PETITIONER: STATE OF MADHYA PRADESH(NOW MAHARASHTRA) Vs. RESPONDENT: HAJI HASAN DADA DATE OF JUDGMENT: 02/12/1965 BENCH: <NAME>, <NAME>: <NAME>, J.C. <NAME>, K. SIKRI, S.M. CITATION: 1966 AIR 905 1966 SCR (2) 854 CITATOR INFO : RF 1986 SC1556 (24) ACT: C.P. and Berar Sales-tax Act (21 of 1947), s. claim for refund--When can be ordered. HEADNOTE: The respondent was assessed to tax by the Assistant Commissioner of Sales-tax under the C.P. and Berar Sales-tax Act, 1947 on the turnover ,of his business and he paid the tax. After the order of assessment <ORG> gave a ruling that dyeing charges were not taxable under the Act. The respondent applied to the Assistant Commissioner, under s. 13 before its amendment in 1953 for refund, on the plea that the amount ,claimed represented dyeing charges included in his turnover. The Assistant Commissioner rejected the application, but <ORG> ordered the case to be returned to the Commissioner for examination of the claim for refund on merits. At the instance of the State, the Board referred to <ORG>, the question whether there was any bar to the examination on merits of claims for refund under s. 13 as originally ,enacted. <ORG> held that there was no bar.In appeal to this Court, HELD:The application for refund of tax was not 'maintainable under the section as originally framed. The Assistant Commissioner is, within the limits of his jurisdiction and authority, competent to decide all questions which arise before him; his orders are liable to be set aside in appeal or modified in revision. But under the Act, the Assistant Commissioner-who exercises the powers of the Commissioner-has no power to review his decision, and so long as his order is not set aside or modified,, a dealer cannot call upon him to ignore the previous order and grant refund contrary to the plain direction of his order. [857 C, H] Commissioner of Income-tax v. Tribune Trust L.R. 74 I.A. 306 applied. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1007 of 1964.

Appeal by special leave from the judgment and order dated September 13, 1961, of <ORG> (Nagpur Bench) in Civil Reference No. 1 of 1961.

<NAME> and <NAME>, for the appellant. The respondent did not appear.

The Judgment of the Court was delivered by <NAME>, J. By order dated April 17, 1952, the respondent <NAME> was assessed by the Assistant Commissioner of Sales Tax, Nagpur Region, to pay tax under the Central Pro-

<NAME>

vinces & Berar Sales Tax Act 21 of 1947 on the turnover from his business in yam for the period November 13, 1947 to November 1, 1948. The respondent paid the amount of tax assessed on July 8, 1952. Thereafter relying upon s. 13 of the C.P. & Berar Sales Tax Act, 1947 he applied on November 20, 1952 to the Assistant Commissioner of Sales Tax for an order refunding Rs. 873/10/- on the plea that in the turnover of his business were included dyeing charges which were not taxable under the Act, and which since the order of assessment were held by <ORG> to be not taxable. The Assistant Commissioner rejected the application, and the order was confirmed by the Commissioner of Sales Tax in appeal. <ORG>, Madhya Pradesh, however, set aside the order and ordered that the case be returned to the Commissioner "for disposal afresh in the light of the legal principles explained in Sheikh <NAME> of Balaghat v. The <ORG>(1)". During the pendency of the proceedings before the taxing authorities, s. 13 of the Act was amended with retrospective effect. It is claimed by the <ORG> that under the amended section the right to obtain refund in cases similar to those under examination was. taken away retrospectively. The <ORG> of Madhya Pradesh moved <ORG>r for a reference under s. 23 of the Act to <ORG>, and <ORG> referred the following three questions :

"1. Is ruling 57 (in Sheikh <NAME>'s case-3 S.T.C. 331) good law ? In other words, was the <ORG> right in holding that <ORG> decision in <CITATION> . Trust (A.I.R. 1948 P.C. 102) constituted no bar to the examination on merits of claims for refund made under the original section 13 of the Sales Tax Act XXI of 1947 within the time-limit mentioned in it ?

2. Has section 24 of Act XX of 1953 been validly enacted, in so far as it seeks to give retrospective effect to the amended section 13 of Act XXI of 1947-as from the very commencement of the latter on 1-6-47 ? and

3.If the answer to question No. 2 is in the affirmative, does sub-section (3) of the new section 13 constitute a bar to the examination on merits of the claim for refund made by the assessee in the present case ?"

(1) 3 S.T.C. 331.

L8Sup.CI/66-8 <ORG> held that by s. 13 of the Act as originally enacted, the respondent had "a valuable right to ask for refund of the amount of the tax paid by him in excess of the amount lawfully due" and that "the right to obtain a refund being a substantive right given to the respondent by the statute and not being a matter of mere procedure", this right could not be taken away except by clear and unambiguous words, and S. 13 as amended was not legislation which satisfied that test. <ORG> accordingly answered the questions as follows :

"1. Ruling No. 57 is good law, and, in our opinion, the <ORG> was right.

2. Section 24 of Act XX of 1953 has been validly enacted.

3. The new section 13 sub-section (3), does not bar an examination on merits of the claim for refund made on 20-11-1952 by the assessee."

With special leave, the State of Maharashtra, upon whom the rights of the State of Madhya Pradesh have devolved by virtue of the States Reorganisation Act , 1956, has appealed to this ,.Court.

We are of the view that the first question alone need be answered in this appeal, and on the answer we propose to record the claim made by the respondent must stand rejected. Section 13 of the Act, as originally enacted, and which applied during the ,year of assessment, read as follows :

"The Commissioner shall, in the prescribed manner and either 'by cash payment or, at the option of the dealer, by deduction of such excess from the amount of tax due in respect of any other period, refund to a registered dealer applying in this behalf any amount of tax or penalty paid by such dealer in excess of the amount due from him under this Act. Provided that no claim for refund shall be allowed unless it is made within twelve months from the date on which the order of assessment with or without penalty was passed or within six months from the date on which the final order is passed on appeal, revision, review or reference in respect of the order of assessment with or without penalty."

The amendment to S. 13 by Act XX of 1953 need not, for reasons already set out, be considered.

Section 13 , in terms authorised the Commissioner to grant refund to a registered dealer applying in that behalf, of any amount of tax or penalty paid by such dealer in excess of the amount due from him under the Act. The section implies that refund may be granted only of the amount which is not lawfully due, and whether a certain amount is lawfully due or not, must be determined by the Assistant Commissioner in making the order of assessment or re- assessment. The order of the Assistant Commissioner is undoubtedly not final : it is liable to be set aside in appeal or modified in a revision application under the provisions of the Act. But so long as the order passed by the Assistant Commissioner is not so set aside or modified, a dealer cannot call upon him to ignore the previous order, and grant refund contrary to the plain direction of the order.

There is abundant authority for the view that until it is set aside by appropriate proceedings under the Act which authorises the levy of tax, full effect must be given to an order of assessment, even if it be later found that the order was erroneous in law : e.g. Commissioner of Income Tax, Punjab, North-West Frontier and Delhi Provinces, Lahore v. <ORG>, Lahore(1). In that case the <ORG> which had been in previous years assessed to, and had paid, income-tax, claimed in respect of its assessment for the year 1932-33 that it was exempt from taxation. In appeal which was carried to <ORG>, the contention was upheld. Before the judgment of <ORG> was pronounced, assessments to income-tax were made on the <ORG> for the years 1933-34 to 1938-39. After the <ORG>'s decision, the <ORG> applied to the Commissioner of Income- tax for an order for refund of income-tax. <ORG> held in a reference under s. 66(3) of the Indian Income-tax Act that the assessments made for the years 1933- 34 to 1938-39 "were a nullity", and that the <ORG> could not be denied the relief. <ORG> reversed the order of <ORG> and held that the assessments which were duly made by the Income-tax Officer in the proper exercise of his duty were validly made and were effective until they were set aside.

The Assistant Commissioner appointed under the Act is within the limits of his jurisdiction and authority competent to decide all the questions which arise before him : his orders, it is true, are liable to be set aside in appeal or modified in revision as provided by the Act. But under the Act the Assistant Commissioner who exercises the powers of the Commissioner-has no power to (1) L.R. 74 I.A. 306.

review his decision, nor is he authorised to ignore his previous order, and to pass an order for refund inconsistent with his previous order which has not been set aside by appropriate proceedings.

It is somewhat unfortunate that a later decision of <ORG> in <CITATION> (1)-a case arising under S. 13 of the Bombay Sales Tax Act, 1946-which decided the identical question which arose in this appeal, was not brought to the notice of <ORG>. In that case it was held by <ORG> that an application for refund of sales tax paid under an order of assessment cannot be entertained by the Sales Tax Officer on the plea that the order was made on an erroneous view of the law, unless the order was set aside in appropriate proceedings by way of appeal or revision. The <ORG> in that case in a reference made under the Bombay Sales Tax Act disapproved of the view of <ORG> which had in arriving at its decision followed the precedent in Sheikh <NAME> case (2). Application for refund of tax was, therefore, not maintainable under s. 13 of the C.P. & Berar Sales Tax Act, 1947 as originally framed.

The appeal must therefore be allowed. The parties to bear their own costs in this <ORG> and in the High <ORG>. Appeal allowed.

(1) 8 S.T.C. 379. (2) 3 S.T.C. 331.


JUDGMENT

1. The plaintiff's suit in this case is to enforce payment of the amount due to her on two mortgages executed by the first defendant's father in July 1891. Of these the first, Exhibit C, is a usufructuary mortgage for Rs. 500. The second, Exhibit D, is a simple mortgage for Rs. 200. On the 4th September 1896 a sale-deed was executed by the first defendant's father in plaintiff's favour. The consideration Rs. 900 for the sale-deed was made up of Rs. 700, the principal amounts due on the two mortgages, Rs. 130, the interest on the simple mortgage bond, Rs. 55, the amount due to plaintiff for municipal tax which the vendor had covenanted to pay by the terms of the usufructuary mortgage-deed and certain sundry amounts which he had borrowed from the plaintiff and Rs. 15 paid in cash. The second defendant had obtained from the vendor a mortgage of the same property in 1893. He instituted a suit on it in 1905, brought the properties to sale and purchased them. The present plaintiff was the second defendant in that suit. The decree directed the sale of the property subject to the plaintiff's prior encumbrances.

