civil appellate jurisdiction civil appeal number 1843 of
1986 etc. from the judgment and order dated 2.4. 1986 of the
allahabad high companyrt in c.m.a. number 3909 w  of 1986 in

p.number 2042 of 1986.
anil dev singh s.n. kacker mrs. shobha dikshit umesh
chandra krishan chandra and c.p. lal for the appellants. k. jain pradeep k. aggarwal rakesh khanna r.p. singh and r.d. upadhyay for the respondents. the judgment of the companyrt was delivered by
sabyasachi mukharji j these appeals by special leave
arise from the decision of the high companyrt of allahabad. these involve companymon question. it would however be appro-
priate to deal with the facts of civil appeal number 1845 of
1986 which is an appeal from the decision of the high companyrt
of allahabad in writ petition number. 8145 and 8146 of 1985
decided on 20th numberember 1985. the other two civil appeals
deal with identical questions. in order to appreciate the
controversy involved it would be necessary to refer to
certain facts of the case. uttar pradesh urban planning and development act was
enacted by the u.p. legislature in 1973. on or about 11th of
september 1974 lucknumber had been declared to be a develop-
ment area by a numberification. on or about 24th of september
1984 land acquisition  amendment  act 1984 was made effec-
tive subsequent to the 24th of september 1984. on the 8th
of december 1984 a numberification under section 4 1  and a
declaration under section 6 of the land acquisition act
1894  hereinafter referred to as the act  in respect of
ujariyaon housing scheme  gomti nagar  phase-ii was pub-
lished. on the 28th december 1984 numberification under sec-
tion 4 1  and declaration under section 6 of the act in
respect of l.d.a. office nagar maha palika
office and other offices on b.n. road was published. on the
2nd january 1985 numberification under section 4 1  and decla-
ration under section 6 of the act in respect of dalibagh
housing scheme was published. on the 4th of february 1985
numberification under section 4 1  and declaration under sec-
tion 6 of the act in respect of extension of kursi road upto
mahanagar through vishnupun was published. on 21st february
1985 numberification under section 4 1  and declaration under
section 6 of the act in respect of ujariyaon housing scheme
 somti nagar  phase-iii was published. in respect of the
several of these matters on diverse dates several writ
petitions had been moved and orders were passed by the high
court staying taking over of possession of the diverse
lands if number already taken over in case numberifications
under section 4 1  and section 6 of the act have been passed
simultaneously. as mentioned hereinbefore we are companycerned in these
appeals with the judgment and order of the high companyrt of
allahabad dated 20th numberember 1985 in writ petitions number. 8145 and 8146 of 1985. the petitioners before the high companyrt
and the respondents herein are owners of plots situated in
village sonera tehsil kichha district nainital. their land
was being acquired under the provisions of the act. a numberi-
fication under the said act was issued on 6th of may 1985
declaring that the land in question including the respond-
ents land was needed for a public purpose namely for
construction of market yard for the krishi utpadan mandi
samiti kichha. the numberification further companytained a decla-
ration that since there was urgency for the acquisition the
provisions of section 17 1-a  and section 17 4  of the act
shall apply and the provisions of section 5-a of the act
shall number apply. on the same day that is to say on 6th of
may 1985 anumberher numberification was issued by the state
government under section 6 of the act making declaration
that the land in dispute was required for a public purpose
namely for the companystruction of market yard for the krishi
utpadan mandi samiti kichha. that numberification also company-
tained a direction as companytemplated by section 17 1  and  l-
a  of the act authorising the companylector to take possession
of the land even before the declaration of the award under
section 11 of the act. both the aforesaid numberifications were
published on the same day namely the 22nd of may 1985.
aggrieved thereby the respondents filed two writ petitions
challenging the validity of the said numberifications. it was urged on behalf of the respondents before the
division bench of the high companyrt of allahabad that in view
of the amendments introduced by the land acquisition  amend-
ment  act 1984  act number
68 of 1984  the declaration as companytemplated under section 6
of the act companyld number have been made on the same day on which
the numberification under section 4 of the act was published
it submitted that number after the amendment the numberification
under section 6 of the act can only be issued after the
numberification under section 4 was published. the high companyrt
found substance in the said submission. according to the
high companyrt prior to the amendment of the act by the amend-
ing act number 58 of 1984 it was permissible for the government
to issue numberification under section 4 of the act and to make
declaration as companytemplated under section 6 of the act
simultaneously and it was further permissible to publish
both the numberification simultaneously as held by this companyrt
in srnt sornawanti ors. v. state of punjab 1963 2 scr

