CASE NO.: Appeal (civil) 4437-4445 of 1997 PETITIONER: COMMISSIONER OF INCOME TAX, COCHIN Vs. RESPONDENT: MRS. GRACE COLLIS AND ORS. DATE OF JUDGMENT: 23/02/2001 BENCH: Y.K.Sabharwal, S.N.Hegde, <NAME> JUDGMENT:

Bharucha, J.

L.....I.........T.......T.......T.......T.......T.......T..J These are the appeals by the <ORG> against the decision of a Division Bench of <ORG> on a reference application at the instance of the assessees under Section 256(1) of the Income Tax Act, 1961. <ORG> was called upon to answer the following three questions : 1. Whether, on the facts and in the circumstances of the case, the <ORG> was right in holding that on the amalgamation of <ORG> with <ORG>, there was a transfer by the assessee of their shares in <ORG> ?

2. In case the answer to question No. 1 above is in the affirmative, whether the <ORG> was right in holding that the transfer was made in consideration of the allotment for to the assessees of shares in <ORG> ?

3. Whether on the facts and in the circumstances of the case, the <ORG> was right in holding that Section 49(2) of the I.T. Act, 1961 applied to the sale of the shares of the assessees in <ORG>, which were obtained by the assessees on the amalgamation of <ORG> with <ORG> ?

<ORG> answered the first question in the negative and in favour of the assessees, namely, that there was no transfer. In view of this answer, it held that the second question did not arise. It answered the third question in the negative and in favour of the assessees. Even so, it held that the taxing authorities could consider taxing the assessees on the basis of the transaction whereunder the share of Rs.100/- was sold for Rs.107.50. The assessees were shareholders of <ORG>.. <ORG> of Kerala sanctioned a Scheme of Arrangement under Section 391(2) and 394 of the Companies Act whereby <ORG>. (the amalgamating company) was amalgamated with <ORG> amalgamated company). The Scheme contemplated the transfer by way of amalgamation of all assets and liabilities of the amalgamating company to the amalgamated company in consideration of the amalgamated company issuing to the members of the amalgamating company 14 equity shares of Rs.100/- each, credited as fully paid up, in the amalgamated company for each share held in the amalgamating company. Upon amalgamation, the amalgamating company would cease to function and the amalgamated company would take over all its business, assets and liabilities and carry on its business. The sanctioned Scheme stated: As the residue of the consideration for the said transfer, <ORG> shall issue to the members of <ORG> 14 equity shares of Rs.100/- each in <ORG> credited as fully paid up in respect of each share held by him or her in <ORG> The assessees sold the 45318 shares of the amalgamated company of the face value of Rs.100/- each which they had acquired under the Scheme to one <NAME> and his associates on 29th February, 1976 for the aggregate sum of Rs.48,72,523/-. This meant that they had sold each share for Rs.107.50.

For the Assessment Year 1976-77, the previous year whereof ended on 31st March, 1976, the Income Tax Officer levied capital gains tax upon the assessees in respect of the sale to <NAME> and others. The Income Tax Officer applied the provisions of Section 49(2) read with Section 47(vii) for the purposes of computing the capital gain. Thereunder the cost of the shares of the amalgamating company is the cost of the shares of the amalgamated company that the assessee surrendered in exchange under a scheme of arrangement. The assessees had not furnished to the Income Tax Officer information as to the cost at which they had acquired the shares of the amalgamating company. Accordingly, the Income Tax Officer noted that under the Scheme the assessees had received 14 shares of the face value of Rs.100/- each in the amalgamated company for one share of the face value of Rs.100/- in the amalgamating company. He multiplied the number of shares of the amalgamated company that the assessees had sold by their face value of Rs.100/- and divided the result by 14 to arrive at their cost. The price at which the assessees had sold the shares less their cost as aforesaid was the capital gain that the Income Tax Officer subjected to tax. The Income Tax Officer rejected the contention of the assessees that Sections 49(2) and 47(vii) were not attracted as the assessees had not become the owners of the shares of the amalgamated company in consideration of the transfer of their shares in the amalgamating company.

The order of the Income Tax Officer was confirmed by the C.I.T.(Appeals). The matter went up before the <ORG> and the <ORG> upheld the appellate order. From out of the order of the <ORG>, the questions aforestated were referred to <ORG> and answered as set out above.

For the purposes of appreciating the controversy in this appeal, it is necessary to set out the relevant provisions of the Act as they obtained at the relevant time.

Section 2(47) defines transfer, in relation to a capital asset, to include the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. Section 45 states that any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head Capital gains and shall be deemed to be the income of the previous year in which the transfer took place. Section 47 states which transactions are not to be regarded as transfers. Nothing contained in Section 45 applies, by reason thereof, to: (vii) any transfer by a shareholder, in a scheme of amalgamation, of a capital asset being a share or shares held by him in the amalgamating company if-

(a) the transfer is made in consideration of the allotment to him of any share or shares in the amalgamated company, and

(b) the amalgamated company is an Indian company.

Section 49 sets out how cost is to be computed with reference to various modes of acquisition. It says, in sub-section(2): Where the capital asset being a share or shares in an amalgamated company which is an Indian company became the property of the assessee in consideration of a transfer referred to in clause (vii) of Section 47 , the cost of acquisition of the asset shall be deemed to be the cost of acquisition to him of the share or shares in the amalgamating company.

<CITATION> ), 177 I.T.R. 198, this Court was concerned with a case of acquisition of shares consequent upon a scheme of amalgamation virtually identical to the Scheme before us. At that time capital gains were chargeable to tax by reason of Section 12B of the Income Tax Act, 1922, which stated thus : 12B. Capital gains.- (1) The tax shall be payable by an assessee under the head Capital gains in respect of any profit or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March, 1956, and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange, relinquishment or transfer took place.

The question this Court was called upon to consider read thus: Whether, on the facts and in the circumstances of the case, the sum of Rs.49,350 could be assessed in the hands of the assessee as capital gains as having accrued to the assessee by exchange or relinquishment as provided for under section 12B of the Act ? This Court held that no exchange was involved in the transaction. An exchange involved the transfer of property by one person to another and, reciprocally, the transfer of property by that other to the first person. There had to be a mutual transfer of ownership of one thing for the ownership of another. In the case before the Court the assessee could not be said to have transferrd any property to anyone. When he was allotted shares of the amalgamated company, he was entitled to such allotment because of his holding 90 shares of the amalgamating company. The holding of 90 shares in the amalgamating company was merely a qualifying condition entitling the assessee to the allotment of 45 shares in the amalgamated company. The dissolution of the amalgamating company deprived the holding of the 90 shares of that company of all value.

Learned counsel for the assessees submitted that no capital gains tax could be levied upon the assessees in respect of the sale by them of their shares in the amalgamated company because there was no provision in the Act with regard to the manner of determination of the cost of these shares. This was for the reason that Section 49(2) prescribed the mode of determining the cost where the shares in an amalgamated company had become the property of the assessee in consideration of a transfer, as referred to in Section 47(vii) ; that is to say, a transfer by a shareholder in a scheme of amalgamation of shares held by him in the amalgamating company if the transfer was made in consideration of the allotment to him of shares in the amalgamated company. The decision in <ORG> had held that there was no transfer of any property to any one by the assessee in circumstances identical to those before us.

This, however, is not the end of the matter for Section 2(47) defines transfer to include the extinguishment of any rights in a capital asset.