2. The plaintiff claimed to recover in this suit as due to her under her mortgages Rs. 830, the amount due up to the 4th September 1896 as fixed in the sale-deed, Exhibit E, and Rs. 300-for interest subsequent to that date up to the 17th July 1908, the date of the plaint. She also claimed Rs. 98-5-4, the total amount of municipal tax paid by her for the property and Rs. 171-10-8 for repairs and improvements made by her.

3. The second defendant alleged that the plaintiff was not entitled to recover anything, contending that her mortgage rights over the property were destroyed by her purchase in the year 1896 and that she was not in law entitled to recover anything either on account of municipal assessment or repairs and improvements.

4. Both the lower Courts have held that the mortgages must be regarded as kept alive as against the second defendant. The District <NAME> allowed the interest claimed on the simple mortgage bond up to the date of plaint and further interest from the date of plaint to the date fixed for payment at l 1/8; per cent, per mensem, the rate stipulated in Exhibit D. He disallowed the amount claimed for municipal assessment and repairs and improvements. On appeal the District Judge held that the plaintiff was entitled to add the amount paid by her for municipal assessment and also the amount spent by her for restoring a room which had fallen down. The amount added to the <NAME> s decree for the expenses of the repairs was Rs. 128-60.

5. In Second Appeal the liability for Rs. 830 which was fixed as the principal and interest due on the mortgages on the date of the plaintiff's sale-deed is not objected to; but the remainder of the decree is impeached.

6. A preliminary objection has been taken by the learned vakil for the respondent on the ground that the liability for the debt not being resisted in <ORG> and the appeal being valued only with respect to the interest decreed from the date of Exhibit E (the sala-deed) the appellant is not entitled to attack the decree for the interest on the debt subsequent to the sale-deed. In the memorandum of <ORG> the grounds taken urge the second defendant's non-liability to the plaintiff for anything on the footing of her mortgages. But the appellant did not want to impeach in this Court the plaintiff's right to recover the amount found due on the date of Exhibit E. The preliminary objection is not sustainable. There is nothing to prevent the appellant from attacking only a portion of the decree, although the reason for the attack might cover the whole decree. The objection must therefore be disallowed.

7. The question whether the plaintiff's mortgages were destroyed by the sale (Exhibit B) was argued at the bar. A distinct argument was also urged on the point whether the plaintiff can claim interest subsequent to Exhibit E. It is unnecessary to decide whether the right under the mortgages is altogether destroyed, as the appellant's contention with regard to the claim for interest must be upheld on a point which is consistent with the mortgages being alive as against the appellant. The respondent contends that Section 101 of the Transfer of Property Act is applicable to the case, and that the encumbrances under the mortgages C and D must be taken to have continued to subsist as against the appellant after the date of Exhibit E as their subsistence was for the plaintiff's benefit, and that she is therefore entitled not only to the principle but also to the interest which Exhibit D gave her according to its terms. The appellant argues that Section 101 is not applicable and that, even if on the principle underlying that section the plaintiff is entitled to have the benefit of the encumbrances as against the second defendant, she is not entitled to the interest. And he draws attention to a passage in Dr. <NAME>'s work on Mortgages in which the learned author says that the Transfer of Property Act does not expressly provide for a case where the payment of the charge is contemporaneous with the purchase of the equity of redemption. It is unnecessary to consider whether the case comes within the express language of Section 101 or not, as the conclusion to be come to on the question of the plaintiff's right to subsequent interest would be the same whether the language of Section 101 itself would be applicable or only the principle recognised in that section. The section declares that the charge or encumbrance existing before the purchase of the property by the owner of the charge or encumbrance shall be extinguished unless its continuance would be for his benefit. The encumbrance is kept alive as against a puisne encumbrancer in the circumstances referred to in the section. It does not of course continue against the owner whose equity of redemption the encumbrancer has purchased. Beyond declaring that the encumbrance will subsist where It is for the benefit of the encumbrancer the section does not state what the exact rights on the encumbrance would be after the date of the purchase. Suppose a first mortgagee takes a further mortgage on the property for the amount duo on his first mortgage after the execution of a second mortgage in favour of a third party by the mortgagor, and suppose farther that according to the terms of the substituted mortgage the rate of interest agreed upon is less than that fixed in the previous mortgage instrument. It is quite clear that although the first mortgagee may claim priority for his mortgage as against the second mortgagee notwithstanding its merger in the substituted mortgage instrument, he cannot be entitled to the higher rate of interest fixed in his first mortgage-deed as he agreed under the substituted mortgage to receive a less rate from that date. The rule embodied in Section 101 is one which in equity and justice should be enforced to; protect the rights created under the first mortgage and the question in each case is what is the measure of protection which equity and justice require to be given. Now on the date of Exhibit E, the plaintiff agreed with her mortgagor to take the property for the price agreed upon according to that exhibit. She thenceforward enjoyed the property in lieu of the price she gave for it, although she was previously in possession of it as usufructuary mortgagee under Exhibit C. What was enjoyed by her till then as compensation for the amount advanced on the usufructuary mortgage, she agreed subsequently to enjoy in consideration of the whole price fixed on Exhibit E. She cannot therefore claim any further compensation from that date for any portion of the price. See <NAME> v. <NAME> (1891) I.L.R., 18 Calc., 164 at p. 181 (P.C.).. If for instance, she took a fresh mortgage instead of a sale-deed and gave up all claim to future interest, her covenant to that effect would be binding on her in a suit against the second mortgagee quite as much as it would bind her against her mortgagor himself. No case expressly deciding this point was cited on either side, but we observe that in several cases where priority was allowed for a previous mortgage on the ground that it was not extinguished no interest after the date of merger aw against the previous owner of the equity of redemption was allowed. See <NAME> v. <NAME> (1885) I.L.R., 8 <ORG>., 246, <CITATION> (1893) I.L.R., 16 <ORG>., 94, and <NAME> v. <NAME> (1906) I.L.R., 29 <ORG>., 37. Where a previous mortgage was merged in a subsequent one, interest was allowed as against a puisne encumbrancer only at the rate stipulated in the substituted mortgage. <NAME> v. <NAME> (1899) 1 Ch., 353, and <NAME> v. <NAME> (1883) I.L.R., 9 Calc., 961 (P.C.). <CITATION> (1898) I.L.R., 21 <ORG>., 143, cited for the respondent is not in point as it does not appear that the plaintiff in that case was in possession of the property enjoying it in consideration of the amount paid by him to discharge the prior encumbrance. We must therefore disallow the amount of Rs. 300 awarded to the plaintiff for interest subsequent to the date of Exhibit B when the second defendant became the purchaser of the property, i.e., 24th March 1908 [4th September 1896?].

8. The next question argued in Second Appeal relates to the plaintiff's claim for the amount paid by her for municipal tax. According to the provisions of Exhibit C the usufructuary mortgage deed, the mortgagor the first defendant in this suit agreed to pay all municipal taxes himself. The plaintiff's right with respect to the taxes was under the personal covenant entered into by the mortgagor. It is unnecessary to consider whether taxes due to a municipality would come within the expression "charges of a public nature" which the mortgagee in possession is bound to pay under Clause (c) of Section 76 of the Transfer of Property Act and the mortgagor is bound to pay when the mortgagee is not in possession under Clause (c) of Section 65 . In this case the mortgagee notwithstanding her being in possession was not bound to pay the municipal tax as the mortgagor expressly covenanted to pay it. The obligation of the mortgagor was not under Clause (c) of Section 65 of the Act, but under his covenant. The tax does not come under the expenses which the mortgagee is entitled to incur under Section 72 and add to the principal money due under the mortgage instrument, as the payment was not required either for the preservation of the property or for the protection of the mortgagor's title to it. It may be observed that the District Judge is wrong in supposing that the doors and windows of a house could be sold as moveable property of the mortgagor. Section 103 of the District Municipalities Act before its amendment in 1899 allowed the seizure only of moveable property in the possession of the occupier where he was the defaulter. The plaintiff was not the defaulter in this case. Covenants entered into by the mortgagor cannot be enforced against a puisne encumbrancer nor can the doors and windows of the house regarded as moveable property. See Peru <NAME> v. <NAME> (1885) I.L.R., 11 Calc., 164, <CITATION> (1890) I.L.R., 13 Mad., 518, and <CITATION> (1891) I.L.R., 14 Mad., 467

9. We must therefore disallow the amount awarded for municipal tax.

10. With respect to the award of Rs. 128 for the costs incurred by the plaintiff in making repairs, it is not contended before us that the repairs were not of such a character as would entitle a mortgagee to reimbursement but it is argued that the plaintiff did not spend the amount as mortgagee but as purchaser of the property as the repairs were made after the date of Exhibit E. No doubt the plaintiff had become the purchaser in 1896, but the contention, though it looks plausible, is not entitled to succeed. As the mortgage subsisted after the purchase, the plaintiff must be held entitled to add all monies to the principal amount which she would be entitled to do under Section 72 , if the sale did not take place. All rights incidental to the mortgage must subsist with the mortgage right itself. If the prior mortgagee spends money for preservation of the property from destruction, forfeiture or sale, it would be inequitable to hold' that the puisne encumbrancer should have the benefit of the expenditure incurred for that purpose without paying for it. The value of the property over which the puisne encumbrancer is entitled to a charge is enhanced by the expenditure and he cannot claim the benefit of the expenditure without making payment for it. The objection to the award for the repairs must be disallowed.

11. The result is that this Second Appeal must be allowed except with regard to the award for repairs. The decree of the District Judge will be modified as indicated above.

