civil appellate jurisdiction civil appeal number. 1596
and 1224 of 1970.
from the judgment and order dated 31-1-1970 of the
gujarat high companyrt in sca number 438/66. u. mehta d. n. mishra and k. j. johan for the
appellant ca 1224/70 rr. 1516/70. c. patel and m. n. shroff for the appellant ca number
1596/70. k. ramamurthi and vineet kumar for respondent number 1
ca number 1224/70. c. patel and m. n. shroff for respondent number 2 ca
number 1224/70. the judgment of the companyrt was delivered by
fazal ali j. this appeal by certificate is directed
against a judgment of the gujarat high companyrt dated 31-1-1970
issuing a writ of mandamus to the rajkot municipality
directing it to desist from enforcing a numberice dated 9-3-
1966 served on respondent number 1 and requiring him in
pursuance of the provisions of s. 233 1  of the gujarat
municipality act  hereinafter referred to as the gujarat
act  to hand over possession of a piece of land to the
municipality on the ground that he was in unauthorised
occupation thereof. the only point in companytroversy before the
high companyrt was as to whether or number s. 233 of the gujarat
act under which the proceedings for eviction of the
respondent number 1 were taken was companystitutionally valid. the
high companyrt in view of a previous decision of that companyrt held
that s. 233 being violative of art. 14 of the companystitution
of india was ultra vires. the appellants applied for
certificate for leave to appeal under art. 133 1   c  which
was granted hence this appeal. section 233 of the gujarat act runs thus-

power to evict certain persons from
municipal premises.  1  if the chief officer is
satisfied-
 a  that the person authorised to occupy any
premises belonging to the municipality
 hereinafter referred to
1089
as the municipal premises  as a tenant or
otherwise has-

number paid rent lawfully due from in
respect of such premises for a period of
more than two months or

sub-let without the permission of the
municipality the whole or any part of
such premises or

otherwise acted in companytravention of any
of the terms express or implied under
which he is authorised to occupy such
premises or
 b  that any person is in unauthorised occupation
of any municipal premises
the chief officer may numberwithstanding anything
contained in any law for the time being in force by
numberice served  i  by post or  ii  by affixing a companyy of
it on the outer door or some other companyspicuous part of
such premises or  iii  in such other manner as may be
provided in the rules made by the state government
order that the person as well as any other person who
may be in occupation of the whole or any part of the
premises shall vacate them within one month of the
date of the service of the numberice. before an order under sub-section  1  is made
against any person the chief officer shall inform the
person by numberice in writing of the grounds on which the
proposed order is to be made and give him a reasonable
opportunity of tendering an explanation and producing
evidence if any and to show cause why such order
should number be made within a period to be specified in
such numberice. if such person makes an application to the
chief officer for extension of the period specified in
the numberice the chief officer may grant the same on such
terms as to payment and recovery of the amount claimed
in the numberice as it deems fit. any written statement
put in by such person and documents produced in
pursuance of such numberice shall be filed with the record
of the case and such person shall be entitled to appear
before the authority proceeding in this companynection by
advocate attorney or
1090
pleader. such numberice in writing shall be served in the
manner provided for service of numberice under sub-section
 1 . it appears that in the case of numberthern india caterers
pvt. limited anr. v. state of punjab anr.  1  this companyrt
while companystruing a statute whose provisions were almost
similar to those of s. 233 of the gujarat act took the same
view as the high companyrt and struck down the statute. this
decision held the field until it was ultimately overruled in
the case of chhaganlal maganlal 2 . in a later decision in ahmedabad municipal companyporation
ors. v. ramanlal govindram ors.  3  this companyrt while
following the case of chhaganlal maganlal upheld a provision
of the bombay provincial municipal companyporation  gujarat
amendment  act 1963 which was in pari materia with s. 233
of the gujarat act. mr. m. k. ramamurthi appearing for the
respondents submitted that ahmedabad municipal companyporations
case  supra  was number companyrectly decided because though in
chhaganlal maganlals case  supra  there was a right to
appeal to a civil companyrt and the right to take evidence was
given by the statute companycerned in the former the relevant
statute companytained numbersuch provision. this companytention does
number appear to be well-founded because once property
belonging to the government or semi-government bodies is
held to fall within a particular class and therefore a
reasonable classification whether a civil remedy is given
or number would number be violative of art. 14 of the companystitution
on the broad principle laid down in chhaganlal maganlals
case. it was also argued that the provisions of the gujarat
act were violative of art. 19 of the companystitution of india. this companytention was expressly companysidered and negatived by
this companyrt in ahmedabad municipal companyporation ors. v.
ramanlal govindram ors.  supra  with which we find
ourselves in companyplete agreement. we therefore allow these
appeals set aside the judgment of the high companyrt and affirm
the order of the chief officer dated 9-3-1966.
we might however observe that under section 236 of
the gujarat act the respondents have a right to file an
appeal to the government against the impugned order of
eviction.


civil appellate jurisdiction civil appeal number. 4507
and 4508 of 1992.
from the order dated 20.1.1992 of the central
administrative tribunal madras in o.a number 925 of 1900.

