summary/full:
The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (U.P. Act XXV of 1964) provides for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of markets in Uttar Pradesh.
The enactment was passed for the development of new market areas and for efficient data collection and processing of arrivals in the Mandies to enable the World Bank to give a substantial help for the establishment of various markets in the State of Uttar Pradesh.
It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards and levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh.
Various Market Committees were formed known as Mandi Samitis.
In order to give effect to the working of the Act the Uttar Pradesh Krishi Utpadan Mandi Niyamawalli 1965, being Rules under the Act were made by the Governor.
The Act was amended several times but the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act.
"Agricultural Produce" has been defined in clause (a) of section 2 of the Act to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes a mixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery." while Clause (e) defines "commission agent" or "Arhatiya" to mean: "a person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission".
105 under clause (p), ""producer" means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce".
Cause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce.
" Under Clause (k), 'Market Area ' means an area notified as such under Section 6, or as modified under Section 8, while 'Principal Market Yard ' has been defined under clause (o) to mean, the portion of a Market Area, declared as such under Section 7, and 'Sub Market Yard ' under clause (w) means a portion of a Market Area, declared as such under Section 7.
The State Government under section 8 has got the power to alter any market area and modify the list of agricultural produce.
Section 9 provides for the effect of declaration of Market Area.
Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees, section 17 provides for the power of the Committee.
Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed.
Clause (iii) authorises a Committee to levy and collect (a) such Fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein.
[Though clause (b) of section 17 (iii) had undergone drastic changes from time to time, the Rules were not correspondingly amended.] Section 19 provides for the Market Committee Fund and its utilisation.
Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f.
29 12 1977 providing for the establishment of 'Market Development Fund ' for each committee.
The Rule making power of the State Government is in Section 40.
Rule 66 deals with the levy of market fee, Rule 68 provides for its recovery and Rule 67 provides for licence fee.
By a State Government notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh had been declared to be a Market Area, dividing it into 250 areas and indicating in Schedule 8 of the Notification 115 commodities in respect of which the fee could be levied by the Market Committees.
Declaration of Principal Market Yards and Sub Market Yards under Section 7 had also been made.
Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court from time to time.
There were several rounds of litigation and the writ petitions were dismissed.
On account of the litigations between the traders and the Market Committees, the working of the Committees had not successfully proceeded, as fees levied from time to time could not be 106 realised in full.
Sometimes illegal or unauthorised collections have been made.
Money justifiably realised also had not been fully utilised as it ought to have been done.
In the appeals and writ petitions to this court it was contended on behalf of the appellants and petitioners that: 1.
Big areas consisting of towns and villages have been notified as Market Areas without rendering any service, which is contrary to the whole object of the Act and the concept of fee.
No market area or market yard had been validly created.
No Mandi Samiti (Market Committee) had been validly appointed.
No machinery had been provided in the Rules for adjudication of disputes.
Fixation of minimum of 1% to be charged as market fee by all the Market Committees under section 17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing.
There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified.
There could not be any multi point levy of any market fee either in the same market area or in different market areas.
The retrospective operation of the law brought about in section 17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12 6 1973 was bad.
No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area.
No market fee could be levied both on paddy and rice.
The rice millers had been illegally asked to pay market fee on their sale of rice.
Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser.
Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done.
Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha).
Wood cut and brought from the jungle by a manufacturer or paper could not be subjected to levy of fee.
Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandis, and cannot be subjected to the levy of market fee.
No market fee could be charged on tobacco or tendu leaves nor on bidis.
No market fee could be charged on rab salawat and rab galawat.
107 17.
No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transaction of purchase and sale in respect of these goods.
If no licence is issued or taken under section 9(1) of the Act then there is no liability to pay a market fee.
No market fee can be levied on transactions of match boxes, soyabin products.
No market fee can be charged from the vendors of fruits and vegetables through their Commission Agents.
Fee can be charged only on those transactions in which the seller is producer and not on any other transaction, and market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction.
^ HELD: 1.
Declaration of big areas as Market Areas does not offend any provision of law.
Any area big or small including towns and villages can be declared as Market Area under section 6 of the Act.
[121 F] 2.
The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a principal Market Yard or a sub Market Yard or at any specified place in the Market Area.
No body can be permitted to carry on his business anywhere in the Market Areas as the Market Committee will not be able to control and levy fee throughout the Market Area.
[121 G H] 3.
(i) Market Committees have not yet been constituted in accordance with the provisions contained in section 13 of the Act.
They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which was a temporary Act, extended from year to year.
It is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act.
[123 C] (ii) The levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants.
[123 D] Kewal Krishan Puri vs State of Punjab [1979] 3 S.C.R. 1217, referred to.
A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees.
[123 E] 5(i) Under clause (b) of section 17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature.
The minimum is 1% and the maximum is 1 1/2% of the price of the agricultural produce sold.
The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services.
[123 G] (ii) The charging of 1% fee throughout the State of Uttar Pradesh by all the market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case.
[124 A] 108 6.
The notification dated 11 4 1978 indicates that in the various Districts, which number about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied.
None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act.
The definition of 'agricultural produce ' is very wide, and it is not confined to items of agricultural produce ' only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest.
[124 C] 7(i) All the four clauses of clause (b) of section 17(iii) are mutually exclusive.
If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2).
But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3).
[125 C] (ii) In a particular market area market fee cannot be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy.
Fee can be charged only on one transaction.
This finds support from the unamended Rules as they are, wherein is to be found sub r.
(2) of Rule 66.
There is nothing in the provisions of the Act or the Rules to warrant the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area.
[125 H 126 A] 8(i) Before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee.
But it could not exceed 1/2 percentum of the price of the agricultural produce.
The liability to pay the fee was of the seller of the agricultural produce.
Market fee was liable to be paid under Rule 68(2) (ii) even if the specified agricultural produces was sold directly by the seller to the consumer.
This provision has now been superseded by an amendment in the Act brought about by U.P. Act 19 of 1979.
[127 F G] (ii) After the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had o prevail.
[128 D] (iii) The State Legislatures are competent to make retrospective amendment and retrospective imposition of a fee is valid.
However, in a given case and in a given situation the retrospective operation may be hit by Article 19.
[129 A B] B. Banerjee vs Anita Pan ; , M/s. section K. G. Sugar Ltd. vs State of Bihar & Ors.
[1975] 1 S.C.R. 312 and H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore [1963] Suppl.
2 S.C.R. 302 referred to.
(iv) The Rules which were framed in 1965 namely Rules 66 and 68 are very different from the present provision of law.
The Government has failed to amend the Rules and bringing it in confirmity with the amended provisions of the Statute from time to time.
The Rules will apply as far as possible so long they do not come in conflict with the Statute and even 109 without the aid of the Rules the provision in section 17(iii) (b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to.
[128 G H] In the present case the retrospectivity of the law as such is not bad and the only safeguard will be that if market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and the coming into force of U.P. Act 7 of 1978, in accordance with law as it prevailed then, no market fee under the amended law can be realized again.
But if in respect of any transactions aforesaid market fee had not yet been realised then it can be realised in accordance with the amended provision of the law.
[129 C] 9.
No provision in the Act or the Rules limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area.
[129 G] 10(i) A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y).
He is covered by clause (p) only.
If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y).
The expression producer trader has been coined for a person who is both a producer of agricultural produce and himself trades in it.
For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates.
[130 A B] (ii) If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and then sold the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under sub clause (2) of section 17 (iii) (b).
He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice.
[130 E] (iii) Market fee has to be levied and collected in relation to the transaction of paddy alone.
Otherwise there will be a risk of violation of Article 14 if it is left to the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in the case of others to charge it when the sale of the rice takes place.
If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction and sale in accordance with sub clause (3).
[130 F G] (iv) In transactions of Ghee, a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also.
When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of Section 17(iii)(b), the manufacturing dealer will be liable to pay market fee to the Market Committee or the transaction of Ghee, but he will be entitled to pass on the burden to his purchaser.
[131 C D] 11.
The definition clause (a) of section 2 uses the expression 'animal husbandry 's by way of a descriptive one without strictly confining to the pro 110 products of animal husbandry as the additions, of the words 'specified in the schedule ' indicates.
In the schedule under the group 'husbandry products ' are mentioned item 11 hides and skins, item 12 bones, item 13 meat etc.
Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh the same having not been included in the notification.
Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins.
It could only be charged in relation to the transaction of purchase and sale of animals.
[131 H, G; 132 B C] 12.
Group E of the notification dated 11 4 1978 deals with forest products.
The items mentioned therein are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu, and (5) Lac.
Market fee can be charged on purchase of wood by a trader from a producer.
