PETITIONER: STATE OF UTTAR PRADESH Vs. RESPONDENT: PRADIP TANDON & ORS. DATE OF JUDGMENT19/11/1974 BENCH: <NAME>, A.N. (CJ) BENCH: <NAME>, A.N. (CJ) MATHEW, KUTTYIL KURIEN UNTWALIA, N.L. CITATION: 1975 AIR 563 1975 SCR (2) 761 1975 SCC (1) 267 CITATOR INFO : RF 1981 SC1009 (10) R 1984 SC1420 (18) E 1984 SC1534 (7,9,10,11) E&R 1985 SC1495 (16,65,128) RF 1986 SC1362 (5) ACT: Constitution of India, 1950-Arts. 15(1)(4) and 29(2)- Reservations of seats in Medical Colleges in favour of hill and Uttrakhand areas-Constitutional validity of-Tests for determining backwardness. HEADNOTE: For admission of students to medical colleges in the <ORG>, <ORG> had made reservation for rural, hill and Uttrakhand areas on the ground that people coming from these areas belonged to socially and educationally backward classes. The validity of these reservations was questioned in <ORG>. <ORG> in one case struck them down as unconstitutional, without considering the earlier decision. On appeal to this Court it was contended on behalf of the <ORG> that the object of the classification was the advancement of medical education for candidates from the reserved areas and to give students from these areas the benefit of medical education. It was further contended that by Art. 41 and 46 of the Constitution the <ORG> is enjoined to promote with special care the educational and economic interests of the weaker sections of the people and that 'the reservations were not on the grounds of place of birth but on the ground of residence and, therefore, the reservations would not fall within the mischief of either Art. 15(1) or Art. 29.  Art. 15(1) states that the <ORG> shall not discriminate against any citizen grounds only of religion, race, caste, sex, place of birth or any of them. Art. 29(2) states that no citizen shall be denied admission into any educational institution maintained by the <ORG> or receiving aid out of <ORG> funds on grounds only of religion, race, caste. language or any of them. Allowing the appeal in part, HELD:Reservation in favour of candidates from rural areas is unconstitutional. The reservations for the hill and Uttrakhand areas are severable and are valid. [773D] (1) The Constitution does not enable the <ORG> to bring socially and educationally backward areas within the protection of Art. 15(4). The backwardness contemplated under Art. 15(4) is both social and educational. Art. 15(4) speaks of backwardness of classes of citizens and, therefore, socially and educationally backward classes of citizens in Art. 15(4) could not be equated with castes'. [766C-D] (2)Neither caste nor race nor religion can be made the basis of classification for the Purposes of determining social and educational backwardness within the meaning of Art. 15(4). When Art. 15(1) forbids discrimination on grounds only of religion. race and caste, caste cannot be made one f the criteria for determining social and educational backwardness. If caste or religion is recog- nised as a criterion of social and educational backwardness Art. 15(4) will stultify Art. 15(1). When a classification takes recourse to caste as one of the criteria in determining socially and educationally backward classes the expression classes" in that case violates the rule of expression unius est exclusio alterius. The socially and educationally backward classes of citizens are groups other than, groups based on caste. [766F-G] (3)The place of habitation and its environment is also a determining factor in judging the social and educational backwardness. Backwardness is judged by economic basis that each region has its own measurable possibilities for the Maintenance of human number,. standards of living and fixed property. From an economic Point of view the classes of Citizens are backward when they do not make effective use of resources. Neglected opportunities and People in remote Places raise walls of social backwardness of people. People in the hill any 2-L346SupCI/75 762 Uttrakhand areas illustrate the educationally backward classes of citizens because lack of educational facilities keep them stagnant and they have neither meaning and values nor awareness for education. [767A; <CITATION> .  3 S.C.R. 595 and <CITATION> .  1 S.C.R. 103, referred to. (4)The test of poverty is not the determining factor of social backwardness. [768D] <CITATION> ,  Supp. 1 S.C.R. 439, held inapplicable. <CITATION> ,  3, S.C.R. 236, referred to. (5)A division between the population on the ground of poverty that the people in the urban areas are not poor and that the people in the rural areas are poor is neither supported by facts nor by a division between the urban people on the one hand and the rural people on the other that the rural people are socially and educationally backward classes. It cannot be said that all citizens residing in rural areas are socially and educationally backward. [768G-H] (6)Population cannot be class by itself. Rural element does not make it a class., To suggest that the rural areas are socially and educationally backward is to have reservations for the majority of the <ORG>. The special need for medical men in rural areas will not make the people in the rural areas socially and educationally backward classes of citizens. [769B-C] (7)The fact that the number of marks obtained by candidates from rural areas were much lower than marks obtained by general candidates makes it neither valid nor justifiable ground for determining social and educational backwardness. On the other hand the success of candidates from rural areas at the open competition indicates that the rural areas do not represent educational backwardness of citizens. [769D] (8)The reservation for rural areas cannot be sustained on the ground that the rural areas represent socially and educationally backward classes of citizens. Poverty in rural areas cannot be the basis of classification to support reservation for rural areas. Poverty is found in all parts of India. No reservation can be made on the basis of place of birth. This would offend Art. 15. [769G-H] In the instant case the reservation for rural areas cannot be upheld because there is no classification based on residence between students coming from within the <ORG> and others coming without. [772B] (9)The present case of classification of rural areas is not one of under classification. This is a case of discrimination in favour of the majority of rural population to the prejudice of students drawn from the general category. This classification is unconstitutional. [772G] <CITATION> .  1 S.C.R. 1215, <CITATION> .  6 S.C.R. 368. <CITATION> .  Supp. S.C.R. 608, <CITATION> .  2 S.C.R. 786 and <CITATION> .  1 S.C.R. 413, distinguished. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1542 of 1974.