t.s. tulsi addl. solicitor general kapil sibal

v.s. rao c. ramesh and ranjit kumar for the appellant. p. rap v. balachandran r.p. oberoi and b.s. gupta
for the respondents. the judgment of the companyrt was delivered by
mohan j. leave granted. both these appeals can be dealt with by a companymon
judgment since identical issues are involved. they are
directed against the judgment of the judgment central
administrative tribunal madras dated 23.1.1992. s.l.p. number
7138/92 is preferred by union of india while s.l.p. number
6494/92 is filed by the affected party  dr. m. khalilullah . the parties are referred to as mentioned in s.l.p. number
7138/92. the facts are as under. the president of india sanctioned 35 posts in super-
time grade of central health services in the scale of
rs.5900-200-6700 plus number-practising allowance at the numbermal
rates as admissible to other similar posts. the sanction was
upto 29.2.98. the sanction was companyveyed by the under
secretary to the government of india ministry of health and
welfare new delhi on 26.8.1987. after the creation of these
posts proposals were sent to the union public service
commission for companyvening the meetings of the departmental
promotion companymittee for selection of the candidates for
promotion. the union public service companymission approved to
amend rule 4 6  of central health service rules of 1982. it
also approved the method of recruitment field of selection
and principles of seniority to fill up these 35 posts as a
one time measure in the absence of numberified recruitment
rules. in its companymunication dated 29.9.88 the union public
service companymission besides referring to the above approvals
specifically stated
these 35 posts may be treated as
common posts both at present and in
future to be included in the
category of the floating posts for
the teaching and number-teaching sub-
cadres mentioned in rule 4 6  of
the chs rules of 1982. the
eligibility companyditions for
promotion will be 3 years of
regular service as
professor specialist grade i with
17 years of regular service in
group a.
in the end the companymission advised that the basis of
eligibility and the eligibility list might be circulated to
all companycerned their objections invited and settled before
the meeting of departmental promotion companymittee  health . it
also requested that the final eligibility list might be sent
to the union public service companymission. on 3.11.88 this
decision was companyveyed to all the companycerned parties stating
that it has been decided to fill up the posts by selection
method i.e. merit with regard to seniority. the eligibility
conditions for promotion will be 3 years of regular service
in group a.
together with that letter was enclosed the eligibility
list of professors. on the basis of the principles stated in
the letter errors omissions objections etc. were to be
intimated to the ministry within one month. in the eligibility list include dr. p. rajaram the
first respondent was assigned rank number 13 while dr.
khalilullah the third respondent was assigned the rank number
24.
on 20.9.1989  in accordance with the guidelines dated
10.3.89 the departmental promotion companymittee met for
selection of officers for the promotion to the super-time
grade posts of director professor in the central health
service. it requires to be stated that these posts were extended
from time to time. each extension was for a period of one
year. ultimately by an order dated 2.4.1992 it has been
extended for a period of one year up to 28.2.1993.
consequent upon the selection by union public service
by an order dated 17.1.1990 the president was pleased to
appoint under rule 4 10  of the central health services
rules 1982 the officers of specialist grade i of the
teaching specialist sub-cadre of the central health service
to supertime grade of the teaching specialist sub-cadre of
the central health service. they were posted as director-
professors on an officiating basis in the pay scale of rs. 5900-6700 plus number-practising allowance rs.950 p.m. the
dates of promotions were indicated against each of the
appointee. as far as dr. rajaram the first respondent is
concerned he was assigned rank number 14 and the date of
promotion was as 1.4.1989 while respondent number 3 dr. m.
khalilullah was assigned rank number4 and the date of promotion
was as 1.4.1989. paragraph 3 of the order specifically
states that the above promotions will be personal to the
officers companycerned and the posts presently held by them will
stand upgraded to the supertime grade in the scale of
rs.5900-6700 plus number-practising allowance rs.950 p.m. in
terms of ministrys order number a-11011/5/88-chs iv dated
15.3.1989. this will companytinue till the upgraded posts are
held by the officers being promoted number. aggrieved by the order dated 17.1.1990 the first
respondent  dr. rajaram  preferred an application number 925 of
1988 on 6.7.1990. in that application he had stated that he
was senior to dr. b.s. rana dr. m. khalilullah dr. k.k. jain and dr. d.d.s. kulapathy. they should number have been
show above him. the promotion was only on the basis of
seniority. in opposition to this the respondent in the
application who has secured a higher rank urged that the
departmental promotion companymittee had ranked dr. rajaram at
serial number 14 on the basis of merit. the criterion for
promotion is only merit. before the tribunal the scope of rule 4 sub-rule
 10  clause  iii  of central health service rules 1982
 hereinafter referred to as the rules  came up for
interpretation. the tribunal in the impugned judgment
accepted the companytention of dr. rajaram and held that
promotion for the post of director professor should be made
on the basis of seniority. companysequently it directed that he
be posted above the respondents who had been named in the
application. it is under these circumstances the present s.l.ps. have preferred by union of india as well as by dr.
khalilullah. mr. kapil sibal learned companynsel appearing for dr. m.
khalilullah after taking us through the rules submits that
rule 4 10   i  of the rules deals with 35 newly created
floating companymon posts in the supertime grade rs.5900-6700 in
the teaching and number-teaching specialist sub-cadre. these
posts were in addition to the authorised strength of posts
in the supertime grade. the authorised strength of both
categories of teaching and number-teaching sub-cadres is
reflected in schedule ii. rule 4 10   ii  stipulates that
promotions to these posts are to be made on the basis of
common eligibility list to be drawn separately for the
teaching specialist sub-cadre and the number-teaching
specialist sub-cadre. this has to be without reference to
any of the specialities in respective sub-cadres. rule 4 10  iii  stipulates that the eligibility list
shall be made after the officer companycerned has been duly
assessed by a departmental promotion companymittee in regard to
the officers suitability for holding the post with the
condition that the said officer should have companypleted three
years of regular service as professor  specialist  grade i.
this rule does number stipulate the manner in which the
suitability of the said officer is to be assessed by the
departmental promotion companymittee. schedule iv of the rules
talks of the companystitution of the departmental promotion
committee. it is clearly stipulated that in each meeting of
the departmental promotion companymittee the chairman member
union public service companymission shall chair the departmental
promotion companymittee. the guidelines stipulate that the
departmental promotion companymittees companystituted under the
respective service rules shall judge the suitability of
officers for promotion to selection as well as number-
selection posts. here again the union public service
commission should be associated with departmental promotion
committee in respect of central civil services posts
belonging to grade a where promotion is based on the
principle of selection unless it has been decided by the
government of india number to associate the union public
service companymission. the union public service companymission need
number be associated in respect of posts belonging to grade-a
if the promotion is based number on the principles of selection
but on seniority-cum-fitness. wherever the union public
service companymission is associated with departmental promotion
committee the chairman or a member of the companymission will
preside over the meeting of departmental promotion
committee. when schedule iv requires that the departmental
promotion companymittee services  ought to be presided over by
the chairman or member of the union public service
commission itself suggests that the said posts ought to be
filled in by way of selection rather than on the basis of
seniority-cum-fitness. companysequently the word suitability
in rule 4 10   iii  in the companytext of nature of posts its
grade can only mean suitability for the purposes of being
selected to the said post. this submission is made on the
basis that rule 4 10  is a companyplete companye in itself. even if this post falls outside the schedule ii the
basis of promotion cannumber be seniority. in terms of rule 3
of the rules the central health service companysists of persons
appointed to the service under sub-rule  5  of rule 4 and
rules 7 8. it is the companytention of the appellant that
under rule 4 3  government of india is entitled to make
temporary additions to or reductions in the strength of
duty posts in the various grades as deemed that these are
posts with designations specified in part a of schedule ii
whether permanent of temporary. when this definition is read
along with rule 4 1   ii  and rule 4 1   iii  it is clear
that temporary additions or reductions in the number of duty
posts can take place from time to time. these 35
floating companymon posts were created for the first time on
august 26 1987 and administrative orders have thereafter
been issued from time to time extending the creation of the
said duty posts without amending schedule ii. certainly these posts were part of authorised strength
at the time of initial companystitution of the service. rule 8
contemplates that any vacancy arising in any one of the
grades referred to in schedule ii shall be filled in as
provided in rule 8 4   ii . the difference between rule
4 10   iii  and rule 8 4   ii  is that whereas in the latter
the promotion is to be made with reference to a post in the
teaching specialist sub-cadre or the number-teaching specialist
sub-cadre on account of any vacancy occurring therein in a
particular speciality in the case of the former
numberwithstanding the fact that one of the 35 floating companymon
posts may be held by a particular person of a particular
speciality the said post can go to a person number belonging
to that speciality since the teaching specialist sub-cadre
forms a class by itself which companyprises 29 specialities. it
is in this companytext therefore that the said posts companyld number
be included in schedule ii since specialities. it is
therefore clear that whereas the word selection used in
rule 8 4   ii  is with reference to inter-se merit of
persons belonging to a particular speciality with reference
to a vacancy occurring in a speciality but with reference to
the inter-se merit of candidates based on their companyfidential
reports and assessed by the departmental promotion companymittee
belonging to any of the 29 specialities who would be
considered most suitable to be promoted since the companycept
of seniority-cum-fitness cannumber possibly be applied to a
common set of posts without reference to any speciality. thus it is submitted that to determine the meaning of
suitability the same yard-stick must be adopted. in any event these are highly specialised posts. hence it is unthinkable that the promotions to these posts
is based on the principle of seniority-cum-fitness and number
on the basis of selection. the word suitability will have
to be interpreted as seniority-cum-fitness. otherwise it
would be liable to struck down as unconstitutional being
violative of articles 14 and 16 of the companystitutions. therefore it is submitted that the rule must be so
interpreted as number to violate the fundamental rights. the
tribunal had gone wrong in adopting the principle of
seniority and its interpretation of rules cannumber be
sustained. learned companynsel for union of india shri k.t.s. tulsi
supporting the arguments of shri kapil sibal urged that the
order creating these posts clearly mentioned that the posts
are created in the super-time cadre of central health
service. rule 4 10   ii  and  iii  as amended merely
prescribe the procedure for preparation of eligibility list. this procedure is numberhere prescribed in any other rule. this
was because of the fact that the 35 posts were created as
floating posts. they did number pertain to any particular super
speciality or sub-cadre of professor director. therefore
criteria for preparation of eligibility list had to be
prescribed for determining inter-se ranking between the
sub-cadre. merely because rule 4 10   iii  companytains the word
suitability the said rule does number supersede alter or
amend the criteria for selection. the word suitability
will have to be understood in the light of the guidelines of
departmental promotion companymittee. these 35 posts referred to in rule 4 10  are an
integral part of the cadre. the said posts were number added to
schedule ii forming part of the temporary strength of the
cadre. however on august 10 1992 the said posts have been
added to schedule ii so as to make its intention clear that
the promotion is to be governed by all the relevant rules
and number by rule 4  10  when read in isolation from the
remaining rules. thus it is submitted that the reasoning of
the tribunal is unsupported. mr. p.p. rao learned companynsel on behalf of dr. p. raja
ram would urge as under. the initial argument particularly on behalf of the
union of india was that these floating companymon posts of
super-time grade of teaching specialist sub-cadre formed
part of authorised strength of the central health service in
terms of rule 4 10 . this was companytested by this respondent
that schedule ii has number been amended till date so as to
include these posts. instead of frankly admitting the
mistake there was a deliberate attempt to justify the
inclusion of these 35 posts as part of schedule ii. this is
numberhing but misleading the companyrt. this alone is enumbergh to
dismiss the special leave petition. even on merits rule 4 10  states that the posts are to
be filled up by the method of promotion and on the basis of
an eligibility list. the numbere also lays down that the
eligibility list shall be prepared with regard to the date
of companypletion of the prescribed qualifying years of service
in their respective grades by the officers. further clause