12. Both parties will pay and receive proportionate costs in all the Courts.

13. The time for redemption will be extended to three months from this date.


JUDGMENT

1. This appeal is preferred against the Judgment of the Division Bench of <ORG> dismissing a Letters Patent Appeal preferred by the <ORG> against the Judgment of a learned Single Judge. The learned Single Judge had allowed the writ petition filed by the respondent-assessee challenging the validity of notices issued under Section 148 read with Section 147(a) of the Income-tax Act. We are concerned herein with three Assessment Years, viz., 1961-62, 1963-64 and 1965-66. For the year 1961-62, the notice under Section 148 was issued on March 12, 1970, whereas in respect of the other two Assessment Years, they were issued on 6th November, 1990. The said notices were issued by the Income-tax Officer on the basis of the letter dated January 30, 1969 addressed by the Chief Mining Officer to him. The letter reads as follows:

Sub: Under reporting of coal raising and shortage of surface coal stock by selected Samla Colliery, Owner M/s. Selected Dalurband Coal Co. Pvt. Ltd., 137, Cotton Street, Calcutta.

A joint inspection was made in the Colliery mentioned above on 9-1-1967 by Sri <NAME>, Assistant Coal Superintendent, Rangunje Division and Sri <NAME>, Mining Officer of <ORG>, <ORG>.

As a result of underground measurement it was revealed that <ORG> under reported the raising figure to the following extent during the period from 1956 to 9-1-1967.

Gr. 1 : 1.36.390 M.T.

Shortage of surface coal stock was also detected to the extent of 387 M. T. of <ORG> on 9-1-1967.

It has been decided to charge royalty on the aforesaid quantity of coal by <ORG>.

This is for your information and necessary action.

2. After receiving the said letter, the Income-tax Officer recorded the reasons as required by Sub-section (2) of Section 148 and thereafter issued the aforesaid notices. Soon after receiving the noteces, the assessee approached <ORG> by way of writ petition, with the result mentioned above.

3. It is well settled by various decisions of this Court that the notice under Section 148 read with Section 147 can be issued only where the Income- tax Officer has reason to believe that the income profits or gains chargeable to tax had been under-assessed or escaped assessment and further that such escapement or under assessment was occasioned by reason of the failure of the assessee to disclose fully and truly all material facts necessary for the assessment of that year. (We are not concerned with Clause (b) of Section 147 here but only with Clause (a). In other words, there must be relevant material before the assessing officer upon which he must reasonably and rationally form the requisite opinion (belief). The question, therefore, is whether the letter of the Chief Mining Officer aforesaid does not constitute relevant material upon which the Income-tax Officer could have formed the requisite belief? It must be remembered that the formation of belief by the Income-tax Officer is essentially within his subjective satisfaction.

4. After hearing the learned Counsel for the parties at length, we are of the opinion that we cannot say that the letter aforesaid does not constitute relevant material or that on that basis, the Income- tax Officer could not have reasonably formed the requisite belief. The letter shows that a joint inspection was conducted in the colliery of the respondent on January 9, 1967 by the officers of <ORG> in the presence of the representatives of the assessee and according to the opinion of the officers of <ORG>; there was under reporting of the raising figure to the extent indicated in the said letter. The report is made by <ORG> and that too after conducting a Joint inspection. It gives a reasonably specific estimate of the excessive coal mining said to have been done by the respondent over and above the figure disclosed by it in its returns. Whether the facts stated in the letter are true or not is not the concern at this stage. It may well be that the assessee may be able to establish that the fact stated in the said letter are not true but that conclusion can be arrived at only after making the necessary enquiry. At the stage of the issuance of the notice, the only question is whether there was relevant material, as slated above, on which a reasonable person could have formed the requisite belief. Since we are unable to say that the said letter could not have constituted the basis for forming such a belief, it cannot be said that the issuance of notice was invalid. Inasmuch as, as a result of our order, the reassessment proceedings have now to go on we do not and we ought not to express any opinion on merits.

5. For the above reasons, the appeal is allowed. The orders of <ORG> are set aside. The reassessment shall now go on according to law and as expeditiously as possible. No costs.


<NAME>, J.

1. This suit was brought in 1884 for the purpose of establishing the plaintiff's right to a share of the property left by the late <NAME>.

2. At an early date in the suit the Court Receiver was appointed Receiver of the property, the subject-matter of the suit.

3. On the 15th August, 1885, a decree was made in favour of the plaintiff.

4. On the 16th September, 1886, this Court made an order, the effect of which has been much discussed at the hearing of the present application. That order provided that the Receiver should be at liberty to accept the offer made by <NAME> for a lease to him of all the properties appertaining to the said estate with certain exceptions for a term of five years from the date of Pooneah in the month of Assur 1293 at the annual rental of Rs. 75,000. It was further ordered by the same order that all necessary parties as the Registrar of this Court should direct do join in the lease, and it was further ordered that the Registrar do approve of the lease and execute the same for and in the name of the plaintiff and the infant defendant, and cause the same to be registered ; and it was further ordered that the Registrar do also execute the lease for and in the name of the defendant <NAME> in the event of her not executing the same on the same being duly tendered to her for that purpose.

5. <NAME>'s offer was accepted by the Receiver and acted upon by both parties. On the 18th September, 1886, <NAME> Soor deposited with the Receiver Government Securities of the nominal value of Rs. 20,000 as security for his due performance of the covenants of the izarah, and on the same date paid the Receiver the sum of Rs. 20,000 on account of the izarah rent for the then current Bengali year 1293, and the Receiver thereupon granted to him amulnamahs, the effect of which was to put him in possession of the property. Although the proposed lessee obtained possession and the Receiver obtained rent from him no lease has yet been executed.

6. I am satisfied from the correspondence that the delay has not been caused by any default on the part of <ORG>. On the other hand I do not think that there has been any willful default on the part of any of the parties to the suit.

7. On the 27th April, 1887, a decree was made by <ORG> dismissing the suit. The result of such decree is that the defendant <NAME> is declared entitled to the property of her late husband.

8. This summons was taken out on the 9th of January, 1888, by <NAME>; it requires the defendant <NAME> to show cause why the izarah should not be completed, and the draft submitted to the Registrar for approval, and also why the Government Securities for Rs. 20,000 deposited with the Receiver as part security for the performance of the covenants of the izarah should not be retained by the Receiver pending the settlement of the izarah and the execution thereof by the Ranee, or in the alternative why they should not be made over to <ORG> for safe custody pending the completion of the izarah, and to show cause why such securities should not thereafter remain in the custody of the Receiver or of the <ORG>, as the case might be, during the term of the izarah to be dealt with only subject to the order of this Court.

9. With respect to the execution of the izarah there are three questions for me to determine:

1. Will the Court entertain an application by a proposed lessee with whom a contract for a lease has been made for the execution of a lease, or is it necessary that in order to enforce his right he should bring a suit for specific performance?

2 Supposing such application to be possible when a suit is pending, does the dismissal of the suit prevent such an application?

3. Are the circumstances of this case such as to justify the <ORG> in refusing an order for the execution of the lease?

10. I do not think that there can be any real doubt as to the determination of the first question.

11. The <ORG> in managing property pending suit, and in managing property which is being administered by the (<ORG>, has occasionally to sanction leases, and to require the execution of such leases. Summary orders are made in England for the execution of leases not only by the parties to the suit, but also by the lessee, and I find that in a case cited at p. 1063 of Darnell's Chancery Practice Carne v. <NAME> 17 W.R. (Eng.) 342 (837) an enquiry was directed as to the damages which a lessee who had repudiated his contract should pay. On reference to the report of that case I find that the lessee happened to be a party to the suit, but this circumstance I do not think makes any difference. In that case the Master of the Rolls declined to order specific performance, but damages afforded apparently a complete remedy against the lessee. The contract for a lease is made with the <ORG>, and as pointed out by Lord Justice <NAME> in the case I have mentioned, the approval by the Judge of the offer constitutes the contract. I think that a <ORG> has complete power to enforce summarily a contract made by it when managing or administering an estate, whatever that contract may be.

12. With regard to the second question, it must be remembered that the contract was completed and acted upon before the suit was dismissed, and in the ordinary course the lease would also have been signed before that event happened.

13. It is admitted that the rights of the lessee are not affected by the dismissal of the suit, but it is contended that his remedy is altered. I do not assent to this contention. The lease is wholly independent of the result of the suit. I do not think that the fact that the <ORG> has ceased to manage the property takes from it the power of enforcing the performance of subsisting contracts made by it. The dismissal of this suit only determines the rights of the parties inter se, and I do not think that the dismissal of the suit would any more than any other form of decree affect the remedies of the lessee.

14. With regard to the third question I do not think that there are any circumstances in this case which would justify me in refusing an order for the execution of a lease. In terms of this summons I make such order.

15. As to the security deposited by the lessee, he so deposited it with the <ORG>, and relying on the safety which would be ensured by its being kept by the Receiver. I do not think it would be right to require the lessee to leave the money with the Ranee, who has a limited interest only.

16. The securities deposited by the lessee with the Receiver will be paid into <ORG> to the credit of an account to be entitled "Andool Raj Lease Security Account." The interest can be, from time to time, paid out to the lessee, but the principal cannot be paid out except on notice to the lessee and to the <NAME>, or in case of her death the person or persons then entitled to the property subject to the izarah. The <ORG> must pay the costs of this application. I certify for counsel.


CASE NO.: Appeal (civil) 5893-5894 of 2005 PETITIONER: <ORG> RESPONDENT: <ORG> and Anr. DATE OF JUDGMENT: 26/09/2005 BENCH: <NAME> & <NAME> JUDGMENT:

JUDGMENT <NAME>, J.

Leave granted.

Challenge in these appeals is to the judgment rendered by <ORG> of <ORG> setting aside the order passed by a learned Single Judge and directing the parties to place their respective stands before <ORG> as regards the claim made by respondent No. 1 in respect of the properties where it claimed to be the tenant.