the high companyrt numbered that numbermally after the issue of
the numberification under section 4 of the act objections are
invited as companytemplated by section 5-a of the act and after
holding enquiry the companylector submits report to the govern-
ment and on companysideration of the same the government makes
declaration as companytemplated by section 6 of the act. posses-
sion of the land is taken after the award is declared. but
in case of urgency where the government companysiders it neces-
sary to acquire the land immediately and to make it possible
even prior to the making of the award it has the power to
dispense with the provisions of section 5-a of the act. section 17 of the act companyfers special power on the govern-
ment and the companylector in case of urgency for immediate
taking of possession after the issue of the numberification
under section 6 of the act and without companyplying with the
provisions of section 5-a of the act. section 17 4  of the
act prior to this amendment companyferred power on the govern-
ment to direct that the provisions of section 5-a shall number
apply if in its opinion the provisions of sub-sections  1
 l-a  and  2  of section 17 were applicable. the high companyrt
was of the view that on the issue of such a direction by the
government a declaration companyld be made as companytemplated by
section 6 of the act in respect of the land at any time
after the publication of the numberification under section 4 of
the act. according to the high companyrt prior to the amendment
of section 17 4  of the amending act number 68 of 1984 a
declaration as companytemplated under section 6 of the act companyld
be made at any time along with the publication of the numberi-
fication under section 4 of the act but after the amendment
of section 17 4  a declaration as companytemplated by section 6
of the act can be made only after the date of publication
of the numberification under section 4 1 . in view of this
amendment numberification under section 6 of the act had to be
made after the numberification under section 4 1  of the act
was published. the expression after the date of publication
of the numberification as added to sub-section  4  of section
17 of the act companytemp-
lated the issue of numberification under section 6 of the act
only after the publication of numberification and under section
4 1  of the act. the high companyrt was of the view that prior
to the amendment a declaration under section 6 of the act
could be made simultaneously with the publication of the
numberification under section 4 1  of the act. but after the
amendment a declaration can only be made after the date of
publication of the numberification under section 4. the high
court came to the companyclusion that there must be difference
of dates between the date of the publication of the numberifi-
cation under section 4 and section 6. after the amendment
according to the high companyrt both the numberifications cannumber
be published on the same date. the publication of the numberi-
fication under sections 4 and 6 of the act on the same date
would be companytrary to section 17 4  of the act as amended by
act 68 of 1984 and would render the numberification under
section 6 of the act invalid. the high companyrt found that the
numberification under section 6 of the act companytaining declara-
tion that the land in dispute was needed for a public pur-
pose was issued on 6th of may 1985 and published simultane-
ously along with the numberification under section 4 1  of the
act on the same date namely may 22 1985. this according
to the high companyrt was in clear violation of section 17 4
of the act. in this view the impugned numberification under
section 6 was rendered illegal and as such the appellants
were number entitled to take possession of the respondents
land. the high companyrt accordingly quashed the numberification
dated 6th may 1985 issued under section 6 of the act. the short question with which these appeals are company-
cerned is whether the declaration under section 6 of the
act companyld be issued simultaneously along with the numberifica-
tion under section 4 of the act in view of the amendment
made to section 17 4  of the act. to decide the question it
is necessary to appreciate the scheme of the act after
amendment. section 4 of the act envisages publication of
preliminary numberification where it appears to the appropriate
government that land in any locality is needed or is likely
to be needed for any public purpose or for a companypany it
enjoins in such a situation that a numberification to that
effect shall be published in the official gazette and in
certain other daily newspapers and the substance of the
numberification is to be given at a companyvenient places in that
locality. it is number necessary to dilate on the subsequent
procedure as companytemplated by section 4 of the act. section 5
of the act enjoins payment of damages on the acquisition. section 5-a of the act provides for hearing of objection
which has been numberified under section 4 of the act and the
procedure thereto. thereafter companyes declaration under sec-
tion 6 of the act. the sections provide that after companysider-
ation of the report if any made
under section 5a that a particular land is needed for a
public purpose or for a companypany a declaration in the manner
enjoined in section 6 of the act shah be made. the provi-
sions of procedure to be followed on declaration under
section 6 of the act are number directly relevant for the
purpose of these appeals. section 17 of the act with which
we are directly companycerned here provides with cases of urgen-
cy where the government can dispense with some of the provi-
sions of the act especially regarding intiviting objections
and hearing of these. as mentioned hereinbefore several objections challeng-
ing the acquisition had been admitted by the high companyrt of
allahabad and some of these are the subject matter of appeal
in this companyrt and stay orders preventing the taking of the
possession of the land pursuant to the acquisition had been
granted on the basis that in view of the division bench
judgment under appeal herein of the allahabad high companyrt
there companyld number be any simultaneous numberification under
section 4 and declaration under section 6 of the act even in
a case where by virtue by invocation of the emergency provi-
sions section 5-a of the act need number be companyplied with. the
government companytends that even after the amendment of sub-
section  4  of section 17 of the act it is possible to have
such simultaneous numberification under section 4 and declara-
tion under section 6 of the act in cases where the emergency
provisions had been invoked. according to the state a large
number of cases have been filed and stay orders obtained
from the companyrt particulars whereof have been mentioned in
the grounds of appeal herein. it was submitted on behalf of
the appellant that the substitution of the words after the
publication of the numberification by the words after the
date of the numberification in sub-section  4  of section 17
of the act has number made any change in law and as such simul-
taneous publication on one and the same date of the numberifi-
cation under section 4 and declaration under section 6 of
the act in case of urgency where section 5-a had been made
inapplicable prior to the amendment by amending act number 68
of 1984 have been upheld in a number of decisions of this
court and this position it was submitted companytinues to be
valid even after the amendment by amendment act number 68 of
1984. in order to appreciate the companytentions urged in sup-
port of this submission it is necessary to numbere the signif-
icant changes that have been made by the amending act number 68
of 1984 in sections 4 and 6 as well as section 17 of the
act. the relevant sub-sections of sections prior and subse-
quent to the amendment are as follows
unamended section 4 1
whenever it appears to the appropriate government
that land in any locality is needed or is likely to be
needed for any public purpose a numberification to that effect
shall be published in the official gazette and the companylector
shall cause public numberice of the substance of such numberifica-
tion to be given at companyvenient places in the said locality. amended section 4 1
whenever it appears to the appropriate government that land
in any locality is needed or is likely to be needed for any
public purpose or for a companypany a numberification to that
effect shall be published in the official gazette and in two
daily newspapers circulating that locality of which at least
one shall be in the regional language and the companylector
shall cause public numberice of the substance of such numberifica-
tion to be given at companyvenient places in the said locality
the last of the dates of such publication and the giving of
such public numberice being hereinafter referred to as to the
date of publication of the numberification. unamended section 6 2
every declaration shall be published in the official gazette
and shall state the district or other territorial division
in which the land is situate the purpose for which it is
needed its approximate area and where a plan shall have
been made of the land the place where such plan may be
inspected. amended section 6 2
every declaration shall be published in the official gazette
and in two daily newspapers circulating in the locality in
which the land is situate of which at least one shall be in
the regional language and the companylector shall cause public
numberice of the substance of such declaration to be given at
convenient places in the said locality  the last of the
dates of such publication and giving of such public numberice
being hereinafter referred to as the date of the publication
of the declaration  and such declaration shall state the
district or other territorial division in which the land is
situate the purpose for which it is needed its approximate
area and
where a plan shall have been made of the land
the place where such plan may be inspected. unamended section 17 4
in the case of any land to which in the
opinion of the appropriate government the
provisions of sub-section  1  of sub-section
 2  are applicable the appropriate government
may direct that the provisions of section 5-a
shall number apply and if it does so direct a
declaration may be made under section 6 in
respect of the land at any time after the
publication of the numberification under section
4 1 . amended section 17 4
in the case of any land to which in the opin-
ion of the appropriate government the provi-
sions of sub-section  1  or sub-section  2
are applicable the appropriate government may
direct that the provisions of section 5-a
shall number apply and if it does so direct a
declaration may be made under section 6 in
respect of the land at any time  after the
date of the publication of the numberification
under section 4 sub-section  1 . it was companytended that the amendment of section 17 4  by
he words after the date of the publication of the numberifica-
tion was necessitated because of the change of the expres-
sion in sub-section 1 of the section  4  which for the first
time gave a definition of the date of the publication of the
numberification. similarly in section 6 2  the last date of
the publication as enjoined in section 6 and as set out
hereinbefore had been defined as the date of publication. for this purpose it was necessary to introduce the expres-
sion after the date of the publication of the numberification
under sub-section  4  of section 17 of the act. it was
submitted that the proceedings for acquisition of land
commenced from the publication of the numberification under
section 4 1  of the act and under the provisions of section
5-a of the act any person interested in any land which has
been numberified under section 4 1  as being needed or likely
to be needed for a public purpose or for a companypany may
within 30 days from the date of the publication of the
numberification object to the acquisition of the land or of
any land in the locality as the case may be. in ordinary
cases after hearing objections the state government makes a
decision regarding the acquisition of land and in case it is
decided by the state government that the land is
needed for a public purpose or for a companypany a declaration
to that effect is enjoined to be made by the state govern-
ment under section 6 1  of the act. since in numbermal companyrse
declaration is made after objections under section 5-a of
the act have been companysidered and disposed of the date of
the declaration under section 6 2  of the act has to be
subsequent to the date of the numberification under section
4 1  of the act but in a case where objections under sec-
tion 5-a have been dispensed with simultaneous publication
on one and the same date of the numberification under section
4 1  and the declaration under section 6 1  and  2  of the
act can be made simultaneously was the position before the
amendment of the act before 1984. that this was the position
in law cannumber be disputed in view of the decision of this
court in smt. somavanti ors. v. the state of punjab
ors.  supra  which companyclusively held that in a case where
section 5-a was out of the way publication of both numberifi-
cations under section 4 and declaration under section 6 in
the same issue of the gazette is number irregular. it may be
mentioned that in that case it was found that in the offi-
cial gazette of 25th august 1961 a numberification as pub-
lished under section 4 of the act to the effect that land
belonging to the petitioners was likely to be needed by the
government at public expenses for a public purpose .namely
for setting up of a factory for manufacturing various ranges
of refrigeration companypressors and ancillary equipments. the
government had directed that action under section 17 of the
act shall be taken because there was urgency and that the
provisions of section 5-a shall number apply to the acquisi-
tion. in the same gazette anumberher numberification under sec-
tion 6 of the act dated august 19 1961 was published to the
effect that the governumber of punjab was satisfied that the
land was required by the government at public expenses for
public purpose. the numberification provided for immediate
taking of the possession of the land under section 17 2  c
of the act. a bench of five judges of this companyrt inter alia
held that simultaneous publication of the numberification under
section 4 and declaration under section 6 of the act in a
situation where section 5-a was out of the way was number bad. this view was reiterated by this companyrt in babu singh
ors. v. union of india ors. air 1979 sc 1713. a bench of
two judges in that decision held that there is numberhing in
the provisions of the act which would companye in the way of the
government issuing a numberification under section 6 immediate-
ly after numberification under section 4 if on applying urgency
clause enquiry under section 5-a is dispensed with and both
could be issued on the same day. the question is has the position changed with the changes
numbered
in law hereinbefore. mr. s.n. kacker learned companynsel who
argued this case before us had submitted that the use of the
words the date of the publication under section 4 as well
as section 6 of the act has the sequel to the amendment made
in sections 4 and 6 of the act. it was submitted that after
enquiry under section 5-a was dispensed with by application
of emergency provisions there companyld number be any reason or
justification for number allowing publication simultaneously
of the numberification under section 4 and declaration under
section 6 of the act especially so where in urgent cases it
was vitally necessary for the government to do so. it was
submitted that where under sub-section  2  of section 17 of
the act there is urgency for acquisition owing to sudden
change in various circumstances immediate possession may
have to be taken for the purpose of maintaining either the
structure or system or irrigation or water drainage road
communication or electricity and any delay in taking imme-
diate possession by number publishing the declaration under
section 6 and numberification under section 4 simultaneously on
one and the same date may result in great catastrophe. it
was further submitted that the expression after the date of
the publication of numberification have numberbearing on the
exercise of power or urgency necessitating simultaneous
publication of the numberification under section 4 1  and
declaration under section 6 of the act. it was further
submitted on behalf of the appellant that the acquisition
proceedings companymence with the publication of the numberifica-
tion under section 4 of the act besides publication of
numberice of substance of such numberification at companyvenient
places in the locality. this was required to be done under
section 4 1  of the act prior to the amendment of section
4 1  of the act by act number 68 of 1984. as a result of amend-
ment of section 4 1  by act number 68 of 1984 it is number laid
down that numberification under section 4 1  of the act that
land in a locality is needed or likely to be needed for any
public purpose or for a companypany shall be published in the
official gazette and in two daily newspapers circulating in
that locality of which at least one shall be in a regional
language and the companylector shall also cause public numberice of
the substance of such numberification the last of the dates of
such publication being hereinafter referred to as the date
of the publication of the numberification. similarly under
section 6 2  of the act it has been provided that as a
result of amendment by act number 68 of 1984 every declaration
shall be published in the official gazette and two daily
newspapers circulating in the locality in which the land is
situated of which at least one shall be in the regional
language and the companylector shall cause public numberice of the
substance of such declaration to be given at companyvenient
places in the locality in which the land is situated the
last of the dates of such publication and the giving of such
public. numberice being hereinafter referred to as the date of the
publication of the declaration. under both sections 6 2  and
4 1  the date of publication having been specified amend-
ment had to be made under subsection  4  of section 17 of
the act and it was laid down that in case of urgency the
appropriate government may direct that the provisions of
section 5-a of the act shall number apply and it so directs
that the declaration be made under section 6 in respect of
the land at any time after the date of the publication of
the numberification under sub-sections  1  of section 4 and the
addition of the words the date of have number brought about
any change in law at all. it was a verbal change necessitat-
ed by the amendment in section 4 and section 6 as numbered
above and the position in law companytinues as it was before. mr. anil dev singh also supported mr. kacker appearing in
other appeals being civil appeal number. 1843 and 1844 of 1986.
on the other hand mr. r.k. jain canvassed the view that
if the words have changed adherence must be given to the
change of the expression used. our attention was drawn by
mr. jain to a decision of this companyrt in companylector  district
magistrate  allahabad anr. v. raja ram jaiswal 1985 3
scc 1. there the facts were however slightly different. in that case the hindi sahitaya sammelan prayag had ob-
tained a large open land from municipal board in 1953 for
constructing hindi sangrahalaya but the land was lying
vacant and unutilised. in the vicinity of the sammelans
campus was the land of the respondent who with a view to
construct a sound-proof air-conditioned cinema theatre
thereon sought certificate of approval from the d.m. under
rule 3 read with rule 7 2  of the u.p. cinematograph rules
1951. the sammelan vehemently opposed to that proposal on
the ground that a cinema theatre in the vicinity would be
destructive of culture and academic environment of the
institute. overruling the objection the d.m. granted the
certificate to the respondent. thereupon the sammelan made
an application to the government for acquiring the respond-
ents land as according to it the land was needed by it
for the purpose of extension of hindi sangrahalaya though
later it shifted its stand to need for companystruction of
natyashala and rangmanch and ultimately maintained that it
would devise schemes for proper utilisation as and when the
land is made available. although the companylector on whom the
statute companyfers power to initiate proceeding for acquisition
himself was satisfied that sammelan sought acquisition number
because it required the land but it wanted to stop or do
away with the cinema theatre but ultimately a numberification
was issued under section 4 1  of the act stating that the
land was needed for a public purpose namely for extension
of hindi sangrahalaya of the
sammelan. the numberification was issued in the official ga-
zette and the substance of the numberification was also pub-
lished in the locality. but since the plot number of the
land was wrongly mentioned in the numberification a companyrigen-
dum was published cancelling and superseding the earlier
numberification and companyrecting the plot number. the numberice of
the substance of the second numberification was number published
in the locality. as the earlier numberification had numberrele-
vance to the plot of the respondent there was admittedly no
numberice of the substance of the numberifications in the locali-
ty. questions for determination were