No fee can be charged on the sale of furniture manufactured by the purchaser of wood.
According to the Market Committees Catechu is a product from timber or trees like Gum or Lac, which trickles down from the trees, while, according to the Catechu dealers by processing of Khar trees Catechu is produced.
This question of fact is left to be decided by the Market Committees concerned in the first instance and then by a court of law.
If Catechu is a product of Khar trees by some processing as prima facie it appears to be so, it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu.
[D, F] 13.
The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii) (b) of the Act liable to pay market fee.
It matters little what use is made of the wood by him.
The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held in Kewal Krishan Puri 's case.
The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee.
[133 B C] 14.
In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc.
They are sold by the Kirana dealers.
Sometimes they purchase them from the agriculturists in the same market area.
In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii) (b).
More often than not such articles are brought from outside and sold by the Kirana merchants.
If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979.
If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce.
[133 E F] 15.
Market fee can be charged on transaction of tobacco as it is included in group A V of the notification.
Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act.
But if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufac 111 ture of bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves.
[133 G 134 A] 16.
Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clause of section 17(iii)(b), as may be applicable.
It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab.
[134 F] 17.
If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged.
If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied.
[135 B] 18(i) Producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii) (b).
But if he is a producer trader in the sense explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence.
[135 E] The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the Rules shall be final.
If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question.
Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law.
[135 G H] (ii) The traders cannot escape their liability to pay the fee on account of their default of taking out licences.
[136 D] 19.
Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purpose of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes.
Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products.
[136 E] 20.
Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables.
The burden does not fall on the producer.
The liability in the first instance is of the commission agent and finally of the purchaser of the articles.
[136 H] 21.
In the U.P. Act even traders under certain circumstances have been made liable to pay such fees.
The argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is devoid of substance.
[138 C] 112 Mangalchand Ramchandra and others etc.
vs State of Bihar approved.
If anything has been realised from the traders or any other person which goes contrary to this judgment the same should be refunded by the Market Committee concerned within six months.
The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case.
[138 D] 23.
Market fee due from the traders should be regularised and be charged in the light of this judgment, and paid within a period of six month.
If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably, in the High Court, within short time thereafter.
[138 E F]


judgement:
ition Nos. 112 115, 175, 297, 194 198, 489 90, 459, 215, 2 3 and 432/80, 1477 of 1979, 1516B 1517/79.
(Under Article 32 of the Constitution) AND SPECIAL LEAVE PETITION (CIVIL) No. 2746 of 1980.
From the judgment and order dated the 11th February, 1980 of the High Court of Calcutta in Appeal from an order No. Nil of 1980.
A. K. Srivastava for the Petitioners in WP Nos. 213 and 175/80.
H. K. Puri for the Petitioners in WP Nos.
1516, 1517, 1477/79 and 2 3 of 1980.
M. P. Jha for the Petitioners in WP No. 297/80.
Dr. Y. section Chitale, B. P. Singh and Naresh K. Sharma for the Petitioners in WPs Nos. 112 115/80.
P. R. Mridul and D. P. Mukherjee for the Petitioners in WPs 489 490 and 432 of 1980.
A. K. Sen, section K. Sinha and C. K. Ratnaparkhi for the Petitioners in WPs.
194 198/80.
Dr. Y. S Chitale, G. section Chatterjee, and D. P. Mukherjee for the Petitioners in SLP No. 2746 of 1980.
section K. Jain for the Petitioners in WP No. 439/80.
M. K. Banerjee Addl.
and Miss A. Subhashini for the Respondent No. 3 in WP Nos.
112 115, 175/80.
Lal Narain Sinha Att.
and U. P. Singh for the Respondent State of Bihar and Its official in WP Nos.
112 115/80, 1477/79, 175, 213, 2 3, 459, 489 90/80 and SLP No. 2746/80.
M. K. Banerjee, Addl.
and section B. Sinha and D. P. Mukherjee for the Respondent No. 9 in WPs 112 115 of 1980.
Rathin Das for the Respondents (State of West Bengal) in WPs.
1516 1517/79.
section section Jauhar for the Interveners in WP No. 175/80.
The Judgment of the Court was delivered by KRISHNA IYER, J.
We have a hunch we leave it at that that these "Workers" writ petitions arc a kind of litigative puppetry.
597 the illicit mine exploiters being the puppeteers.
This set of writ petitions, where some private management claim to have the right to extract coking coal on the score that prohibition enacted in the Coal Mines (Nationalisation) Amendment Act, 1976 does 'not affect or operate on coking coal mines, must be dismissed as devoid of deserts.
The short point sharply focussed by Dr. Chitale and echoed with some variant notes by other counsel, in support of these writ petitions may be briefly stated thus.
According to him, the history of coal nationalisation legislation in this country in the seventies of this century shows that Parliament has treated coal and coking coal separately for legislative purposes in regard to taking over of management, nationalisation of ownership and the like.
It all began with the year 1971 when Parliament enacted the (hereinafter called the 1971 Act, for short).
It took over management of coking coal mines.
Iron and Steel are key industries requiring, importantly, coking coal for their very survival.
When Parliament found that coking coal was not being made available properly to the Industry on account of the unsatisfactory con duct of the private sector operating in this field, the entire management of coking coal mines.
was taken over on an emergency footing in the public interest be the 1971 Act.
Thereafter, with more deliberation and detailed investigation, the management of coking coal mines (and of other coal mines) was taken over by appropriate legislation.
Still later, after mature planning and understanding of implications, Parliament enacted legislation for vesting of ownership of coking coal Mines and eventually of all coal mines.
The Management of coking coal was taken over by the Central Government under .
The management of all other coal mines was taken over by the Central Government under the Coal Mines (Taking over of Management) Act, 1973.
The second step after management came under the control of the Central Government was the actual nationalisation of ownership itself.
This state of planning led to Parliamentary enactments of (36 of 1972) and the (26 of 1973).
The sequence of events shows the evolution of national policy in this regard.
Coking coal, being absolutely essential, was first taken over urgently.
Later on, the entire coal industry came under Parliamentary consideration and management thereof was taken over.
Finally, the ownership of all coal mines, including coking coal mines, was vested in the Central Government and in certain instrumentalities created by Central Government.
Thus we see that the comprehensive plan behind coal nationalisation did not permit of private agencies operating in the field.
Coking coal was 19 289 SCI/80 598 more strategic than ordinary coal having regard to its use for iron and steel industries.
Nevertheless, it was found as a fact that on account of these mines being located in remote places and in jungles, especially in the State of Bihar and Bengal, the Central Government wanted to take effective steps to put an end to clandestine mining by any private agency.
The jungle of laws haphazardly enacted partly helped the privateers get round the law and clandestinely or even through court receivers extract coal as there was big money in it.
Therefore, the 1976 Act was enacted to plug all loopholes, virtually banish the private sector and to ensure legal success for Project Public Sector in the field of coal mining.
Section 3(3) of the 1976 Act reads thus: 3.(3) on and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act.
1976: (i) the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government, or (ii) a person to whom a sub lease, referred to in the proviso to clause (c) has been granted by any such Government, company or Corporation, or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation in India, in any form; (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause(a), and any sub lease granted by any such Government, company or corporation, all other mining leases and sub leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated; (c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause(a): Section 4 of the same Act super adds severe punishment for contravention of the prohibition contained in section 3(3).
The total effect thus is clear.
The Parliament wanted to prevent the mischief of coal P! mining and other illicit extraction of coal to the national detriment.
Scratching, slaughter mining and such like activities on the sly were regarded as defeating the nationalisation scheme.
599 Counsel for the petitioners contended that the legislative history A was relevant to the interpretation of section 3(3) of the 1976 Act.
In his submission, the amendment brought about in 1976 incorporating total interdict of mining applied only in relation to coal mines and not in relation to coking coal mine.
For this argument he sought sustenance from the existence of two sets of legislation dealing with coal mines and coking coal mines throughout the 1970s.
He further pointed out that even as late as 1978 when amendments were contemplated in regard to coal mines ' and coking coal mines ' nationalisation there were separate provisions separately inserted in both the nationalisation measures.
He cited the 1978 Act as illustrative, even decisive.
The absence of any mention of coking coal mines in the 1976 Act, was, in his submission, conclusive of the parliamentary intent in his favour, especially when read in the light of the history of the package of nationalisation legislations.
We are far from satisfied that there is substance in this submission.
History may illumine but cannot imprison interpretation.
It is true that in 1971 when Parliament was faced with a crisis regarding need for coking coal in iron and steel industries a legislation, on an emergency footing, was made solely confined to coking coal mines.
As we have earlier explained, the plan of the nation in regard to these natural resources was then embryonic and later final and there was step by step legislation to implement the policy on a phased programme.