Background facts in a nutshell are as follows:

Appellant filed a suit in the court of IV Additional Chief Judge, <ORG>, Hyderabad for recovery of Rs. 20,91,319 from respondent No. 2 a proprietary concern represented by its proprietor Dr. <NAME> under Order 37 Rules 1 and 2 of the Code of Civil Procedure, 1908 (in short the `CPC') inter alia with the following prayers:

(a) a decree for Rs. 20,91,319;

(b) and future interest at the agreed rate of 36% p.a. on the said amount from the date of the suit till the date of payment.

The claim of the plaintiff-appellant, according to it, arose on account of non payment of the aforesaid sum which was covered by a demand promissory note dated 20.3.1995 executed by aforesaid Dr. <NAME> in favour of the plaintiff and thereby acknowledging the liability against the value received. The said demand promissory note indicated the aggregate amount of quarterly instalments agreed to be paid by Dr. <NAME>. Post dated cheques were issued by him in respect of quarterly instalments which were dishonoured. Though summons were served, he did not enter appearance and also did not file any application for leave to defend the suit. The IV Additional chief Judge, <ORG>, Hyderabad passed a judgment and decree in terms of the prayers as noted above. Cost of the suit was assessed at Rs. 45,491. The appellant-plaintiff moved for execution of the decree which was transmitted to <ORG> being Execution Case No. 15/1998. Dr. <NAME> entered appearance in the said execution petition. On 11.1.1999 a learned Single Judge of <ORG> passed an order of injunction restraining said Dr. <NAME> from alienating, dealing with or disposing of any of the properties contained in Schedule A. B and C of tabular statement filed along with Execution Petition. An opportunity was given to the parties to-file affidavits. On 22.1.1999, Dr. <NAME> filed a petition purportedly under Order 9 Rule 13 CPC before the trial Court to set aside the ex-parte decree and order dated 21.8.1996. It was claimed in the petition that <ORG> was a proprietary concern and Dr. <NAME> was the proprietor and that he had no knowledge of the suit proceedings. The application was rejected by order dated 21.3.2000 on the ground that perusal of records revealed that suit summons were received and notice of attachment was also received. It was noted that the notice of attachment was personally served on Dr. <NAME>.

Challenging the said order, a Civil Revision Petition No. 3041 of 2000 was filed before <ORG> which was disposed of on 29.9.2000. Dr. <NAME> was directed to deposit half of the decretal amount and costs within 8 weeks. Application was filed for extension of time to deposit the amount. However, no deposit was made. On 4.3.2003, fresh tabular statement along with supporting affidavits was filed by the appellant with the leave of the <ORG> and copies were served on respondent No. 2-Dr. <NAME>. In the tabular statement certain flats were shown as immovable properties to be brought to sale for satisfaction of the decree. By order dated 5.3.2003, a learned Single Judge directed attachment of the properties mentioned in column 10 of the tabular statement filed with the affidavit dated 4.3.2003 with leave of the <ORG>. It was however indicated in the order that if the judgment debtor pays the decretal amount to the receiver within four weeks from the date of order the receiver would not take any further steps in respect of the properties. Stand of the appellant is that pursuant to the said orders symbolic possession was taken by the receiver on 26.3.2003. G.A. No. 3156 of 2003 was filed by respondent No. 1 stating therein that it is a public limited company incorporated in 1995 with an authorized share capital of rupees two crores. The company has taken over the business of <ORG> which was the proprietary concern of Dr. <NAME>. The company is a tenant under Mrs. Prema <NAME>, mother of Dr. <NAME>. Since the receiver was appointed without notice to the Company, the substantial rights and interest over the properties as tenants were being affected. The appellant filed affidavits in opposition to the intervention application highlighting several aspects. It was clearly stated that there was no tenancy as claimed and in any event Smt. Prema <NAME> had at no point of time come to <ORG> claiming that she was the landlady in respect of the properties which were claimed to be rented out to the company. Learned Single Judge by order dated 5.8.2003 held that the order appointing the receiver is one of the modes of the execution of decree under Order 21 Rule 58 CPC. The respondent No. 1 was not the owner of the flats and the owner of the flats had not come forward with any claim or objection to attachment of the property. The respondent No. 1, therefore, cannot have any independent right in respect of the properties. The High <ORG>, therefore, dismissed the application being G.A. No. 1674/2003. It accepted the request of the appellant herein for police assistance to the receiver for obtaining vacant possession.

Against the said order, two appeals were filed before <ORG> and as noted above, <ORG> set aside the order of learned Single Judge. It was of the view that on the basis of affidavits it was not possible to say that transfer if any made by Dr. <NAME> to the company is a fraudulent transfer and the matter has assumed the proportion of a full blown suit. Accordingly, it inter alia gave the following directions:

``In these circumstances, it is not possible only on affidavits to say that the transfer, if any, made by <ORG> to the company is of a fraudulent transfer which is voidable under Section 53 of the Transfer of Property Act and thereafter, the flats can be sold here and now even if these seem to be in the ostensible occupation, possession or tenancy of the incorporated company.

Our order and observations are made without prejudice. The matter has assumed the proportions of a full blown suit although a suit there shall not be put a trial on evidence in <ORG> itself on the basis of the 1976 amendments of the Code.'' In support of the appeals, learned counsel for the appellant submitted that a new dimension has been given by <ORG>. Admittedly, respondent No. 1 does not claim any right of ownership over the attached properties. No claims of the nature set forth by the respondent No. 1 can be examined in terms of Section 47 or Order 21 Rule 58 CPC. By the impugned judgment, <ORG> has enlarged the scope of the execution proceedings and has treated it as a full blown suit without even recording any reason as to how the respondent No. 1 has any adjudicable interest in the proceedings. The question of tenancy cannot be decided by <ORG>.

In response, learned counsel for respondent No. 1 submitted that what they were interested is not determination of any ownership rights. The company only claimed to be a tenant. Even if it is held that they were trespassers, they cannot be evicted except with due process of law.

<ORG> order is clearly unsustainable on more grounds that one. Respondent No. 1 claimed its tenancy from Mrs. <NAME>. Her application to be impleaded as a party in the present proceedings was rejected. At no point of time she had pressed a claim of being the owner of the property. It is to be noted that the appellant has not accepted that the respondent No. 1 was a tenant in respect of the attached properties. In any event, the question of tenancy cannot be decided by <ORG>.

<ORG> cannot go beyond the decree. It is the settled position in law which flows form Section 38 of <ORG>; except when the decree is a nullity or is without jurisdiction. The crucial expression in Section 47 is ``All questions arising between the parties to the suit'' ``or their representatives''. Order 21 Rule 54 deals with attachment of immovable property, while Rule 58 deals with adjudication of claims to, or objections to attachment of property. Case of respondent No. 1 is not covered by Section 47 or Order 21 Rule 54 or Rule 58. <ORG> misconceived the nature of claim set up by respondent No. 1. Learned Single Judge rightly noted that respondent No. was not having independent right to the properties. It found that the right claimed was as assignee under the judgment debtor. The agreement, if any, in that regard was not produced before the <ORG> and, therefore, learned Single Judge drew adverse inference. Before <ORG>, the stand of respondent No. 1 was that it was a tenant. Without indicating any reason as to how reasoning of learned Single Judge was wrong <ORG> enlarged the scope of the controversy and directed the Execution <ORG> to decide question of tenancy which is legally impermissible.

<ORG> unnecessarily enlarged the scope of the controversy observing that the matter has assumed the proportion of a full blown suit. It permitted <ORG> to deal with the matters which are clearly beyond the scope of its adjudication. We, therefore, set aside the impugned order of <ORG> and affirm that of the learned Single Judge of <ORG>. However, it is made clear that if the question of dis- possession of respondent No. 1 arises, even if it is treated to be a trespasser the same can only be decided in accordance with law. With the aforesaid observations, the appeals are allowed but without any order as to costs.