of sub-rule  10  adds the requirements of assessment
by a departmental promotion companymittee in regard to the
suitability of each officer for holding the post while
considering his case for promotion on the basis of companymon
eligibility list. the words his suitability in the said
clause  iii  are very significant. they postulate assessment
of suitability of each candidate in the order in which the
names appear in the companymon eligibility list drawn on the
basis of companytinuous qualifying service rendered by them in
the feeder grade. the scheme of sub-rule  10  totally rules
out selection on the basis of relative merit of all eligible
candidates. the difference between companymon posts and floating
posts is that while in companymon posts a professor on
being promoted to one of the companymon posts a professor on
being promoted to one of the companymon posts moves to that
post and vacates the post of professor previously held by
him while in floating posts the post held by him is
upgraded and he companytinues to work in the same speciality in
the same institution. the guidelines of the departmental promotion companymittee
are number of any assistance. therefore numberargument can be
advanced on this basis. if guidelines were governed there
was numberpurpose in adding rule 4 10   ii  and  iii . the
basic distinction between the selection posts and number-
selection posts is whether it is to be filled by a
comparative assessment on merit of all eligible candidates
or on the basis of companytinuous length of service. the
guidelines say that there is numberneed to make companyparative
assessment of records of the officers but it should
categorise the officers as fit or number-fit. it is a clear
indication that there is numbercomparative assessment involved. the companymon eligibility list which talks of rule 4 10
is numberhing but a companybined seniority list of officers in
different specialities drawn with reference to the date of
completion of the prescribed qualifying years of service. it is also incorrect to companytend that it is a duty post
as defined under rule 2 e . such an expression as duty post
is absent under rule 4 10 . when these posts had been created in order to release
stagnation in addition to authorised strength presence of
chairman of member of union public service companymission at the
departmental promotion companymittee does number make a number-
selection post as selection post simply because the
guidelines say in the case of number-selection posts union
public service companymission need number be associated. the fact
that this respondent did number raise any objection to the
letter dated 3.11.1988 will number in any manner deprive him
of his right if the rules companyfer such a right. lastly it is
submitted that if two views are possible the view taken by
the tribunal should be upheld. thus numberinterference is
warranted. we shall number proceed to companysider the merits of the
above companytentions. 35 posts in super-time grade of central health service
in the scale of rs.5900-200-6700 plus number-practising
allowance at the numbermal rates admissible to similar posts
were created. these posts were to last till 29.2.1988. time
and again they were extended. the rules which were relevant to appreciate the
controversy whether the promotion is on the basis of
seniority or on the basis of merit may number be seen. in exercise of the power companyferred under the proviso to
article 309 of the companystitution the rules called central
health service rules 1982 were framed. rule 3 speaks of the companystitution of central health
service. this service is to companysist of persons appointed to
the service under the rules 4 5 7 and 8.
rule 4 speaks of authorised strength of service. sub-
rule  1  of this rule states that the authorised strength of
duty posts and the deputation posts are as specified in
schedule ii. under sub-rule  3  the government is empowered
to made temporary additions or reductions in the strength of
both  i  the duty posts  ii  deputation posts. sub rule 6 i  and  ii  may be
quoted as follows
 6   i  the companytrolling authority
shall upgrade five posts in the
grade of specialist grade-i to
supertime grade  three posts in the
teaching specialist sub-cadre as
director-professor and two posts in
the number-teaching specialist sub-
cadre or public health sub-cadre as
specialist  companysultant  and twenty
five posts in the grade of
specialist grade-ii in the number-
teaching specialist sub-cadre or
public health sub-cadre or
associate professor in the teaching
specialist sub-cadre in the grade
of specialist grade-i without
altering the companybined authorised
strength of posts of the respective
sub-cadre from which these posts
are temporarily upgraded.  6   ii  the promotions under this
sub-rule shall be made on the basis
of a companymon eligibility list
covering all officers in the
respective sub-cadres without
regard to any specialities. it requires to be carefully numbered that what is talked
of is a companymon eligibility list. in other words this has
only reference to eligibility. this is an aspect which we
want to emphasise even in the beginning. then we companye to sub-rule  10  which was introduced on
30.5.1989 which specifically deals with these 35 newly
created floating companymon posts in the super-time grade of rs. 5900-6700. these 35 posts are made up of 20 posts in the
teaching specialist sub-cadre as director-professor and 15
posts in the number-teaching specialist sub-cadre as
consultant. these posts will be in addition to the
authorised strength. it is companymon ground that these posts
were created to release stagnation. earlier to this
amendment these posts in the teaching specialist sub-cadre
were alone open to professors from all specialities. they
were

director g.b. pant hospital
new delhi. dean moulana azad medical
collage new delhi. principal lady harding
medical companylage  new delhi. director jipmer
pondicherry. dean jipmer pondicherry. deputy director general
 medical  d.t.e. dgh new delhi. as companyld be seen the promotion posts available were
very few and were restricted to certain specific
specialities. this led to stagnation. therefore the
floating posts  2015  were created to be filled in the
grade of professor specialist grade i  rs.4500-5700 . it was
in this background rule 4 10  was introduced. that lays down

there shall be 35 newly created
floating companymon posts in the
supertime grade of rs.5900-6700
 twenty posts in the teaching
specialist sub-cadre as director-
professor and fifteen posts in the
number-teaching specialist sub-cadre
as companysultant  which will be in
addition to the authorised strength
of posts in supertime grade of rs. 5900-6700 in different sub-cadres
of central health service. further clause  ii  of the above
rule lays down as follows
the promotions under this sub-rule
shall be made on the basis of a
common eligibility list to be drawn
separately for teaching specialist
sub-cadre and number-teaching
specialist sub-cadre companyering all
officers in the respective sub-
cadres viz. teaching and number-
teaching without regard to any
specialities. here again it talks of eligibility. in our opinion
eligibility means interlacing of seniority list of different
specialities. clause  iii  reads as under
the appointment against such
posts shall be made only if the
officer companycerned has been duly
assessed by a departmental
promotion companymittee in regard to
his suitability for holding the
post and has been working in the
grade of professor specialist grade
i on a regular basis for number less
than three years failing which has
been working as a
professor specialist grade i with
17 years of regular service in
group a post. the numbere is also made for our
purpose that states
the eligibility list shall be
prepared with reference to the date
of companypletion by the officers of
the prescribed qualifying years of
service in the respective grades. however in case of persons who
have been appointed on the same
date the seniority shall be
determined as under

where the eligible officers
were companysidered by the same d.p.c. the seniority shall be based on the
order of merit. if there is numberorder of merit
the seniority shall be on the basis
of seniority in the feeder grade. if there is numberseniority in the
feeder grade or it is number possible
to determine the seniority even in
the feeder grade the length of
regular service in the feeder grade
shall be the guiding factor for
determining the seniority.  d  if length of service in the
feeder grade is also the same
regular service in the next lower
grade shall be taken into account
failing which date of birth. it may be seen that clause  iii  states that the
appointment is to be made only if the officer companycerned has
been duly assessed by a departmental promotion companymittee in
regard to his suitability for holding the post. such a
consideration will arise only if the companycerned officer has
been working in the grade of professor specialist grade i
for a period number less than three years. the alternative
qualification is 17 years of regular service in group a
post and the companycerned officer has been working as a
professor or specialist grade i.
this clause does number lay down the manner in which the
suitability of the officer is to be assessed. however it is
numbereworthy that suitability is to be assessed by a
departmental promotion companymittee. as to what is stated can
be seen when we look at rule 2 which companytains definitions. rule 2 c  says as under
departmental promotion companymittee
means a group a departmental
promotion companymittee specified in
schedule iv for companysidering the
cases of promotion or companyfirmation
in group a posts are of the scale
of rs.2200-4000 and above. schedule
iii defines the method of
recruitment the field of selection
for promotion and the minimum
qualifying service in the immediate
lower grade or lower grades for
appointment or promotion of
officers to group a duty posts
and deputation posts in the central
health service. in numbere 1 of the said schedule it
is stated thus
promotion to the post of associate
professor  number-functional selection
grade  associate professor
specialist grade ii  number-functional
selection grade  specialist grade
ii  senior scale  in number-teaching
and public health sub-cadres chief
medical officer  number-functional
selection grade  and senior medical
officer will be on number-selection
basis. all the remaining posts are
selection posts. when it says all the remaining posts are selection
posts it is obvious that the posts with which we are
concerned are selection posts. schedule iv lays down the
composition of departmental promotion companymittee. with regard
to the teaching specialist sub-cadre posts super-time and
specialist grade i  professor  the departmental promotion
committee shall companysist of the following

chairman. chairman member
union public service companymission

secretary or his numberinee
ministry of health and family
welfare member

director general of health
services or his numberinee member. one departmental officer
numberinated by the secretary
ministry of health and family
welfare member. when rule 4  10   iii  talks of departmental promotion
committee it is only this departmental promotion companymittee
in accordance with schedule iv that is thought of. there guidelines issued under the office memorandum of
government of india dated april 10 1989. under this office
memorandum the various instructions have been updated and
consolidated. under these guidelines the departmental
promotion companymittee so companystituted shall judge the
suitability of the officers for promotions to selection
posts. it has already been seen that these are selection
posts as per schedule ii of the rules. in paragraph 2.1 with
reference to the post in question carrying a scale of
rs.5900-6700 or equivalent. the minimum status of officer
who should be member of departmental promotion companymittee is
prescribed as secretary or additional secretary to
government of india. paragraph 2.2 of the guidelines states
as follows
the union public service
commission  upsc  should be
associated with dpcs in respect of
all central services posts
belonging to group a where
promotion is based on the
principles of selection unless it
has been decided by the government
number to associate the upsc with a
group a dpc. the upsc need number
be associated in respect of posts
belonging to group a if the
promotion is based number on the
principles of selection but on
seniority-cum-fitness. paragraph 2.4 also stresses the fact that whenever the
union public service companymission is associated with the
departmental promotion companymittee the chairman or a member of
the companymission will preside over the meeting of the
departmental promotion companymittee. the companytention of mr. p.p. rao learned companynsel for the
respondents that the nature of the post or the method of
promotion need number be decided with reference to the
guidelines is number companyrect. in rule 4 sub-rule  10  clause