The culmination came in the blanket ban of 1976.
We are concerned here with the interpretation of section 3(3) which we reproduce again for facility of reference at this state: 3.(3) on and from the commencement of section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976, (a) no person, other than (i) the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government.
Or G (ii) a person to whom a sub lease, referred to in the proviso to clause (c) has been granted by any such Government, company or corporation, or (iii) a company engaged in the production of iron and steel, shall carry on coal mining operation, in India, in any form; .
600 (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause (a), and any sub lease granted by any such Government, company or corporation, all other mining leases and sub leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal.
stand terminated; (c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause (a): Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sub lease to any person in any area on such terms and conditions as may be specified in the instrument granting the sub lease, if the Government, company or corporation is satisfied that (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner, and (ii) the coal produced by sub lessee will not be required to be transported by rail.
The short question of statutory construction turns on the meaning to be assigned to the expression "no person, other than the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government. shall carry on coal mining operations in India, in any form".
The expression is semantically sweeping and is wide in meaning so as to spare no class of coal, including even coking coal, because coking coal is a species of coal, coal itself being the genus.
What is more, there is a definition of 'coal mine ' in the Coal mines (Nationalisation) Act, 1973.
Section 2(b) of the 1973 Act defines coal mine to mean "a mine in which there exists one or more seams of coal".
It is apparent that even a coking coal mine is a coal mine because the definition is broad.
It is inarguable that coking coal is not coal.
This conclusion is reinforced by looking at the definition of coking coal mine in section 3(c) of the .
Section 3(c) reads thus: "coking coal mine" means a coal mine in which there exists one or more seams of coking coal, whether exclusively or in addition to any seam of other coal.
601 Indeed, it is irrefutable, viewed literally, lexically, semantically, teleologically or applying the rule in Heydon 's case that coking coal mine is a coal mine.
If it is a coal mine it is covered by the 1976 Act.
Coking coal is more precious,, strategically speaking, than other forms of coal and it would be an error, nay a blunder, to prevent private extraction of common coal and to permit removal of coking coal.
It would be pathetic and bathetic for any policy maker to be so egregious.
Parliament may err but not be absurd ! So construed, it is obvious that coking coal, which is more importantly needed for the nation than other supplies of coal, must be the last to be squandered away by permitting it to be privately exploited.
We have no hesitation in holding that 'coal mine ' in the 1976 Act includes coking coal mine and section 3(3) of that Act clamps down the ban on extraction of coking coal also.
lt was feebly submitted that some of the mines may have fire clay layers to reach which the mining operation may have to pass through coal seams; and, therefore, such operation cannot be prohibited.
We are not impressed with this argument at all.
Even assuming there is fire clay or other layer somewhere in the bowels of the earth the statutory mandate is that once you come up on a coal seam you shall stop extracting it to proceed beyond.
Maybe, some injury may be caused, fancied or real, but it is permissible for Parliament to make provision to prevent evasion of the purpose of the statute by prohibition of mining other minerals which may incidentally defeat the coal nationalisation measure.
In this view we find no merit in any of the writ petitions and dismiss them all with costs.
It has been mentioned on more than one occasion in this court that interlocutory orders have been sought and obtained, that Receivers have been appointed by other courts and that they have been working these mines.
In the face of the statutory prohibition which is imperative in tone and all embracing in language, even punishable for violation, it is surprising that any Receiver could at all dare to work mines without running a grave risk.
The court cannot sanction the commission of a crime.
We make it perfectly plain that there will be no more authorisation for any receiver or other officer of court to extract coal or coking coal from any mine in India.
Section 3(3) of the 1976 Act, being all inclusive and having been constitutionally upheld by thus Court, it is no longer permissible for any court in India n 602 to appoint a receiver for or otherwise permit extraction of coal or coking coal.
These observations and reasonings must converge to only one conclusion that the crowd of writ petitions deserve to be and are hereby dismissed of course, with costs.
We would conclude with a conscientious query will the State keep the coal mafia out, break the coal racket where government agencies are suspect and demonstrate that, the court having come to the aid of the Executive, nationalisation will fulfil the targets and tide over the crisis ? Caesar 's wife must be above suspicion.
S.R. Petitions dismissed.

dataset_name: IN-Abs

summary/full:
Dismissing the petitions, the Court ^ HELD 1.
"Coal Mine" in the 1976 Act includes coking coal mine and section 3(3) of that Act clamps down the ban on extraction of Coking Coal also [601B C] History may illumine but cannot imprison interpretation.
It is true that in 1971 when Parliament was faced with a crisis regarding need for coking coal in iron and steel industries, on an emergency footing was made solely confined to coking coal mines.
The plan of the nation in regard to these natural resources was then embryonic and later final and there was step by step legislation to implement the policy on a phased programme.
The culmination came in the blanket ban of 1976.
[599D E] The expression in Section 3(3) is semantically sweeping and is wide in meaning so as to spare no class of coal, including even coking coal, because coking coal is a species of coal, coal itself being the genus.
Section 2(b) of the 1973 Act defines coal mine to mean "a mine in which there exists one or more seams of coal".
Even a coking coal mine is a coal mine because the definition is broad and this is clear from the definition of coking coal mine in Section 3(c) of the .
[600E G] Coking coal is more precious, strategically speaking, than other forms of coal and it would be an error, nay a blunder, to prevent private extraction of common coal and to permit removal of coking coal.
It would be pathetic and bathetic for any policy maker to be so egregious.
Parliament may err but not be absurd! So construed, it is obvious that coking coal, which is more importantly needed for the nation than other supplies of coal, must be the last to be squandered away by permitting it to be privately exploited.
[601A B] 3.
Even assuming there is a fire clay or other layer somewhere in the bowels of the earth tho statutory mandatory is that once you come up on a coal seem you shall stop extracting it to proceed beyond.
May be some injury may be caused, fancied or real, but it is permissible for Parliament to make provision to prevent evasion of the purpose of the statute by prohibition of mining other minerals which may incidentally defeat tho coal nationalisation measure.
[601D F] 596 4.
Section 3(3) of the 1976 Act, being all inclusive and having been constitutionally upheld it is no longer permissible for any Court In India to appoint a receiver for or otherwise permit extraction of coal or coking coal.
The Court cannot sanction the commission of a crime.
[601G, H, 602A]


judgement:
tition Nos. 1311, 1269 70, 1113, 1109, 1479 1480, 924 925, 1478, 1250 1251, 1219, 926 927, 1072 1076, 1565, 1652 1654, 1434 1435, 1648, 1306 1310, 13121314, 1590 1591, 1588 1589 of 1979 and 400, 192, 448 and 462 of 1980.
(Under Article 32 of the Constitution) A. K. Sen and section K. Sinha for the Petitioners in WP Nos.
1306 1314/79, 1434, 1113, 1109, 1250 1251, 1219, 1072 1076, 1565, 1652 1654, 1435/79 and 192/80.
588 K. N. Choubey and A. K. Srivastava for the Petitioners in WP Nos.
1269 1270, 1590 1591, 1588 1589, 924 925, 926 927/79.
M. P. Jha for the Petitioners in W.P. 1648/79.
A. K. Ganguli, for the Petitioner in W.P. Nos.
1479 1480/79.
Arun Madan for the Petitioners in W.P. No. 40()/80.
section N. Jha for the Petitioners in W.P. No. 488/80.
K. N. Choubey and Mukul Mudgal for the Petitioners in W.P. 462/80.
Lal Narain Sinha Att.
Genl., M. K. Banerjee Addl.
Sol '.
Genl., and Miss A. Subhashini for the Respondent Union of India, Central Coal Fields, Easter Coal Field in WP.
1307, 1310, 1312, 1314 and Respondent 3 in W.P. Nos.
1308,1588, 1589, 1434, 1072 1076/79.
Lal Narain Sinha Att.
and U. P. Singh for the Respondents, State of Bihar and Its officials in W.P. Nos.
1588 89, 1434, 1109, 924 925, 1250 1251, 926 927, 1219, 1250 1251, 1072, 1290 91, 1648, 1479 80, 1073 1074, 1565/79 and 400, 192, 488 and 462/80.
Lal Narain Sinha Att.
and Rathin Dass for the Respondents (West of Bengal) in W.P. Nos.
1306 1314, 1073 1074/79.
P. K. Chatterjee for the State of West Bengal in W.P. 1072/79.
A. K. Srivastava for the Caveator/Respondent No. 4 in W.P. Nos.
1652 1654 of 1979.
The Judgment of the Court was delivered by KRISHNA IYER, J.