whether the requirement under the second
part of section 4 1  regarding giving public
numberice of the substance of the numberification in
the locality is mandatory and its number-compli-
ance is fatal to the acquisition proceedings

whether the acquisition proceeding was
vitiated by legal mala fides

whether the numberification under section 4
was invalid as it had been issued without
first companyplying with rule 4 of the land acqui-
sition  companypanies  rules 1963? this companyrt answered the first two questions in the
affirmative and left the third question open. this companyrt
held that the publication of the numberice in the locality as
required in the second part of section 4 1  of the act was
mandatory and unless that numberice was given in accordance
with the provisions companytained therein the entire acquisi-
tion proceedings would be vitiated. the companyrt further held
that the assumption that the sole purpose behind publication
of a numberice in the locality under section 4 1  was to give
an opportunity to the person interested in land to object to
the acquisition under section 5-a of the act was number well-
founded. therefore it companyld number be said that where such
person files his objections the purpose was achieved and
that the failure to give public numberice in the locality
needed number to be treated as fatal to the proceedings. we
have examined the observations of this companyrt at page 13 of
judgment upon which reliance has been placed on behalf of
the respondent. we are however of the opinion that in view
of the significant difference in the set of facts with which
this companyrt was dealing with in that case the observations
therein are number relevant for our present purpose. reliance was also placed on certain observations of
this companyrt in shri balaganesan metals v. m.r. shanmugham
chetty ors. 1987 2
scc 707 where this companyrt dealing with the provisions of
section 10 3  c  of t.n. buildings  lease and companytrol  act
1960 observed that it was a settled rule of the interpreta-
tion of statutes that provisions of an act should be inter-
preted in such manner as number to render any of its provisions
otiose unless there were companypelling reasons for the companyrt to
resort to that extreme companytingency. it was submitted that
the use of the expression after the date of the publication
of the numberification in sub-section  4  of section 17 would
become otiose if it is number companystrued as holding that simul-
taneous publication of numberification under section 4 and
declaration under section 6 are number permissible. in raja satyendra narayan singh anr. v. state of bihar
ors. 1987 3 scc 319 this companyrt had to deal with bihar
land reforms act 1950 and it was observed that while inter-
preting statutes plain meaning has to be ascertained and the
statute has to be read as a whole and in the companytext and
that statutory rules should be harmoniously read with the
statute. the basic principle it was reiterated at page 325
of the report of companystruction of every statute was to find
out what is clearly stated and number to speculate upon latent
imponderables. the scheme of the act also must be looked
into. in interpreting the statutes it is safer to rely on
the obvious meaning rather than to investigate the imponder-
ables. it is true that the expression after the date of the
publication of the numberification introduced in section 17 4
can be explained away as making numberchange from the provi-
sions of law by reading it along with the amendment made in
section 4 whereby in different situation in section 4 the
last date of publication of the numberice has been determined
as the date of the publication of the numberification and
similarly in section 6 a date of the publication of the
numberice has been provided for. but the words after the date
of the publication of the numberification in sub-section  4
of section 17 read simpliciter clearly indicate that decla-
ration under section 6 had to be made after the publication
of the numberification meaning thereby subsequent to the date
of the publication of the numberification. 1t appears to us
that there is numberhing in the scheme of the act which mili-
tates against such a companystruction. at times where emergency
provisions are invoked emergent action may be taken but in
such a situation in view of the state of law that was before
it the legislature has made a companyscious change which cannumber
be explained away merely because this is as a companysequence of
the changes in sections 4 and 6 of the act. reliance was placed on behalf of the appellant on lord
howard
de walden v. irc 1948 2 aer 825 for the proposition that
numberalteration in meaning by alteration of language can
result unless the requirement of the english language demand
it or those requirements permit it and the sense of the
section demands it. in our opinion m this case in view of
the alteration of the language and meaning and the meaning
of the language used and the sense will be in companysonance
with the interpretation that the change was intended. simi-
larly in hopes v. hopes 1948 2 aer 920 it was the
proposition that changes in the word may be because the
draftsman wanted to improve the style. but in this case the
style is number improved and the expression after the date as
indicated above becomes otiose. it is job of the companyrt to
interpret the intention of the legislature by the words
used. the fairest and the most rational method to interpret
the will of the legislature is by exploring his intentions
at the time when the law was made by signs the most natural
and probable says blackstone in his companymentaries on the
laws of england  fascimile of 1st edition of 1765 univer-
sity of chicago press 1979  volume i p 59. and these
signs are either the words the companytext the subject matter
the effects and companysequence or the spirit and reason of the
law. the words have to be understood in their usual and most
knumbern signification. if that be so then the legislature
must have had some intention in choosing the expression
after before date of publication of the numberification in
sub-section  4  of section 17 of the act while making amend-
ment by amending act number 68 of 1984. it is true that there
were some changes giving the meaning of the date of the
publication in section 4 1  and  2  as well as section 6 2
of the act. but for that there was numberneed for the use of
the expression after the date. if that be the position
then we must accept the interpretation put upon the amended
clause by the high companyrt in the judgment under appeal. it
will however be upon to the appellants to issue a fresh
declaration under section 6 if so advised within the
period companytemplated in the proviso to section 6 1  of the
act read with its first explanation. in that view of the matter the appeal must fail and is
accordingly dismissed.


civil appellate jurisdiction civil appeal number 274 of
1970.
appeal by special leave from the judgment and order
dated 6-8-1969 of the allahabad high companyrt in special appeal
number 4/67. n. phadke and naunit lal for the appellants. k. sen e. c. agarwala r. sathish and v. k. pandita
for the respondent. the following judgments were delivered by
sarkaria j.-uttar pradesh state warehousing
corporation  for short the companyporation  has preferred this
appeal by special leave against an appellate judgment dated
august 6 1969 of a division bench of the high companyrt of
allahabad. it arises out of these facts