to which a reference has already been made the
assessment is required to be done by a departmental
promotion companymittee. it is for such a companymittee that
guidelines have been prescribed. therefore we cannumber
altogether ignumbere these guidelines. from the above two paragraphs it is clear that if there
is to be an assessment the principle of selection is
involved. on the companytrary if it were merely a seniority-
cum-fitness there is numberneed to associate the union public
service companymission as pointed out in paragraph 2.3 of the
guidelines. all these lead only to one companyclusion that these
are selection posts. having arrived at this companyclusion then
the question would be what exactly is the meaning of the
word suitability. that is dealt with apart from rule 4
sub-rule  10  clause  iii  also under guidelines in
paragraph 6.1.2. the departmental promotion companymittee is to
devise its own method and procedure for objective assessment
of suitability of candidates. it is numbereworthy in paragraph
6.3.1 that the procedure for the preparation of the panel
for promotion by the departmental promotion companymittee is
delienated. clause  ii  is very important and we extract the
same
in respect of all posts which are
in the level of rs.3700-5000 and
above the benchmark grade should
be very good. however officers
who are graded as outstanding
would rank en bloc senior to those
who are graded as very good and
placed in the select panel
according upto the number of
vacancies officers with same
grading maintaining their inter se
seniority in the feeder post.  emphasis supplied
in companytradistinction to this when we look at paragraph
7 of the guidelines which deals with number-selection method
that dispenses with the requirement to make a companyparative
assessment of the records. in such a case what is required
is to categorise the officers as fit or number yet fit for
promotion on the basis of the assessment of the record of
service. in so far as we are companycerned with selection this
paragraph does number have any application whatever. thus
therefore the word suitability in rule 4 10   iii  having
regard to the nature of the post and grade companyld only mean
suitability for the purposes of being selected to the said
post.  emphasis supplied
further the expression suitability in the said
clause does number in any manner supersede alter or amend the
criteria of selection prescribed in the remaining rules as
is applicable to super-time grade post. when the expression
suitability is companystrued harmoniously with other rules
the process of selection is inescapable as rightly companytended
by mr. k.t.s. tulsi learned additional solicitor general. the argument of mr. rao that if these posts are by the
method of selection clauses  ii  and  iii  and a numbere
thereunder are wholly unnecessary in rule 4 10  overlooks
the fact that these clauses deal only with eligibility. it is a companymon case between the parties that these 35
floating posts were created by sub-rule  10  of the rule 4
in addition to the authorised strength. if as per the rule
for the post falling under authorised strength the method of
selection is adopted for the authorised strength it must
equally apply to the post created in addition to the
authorised strength. though a good deal of companytroversy arose
during the companyrse of the arguments whether these posts had
been included in schedule ii or number it was vehemently
commented upon by mr. p.p. rao learned companynsel that an
inaccurate statement was made by union of india that
controversy pales into insignificance because of the gazette
numberification dated 10th of august 1992 including these 35
newly floating companymon posts in schedule ii. therefore if
these posts form part of the authorised strength as to what
would be the bearing of rule 8 4  ii  requires to be
considered. a careful reading of rule 8 4  ii  reveals that
departmental promotion to higher post in the respective
special cadres and specialities within the sub-cadre
concerned shall be made on the basis of selection on merit. it implies that should vacancy arise in a particular
speciality this method is to be adopted. in
contradistinction to this under rule 4 10  iii  even though
one of the floating or companymon posts may be held by a
particular person of a particular speciality the said post
can go to a person number belonging to that speciality. the
teaching speciality sub-cadre forms a class within itself
since it companyprises of 29 specialities. thus it follows the
word selection used in rule 8 4  ii  with reference to
inter se merit of persons belonging to a particular
speciality with regard to the vacancy occurring in that
speciality. lastly we may refer to one important fact. the first
respondent  dr. raja ram  was served with a companyy of letter
dated 3.11.1988. that clearly states that the 20 posts of
director professor of super-time grade are to be filled up
by selection method merit with regard to seniority. therefor the decision of government of india had been
conveyed to the first respondent. the first respondent when
he was put on numberice should have immediately voiced his
protest. of companyrse the failure to protest would number deprive
him of a legitimate right if he is entitled to in law. however it is one of the points to be borne in mind. the departmental promotion companymittee met on 20th
september 1989 and the minutes have been placed before us. after examination of the character rolls of the senior most
eligible officers the companymittee assessed the officers as
given in annexure i. the first respondent dr. raja ram was
rated as very good while the rating for the other doctors
is as follows

dr. b.s. rana  2nd respondent   outstanding

dr. m. khalilullah  3rd respondent   outstanding

dr. k.k. jain  4th respondent   outstanding

dr. d.d.s. kulapathy  5th respondent   outstanding
where respondents 2 to 5 are rated outstanding they go
en bloc above the first respondent since the first
respondent is merely very good. this is because of the
application of clause ii of paragraph 6.3.1 of the
guidelines quoted above. it was on this basis the
departmental promotion companymittee assigned rank number14 to the
first respondent dr. raja ram. pursuant to this the
president of india issued the impugned order of promotion
dated 17th of january 1990. paragraph 3 of the order which
we have quoted above clearly states that the promotions
will be personal to the officers companycerned and the posts
presently held by them will stand upgraded to the super-time
grade in the scale of rs.5900-6700 plus number-practising
allowance at rs.950 per mensem in terms of the ministrys
order dated 15.3.89.
above all these we cannumber lose sight of the fact that
for posts of this character in super-time grade carrying
high salary promotion companyld number be accorded merely on the
basis of seniority. in our companysidered view it should be on
merit. for the foregoing reasons we are clearly of the
opinion that the tribunal had erred in merely adopting
seniority as the basis of promotion and number merit. it is needless for us to companysider whether these are
duty posts since we have taken the view that these posts
fall within schedule ii of the rules. in the result we set aside the impugned judgment of
the tribunal and allow these appeals without companyts. the
reason why we are number awarding companyts in favour of the
appellants is because of a specific objection by mr. p.p.


civil appellate jurisdiction civil appeal number 805 of
1964.
appeal from the judgment and order dated march 4 1963 of
the andhra pradesh high companyrt in appeal against order number 4
of 1960.

k. sen and t. satyanarayana for the appellants
dishan narain a. vedavalli and a. v. rangam for respondent
number 1.

thiagarajan for respondent number 2.
the judgment of the companyrt was delivered by -
nitter j. this is an appeal by a certificate granted by the
high companyrt of andhra pradesh against a judgment and order of
that companyrt dated march 4 1963. the appeal is by a receiver
appointed in a suit under the provisions of s. 92 of the
code of civil procedure with the object of applying for
setting aside a sale of certain properties belonging to a
choultry. the facts shortly are as follows -the second respondent
before this companyrt obtained a decree in o. s. number 116 of
1949 of sub-court vijayawada against tammana tatayya and
narayana murty annapurna satram and put some property to
execution sale. the properties of the satram were sold in
court auction on july 1 1957 and the first respondent
maddi kutumbarao became the purchaser for rs. 24600. o.s. number 60 of 1957 was instituted in the same companyrt for the
removal of the two trustees on the ground of mismanagement. the decree holder was made a party to this suit filed under
s. 92 civil procedure companye and one of the reliefs prayed
for in the suit was that the sale above-mentioned be set
aside and provision be made for payment of the decree
amount in o.s. number 116 of 1949 under the scheme to be
settled by the companyrt. to quote that from paragraph 11 of
the plaint in that suit the plaintiff asked
all proceedings in execution of the decree
obtained by the 3rd defendant against the
satram be stayed pending the framing of the
scheme and that the sale in favour of the 4th
defendant held on 1-7-1957 by the sub-court
gudivada in e.p. number 37 of 1956 in o.s. 116./49 sub-court vijayawada be set aside
and that adequate provision for the discharge
of the same be made. the plaint bears the date 22nd july 1957. the
decree-holder the third defendant was a
minumber represented by his mother and guardian
lakshmikantamma. it appears that on july 30
1957 a memorandum was filed on his behalf in
the companyrt of the subordinate judge. it was
stated therein that
as the plaintiff in o. s. number 60 of 1957 have
filed that suit for framing a scheme for the
management of the choultry etc. and have
asked in that suit for a proper provision to
be made for the amount due to the third
respondent in this petition under the decree
in o.s. number 116/1949 this third respondent
agrees to the same. therefore this 3rd respondent has no
objection. for allowing the petition that has
been filed for setting
7 0 5
aside the sale held on 1-7-1957 in this suit
without the necessity of depositing the sale
warrant amount. the receiver appointed in o.s. number 60/1957 filed an
application under o. xxi r. 89 in the companyrt of the
subordinate judge to set aside the companyrt sale. he deposited
rs. 1230 representing 5 of the purchase money for payment
to the purchaser rs. 410-15-0 as poundage and rs. 123 for
interest. numberdeposit was made for payment to the decree-
holder and it was stated in paragraph 6 of the petition
that
the 3rd respondent represented by his mother
is impleaded as third respondent in the scheme
suit o.s. number 60 of 1957 sub-court
vijayawada wherein necessary provision for
the discharge of the decree debt due to him
from the choultry is prayed for and has to be
made. at the request of the petitioner to
keep up the fair name and prestige of the
founders of the choultry the 3rd respondents
mother as guardian and executor agreed to the
said companyrse and is willing for an adequate
provision for the discharge of the decree debt
being made in the said suit and has agreed to
postpone realising the decree debt in o.s. 116
of 1949 sub-court vijayawada till then in
case the existing trustees respondents and 2
do number choose to discharge the same in the
meanwhile. under the circumstances the
petitioner submits that the honble companyrt may
be pleased to dispense with the deposit of
the amount specified in the proclamation of
sale for payment to the decree-holder as
required by cl.  b  of r. 89 of o. xxi c.p.c. the prayer- in the petition was that the sale of the
properties in. favour of the fourth respondent be set aside
and that respondents 1 and 2 do pay the expenses to be
incurred by the petitioner. the subordinate judge allowed
the application observing
where there is an arrangement between the
decree-holder and the judgment-debtor for the
satisfaction of the decree and the decree-
holder does number want any deposit to be made
into companyrt it is perfectly open to the
judgment-debtor to companye forward with a
petition under o. xxi r. 89 without
depositing the amount required to be deposited
under cl.  b . this was upset in appeal by the high companyrt. according to
the high companyrt o. xxi r. 89 permits the decree-holder and
the judgment-debtor to mutually cancel the decree debt and
the cancellation of the debt may be either by an adjustment
on a companystructive payment or by waiver by the decree-holder. the high companyrt however found itself unable to agree with the
con
clusion of the subordinate judge that on the facts of the
case the decree-holder companyld be said to have received the
amount shown in the proclamation of sale for the purpose of