'Survival after death ' is the expression that aptly describes these writ petitions relating to coal mining by private agencies long after a prohibitory legislation and an order by this Court repelling the challenges to the vires of that Act.
Parliament by the Coal Mines (Nationalisation) Amendment Act, 1976 (Act No. LXVII of 1976) (For short, the 1976 Act) totally prohibited all mining of coal save by instrumentalities set out in section 3, sub section (3) which we may excerpt here: (3) on and from the commencement of Section 3 of the Coal Mines (Nationalisation) Amendment Act, 1976. (a) no person, other than (i) the Central Government or a Government company or a corporation owned, managed or controlled by the Central Government, or 589 (ii) a person to whom a sub lease, referred to in the proviso to cl.
(c), has been granted by any such Government, company or corporation, or (iii) a company engaged in the production of iron and steel shall carry on coal mining operation, in India, in any form; (b) excepting the mining leases granted before such commencement in favour of the Government, company or corporation, referred to in clause (a), and any sub lease granted by any such Government, company or corporation, all other mining leases and sub leases in force immediately before such commencement, shall, in so far as they relate to the winning or mining of coal, stand terminated; (c) no lease for winning or mining coal shall be granted in favour of any person other than the Government, company or corporation, referred to in clause (a) .
Provided that the Government, company or corporation to whom a lease for winning or mining coal has been granted may grant a sublease to any person in any area on such terms and conditions as may be specified in the instrument granting the sub lease, if the Government, company or corporation is satisfied that (i) the reserves of coal in the area are in isolated small pockets or are not sufficient for scientific and economical development in a coordinated and integrated manner, and (ii) the coal produced by the sub lease will not be required to be transported by rail.
It is obvious that the provision is peremptory and the prohibition is mandatory because there is punishment provided for contravention of that provision.
Section 4(1) of the 1976 Act makes a breach of section 3(3) punishable with imprisonment.
This broad spectrum ban in law arrested the extraction of coal and was naturally assailed as ultra vires by the managements themselves in writ petitions under article 32.
A bench of seven judges of this court heard erudite and elaborate arguments, at the end of which the writ petitions were dismissed.
But it is not unusual for many litigants 'even though vanquished, to argue still '.
Here, however, the challenge and challenger are of different colour.
For, the petitioners before us 590 claim to be workmen who are thrown out of employment on account of the 1976 Act and lament in this Court that they are discriminated against and on that score the law is violative of article 14 of the Constitution.
The plea put forward is that in regard to nationalised coal mines the workmen are taken care of and their benefits assured, while in regard to coal mines where mining is prohibited by section 3(3) of the 1976 Act the workmen are left in the cold.
This is stated to be discrimination between workmen and workmen, thus contravening the mandate of equality before the law.
Maybe, the writ missiles of the managements proved damp squibs but the workers undaunted by that rebuff, want to try a new weapon of ultra vires.
The coal will go to the employers and the wages to the workers.
The Union of India resists this relief and contends that the writ petitioners are mere reincarnations of the old managements which have fought and lost and are masquerading as workmen so as to facilitate a second challenge.
The State asserts that clandestine coal mining mafia having been stopped, these racketeers are playing the maricha game through bogus workers in tears.
Without going into the merits of this averment we may state that every other conceivable objection to the validity of the 1976 Act and other sister enactments had been urged in vain before the seven judges ' bench.
Now the alleged workmen are complaining of discriminatory denial of benefits to one class of workers.
The Union of India counters this plea as factually a ruse for clandestine mining operations by management and legally a second battle after the legal Waterloo, hoping against hope that there is nothing to lose in a gamble.
Even if a spell of stay were got the gain will outweigh possible losses in litigation.
Indeed, the State 's contention is that considerable losses to Government and traumatic consequences on the nation are being daily inflicted by such clandestine operations.
The whole mischief contemplated by the 1976 Act is being continued under the guise of invalidity of the legislation and, alternatively, by going to court and getting receivers appointed so that a legal colour is imparted to lawless depradations.
It is true that nationalisation of coal, as a policy, has been evolved over the seventies.
In the beginning, the management of coal mines was taken over and at a later stage ownership itself vested in the Union of India by virtue of ownership of all coal mines is the simple and incontrovertible fact emerging from the bunch of legislation we have been taken through.
We are not going into the catena of enactments and their sequence covering this question, because they are being discussed in greater detail and fuller depth in the comprehensive judgment where reasons have yet to be given but the result, by way 591 Of brief order, has already been announced.
Suffice it to say that the 1976 Act totally prohibits working of any coal mines by any agency other than those which have been set out in section 3(3).
Surely, there is authority for the managements under whom the present petitioners are alleged to be workmen to operate coal mines in the face of the prohibition in the 1976 Act.
There is a point of dispute raised by the Union of India that the managements which have come up before this Court do not have even leases under the .
This is controverted by the other side but we may side step that issue because it is not essential for the decision of this case.
For one thing, no such lease is before us.
For another, what is relied on in some cases is hukumnamas which cannot do duty for leases.
Even granting leases and their renewal by the State itself as is asserted in a few cases, the grown and force of the law stand four square between the mines and extraction of coal by any but the agencies specified in s.3(3) of the 1976 Act.
It is common ground that there is no specification of the coal mines in question in the schedule to the nationalisation legislation of 1973, nor is there any specific notification relating thereto.
Investigation by the State or intimation by the private managements are obligatory under the appropriate legislation and in the absence of any intimation none has been produced before us we have to presume that these are no such coal mines as are set up before us.
What apparently has been done, it at all, is to do what has been described as 'scratching that is surface mining of coal bearing areas, destructive of the natural resources of the nation without any thought for the morrow and without any reference to the planned, phased programme of exploitation of coal for the benefit of the country in the public sector.
We are satisfied that on the materials placed before us in all these cases, the mines, if any, are illicitly being operated, there being no sanction of the law.
It is precisely to prevent this mischief of slaughter mining that section 3(3) was introduced and section 4 was enacted to make the activity punishable.
The proscription is comprehensive and the penalty makes it imperative.
Once we accept the position that it is not permissible to operate these mines save by those specified in the 1976 statute it necessarily follows that workmen, genuine or other, cannot claim any fundamental right to work these mines.
The prohibition of mining coal except as under section 3(3) of the 1976 Act, is in the public interest and indeed, the scheme shows that wherever public interest requires exploitation of coal mines it has been permitted in the public sector and even in the private sector so far as certain specified industries, such as iron and steel industries, are concerned.
The ban is part of a 592 national policy, conceived for conservation of a vital national resource and the wisdom of the regulation of fuel sources and their planned user is beyond argument.
therefore, the language of section 3(3) is express, explicit and admits of no exception.
An aware court will not relax when the language is peremptory, the legislation is charged with a critical purpose and even the commiserative cause of workmen not wolves in sheep 's clothing.
as is asserted, cannot override the larger cause of the nation.
No nation no workmen; Assuming for a moment that the private managements are, as Dr. Chitale and Shri A. K. Sen urged, deemed custodians within the scheme of the legislative take over, they are necessarily to operate oh behalf and under the direction of the Central Government.
Here is the Central Government protesting, as stridently as it can, against the mining operations by the alleged mine owners.
Both the State and Central Governments are making common cause and demand that no deemed custodian need ' work any mine on their behalf.
How can a surrogate custodian exceed the command of the principal to stop mining ? The whole case of the Union of India is that a clandestine cluster a sort of coal mafia which may even have got sham registers of workmen is defying Government and extracting coal on the sly.
It is audacious for the dubious managements, under whom the petitioner are supposed to be innocent workmen, to represent to the court that they are 'deemed custodians ', working on behalf of the Central Government.
Nor are we prepared to accept the naive case that the petitioners ' employers can be regarded as deemed custodians under section section We may read s '.
S of the Coal Mines nationalisation Act, 1973.
Power of Central Government to direct vesting of rights in a Government company: (1) Notwithstanding anything contained in Sections 3 and 4, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose, direct, by an order in writing, the right, title and interest of an owner in relation to a coal mine referred to in Section 3, shall; instead of continuing vest in the Central Government, vest in the Government company either on the date of publication of the direction or on such earlier or later date (not being a date earlier than the appointed day), as may be specified in the direction.
593 (2) Where the right, title and interest of an owner in relating to a coal mines vest in a Government company under sub section (1), the Government company shall on and from the date of such vesting, be deemed to have become the lessee in relation to such coal mine as if a mining lease in relation to the coal mine had been granted to the Government company and the period of such lease shall be the entire period for which such lease could have been granted under the Mineral Concession Rules; and all the rights and liabilities of the Central Government in relation to such coal mine shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively, of the Government company.
(3) The provisions of sub section (2) of section 4 shall apply to a lease which vests in a Government company as they apply to a lease vested in the Central Government and references therein to the "Central Government" shall be construed as references to the Government company.
