at its meetings in which the case of the appellant was considered are vitiated by reason of reliance being placed on the adverse remarks which were later on expunged.
The High Court committed an error in dismissing the petition of the appellant and its order is, therefore, liable to be set aside.
We accordingly set aside the order of the High Court.
We hold that the appellant has made out a case for reconsideration of the question of his promotion to the Indian Police Service Cadre of the State of Bihar as on December 22, 1976 and if he is not selected as on that date for being considered again as on March 12, 1981.
If he is not selected as on March 12, 1981 his case has to be considered as on October 14, 1981.
The Selection Committee has now to reconsider the case of the appellant accordingly after taking into consideration the orders passed by the State Government subsequently on any adverse entry that may have been made earlier and any other order of similar nature pertaining to the service of the appellant.
If on such reconsideration the appellant is selected he shall be entitled to the seniority and all other consequential benefits flowing therefrom.
We issue a direction to the respondents to reconsider the case of the 305 appellant as stated above.
We hope that the above direction will be complied with expeditiously but not later than four months from today.
Before concluding we wish to state that the Central Government and the State Governments should now examine whether the present system of maintenance of confidential rolls should be continued.
Under the present system, entries are first made in the confidential roll of an officer behind his back and then he is given an opportunity to make a representation against any entry that may have been made against him by communicating the adverse entry after considerable delay.
Any representation made by him would be considered by a higher authority or the State Government or the Central Government, as the case may be, some years later, as it has happened in this case, by which time any evidence that may be there to show that the entries made were baseless may have vanished.
The predicament in which the officer against whom adverse remarks are made is then placed can easily be visualised.
Even the authority which has got to pass orders on the representation of the officer will find it difficult to deal with the matter satisfactorily after a long interval of time.
In the meanwhile the officer concerned would have missed many opportunities which would have advanced his prospects in the service.
In order to avoid such a contingency, the Government may consider the introduction of a system in which the officer who has to make entries in the confidential roll may be required to record his remarks in the presence of the officer against whom remarks are proposed to be made after giving him an opportunity to explain any circumstance that may appear to be against him with the right to make representation to higher authorities against any adverse remarks.
This course may obviate many times totally baseless remarks being made in the confidential roll and would minimise the unnecessary suffering to which the officer concerned will be exposed.
Another system which may be introduced is to ask the officer who records the confidential remarks to serve a copy of such remarks on the officer concerned before the confidential roll is submitted to the higher authorities so that his representation against the remarks may also reach the higher authority shortly after the confidential roll is received.
This would curtail the delay in taking action on the representation.
Suspensions, adverse remarks in confidential rolls and frequent transfers from one place to another are ordered or made many a time without justification and without giving a reasonable opportunity to the officer concerned and such actions surely result in the demoralisation of the services.
Courts can give very little relief in such cases.
The 306 Executive itself should, therefore, devise effective means to mitigate the hardship caused to the officers who are subjected to such treatment.
These questions require to be examined afresh in the light of the experience gained in recent years and solutions should be found to eliminate as far as possible complaints against misuse of these powers by official superiors who may not be well disposed towards the officer against whom such action is taken.
It is needless to state that a non disgruntled bureaucracy adds to the efficiency of administration.
The appeal is accordingly allowed with costs.
H.S.K. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The appellant, a directly recruited Deputy Superintendent of Police in the Police Department of the Respondent State was considered in 1976 for appointment as a member of the India Police Service under the provisions of the Indian Police Service (Recruitment) Rules, 1954 read with the Indian Police Service (Appointment by promotion) Regulations, 1955.
The Selection Committee did not include the appellant in the select list because of an adverse entry in his confidential roll of 1973 74.
The appellant was communicated the said adverse entry only in 1977 which was later on expunged by the State Government in December 1980.
There were also adverse entries in the confidential roll of the appellant for the year 1974 75 which were communicated to him in 1976 and which were also later on expunged by the State Government in February, 1978 and October 1980.
The Selection Committee met again in March 1981, but this time also did not include the appellant in the select list while some of his juniors were included.
The appellant questioned the validity of the decision of the Selection Committee in a writ petition before the High Court.
The High Court dismissed the writ petition at the stage of admission.