In this regard, our attention was drawn by learned counsel for the assessees to the decision of a Bench of two learned Judges of this Court in <CITATION> . 191 I.T.R. 647. This was a case in which the appellant company carried on the business of manufacture and sale of art-silk cloth. It purchased during the year 1957 machinery and gave it on hire to <ORG> at an annual rent. <ORG>, as bailee of the machinery, insured it against fire along with its own machinery. The insurance policy contained a reinstatement clause requiring the insurer to pay the cost of the machinery as on the date of the fire in case of destruction or loss. A fire did break out in the premises of <ORG> causing extensive damage, inter alia, to the machinery which became useless as a result. On settlement of the insurance claim, <ORG> received an amount from the insurance company. From out of it it paid Rs. 6,32,533 to the appellant on the account of the destruction of the machinery. The Income-tax Officer brought to tax the sum of Rs. 3,50,792, being the difference between the insurance amount received by the appellant for the machinery and the original cost thereof, as a capital gain. <ORG> held that the insurance amount was not received by the appellant on the transfer of a capital asset but on account of the damage to its machinery and that Section 45 of the Act was not attracted. On a reference, <ORG> reversed the decision of the <ORG>. This Court held in appeal therefrom that when an asset was destroyed, there was no question of transferring it to others. The destruction or loss brought about the destruction of the right of the owner of the asset in it, but it was not on account of a transfer but on account of the disappearance of the asset. The extinguishment of the right in an asset on account of the extinguishment of the asset was not a transfer of the right but its destruction. The destruction of the right on account of the destruction of the asset could not be equated with the extinguishment of the right on accounts of its transfer. Section 45 of the Act was, therefore, not attracted. The fact that while paying for the total loss or damage to the property the insurance company took over such property or whatever was left of it did not change the nature of the insurance claim, which was an indemnity or compensation for the loss. The payment of the insurance claim was not in consideration of the property taken over by the insurance company, for one was not consideration for the other. This Court then, having so very rightly held that Section 45 was not attracted, went on to consider the definition of transfer and it said: It is true that the definition of transfer in section 2(47) of the Act is an inclusive definition and therefore, extends to events and transactions which may not otherwise be transfer according to its ordinary, popular and natural sense. It is this aspect of the definition which has weighed with <ORG> and, therefore, <ORG> has argued that, if the words extinguishment of any rights therein are substituted for the word transfer in section 45 , the claim or compensation received from the insurance company would attract the said section. <ORG> has, however, missed the fact that the definition also mentions such transactions as sale, exchange, etc., to which the word transfer would properly apply in its popular and natural import. Since those associated words and expressions imply the existence of the asset and of the transferee, according to the rule of noscitur a sociis, the expression extinguishment of any right therein would take colour from the said associated words and expressions and will have to be restricted to the sense analogous to them. If the <ORG> intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz., sale, exchange, etc. Hence, the expression extinguishment of any rights therein will have to be confined to the extinguishment of rights on account of transfer and cannot be extended to mean any extinguishment of right independent of or otherwise than on account of transfer.

Learned counsel for the assessees relied upon this decision to contend, again, that there had been no transfer by the assessees of their shares in the amalgamating company and that, therefore, the case would still not fall within the meaning of the expression extinguishment of any rights therein in Section 2(47) . By reason of the decision, the expression extinguishment of any rights therein had to be confined to the extinguishment of rights on account of a transfer and could not be extended to refer to the extinguishment of rights independent of or otherwise than on account of transfer.

Learned counsel for the <ORG> submitted that having held that the payment in settlement of the insurance claim was not in consideration of the transfer to the insurer of the damaged machinery and that, therefore, there was no transfer within the meaning of Section 45 , it was unnecessary for this <ORG> in <NAME> case to go on to consider the definition in Section 2(47) and the meaning to be attached to the expression extinguishment of any rights therein. In his submission, the decision in <NAME> case was to this extent obiter dicta. The definition in Section 2(47) of transfer included sale and exchange. In each of those cases there was an extinguishment of the right of the seller or exchanger in the capital asset. To restrict the extinguishment of rights to extinguishment on account of transfer was, in learned counsels submission, to render the expression extinguishment of any rights therein otiose and to nullify the effect of their use in the definition.

We have given careful thought to the definition of transfer in Section 2(47) and to the decision of this <ORG> in <NAME> case. In our view, the definition clearly contemplates the extinguishment of rights in a capital asset distinct and independent of such extinguishment consequent upon the transfer thereof. We do not approve, respectfully, of the limitation of the expression extinguishment of any rights therein to such extinguishment on account of transfers or to the view that the expression extinguishment of any rights therein cannot be extended to mean the extinguishment of rights independent of or otherwise than on account of transfer. To so read the expression is to render it ineffective and its use meaningless. As we read it, therefore, the expression does include the extinguishment of rights in a capital asset independent of and otherwise than on account of transfer.

This being so, the rights of the assessees in the capital asset, being their shares in the amalgamating company, stood extinguished upon the amalgamation of the amalgamating company with the amalgamated company. There was, therefore, a transfer of the shares in the amalgamating company within the meaning of Section 2(47) . It was, therefore, a transaction to which Section 47(vii) applied and, consequently, the cost to the assessees of the acquisition of the shares of the amalgamated company had to be determined in accordance with the provision of Section 49(2) , that is to say, the cost was deemed to be the cost of the acquisition by the assessees of their shares in the amalgamating company.

Upon this reading of the law, our answers to the questions are: (1) In the affirmative and in favour of the assessee. (2) Does not arise. (3) In the affirmative and in favour of the <ORG>.

We have already set out how the Income Tax Officer computed the capital gain and see no reason to take another view, having regard to the fact that the assessees could have disclosed, without prejudice to their contentions, the cost at which they had acquired their shares in the amalgamated company. We are at a loss to understand the reasoning of <ORG> in giving to the <ORG> the liberty to consider taxing the assessees on the basis that it was a transaction by itself whereunder a share of Rs.100.00 each was sold as a share of Rs.107.50. We are obliged to learned counsel for their assistance. The appeals are allowed. The judgment and order under appeal is set aside. The questions are answered as already indicated. There shall be no order as to costs.


PETITIONER: <NAME> Vs. RESPONDENT: <NAME> AND OTHERS. DATE OF JUDGMENT: 29/01/1953 BENCH: DAS, <NAME> BENCH: DAS, <NAME> MAHAJAN, MEHR CHAND BHAGWATI, NATWARLAL H. CITATION: 1953 AIR 148 1953 SCR 533 CITATOR INFO : R 1982 SC 149 (252) F 1990 SC 933 (14) RF 1991 SC 101 (69,227,273) R 1992 SC 96 (14) ACT: West Bengal Premises Rent Control (Temporary Provisions) Act (XVII of 1950), s. 18 (1)- Whether aplies to orders for re- covery of possession made by Presidency Small Cause <ORG>- " Decree for recovery of possession "-Construction of statutes-Mistakes of legislature. HEADNOTE: The expression " decree for recovery of possession " in s. 18 (1), of the West Bengal Premises Rent Control (Temporary Provisions) Act (Act XVII of 1950) does not include an order for recovery of possession made under s. 43 'of the Presidency Small Cause <ORG>s Act , 1882, and a person against whom an order for 534 recovery of possession has been passed under s. 43 of the Presidency Small Cause <ORG>s Act, 1882, is not therefore entitled to claim relief under the provisions of s. 18 (1) of Act XVII of 1950. <NAME> v. <NAME> ( 5 5 O.W.N. 343), <NAME>-v. <NAME> ( 55 C.W.N. 347), <NAME> v. <NAME> ( 55 C.W.N. 421) <CITATION> ([19511 55 C.W.N. 563), <CITATION> ([19511 55 C.W.N. 719) overruled. In construing a statute it is not competent to any court to proceed upon the assumption that the <ORG> has made a mistake and even if there is some defect in the phraseology used by the <ORG>, the <ORG> cannot aid the defective phrasing of an Act or add and amend, or by construction, make up deficiencies which are left in the Act. Commissioner for Special Purposes of Income Tax v. <NAME> (11891] A.C. 531); <NAME> v. Spooner ([1846-51] 4 M.I.A. 179) and <CITATION> . ( 60 I.A. 13) referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: , Civil Appeal No. 96 of 1952. Appeal from the Judgment and Order dated the 9th April, 1951, of <ORG> at Calcutta (<NAME> and <NAME>.) in Civil Rule No. 1038 of 1950 arising out of the Order dated the 4th July, 1960, of <ORG> Judge, <ORG>, Calcutta, in Ejectment Suit No. 6571 of 1949.

<NAME> and, <NAME> for the appellant. <NAME> (<NAME>, with him) for the respondent. 1953. January 29. The Judgment of the Court was delivered by <NAME> appeal is directed against the judgment and order of a Bench of <ORG> passed on the 9th April, 1961, in Civil Rule No. 1038 of 1950. The facts leading up to this appeal may be shortly stated as follows : The respondents were, according to the appellant, monthly tenants under the appellant in respect of three rooms, one kitchen, one privy and a bathroom on the ground floor of premises No. 6, Roy Began Street, Calcutta, at a monthly rent of Rs. 25 payable according to the Bengali calendar month. On the 29th Baisakh 1356 B. S. the appellant gave notice to the respondents to quit the premises on or before the 7th Jaistha 1356 B.S. The respondents having failed to comply with the notice the appellant on the 1st June, 1949, instituted proceedings under Chapter VII of the Presidency Small Cause Courts Act, 1882, for the eviction of the respondents from the demised premises on the allegation that the tenancy had determined ipso fact,) for nonpayment of rent for three consecutive months in terms of section 12 (3) of the West Bengal Premises Rent Control Act, 1948. The respondents on the 6th July, 1949, deposited into Court Rs. 233-7-0 and on the 8th July, 1949, entered appearance and filed a written statement denying that they were in arrears with their rent or that their tenancy , had been ipso facto determined. The said proceedings came up for hearing on the 27th February, 1950, and the respondents not having appeared it was heard ex parte and an order was made directing the delivery of possession of the premises to the appellant on the 3rd May, 1950. In the meantime on the 31st March, 1960, the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950 (Act XVII of 1950) came into force. On the 29th May, 1950, the respondents filed an application in <ORG> under section 18 of the said Act for vacating the order for possession. On the 5th June, 1950, <ORG> made an order upon terms which, as set out in the respondents' case, are as follows :

"5-6-50. On consent all arrears of rent up to Jaistha 1357 B.S. with interest at 9% p.a. along with the costs of the suit including half <NAME>'s fee amounting to Rs. 399-3-0 on consent in total to be paid by the defendants to the plaintiff by 4-7-50. The date fixed for payment and final orders. All proceedings and execution stayed until further orders."