D The notification required under section 5 authorising the mine to be worked, is admittedly absent.
No such notification exists or has been hinted at or is existing.
In the absence of the relevant notification contemplated by section 5, it is impossible to postulate 'deemed custodianship '.
There are scheduled mines or notified mines, under the scheme of statutory management in the Management Take over Act.
Notifications are a sine sua non for custodian ship, actual or deemed and absent such notification taking over management no private agency can self style itself as deemed custodian.
It follows that on any view of the matter the managements other than those specified under section 3(3) of the 1976 Act can claim to extract coal from any coal mines.
If this conclusion is sound, as we have demonstrated it is, the inference is irresistible that no one can claim to extract coal as a workman, although in public interest, it is imperative that such operation should stop.
We hold that there is no violation of article 14 of the Constitution, vis a vis is the workmen concerned assuming them to be real workmen.
We have grave doubts about the veracity of this piece of workmanship that the petitioner and others of their ilk are actual, not imaginary.
Anyway, after the dismissal of the managements ' writ petitions, the argument that the Act impugned is ultra vires vis a vis workmen is a daring legal workmanship.
If a larger bench of this Court has already upheld the vires of a statute the discovery of a new argument cannot invalidate that decision.
That proposition will make the binding effect of precedents, read in the light of article 141, a vanishing cream once a novel thought strikes a legal brain.
594 The question of discrimination between two classes of workmen hardly arises because one set of mines has been closed down validly.
If the closure is valid, no one employed there has a right to force it open on the score of discrimination.
Denial of lay off or other benefits belong to a different jurisdiction.
If any workmen are really aggrieved that their interests are not protected and that their future is in jeopardy, it is certainly open to them to make representation to the Central Government for consideration of their lot, and certainly a welfare State will give due consideration for such representation if it is satisfied that he grievance is genuine.
We dismiss the Writ Petition with costs.
It has been mentioned on more than one occasion in this court that interlocutory orders have been passed, that Receivers have been appointed by civil courts, including High Courts, and that working of mines is licitly going on.
In the face of the all pervasive statutory prohibition which is peremptory in language and punishable in consequence, it is surprising that any Receiver could at all dare to work mines.
While we disapprove of that conduct we make it perfectly plain that there will be no more sanction for any receiver or other officer of court to extract coal or coking coal from any mine in India.
Section 3(3) of the 1976 Act being mandatory and having been held constitutional by this Court, it is no longer permissible for any court in India to appoint a receiver or otherwise permit extraction of coal or cooking coal.
We vacate all interim orders forthwith It may be fair to the learned Attorney General, whose hunch we share to state that this wealth of "workers" writ petitions is a kind of litigative puppetry, the illicit mine exploiters being the puppetteers and those who figure as worker petitioners being the puppets.
S.R. Petitions dismissed.

summary/full:
Dismissing the Writ Petitions, the Court, ^ HELD: 1.
The provision contained in Section 3(3) of Act LXVII of 1976 is peremptory and the prohibition is mandatory because there is punishment provided for contravention of that provision.
Breach of Section 3(3) is made punishable with imprisonment.
The 1976 Act totally prohibits working of any coal mines by any agency other than those which have been set out in Section 3(3).
Surely, there is no authority for the managements under whom the present petitioners are alleged to be workmen to operate coal mines in the face of the prohibition of the 1976 Act.
Even for granting leases and their renewal by the State itself, the frown and force of the law stand four square between the mines and extraction of coal by any but the agencies specified in section 3(3) of the 1976 Act [589F G, 591A, B & C] 2.
Investigation of the State or intimation by the private managements are obligatory under the appropriate legislation and in the absence of any intimation the presumption is that there are no such coal mines as are set up before the Court.
What apparently has been done, if at all, is to do what has been described as 'scratching ' that is surface mining of coal bearing areas, destructive of the natural resources of the nation without any thought for the morrow and without any reference to the planned, phased programme of exploitation of coal for the benefit of the country in the public sector.
The mines, if any, are illicitly being operated, there being no sanction of the law.
It is precisely to prevent this mischief of slaugter mining that s.3(3) was introduced and s.4 was enacted to make the activity punishable.
The proscription is comprehensive and the penalty makes it imperative.
When it is accepted that it is not permissible to operate these mines save by those specified in the 1976 statute, it necessarily follows that workmen, genuine or other, cannot claim any fundamental right to work these mines.
[591D G] 3.
The prohibition of mining as under section 3(3) of the 1976 Act, is in the public interest and indeed, the scheme shows that wherever public interest requires exploitation of coal mines it has been permitted in the public sector and even in the private sector so far as certain specified industries, such as iron and steel industries, are concerned.
The ban is part of a national policy, conceived for conservation of a vital national resource and the wisdom of the regulation of 587 fuel sources and their planned user is beyond argument.
Therefore, the language of section 3(3) is express, explicit and admits of no exception.
An aware Court will not relax when the language is peremptory, the legislation is charged with a critical purpose and even the commiserative case of workmen not wolves in sheep 's clothing, cannot override the larger cause of the nation.
No nation, no workmen.
[591G H, 592A] 4.
It is audacious for the dubious managements under whom the petitioners are supposed to be innocent workmen to represent to the Court that they are "deemed custodians" working on behalf of the Central Government.
[592D E] Under section S, notifications are a sine qua non for custodianship, actual or deemed and absent such notification taking over management no private agency can self style itself as "deemed custodian".
Therefore, the managements other than those specified in section 3(3) of the 1976 Act, can not claim to extract coal from any coal mines.
If this be so, no one can claim as a workman, although in public interest, although it is imperative that such operation should stop.
[593E F] 5.
There is no violation of Article 14 of the Constitution vis a vis the workmen concerned assuming them to be real workmen.
After the dismissal of the management 's writ petitions, the argument that the Act impugned is ultra vires vis a vis workmen is a daring legal workmanship.
If a larger Bench of this Court has already upheld the vires of a statute the discovery of a new argument cannot invalidate that decision.
That proposition will make the binding effect of precedents, read in the light of article 141 a vanishing cream once a novel thought strikes a legal brain.
[593F H] The question of discrimination between two classes of workmen hardly arises because one set of mines has been closed down validly.
If the closure is valid, no one employed there has a right to force it open on the score of discrimination.
Denial of lay off or other benefits belong to a different jurisdiction.
If any workmen are really aggrieved that their interests are not protected and that their future is in jeopardy, it is certainly open to them to make representation to the Central Government for consideration of their lot, and certainly a welfare State will give due consideration for such representation if it is satisfied that the grievance is genuine.
[594A B] 6.
Section 3(3) of the 1976 Act being mandatory and having been held constitutional by this Court, it is no longer permissible for any court in India to appoint a receiver or otherwise permit extraction of coal or cooling coal.
[594D E]


judgement:
Civil Appeal No. 6 of 1954.
Appeal from the judgment and order dated the 8th day of June 1951 of Calcutta High Court in Income tax Reference No. 1 of 1951.
R. J. Kolah and P. K. Ghosh, for the appellant.
552 G. N. Joshi, Porus A. Mehta and R. H. Dhebar, for the respondent.
May 8.
The Judgment of the Court was delivered by BHAGWATI J.
This is an appeal with certificate under section 66 A(2) of the Indian Income tax Act, 1922 from the judgment and order passed by the High Court of Judicature at Calcutta on a reference under section 66(1) of the Act, whereby the High Court answered the referred question in the negative.
The appellant is a timber merchant.
On 5th February 1930.
he obtained a loan of Rs. 1 lakh from the Bank of India on the joint security of himself and one Mamraj Rambhagat.
On the same day Mamrai Rambhagat obtained a loan of Rs. 1 lakh from the Imperial Bank of India.
, Bombay on the joint security of himself and the appellant.
The appellant paid off his loan of Rs.
I lakh to the Bank of India but Mamraj Rambhagat failed to make good the amount of his loan to the Imperial Bank of India, Bombay.
This sum of Rs. 1 lakh was realised by the Imperial Bank of India from the appellant with interest thereon of Rs. 626 on 24th March 1930.
Mamraj Rambhagat failed in his business and his estate went into the hands of the receivers on 25th April 1930.
The appellant opened a ledger account in the name of Mamraj Rambhagat and the total amount of Rs. 1,00,626, was debited to this account.
The appellant received the dividends from the receivers: Rs.31,446 on 30th October 1930, Rs. 9,434 on 25th April 1934 and Rs. 4,716 on 17th May 1938, aggregating to Rs. 45 596 leaving a balance of Rs. 55,030 unpaid, which sum he wrote off as bad debt in the assessment year 1941 42 (the account year being 1997 Ramnavmi) and claimed as an allowable deduction under section 10 of the Act.