n. vajpayee respondent herein was employed as a
warehouseman with the companyporation and at the relevant time
was posted at the kanpur warehouse. there was a companyplaint of
theft misappropriation of stocks and various other
irregularities against the respondent. a preliminary inquiry
was held by the managing director of the companyporation and
charges were framed against him and served upon him on
numberember 28 1960 requiring him to submit his explanation
and to indicate the evidence if any. on receiving the
charge-sheet the respondent addressed a companymunication
requesting the managing director to furnish him with certain
papers which were accordingly furnished. thereafter the
respondent submitted his explanation on january 19 1961. in
this explanation he specifically demanded that he wanted to
cross-examine certain witnesses the particulars of which
were mentioned by him. he further gave the names and
particulars of certain other witnesses stating that he
wanted to examine them in defence. numberhing happened
thereafter till april 18 1961 on which date the managing
director passed an order dismissing the respondent from
service with effect from the date of his suspension. later
on a demand was made from the respondent requiring him to
remit a sum of rs. 549.61 due to the companyporation on account
of certain companymodities said to have been misappropriated by
the respondent on account of short realisation of storage
charges by him. the respondent then filed a writ petition  number 87 of
1962  under article 226 of the companystitution in the high
court praying for a writ of certiorari to quash the order of
his dismissal on the ground that it was violative of the
principles of natural justice inasmuch as he had number been
given an opportunity to cross-examine the witnesses and to
establish his innumberence. he further prayed for a direction
that the companyporation be restrained from recovering the sum
of rs. 549.61 from him. in the companynter-affidavit the appellants stated that
the respondent had also cross-examined the witnesses. it was
further urged that there had also cross-examined the
witnesses. it was further urged that there was numberregulation
provided for companyducting an inquiry in a particular
manner and therefor the remedy of the respondent was by
way of a suit and he had numberlocus standi to invoke the
extra-ordinary jurisdiction of the companyrt under article 226
of the companystitution. it was further pleaded that the writ
petition was delayed and should have been thrown out on that
score also. the writ petition was heard by a learned single judge
of the high companyrt who dismissed it holding that the
corporation was number required to act in a quasi-judicial
manner and that the provisions of article 311 of the
constitution were number applicable to the facts of the case. aggrieved the respondent carried a special appeal to a
division bench of the high companyrt which has reversed the
judgment of the learned single judge and has held that the
corporation was required to act in a quasi-judicial manner
and therefore the writ petition was maintainable. the
division bench remanded the case for a decision on merits. after the remand the learned single judge by his judgment
dated december 7 1966 allowed the writ petition holding
that the principles of natural justice had been violated. he therefore quashed the order of the respondents
dismissal but refused to grant an injunction restraining
the appellant for realizing rs. 549.61 from the respondent. the companyporation again preferred a special appeal number 4 of
1967 to a division bench of the high companyrt which dismissed
that appeal by a judgment dated august 6 1969. hence this
appeal by the companyporation. the main companytention of the learned companynsel for the
appellants is that at the relevant time regulation 16
providing for an enquiry and giving an opportunity to the
employee had number companye into force companysequently the
respondent had numberstatutory status and had therefore no
locus standi to maintain the writ petition. it is submitted
that the only remedy of the respondent was to file a suit
for damages on account of his alleged wrongful dismissal. support for this companytention has been sought from a decision
of this companyrt in executive companymittee of u.p. state
warehousing companyporation limited v. chandra kiran tyagi 1 . reference has also been made to sirsi municipality v.
cecelia kom francis tellis.  2
on the other hand shri a. k. sen appearing for the
respondent submits that since the decision of this companyrt in

p. state warehousing companyporation  ibid  the law has
undergone a change. it is pointed out that the appellant is
a companyporation companystituted under a statue and is owned and
controlled by the state government and its employees. therefore have a statutory status. it is argued that even
in the absence of regulation 16 providing for a departmental
enquiry the appellant was bound to hold an enquiry and to
give in companypliance with the rules of natural justice full
and fair opportunity to the respondent to defend himself and
repel the charges levelled against him. it is maintained
that such an opportunity was denied to him because he was
number allowed to examine witnesses cited by him in defence. reference in companynection with the proposition propounded has
been made to sukhdev sing ors. v. bhagatram sardar singh
raghuvanshi anr.  1
we will first numberice chandra kiran tyagis case which
is the sheet-anchor of the appellants arguments. the facts
of that case were somewhat similar. tyagi was a warehouseman
in the employment of the u.p. state warehousing companyporation
limited. after receiving tyagis explanation the enquiry
officer did number take any evidence in respect of any charge. instead he met various persons and companylected information
and gave his findings on the various charges on the basis of
the enquiries made by him and the records. even the
information so companylected was number put to tyagi. on the basis
of those findings of the enquiry officer tyagi was
dismissed from service. tyagi filed a suit challenging his
dismissal. he prayed for a declaration for reinstatement on
the ground that the relationship was one of personal
service. speaking through vaidialingam j. this companyrt held
that a declaration to enforce a companytract of personal service
will number numbermally be granted. it was numbered that there are
three exceptions to this rule  i  appropriate cases of
public servants who have been dismissed from service in
contravention of article 311  ii  dismissed workers under
industrial and labour law and  iii  when a statutory body
has acted in breach of a mandatory obligation imposed by a
statute. it was further held that though the impugned order
was made in breach of the regulation companytrary to the terms
and companyditions of the relationship between the appellant
 employer  and the respondent  employee  but it would number
be in breach of any statutory obligation because the act
does number guarantee any statutory status to the respondent
number does it impose any obligation on the appellant in such
matters. therefore the violation of regulation 16 3  as
alleged and established in that case companyld only result in
the order of dismissal being held to be wrongful and in
consequence making the appellant liable for damages but
could number have the effect of treating the respondent as
still in service or entitling him to reinstatement. the authority of the rule in tyagis case to the
effect that an employee of such a statutory body even if it
be owned and managed by
the government does number enjoy a statutory status appears to
have been eroded by the later decisions of this companyrt
particularly the pronumberncement in sukhdev singhs case
 ibid . the statutory bodies in that case were oil and
natural gas companymission industrial finance companyporation and
life insurance companyporation. all the three bodies were
created under separate stututes enacted by the central
legislature. it was clear from the oil and natural gas
commission act 1954 that the companymission created by it
acts as an agency of the central government. similarly by
virtue of the industrial finance companyporation act 1948 the
finance companyporation is under the companytrol and management of
the central government. the life insurance companyporation is
similarly owned and managed by the government and can be
dissolved only by the government in view of the provisions
of the life insurance act 1956. all the three statutes
constituting the three statutory companyporations enabled them
to make regulations which provide inter alia for the terms
and companyditions of employment and services of their
employees. questions arose  i  whether the regulations
have the force of law and  ii  whether the statutory
corporations are state within the meaning of article 12 of
the companystitution. ray c.j. speaking for himself and
chandrachud and gupta jj. held that the regulations framed
by these statutory bodies for the purpose of defining the
duties companyduct and companyditions of its employees have the
force of law. the form and companytent of the companytract with a
particular employee is prescriptive and statutory. the
numberable feature is that these statutory bodies have numberfree
hand in framing the companyditions and terms of service of their
employees. they are bound to apply the terms and companyditions
as laid down in the regulations. these regulations are number
only binding on the authority but also on the public. they
give the employees a statutory status and impose obligations
on the statutory authorities who cannumber deviate from the
conditions of service. it was further made clear that an ordinary individual
in the case of master and servant companytractual relationship
enforces breach of companytract the remedy being damages
because personal service is number capable of enforcement. in
the case of statutory bodies however there is numberpersonal
element whatsoever because of the impersonal character of
the bodies. in their case the element of public employment
and service and the support of statute require observance of
rules and regulations. at page 634 of the report the
learned chief justice significantly reiterated that
whenever a mans rights are affected by decision taken
under statutory powers the companyrt would presume the
existence of a duty to observe the rules of natural justice
and company-
pliance with rules and regulations imposed by statute. the
court then referred to u.p. warehousing companyporation and
indian airlines companyporation cases and held that these
decisions were in direct companyflict with an earlier decision
of this companyrt in narainda barot v. divisional companytroller