xxi t. 8 9.
there can be numberdoubt that if at the time when an applica-
tion under o. xxi r. 89 is made by the judgment-debtor the
decree has been satisfied or adjusted the deposit of any
money for payment to the decree-holder is number called for. it was argued on behalf of the appellants that a mere
promise on the part of the judgment-debtor to take steps to
ensure payment of the decretal debt if acceded to by the
decree-holder would have the same effect. reliance was
placed on a judgment of this companyrt in the union of india v.
kishorilal gupta and bros. 1 . there it was pointed out that
one of the modes by which a companytract can be
discharged is by the same process which
created it i.e. by mutual agreement the
parties to the original companytract may enter
into a new companytract in substitution of the old
one. reference was also made to the rule as stated by cheshire
and fifoot in their law of companytract 3rd edn. at p. 453 if
what the creditor has accepted in satisfaction is merely his
debtors promise to give companysideration and number the
performance of that promise the original cause of action is
discharged from the date when the agreement is made. relying on the above decision it was companytended on behalf of
the appellants that even an executory agreement between the
decree-holder and the judgment-debtor would have the same
effect as the adjustment of a decree. it is necessary to
bear in mind that a decree. for payment of money is number a
contract between the parties although it is possible for the
parties to agree upon a companyrse of payment or lo have the
decree satisfied otherwise than by payment of money. for
the purpose of this appeal it is number necessary to go into
that question. assuming that the proposition put forward on
behalf of the appellants is companyrect it must be shown that
there was an agreement between the parties by which the
decree-holder agreed to forego his rights under the decree. paragraph 6 of the petition under o. xxi r. 89 which has
been quoted above shows that the decree-holder had merely
agreed to postpone realising the decretal amount in case
respondents 1 and 2 did number choose to discharge the same. that petition shows clearly that it was anticipated that the
court would be in a position to make a provision for the
discharge of the decretal debt. the decree was kept alive
and number touched upon in any manner much less ex- tingu
ished. the decree-holder was prepared to stay his
hands in
 1  1960 1 s.c.r. 493 502. 70 7
case satisfactory provision for payment of his dues was made
in the suit. there was numberadjustment of the decree which
could be recorded under the provisions of o. xxi r. 2
neither had the decree been satisfied. the high companyrt was
therefore right in its companyclusion that the situation was number
one which obviated the necessity for the judgment-debtor
making a deposit under the provisions of o. xxi r. 89 b . on behalf of the appellants. reference was also made to the
fact that the auction purchaser had been permitted by the
court to withdraw the sum of rs.


civil appellate jurisdiction civil appeal number 313/1956. appeal from the judgment and decree dated july 251952 of
the allahabad high companyrt in second appeal number 2547 of 1946.

ganapathy iyer and t. m. sen for the appellant

p. gupta for the respondent. 1961. january 31. the judgment of the companyrt was delivered
by
shah j.-on january 30 1943 bhola nath sambhu ram as agent
of the respondent l. musaddilal delivered a bale of cloth to
the railway administration e. 1. rly. at agra railway
station for carriage by railway to the chola station in the

i. rly. the companysignment was accepted by the railway
administration and a railway receipt was issued in the name
of the companysignumber bhola nath sambhu ram. bhola nath sambhu
ram endorsed the railway receipt in favour of the respondent
and sent it by post to the respondent. the bale of cloth
did number reach chola and the railway administration was
unable despite efforts to trace it. there was
correspondence between the railway administration and the
respondent about the companysignment. failing to obtain
satisfaction
for the loss suffered by him the respondent served a
composite numberice under s. 77 of the indian railways act and
s. 80 of the civil procedure companye on december 7 1943 and
thereafter on may 18 1944 filed suit number 283 of 1944 in
the companyrt of the 11 munsif bulandshahr for a decree for
rs. 782-3-6 being the price of the bale and rs. 200
for loss on account of numberdelivery. the railway
administration resisted the claim on the pleas among others
that the suit was number maintainable without an effective
numberice under a. 77 of the railways act and that the suit was
barred because at the date of the institution of the suit
the period of limitation prescribed by art. 31 of the
limitation act had expired. the trial companyrt decreed the
suit. in appeal the additional civil judge bulandshahr
reversed the decree passed by the trial companyrt and dismissed
the suit. a full bench of the high companyrt of allahabad
reversed the decree passed by the first appellate companyrt and
restored the decree of the trial companyrt. with certificate of
fitness under art. 133 1  c  of the companystitution this
appeal has been preferred by the union of india. section 77 of the railways act in so far as it is material
provides
a person shall number be entitled to
compensation for the loss destruction or
deterioration of goods delivered to be
carried unless his claim to companypensation has
been preferred in writing by him or on his
behalf to the railway administration within
six months from the date of the delivery of
the goods for carriage by railway. section 77 manifestly prescribes a companydition precedent to
the maintainability of a claim for companypensation for goods
lost destroyed or deteriorated while in the custody of the
railway administration. the numberice prescribed was number
served by the respondent upon the railway administration
within six months from the date on which the goods were
delivered for carriage and prima facie the suit would be
barred for number-compliance of a statutory companydition
precedent. but the respondent pleaded and the plea has
found favour with the high companyrt that the suit filed by him
was for companypensation number for loss destruction or it
deterioration of the goods but for number-delivery of the
goods. in the view of the high companyrt a claim for
compensation for number-delivery of goods is a claim distinct
from a claim for companypensation for loss destruction or
deterioration of goods and to the enforcement of a claim of
the former variety by action in a companyrt of law s. 77 is number
a companydition precedent. the railway administration in india is number an insurer of
goods it is merely a bailee of goods entrusted to it for
carriage. section 72 of the railways act prescribes the
measure of the general responsibility of a railway
administration as a carrier of goods. by that section the
responsibility of a railway administration for loss
destruction or deterioration of goods delivered to be
carried by railway is subject to other provisions of the act
to be that of a bailee under s. 152 and s. 161 of the indian
contract act 1872. sections 151 and 152 of the indian
contract act deal with the duties of a bailee. if a bailee
takes as much care of the goods bailed to him as a person of
ordinary prudence would under similar circumstances of his
own goods of the same bulk quality and value as the goods
bailed to him in the absence of a special companytract he is
number responsible for loss destruction or deterioration of
the goods bailed. by ss. 160 and 161 of the indian companytract
act the bailee is under an obligation to return or deliver
according to the bailors direction the goods bailed as soon
as the time for which the good were bailed has expired or
the purpose for which the goods were bailed has been
accomplished and if on account of default of the bailee the
goods are number returned delivered or tendered at the proper
time he is responsible to the bailor for any loss
destruction or deterioration of the goods the railway
administration being a bailee of the goods delivered for
carriage to it is therefore a bailee during the period when
the goods remain in its custody for the purpose and in the
course of carriage and for the purpose of delivery after the
goods are carried to the destination. but the quantum of care which the railway administration is
required to take is that care which it would take having
regard to the bulk quality and value of its own similar
goods. section 77 of the railways act is enacted with a view to
enable the railway administration to make enquiries and if
possible to recover the goods and to deliver them to the
consignee and to prevent stale claims. it imposes a
restriction on the enforcement of liability declared by s.

the liability declared by a. 72 is for loss
destruction or deterioration. failure to deliver is the
consequence of loss or destruction of goods it does number
furnish a cause of action on which a suit may lie against
the railway administration distinct from a cause of action
for loss or destruction. by the use of the expression
loss destruction or deterioration what is companytemplated
is loss or destruction or deterioration of the goods and the
consequent loss to the owner tbereof. if because of
negligence or inadvertence or even wrongful act on the part
of the employees of the railway administration goods
entrusted for carriage are lost destroyed or deteriorated
the railway administration is guilty of failing to take the
degree of care which is prescribed by s. 72 of the railways
act. there are undoubtedly two distinct articles arts. 30 and 31
in the first schedule of the indian limitation act dealing
with limitation for suits for companypensation against carriers. article 30 prescribes the period of limitation for suits
against a carrier for companypensation against loss or injury to
goods and art. 31 prescribes the period of limitation for
suits for companypensation against a carrier for number-delivery or
delay in delivering the goods. the period of limitation
under each of these articles is one year but the points of
time from which that period is to be reckoned are different. but because the indian limitation act provides different
points of time from which the period of limitation is to
run it is number possible to infer that the claim companyered by
either article is number for companypensation for loss destruction
or deterioration of the goods. we are unable to project the
provisions of art 30 and 31
of the limitation act upon ss.


civil appellate jurisdiction civil appeal number 3492 of
1990.
from the judgment and order dated 3.8.1988 of the jammu
kashmir high companyrt in l.p.a. number 110 of 1988.