The agreed amount having been paid the order for possession was vacated on the 4th July, 1950. The order as recorded in the order sheet reads as follows:- "4-7-50. Parties present as before. Defendant carries out the order of the learned <ORG>, dated 5th June, 1950. Money deposited in <ORG> as ordered. Accordingly order of decree for possession is vacated. Money in <ORG> is allowed to be withdrawn by the plaintiff's pleader under power." The appellant on the 1st August, 1950, moved the High <ORG> under section 115 of the Code of Civil Procedure for setting aside the order of the trial <ORG> passed on the 4th July, 1950. While the application was pending before the High <ORG> the West 'Bengal Premises Rent Control (Temporary Provisions) (Amendment) Act, 1950 (Act LXII of 1950) came into force on the 30th November, 1950. On the 9th April, 1951, the High <ORG> following an earlier decision of another Bench of that <ORG> in <NAME> v. <NAME>) dismissed the application. On the 30th November, 1951, the High <ORG> granted leave to the appellant to appeal to this <ORG> and issued a certificate under the provisions of article 133 (1)

(c) of the Constitution of India.

As already stated, the proceedings out of which the present appeal arises were instituted under Chapter VII of the Presidency Small Cause <ORG>s Act, 1882. Chapter VII of that Act which is intituled "Recovery of Possession of Immovable Property" allows the landlord, in certain circumstances, to "apply to <ORG> for a summons against the occupant calling upon him to show cause on a day therein appointed why he should not be compelled to deliver up the property." Section 43 provides that if the occupant does not appear at the time appointed or show cause to the contrary, the applicant landlord shall, if the <ORG> is satisfied that he is entitled to apply under section 41 , be entitled to an order addressed to a Bailiff of the <ORG> directing (1) (1951) 55 C.W.N, 343.

<NAME>

him to give possession of the property to the applicant on such date as the <ORG> thinks fib to name in such order. Although under the rules framed under the Act this application under section. 41 is initiated by a plaint there is no dispute that the proceeding is not a suit and the order for delivery of possession does not strictly speaking amount to a decree for recovery of possession [ <CITATION> (1)]. Indeed, section 1 .9 of the Act peremptorily provides, inter alia, that the Small Causes <ORG> shall have no jurisdiction in suits for recovery of immovable property. The only question for consideration, therefore, is whether section 18(1) of Act XVII of 1950 applies to an -order for possession made under section 43 of the Presidency Small Cause <ORG>s Act, 1882.

Section 18(1) and the marginal note to that section run as follows:

"18. (1). Where any decree for recovery of posses- Power of court to sion of any premises has been made |rescind or vary on the ground of default in decrees and orders payment of arrears of rent under or to give relief in the provisions of the West Bengal pending suits in Premises Rent Control (Temporary, certain cases Provisions) Act , 1948,but the possession of such premises has not been recovered from the tenant, the tenant may apply to the trial Court within sixty days of the coming into force of this Act for vacating the decree for ejectment against him and within such period no order for delivery of possession shall be made by any Court, nor if an application is made by the tenant under this sub- section till the application has been dismissed under sub- section (4)."

In <NAME> v. <NAME> it was held that the expression "decree for recovery of possession" in subsection (1) of section 18 includes an order for recovery of possession made under Chapter VII of the Presidency Small Cause Courts Act, 1882. This case (1) (1927) I.L.R. 51 BOM. 385.

(2) (1951) 55 C.W.N. 343.

was followed, without further discussion, by different Benches of the-same <ORG> in <NAME> v. <NAME> (1), <NAME> v: <NAME>), <CITATION> (3) and also in the present case. Finally, the question was again considered by a larger Bench of the Calcutta <ORG> in <CITATION> (4). The learned Judges agreed with the earlier decision in <NAME> v. <NAME> (5). After hearing the able arguments I advanced before us and giving the most anxious consideration to the decisions in the cases mentioned above we-are unable to accept the conclusion arrived at by them in those, cases as correct. Apart from the question whether the marginal note can at all be referred to in construing the provisions of a section of an Act, it is quite clear, on the authorities, that the marginal note cannot control the meaning of the body of the section if the language employed therein is clear and unambiguous. If the language of the section is clear then it may be that there is an accidental slip in the marginal note rather than that the marginal note is correct and the accidental slip is in the body of the section itself. Take for instance section 11 of the West Bengal Premises Rent Control Act, 1948. The section says that notwithstanding anything contained in certain Acts specified therein, "no order or decree for the recovery of possession of any premises shall be made so long as the tenant pays to the full extent the rent allowable by this Act and performs the conditions of the tenancy." The marginal note to that section simply says: " No order for ejectment ordinarily to be made if rent paid at allowable rate." 'In the marginal note the words " or decree " do not find a place at all, a fact which clearly shows that the marginal note was' not prepared carefully and that it was not a sure guide in the matter of the (1) (1951) 55 C.W.N. 347.

(2) (I951) 55 C.W.N. 421.

(3) (1951) 55 C.W N. 563.

(4) (1951) 55 C.WN. 7I9.

(5) (1951) 55 C.W.N. 343.

interpretation of the body of the section. We have, therefore, to read the words used in the body of section 18(1) of the 195O Act and if we find the meaning clear and unambiguous' the marginal note should not be permitted to create an ambiguity in the section. Section 18 (1), as it stood on the 4th July, 1950, when the order for possession passed on the 27th February, 1950, was vacated, gave relief to a tenant against whom any decree for recovery of possession of any premises had been made on the ground of default in payment of arrears of rent under the provisions of the 1948 Act, provided that the possession of the premises had not been recovered from him. The relief given by this section is clearly against a decree for possession which "has been made" under the 1948 Act. The language of section 18 (1) of the 1950 Act and in particular the specific reference therein to the Act of 1948 take us back to that Act. Section II of the 1948 Act %refers " to order or decree for the recovery of possession of, any premises". The reference in the non obstante clause of section 11 to the Presidency Small Cause Courts Act , I 882, clearly indicates that the order for the recovery of possession refers to orders passed under section 43 of the last mentioned Act on applications made under section 41 thereof. Section 11 speaks of both " order " for the recovery of possession and " decree " for the recovery of possession. Therefore, there can remain no manner of doubt that the two words " order " and " decree " in section 11 connote two different things. This is further made clear by the use of two words " suit " or " proceeding " in section 12 of the 1948 Act. It is, thus, quite clear that in the 1948 Act " suit " is different from " proceeding" and " order " is different from " decree ". Therefore, in construing the 1948 Act there can be no occasion for giving any extended meaning to the word " decree" so as to include "order", for the two are distinctly and separately provided for. Section 18 (1) of Act XVII of 1950 does not refer to "decree"

<NAME>

simpliciter but to "any decree for recovery of possession of any premises on the ground of default in payment of arrears of rent under the provisions of" the 1948 Act. Turning then to that Act we find that a decree for possession on the ground of non-payment of rent under that Act is treated distinctly from an order for possession on the ground of non-payment of rent under the same Act. A decree for the recovery of possession within the meaning of that Act can, therefore, only mean a decree in a suit for recovery of possession and cannot cover an order for possession passed under section 43 on an application made under section 41 of the Presidency Small Cause Courts Act. In short, section 18(1) of Act XVII of 1950 expressly attracts the 1948 Act and under that Act there can be no necessity for giving an extended meaning to the word "decree", for "order " is sepa- rately dealt with in that Act.