From the judgment and order dated August 5, 1974 of <ORG> in C. W. Misc. Petn. No. 5287 of 1973.

Civil Appeal No. 1385 of 1974.

Appeal by Special Leave from the judgment and order dated October 27, 1972 of <ORG> in Spl. A. No. 540 of 1972.

Writ Petition No: 442 of 1974.

Petition under Article 32 of the Constitution. <NAME>, Attorney General of India (in C.A. No. 1542/74) and <NAME>, for the appellant (in C.A. No. 1542/74) respondent No. 1 (in C.A. No. 1385/74) and respondents (in W.P. No. 442/74).

<NAME>, <NAME>, <NAME> and <NAME>, for the appellants (in C.A. No. 1385/74 and W.P. No. 442/74).

<NAME>, <NAME> and <NAME>, for the Inter- vener (<NAME>).

<NAME>, for the intervener (<NAME> and <NAME>.).

The Judgment of the Court was delivered by <NAME>, C. J.-The principal question for consideration in these Civil Appeals and Writ Petition is whether the instructions framed by the <ORG> in making reservations in favour of candidates from Rural Areas, Hill Areas and Uttrakhand are constitutionally valid. These reservations were made by the <ORG> Government for admission of students to medical colleges in the <ORG> of Uttar Pradesh.

In Civil Appeal No. 1542 of 1974 the instructions for the combined premedical test for the year 1973 were impeached. The instructions for the combined pre-medical test 1973 for admission to 7 medical colleges in Uttar Pradesh under <ORG> provided for reservation, of 117 seats for rural areas, 25 seats for hill areas and 25 seats for Uttrakhand area. The total number of seats in the 7 colleges is 782. 392 seats are open to candidates under general category. There are reservations for Scheduled Castes, Scheduled Tribes, children of political sufferers and children of army personnel. The reservations for rural, hill and Uttrakhand areas were challenged as unconstitutional.

In Civil Appeal No. 1385 of 1973 the combined pre-Medical test for admission to 5 medical colleges at Allahabad, Kanpur, Meerut, Agra and Jhansi for the year 1971 was challenged. The total number of seats was 758. 26 seats were reserved for the nominees of <ORG> under various heads. 732 seats were available to be filled in through the combined pre-medical test. 368 seats were open to general competition. 89 seats were reserved for rural areas, 23 seats for bill areas and 23 seats for Uttrakhand Division. The reservations for the rural, bill and Uttrakhand areas were challenged as unconstitutional. The contention on behalf of the <ORG> was that the reservations for rural, hill and Uttrakhand areas are for socially and educationally backward classes. It was also said that these reservations are valid on geographical or territorial basis.