The Income tax Officer disallowed the claim holding that the said loss was a capital loss, and so did the Appellate Assistant Commissioner.
It was argued on behalf of the appellant before the Appellate Assis 553 tant Commissioner that it was the usual custom in Bombay to secure loans on joint security from Banks by persons carrying on business.
It was stated that this manner of securing loans on joint security was preferred by the Banks and it was also in the interest of the traders as lower rate of interest was charged, if the loan was on joint security.
It was also stated that the appellant used to borrow money on joint security frequently and certain old pro notes jointly executed were submitted before the Appellate Assis tant Commissioner.
Reference was made to the case of Commissioner of Income tax, Madras vs section A. section Ramaswamy Chettiar(1), where it was held that it was a custom amongst Nattukottai Chettiars to stand surety for one another for borrowing from ' Banks for the purpose of lending out at higher rates of interest and that the loss incurred under the agreement of guarantee by the Chettiar firm should be allowed as a deduction.
The Appellate Assistant Commissioner, however, distinguished the case on facts and held that even though the appellant stood surety for Mamraj Rambhagat in course of securing finance for his business of timber, it was the loss of a sum borrowed by another, the sum borrowed was capital in its nature and the loss suffered by the appellant on account of Mamraj Rambhagat 's failure to pay was a capital loss.
On appeal taken by the appellant before the Income Tax Appellate Tribunal, the Tribunal was of the opinion that the Appellate Assistant Commissioner had not expressed any opinion in his order as to whether there was such custom or not nor had he asked the appellant to establish the custom.
The Tribunal in these circumstances held that the custom was accepted by the Department.
The Tribunal did not see any distinction between the money lending business and timber business which were both financed by this type of borrowing and differing from the Appellate Assistant Commissioner followed the decision in Commissioner of Income tax, Madras V. section A. section Ramaswamy Chettiar (supra)., and came to (1) 554 the conclusion that the loss suffered by standing surety was an allowable loss and upheld the contention of the appellant.
At the instance of the respondent the Tribunal stated a case to the High Court under section 66(1) of the Act and referred the following question for its decision: "Whether on the facts found the sum of Rs. 55,030 is allowable as a bad debt under the provisions of section 10(2)(xi) of the Indian Income tax Act".
The said reference was heard by the High Court and in its judgment the High Court held that the Tribunal had proceeded on an erroneous assumption as to the facts of the case and the application of the money. ' Since ' no part of the loan, which had been taken from the Imperial Bank of India by Mamraj Rambhagat on the joint security of himself and the appellant, was applied to the appellant 's own business, there was no question of an allowable deduction in relation to the business of the appellant.
The High Court held that the Tribunal was in error even in law inasmuch as under section 10(2) (xi) it is only a trading.
or business debt of the trade or business of the appellant, which could be claimed as a loss and as the debt claimed was not in respect of the business of the appellant, which was the business of trading in timber and not of a person carrying on the business of standing surety for other persons, the loss suffered by the appellant was a capital loss and not a business loss at all.
Regarding the decision relied upon by the Tribunal, the High Court referred to a later decision in Commissioner of Income tax, Madras vs section R. Subramanya Pillai(1), which held that the earlier decision must be read as confined to its peculiar facts and not applicable to business other than money lending business of Nattukottai Chettiars.
The High Court, therefore, answered the referred question in the negative.
Hence this appeal.
The sole question for our determination in this appeal is whether the loss of Rs. 55,030 suffered by the appellant in this transaction was a capital loss or (1) 555 was a trading loss or a bad debt incurred by the appellant in the course of carrying on his business of timber.
It is clear that no part of the monies borrowed on the joint security of the appellant and Mamraj Rambhagat from the Imperial Bank of India, Bombay went to finance the timber business of the appellant, but they were all utilised by Mamraj Rambhagat in his own business.
These monies were not required to finance the timber business of the appellant, nor was the debt due by Mamraj Rambhagat and in respect of which the account was opened by the appellant in his ledger in the name of Mamraj Rambhagat a debt due by Mamraj.
Rambhagat to the timber business of the appellant.
If any monies had been borrowed by the appellant in his timber business, they would certainly have been his capital and whatever loss he incurred therein would have been his capital loss.
The manner in which these monies were sought to be connected with the timber business and treated as a trading loss or bad debt of the timber business was by showing that it was the custom amongst the persons carrying business in Bombay to borrow monies from Banks on joint security and if A wanted monies for financing his business, he could do so by asking B to join him as surety, but he could not ask B to join him as such unless he stood surety for B in the loans which B borrowed in his turn from the Bank.
A s joining B as surety was thus a consideration for B 's joining A as surety in his transaction with the Bank and, therefore, although no part of the monies borrowed by B came into the business of A, A joined B as surety for the purpose of financing his own business, which he could not do without B joining him as surety in the loan which he himself obtained from the Bank for the purpose of financing his own business.
The transaction of A 's joining B as surety in the matter of B 's procuring a loan for the financing of his business was thus an essential operation of the financing of A 's business and was, therefore, an incident of A 's business and any loss incurred by A in the transaction could thus be treated as a trading loss in the course of carrying on of A 's 72 556 business.
The loss incurred by the appellant in the transaction of his joining Mamraj Rambhagat as surety in the loan which Mamraj Rambhagat procured from the Imperial Bank of India could, it was urged, thus be treated as a trading loss or bad debt of the appellant 's timber business.
It is necessary, therefore, to see what is the exact nature and scope of the custom said to have been accepted by the Department.
The custom stated ' before the Appellate Assistant Commissioner was that persons carrying on business in Bombay used to borrow monies on joint security from the Banks in order to facilitate getting financial assistance from the Banks and that too at lower rates of interest.
A businessman could procure financial assistance from the Banks on his own, but he would in that case have to pay a higher rate of interest.
He would have to pay a lower rate of interest if he could procure as surety another businessman, who would be approved by the Bank.
This, however, did not mean that mutual accommodation by businessmen was necessarily an ingredient part of that custom.
A could procure B, C or D to join him as surety in order to achieve this objective, but it did not necessarily follow that if A wanted to procure B, C or D to thus join him as surety, he could only do so if he in his own turn joined B, C or D as surety in the loans, which B, C of D procured in their turns from the Banks for financing their respective businesses.
Unless that factor was established, the mere procurement by A of B, C or D as surety would not be sufficient to establish the custom sought to be relied upon by the appellant so as to make the transaction of his having joined Mamraj Rambhagat as surety in the loan procured by Mamraj Rambhagat from Imperial Bank of India, a transaction in the course of carrying on his own timber business and to make the loss in the transaction a trading loss or a bad debt of the timber business of the appellant.
The old pronotes jointly executed by the appellant and others, which were submitted before the Appellate Assistant Commissioner did not carry the case of the appellant far enough and stopped 557 short of proving the custom alleged by the appellant in, its entirety.
The transaction in question could not, 'therefore, be.
deemed to be one entered into by the appellant in the course of or in carrying on his timber business.
Procuring finances for his timber business would no doubt be an essential operation in the course of his carrying.
on his business, but the same thing could not be predicated of this transaction of his joining Mamraj Rambhagat as surety for procuring Rs. 1 lakh from the Imperia Bank of India, which was wholly to finance Mamraj Rambhagat 's business and not the timber business of the appellant.
Learned counsel for the appellant laid particular emphasis on the finding by the Appellate Assistant Commissioner that "it was in the course of securing finance for the business of timber that he stood surety with Mamraj Rambhagat".
This finding merely records the statement of fact, but does not go so far as to establish the custom sought to be relied upon by the appellant.
The old pronotes submitted by the appellant before the, Appellate Assistant Commissioner merely related to his own transactions, where he had been joined by others as surety and did not establish that the others had been similarly accommodated by him in the matters of loans which they had in their turn procured from the Banks.
The solitary instance of the appellant 's having joined Mamraj Rambhagat in the transaction in question could not be sufficient to establish the custom sought to be relied upon by him and we do not see any reason to enlarge the scope of the so called custom beyond what is warranted by the facts as set out in the order passed by the Appellate Assistant Commissioner.
The custom among the Nattukottai Chettiars held proved in Commissioner of Income tax, Madras vs section A. section Ramaswamy Chettiar (supra) was that they stood surety for one another, when they borrowed from Banks for the purpose of lending out at higher rates of interest.
It was, moreover, an essential element in the carrying on of a money lender 's business that 558 money, which Was thus lent out should be procured and that could not be done unless it was borrowed on the joint security of Nattukottai Chettiars, who stood surety for one another.
Unless that type of suretyship was resorted to, a Nattukottai Chettiar by himself could never procure any monies which he could invest in his money lending business.