It is said that whatever the word "decree" may mean in the 1948 Act it is immaterial for the purposes of construing Act XVII of 1950 for the Court has to ascertain the meaning of the word "decree" as used in section 18(1) of the last mentioned Act. It has been already stated that the language of section 18 (1) attracts the relevant provisions of the 1948 Act and, therefore, the word "decree" occurring in section 18(1) must necessarily be construed in the light of the 1948 Act and it is clear that so construed it cannot cover "order" for possession made under Chapter VII of the Presidency Small Cause Courts Act. Apart from' that consideration, the question still remains: What does the word "decree" in section 18 (1) mean? That word has not been defined either in the 1948 Act or in Act XVII of 1950 or in the Bengal General Clauses Act . That word, however, has been defined in the Code of Civil Procedure, 1908, and, as there defined, it means the formal expression of an adjudication which determines the rights of the parties with regard to the matter in controversy in the suit which last word prima facie means a civil proceeding initiated by a plaint ( section 26 and Order IV, rule 1, Civil Procedure Code). This is the ordinary accepted meaning of the word " decree " and if that meaning is attributed to the word " decree " occurring in section 18(1) then clearly it cannot cover an order for possession passed under section 43 of the Presidency Small Cause Courts Act on an application made under section 41 of that Act. It is, however, urged that the word " decree" in - section 18 (1) of Act XVII of 1950 should not be read in its strict sense. It is said that although the word "suit" ordinarily means a proceeding instituted by a plaint, it is also used in a wider sense so as to cover proceedings which are not instituted by a plaint and, therefore., an adjudication in those proceedings which are also suits in that extended meaning may well be said to be a " decree". Reference is made to the explanation of sub-section (1) of section 12 of Act XVII of 1950, which expressly provides that in the proviso to sub-section (1) the term "suit" does not include proceeding under Chapter VII of the Presidency Small Cause Courts Act, 1882, and it is urged that this explanation inferentially means that the word " suit " occurring in the other sections of Act XVII of 1950 may include a proceeding under Chapter VII of the Presidency Small Cause Courts Act and, therefore, an order made on such a proceeding may be described as an adjudication in a suit and, therefore, a decree. It is not quite clear how this inference, even if it can be properly drawn, can have any bearing on the construction of the word "decree" in sub-section (1) of section 18 of the Act XVII of 1960 where the word " suit " is not used at all. Be that as it may, the argument founded on the aforesaid inference sought to be drawn from the explanation to section 12 (1) of Act XVII of 1950 will clearly appear to be untenable when the provisions of that Act are closely scrutinised, for it will then be found that the word " suit" does not and was not intended to cover any proceeding under Chapter VII of the Presidency Small Cause Courts Act. Section 12 (1) prohibits the making of any order or decree for the -

recovery of possession by any <ORG>, notwithstanding anything to the contrary in any other Act or law. This sub- section (1), standing by itself, means that no order for possession can be passed by <ORG> notwithstanding <ORG>s Act and no decree for possession can be made by any <ORG> in any suit notwithstanding the Transfer of Property Act or the Contract Act or the Code of Civil Procedure, 1908. The proviso to sub-section (1), however, saves "any suit for decree for such recovery of possession" against certain tenants or in certain circumstances. Therefore, it is clear that the proviso to sub-section (1) of section 12 does not save proceedings under Chapter VII of <ORG>s Act. The explanation to that sub-section stating that the word "suit" in the proviso does not include a proceeding under Chapter VII of <ORG>s Act appears to have been inserted out of abundant caution to put the position beyond any doubt. Section 16 of Act XVII of 1950 provides that notwithstanding anything contained in any other law a suit by a landlord against a tenant for recovery of possession of any premises to which the Act applies shall lie to the <ORG>s as set out in Schedule B and that no other <ORG> shall be competent to entertain or try such suit. According to Schedule B, where the premises are situate on land wholly within the ordinary original civil jurisdiction of the Calcutta High <ORG> and when the rent does not -exceed Rs. 500 per month, the Chief Judge of the Calcutta <ORG> of Small Causes shall entertain and try such suit as a <ORG> of the District Judge, provided that be shall be entitled to transfer the suit to any other Judge of that <ORG> who shall try it as a <ORG> of the Subordinate Judge. The result of sections 12 and 16 read with Schedule B is for all practical purposes to suspend the operation of Chapter VII of <ORG>s Act in Calcutta for no one will take proceedings in which no order can be made. The effect of those sections is to confer a new jurisdiction on the Chief Judge of the Calcutta Small Cause <ORG> to entertain and try suits by landlords against tenants for recovery of possession of premises situate within the ordinary original civil jurisdiction of the Calcutta High <ORG> when the monthly rent does not exceed Rs. 600. Thus after Act XVII of 1950 came into force the Calcutta Small Cause <ORG> has ceased to have any power to pass an order for possession under Chapter VII of <ORG>s Act and the Small Cause <ORG> of Calcutta can, under that Act,, only pass a decree for possession in a suit Which is saved by the proviso to sub-section (1) of section 12 and with regard to which a special jurisdiction is conferred on that <ORG> by section 16 of that Act. That being the position, the word" suit " in none of the sections of Act XVII of 1950 can be said to have been used as including -a proceeding under Chapter VII of <ORG>s Act. Therefore, the reasoning advanced in support of attributing an extended meaning to the word "suit" and then inferentially to the word decree " in section 18 (1) cannot be sustained.

It is next argued that if the word "decree" is construed strictly it will give rise to startling results in that poor tenants against whom orders for possesSion had been made under the 1948 Act will be deprived of the benefit of section 18 (1) while the wealthy tenants paying rents above Rs. 500 per month will get relief under that section and this will frustrate the intention of the <ORG>. This argument proceeds on the assumption that the <ORG> intended to give relief to all tenants against whom orders or decrees for possession had been made. The language of section 18 (1) clearly shows that the intention of the <ORG> was to give relief only to certain tenants in certain circumstances. In the first place relief is given only with respect to decree for possession made on the specified ground and not with respect to a decree for possession made on any other ground. In the next place relief is given only when the possession of the premises in respect of which a decree for possession had been made had not been made over by the tenant. Thus tenants against whom a decree for possession had been made on grounds other than the ground specified. in the subs section and even tenants against whom a decree for possession had been made on the specified ground but who had, voluntarily or otherwise, delivered possession of the premises get no relief under section 18 (1). An order for possession is made by <ORG> under Section 43 on a summary application under section 41 and the order directs the Bailiff of the Court to deliver possession to the applicant. This order for the recovery of possession which under section 37 of <ORG>s Act is final and conclusive and from which there is no appeal or a new trial under section 38 of that Act does not ordinarily take much time to be obtained or to be carried out and certainly much less than what is taken to obtain a decree for possession in a suit and to execute such decree, because both the decree for possession in a suit and the order for execution thereof are subject to appeal. The <ORG> may well have thought that cases where orders for possession had been made under Chapter VII of <ORG>s Act with respect to premises which were situate within the small area of the ordinary original civil jurisdiction of <ORG> and which, in spite of such orders, were still in the possession of the tenants at the date of the commencement of Act XVII of 1950 would be few in number as compared to the number of cases where decrees for possession had been made with respect to premises which were situate within a very much larger area and which were still in the possession of the tenants and, therefore, did not think fit to provide for those few cases. It must always be borne in mind, as said by Lord <NAME> in Commissioner for Special Purposes of Income Tax v. <NAME> (1), that it is not competent to any Court to proceed upon the assumption that the <ORG> L. R.  A. C. 531 at P. 549.

has made a mistake. The <ORG> must proceed on the footing that the <ORG> intended what it has said. Even if there is some defect in the phraseology used by the <ORG> the <ORG> cannot, as pointed out in <NAME> v. Spooner(1), aid the <ORG>'s defective phrasing of an Act or add and amend or, by construction, make up deficiencies which are left in the Act. Even where there is a casus omissus, it is, as said by Lord <NAME> of <ORG> in <CITATION> . (2), for others than the <ORG>s to remedy the defect. In our view it is not right to give to the word " decree" a meaning other than its ordinary accepted meaning and we are bound to say, in spite of our profound respect for the opinions of the learned Judges who decided them, that the several cases relied on by the respondent were not correctly decided. Reference was made, in, course of argument, to section 6 of the West Bengal Act LXII of 1950. That section refers to orders or decrees made between the commencement of Act XVII of 1950 and Act LXII of 1950, i.e., between the 30th March, 1950, and the 30th November, 1950, and cannot have any application to the order for possession made in this case on the 27th February, 1950.

For reasons stated above this appeal must be allowed and the order made by <ORG> should be set aside and the respondents' application under section 18 (1) of Act XVII of 1950 should be dismissed and we order accordingly. In the circumstances of this case we make no order as to costs except that the parties should bear their own costs throughout.

Appeal allowed.

Agent for the appellant: <NAME>.

Agent for the respondent : <NAME>.

(1) 6 Moo. P.C. I; 4 M.I.A. 179.

(2) (1933) L.R. 60 I.A. I3; A.I.R. 1933 P.C 63.


CASE NO.: Appeal (civil) 4386 of 2006 PETITIONER: <NAME> & Others RESPONDENT: The State of Bihar & Others DATE OF JUDGMENT: 10/10/2006 BENCH: ARIJIT PASAYAT & <NAME> JUDGMENT:

J U D G M E N T (Arising out of SLP (C) Nos. 20306-20308 of 2005) WITH [Civil Appeal Nos 4387/2006 (Arising out of S.L.P. (C) 1827-1828)] ARIJIT PASAYAT, J.

Leave granted.

In both these appeals challenge is to the legality of the common judgment passed by <ORG> dismissing of different Letters Patent Appeals filed by the appellants. By the impugned judgment <ORG> dismissed the Letters Patent Appeals. It was held that the view of learned Single Judge dismissing the writ petitions filed by the appellants challenging their reversion as well as recovery of the amounts paid on account of promotion was in order.