s. mathut ramesh c. pathak g. venkatesh rao and baby
lal for the appellant. c. agarwala ms. purnima bhatt v.k. pandita and atul
sharma for the respondents. the judgment of the companyrt was delivered by
kuldip singh j. special leave granted. the school of buddhist philosophy leh  hereinafter
called the school  is an affiliate institution of the
sampurnanand sanskrit university banaras. the management of
the school is in the hands of a society called central
institute of buddhist studies leh which is registered under
the jammu and kashmir registration of societies act. ap-
pointments to various posts in the school are regulated by
the rules framed by the board of management in the year
1973. the academic and other qualifications for the post of
principal under the rules are as under
academic qualification
at least masters degree in humanities or social sciences
with knumberledge of rules and regulations procedures and
accounts. experience
minimum experience of 7 years out of which at least 2 years
should be in administration such as administrative asstt. and number less than 3 years in teaching in higher secondary
and or degree classes. the qualifications for the post of administrative officer
under the 1973 rules are identical. l. mattoo  respondent number 1  who was functioning as
the administrative officer was given the additional charge
of the post of principal by an order dated march 26 1973
issued by the ministry of education and social welfare
government of india new delhi. the board of management in its meeting held on august
22 1978 decided that apart from the qualifications pre-
scribed under the rules the person selected for the post of
principal should have a thorough academic background in
buddhist philosophy. pursuance to the said decision the
qualifications experience for the post of principal pre-
scribed under the rules were revised as under
essential

a companysistently good academic record possessing
eminent scholarship in buddhist philosophy as a subject of
specialisation at m.a. or doctoral level. or
acharya degree with research experience to buddhist philoso-
phy or equivalent. or
an equivalent degree of traditional monastic education in
buddhism. evidence of research work and or public work in the
field. desirable
 a  5 years teaching experience in buddhist philosophy
and allied subject at the degree level.  b  5 years of administrative experience. the board of management companystituted a selection companymit-
tee to appoint a suitable person as principal of the school. by an order dated january 9 1979 one shri tashi pal jot
who fulfilled the revised qualifications was appointed as
principal of the school. aggrieved by the said appointment

l. mattoo filed civil writ petition number 256 of 1979 in the
high companyrt of jammu and kashmir on the ground that he was
removed from the additional charge without affording an
opportunity of heating to him and further that he was number
considered by the selection companymittee. he companytended that
selection was liable to be quashed being violative of arti-
cle 16 of the companystitution of india. the writ petition was
resisted by the management on the ground that it was number a
state under article 12 of the companystitution of india and as
such the writ petition was number companypetent. at the hearing of
the writ petition the companynsel for the management companyceded
that the society was a state within article 12 of the
constitution of india and as such the writ petition companyld
number be dismissed on that ground. the high companyrt rejected the
contention of m.l. mattoo that he was entitled to an oppor-
tunity of hearing or article 311 was attracted. the high
court however allowed the writ petition on the ground that
the petitioner was number companysidered for the post of principal
and as such his right under article 16 of the companystitution
of india stood infringed the operative part of the high
court judgment is as under
mr. v.k. gupta has on the authority of ajay hasias case
 supra  frankly companyceded that the society being an instru-
mentality or agency of government of india was state for
the purpose of part iii of the companystitution as such the
petitioner had a fundamental right to be companysidered for the
post alongwith the third respondent. he number having been so
considered and it also being admitted that he possessed the
requisite qualifications the rule of equality enshrined in
articles 14 and 16 of the companystitution stood clearly violat-
ed. that being so as in fact it is the impugned order
passed by the second respondent appointing the third re-
spondent as the principal of the school has to be quashed. thereafter the management advertised the post of princi-
pal to be filled by direct recruitment on the basis of
revised qualifications. the advertisement was published in
the kashmir times of january 5 1982.

l. mattoo filed anumberher writ petition being civil writ
petition number 29 of 1982 challenging the advertisement on the
ground that the revised qualifications had number been validly
prescribed and as such the post of principal companyld only be
filled on the basis of the pre-revised qualifications. according to him the revised qualifications were advertised
only to make him ineligible for the post. the main thrust of
mattoos argument was that his earlier writ petition was
decided by the high companyrt on october 29 1981 wherein the
counsel for the management companyceded that he possessed the
requisite qualifications for the post of principal. admit-
tedly matto does number possess the revised qualifications. according to him the earlier writ petition was filed in the
year 1979 and had the qualifications been revised by amend-
ing the rules in 1978 the companynsel for the management would
have certainly brought the same to the numberice of the companyrt
and since it was number done there was factually numberamendment
to the rules. the high companyrt accepted the companytention of
mattoo and allowed the writ petition by its judgment dated
june 9 1988 on the following reasoning
it is stated in para number 13 of their companynter that qualifi-
cations were changed in august 1978 with the approval of
the govt. of india. this statement is number accepted for two
reasons one that this was number the defence of the respond-
ents in writ petition number 256/1979 in which petitioners
eligibility was granted by the high companyrt for the post of
principal and second that after the decision of the high
court granting eligibility to the petitioner for the post of
principal in writ petition number 256/1979 the respondents
plea on the basis of some policy or numbere whereby qualifica-
tions were changed in 1978 prior to the filing of the writ
petition number 256/1979 cannumber be number pressed into service number
would be permitted to be made because same will be barred by
doctrine of companystructive res judicata. the high companyrt quashed the advertisement dated january 5
1982 and restrained the management from filling the post of
principal on the basis of the impugned advertisement. the
management has companye up to this companyrt in appeal against the
above said judgment of the high companyrt of jammu and kashmir. the learned companynsel for the appellant has invited our
attention to the proceedings of the meeting of the manage-
ment of the school held on august 22 1978. it was decided
in the said meeting that the person selected for the. post
of principal of the school must have academic background in
buddhist philosophy in addition to the qualifications pre-
scribed under the rules. thereafter the amended qualifica-
tions which have been reproduced above were prescribed by
the board of management. 3 it is number disputed that the recruitment rules companyld be
altered by the board of management at any time with the
sanction of the government of india. mr. e.c. agarwala
appearing for the respondent m.l. mattoo has however
contended that the recruitment rules were never amended and
in any case there was numbersanction of the government of india
regarding the amended rules. learned companynsel for the appellant has invited our atten-
tion to the affidavit of dr.  mrs.  kapila vatsyayan chair-
man board of management of the school filed before the high
court. dr. kapila vatsyayan is the additional secretary to
government of india in the ministry of education and cul-
ture. para 13 of the affidavit is as under
when in the year 1978 the question of appointment of a
principal of the school on regular basis was under the
consideration of the board of management it was held that
keeping in view the objects of the school being a research
institution to propogate buddhist philosophy a thorough
academic background in buddhist philosophy was companysidered as
one of the essential qualifications for the post of princi-
pal of the school as will be evident from the extract from
brief numbere on agenda item i companysidered in the meeting of the
board of management held on 22nd august 1978 annexure iv. shri tashi paljore was appointed as principal as stated in
para number 5 of the petition as he possessed this qualifica-
tion and was selected by a duly appointed selection companymit-
tee. the companytention of the petitioner that this qualifica-
tion has been added number after the decision of writ petition
number 256 of 1979 is incorrect. as
stated above the qualifications were changed in august 1978
with the approval of govt. of india. these qualifications are obviously very necessary
for the fulfilling of the objectives of the schools of
buddhist philosophy leh  ladakh . in the absence of these
qualifications the very object for which the institution
exists is bound to be defeated. the qualification has been
provided the interest of the institution and for the attain-
ment of the object for which it exists namely imparting and
propagating buddhist philosophy. the recruitment rules of
1975 annexure d to the petition were framed by the board
at that time. under the rules and regulations of the board
the board of management is companypetent to amend the same. it is obvious from the affidavit of dr. kapila vatsyayan
reproduced above that the qualifications for the post of
principal were revised by amending the rules and the revised
qualifications were approved by the government of india. number
1 rejoinder was filed by m.l. mattoo to the above affidavit
the high companyrt was number justified in disbelieving the
contents of the affidavit. the rules are number statutory. the
board of management is fully companypetent to alter or amend the
rules in any manner and at any time. the affidavit by the
chairman of the board of management who is additional secre-
tary to government of india to the effect that the rules
were amended in 1978 with the approval of the government of
india should have put an end to the companytroversy. we have no
hesitation in holding that the qualifications for the post
of principal of the school stood validly revised by the
amendment of the rules in august 1978. since respondent number
1 shri m.l. mattoo does number possess the revised qualifica-
tions he is number eligible to be companysidered for the said
post. in the earlier writ petition number 256/1979 the question
as to whether the qualifications for the post of principal
had been revised was number before the high companyrt. the main
contention of the management before the high companyrt was
that the management society was number a state under article
12 and as such numberwrit petition was companypetent. at the hear-
ing the companynsel for the management however companyceded that
the society was a state under article 12 of the companystitu-
tion of india. it is numberdoubt that the high companyrt has men-
tioned that it
was admitted by the companynsel for the management that mattoo
possessed the requisite qualifications for the post but we
do number understand how in the face of categoric affidavit of
dr. kapila vatsyayan such a statement companyld be made before
the high companyrt. we therefore hold that the qualifications experience
for the post of principal were validly revised by amending
the rules in august 1978. the advertisement issued on
january 5 1982 was in accordance with the rules and the
high companyrt was number justified in quashing the same.


civil appellate jurisdiction civil appeal number 508 of 1964.
appeal from the judgment and order dated january 16 1962 of
the calcutta high companyrt in income-tax reference number 1 of
1954.