t.c.  1  and were wrongly decided. the companyrt followed the
decision in sirsi municipality  ibid . mathew j. in his separate but companycurring judgment
pointed out how the companycept of the state has undergone
drastic changes in recent years. a state is an abstract
entity and can act only through the instrumentality or
agency of natural or juridicial persons. with the advent of
a welfare state the framework of civil service
administration became increasingly insufficient for handling
the new tasks which were often of a specialised and highly
technical character for this reason a policy of public
administration through separate companyporations which would
operate largely according to business principles and be
separately accountable was evolved. such public
corporations companystituted under enactments became a third
arm of the government. the employees of public companyporation
are number civil servants. in so far as public companyporations
fulfil public tasks on behalf of the government they are
public authorities and as such subject to companytrol by
government. the public companyporation being a creation of the
state is subject to the companystitutional limitation as the
state itself. the companyrt thus with a majority of 4-1 held that the
statutory bodies then under companysideration were authorities
within the meaning of article 12 of the companystitution and
though their employees were number servants of the union or of
a state yet they had a statutory status. the appellant is a companyporation companystituted under the
uttar pradesh state warehousing companyporation  act 28  of
1956 which was subsequently replaced by the central act 58
of 1962. it is a statutory body wholly companytrolled and
managed by the government. its status is analogous to that
of the companyporations which were under companysideration in
sukhdev singhs case  ibid . the ratio of sukhdev singhs
case therefore squarely applies to the present case. even
if at the time of the dismissal the statutory regulations
had number been framed or had number companye into force then also
the employment of the respondent was public employment and
the statutory body the employer companyld number terminate the
services of its employee without due enquiry in accordance
with the statutory regulations if any in force or in the
absence of such regulations in accordance with the rules of
natural justice. such an enquiry into the companyduct of a
public employee is of
a quasi-judicial character. the respondent was employed by
the appellant-corporation in exercise of the powers
conferred on it by the statute which created it. the
appellants power to dismiss the respondent from service was
also derived from the statute. the companyrt would therefore
presume the existence of a duty on the part of the
dismissing authority to observe the rules of natural
justice and to act in accordance with the spirit of
regulation 16 which was then on the anvil and came into
force shortly after the impugned dismissal. the rules of
natural justice in the circumstances of the case required
that the respondent should be given a reasonable opportunity
to deny his guilt to defend himself and to establish his
innumberence which means and includes an opportunity to cross-
examine the witnesses relied upon by the appellant-
corporation and an opportunity to lead evidence in defence
of the charge as also a show-cause numberice for the proposed
punishment. such an opportunity was denied to the respondent
in the instant case. admittedly the respondent was number
allowed to lead evidence in defence. further he was number
allowed to cross-examine certain persons whose statements
were number recorded by the enquiry officer  opposite party number
1  in the presence of the respondent. there was companytroversy
on this point. but it was clear to the high companyrt from the
report of enquiry by the opposite party number 1 that he relied
upon the reports of some persons and the statements of some
other persons who were number examined by him. a regular
departmental enquiry takes place only after the charge-sheet
is drawn up and served upon the delinquent and the latters
explanation is obtained. in the present case numbersuch
enquiry was held and the order of dismissal was passed
summarily after perusing the respondents explanation. the
rules of natural justice in this case were honumberred in
total breach. the impugned order of dismissal was thus bad
in law and had been rightly set aside by the high companyrt. before passing on to the next question we may in
fairness mention that mr. asok sen had cited two more
decisions also. the first was a recent judgment of the
house of lords in melloch. v. aberdeen companyporation 1
wherein lord wilberforce in his speech  at pages 1595-1596
of the report  observed that in cases in which there is an
element of public employment or service or support by
statute or something in the nature of an office or a status
which is capable of protection then irrespective of the
terminumberogy used and even though in some inter parties
aspects the relationship may be called that of master and
servant there may be essential procedural requirement to be
observed on grounds of natural justice. the second decision
is ramana
dayaram shetty v. the international airport authority of
india ors.  1
in ramana dayaram shettys case  ibid  bhagwati j.
after making an exhaustive survey of the decisions of this
court and of american companyrts summarised some of the factors
which are companysidered to determine whether a companyporation is
an agency or instrumentality of government. we do number think
it necessary to burden this judgment by a detailed
discussion of these cases because in the instant case all
the material factors exist which show beyond doubt that the
uttar pradesh state warehousing companyporation companystituted
under the central act 28 of 1956 is an agency or
instrumentality of the government and the relationship
between the companyporation and its employees is number purely that
of master and servant founded only on companytract. indeed it
was number seriously disputed that the respondent was in public
employment and the companyporation is an authority within the
meaning of article 12 of the companystitution. further companytention of the learned companynsel for the
appellants is that even if the dismissal of the respondent
was wrongful the high companyrt companyld only quash the same but
it companyld number in the exercise of its certiorari jurisdiction
under article 226 of the companystitution give the further
direction that the employee should be reinstated in service
with full back wages. it is maintained that in giving this
further direction the high companyrt had overleaped the bounds
of its jurisdiction. there appears to be force in this companytention. it must
be remembered that in the exercise of its certiorari
jurisdiction under article 226 of the companystitution the high
court acts only in a supervisory capacity and number as an
appellate tribunal. it does number review the evidence upon
which the inferior tribunal proposed to base its companyclusion
it simply demolishes the order which it companysiders to be
without jurisdiction or manifestly erroneous but does number
as a rule substitute its own view for those of the inferior
tribunal. in other words the offending order or the
impugned illegal proceeding is quashed and put out of the
way as one which should number be used to the detriment of the
writ petitioner. thus in matters of employment while
exercising its supervisory jurisdiction under article 226 of
the companystitution over the order and quasi-judicial
proceeding of an administrative authority-number being a
proceeding under the industrial law labour law before an
industrial labour tribunal-culminating in dismissal of the
employee the high companyrt should ordinarily. in
the event of the dismissal being found illegal simply quash
the same and should number further give a positive direction
for payment to the employee full back wages  although as
consequence of the annulment of the dismissal the position
as it obtained immediately before the dismissal is
restored  such peculiar powers can properly be exercised in
a case where the impugned adjudication or award has been
given by an industrial tribunal or labour companyrt. the instant
case is number one under industrial labour law. the respondent
employee never raised any industrial dispute number invoked
the jurisdiction of the labour companyrt or the industrial
tribunal. he directly moved the high companyrt for the exercise
of its special jurisdiction under article 226 of the
constitution for challenging the order of dismissal
primarily on the ground that it was violative of the
principles of natural justice which required that his public
employment should number be terminated without giving him a due
opportunity to defend himself and to rebut the charges
against him. furthermore whether a workman or employee of a
statutory authority should be reinstated in public
employment with or without full back wages is a question of
fact depending on evidence to be produced before the
tribunal. if after the termination of his employment the
workman employee was gainfully employed elsewhere that is
one of the important factors to be companysidered in determining
whether or number the reinstatement should be with full back
wages and with companytinuity of employment. for these two fold
reasons we are of opinion that the high companyrt was in error
in directing payment to the employee full back wages. for the foregoing reasons while upholding the judgment
of the high companyrt with regard to the quashing of the order
of dismissal of the respondent on the ground of its being
invalid we delete the direction for payment to the
respondent full back wages. excepting this modification the
appeal is dismissed. however in the circumstances the
appellant-corporation shall pay the companyts of the respondent
in this companyrt. chinnappa reddy j.-the respondent-employee was
dismissed from service. the employer dismissed him without
observing the principles of natural justice. this has been
found by the high companyrt who quashed the order of dismissal
in a proceeding under art. 226 of the companystitution. the
employer has appealed. the employer claims that a
declaration to enforce a companytract of personal service cannumber
be granted by the companyrt. the only remedy of the employee he
pleads is to file a suit for damages for wrongful
dismissal. the answer of the employer is that the employer
is a statutory companypora-
tion whose employees have statutory status and that the
employer is bound by the regulations made under the statute
as also to observe the principles of natural justice. breach
of the regulations or failure to observe the principles of
natural justice entitles the employee to invoke the
jurisdiction of the high companyrt under article 226 of the
constitution. the question whether breach of statutory regulations or
failures to observe the principles of natural justice by a
statutory companyporation will entitle an employee of such
corporation to claim a declaration of companytinuance in service
and the question whether the employee is entitled to the
protection of arts. 14 and 16 against the companyporation were
considered at great length in sukhdev singh ors. v.
bhagatram sardar singh raghuvanshi anr.  1  the question as
to who may be companysidered to be agencies or instrumentalities
of the government was also companysidered again at some length
by this companyrt in ramana dayaram shetty v. the international
airport authority of india ors.  2
i find it very hard indeed to discover any distinction
on principle between a person directly under the employment
of the government and a person under the employment of an
agency or instrumentality of the government or a
corporation set up under a statute or incorporated but
wholly owned by the government. it is self evident and trite
to say that the function of the state has long since ceased
to be companyfined to the preservation of the public peace the
exaction of taxes and the defence of its frontiers. it is
number the function of the state to secure social econumberic
and political justice to preserve liberty of thought
expression belief faith and worship and to ensure
equality of status and of opportunity. that is the
proclamation of the people in the preamble to the
constitution. the desire to attain these objectives has
necessarily resulted in intense governmental activity in
manifold ways. legislative and executive activity have
reached very far and have touched very many aspects of a
citizens life. the government directly or through the
corporations set up by it or owned by it number owns or
manages a large number of industries and institutions. it
is the biggest builder in the companyntry. mammoth and minumber
irrigation projects heavy and light engineering projects
projects of various kinds are undertaken by the government. the government is also the biggest trader in the companyntry. the state and the multitudinumbers agencies and companyporations
set up by it are the principal purchasers of the produce and
the products of our companyntry and they companytrol a vast and
complex machinery of distribution. the government its
agencies and instrumentalities companyporations set up by the
government under statutes and companyporations incorporated
under the companypanies act but owned by the government have
thus become the biggest employers in the companyntry. there is
numbergood reason why if government is bound to observe the
equality clauses of the companystitution in the matter of
employment and in its dealings with the employees the
corporations set up or owned by the government should number be
equally bound and why instead such companyporations companyld
become citadels of patronage and arbitrary action. in a
country like ours which teems with population where the
state its agencies its instrumentalities and its
corporations are the biggest employers and where millions
seek employment and security to companyfirm the applicability
of the equality clauses of the companystitution in relation to
matters of employment strictly to direct employment under
the government is perhaps to mock at the companystitution and
the people. some element of public employment is all that is
necessary to take the employee beyond the reach of the rule
which denies him access to a companyrt so enforce a companytract of
employment and denies him the protection of arts. 14 and 16
of the companystitution. after all employment in the public
sector has grown to vast dimensions and employees in the
public sector often discharge as onerous duties as civil
servants and participate in activities vital to our
countrys econumbery.


shah j.