Factual position in a nutshell is as follows:-

Except some of the appellants who were Class IV employees remaining appellants were holding Class III posts, that is, Basic Health Workers. They were promoted to the post of Clerk in the year 1992. Subsequently, an audit team raised objection to the said promotions expressing the view that the appellants could not have been promoted. On the basis of the audit report action was taken. State Government was of the view that promotions granted were illegal and accordingly the appellants were reverted to the original post held by each one of them. Being aggrieved by the said order, some of the appellants moved <ORG> which quashed the orders on the ground that adequate opportunity was not granted to show cause before the action was taken. Thereafter, show cause notices were issued to which the appellants responded. Ultimately they were reverted to the original post held by each and direction was given to recover the excess amounts which had been paid. Writ petitions were filed challenging the orders in that regard. In each case learned Single Judge dismissed the writ petition. As noted above the Letters Patent Appeals were also dismissed.

In support of the appeals learned counsel for the appellants submitted that there was no fault on the part of the appellants and they had been appointed on the basis of the recommendations made by <ORG>. Even if it is conceded that there was any procedural irregularity that could not have affected the promotion granted and no action could have been taken after lapse of time. In any event, the recovery of the amount is uncalled for.

Learned counsel for the respondent-State and its functionaries supported the judgment submitting that the courts below had noted the reasons for directing reversion. Even if the appellants had worked in the promotional post yet they were not entitled to the higher salary attached to each of the promotional post. Therefore, the recovery has rightly been directed. Reliance was placed on decisions of this Court in <CITATION> . (2004 (2) SCC

105), <CITATION> (2006 (2) SCC 471) and <CITATION> (2006 (2) SCC 541).

The reasons which weighed by the respondent-State to hold that the promotion was illegal does not suffer form any infirmity. Class III employees could not have been promoted as they belong to the technical cadre and the promotional posts related to non-technical cadre. That apart the Class III employees were already holding Class III post and, therefore, there was no question of promotion to the same class. So far as class IV employees are concerned, their promotion was also not considered in terms of statutory provision. The quota of promotion to Class III from Class IV is fixed and the procedure is provided for deciding the question of promotion. The promotions were granted without placing their cases before <ORG> and the <ORG> which accorded approval was not properly constituted, and the reservation policy was not followed and promotions were given without adopting the procedure relating to advertisement. <ORG> also noted that the appointments were made by the Civil Surgeon though a ban had been imposed by the State Government on appointments. Therefore, the order of reversion in each case cannot be faulted.

So far as the recovery is concerned, in a normal course if the promotion/appointment is void ab initio, a mere fact that the employee had worked in the concerned post for long cannot be a ground for not directing recovery. The cases relied upon by the learned counsel for the <ORG> were rendered in different backdrop. In those cases the appellants were guilty of producing forged certificates or the appointments had been secured on non-permissible grounds. In that background this Court held that recovery is permissible. On the contrary, the fact situation of the present case bears some similarity to the cases in <CITATION> (1995 Supp.(1) SCC

18), <ORG> and Anr. v. Bijay Bhadur and Anr. (2000 (10) SCC 99) and <CITATION> . (2002 (3) SCC 302).

In <ORG> case (supra) it was held as follows:

"9. Further, an analysis of the factual score at this juncture goes to show that the respondents appointed in the year 1966 were allowed to have due increments in terms of the service conditions and salary structure and were also granted promotions in due course of service and have been asked after an expiry of about 14-15 years to replenish the <ORG> exchequer from out of the employees' salaries which were paid to them since the year 1979. It is on this score <ORG> observed that as both the petitioners have passed the examination though in the year 1993, their entitlement for relief cannot be doubted in any way. <ORG> has also relied upon the decision of this <ORG> in the case of <CITATION> (1995 Supp (1) SCC 18), wherein this <ORG> in para 5 of the Report observed: (SCC p.20) "5. Admittedly the appellant does not possess the required educational qualifications. Under the circumstances the appellant would not be entitled to the relaxation. The Principal erred in granting him the relaxation. Since the date of relaxation the appellant had been paid his salary on the revised scale.

However, it is not on account of any misrepresentation made by the appellant that the benefit of the higher pay scale was given to him but by wrong construction made by the Principal for which the appellant cannot be held to be at fault. Under the circumstances the amount paid till date may not be recovered from the appellant. The principle of equal pay for equal work would not apply to the scales prescribed by <ORG>. The appeal is allowed partly without any order as to costs."

10. <ORG> also relied on the unreported decision of the learned Single Judge in the case of <NAME> v. <ORG> (CWJC No. 710 of 1994 disposed of on 27.01.1995). We do record our concurrence with the observations of this Court in <NAME> case (supra) and come to the conclusion that since payments have been made without any representation or a misrepresentation, the appellant <ORG> could not possibly be granted any liberty to deduct or recover the excess amount paid by way of increments at an earlier point of time. The act or acts on the part of the appellant <ORG> cannot under any circumstances be said to be in consonance with equity, good conscience and justice. The concept of fairness has been given a go-by. As such the actions initiated for recovery cannot be sustained under any circumstances. This order, however, be restricted to the facts of the present writ petitioners. It is clarified that Regulation 8 will operate on its own and the <ORG> will be at liberty to take appropriate steps in accordance with law except, however, in the case or cases which has/have attained finality.

In <ORG> Non-teaching Employees' case (supra) it was held as follows:

"12. Though the above discussion merits the dismissal of the Writ Petitions and the denial of relief to the respondents, we are of the view that on the special facts of this case, the employees of the <ORG> have to be protected against the move to recover the excess payments upto 31.03.1991. When the concerned employees drew the allowances on the basis of financial sanction accorded by <ORG> i.e. the <ORG> and they incurred additional expenditure towards house rent, the employees should not be penalized for no fault of there is. It would be totally unjust to recover the amounts paid between the 1.4.1994 and the date of issuance oft he G.O. No. 42 dated 13.2.1996. Even thereafter, it took considerable time to implement the G.O. It is only after 5th March, 1997 the <ORG> acted further to implement the decision taken a year earlier. Final orders regarding recovery were passed on 25.3.1997, as already noticed. The Vice- Chancellor of the <ORG> also made out a strong case for waiver of recovery upto 31.3.1997. That means, the payments continued upto March 1997 despite the decision taken in principle. In these circumstances, we direct that no recovery shall be effected from any of the <ORG> employees who were compelled to take rental accommodation in Mangalore City limits for want of accommodation in <ORG> Campus upto 31.3.1997. The amounts paid thereafter can be recovered in instalments. As regards the future entitlement, it is left to the <ORG> to take appropriate decisions, as we already indicated above. "

<ORG> itself noted that the appellants' deserve sympathy as for no fault of theirs, recoveries were directed when admittedly they worked in the promotional posts. But relief was denied on the ground that those who granted had committed gross irregularities.

While, therefore, not accepting the challenge to the orders of reversion on the peculiar circumstances noticed, we direct that no recovery shall be made from the amounts already paid in respect of the promotional posts. However, no arrears or other financial benefits shall be granted in respect of the concerned period.

The appeals are accordingly disposed of. No costs.


PETITIONER: STATE OF PUNJAB & ORS. Vs. RESPONDENT: INDER SINGH & ORS. ETC. DATE OF JUDGMENT: 14/10/1997 BENCH: A.S. ANAND, S. RAJENDRA BABU ACT: HEADNOTE: JUDGMENT:

WITH CIVIL APPEAL NOS 8302/95 AND 1939/97 AND CIVIL APPEAL NOS 7137-38 AND 7145-47 OF 1997 (Arising out of SLP (C) Nos. 2584, 4937, 3679, 3745 and 12685 of 1996) J U D G M E N T D.P. Wadhwa J.

Leave granted in all the special leave petitions. In this batch of appeals, it is the State of Punjab in <ORG> which is the appellant. There are in all 18 respondents. They were all enrolled as Constables in <ORG> and later deputed to <ORG> (CID) of <ORG>. During the course of their deputation, they earned promotions on ad hoc basis and some of the respondents reached the rank of ad hoc Sub-Inspectors. When they were sought to be repatriated to their parent departments, they were to go back as Constables or Head Constables if in the meanwhile on deputation they earned any promotion in their parent departments. They had served long years in the CID and the prospect of going back as Constables was not to their liking. They, therefore, approached <ORG> and Haryana by filing writ petitions which were allowed to an extent. <ORG> did say that the order of repatriation of the respondents being legal could not be set aside as such. However, directions were issued that the cases of the respondents in their parent departments to considered for promotions on the relevant dates when person junior to them were promoted at different levels and, if necessary, even to relax the rules. In some of the cases two directions were given, namely, (1) if the respondents sought voluntary sought voluntary retirement from the posts they were holding in CID, the order of repatriation would not come in their cases for voluntary retirement be considered on the basis of the posts they were holding in CID; and (2) to determine the seniority of the respondents in their parent departments by giving them the benefit of service they rendered in CID and consequently to be considered for promotion with effect from the date the persons junior to them were promoted.