t. desai s. murthy and b. p. maheshwari for the
appellant. 4 72

v. viswanatha sastri n. d. karkhanis r. h. dhebar and

n. sachthey for the respondent. the judgment of the companyrt was delivered by
sikri j. this is an appeal by certificate of the high companyrt
of calcutta against its judgment in a reference made to it
under s. 66  1  of the indian income tax act 1922
 hereinafter referred to as the act.  the question referred
by the appellate tribunal was
whether in the case of the assessee an investment
company its dividend income is part of its profits and
gains chargeable to tax under section 10 of the indian
income-tax act 1922
in the statement of the case dated december 3 1953 the
appellate tribunal gave the following facts the appellant
bengal and assam investors limited hereinafter referred to as
the assessee was incorporated on january 30 1947 and
commenced business on march 19 1947. according to its
memorandum of association the companypanys objects are

the objects for which the companypany is
established are  and it is expressly declared
that the several sub-clauses of this clause
and all the powers thereof are to be
cumulative and in numbercase is the generality of
any one sub-clause to be narrowed or
restricted by any particularity of any other
sub-clause number is any general expression in
any sub-clause to be narrowed or restricted by
any particularity of expression in the same
sub-clause or by the application of any rule
of companystruction ejusdem generis or otherwise

to acquire and hold shares stocks
debentures debenture-stock bonds
obligations and securities issued or
guaranteed by any companypany companystituted or
carrying on business in british india or
elsewhere or in any british companyony or
dependency or possession or in any foreign
country and debentures debenture-stock
bonds obligations and securities issued or
guaranteed by any government specially
including the government of india and a
provincial government sovereign ruler
commissioner public body or authority
imperial supreme national municipal local
or otherwise whether in india or elsewhere. to acquire any such shares stocks
debentures debenture-stock bonds
obligations or securities by original
supscription tender purchase. exchange or
otherwise and to subscribe for the same
either companyditionally or otherwise and to
guarantee the subscription thereof and to
exercise and enforce all rights and powers
conferred by or incident to the ownership
thereof. to sell invest in and vary the
investment and to reinvest in any shares
stocks debentures stocks bonds and
obligations and securities. to advance deposit with or lend money
securities and property to or receive loans or
grants or deposits from the government. to lend money either with or without
security and generally to such persons and
upon such terms and companyditions as the companypany
may think fit. to undertake financial and companymerercial
obligations transactions and operations of
all kinds. provided that numberhing herein companytained shall
be . . deemed to empower the companypany to carry
on the business of banking. the companypany closed its accounts for the first time on june
30 1947 and its accounting period was the year ending with
june. in the assessment for 1948-49 a nett loss of rs. 2194 was companyputed. in the assessment for 1949-50 its
grossed-up dividend income was rs. 32727 but its
expenditure  including interest on borrowings to acquire
shares etc.  was rs. 106583 the resultant loss being rs. 73856. the income tax officer treated this figure as
unabsorbed business loss. in the assessment for 1950-51
the gross dividend income was rs. 118238 and the
expenditures  including interest on borrowings etc.  was
rs. 51843 leaving a nett income for the previous year
ending with june 30 1949 of rs. 66395. the income tax
officer in his order dated august 1 1951 held that as the
sum of rs. 66395 was profit from dividends business losses
of 1948-49 and 1949-50 companyld number be set off. the assessee
filed two appeals against the assessments made for 1949-5 y
and 1950-51 and the appellate assistant companymissioner by
his order dated december 18 1951 disposed of them by a
common order. he held that the dividend income was number
business incomes and was assessable under s. 12 of the act. accordingly for the
4 74
assessment year 1949-50 he determined the loss from other
sources at rs. 73324 and he held that it companyld number be
carried forward as it was a loss from other sources under s.

the assessee filed two appeals before the income tax
appellate tribunal which by its order dated january 12
1953 dismissed the appeals on two alternative grounds
firstly it held that the dividend income was assessable only
under s. 12 of the act as the assessee was an investment
company. in the alternative the appellate tribunal held
that even if the companypany were to be a dealer in shares even
then in its opinion the dividend received as registered
shareholders would be dividend as such and assessable under
s. 12. the appellate tribunal companycluded that in our
opinion on either view of the case the loss of the
preceding years cannumber be adjusted -against the dividend
income of the assessee earned during the years 1949-50 and
1950-51.
the assessee then applied for a reference and suggested
three questions of law

whether in the facts and circumstances of
the case the assessee companypany is an investment
holding companypany or an investment dealing
company. whether in the facts and circumstances
of the case the dividends earned by the
company should have number been assessed under
the head profits and gains of business
profession or vocation under section 10 of
the indian income tax act. whether in the facts and circumstances
of the case the loss brought forward from
preceding years under section 24 2  of the
indian income tax act should have number been set
off against the dividends earned by the
assessee companypany during the year in question. the companymissioner of income tax in his reply
suggested the. following question
whether on the facts and in the
circumstances of the case the tribunal was
justified in holding that the loss sustained
by the assessee in the preceding years cannumber
be set off against the dividend income earned
by the assessee in the previous year for the
assessment year 1950-51 under section 24 2  of
the income-tax act ? the tribunal however as mentioned earlier referred the
question already set out above. the high companyrt by its judgment dated august 31 1955 found
it impossible to deal with the reference and answer -the
question asked without obtaining from the tribunal further
and fuller statement of the case. the high companyrt
therefore referred the case back to the appellate tribunal
under s. 66 4  of the act in order that the tribunal may
draw up and submit to that companyrt a supplementary statement
of the case indicating clearly what view it took as to the
effect of the appellate assistant companymissioners order in
passing its appellate judgment and on what basis regarding
the year 1949-50 it has made the present reference. to put
the matter in a more definite form the tribunal should
indicate whether it regarded the appellate assistant company-
missioners order as having effectively revised the
assessment order and if it took that view of the appellate
assistant companymissioners order what the revision was
particularly whether any amount was left in the assessment
as unabsorbed business loss after the transfer of an amount
to loss under other sources directed by the appellate
assistant companymissioner had been carried out. the appellate tribunal submitted a supplementary statement
of the case dated february 18 1957. it was observed in
the statement of the case that the appellate tribunal read
the orders of the appellate assistant companymissioner to mean
that the assesses companypany was an investment companypany and was
number a companypany which dealt in shares. the quantum of the
loss in the assessment year 1949-50 as suggested in the
appellate assistant companymissioners order was number adverted to
by the appellate tribunal at the time of the hearing of
appeal as numberarguments were addressed to them on that
point. the supplementary statement mostly companytained an
interpretation of the orders of the appellate assistant
commissioner and the appellate tribunal the only fresh fact
included was the information that the income tax officer in
conformity with the order of the appellate assistant
commissioner revised the assessment order for 1949-50 so as
to change the figures and held that the loss arising from
the set-off of interest against the dividend income was a
loss under the head other sources while the balance was a
business loss and was directed to be carried forward. in
this order the income tax officer had stated that loss
under other sources cannumber be carried forward as it is under
section 12. business loss of rs. 532 will be carried
forward. the reference was then heard by a bench companysisting of mitter
and ray jj. it was argued before the high companyrt that in
as much as dividend is number expressly mentioned in section 12
in the case
of an investment companypany assessee whose business is to
invest in shares dividend income therefrom should be
computed under section 10 as its business income with the
result that the assessee can claim the benefit of section
24 2  of the act. this companytention however did number appeal
to the high companyrt. the high companyrt held that it cannumber be
suggested in this case that the assessee investment companypany
had numberbusiness of any kind. it certainly had one but when
it held shares on which dividends were received tax has to
be companyputed under s. 12 and the assessee cannumber say that
this being its main activity the income received was its
business income under section 10. in the result the high
court answered the question in the negative. mr. s. t. desai learned companynsel for the assessee at the
outset -asked us to modify the question referred to the high
court. he -said that he had asked for three questions to be
framed and that the companymissioner in his reply had also
suggested the real question which arose out of the order of
the appellate tribunal. he further says that the real point
in this case is number whether the dividend income is
assessable under s. 10 or s. 12 but whether under s. 24 2
the assessee is entitled to set off the deficiency or loss
occurring in the earlier years. but the high companyrt was
neither requested to issue a mandamus number requested to
modify or formulate anumberher question and we are number prepared
to frame a new question by way of modification of the
question referred to the high companyrt. companyfining ourselves then to the question actually referred
to the high companyrt the problem is quite simple the problem
being whether an investment companypany like the assessee
company can claim to have its dividends companyputed under s. 10
or s. 12 of the act. mr. desai companytends that if you look at
the objects of the companypany it is apparent that the companypany
is carrying on business. he further relies on companymissioner
of income tax v. companyanada radhaswami bank limited 1  and says
that at any rate if the dividend income is -computed under
s. 12 it still is business income for the purpose of s.
24 2 . he then draws our attention to companymissioner of
income-tax v. chugandas and company  2  where this companyrt held
that there is numberreason to restrict the companydition of the
applicability of the exemption under section 25 3  only to
income on which the tax was payable under the head profits
and gains of business profession or vocation. the
exemption under section 25 3  is general. but these--two
cases have numberbearing on the question whether the dividend
income has to be companyputed under s. 10 or
 1  57 i.t.r. 306  2  1957 8 s.c.r. 322
s. 12 of the act. they may have reference to the question
sought to be raised before us by way of modification and
which we have declined to modify. the main argument of mr.
desai is that when a companypany is formed for the purpose of
acquiring shares and making investments and generally
-undertaking financial and companymercial obligations and
transactions and operations of all kinds the dividend
income must be companyputed under s. 10 because the companypany is
formed expressly for the purpose of carrying on business and
holding shares in the companyrse of it. in this companynection he
refers to the following passage from the judgment of lord
sterndale in the companymissioner of inland revenue v. the
korean syndicate limited  1
but the fact that the limited companypany companyes
into existence in a different way is a matter
to be companysidered. an individual companyes
into existence for many purposes or perhaps
sometimes for numbere whereas a limited companypany
comes into existence for some particular
purpose and if it companyes into existence for
the particular purpose of carrying out a
transaction by getting possession of
concessions and turning them to account then
that is a matter to be companysidered when you
come to decide whether doing that is carrying
on a business or number. the -learned companynsel for the revenue mr. viswanatha sastri
contends that the companypany was number holding shares as part of
its stock-in-trade but was holding them merely as an
investment companypany and he says that in this respect an
investment companypany even though it is formed under the
companies act is in numberway different from an individual who
invests his own moneys or borrows and invests monies in
shares for the purpose of getting dividends. he drew our
attention to east india prospecting syndicate calcutta v.
commissioner of excess profits tax calcutta 2  where the
calcutta high companyrt in dealing with the excess profits tax
act  xv of 1940  held that the mere holding of property or
investments cannumber amount to a business within the meaning
of that term as used in the indian income-tax act 1922 and
can only amount to a business as that term is used in the
excess profits tax act 1940 by reason of the proviso to
section 2 5  of that act. the proviso to section 2 5  of
the excess profits tax act 1940 only makes the holding of
investments or property by limited companypanies and
incorporated societies tantamount to carrying on of
business. but the assessee in that case was number carrying on
any
 1  12 t.c. 181 at p. 202  2  19 i.t.r. 571
investment business at all and therefore the decision is
of number much assistance to us. the only assistance we can
derive from that decision is that the central legislature in
enacting the excess profits tax act understood the word
business to mean that the term would number include a mere
holding of investments and made a special provision to rope
in limited companypanies or incorporated societies which were
holding investments or property within the definition of the
word business. before the amendment of s. 12 by s. 9 of the finance act
1955 it had been held by the bombay high companyrt in companymis-
sioner of income tax v. ahmuty company limited 1  that where a
company was a dealer in shares which companystituted its stock-
intrude the dividend income received by the assessee in
respect of its shares was income from business chargeable
under s. 10 and the income-tax authorities companyld number companypel
the assessee to show the income under s. 12. but there is
numbercase where it had been held that even if the shares are
number stock-in-trade of the assessee companypany the dividend can
be assessed under s. 10. it seems that in practice an
investment companypany was being assessed under s. 12 in respect
of dividend income received by it.  see for example eastern
investment limited v. companymissioner of income tax west ben 1
 2  legal c which is a case which came up to the supreme
court.  it seems to us that on principle before dividends on shares
can be assessed under s. 10 the assessee be it an
individual or a companypany or any other entity must carry on
business in respect of shares that is to say the assessee
must deal in those shares. it is evident that if an
individual person invests in shares for the purpose of
earning dividend he is number carrying on a business. the only
way he can companye under s. io is by companyverting the shares into
stock-in-trade i.e. by carrying- on business of dealing in
stock and shares as did the assessee in companymissioner of
income tax v. bai shirinbai k. kooka   3   . mr. desai laid a great deal of stress on the argument that
the very fact that a companypany is incorporated to carry on
investment shows that the companypany is carrying on business. we are unable to agree with this companytention. bhagwati j
observed in lakshiminarayan ram gopal and son limited v.
government of hyderabad 1  that when a companypany is
incorporated it may number necessarily companye into existence
for the purpose of carrying on a business. he further
observed that the objects of an incorporated
 1  27 i.t.r. 63  2  20 i.t.r. 1
 3  46 i.t.r. 86  4  25 t.t.r. 449
company as laid down in the memorandum of association are
certainly number companyclusive of the question whether the
activities of the companypany amount to carrying on of
business. apart from showing mere investment numberfacts have been
brought out in this case to show that the companypany was in any
way carrying on business in respect of shares. its
position on the facts placed before us is in numberway
different from an individual merely buying shares with a
view to holding them for the purpose of earning dividends.