The affidavit evidence on behalf of the <ORG> was this. The <ORG> in the years 1952 and 1953 made reservations for Kisan and hill area candidates. The <ORG> reviewed the position from time to time. The reservations are considered necessary to attract graduates from those areas which are otherwise handicapped in the matter of education. It is necessary to feed the dispensaries with medical men in adequate number to serve the people inhabiting those areas. The rural,, hill and Uttrakhand areas lack educational facilities, People living there are illiterate or have' a very modest education. Their economic condition is unsatisfactory. The, level of income is low. There is acute poverty. There is lack and in some cases total absence of communication and transportation. Historically these areas have been neglected. People living in those areas are socially backward. The percentage of education among them is low. Candidates from those areas on account of various difficulties and handicaps cannot generally compete on parallel or equal footing with other candidates. The <ORG> maintains and financially supports the medical colleges. The <ORG> can. therefore, claim to lay down the criterion for admission to those colleges. The <ORG>, classified these rural, hill and Uttrakhand areas as socially and educationally backward areas. The affidavit evidence on behalf of the candidate at the combined pre-medical test is that candidates belonging to reserved categories obtained admission although they secured marks as low as 128 and other candidates were placed in the waiting list although the marks obtained by them was as low as 103. In the general category candidates in the waiting list secured about 266 marks. (See petition In Civil Appeal No. 1542 of 1974). In Civil Appeal No. 1385 of 1973 it was alleged that the candidates from rural Scheduled Castes, Uttrakhand and Hill areas who obtained admission obtained 281, 298 and 163 marks respectively whereas the Petitioner in that case obtained 288 marks and could not obtain admission because of reservation of seats. <ORG> at Allababad upheld the reservation for rural, hill and Uttrakhand areas in <CITATION> . A.I.R. 1973 All. 295. <ORG> struck down the aforesaid reservation in the case of <CITATION> . A.I.R. 1973 All. 592. <ORG> in the case of <NAME> (supra) however did not consider the case of <NAME> which was an earlier decision. It is desirable from the point of view of judicial propriety to refer to earlier decisions of the same <ORG>. The contentions of the Attorney General were under two broad heads. First, the <ORG> hag given sufficient material which remains uncontradicted to show that the areas concerned consisted of people who were as a class socially and educationally backward. Among the factors given by the <ORG> were the factors recognised by the <ORG> in determining socially and educationally backward classes. These were poverty, nature of occupation. place of residence, lack of education and also the sub-standard education of the candidates for the test in comparison to the average standard of candidates from general category. Second, the, classification has not been made only on the basis of Place of birth as is evident from the, <ORG> affidavit.

If this classification be neither within the, vice of Article 15(1) or Article 29(2) then the classification of rural, hill and Uttrakhand areas can be justified on the basis of reasonable sources for the purpose of admission to medical colleges. The sources are the rural, hill and Uttrakhand areas which form geographical or territorial basis.

The Attorney General put in the forefront the object of the classification to be the advancement of medical education for candidates from reserved areas. He amplified his submissions as follows. It is a notorious fact that rural, hill and Uttrakhand areas are socially backward because of extreme poverty. These areas are also educationally backward because the standard of literacy is poor and there is lack of educational facilities. There, is dearth of doctors in these reserved areas. It is necessary to attract students from these areas for admission to medical colleges. This will give impetus to students from these areas to equip themselves as doctors.

The Attorney General submitted that the object of classification is to give students from rural areas benefit of medical education. If the object is to get the best material then it would be, justifiable to look at the historically backward rural areas which have no medical colleges. The classification may be supported either on historical or geographical exigencies of circumstances, The geographical, territorial, historical and the economic conditions in the rural and hill areas were emphasised to support the classification.

The Attorney General laid considerable stress on the, feature that Rural India is socially and educationally backward by reason of poverty. He said that the Court should take judicial notice of the extreme poverty in these areas. The rural people were said to have common traits of agriculture and they were all conditioned by economic poverty. Articles 41 and 46 were put in the forefront that the right to education was one of the provisions in the Directive Principles of <ORG> Policy. The <ORG> is to promote with special care the educational and economic interests of the weaker sections of the people. Article 15(1) states that the <ORG> shall not discriminate against any citizen on grounds only of religion, race, caste,.sex place of birth or any of them. The Attorney General submitted that the reservation was not on grounds only of place of birth or caste. Article 29(2) states that no citizen shall be denied admission into any educational institution maintained by the <ORG> or receiving aid out of <ORG> funds on grounds only of religion, race, caste, language or any of them. It is said by the Attorney General that inasmuch as place of birth is not mentioned in Article 29(2 ), the reservations in the present case would not offend Article 29(2). The Attorney General submitted that the reservations in the present case were not on ground of place of birth but on ground of residence. and, therefore, the reservations would not fall within the mischief of either Article 15(1) or Article 29(2).