PETITIONER: CONAL BIHIMAPPA Vs. RESPONDENT: STATE OF KARNATAKA & ORS. DATE OF JUDGMENT11/08/1987 BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH DUTT, M.M. (J) CITATION: 1987 AIR 2359 1987 SCR (3) 885 1987 SCC Supl. 207 JT 1987 (3) 321 1987 SCALE (2)323 CITATOR INFO : F 1991 SC 235 (6) RF 1991 SC1244 (9) ACT: Inter se seniority between direct recruits and promotees amongst the officers of <ORG> relating to. HEADNOTE: Under the relevant Recruitment Rules relating to Class I junior scale posts, there was a quota system--two-thirds of the vacancies had to be filled up by promotion by selection from Class II officers and the remaining one-third by direct recruitment by competitive examination to be held by <ORG>. When direct recruitment was not made timely as envisaged by the scheme in the Rules, officiating promotions were given in respect of the posts covered by the direct recruit quota. Such temporary promotions remained effective for a number of years and later when the vacancies within the direct recruitment quota were filled up, the appointments made in the later years were deemed to carry weightage for seniority on the footing of deemed filling up when the vacancies had arisen. Thus, the dispute as to seniority inter se between those who had manned the promotional posts beyond 2/3rds limit and the direct recruits subsequently appointed, arose for judicial determination. This <ORG> in V.P. <NAME>, etc. v. <ORG> and Ors., [1976] 1 SCR 313 had dealt with a similar situation with reference to the same set of rules, and with a view to implementing the rule of this <ORG> in <NAME>'s case, the <ORG> government had issued an official memorandum on 5.7.75, laying down guide- lines for determination of the seniority between the direct recruits and promotees, and accordingly, gradation list of the junior scale officers as on 30.6.73 was drawn up, and notified on 10.8.75. By a later notification dated 2.2.77, a further gradation list was published. Then, on a representa- tion by the 1974 batch of direct recruits for refixation of inter se seniority in the gradation list taking into account the carried forward vacancies, <ORG> made an order on 22.5.80 to the effect that the 1974 batch of direct recruits should be shown immediately below serial number 64 and above serial number 65 in the continuation gradation list published on 2.2.77. 886 Aggrieved by this government direction, some promotees moved <ORG> under Article 226 of the Constitution for protection of their seniority, and aggrieved by the decision of <ORG>, both, the direct recruits and promotees moved this <ORG> for relief by appeals by special leave and writ petitions. The promotees challenged the propriety of the direction of <ORG> to modify the gradation list by applying the quota rule, while the direct recruits sought to have full application of the quota rule instead of the limitation of three years, and the consequen- tial benefits. Allowing the appeals and the writ petitions of the direct recruits and dismissing the appeals by the promotees, the <ORG>, HELD: The rule of this court in V.P. <NAME>, etc. v. <ORG> and others,  1 SCR 313 has to be given full effect. The appeals and writ petitions of the direct recruits have to succeed and those by the promotees have to fail. The <ORG> hopes the <ORG> of Karnataka will not demote anyone who has been in a promotional post for several years in the Class II service as a consequence of this decision, but the gradation list has got to be adjusted to fit into the principles indicated in the judgment. No justification was shown as to why the <ORG> of Karnataka failed to comply with its obligation of making recruitments in accordance with the quota system. Once the <ORG> frames rules, the rules are binding on the <ORG>, and like individuals, the <ORG> has got to resulate its conduct in accordance with the rules; in fact, the <ORG> has to observe them all the more. The <ORG> hopes that the <ORG> of Karnataka in the years ahead will comply with the quota rule with regularity so that a litigation of this type may not arise again. [907D-F] Upon a suggestion of the <ORG>, counsel for the parties filed charts, containing recast gradation list on the basis of the claims advanced before the <ORG>---showing (1) how it would be when the full claim of the promotees was granted and (2) how different it would look when the total claim of the direct recruits was allowed, and the <ORG> notices that the process of pushing up and down would be inevitable, but would be within reasonable limits and no irreparable preju- dice was apparent. [907H; 908A-B] OBSERVATION: The <ORG> was struck by the innumerable rules framed within a period of about thirty years to cover the field relating to constitution, recruitment and provi- sion for other conditions of service. It is proper that service rules should be simple, making 887 reasonable provision for necessary aspects. While framing such rules, the relevant provisions of the Constitution and the laws in force hove to be kept in view. There should be no frequent alteration of the service rules. Exigencies of circumstances and unforeseen situations will certainly justify alterations. Those would be indeed rare occations. [905H; 906A-B] Experience shows that legal battles are fought in court between Government servants--whether an individual pitched against an individual or a group against a group; this embitters relationship inter se and often results in a switch-over of attention from public duty to personal cause. Frequent litigations against the <ORG> or the higher author- ities in the hierarchies of administration wipe out rever- ence, loyalty and the sense of discipline, and substitute these by anger, disrespect and ram:our. In the process, fellow-feeling is lost and the sense of brotherhood vanish- es. The net result of all this is the deprivation of the efficiency of the bureaucratic community to serve the socie- ty. The undue growth of service litigation within the four decades of independence clearly calls for these observa- tions. As and when the occasion has arisen, the <ORG> has sought to draw the attention of the <ORG> as the ' employer as also the government servants to this aspect of the mat- ter. This has been done not with a view to subjecting any litigant to undue criticism but with the fond hope that it would help the problem to receive adequate attention. The <ORG> is surprised that the words spelt out in the different judgments have fallen on deaf ears. Thereby the most power- ful wing in the administrative set up is gradually moving away from its designated path. There have been cases where officers have been in court, litigating over service dis- putes for about twenty-five to thirty years of their career, which would mean almost three-fourth of their service peri- od. What would be the contribution of such officers to the public service, can be well imagined. Very often a public officer is forced into litigation as he gets no justice from his superior. There are also several instances where an officer drags the employee into litigation without a cause of action. These are matters which must be taken into ac- count without further loss of time and with fortitude so that the most effective wing of the administration does not further lose its service ability. [906B-G] A public servant is in the position of a trustee. Social power vests in him for rendering service to the community. Every public servant has to be cognizant to that obligation. Once the level of that consciousness grows up, there is bound to be a corresponding fail in the attitude 888 to litigate over small issues. It is for the privileged public servant as also his employer to share this philoso- phy. [906H; 907C] V.P. <NAME>, etc. v. <ORG> & Ors.,  1 SCR 313; M.G. Kadali v. <ORG> of Karnataka & Ors.,  2 K.L.J. 453; <CITATION> .,  3 SCR 372; <CITATION> .,  2 SCR 703; <NAME> case,  Suppl SCR 491; <CITATION> .,  3 SCR 390; <NAME>'s case,  2 SCR 979; Col. <CITATION> .,  1 SCR 1036; <CITATION> ,  2 SCR 165; <CITATION> .,  2 SCR 165; <CITATION> .,  3 SCR 431; <CITATION> .,  1 SCR 70; O.P. Singla and Anr., etc. v. Union of India and Ors.,  1 SCR 351; <CITATION> ,  2 SCR 165; <CITATION> ,  1 SCR 1037; <CITATION> ,  3 SCR 271 and Dr. T.C. Siddapparadhya JUDGMENT:

& ORIGINAL/APPELLATE JURISDICTION: Writ Petition (Civil) No. 811 of 1986 etc. etc. (Under Article 32 of the Constitution of India).

<NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and <NAME> for the Petitioner/Appel- lant.

<NAME>, Additional Solicitor General, <NAME>, <NAME> and <NAME> for the Respondents. The Judgment of the Court was delivered by <NAME>, J. The obstinate problem of inter se seniority, this time amongst officers in <ORG> has fallen for determination in this group of appeals by special leave and writ petitions under Article 32 of the Constitution at the instance of both direct recruits and promotees.

It is not disputed that under the relevant Recruitment Rules of 1957 in regard to Class I Junior Scale posts there was a quota system--

two-thirds of the vacancies had to be filled up by promotion by selection from Class II Officers and the remaining one- third by direct recruitment by competitive examination to be held by <ORG>. When direct recruit- ment had not been made timely as envisaged by the scheme in the Rules officiating promotions were given in respect of posts covered by the direct recruit quota. Such temporary promotions remained effective for a number of years some- times varying between 5 and 8--and later when the vacancies within the direct recruitment quota were filled up, the appointments made in latter years were deemed to carry weightage for seniority on the footing of deemed filling up when vacancies had arisen. Thus the dispute as to seniority inter se between those who had manned the promotional posts beyond the 2 3rds limit and the direct recruits subsequently appointed has come for judicial determination. A three-Judge Bench of this Court in V.P. <NAME> etc. v. State of Mysore & Ors., [1976] 1 SCR 315 dealt with a situa- tion of this type with reference to the same set of Rules. A similar dispute came before <ORG> in a bunch of writ petitions filed both by promotees and direct recruits and in view of common questions of fact and law involved therein, <ORG> disposed them by a common leading judgment in the case of <NAME> v. State of Karnataka & Ors., [1982] 2 KLJ 453. <ORG> noticed the ratio in <NAME>'s case and found that with a view to implementing the rule in <NAME>'s case, <ORG> issued an official memorandum on 5.7.1976. laying down guidelines for determination of seniority between the direct recruits and promotees. The Gradation List of Junior Scale officers as on 30.6.1973 was drawn up following such guide- line and was notified on 10.8.1976 with the following ex- planatory cover note:

(i) Between 2.12.1957 and 10.9.1959, the number of substantive vacancies were thirty- nine and of those, twenty-six were promotional and thirteen were the share of direct re- cruits. The first fifteen of the promotional posts were given to allottees and the remain- ing eleven to promotees. In the absence of direct recruitment, these thirteen posts were carried forward;

(ii) Between 11.9.1959 and 26.10.1964 (when 1962 direct recruits became due for promotion), the vacancies were seventy-six, of which fiftyone were available for direct recruits and twentyfive for promotees in view of the change in the proportion in the 1959 Rules. Twentythree substantive vacancies were given to direct recruits of 1962. The net result, therefore, was 13 direct recruit posts of the earlier period and twentyeight of this period were carried forward;

(iii) After October 1964, the vacancies were classified on annual basis. Upto 7.10.1971, sixty vacancies were filled up by promotion. As noticed earlier fortyone direct recruits vacancies had been carried forward and thirty- five fresh vacancies were available to direct recruits. Eleven vacancies were filled up by direct recruitment and sixtyfive were carried forward.

By a latter notification dated 2.2. 197 1, when a further gradation list was pub- lished, the following explanatory note was added:

"(i) During the period 7.6.1974 to 15.7.76 (when direct recruits of 1974 were eligible for confirmation), eleven substantive vacan- cies were available on the basis of the perma- nent strength of the cadre;

(ii) Out of one hundred and thirty- three temporary posts available during that period, eightynine posts were assigned to promotees. The direct recruitment vacancies carried forward from the earlier period. The recruits of the 1964 batch were assigned ranks taking into account the direct recruitment vacancies carried forward for the previous period."

On a representation by the 1974 batch of direct re-

cruits for refixation of inter se seniority in the Gradation List taking into account only the permanent posts in the cadre and by taking into account the carried forward vacan- cies, <ORG> made an order on 22.5. 1980, to the effect that the 1974 batch of direct recruits should be shown immediately below serial number 64 and above serial number 65 in the continuation Gradation List published on 2.2. 1977.