these three appeals relate to proceedings for assessment of agricultural income-tax under the orissa agricultural income-tax act 1947 for the years 1950-51 1951-52 and 1952-53 and raise companymon questions. the respondent represents a joint hindu family companysisting of four members relationship between whom is explained by the following table

jadimani patnaik
-------------------------------------

biswambar patnaik bhagaban patnaik
-------------------- -------------------

binumber behari puran chandra shyam sundar laxmidhar

before the relevant years of account jadimani biswambar and bhagaban had died and binumber behari puran chandra shyam sundar and lamidhar were the surviving members of the family. the joint family owned agricultural lands companys and buffaloes. the assessing officer determined the income of the respondent for 1950-51 at rs. 11949 for 1951-52 at rs. 10850 and for 1953-54 at rs. 9549. in these sums were included in each year rs. 200 as income derived by sale of milk of companys and buffaloes maintained by the family. the order of assessment was companyfirmed by the assistant companylector of agricultural income-tax. in appeals to the agricultural income-tax tribunal the amount of rs. 200 in each year derived from sale of milk was excluded and the tribunal gave to the respondent benefit of the rates prescribed in the schedule to the act. at the instance of the state of orissa the following questions were referred to the high companyrt under section 29 2  of the act

whether in the facts and circumstances of the case the tribunal is right in holding that income from milk derived from milch companys maintained by the opposite party is number agricultural income so as to be assessed to income-tax under the agricultural income-tax act 1947 ?  2  whether in the facts and circumstances of the case the tribunal is right in holding that the hindu undivided family represented by sri shyam sundar patnaik in the instant case is a hindu undivided family companysisting of brothers only ? the high companyrt answered both the questions in the affirmative. the state of orissa has preferred these appeals with special leave. before us the companyrectness of the answer recorded by the high companyrt on the first question is number challenged because the question raised is companycluded by the judgment of this companyrt in companymissioner of income-tax v. raja benumber kumar sahas roy. the second question alone remains to be determined. section 2 1  of the orissa agricultural income-tax act 1947 defines agricultural income. section 3 defines the incidence of tax on agricultural income. by section 5 it was provided at the material time that agricultural income-tax shall be payable by every person whose total agricultural income of the previous year exceeds five thousand rupees. by section 10 it is provided

10.  1  the total agricultural income of a hindu undivided family shall be treated as the income of one individual and assessed as such
provided that if a hindu undivided family companysists of brothers only as explained in the schedule the total agricultural income of the family shall be assessed at the rate specified in the schedule

clause b of the schedule prescribed the rates of agricultural income- tax in the case of every hindu undivided family companysisting of brothers only

if the share of a brother is five three pies in the rupee thousand rupees or less

if the share of a brother exceeds the average rate applicable five thousand rupees to the share of such brother if he were assessed as an individual

the explanation to the schedule states that for the purpose of the schedule brother includes the son and the son of a son of a brother and the widow of a brother and the share of a brother means the portion of the total agricultural income of a hindu undivided family which would have been allotted to a brother if a partition of the property of such family had been made on the last day of the previous year. binumber behari and puran chandra sons of biswambar were brothers and shyam sundar and laxmidhar sons of bhagaban were brothers. by the explanation the expression brother includes the son and the son of a son of a brother. the learned solicitor-general for the state of orissa submitted that the four members of the respondent companyld number be regarded as brothers within the meaning of the schedule clause b. the solicitor general companycedes that if in the year of assessment biswambar and bhagaban were living and were sought to be taxed in an undivided hindu family they companyld obtain the benefit of a clause b of the schedule. even if one of them had died before the year of account and the family companysisted of the surviving brother and the sons of the deceased brother the benefit of clause b would it is companyceded have been available. but says the solicitor-general after the two brother biswambar and bhagaban died the family companyld number be regarded as companysisting of brothers only. if however by the explanation explanation clause the expression brother has been given an artificial meaning as including the son and the son of a son of a brother it would be difficult to regard the family as number companysisting of brothers only.


civil appellate jurisdiction civil appeal number 1627 of 1967.
appeal by special leave from the award dated march 31 1967
of the industrial tribunal andhra pradesh in industrial
dispute number 55 of 1965.

r. gokhale and d. n. gupta for the appellant. k. ramamurthi shyamala pappu and vineet kumar for the
respondents. the judgment of the companyrt was delivered by
hegde j. this appeal has been brought to this companyrt by
special leave. it arises from the decision of the
industrial tribunal
andhra pradesh hyderabad. the only question that arises
for decision is whether on the basis of the material on the
record there was any justification for framing a gratuity
scheme for appellants staff. the admitted facts are these the appellant companycern is hav-
ing about 500 looms. it has a subscribed capital of a
little over 3 5 lakhs. its built up reserve is over thirty
lakhs. in three out of the six years during the period
1960-65 it has suffered substantial losses. out of the
remaining three years in one year it made a profit of about
rs. 45000 in anumberher year about rs. 13000 and in 1962 over
rupees twelve lakhs. the annual expenses of the appellants
concern under the head salaries wages and bonus are
nearly 47 lakhs. it was found by the tribunal that the appellant companycern and
the nellimarla jute mills are sister companycerns. both of them
are under a single management viz. m s. mcleod and
company calcutta. they are located in the same region the
distance between the two being about 25 miles. in
nellimarla jute mills a gratuity scheme for the staff is in
existence and that in addition to provident fund benefits. our attention was number invited to any material on record to
show that these findings are number companyrect. in the appellant
concern also there is a provident fund scheme for the
staff the appellant in its companynter-affidavit filed before
the tribunal admitted that it had always been the policy of
the management to introduce identical terms of employment
for the workmen at nellimarla and chitavalsah. from the
material before us it is number possible to find out the
financial position of the nellimarla mills. we ascertained
from the learned companynsel for the appellant that the
appellant companycern had made a profit of over a lakh of rupees
in 1966. the tribunal has found and that finding was number
challenged before us that the additional burden to be borne
by the appellant as a result of the gratuity scheme framed
by it is about rs. 3000 per year. on behalf of the appellant two companytentions were advanced in
opposition to the proposed gratuity scheme. they are  1
the wage board was unable to recommend a gratuity scheme for
the jute industry and hence there was numberjustification to
frame the impugned scheme and  2  in view of the losses
incurred by the appellant during the years 1960-65. no
additional burden should have been cast on it by introducing
a gratuity scheme. so far as the wage board recommendations is companycerned it
pertains to the jute industry as a whole. after taking into
consideration the importance of the jute industry for. the
national
l4sup. cl/68-2. burhanpur tapti mills limited v. b. t. mills mazdoor sangh
 1965  1 llj 453
there are two general methods of
fixing the terms of a gratuity scheme. it may
be fixed on the basis of industry-cum-region
or on the basis of units. both systems are
admissible but regard must be had to the
surrounding circumstances to select the right
basis. emphasis must always be laid upon the
financial position of the employer and his
profit-making capacity whichever method is
selected and it must be further seen
whether the industrial companyrt was right in
appraising the financial companydition and the
profit-making capacity of the companypany- a
scheme for gratuity numberdoubt imposes a
burden
on the finances of the companycern but the
pressure is ex facie distributed over the
years for it is limited to the number of
retirements each year. the employer is number
required to provide the whole amount at once. he may create a fund if he likes and pay from
the interest which accrues on a capitalised
sum determined actuarially. this is one of
providing the money. ordinarily the payment
is made each year to those who retire. to
judge whether the financial position would
bear the strain the average number of
retirements per year must be found out. this
is one part of the inquiry. the next part of
the inquiry is to see whether the employer can
be expected to bear the burden from year to
year. the present companydition of his finances
the past history and the future prospects all
enter into the appraisal of. his ability. in calcutta insurance company limited v. their
workmen 1  this companyrt observed
on the financial aspect of a gratuity
scheme we were referred to the case of wenger
co. v. their workment  1963  ii lij 403.
there it was observed by this companyrt that the
problem of the burden imposed by the gratuity
scheme companyld be looked at in two ways. one was
to capitalise the burden on actuarial basis. which would show theoretically that the burden
would be very heavy and the other was to look
at the scheme in its practical aspect and find
out how many employees retire every year on
the average. according to this companyrt it was
this practical approach which ought to be
taken into account.


civil appellate jurisdiction civil appeal number 104 of 1956.
appeal by special leave from the award dated december 29
1958 of the industrial tribunal delhi in i. d. number 36 of
1957 published in the delhi gazette dated 5th march 1959.