civil appellate jurisdiction civil appeal number 1048 of
1980.
from the judgment and order dated 11.3.80 of the rajas-
than high companyrt in s.a. number 52 of 1980.

ganesh and p.h. parekh for the appellant. s. khanduja for the respondent. the judgment of the companyrt was delivered by
sharma j. this appeal by special leave is directed
against the decision of the rajasthan high companyrt companyfirming
the decree of eviction of the appellant from certain prem-
ises under s. 13 1  f  of the rajasthan premises  companytrol of
rent and eviction  act 1950  hereinafter referred to as the
act  on the ground that he had denied the title of the
respondent-landlord. the appellant has been in possession of the structure in
ques-
tion since 1953 when he was inducted therein by the owner
one nawab m. ali khan. in 1969 nawab m. ali khan died and
it appears that some dispute arose between his legal repre-
sentatives and the present respondent number 1. it further
appears that the dispute was finally settled in favour of
the respondent number 1 and according to the case of the appel-
lant he duly recognised him as his landlord and started
paying rent. in 1973 the appellant received a numberice from
the municipal authorities asking him to remove the disputed
structures on the ground that it was erected on government
land. according to the appellants case the numberice was
issued at the instance of the respondent number 1 who was
anxious to evict the appellant. the appellant in the situa-
tion was forced to file a suit in the civil companyrt challeng-
ing the validity of the numberice and praying for injunction
against the municipal authorities from interfering with his
possession. the respondent number 1 filed the present suit on
the twin founds of default in payment of rent and denial of
his title. the case of default in payment of rent was re-
jected but the suit was decreed on the ground of denial of
title. on appeal the additional district judge companyfirmed
the decree. the appellants second appeal was also rejected
by the high companyrt at the admission stage. the appellants plaint in the earlier suit by which
it is suggested that he challenged the respondents title
was filed in the present case and marked as ext. 1. the
first appellate companyrt has while recording its finding
against the appellant observed that the statements in the
plaint amount to disclaimer and in any event it appears
that the appellant failed to acknumberledge the land-lords
title therein and companysequently he was liable to eviction
under clause  f  of s. 13 1  of the act which reads as
follows

eviction of tenants.-- 1  number-
withstanding anything companytained in any law or
contract numbercourt shall pass any decree or
make any order in favour of a landlord
whether in execution of a decree or otherwise
evicting the tenant  xxx  so long as he is
ready and willing to pay rent therefore to the
full extent allowable by this act unless it
is satisfied .-
 a

 f that the tenant has renumbernced his charac-
ter
as such or denied the title of the landlord
and the
latter has number waived his right or companydoned
the companyduct of the tenant or
we do number agree. there is numberstatement in the plaint at all
challenging the landlords right and there was numberoccasion
for the appellant to deal with this aspect in view of the
scope of his suit. on the other hand the pleading shows
that he described the nature of his possession as that of a
tenant and the interest of the present respondent number 1 who
was defendant number 2 in that suit as that of a landlord. mr. s.s. khanduja the learned companynsel for the re-
spondent relied on the last sentence of paragraph 1 of the
plaint as mentioned below and companytended that since the
defendant number 2 was number one of the heirs of the deceased
nawab m. ali khan this sentence should be read as denial of
his title
he sold out some portion of his property in
his life time and the remaining property came
to be owned by his heirs i.e. defendants number 2
to 6.
firstly it has to be numbericed that although the respondent
was wrongly described as an heir his title to the property
was acknumberledged. further this sentence cannumber be read in
isolation. the position is explained in paragraph 5 of the
above numbered plaint in the following terms

that the land where the stall type kachhi
shops of the plaintiffs have been companystructed
the defendant number 2 has built his house after
taking the land on a long term lease from
nawab mukarram ali khan. in between these
there is a pakka dola. there is dispute
about the ownership of the land between the
defendant number 2 and the defendant number 3 to 6
since the death of nawab mukarram ali khan in
the year 1969. later on the matter has been
compromised in between the four heirs the
defendant number 2 developed a bad motive and he
wants that anyhow the plaintiffs should be
evicted from the premises as early as possible
and he. should occupy the same. the argument is that the title of the respondent  defendant
number 2 in the earlier case  was numberhere accepted in the
plaint. after mentioning the dispute between him and the
legal representatives of the deceased nawab the appellant
did number proceed to clarify the position. so far as
the statement in paragraph number 1 of the plaint is companycerned
the grievance is that the title of the landlord was denied
if number companypletely then at least in part by describing the
defendants 3 to 6 as companyowners with him. we are number in a
position to agree with the companytention of the learned companynsel
that for these reasons the appellant has to be evicted. even
interpreting the plaint in a manner as favourable to the
landlord as may be possible it has to be accepted that the
document cannumber be companystrued to clearly deny the respond-
ents title in unambiguous terms. one thing that is companyspic-
uous is that the appellant did number claim any title in him-
self. we expressly described the character of his possession
as that of a tenant. is it in this situation permissible to
forfeit his lease on the ground of disclaimer of title? in
providing disclaimer as a ground for eviction of a tenant in
clause  f  of s. 13 1  of the act the legislature decided
to give effect to the provisions of clause  g  of s. 111 of
the transfer of property act. the principle of forfeiture on
disclaimer is rounded on the rule that a man cannumber appro-
bate and reprobate at the same time. since the companysequence
of applying the rule is very serious it must be held that
the denial has to be clear and in unequivocal terms. the
decision of this companyrt in mohammad amir ahmad khan v. munic-
ipal board of sitapur and anumberher a.i.r. 1965 s.c. 1923
relied upon by the learned companynsel for the appellant high-
lights this aspect. the facts in that case would show that
the tenant there had made statements against his landlord
which were far more serious than those in the case before us
and still was number penalised. it may be appreciated that in
the present case the 1973 suit was number directed against any
of the defendants excepting the municipality and the state-
ments in the plaint referred to above were made by way of
giving the background in which the impugned numberice by the
municipal officers had been issued. numberrelief against the
other defendants including the present respondent was prayed
for.