The following passage from the judgment at page 238 is every apposite: "It is their custom to borrow from banks for the purpose of lending out the sums so obtained at higher rates of interest.
The banks require such overdrafts to be guaranteed by other Chettiars.
The Chettiars stand surety for one another in these borrowings.
If a Chettiar refused to accommodate another moneylender in this way, he would not be able to obtain a guarantor for his own essential borrowings.
The assessee in this case borrowed money on the guarantee of others and in turn stood surety for other Chettiars".
There were thus elements of mutuality and the essential ingredient in the carrying on of the money lending business, which were elements of the custom proved in that case, both of which are wanting in the present case before us.
It is significant to note that this case was distinguished by the learned Judges of the Madras High Court in Commissioner of Income tax, Madras V. section B. Subramanya Pillai (supra), where it was held that that decision must be confined to its own peculiar facts and does not apply to businesses other than Nattukottai Chetty money lending business.
In that case the assessee was a bookseller, who borrowed from time to time jointly with one L a sum of Rs. 16,200 out of which the assessee took a sum of Rs. 10,450 for his business needs and L took the balance.
The joint borrowing was necessitated by the business needs of both the borrowers and by the insistence of money lenders, who required the joint security of the two persons.
L failed in his business and the assessee had to repay the creditors the whole of the joint borrowing.
The assessee had also to 559 spend a sum of Rs. 658 in an unsuccessful attempt to recover the amount due from L.
The assessee 'Claimed to deduct the sum of Rs. 658 and also the sum of Rs. 520495 which he had to pay the creditors on account of L 's share of the joint loan; in the computation of his business profits.
It was held that the assessee was not entitled to deduct these sums in the computation of his business profit either under sec tion 10 (2) (xi) or section 10 (2) (xv) or as business loss.
This case furnishes the proper analogy to the present case and points to the right conclusion in regard to the claim of the appellant.
The following passage from the judgment of the learned C. J. under appeal correctly sums up, in our opinion, the whole position: "The debt must therefore be one which can properly be called a trading debt and a debt of the trade, the profits of which are being computed.
Judged by that test, it is difficult to see how The debt in the present case can be said to be a debt in respect of the business of the assessee.
The assessee is not a person carrying on a business of standing surety for other persons.
Nor is he a money lender.
He is simply a timber merchant.
There seems to have been some evidence before the Appellate Assistant Commissioner that he had from time to time obtained finances for his business by procuring loans on the joint security of himself and some other person.
But it is not established, nor does it seem to have been alleged, that he in his turn was in the habit of standing surety for other persons along with them for the purpose of securing loans for their use and benefit.
Even if such, had been the case, any loss suffered by reason of having to pay a debt borrowed for the benefit of another, would have been a capital loss to him and not a business loss at all.
The result, therefore, is that the appeal fails and must stand dismissed with costs.
Appeal dismissed.

summary/full:
The appellant who was a timber merchant obtained a loan from the Bank of India on the joint security of himself and a third party, M.
On the same day M obtained a loan from the Imperial Bank of India on the joint security of himself and the appellant.
M failed in his business and the Imperial Bank of India realised the amount of the loan from the appellant who after getting some dividends from the receivers, wrote off the balance as bad debt in the assessment year in question and claimed it as an allowable deduction under section 10 of the Indian Income tax Act, 1922 on the footing that it was in the course of securing finances for the business of timber that he stood surety with M and that it was the usual custom to secure loans on the joint security from Banks by persons carrying on business.
It was not established that the appellant was in the habit of standing surety for other persons along with them for the purpose of securing loans for their use and benefit.
Held, that the debt in question could not be considered a debt in respect of the.
business of the assesses who was not a person carrying on a business of standing surety for other persons and that, in any event, the loss suffered by reason of having to pay a debt borrowed for the benefit of another would be a capital loss and not a business loss and was not an allowable deduction under section 10(2) (xi) of the Indian Income tax Act.
Commissioner of Income tax, Madras vs section A. section Bamaswamy Chettiar ([1946] , distinguished.
Commissioner of Income tax, Madras vs S, B. Subramanya Pillai ([1950] , approved.


judgement:
Civil Appeal No. 2686 of 1979.
From the Judgment and order dated 27 8 1979 of the Delhi High Court in Civil Writ Petition No. 844/78.
R.K. Garg and C. M. Nair for the Appellant.
H.S. Marwah for the Respondent No. 6.
V.M. Tarkunde and P. P. Juneja for Respondent No. 7.
Lal Narain Sinha Att.
Genl., Abdul Khader and Miss A. Subhashini for the Union of India.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The judgment in this appeal is really an appendix to the judgment pronounced by us in Civil Appeal No. 2112 of 1979.
The relevant facts may be gathered from that judgment.
The further events requiring to be mentioned are these: While the Writ Petition filed by Ahluwalia in the High Court of Himachal Pradesh was pending, some of the respondents to the Writ Petition and one R. R. Verma all direct recruits, chose to file a Writ Petition in the Delhi High Court questioning the notice dated June 29, 1979, calling upon them to submit representations against the year of allotment proposed to be allotted to Sahney, Dhaliwal and Ahluwalia.
After the Writ Petition of Ahluwalia was allowed, and after the Central Government passed the order dated July 27, 1979, pursuant to the direction issued by the High Court of Himachal Pradesh, the Delhi High Court dismissed the Writ Petition filed by the direct recruits as infructuous.
The High Court, however, granted a certificate of fitness to appeal to this Court under Article 133 of the Constitution.
Therefore, this appeal.
The Writ Petition having been dismissed as infructuous we do not see how a certificate under Article 133 could have been granted.
But, we do not want to dismiss the appeal on that preliminary ground.
Shri R. K. Garg, learned counsel for the appel 481 lants challenged the order of the Central Government dated July 27, 1979 on three grounds: (1) Rule 3 of the All India Services (Conditions of Service residuary matters) Rules, offended Article 14 of the Constitution and was ultra vires as it conferred arbitrary and uncanalised power upon the Central Government to grant relaxation whenever it pleased it to do so.
(2) The discretion to relax the rules was wrongly exercised in the present case.
(3) The Central Government was powerless to review its earlier orders as such a power of review was not expressly conferred by the rules.
The second question has already been considered by us in Civil Appeal No. 2112 of 1979 and we have held that this was a fit case for the exercise of the power of the Central Government to relax the rules.
The first question is about the Constitutional validity of rule 3 of the All India Services (Conditions of Service residuary matters) Rules 1960.
Rule 3 is as follows: "3.
Power to relax rules and regulations in certain cases Where the Central Government is satisfied that the operation of (i) any rule made or deemed to have been made under the All India Services Act, 1951 (61 of 1951), or (ii) any regulation made under any such rule, regulating the conditions of service of persons appointed to an All India Service causes undue hardship in any particular case, it may, be order, dispense with or relax the requirements of that rule or regulation, as the case may be, to such extent and subject to such exceptions and conditions, as it may consider necessary for dealing with the case in a just and equitable manner".
The submission of Shri Garg was that the rule conferred upon the Central Government absolute and arbitrary discretion, a discretion left entirely to the satisfaction of the Government, Government with no prescribed objective standards or guidelines.
It is true that the rule is couched in a language suggestive of near autocratic power reminiscent of "bad old days" of the Imperial Raj but, we have no doubt that the rule is not meant to vest the Central Government with power to pass any order they like with a view to promote the interests 482 of a favoured Civil servant.
It is really meant to relax, in appropriate cases, the relentless rigour of a mechanical application of the rules, so that civil servants may not be subjected to undue and undeserved hardship.
Sufficient guidance can be had from the very rule and from the scheme of the various statutory provisions dealing with the conditions of service of Members of the All India Service.
Section 3 of the All India Services Act enables the Central Government in consultation with the Governments of the States concerned to make rules for the regulation of recruitment, and the conditions of service of persons appointed to an All India Service.
Pursuant to the power given by Section 3 of the All India Services Act the Central Government has made innumerable sets of rules, some common to all the All India Services and some applicable separately to each of the All India Services.
The All India Services (Leave) Rules, the All India Services (Conduct) Rules, the All India Services (Discipline and Appeal) Rules, the All India Services (Travelling Allowance) Rules, and the All India Services (Conditions of Service residuary matters) Rules are examples of rules made under Section 3 of the All India Services Act which are common to all the All India Services.
The Indian Police Service (Cadre) Rules, the Indian Police Service (Recruitment) Rules, the Indian Police Service (Probation) Rules, the Indian Police Service (Regulation of Seniority) Rule are examples of rules made under section 3 of the All India Services Act applicable to a single All India Service namely, the Indian Police Service.