To understand the rival contentions, we shall consider the case of <NAME> one of the respondents (CA Nos. 1293-1303 of 1996). He was enrolled in <ORG> on August 31, 1966 as Constable and on April 13, 1969 was sent on deputation to <ORG> in the same rank. He was sought to be repatriated on September 15, 1990 while he was holding the rank of ad hoc Sub-Inspector. During this period of deputation, <NAME>, by order dated February 19, 1985 was promoted as officiating Head-Constable after giving him exemption under the relevant rules which we will consider hereinafter. In the parent <ORG>, he was holding the substantive rank of Head Constable. During the pendency of the writ petition in <ORG>, we are told that there was stay of order of repatriation. <NAME> was not, however, given any posting till the judgment was delivered by <ORG>. On November 7, 1994, he was posted in the <ORG> unit at Faridkot. However, this joining was subject to final decision of the present appeal. This <ORG> at the time of the admission of the special leave petitions granted status quo which is continuing. The appellant has, therefore, contended that from the date of repatriation, <NAME> remained absent uptil November 6, 1994. Taking into account this period of four years, <NAME> was on deputation in <ORG> for over 28 years. We may note that the <ORG> has not taken any action against <NAME> for his alleged absence from the date of the order of repatriation till the order of this rejoining <ORG> and his posting at Faridkot. The High <ORG> in granting relief to respondents negatived the contention of the <ORG> that the respondents could not be promoted to higher posts in their parent departments without passing the various departmental examinations as per the relevant Rules. That was how <ORG> dealt with these contentions first by allowing the writ petitions by the learned <NAME> judge and then on appeal before <ORG> filed by the <ORG> against the judgment of the learned single Judge. The High <ORG> was of the view that in terms of sub-rule (3) of Rule 21.25 of <ORG> Rules, when an officer borne on the rolls of a district or range reached a place in seniority which would entitle him to be considered for substantive promotion if he were serving in the establishment to which he belonged permanently, he shall be informed and given the opportunity to return to the district police force. The <ORG> said that admittedly, the writ petitioner, who was sent on deputation to the <ORG>, was not so informed and given the opportunity to return to his parent <ORG> when he was entitled to be considered for substantive promotion to the higher post. As held by the learned single Judge, the appellant who failed in its statutory duty to inform the petitioner when his juniors in the parent department were considered for promotion to the higher post, could not take advantage of its own wrong. The writ petitioner while on deputation to <ORG>, Intelligence <ORG>, was found fit and had been promoted as Sub-Inspector on 12th December, 1989, and was holding that post on the date when the order for the repatriation to his parent department was issued. The High <ORG> said that in view of such peculiar facts, it would be a good ground for relaxing the rule for considering him for promotion to the higher post with effect from the date his immediate juniors were so promoted in accordance with the directions given by the learned Single Judge. The respondent in the writ petitions had prayed for writ of certiorarl for quashing the order of repatriation and a writ of mandamus directing the petitioner to absorb him in <ORG> (Intelligence <ORG>) where he had put in 23 years of service or directing the petitioner to determine the seniority of the respondent in his parent department after giving him benefit of service which he had rendered for 23 years in the <ORG> and consequently to promote him from the date when his juniors were promoted.

The Rules are called Punjab Police Rules and have been framed under the Police Act 1861. It is not necessary for us to quote the relevant Rules in extenso except Rule 21.25 dealing with deputation to CID which is as under:

"21.25(1) Upper and lower subordinate posts other than those of inspectors in <ORG> shall be filled by the deputation of suitable men from districts for periods three years extensible by not more than two years at a time at the discretion of the Deputy Inspector-General, <ORG>.

(2) A Police officer on deputation to <ORG> will retain his original position in the cadre of his district or range. While in <ORG> he will be eligible for officiating promotion in that branch; on reversion from <ORG> he will assume his place in his original cadre. Officiating promotion may be given in the district or range in the place of an officer deputed to <ORG>, such officiating post lapsing on the officer's reversion.

(3) When an officer borne on the rolls of a district or range reaches a place in seniority which would entitled him to be considered for substantive promotion if he were serving in the establishment to which he belongs permanently, he shall be informed and given the opportunity of returning to district police work. No officer on deputation to <ORG> shall be substantively promoted to head constable or higher rank unless both the Deputy Inspector-General, <ORG> and the Deputy Inspector-General, <ORG> and the Deputy Inspector-General of the range to which he belongs agree that he is qualified for such promotion by all the prescribed standards.

(4) The Deputy Inspector-General, <ORG>, may make recommendation on behalf of, sub-inspectors serving under him to the Deputy Inspector serving under him to the Deputy Inspector-

General of the range and the Inspector-General of Police, respectively, for promotion to the selection grade or admission to List F. A sub-inspector who becomes eligible while serving in <ORG> for grade promotion in the selection grade, shall receive such promotion, if the Deputy Inspector-

General of the range and <ORG> agree that he is fit for it.

(5) Annual reports on upper subordinates serving on deputation in <ORG> shall be sent by <ORG>, to the range Deputy Inspector-General concerned for record and other necessary action.

(6) In very exceptional cases and for the political branch only and with the written sanction of the Deputy Inspector-General personally, direct enrollment as constable or in higher ranks, may be made to <ORG>.

Specialists shall, however, when possible, be entertained on contract terms control, terms, so that their services may be dispensed with then their utility ceases or deteriorates.

21.25(A) The Deputy Inspector-

General, <ORG>, shall have complete disciplinary control over all police offices while serving in the <ORG>."

Rules also described the duties of <ORG> by that is not necessary for us to refer to.

Rules relating to promotion and deputation are quite specific and there is no ambiquity about them. Each district/Range (Districts are grouped into Ranges) has its own cadre of officers upto certain ranks. We are concerned with the rank upto Sub-Inspector. Promotion from one rank to another and from one grade another in the same rank is on the basis of selection-cum-seniority. What factors are to be taken into consideration for promotion have been set out in Rule 13.1 and which are of general nature. Upto the rank of Sub-Inspector five lists A,B,C,D and E are to be maintained for the purposes of promotions from the Constable and contain the names of the candidates as per their seniority after they have fulfilled the specified requirements. List A contained the names of the Constables who were eligible for promotion to the selection grade and is maintained by the Superintendent of Police of the District. List B contains the names of all Constables selected for admission to the promotion course for Constables at <ORG>. Selection is made in the month of January each year and is limited to the number of seats allotted to the district for the year with twenty per cent reserve. <ORG> is constituted which conducts tests in general law (Indian Penal Code , Criminal Procedure Code , Indian Evidence Act and Local and Special Laws), interviews and examination of records and prepares the merit list, Rule 13.7 (2) prescribes the eligibility criteria of the Constables who are to be entered in List-B. Those Constables who have passed the Lower School Course at <ORG> Phillaur and are considered eligible for promotion to Read Constables are entered in List-C. Promotions to Head Constables are made in accordance with the principles set out in Rule 13.1(1) and (2). Selection grade Constables who have not passed the Lower School Course but are otherwise considered suitable can be promoted to Head Constables upto a maximum of ten per cent of vacancies but that can be done with the approval of the Deputy Inspector-General of Police. Similarly D List is maintained for selection for admission to the promotion course for Head Constables at <ORG> is made from amongst, all the confirmed Head Constables. Eligibility for admission to the promotion course for Head Constables is prescribed in Rule 13.9(1). Those Head Constables who qualify at <ORG> in the promotion course for Head Constables find their names entered in Part-I of List-D. Rule 13.9(2) prescribes that names of outstanding Head Constables who have not passed the promotion course for Head Constables due to being over-age but otherwise are of exceptional merit and are considered suitable may, with the approval of Inspector-General of Police, be entered in Part II of List D. Further under this sub-rule no more than in per cent of the posts of Assistant Sub-Inspectors will be filled from the names in Part II of List D. Promotions to the post of Assistant Sub-Inspectors are to be made from List D (Part II). Similar procedure is prescribed for promotion of all Assistant Sub-Inspectors to Sub-Inspector from List E (Part-I) which contains the names of Assistant Sub-Inspectors who qualified for promotion course for Assistant Sub-Inspectors at <ORG> List E is also in two parts. Part II of List E contains the names of Assistant Sub-Inspectors of exceptional merit who have not qualified the course for Assistant Sub-Inspectors at <ORG> and are considered suitable for promotion.