Certain promotees being aggrieved by this Governmental direction approached <ORG> under Article 226 for relief claiming protection of their seniority. <ORG> classified their contentions into the following five:

(i) The only basis for determination of inter se seniority of officers in a cadre--whether by promotion or direct recruitment-should be the date of entry into the cadre and the quota rule is not available to be used for pushing up or down officers of the cadre;

(ii) Even if there be any 'carry forward' it should not extend beyond three years;

(iii) Quota rule should be applied taking into account both substantive as well as temporary vacancies in the cadre;

(iv) The quota rule did no longer operate in regard to the junior scale officers when the 1959 rules became operative; at any rate it was clearly so when the 1966 Rules came into force, and

(v) The impugned Government order of 1980 was invalid and liable to be quashed on several grounds, one of them being that it was made without providing an opportunity to the promo- tees who were adversely affected by it. <ORG> analysed the judgment of this <ORG> in <NAME>'s case and also referred to, and relied upon, the observations in Col. <NAME>'s case and with reference to the issues catalogued above came to the conclusion as stated below in its own words:

(i) "If promotions have taken place in excess of the quota for promotion, pushing down the promotees promoted in excess of their quota or if direct recruitment was done in excess of the quota for direct recruitment, pushing down direct recruits appointed in excess of their quota in a necessary concomitant of the quota rule. Carrying forward of direct recruitment vacancies or promotional vacancies to the next recruitment period is merely the consequence of such pushing down. (What was perhaps in- tended to be said was that pushing down was the direct outcome of the mandate to carry forward) we are unable to accept the conten- tion of learned counsel for the promoteepeti- tioners that there should be no such pushing down or such carry forward."

(ii) "In the light of the above ruling of <ORG>, it must be held that carry forward of direct recruitment vacancies cannot extend beyond three years. However, this ruling of <ORG> (In <NAME> case) does not affect the finality and binding character of the earlier judgment of <ORG> in <NAME>'s case which specifi- cally dealt with the Grada-

tion List of Junior Scale officers as on 1.1. 1972, and gave direction as to how a fresh Gradation List should be prepared. Those directions are bound to be obeyed while pre- paring such Gradation List of officers who entered that cadre upto 1.1.1972 without any limitation as to the period upto which promo- tional or direct recruitment vacancies should be carried forward to the next recruitment period. But such carry forward cannot exceed three years after 1.1.1972."

(iii) "The above ruling of <ORG> (<NAME>'s case) is binding on all courts under Article 141 of the Constitution. It is not open to us to speculate what would have been the conclusion of <ORG> if it had known the correct factual position that the cadre of Junior Scale officers consisted both of permanent and temporary posts. That the promotee-petitioners in the present writ petitions were not parties to <NAME>'s case, in no way detracts from the binding character of the law declared by <ORG>."

(iv) "Hence, we reject the contention that 1959 Rules abrogated the quota rule in regard to recruitment to the cadre of Junior Scale officers ...... We, therefore, reject the contentions of learned counsel for promotee- petitioners that after the 1966 Rules came into force, the quota rule ceased to apply to the recruitment to the cadre of Junior Scale officers and that thereafter the date of entry into the cadre, whether by direct recruitment or by promotion, became the only basis for determining the seniority in that cadre."

(v) "<ORG> examined the individual cases of both the groups and finally directed dismissal of <ORG>'s (or promotee) writ application as also of the direct recruits of 1976 and 1977. It further quashed the Govern- ment order dated 22.5. 1980 by which certain modifications were made in the Gradation List of 1976 and called upon <ORG> to make appropriate alterations in the Grada- tion List of 10.8. 1976 and the continuation list of 2.2. 1977 on the basis that the carry forward rule should operate for a maximum period of three years subsequent to 1.1. 1972."

We have before us a batch of appeals by special leave and two writ petitions under Article 32. Both the writ petitions are by direct recruits; Civil Appeal Nos. 2906 and 2910 and 2911 of 1984 are by promotees while Civil Appeal Nos. 2902 to 2905 to 2907 to 2909 of 1984 are by direct recruits. The promotees challenge the propriety of the direction of <ORG> to modify the Gradation List by applying the quota rule while the direct recruits seek to have full application of the quota rule instead of the limitation of three years and have asked for consequential benefits.

This group of cases has been heard at great length and learned counsel for the parties have produced a lot of papers. On looking into the matter objectively in the back- drop of <NAME>'s decision we are of the view that if the following aspects are answered all that arose for judicial determination would be appropriately met. Those aspects are:

(i) What is the effect of the quota rule in the matter of fixation of inter se seniority in the Gradation List so far as recruits from different sources are concerned?

(ii) Though admittedly in 1957 under the relevant rule, a quota existed, was that basis altered or given up during the relevant peri- od?

(iii) What is the effect of this <ORG>'s judgment in <NAME>'s case? Was the High <ORG> correct in observing that this <ORG> would not have come to the conclusion that quota was confined to substantive vacancies only if the true state of facts was known?

(iv) What is the effect of the observation in <NAME>'s case and does it supersede the rule in <NAME>'s case?

(v) Does the situation highlighted in this case require any other direction? It is a well-settled position in law that where recruit-

ment is from two sources to a service, a quota rule can be applied fixing the limits of recruitment from the two sources. ( <CITATION> .,  3 SCR 372.

FIRST ASPECT In S.G. Jaisinghani v. <ORG>, [1987] 2 SCR 703 a Constitution Bench of this Court observed:-

"The Solicitor-General on behalf of respond- ents 1, 2 and 3 submitted that the quota rule was merely an administrative direction to determine recruitment from two different sources in the proportion stated in the rule and a breach of that quota rule was not a justiciable issue. The Solicitor-General said that there was, however, substantial compliance with the quota rule ............ We are unable to accept the argument of the Solicitor-General that the quota rule was not legally binding on the <ORG>. It is not disputed that Rule 4 of the Income Tax Officers (Class I, Grade II) Service Recruitment Rules is a statutory rule and there is a statutory duty cast on the <ORG> under this rule to determine the method or methods to be employed for the purpose of filling the vacancies and the number of candidates to be recruited by each method. In the letter of the <ORG> of India dated October 1951 there is no specific reference to rule 4, but the quota fixed in their letter must be deemed to have been fixed by the <ORG> of India in exercise of the statutory power given under rule 4, it is not now open to the <ORG> of India to say that it is not incumbent upon it to follow the quota for each year and it is open to it to alter the quota on account of the particular situation. We are of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Govern- ment of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, act its own will and pleasure. As we have already indicated, the quota rule is linked up with the seniority rule and unless the quota rule is strictly observed in practice, it will be difficult to hold that the seniority rule i.e., rule 1(f)(iii) and (iv), is not unrea- sonable and does not offend Article 16 of the Constitution."

In <NAME>'s case (supra) this aspect was examined by the <ORG>. The learned Chief Justice spoke for the three-Judge Bench thus:- "In working out the quota rule, these principles are generally followed. First, where rules prescribe quota between direct recruits and promotees, confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre. Second, confirmed persons are senior to those who are officiating.

Third, as between persons appointed in offici- ating capacity, seniority is to be counted on the length of continuous service. Fourth, direct recruitment is possible only by compet- itive examination which is the prescribed procedure under the rules. In promotional vacancies, the promotion is either by selec- tion or on the principle of seniority-cummer- it. A promotion could be made in respect of a temporary post or for a specified period but a direct recruitment has generally to be made only in respect of clear permanent vacancy either existing or anticipated to arise at or about period of probation is expected to be completed. Fifth, if promotions are made to vacancies in excess of the promotional quota, the promotions may not be totally illegal but would be irregular. The promotees cannot claim any right to hold the promotional posts unless the vacancies fall within their quota. If the promotees occupy any vacancies which are within the quota of direct recruits, when direct recruitment takes place, the direct recruits will occupy the vacancies within their quota. Promotees who were occupying the vacancies within the quota of direct recruits will either be reverted or they will be ab- sorbed in the vacancies within their quota in the facts and circumstances of a case. The important principle is that as long as the quota rule remains neither promotees can be allotted to any of the substantive vacan- cies of the quota of direct recruits nor recruits can be allotted to promotional vacan- cies. The result is that direct recruitment vacancies between 11th September, 1959 and 26th October, 1964 cannot be occupied by any promotees. The fact that direct recruits were confirmed on 28th October, 1964 will not rob the direct recruits of their quota which remained unfilled from 2nd December, 1957 ............ <CITATION> (supra) it was said that when the quota was fixed for the two sources of recruitments, the quota could not be altered according to exigencies of the situation. It was held there that the promotees who had been promoted in excess of the prescribed quota should be held to have been illegally promot- ed. In <NAME> case  SCR Suppl. 491 it was held that when it was ascertained that not more than 1/3rd of the vacancies were to go to the promotees and the rest to the direct recruits the ratio was not mere depend- ant on whether any direct recruit was appoint- ed in any particular year or not. The promotees were entitled to 1/3rd of the vacancies in any particular year, whether or not there was direct recruitment by competitive examination in that year.

Two principles are established in the decision referred to. One is that quotas which are fixed are unalterable. according to exi- gencies of situation. Quotas which are fixed can only be altered by fresh determination of quotas under the relevant rules. The other is that on the ground one group cannot claim the quota fixed for the other group either on the ground that the quotas are not filled up or on the ground that because there has been a number in excess of quota the same should be absorbed depriving the other group of quota. <CITATION> .,  3 SCR 390 the two appel- lants were promoted in the year 1958 and 1959. The respondents were appointed by direct recruitment in 1962, 1963 and 1964. The re- spondents were confirmed in their posts before the appellants. The appellants contended that the respondents who were directly appointed after the appellants had been promoted were not to be confirmed in permanent posts before the appellants. It was held that the direct recruits were confirmed against permanent vacancies within their quota. The earlier confirmation of direct recruits though ap- pointed later was upheld on the ground that they fell within their quota of permanent vacancies.