The rules, as may be seen, deal with countless matters which concern a civil servant, such as creation of cadres, fixation of Cadre Strength, recruitment, seniority, promotion, leave, allowances, conduct, discipline and appeal, and a host of such other matters.
The golden thread, if we may so call it, which runs through the entire complex fabric of rules is the securing of honest and competent civil servants.
Integrity and efficiency are the hall marks of any civil service anywhere and they are what are contemplated and aimed at by the wide range of rules.
The interest to be served is always the public interest and not individual interest.
Public interest, in the matter of the conditions of service of civil servants, is best served by rules which are directed towards efficiency and integrity.
Now, very wide as the range covered by the rules is, the rules can never be exhaustive.
Unforeseen and complex situations often arise as will be obvious even from a bare perusal of the cases reported in the Law Journals arising out of "service controversies".
Very often it is found that an all too strict application of a rule works undue hardship on a civil servant, resulting in injustice and inequity, causing disappointment and frustration to the civil 483 servant and finally leading to the defeat of the very object aimed at by the rules namely efficiency and integrity of civil servants.
Hence it is that the Central Government is vested with a reserve power under rule 3 to deal with unforeseen and unpredictable situations, and to relieve the civil servants from the infliction of undue hardship and to do justice and equity.
It does not mean that the Central Government is free to do what they like, regardless of right or wrong; nor does it mean that the Courts are powerless to correct them.
The Central Government is bound to exercise the power in the public interest with a view to secure civil servants of efficiency and integrity, and when and only when undue hardship is caused by the application of the rules, the power to relax is to be exercised in a just and equitable manner but, again, only to the extent necessary for so dealing with the case.
We do not have to add that the exercise of the power of relaxation like all other administrative action affecting rights of parties is subject to judicial review on grounds now well known.
Viewed in this light we do not think that Rule 3 is unconstitutional on the ground that it vests an unfettered discretion in the Government.
The last point raised by Shri Garg was that the Central Government had no power to review its earlier orders as the rules do not vest the Government with any such power.
Shri Garg relied on certain decisions of this Court in support of his submission : Patel Narshi Thakershi & Ors.
vs Pradvamunsinghji Arjunsinghji, D. N. Roy and section K. Bannerjee & Ors.
vs State of Bihar & Ors.
, and State of Assam & Anr.
vs J. N. Roy Biswas.
All the cases cited by Shri Garg are cases where the Government was exercising quasi judicial powers vested in them by statute.
We do not think that the principle that the power to review must be conferred by statute either specifically or by necessary implication is applicable to decisions purely of an administrative nature.
To extend the principle to pure administrative decisions would indeed lead to untoward and startling results.
Surely, any Government must be free to alter policy or its decision in administrative matters.
If they are to carry on its their daily administration they cannot be hide bound by the rules and restrictions of judicial procedure though of course they are bound to obey all statutory requirements and also observe the principles of natural justice where rights of parties may be affected.
Here again, we emphasise that if administrative decisions are reviewed, the decisions 484 taken after review are subject to judicial review on all grounds on which an administrative decision may be questioned in a Court.
We see no force in this submission of the learned counsel.
The appeal is, therefore, dismissed.
S.R. Appeal dismissed.

summary/full:
One Sri Ahluwalia a senior member of the Indian Police Service sought to quash the decision of the Union of India dated 26 6 1976 whereby his year of allotment was fixed as 1965.
When the Writ Petition of Sri Ahluwalia was pending in the High Court of Himachal Pradesh, some of the respondents in that Writ Petition and one R. R. Verma all direct recruits, choose to file a Writ Petition in the Delhi High Court questioning the notice dated June 29, 1973 calling upon them to submit representations against the year of allotment proposed to be allotted to M/s. Sahney, Dhaliwal and Ahluwalia.
After the Writ Petition of Ahluwalia was allowed, and after the Central Government passed the order dated July 27, 1979, pursuant to the direction issued by the High Court of Himachal Pradesh to Union of India to refix the seniority and year of allotment to Sri Ahluwalia, the Delhi High Court dismissed the Writ Petition filed by the direct recruits as infructuous.
The High Court, however granted a certificate of fitness to appeal to this Court under Article 133 of the Constitution.
Dismissing the appeal, the Court ^ HELD: 1.
The Writ Petition having been dismissed as infructuous it is not proper on the part of the High Court to grant a certificate of fitness under Article 133 of the Constitution.
[480G H] 2.
Rule 3 of the All India Services (Conditions of Service residuary matters) Rules, 1960 is couched in a language suggestive of near autocratic power reminiscent of "bad old days" of the Imperial Raj but, the rule is not ment to vest the Central Government with power to pass any order they like with a view to promote the interests of a favoured Civil servant.
It is really meant to relax.
In appropriate cases, the relentless rigour of a mechanical application of the rules, so that civil servants may not be subjected to undue and undeserved hardship.
Sufficient guidance can be had from the very rule and from the scheme of the various statutory provisions dealing with the conditions of service of Members of the All India Service.
[481G H, 482A B] 3.
Rule 3 is not unconstitutional on the ground that it vests an unfettered discretion in the Government.
Section 3 of the All India Services Act enables 479 the Central Government in consultation with the Governments of the States concerned to make rules for the regulation of recruitment, and the conditions of service of persons appointed to an All India Service.
Pursuant to the power given by Section 3 of the All India Services Act the Central Government has made innumerable sets of rules, some common to all the All India Services and some applicable separately to each of the All India Services.
The All India Services (Leave) Rules, the All India Services (Conduct) Rules, the All India Services (Discipline and Appeal) Rules, the all India Services (Travelling Allowance) Rules, and the All India Services (Conditions of Service residuary matters) Rules are examples of rules made under Section 3 of the All India Services Act which are common to all the All India Services.
The Indian Police Service (Cadre) Rules, the Indian Police Service (Recruitment) Rules, the Indian Police Service (Probation) Rules, the Indian Police Service (Regulation of Seniority) Rules are examples of rules made under section 3 of the All India Services Act applicable to a single All India Service, namely, the Indian Police Service.
The rules deal with countless matters which concern a civil servant, such as creation of cadre, fixation of Cadre Strength, recruitment, seniority, promotion, leave, allowances, conduct, discipline and appeal, and a host of such other matters.
The golden thread, which runs through the entire complex fabric or rules is the securing of honest and competent civil servants.
Integrity and efficiency are the hall marks of any Civil service anywhere and they are what are contemplated and aimed at by the wide range of rules.
The interest to be served is always the public interest and not individual interest.
Public interest, in the matter of the conditions of service of civil servants, is best served by rules which are directed towards efficiency and integrity.
[482B G & 483D] Now very wide as the range covered by the rules is, the rules can never be exhaustive.
Unforeseen and complex situations often arise.
Very often it is found that all too strict application of a rule works undue hardship on a civil servant.
resulting in injustice and inequity, causing disappointment and frustration to the civil servant and finally leading to the defeat of the very objects aimed at by the rules namely efficiency and integrity of civil servants.
Hence it is that the Central Government is vested with a reserve power under rule 3 to deal with unforeseen and unpredictable situations, and to relieve the civil servants from the infliction of undue hardship and to do justice and equity.
It does not mean that the Central Government is free to do what they like, regardless of right or wrong; nor does it mean that the Courts are powerless to correct them.
The Central Government is bound to exercise the power in the public interest with a view to secure civil servants of efficiency and integrity, and when and only when undue hardship is caused by the application of the rules, the power to relax is to be exercised in a just and equitable manner but, again, only to the extent necessary for so dealing with the case Moreover, the exercise of the power of relaxation like all other administrative action affecting rights of parties is subject to judicial review on grounds now well known.
[482G H, 483A C] 4.
It is not correct to say that the principle that the power to review must be conferred by statute either specifically or by necessary implication is applicable to decisions purely of an administrative nature.
To extend the principle to pure administrative decisions would indeed lead to untoward and startling re 480 sults.
Surely, any Government must be free to alter its policy or its decision in administrative matters.
If they are to carry on their daily administration they cannot be hide bound by the rules and restrictions of judicial procedure though of course they are bound to obey all statutory requirements and also observe the principles of natural justice where rights of parties may be affected.
Again, if administrative decisions are reviewed, the decisions taken after review are subject to judicial review on all grounds on which an administrative decision may be questioned in a Court.
[483F H, 484A] Patel Narshi Thakershi and Ors.
vs Pradvamunsinghji Arjunsinghji, AIR 1970 SC 1273; D. N. Roy and section K. Banerjee and Ors.
vs State of Bihar and Ors.
, ; and State of Assam and Anr.
vs J. N. Roy Biswas [1976] 2 S.C.R. 128, distinguished.