Hence this appeal.
In this appeal the appellant urged that the Selection Committee was wrong in relying upon the adverse entries which had been made in his confidential rolls which had not been either communicated to him or against which he had made representation which had remained undisposed of and which had been subsequently expunged.
Allowing the appeal, ^ HELD: The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report.
Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified.
[302 F] Gurdial Singh Fijji vs State of Punjab & Ors., ; referred to.
In the instant case, the case of the appellant for promotion to the Indian 300 Police Service Cadre had not been considered by the committee in a just and fair way and his case has been disposed of contrary to the principles laid down in the Gurdial Singh Fijji 's case.
The decisions of the Selection Committee recorded at its meetings in which the case of the appellant was considered are vitiated by reason of reliance being placed on the adverse remarks which were later on expunged.
The High Court committed an error in dismissing the petition of the appellant.
The appellant has made out a case for reconsideration of the question of his promotion to the Indian Police Service Cadre of the State of Bihar as on December 22, 1976.
The Selection Committee has now to reconsider the case of the appellant accordingly.
[104 E G] R.L. Butail vs Union of India & Ors., [1971] 2 S.C.R. 55.
distinguished.
In order to avoid a contingency, as arose in this case, the Government may consider the introduction of a system in which the officer who has to make entries in the confidential roll may be required to record his remarks in the presence of the Officer against whom remarks are proposed to be made after giving him an opportunity to explain any circumstance that may appear to be against him with the right to make representation to higher authorities against any adverse remarks.
Another system which may be introduced is to ask the officer who records the confidential remarks to serve a copy of such remarks on the officer concerned before the confidential roll is submitted to the higher authorities so that his representation against the remarks may also reach the higher authority shortly after the confidential roll is received.
This would curtail the delay in taking action on the representation.
[105 E G]


judgement:
riminal Appeal No. 50 of 1957.
Appeal by special leave from the judgment and order dated January 27, 1956, of the Rajasthan High Court at Jodhpur in Criminal Appeal No. 119 of 1954 arising out of the judgment and order dated March 23, 1954, of the Court of the Sessions Judge at Ganganagar in Original Criminal Case No. 74 of 1953.
Mohan Behari Lal, for the appellant.
Kan Singh and T. M. Sen, for the respondent.
1957 April 2.
The Judgment of the Court was delivered by KAPUR J.
Bhagwandas and Netram are two brothers who along with Mt. Rameshwari, a daughter 855 of the former, were tried by the Sessions Judge of Ganganagar for an offence under section 302 of the Indian Penal Code but were acquitted.
On appeal to the High Court of Rajasthan, the order of acquittal of Bhagwandas and Netram was reversed and they were convicted under s.302 read with section 34 and sentenced to transportation for life.
The order as to Mt. Rameshwari was affirmed and she was acquitted.
The convicted persons have obtained Special Leave to appeal under article 136 of the Constitution.
he appeal is founded on two grounds: (1) that there was no evidence against the appellants sufficient to warrant a conviction and (2) that there were no compelling reasons for reversal of the judgment of acquittal.
According to the prosecution the canal after a temporary ' closure restarted flowing on May 5, 1953.
And although it was not his turn of water the deceased Shivlal was allowed to take the water to irrigate his fields.
On May 6 the canal was flowing to its full capacity and Shivlal was to take his turn of water which was of 6 hours duration from 8 a.m. to 2 p.m. but he watered his lands from 8 a.m. to 10 30 a.m. because the village diggi (pond) which was empty had to be filled up.
Mirab Ram Karan P. W. 1 with the consent of Shivlal diverted the water for the purpose of filling up the diggi, promising him (Shivlal) to.
get him the rest of his turn of water, i.e., for 3 1/2 hours after the diggi had been filled up.
The diggi was filled up by 1 p.m. on the 7th.
Shivlal then wanted to divert the water into his field but Bhagwandas prevented him from doing so claiming the turn to be his.
According to Ram Karan Mirab P. W. I the turn of Bhagwandas was after Surta whose turn was next to that of Shivlal.
As Shivlal was prevented from taking his turn of water he started walking towards the village saying that he would go and speak to Mirab.