<NAME>'s case [1975] 2 SCR 979 on which the appellants relied also held that each quota would have to be worked independ- ently on its own force. In that case the Assistant Executive Engineers who were ini- tially entitled to 3/4th and subsequently to 2/3rd of the vacancies while Assistant Engi- neers who were entitled initially to 1/4th and subsequently to 1/3rd of such vacancies were held to be entitled to their respective quotas independent of the fact that whether any person from one class or the other was promot- ed or not. It was illustrated by saying that if there were three vacancies in a year two would go to the Assistant Executive Engineers and one would go to the Assistant Engineers and even if there were not eligible Assistant Executive Engineers who could be promoted to fill in two vacancies belonging to their quota, one vacancy is to be filled up by promotion of an Assistant Engineer if he was eligible. Similarly, if two vacancies belong- ing to the quota of Assistant Executive Engi- neers are to be filled by Assistant Engineers for want of availability of eligible Assistant Executive Engineers, the appointment of As- sistant Executive Engineers have to be pushed down to later years when their appointment could be regularised as a result of absorption in their lawful quota for those years."

<NAME>'s case referred to several authorities of the <ORG> and clearly drew out the judicial consensus on the point in issue by concluding that the quota rule had to be strictly enforced and it was not open to the authorities to meddle with it on the ground of administrative exigencies. The scheme in force relating to the services for fixing inter se seniority takes into account the filling-up of the vacancies in the service from the two sources on the basis of the quota and, therefore, fixation of inter se seniority in the Gradation List has to be worked out on the basis of quota.

SECOND ASPECT There was no dispute either before <ORG> or before us that in the 1957 Rules there existed a quota for filling-up vacancies in the Class I Junior Scale posts. <ORG> found that the quota continued throughout during the relevant period. Before us Mr. <NAME> supported that finding while Mr. <NAME> maintained that the quota had in later years been given up. Rule 3 of Mysore Recruitment of Gazetted Probationers Rules, 1959 made the following provi- sions:

"(1) The provisions of these rules shall be applicable in respect of direct recruitment to the cadres in State Civil Services Class I and Class II specified in column 3 of the Schedule to these rules relating to the Services speci- fied in the corresponding entries of Column 2 of the said Schedule.

(2) These rules shall have effect notwith- standing anything contrary contained (i) in the Cadre and Recruitment Rules for the time being in force applicable to the Cadres in the State Civil Services referred to in sub-rule

(i) and (ii) in the Mysore State Civil Service (General Recruitment) Rules, 1957. (3) During the period of five years from the date of commencement of these rules, as nearly as may be two-thirds of the number of vacan- cies arising in the cadres in <ORG> referred in to in sub-rule (i) shall be filled by appointment of candidates herein- after in these rules referred to as probation- ers selected in accordance with the provisions of these rules and the actual number of vacan- cies to be so filled shall be determined by the Government."

Admittedly these rules related only to direct recruitment and as it appears, in sub-rule (3) remained in force for five years (said to have been extended for one more year); with the lapse of a total period of six years from the date when these rules came into force, they cease to have effect. In 1966 rules were made under the proviso to Article 309 known as the Karnataka Government Gazetted Probationers Posts (Appointment by Competitive Examination) Rules, 1966 and sub-rule (3) of Rule 3 thereof provided inter alia:

"That notwithstanding anything contrary in the rules of recruitment to <ORG> the number of vacancies as determined by the <ORG> in that service should be filled by direct recruitment after holding a competitive examination by the <ORG>."

On the 11th of August, 1977, <ORG>

tive Service (Recruitment) (Amendment) Rules, 1977 came into force. Rule 2 thereof provided:

"Amendment to Schedule:-In the Schedule to the Karnataka Administrative Service (Recruitment) Rules, 1957 for the entries at the Item (b) the following entries shall be subsituted, namely:-

1 2 3

(b)All Class I (i)50%of vacancies to be Forpromotion;ClassII (Junior Scale) filled by promotion Officers must have Posts. from Class II Officers; worked for at least a and period of four years

(ii) 50% by Direct including the period of Recruitment in accor- officiation or probation dance with the Karnataka Recruitment of Gazetted Probationers (Appoint-

ment etc.) Rules, 1966.

Unless the 1957 Rules remained in force till 1977, there would have been really no necessity to refer to them for the purpose of amendment; <NAME>'s case did proceed on the footing that the quota system in the Recruitment Rules continued till 1971-72. It is not Mr. <NAME>'s case that anything happened after 1972 which brought about dissolution of the quota. We reject the contention of Mr. <NAME> that the quota system had been abandoned and confirm the finding of <ORG> in that regard. It is, however, a fact that the ratio has been changed from time to time. THIRD ASPECT As already pointed out, <NAME>'s case was concerned with these very rules and a similar situation though for a dif- ferent period. It is a decision of a three-Judge Bench and we proceed on the footing that it is binding on us. <ORG> has pointed out in the leading judgment in <NAME>'s case:-

"There are numerous Government orders sanc- tioning, from time to time, temporary posts of Assistant Commissioner which are the same as the posts of Junior Scale Officers and extend- ing the tenure of those temporary posts from time to time .......................... Though the Karnataka Administrative Service Cadre Rules mention of only permanent posts and not temporary posts in the cadre of Junior Scale Officers, the material produced before us clearly establishes that the cadre of Junior Scale Officers consisted of a consider- able number of temporary posts at all material times. In para 6 of the statement of objec- tions filed on behalf of the <ORG> in these petitions, the <ORG> has admitted thus:- "The cadre strength of KAS Class I Junior Scale Officers had itself undergone revision and figures showed that 152 permanent posts and 133 tempo- rary posts were available as is clear from the notification No. GAD 590 SMC 74 dated 3.3. 1976."

However learned counsel for direct recruits on the following observations of <ORG> in <NAME>'s case at page 1564 of the report:-

"In <NAME> v. State of Tamii Nadu, [1974] 2 SCR 348 this Court said on the con- struction of Rule 2 of the relevant Cadre Rules in that case that the State Government might add for a period to the cadre one or more posts. But, the posts so added could not become cadre posts. The temporary posts which are created due to exigencies of the service are posts which are outside the Cadre." From the above observations, it would appear that <ORG> took the view that temporary posts which were created due to exigencies of service, were posts which were outside the cadre. In other words, <ORG> seems to have thought that temporary posts added to the cadre were ex-cadre posts. The attention of <ORG> does not appear to have been drawn to Note 2 to R 49 of the <ORG> which classifies temporary posts into two categories, namely, posts created to perform the ordinary work for which permanent posts already exist in the cadre, and isolated posts created for the performance of special task unconnected with the ordinary work which a service is called upon to perform."

The conclusion indicated in the decision of the learned Chief Justice of this <ORG> in <NAME>'s case had been sup- ported by reasons. As it would appear at page 8 19 of the Reports, this aspect was raised as the first of the six contentions formulated for consideration of the <ORG>. Keeping the facts of the case in the background, three reasons were indicated in the judgment for the conclusion that quota covered permanent posts. Reference was made to certain decisions of this <ORG> as also. to Rule 9 of the Probation Rules of 1959. It was held that Rule 9 establishes the exclusion of temporary posts from the cadre. <NAME>'s case (supra) was relied upon for the same conclusion by saying that posts temporarily added to the cadre by exercise of power under a permissive rule would not become cadre posts and temporary posts created due to exigencies of the service should be treated as posts outside the cadre. The High <ORG> in the judgment in <NAME>'s case relied upon Note 2 of Rule 49 of the KCSR and thought that this <ORG> was not properly in- formed of the factual situation when in <NAME>'s case it said that temporary posts were not to be taken into consid- eration for the purpose of working out the quota. The note to Rule 49 has indeed no bearing on the point and we are of the view that there was really no justification for the doubt indicated by the High <ORG>. Apart from the fact that the conclusion of this <ORG> in <NAME>'s case on this score is a binding authority on us, from an examination of the matter we also reiterate that conclusion to be correct. FOURTH ASPECT The High <ORG> in these cases has taken the view that the quota could be carried forward for a maximum period of three years and not beyond. This has been done by placing reliance on the Constitution bench judgment of this <ORG> in the case of Col. <CITATION> .,  1 SCR 1036. <NAME>, J. speaking for the <ORG> at page 1058 of the Reports stated:-

"The total number of vacancies at the <ORG> level for each year shall be divided in the ratio of 2:1 (50% for <ORG> and 25% for direct recruits). The 50% reserved for the army corps shall be available to be filled by those candidates. The 25% seats to be filled by direct recruits shall be filled only by such recruits. Even if enough direct re- cruits are not available they will not be filled by the army nominees but shah be kept vacant to be carried forward and filled in later years by such direct recruits. A reason- able period for the carry forward scheme will be three years, not more. Likewise, military vacancies at the <ORG> level each year shall be filled only by such nominees. If enough such hands are not available, a similar procedure of carry forward will govern. For the <ORG> posts 25% belongs to promotees from Class II offi- cers. The total number will be worked out by adding all the posts of <ORG>, Deputy Directors and Directors and Surveyor General and allot- ting 1/4th of it as the quota for Class II promotees for appointment as <ORG>. Such is the reasonable interpretation of the rule."

The <ORG> in that case had been called upon to decide the dispute of seniority between the direct recruits and promotees within the civilian quota in the <ORG> service. <ORG> (Recruitment) Corps of Engineer Officers, Rules, 1950 came for consideration of the <ORG>. The opinion expressed by this <ORG> in the extracted paragraph was with reference to the rules before the <ORG>. The provisions as indicated in the extracted paragraph were somewhat peculiar. After the quota was provided, there was a prohibition against filling up of the vacancies in the respective quotas from other categories even when suitable candidates were not available from within the reserved sphere. This meant that the posts were allowed to go vacant even though in public interest the same should have been filled up on account of the bar in the rule. It is in that background that this <ORG> indicated that a reasonable period for the carry-forward scheme would be three years and at the end of the paragraph indicated that that would be a reasonable interpretation of that rule. Obviously nothing of general application was intended to be said and this <ORG> did not certainly intend to lay down a time limit of general application. <ORG>, 1957 which admittedly applied to the services in question by Rule 17 provided:

"Notwithstanding anything contained in these rules or in the rules of recruitment specially made in respect of any service or post, the appointing authority may--

(a) recruit by direct recruitment to a post reserved to be filled by promotion when it is satisfied that the person eligible to be considered for appointment by promotion is not fit to be also appointed, or

(b) fill up by promotion any vacancy relating to a post which is required to be filled by direct recruitment when such vacancy is not likely to last for more than one year ................ "

In exercised of the powers conferred under this rule the appointments in excess of the quota limit appear to have been made. It is conceded that every appointment to the promotional post made in excess of the quota was at the commencement a temporary one. The 1957 Rules were substitut- ed in 1977 by the Karnataka Civil Services (General Recruit- ment) Rules, 1977. As far as relevant Rule 17 thereof pro- vides:

(a)...............................................