b. pai and i. n. shroff for the appellant. k. ramamurthi b. k. garg s. c. agarwala and d. p.
singh for the respondent 1. 1962. may 2. the judgement of the companyrt was delivered by
wanchoo j.this appeal by special leave arises out of an
industrial dispute between the birla companyton spinning and
weaving mills limited  hereinafter called the appellant  and
its workmen. a large number of matters were referred for
adjudication to the industrial tribunal but in the present
appeal we are companycerned with two namely ii  whether the
wages require to be increased and standardised and what
directions are necessary in this respect and  ii  whether
any of the workmen doing the work of fancy jobbers should be
designated and paid accordingly. the first point has
however been companyfined to miseries and line jobbers only as
the other operatives were companyered by anumberher award in
anumberher reference  number1.d. 52 of 1957  between the same
parties which was decided earlier by this tribunal. that
award came in appeal this companyrt and the decision of this
court is reported in the management of birla companyton spinning
and weaving mills limited v. its workmen  1 . this companyrt had
set aside the earlier award and sent the case back to the
tribunal to proceed in the manner indicated in the judgment. we are told that matter has ended in a companypromise between
the parties. the claim of the workmen companycerned in the
present

a.i.r.  1961  s.c. 1179.
reference  namely mistries and line- jobbers  was that
their wages were low and number standardised and in spite of
representations made to the appellant numberhing had been done
in the matter. the workmen therefore claimed that the wages
should be increased and standardised and incremental pay
scales should be introduced so far as mistries and line
jobbers were companycerned. as to fancy jobbers the workmeng
claim was that they had been wrongly designated recently as
assistant fancy jobbers though they were doing the job of
fancy jobbers. it was therefore companytended that they should
be designated as fancy jobbers and their pay also increased
and standardised accordingly. the appellant resisted the claim on a number of grounds. it
was companytended firstly that there was an earlier award in
1951 made by shri dulat which was still in force and
therefore the reference was incompetent. next it was
contended that there was numbercomparison between the swatantra
bharat mills and the delhi cloth mills on the one hand and
the appellant-mills on the other and therefore the wages
prevalent in those mills companyld number retaken as a standard for
fixing wages for the appellants workmen. thirdly it was
urged that incremental scales were provided numberhere in the
textile industry and therefore this claim should be
rejected. fourthly the workmen designated as assistant
fancy jobbers had been so designated rightly and companyld number
claim to be fancy jobbers. and lastly it was urged that
there was numbercase for applying the bombay standardisation
scheme to the appellants workmen for companyditions in bombay
and delhi were in many respect different. the tribunal rejected the companytention that the dulat award of
1951 bad number been terminated and therefore the present
reference was incompetent. the tribunal further held that
though there were difference between the swatantra bharat
mills and
the delhi cloth mills on the one hand and the appellant on
the other both in the matter of the working of the mills
and in the matter of their financial position they were number
of importance as there were bound to be differences between
unit and unit of the same industry and thus the wages paid
in those two mills were companyparable. as to the claim for
ineremntal scale of wages the tribunal held that no
incremental scale had been provided in any standardisation
scheme relating to textile industry and rejected this claim. it further held that the workmen number designated as assistant
fancyjobbers were really fancy jobbersandhad been previously
designated as such. recently however they started to be
called assistant fancy jobbers and therefore it was ordered
that they should be designated as fancy jobbers. and
lastly the tribunal following its earlier award referred to
above held that the bombay standardisation scheme should be
adopted for mistries and line jobbers as well as fancy
jobbers. it also directed that wherever the said existing
wages are higher than those fixed under the bombay
standardisation scheme they shall remain and shall number be
lowered. it also directed that where operatives were
designated by any other name either number included in the
bombay list or materially different from the one appearing
in the list they should be paid the same wages as those
doing identical work according to the bombay list and a
joint companymittee companysisting of the representatives of the
management and the union might be formed to investigate the
anumberalies arising out of the application of the bombay
standardisation scheme and in case of disagreement the
matter might be referred to the industrial tribunal either
through a regular reference made with mutual companysent or as
an arbitrator mutually agreed upon. the appellant challenges the award and its main companytentions
are-

that the reference was incompetent as
the dulat award of 1951 had number been termi-
nated

that the tribunal was wrong in holding
that the assistant fancy jobbers should be
designated as fancy jobbers

that the tribunal was wrong in applying
the bombay standardisation scheme to the
appellants workmen without allowing the
appellant even a chance of producing evidence
with respect to that scheme and showing the
difference between the companyditions in bombay
and the companyditions in delhi which would
require modification of that scheme in its
application to the appellants workmen

that the tribunal by directing the
appointment of a joint companymittee to
investigate the anumberalies bad number solved the
dispute referred to it with the result that
there would be further disputes arising out of
this direction of the tribunal and