Bhagwandas thereupon shouted that " the enemy was going " and hit Shivlal on the head with a kassi.
Netram then hit Shivlal with lathi as a result of which he fell down and then both beat Shivlal, and 856 Mt. Rameshwari also, it was alleged, joined in this beating with a wooden handle of a kassi.
This occurrence was witnessed by Hazari P. W. 3 who was grazing his camels in the field of Surta.
He went up to the place where the beating was going on and shouted to the assailants who " went away " leaving their kassi behind.
Hazari found Shivlal seriously injured and unconscious.
He sprinkled some water on his face which revived Shivlal and the latter asked Hazari to take him to the Thana but Hazari helped him to walk up to the Khala (threshing floor) of Hukma which was at a short distance from that place.
Hazari P. W. 3 has stated that he left Shivlal with Jora, Jagmal, Bhogar, Begaram and Binja, and on their asking him he (Hazari) told them what he had seen.
Shivlal was then taken to Raisinghnagar by Bhaggu and Jagmal on a she camel to the shop of Gyani ham P. W. 4.
There Shivlal told Gyani Ram also that Bhagwandas, Netram and Rameshwari had assaulted him because of the water ' dispute and also asked Gyani Ram to send for his son Ram Pratap and his Artya (Commission Agent) Ishardas.
Ram Pratap came at about 6 p. m. Shivlal repeated the story to him and was then taken to the hospital by Jagmal, Bhaggu and others.
At the hospital he was treated by the doctor P. W.
I I but died the following day (8th) at 8 15 a. m.
The First Information Report was based on a written report exhibit P 1 by Ram Pratap s/o Shivlal.
It was recorded on May 7 at about 7 30 p. m.
The prosecution supported their case by the evidence of two eye witnesses, dying declarations made to 3 persons and on the recovery of the kassi.
They produced two eye witnesses Begaram P. W. 2 and Hazari P. W. 3.
The dying declarations were made to three persons first to Jora P. W. 7, later to Gyaniram P. W. 4 at his shop and lastly to Ram Pratap P. W. 5 who arrived at the shop at 6 p. m.
If the dying declaration was made to this witness it must have been at that time.
According to the doctor 's evidence Shivlal was unconscious when he was brought to the hospital at 5 p. m, He had 15 injuries on his body, out of which 857 injury No. 1 was with a sharp edged weapon and injury No. 2 with a blunt weapon and both these injuries were grievous and were " individually and collectively fatal sufficient to cause death.
" The learned Sessions Judge disbelieved the whole evidence and acquitted the accused.
He was of the opinion that the evidence produced by the prosecution was not " free from suspicion and not sufficient to convict them ".
Begaram P. W. 2 was disbelieved both by the Sessions Judge and the High Court.
The learned Sessions Judge described Hazari as a " facile fluent liar " but his testimony was accepted by the High Court.
Both courts rejected the statement of Ram Pratap but the statements of Gyaniram and Jora were accepted by the High Court although they were rejected by the Sessions Judge.
The High Court has relied upon the testimony of one eye witness Hazari P. W. 3 and two witnesses before whom Shivlal is alleged to have made two dying declarations.
There are apparent contradictions between the testimony of Hazari and Bega.
The learned High Court Judges disposed of this by saying that Bega 's presence "on the spot is open to grave doubts.
As such it is, in our opinion, not proper to contradict the statement of a man who was present on the spot by using the statement of another man who was in all probability not there." The learned Judges have made the following significant observation in regard to Hazari: " It seems to us that Hazari had said this because the prosecution was producing Bega, and he must have been asked to say that Bega was also present.
So far as the story of Hazari about the incident itself is concerned, nothing has been brought out in his cross examination to throw doubts on this part of his statement.
" They also pointed out, but attached no importance, to other contradictions in the statements of Hazari made before the trial court and before the Police.
If as observed by the learned Judges of the High Court, Hazari had mentioned the presence of Bega merely I 858 because the latter was to be produced as a prosecution witness and because he (Hazari) had been asked to mention it, then it would detract so materially from his reliability that it would be dangerous to accept his testimony as being of any great value which is still more diminished by the finding as to the innocence of Mt. Rameshwari. ' The other piece of evidence which the prosecution relied upon was the two dying declarations made by Shivlal to Gyaniram P. W. 4 and Jora P. W. 7.