(b)...............................................

(c) fill by promotion temporarily on the basis of senioritycum-merit a vacancy required to be filled by direct recruitment where selection to the post has not been finally made and there is likelihood of delay in making direct recruitment. No such promotion shall be made unless a requisition has been sent to the <ORG> or to the appropriate recruiting authority for selection of a suitable candi- date. A candidate temporarily promoted under this sub-rule shall not have any preferential claim for regular promotion and also shall not count the period of service in the promoted post for seniority; he shall revert to his original post on the expiry of one year or on the appointment of a direct recruit whichever is earlier ......................... "

The scheme in the Rules of 1977 clearly indicates that the transgression of the quota rule was a deviation of a tempo- rary nature and was intended to be balanced in good time. The conclusion of <NAME>, C.J. is fortified by the spirit of Rule 17 of the 1957 Rules as clarified in clause (c) of that rule in 1977. The presence of such a rule in the field excludes the application of the ratio of Col. <NAME>'s case to the facts hereof. We do not think <ORG> was right in overlooking the binding judgment of this Court in <NAME> case and preferring to apply the observations of <NAME>, J in the latter decision made with reference to a different set of rules containing a different scheme of implementing quota. The rule on this aspect of <NAME>'s case was quoted with approval by a two-Judge Bench of this Court in <CITATION> ,  3 SCR 847. A lot of argument was advanced at the Bar particularly on the side of the promotees that serious prejudice was being caused to them by enforcing the quota rule. Reliance was placed on a number of authorities of this Court begin- ning with the case of <CITATION> .,  2 SCR 165; <CITATION> .,  3 SCR 431; <NAME> & Ors. v. Chief Secre- tary, Government of U.P. & Ors,  1 SCR70; <NAME> &Anr. etc. v. <ORG>.,  1 SCR 351 and <CITATION> ,  2 SCR 165.

In <NAME>'s case (supra) the <ORG> found that the promo- tion was not styled as temporary or ad hoc or stop-gap; on the other hand, the <ORG> at page 459 of the judgment in the Reports referred to the case of <CITATION> ,  1 SCR 1037 where on the basis of a power of relaxation the <ORG> had held such promotion to be regu- lar. The <ORG> further held:

"Once the promotees were promoted regularly to substantive vacancies even if temporary unless there was a chance of their demotion to the lower cadre their continuous officiation confers on them an advantage of being senior to the later recruits under Rule 21(4). If as stated earlier by the enormous departure or by the power to relax, the quota rule was not adhered to, the rota rule for inter se senior- ity as prescribed in Section 25(1)(ii) cannot be given effect. In the absence of any other valid principle of seniority it is well-estab- lished that the continuous officiation in the cadre grade of service will provide a valid principle of seniority................"

This principle appears to have been followed in this Court in some cases during the last two years or so. The excep- tional circumstances indicated in <NAME>'s case for support- ing the departure in the judicial opinion has been over- looked in some of these cases and the resultant benevolent approach to protect the promotees in their claim for senior- ity has been accepted without considering the special cir- cumstances in which the ratio had been inducted in support of the departure.

In a precedent-bound judicial system binding authorities have got to be respected and the procedure for developing the law has to be one of evolution. It is not necessary for disposal of these matters before us to go into that aspect except noticing the existence of distortion in the field. The rationalisation of the view in a way known to law is perhaps to be attempted some day in future. In the present batch of cases the law being clear and particularly the mandate in the rule being that when recruitment takes place the promotee has to make room for the direct recruit, every promotee in such a situation would not be entitled to claim any further benefit than the advantage of being in a promo- tional post not due to him but yet filled by him in the absence of a direct recruit. One aspect which we consider relevant to bear in mind is that the promoted officer has got the advantage of having been promoted before it became his due and is not being made to lose his promotional position. The dispute is confined to one of seniority only. The advantage received by the promotee before his chance opened should be balanced against his forfeiture of claim to seniority. If the matter is looked at from that angle there would be no scope for heartburning or at any rate dissatisfaction is expected to be reduced so far as the promotees are concerned.

LAST ASPECT In <NAME> v. Union of India, [1985] 3 SCR 271 a three-Judge Bench of this Court to which one of us was a party indicated as follows:-

"In a vast country such as ours, strong and independent bureaucratic set up is indispens- able. At the same time it is equally necessary that the service from top to bottom must be alive to the fact that it is its obligation to maintain proper attitudes, discipline and duty-oriented working. While it is the right of every person in the service set up to expect just and fair treatment in regard to his employment frequent litigation between him and the <ORG> involving countless other co- employees in the service in the battle is a deviation from the right direction. It is true that very often instances come to light where the grievance is genuine and the treatment meted is unwarranted and uncalled for. Govern- ment in a democratic polity runs on impersonal basis but on the cadinal code that everyone shall perform his duty."

This <ORG> further observed, "There has been a phenomenal rise in service disputes in the last three decades. It is time that serious attention is devoted to discover the reason for it and take effective steps to ensure curtailment thereof. Whether such litigations come before <ORG>s or <ORG> is of no consequence here. Frequent litigations between the <ORG> and its employees ultimate-

ly affect the efficiency of service and bring about indiscipline, lack of loyalty and an attitude of indifference.'' We are struck by the innumerable rules that have been framed within a period of about thirty years to cover the field relating to constitution, recruitment and provision for other conditions of service. It is proper that service rules should be simple making reasonable provision for necessary aspects. While framing such rules, the relevant provisions of the Constitution and laws in force have to be kept in view. There should be no frequent alteration of the service rules through. Exigencies of circumstances and unforeseen situations will certainly justify alterations. Those will be indeed rare occasions. Experience shows that legal battles are fought in court between government servants--whether individual pitched against individual or group against group; this embitters relationship inter se and often results in a switch over of attention from public duty to personal cause. Frequent litigations against the <ORG> or higher authorities in the hierarchies of administration, wipe out reverance, loyalty and the sense of discipline and substitute those by anger, disrespect and rancour. In the process fellow feeling is lost, the sense of brotherhood vanishes. The net resultant of all is deprivation of the efficiency of the bureaucratic community to serve the society. The undue growth of service litigation within these four decades of independence clearly calls for these observations. As and when, occasion has arisen the <ORG> has sought to draw the attention of the <ORG> as the employer as also the Government servants to this aspect of the matter. This has been done not with a view to subjecting any litigant to undue criticism but with the fond hope that it would help the problem to receive adequate attention. We are surprised that the words spelt out in the different judgments have fallen on deaf ears and created no stir. Thereby the most powerful wing in the administrative set up is gradually moving away from its designated path. We have come across cases where officers have been in court litigating over service disputes for about twenty-five to thirty years of their career which would mean almost three-fourths of their service period. What would be the contribution of such officers to the public service can well be imagined. Very often a public officer is forced into litigation as he gets no justice in the hands of the superior. There are also several instances where an officer drags the employer into litigation without a cause of action. These are matters which must be taken into account without further loss of time and with fortitude so that the most effective wing of the administration does not further lose its serviceability.

A public servant--whatever his status be--is in the position of a trustee. Social power vests in him for the purpose of rendering service to the community. Every public servant has to be cognizant to that obligation. Once the level of that consciousness grows up there is bound to be a corresponding fail in the attitude to litigate over small issues. What this Court said in the case of Dr. <NAME> & <ORG>., [1971] 1 SCR 568 has to be borne in mind. These were the words then said:-

"The canker of litigiousness has spread even to a sphere of life where discipline should check ambition concerning personal preferment. A teacher is justified in taking legal action when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile himself to his lot suppressing disappointment when he finds a co-worker raised to a position which he him- self aspired after".

What applies to a teacher may perhaps well apply to everyone in positions of social trust. It is for the privileged public servant as also his employer to share this philoso- phy.

The net result of the discussion above requires that rule in <NAME>'s case has to be given full effect. The appeals and writ petitions of the direct recruits have to succeed and those by the promotees have to fail. We hope and trust that the <ORG> of Karnataka will not demote anyone who has been in a promotional post for several years to the Class II service as a consequence of this decision but the Gradation List has got to be adjusted to fit into the prin- ciples indicated in the judgment. No justification was shown to us as to why the <ORG> of Karnataka failed to comply with its obligation of making recruitments in terms of the quota. Once the <ORG> frames rules they are binding on the <ORG> and like individuals the <ORG> has got to regulate its conduct in accordance with the rules--nay, the <ORG> has to observe it all the more. We hope and trust that the <ORG> of Karnataka in the years ahead will comply with the quota rule with regularity so that a litigation of this type may not arise again. If any party has to be directed for payment of costs in this bunch of litigation it must be the <ORG>. We, however, do not want to saddle the <ORG> with costs for two reasons-firstly, we do not want the employees to have a feeling that in the fight their employer has been vanquished and secondly we entertain a fond hope that there will be no reoccurrence.

In course of arguments we had suggested to learned counsel for the parties to furnish recast Gradation List on the basis of claims advanced before us---(1) showing how it would be when full claim of the promotees is granted and (2) how different it would look when the total claim of the direct recruits is allowed. Such charts have been prepared and furnished and we find that the proc- ess of pushing up and down would be inevitable but would be within reasonable limits and no irreparable prejudice was apparent.

The appeals and writ petitions of the direct recruits are allowed, and the appeals by the promotees are dismissed. There shall be no order for costs throughout.

S.L. Appeals and Petitions dis- posed of.