<ORG> does not have a cadre of its own officers upto the rank of Sub-Inspectors. Rules 21.25 states that posts other than those of Inspectors in <ORG> shall be filled by the deputation of suitable men from districts for period three years extensible by not more than two years at a time at the discretion of the Deputy Inspector-General, <ORG>. A police officer on deputation to the <ORG> retains his original position in the cadre of the district or range. While in the <ORG> he is eligible for officiating promotion in that branch but on reversion from <ORG> he assume his place in his original cadre. Sub-rule (2) of Rule 21.25 also prescribes that officiating promotion may be given in the district or range in the place of an officer deputed to <ORG> but such officiating post lapsing on the officer's reversion. Under sub-rule (3) of this rule when an officer while on deputation in <ORG> reaches a place in seniority in his district he is entitled to be considered for substantive promotion as if he was serving in that district but he shall be informed and given the opportunity of returning to his district police work. This sub-rule further prescribes that no officer on deputation to <ORG> shall be substantively promoted to Head Constable or higher rank unless both the Deputy Inspector-General, <ORG> and the Deputy Inspector- General of the range to which the officer belongs agree that he is qualified for such promotion by all the prescribed standards. It would appear that under this sub-rule <NAME> while on deputation with <ORG> earned his promotion as officiating Head Constables without his having to have passed Lower School Course in Phillaur and thus promoted to Head Constable out of 10 per cent of vacancies as having been found suitable for the promotion.

In the writ petition of <NAME> he raised the following four questions which according to him needed consideration:

"i) Whether the respondents were bound to absorb the petitioner in the C.I.D. Intelligence department where he had put in 23 years service and had excellant and unblemished service record?

ii) Whether the respondents are justified in repatriating the petitioner after more than 23 years of service and that too without giving him any benefit of 23 years of service which he has rendered in <ORG>?'

iii) Whether the respondents are justified in repatriating the petitioner as constable to his parent department when his juniors have been promoted and are working on the post of sub Inspectors and Inspectors?

iv) Whether the order of repatriation is discriminatory and violative of Articles 14 and 16 of the Constitution of India?

As to what relief <ORG> granted we have noted above.

We find that the respondents have not challenged their repatriation to their respective districts on the rolls of which they are borne but what they contend is that they should hold the same position there as they were holding in <ORG>. They submitted that while they were on deputation to <ORG> their juniors have been promoted and now if they go back they have to work under them. These contentions do not appear to us to be correct. For one the respondents do not have any right to hold on the post which they were having in <ORG> in their parent department and (2) they were holding the posts in <ORG> only on and hoc basis. Appellants have brought on record a chart to show that even Constables who were senior to the respondents are still working as Constables as they could not qualify for further promotion in terms of the Rules mentioned above. In the case of <NAME> no Constable junior to him has been promoted and there are 65 Constables who are senior to <NAME> who are still working as Constables. Respondents have been contended that as per sub-rule (3) of Rule 21.25 they were never informed and given no opportunity of returning to their respective districts after they reached their places in seniority of their districts entitling them to be considered for substantive promotion. In the case of <NAME> appellants have stated that old record of test for List-B was not traceable. However, <NAME> has given his unwillingness to undergo Intermediate School in the term commencing with effect from April 1, 1990 to October 1, 1990. For promotion from Constable to Head Constable passing of B-1 test is a must. <NAME> was not eligible to appear in the test for the first three years as he had not completed three years of service. Subsequently also he did not appear in any test held for the purpose. However, he was promoted on February 19, 1985 as officiating Head Constable by order of the Senior Superintendent of Police, Ludhiana from List C having been given exemption. Appellants have stated that since test is held in January every year circular/letters are issued to the organisations including then <ORG> where their employees are working asking them to appear in the test. This test is held on the same date throughout the State. The Constables who are eager to compete are always on the alert to appear in the test as it is known to all the Constables that the test is being held. Appellants have also brought on record that apart from the fact that every Constable on deputation in <ORG> would come to know of the test, the respondents were also individually informed except that in the case of one or two of the respondents records were not available to show that they had also been individually informed of the test being held. On the dates of holding of the test eligible candidates assemble at the prescribed place where the test is conducted. Several Constables serving in the <ORG> on deputation appeared in B-1 test. So it is very well known to every Constable wherever he may be, the appellants submit. It would, therefore, appear to us that there cannot be any excuse that the candidates were not aware of the holding of the test.

It is when submitted that deputation to <ORG> could not exceed a period of five years after the expiry of this period the respondents should have been sent back to their respective districts and that after all this period on deputation to <ORG> now asking them to appear in test would not only be irregular but arbitrary as well. We do not think that sub-rule (1) of Rule 21.25 limits the deputation to <ORG> for a maximum period of five years. In the first instance deputation is for three years and it can be extended for not more than two years at a time. It cannot be said that after three years the extension is for further two years and no more. We have to give an ordinary meaning to the words used in the sub-rule. We, however, agree with the respondents that every time deputation was extended they should have been informed of their rights in <ORG> while on deputation vis-a-vis their parent department.

Mr. <NAME>, learned counsel for the appellants, State of Punjab, submitted that repatriation of the respondents was necessary as Government thought of injecting fresh blood in CID. It appears to be rather a specious plea. It is not disputed that officers having put in more years than the respondents are still working on deputation in CID. No reason is forth-coming as to why the respondents are the only persons who are picked up to be repatriated. But since this question was not raised in these terms we are not called upon to decide the same.

It was then submitted by the respondents that deputation to <ORG> had no meaning as all the police departments in the State are headed by the Inspector General of Police who is also the administrative head of <ORG>. Reference in this connection was made to Rules 1.2, 1.4 and 1.5. It is, however, not necessary for us to refer to these Rules as we do not find any substance in this contention. Rules are statutory and each district/range in the State has a separate cadre of its officers. There is no cadre of officers upto the rank of Sub inspector in <ORG> and the officers upto this rank are drawn from various districts in the State. Merely because the administrative head of all the police departments in the State is one it cannot be said that there can no rule for deputation to a particular department in the whole of the police establishment in the State. If we refer to the Rule 21.25 Deputy Inspector General, <ORG> has complete disciplinary control over all the police officer while serving in that department. On this very reasoning, there is no scope for the argument that respondents be absorbed in <ORG> as this <ORG> has no cadre of its own upto the rank of Sub-Inspector.

It was then submitted that officers in CID are of exceptional merit and they have vast experience of conducting investigation and in fact they help the district police in the conduct of investigation and that they should be given exemption from appearing in tests or undergoing any training in <ORG> and that they should be promoted in 10 per cent quota meant for officers of special qualities. If that is done it will certainly be in violation of the statutory rules. Promotion has to be by prescribed standards. Moreover it is nobody's case that any vacancy exists to which the respondents could have been promoted. In any case we are not impressed with this argument.

Mr. <NAME> appearing for more of the respondents submitted that the case of <NAME> (CA 1297/95) was different. In his writ petition (No. 8979 of 1991) in <ORG> it was mentioned in order dated June 12, 1991 that <NAME> was working as Sub-Inspector in CID and was being repatriated as Head Constable to his parent department. <ORG> ordered that he shall be repatriated as Sub-Inspector and it shall be open to the authorities to determine his seniority in the parent department in accordance with law. On clarification sought by the <ORG> the court order dated March 6, 1992 states that it shall be open to the <ORG> to determine the seniority of <NAME> and post him to the post he was entitled to and that the order dated June 12, 1991 would not confer any benefit on him. We, therefore, fail to see how this case is any different or that <NAME> would be posted as Sub Inspector in his parent department on repatriation.

During course of arguments, certain decisions of this court were referred to on the question of deputation and the right of the deputationist on his repatriation. These, we may note. <CITATION> . [1991 Supp. (2) SCC 162], the appellant who was working as a Tracer in <ORG> Ahmedabad went to <ORG> by way of deputation. In the <ORG>, the appellant was promoted as Junior Draftsman and there was a proposal to promote him further as Surveyor-cum-Draftsman. But before this promotion could materialise, the <ORG> was wound up. The appellant was, therefore, reverted back to his parent department, i.e., <ORG> and posted as a Tracer and not as a Junior Draftsman. The appellant treated this as a reversion and challenged the same. This Court said that it was not reversion and that when the appellant left <ORG> and joined the <ORG>, he was a Tracer and he could go back only as a Tracer subject, however, that if in the meantime, while he was on deputation, he had qualified for promotion to a higher post in the parent department, that benefit could not be denied to him. The Court said that promotions earned by an employee on deputation did not enjoin any protection and that on repatriation, he could be accommodated only on its original post or to the post to which he stood notionally promoted in the parent department by having so qualified. <CITATION> . (1990) 1 SCR 414], the appellant who belonged to <ORG> was allocated to <ORG> on coming into force of <ORG>, 1961. He went on deputation as Circle Inspector in <ORG> and was later reverted back to his parent cadre in <ORG>. This was challenged by the appellant. This Court held that the appellant being on deputation could be reverted to his parent cadre at any time and he did not get any right to be absorbed on the deputation post. <CITATION> . [1994 Supp. (3) SCC 471]. it was held that when a deputationist was repatriated, he could not claim promotions in the parent department on the basis of officiation in higher post in the borrowing organisation. <CITATION> . Through Secretary, <ORG>, Administrative Reforms & Ors. [(1988) 8 SCR 147], the question before this Court which fell for consideration was whether the service rule requiring eight years of approved service as Section Officer both for the direct recruits as well as for promoters for being eligible for consideration for promotion to the Grade-I post in the <ORG> was arbitrary being in contravention of Articles 14 and 16 of the Constitution of India. This Court laid the following principle:

"The rule-making authority is competent to frame rules laying down eligibility condition for promotion to a higher post. When such an eligibility condition has been be Said that a direct recruit who is senior to the promotees is not required to comply with the eligibility condition and he is entitled to be considered for promotion to the higher post merely on the basis of his seniority. The amended rule in question has specified a period of eight years' approved service in the grade of Section Officer as a condition of eligibility for being considered for promotion to Grade I post of C.S.S. This rule is equally applicable to both the direct recruit Section Officers as well as the promotee Sections Officers. The submission that a senior Section Officer has a right to be considered for promotion to Grade-I post when his juniors who have fulfilled the eligibility condition are being considered for promotion to the higher post, Grade I, is wholly unsustainable. The prescribing of an eligibility condition for entitlement for consideration for promotion is within the competence of the rule- making authority. This eligibility condition has to be fulfilled by the Section Officers including senior direct recruits in under to be eligible for being considered for promotion. When qualifications for appointment to a post in a particular cadre are prescribed, the same have to be satisfied before a person can be considered for appointment. Seniority in a particular cadre does not entitle a public servant for promotion to a higher post unless the fulfils the eligibility condition prescribed by the relevant rules. A person must be eligible for promotion having regard to the qualifications prescribed for the post before he can be considered for promotion.

Seniority will be relevant only amongst persons eligible. Seniority cannot be substituted for eligibility nor it can over-ride it in the matter of promotion to the next higher post. The rule in question which prescribes a uniform period of qualified service cannot be said to be arbitrary or unjust violative of Articles 14 or 16 of the Constitution."

In view of the clear statement of law, the respondents before us cannot claim promotion in their parent department in contravention of statutory Rules as they do not satisfy the eligibility conditions.

<CITATION> . [], the appellant was appointed in <ORG> of the State Government as Second Division Clerk. He was sent on deputation to <ORG> which was then part of <ORG> as Assistant Civil Supplies Inspector. There he was promoted as Second Grade Civil Supplies Inspector. There was a seniority dispute between the appellant and Mr. <NAME> who was appointed in the Food Wind of <ORG>. The Court found that at all levels of appointments and promotions, the appellant was always senior to Mr. <NAME>. But fact remained that the appellant continued to be on deputation in the Food Wing of <ORG> right from 1967 to 1986. When the appellant was sought to be repatriated, he approached <ORG> which by order dated January 28, 1988 directed absorption of the appellant in <ORG> holding that he had not been given any performa promotion in his parent department and that there was no valid ground to reject his request for absorption and that the appellant was entitled for a direction to the respondents to absorb him in <ORG> in the post them told by him. The appellant was, thus, absorbed and was placed above <NAME>. The appellant was then promoted as Assistant Director on January 1, 1980. Similarly, <NAME> was also promoted as Assistant Director. The question before this Court was of the inter se seniority between the appellant and <NAME>. This Court agreed that as per Rules, the appellant could not have been sent on deputation to higher post than the post held by him in the parent Department. But then the Court said that he had uninterruptedly worked in <ORG> and under those circumstances though initially the appellant might have been mistakenly deputed to hold higher post in <ORG>, but "Since the appellant had obviously discharged his duties and higher responsibilities to the satisfaction of all concerned, at this distress of time, it is highly unjust to send him back to hold the post in the parent department which he was entitled to hold and the Tribunal is not right to interfere with action of the department in its absorption of the appellant as per its own earlier order". This judgment is quite distinguished and of no help to the respondents as the question which falls squarely for consideration before us was not there and the appellant in that case had been absorbed by the department. In the present case before us, there is no separate cadre to which the respondents or any one of them could be absorbed. <CITATION> . [], the appellant who was working in <ORG> as Inspector was sent on deputation to <ORG> at Nagpur. He remained there from 1961 to 1975 and earned promotion. His last promotion being that of Assistant Director. When he came back to his parent department, he was appointed as Assistant Director on ad hoc basis. While he was on deputation, his juniors in the parent department were appointed as Assistant Directors on ad hoc basis. After the decision of this Court in <CITATION> [] where it was held that all those officers who were appointed as Assistant Directors in <ORG> should be deemed to have been appointed substantively from the date of their ad hoc appointment. In consequence thereof, they became senior the appellant. This Court held that the appellant was similarly situated along with those who were granted benefit by this Court and merely because the appellant was working in the <ORG> at the relevant time, he could not be prejudiced. The Court extended the benefit given in <NAME> case (supra) to the appellant as well. Again this decision does not support the case of the respondents before us.

Concept of "deputation" is well understood in service law and has a recognised meaning. `Deputation' has a different connotation in service law and the dictionary meaning of the word `deputation' is of no help. In simple `deputation' means service outside the cadre or outside the parent department. Deputation is deputing or transferring an employee to a post outside his cadre, that is to say, to another department on a temporary basis. After the expiry period of deputation the employee has to come back to his parent department to occupy the same position unless in the meanwhile he has earned promotion in his parent department as per Recruitment Rules. Whether the transfer is outside the normal field of deployment or not is decided by the authority who controls the service or post from which the employee is transferred. There can be no deputation without the consent of the person so deputed and he would, therefore, know his rights and privileges in the deputation post. The law on deputation and repatriation is quite settled as we have also been in various judgments which we have referred to above. There is no escape for the respondents now to go back to their parent departments and working there as Constables or Head Constables s the case may be.

It is no doubt really harsh on the respondents to be sent back after they have served the <ORG> for number of years in higher rank though on ad hoc basis and now when they go back they have to work either as Constables or Head Constables. It was submitted before us that an employee could seek voluntary retirement after putting in 20 years of qualifying service and that <ORG> in the impugned judgment gave option to the respondents to seek voluntary retirement while still working in the <ORG> and holding higher ranks. This option can, however, be limited to only those respondents who have put in 20 years of qualifying service as per the relevant Rules. In our opinion, <ORG> was justified in giving such an option to the respondents to seek voluntary retirement. At the time when special leave petitions were filed against the impugned judgment of <ORG>, this Court directed that status quo be maintained while staying the impugned judgment of <ORG>. <ORG> in the writ petitions filed by the respondents granted stay of the orders of repatriation. After the impugned judgment, there was order of status quo by this Court. In this view of the matter, the respondents continued to be in the <ORG>. We affirm he impugned judgment of <ORG> to the extent that the respondents who put in 20 years of qualifying service in their parent departments and in <ORG> would be entitled to seek voluntary retirement from the ranks they are holding in <ORG> and the period of qualifying service would be counted upto the dare of this judgment. These options the respondents shall give within 30 days from the date of this judgment. The respondents who do not give such option and those respondents who have not put in 20 years of qualifying service would have to revert back to their parent departments.

It is in fact an admitted position that Constables on deputation to <ORG> have reached higher ranks and retired from <ORG> in those ranks. A hope, though not true, is instilled in officers like the respondents that they would continue in the <ORG> holding higher ranks till the age of superannuation. The conduct of the appellants now suddenly asking the respondents to go back to their parent departments when they have put in best years of their lives in <ORG> would appear to be rather unjust. It would have been more appropriate for the appellant to repatriate the respondents after the expiry of the initial period of deputation or at least they should have been told the consequences of their continuing on deputation and sudden repatriation. It would also be more appropriate, considering the fact that the deputation in <ORG> could be for any number of years, that the rules are amended and a separate cadre is created in <ORG> to absorb the officers, if they are on deputation for a number of years. It is submitted before us that Constables who have come on deputation to <ORG> retired while holding higher ranks in <ORG> and they earned their pension on the basis of their holding higher ranks though the pension was being paid by their parent department. This may be on the basis of relevant pension rules as applicable in the State. Now, if the respondents go back to their parent department and work their as Constables or Head Constables their emoluments would be reduced considerably and they would be deprived of getting higher pension when they retire.

Considering the whole aspect of the matter we affirm the order of <ORG> to the extent that option be given to all those respondents who have put in 20 years qualifying service to seek voluntary retirement from the <ORG> in the ranks they are holding and they will be deemed to have worked in <ORG> upto the date of this judgment. The option shall be given within 30 days.

Except as aforesaid the appeals are allowed and the impugned judgment is set aside. Writ Petitions filed by the respondents are dismissed. There will be no order as to costs.