Besides the infirmities which the testimony of these two witnesses (Gyaniram P. W. 4 and Jora P. W. 1) suffered from due to material contradictions in their respective statements made at various stages of the case and which have been pointed out by the learned Sessions Judge who said about Gyaniram: " In such a state of affairs I refuse to put any weight and value to the statement of Gyaniram. . . . their evidence cannot be a sure foundation for maintaining the conviction if the statement of Hazari the sole eye witness is disregarded, as it must be disregarded in this case; because ordinarily a dying declaration of the kind which the prosecution has relied upon is by itself insufficient for sustaining a conviction on a charge of murder.
The learned Sessions Judge was of the opinion that the evidence of the doctor P. W. II made the story that Shivlal could walk for a little distance upto the Khala of Hukma or was able to talk so as to make a dying declaration, improbable.
But the learned Judges of the High Court disposed of this matter by saying that the doctor was comparatively young and that his statement was not in accord with the opinion expressed in books on Medical Jurisprudence by authors like Modi and Lyon.
But it cannot be said that the opinions of these authors were given in regard to circumstances exactly similar to those which arose in the case now before us nor is this a satisfactory way of disposing of the evidence of an expert unless, the passages which are sought to discredit his opinion are put to him.
This Court in Sundarlal vs The State of Madhya Pradesh (1) disapproved of Judges drawing (1) A.I.R. 1954 section C. 28 859 conclusions adverse to the accused by relying upon such passages in the absence of their being put to medical witnesses.
The learned Judges of the High Court were, therefore, in error in accepting the testimony of these witnesses in support of the correctness of the two dying declarations nor could the statement of the deceased alleged to have been made in the circumstances of this case be considered sufficient to support the conviction of the accused.
The recovery of the kassi is a wholly neutral circumstance because it has not been proved that it belonged to Bhagwandas.
Although this Court will not interfere with the findings of the High Court because its conclusions on the evidence as to the guilt or innocence of the accused differ from that of the High Court, yet where the evidence is such that no Tribunal could legitimately infer from it that the accused is guilty this court would set aside the conviction.
The Judicial Committee of the Privy Council in Stephen Seneviratne vs The King (1) in setting aside an order of conviction said : ".
. there are here no grounds on the evidence, taken as a whole, upon which any Tribunal could properly, as a matter of legitimate inference, arrive at a conclusion that the appellant was guilty. .
In our view the evidence in the present case is of such quality and no legitimate inference of guilt of the accused could properly be drawn.
The second point on which the judgment of the High Court is assailed is the lack of compelling reasons for setting aside the judgment of acquittal.
This court has held that the High Court should not set aside an acquittal unless there are " substantial and compelling " reasons for doing so.
Surajpal Singh vs State(1) Ajmer Singh vs The State of Punjab (3) Aher Raja Khima vs The State of Saurastra (4).
The judgment of the High Court does not disclose any such reasons justifying interference with the findings of the trial Court.
(1) A.I.R. 1936 P.C. 289, 299.
(2) ; , 201.
(3) ; , 423, (4) ; 860 We would, therefore, allow this appeal, set aside the judgment of the Rajasthan High Court, restore that of the Sessions Judge and order the acquittal of the accused.
Appeal allowed.

summary/full:
The High Court should not set aside an acquittal unless there are "substantial and compelling" reasons for doing so.
Surajpal Singh vs State, ; , Ajmer Singh vs The State of Punjab; , , Aher Raja Khima vs The State of Saurashtra; , , followed.
It is not a satisfactory way of disposing of the evidence of an expert witness to discredit it by reference to text books unless the passages which are sought to discredit his opinion are put to him.
Sunderlal vs The State of Madhya Pradesh, A.I.R. (1954) S.C. 28, followed.
Although the Supreme Court will not interfere with the find ings of the High Court because its conclusions on the evidence as to the guilt or innocence of the accused differ from that of the High Court, yet where the evidence is such that no tribunal could legitimately infer from it that the accused is guilty the Supreme Court would set aside the conviction.
Stephen Seneviratne vs The King, A.I.R. (1936) P.C. 289, relied on.