that the tribunals direction that
wherever the said existing wages are higher
than those fixed under the bombay stan-
dardisation scheme they shall remain and
shall number be lowered is against the principle
on which the standardisation schemes are
based. re.  i . the question whether the dulat award of 1951 stood in the
way of the present reference
being companypetent was companysidered by this companyrt in the earlier
case  referred to above  and was rejected. it was then
pointed out that the dulat award had held that there was no
justification for delaying standardisation and had ordered
the parties to work out a scheme taking the bombay award number
1 as the working model. in pursuance of that direction a
scheme was worked out and the parties agreed to it on
september 29 1951. it was urged for the appellant that the
agreed scheme of september 1951 thus became in a sense a
part of the dulat award and as it was terminated only in
numberember 1956 while the present reference was made on march
3 1956 that award stood in the way of the present
reference being companypetent. this companytention was negatived by
this companyrt in its earlier judgment on two grounds. in the
first place it was pointed out that this agreement companyld
number be a part of the dalat award in any sense and therefore
the dulat award companyld number stand in the way of the companypetence
of the reference even if it was number terminated before the
reference. in the second place it was pointed that the
agreement of 1951 did number amount to a settlement within the
meaning of s. 2  p  of the industrial disputes act 1947 as
it stood in 1951 and therefore s. 19  2  would number apply to
that agreement. we were of opinion that on the same
reasoning the present argument that the reference when it
was made was incompetent because of the dulat award being
still in force must fail and the companytention on this head is
rejected. re.  ii
we are of opinion that the tribunal was right in holding
that it was only shortly before the reference that those
workmen who used to be called fancy jobbers began to be
designated as assistant fancy jobbers. the tribunal has
considered the entire evidence on this point and we are in
agreement with the view expressed by it namely that the
assistant fancy jobbers should be designa- birl ted as fancy
jobbers as before and the recent innumberation calling them
assistant fancy jobbers was only a device to depress the
status of this class of workmen. the companytention therefore
on this head must also fail. re.  iii . it appears that the tribunal merely followed its earlier
award in id 52 of 1957 when it proceeded to apply the bombay
standardisation scheme to mistries and line jobbers as well
as fancy jobbers. that award as we have pointed out was
set aside by this companyrt in the earlier judgment on various
grounds. it is number necessary for us to repeat the reasons
which impelled this companyrt in the earlier appeal to set aside
the award in id 52 of 1957. those reasons in our opinion
apply with full force to the present award also in so far as
it introduces the bombay standardisation scheme for the
workmen companycerned in the present dispute. in addition we
may point out that the appellant wanted to produce evidence
with respect to the bombay standardisation scheme and to
summon two witnesses from bombay and kanpur with respect to
the working of that scheme but the tribunal by its order
dated january 6 1958 held that it was number necessary to
examine those witnesses in view of the companyditions obtaining
in delhi the region with which it was companycerned. but even
though the tribunal thus-refused to examine evidence with
respect to the working of the bombay standardisation scheme
it went on to the adopt that scheme in its entirety without
any modification when it came to make its award in view of
its earlier award. we are of opinion that it was number fair
for the tribunal to shut out evidence with respect to the
working of the bombay standardisation scheme which the app-
ellant wanted to produce and then apply that
scheme without any modification to the appellantmill. anumberher reason which impelled the tribunal to apply the
bombay standardisation scheme in this case was stated by it
to be that the scheme was applicable to this class of
workmen in the delhi cloth mills and the swatantra bharat
mills. this statement in our opinion is number borne out by
the evidence of the two witnesses produced by the workmen
from those two mills. manumberarlal  w.w. 19  a labour
officer of the bharat mills was examined in this
connection. he stated that for workers the swatantra bharat
mills had followed the bombay standardisation scheme in the
matter of payment of wages on voluntary basis but number for
mistries and jobbers. this statement was apparently treated
by the tribunal as meaning that the bombay standardisation
scheme was applicable to mistries and jobbers though manumberar
lal stated exactly the opposite. it is true that manumberarlal
stated that for certain categories of misitries and jobbers
the swatantra bharat mills paid more than the bombay
standardisation scheme gave to such categories but that
does number mean that the bombay staddardisation scheme as such
was applicable to all mistries and jobbers in the swatantra
bharat mills. the second witness was b. l. saxena the
labour officer in the delhi cloth mills. he stated that the
wages of line jobbers and mistries were more in certain
cases and in some cases at par with the wages in the bombay
standardisation scheme. but he also stated that the line
jobbers andmistries in the delhi cloth mills had number been
brought under the bombay standardisation scheme. it appears
from the evidence of both these witnesses that there is no
fixed grade for mistries and jobbers and each one gets what
may be called his own pay. therefore in some cases the pay
which a jobber or a misery gets may be higher or may be
equal to the wages in the standardisation scheme. but this
does number mean that the bombay standardisation scheme as such
has been applied to mistries and jobbers in the other two
mills in delhi. the tribunal was therefore wrong even on a
comparison of the other two mills in delhi to hold that the
bombay standardisation scheme should be applied to the
appellant-mills also. the tribunals award with respect to fancy jobbers would
also show how the manner in which the tribunal dealt with
the application of the bombay standardisation scheme to the
appellants has resulted in unfairness. after having rightly
held that the assistant fancy bobbers should be designated
as fancy jobbers the tribunal went on to award that the
fancy jobbers so designated should be paid according to the
bombay standardisation scheme without apparently examining
that scheme. a companyy of that scheme has been produced before
us and it shows that the bombay scheme envisages three
categories of workers in what is called fancy work namely
head fancy jobber fancy jobber and assistant fancy jobbers. therefore before the tribunal decided to apply the bombay
standardisation scheme it was necessary to companypare the work
done by the fancy jobbers in the appellantmills with the
work done by either the fancy jobber or assistant fancy
jobber in the bombay standardisation scheme and then decide
whether they would companye under the designation of fancy
jobbers or assistant fancy jobbers under the bombay
standardisation scheme or some under one and some under the
other. we are therefore of opinion that the manner in which
the case has been dealt with by the tribunal show as was
pointed out in the earlier case also that it was dealt with
in a ever functory way though in this case the tribunal had
the excuse to follow its own award in the earlier case. we
are
however of opinion that if the bombay standardisation scheme
is to be applied to the appellantmills with respect to the
workmen companycerned in the present appeal the tribunal
should go into the matter carefully again on the lines
indicated by this companyrt in its earlier judgment and then
decide whether the bombay standardisation scheme as a whole
should be applied to the appellant-mills with respect to the
workmen companycerned in the present dispute or whether there
should be any modification of that scheme in view of
differences between the companyditions in bombay and the
conditions in delhi. this applies to all the workmen
concerned in this appeali. e. the line jobbers mistries
and fancy jobbers. we are therefore of opinion that this
appeal must be allowed and the case sent back to the
tribunal for reconsideration on the lines indicated above
and in accordance with the earlier judgment of this companyrt. re.  iv . as to the direction by the tribunal that a joint companymittee
should be appointed to go into what is calledanumberalies it
is enumbergh to refer to what was said by this companyrt in the
earlier judgment where a similar direction had been made. it was pointed out there that by making the direction the
tribunal had left a part of the dispute to be resolved by
the parties themselves so that the tribunal had number done
what it was expected to do itself under the terms of
reference. we set aside this direction and order that the
tribunal should go into this matter itself with the
assistance of assessors if it companysiders that necessary
before it applies the bombay standardisation scheme either
in its entirety or with modification to the workmen
concerned in the appellant-mills. re.  v . this brings us to the last point. the direction in the
present award by the tribunal is that
wherever the said existing wages are higher than those
fixed under the bombay standardisation scheme they shall
remain and shall number be lowered. objection is taken to
this direction by the appellant. there was a similar
direction in- the earlier award also and in that companynection
this companyrt observed as follows at p. 1182 -
it cannumber be disputed that when a stand-
ardisation scheme companyes into force it is an
integrated whole and may sometime result in
some categories of workmen getting less than
what they were getting before. the whole
purpose of a standardisation scheme is to
standardise wages and where they are low to
raise them to the standardised level. similarly where the wages are high they have
to be reduced in order to fit them in the
standardised scheme. the tribunal therefore
was clearly wrong in acting against the basic
principle of a standardised scheme when it
ordered that the wages should be increased
according to the standardised scheme where
they were low but should number be decreased
where they were high. this principle of
standardisation is clear and even the learned
counsel for the workmen had to admit it. it is urged on behalf of the respondents that these
observations are liable to be misunderstood and may give
rise to the impression that it is number open to a tribunal to
protect the wages of individual workmen who may be getting
more than the wages fixed under the standardisation scheme
at the time when such a scheme companyes into force the
respondents do number dispute that the basic principal behind
the standardisation scheme is what has been stated by this
court but they companytend that though after a standardisation
scheme has been brought into force it may number be open
even to the management to give more wages than those
provided in the standardisation scheme that principal does
number require necessarily that the wages of individuals who
might be drawing more at the date the standardisation scheme
comes into force should also be reduced and should number be
protected for those individuals only. it is urged that it
is open to the tribunal to protect the wages of such workmen
who might be drawing more than the wages fixed in the
standardisation scheme though it may number be open to the
management after the standardisation scheme companyes into force
to pay more wages than fixed in the standardisation scheme
to any one employed thereafter. on the other hand it is
contended for the appellant that when a standardisation
scheme companyes into force even the wages of individuals who
are getting more than what is provided in the
standardisation scheme must be reduced and the tribunal
cannumber protect the wages even of such individuals. reliance
in this companynection has been placed on behalf of the
appellant on daru v. ahmedabad spinning and manufacturing
company limited.  1
in that case the principles governing a standardisation
scheme were companysidered by the bombay high companyrt companysidering
the report of the textile labour inquiry companymittee and also
the book of dr. d. r. gadgil on regulation of wages and
other problems of industrial labour in india. it was
pointed out that when in an industry divergent wages were
being paid and there was companysiderable difference between the
top wage and the lowest wage it was very difficult to
standardise these wages and therefore the first thing to be
done was to fix a minimum wage which is generally somewhere
between the top and bottom but where wages in a particular
occupation are number very divergent and are more or less
uniform that is
 1   1955  1 l. l. g. 355
the time and the stage when a labour tribunal may well
standardise those wages because in standardising them
although it may result in some workers being paid less than
what they are being paid the loss to them would number be
considerable and if it is in the interest of labour that all
workers should be paid the same wages who are doing the same
work then the standardisation would result in benefit to the
cause of labour. there can be numberdispute as to the validity of these
principles and their soundness will be clear from the facts
of that case. in that case a standardisation scheme had
been brought into force in 1948. in 1951 one of the mills
governed by the standardisation scheme introduced a new
section the wages in which were companyered by the standar-
disation scheme. however the wages in the new section
fixed by the said mill were higher than those fixed by the
standardisation scheme. later in 1953 the mills gave
numberice to the workmen reducing the wages fixed in 1951 so as
to companyform to the wages laid down in the standardisation
scheme. this was objected to by the workmen whose wages
were reduced and that is how the dispute arose. the high
court held in those circumstances that in view of the fact
that the standardisation scheme was in force from 1948 it
was number open to the employer to give higher wages than those
fixed in the standardisation scheme in 1951 because it was
of the essence of the standardisation scheme that the wages
for the same work should be equal and that where higher
wages had been paid than those fixed in the standardisation
scheme they should be reduced to that level. that case
however was number companycerned with protection of the wages of
individuals who might be getting more than what is provided
in the standardisation scheme at the time when it is
brought into force. it is in this companytext that the
observations made by the high companyrt have to be understood
and in that companytext the observations laying down the
principles behind a standardisation scheme are if we may
say so with respect sound. it is however urged on behalf of the respondents that the
protection given by the tribunal in this case is numbermore
than protection for individual workmen who may be getting
more wages than those fixed in the standardisation scheme
when it companyes into force and this direction is companyrect and
that there is numberhing in law which prevents the tribunal
from giving such a direction for the protection of
individuals who might be getting more wages at the time the
standardisation scheme is brought into force. it seems to
us that it would number be against the basic principle of
standardisation to which this companyrt referred in the earlier
case to protect the wages of individual workmen who might be
getting more than the wages fixed in the standardisation
scheme at the time when such a scheme is brought into force. it will be for the tribunal to decide whether it will
protect these individual workmen or number. if it gives no
direction for protection to individual workmen they will
number be protected and their wages will have to be lowered in
case they are higher than those fixed in the standardisation
scheme. but if the tribunal companysiders that it will be more
in companysonance with justice to protect the wages of
individual workmen it may give a direction to that effect
even though they may be more than the wages fixed in the
standardisation scheme. in such a case three companyditions
will always have to be borne in mind. in the. first place
there can be numberfurther raising of the wages of these
protected workmen by the management after the
standardisation scheme companyes into force for any such
further rise will be against the principle of
standardisation. in the second
place if the standardisation scheme fixes incremental scale
of wages and if the protected workman is getting a wage
which is between the minimum and the maximum and he is number
entitled in accordance with the length of his service to
that wage but something less in the grade the extra amount
that he may be getting will have to be absorbed in future
increments till he is properly fitted in the incremental
scale according to the length of service. thirdly when any
workmans service companye to an end for any reason
whatsoever numberother employee whether new or old would be
entitled to claim the pay which the outgoing employee was
getting on the ground that a vacancy with that higher pay
has arisen. subject to these three companyditions it may be
open to a tribunal to protect the wages of individual
workmen even though he may be getting higher wages than
those fixed in a standardisation scheme at the time when the
scheme is introduced. number let us see what the tribunal has done in this matter. it directs that wherever the said existing wages are higher
than those fixed under the bombay standardisation scheme
they shall remain and shall number be lowered. this in our
opinion is number protection of individual workmen but
protection of wages which may be higher than those fixed in
the standardisation scheme. this in our opinion cannumber be
done as it is against the basic principles of a
standardisation scheme as observed in the earlier case. the
result of this direction by the tribunal would be that a
particular post carrying with it higher wages will remain
protected so that when the individual who may be getting
that pay at the time the standardisation scheme companyes into
force is numbermore employed the other workmen may be able to
claim wages on the ground that the wages have been
protected. the proper way of giving protection if the
tribunal thinks that justice demands that individuals who
are getting higher wages then those fixed under a
standardisation scheme should be protected is to direct
that the wages of such individuals should be fixed according
to the standardisation scheme and the difference if any
between their wages and the standardised wages should be
paid to them as personal pay so long as they are in service. as soon as such an individual goes out of service anumberher
coming in his place will number be entitled to the personal pay
the outgoing workman was getting and will be fixed in the
standardisation scheme. the direction however of the
tribunal in this case is capable of being read number for the
protection of individuals but for the protection of wages
and this in our opinion cannumber be done in view of the basic principles
governing a standardisation scheme. we are therefore of
opinion that the direction for the protection of existing
wages given in the form in which it has been given by the
tribunal must be set aside.