Article 15(4) was added by the Constitution First Amendment Act, 1951. The object of the amendment was to bring Articles 15 and 29 in line with Article 16(4).  Article 16(4) states that nothing in that Article shall prevent the <ORG> from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which in the opinion of the <ORG> is not adequately represented in the services under the <ORG>. <CITATION>  S.C.R. 525 the reservation of seats for non-Brahmins, backward Hindus, Brahmins, Harijans, Anglo Indians and Indian Christians and Muslim was held to offend Article 15(1) and 29(2). This Court pointed out that the omission of. a clause like Article 16(4) from Article 29 indicated the intention of the Constitution makers not to introduce communal consideration in matters of admission to educational institutions.

Article 15(4) speaks of socially and educationally backward classes of citizens. The State described the rural, hill and Uttrakhand areas as socially and educationally backward areas. The Constitution does not enable the State to bring socially and educationally backward areas within the protection of Article 15(4). The Attorney General however submitted that the affidavit evidence established the rural, hill and Uttrakhand areas to have socially and educationally backward classes of citizens. The backwardness contemplated under Article 15(4) is both social and educational. Article 15(4) speaks of backwardness of classes of citizens. The accent is on classes of citizens. Article 15(4) also speaks of Scheduled Castes and Scheduled Tribes. Therefore, socially and educationally backward classes of citizens in Article 15(4) could not be equated with castes. <CITATION>  Supp. 1 S.C.R. 439 and <CITATION>  3 S.C.R. 595 this Court held that classification of backwardness on the basis of castes would violate both Articles 15(1) and 15(4).

Broadly stated, neither caste nor race nor religion can be made the basis of classification for the purposes of determining social and educational backwardness within the meaning of Article 15(4 ), When Article 15(1) forbids discrimination on grounds only of religion, race, caste, caste cannot be made one of the criteria for determining social and educational backwardness. if caste or religion is recognised as a criterion of social and educational, backwardness Article 15(4) will stultify Article 15(1). It is true that Article 15(1) forbids discrimination only on the ground of religion, race, caste, but when a classification taken recourse to caste as one of the criteria in. determining socially and educationally backward classes the expression "classes" in that case violates the rule of expression unius est exclusio altrius. The socially and educationally backward classes of citizens are groups other than groups based on caste.

The expression "socially and educationally backward classes" in Article 15(4) was explained in <NAME>'s case (supra) to be comparable to Scheduled Castes and Scheduled Tribes. The reason is that the Scheduled Castes and Scheduled Tribes illustrated social and educational backwardness. It is difficult to define the expression "socially and educationally backward classes of citizens". The traditional unchanging occupations of citizens may continue to social and educational backwardness. The place of habitation and its environment is also a determining factor in judging the social and educational backwardness. The expression "classes of citizens" indicates a homogeneous section of the people who are grouped together because of certain likeliness and common traits and who are identifiable by some common attributes. The homogeneity of the class of citizens is social and educational backwardness. Neither caste nor religion nor place of birth will be the uniform element of common attributes to make them a class of citizens.

The traits of social backwardness are these. There is no social structure. There is no social hierarchy. There are no means of controlling the environment through technology. There is no organization of the society to create inducements for uplift of the people and improvement of economy. Building of towns and industries, growth of cash economy which are responsible for greater social wealth are absent among such classes. Social growth and well being can be satisfied by massive change in resource conditions. High lands 'and hills are to be developed in fiscal values and natural resources. Nature is a treasury. Forests, mountains, rivers can yield an advanced society with the aid of education and technology.

The hill and Uttrakhand areas in Uttar Pradesh are instance of socially and educationally backward classes of citizens for these reasons. Backwardness is judged by economic basis that each region has its own measurable possibilities for the maintenance of human numbers, standards of living and fixed property. From an economic point of view the classes of citizens are backward when they do not make effective use of resources. When large areas of land maintain a sparse, disorderly and illiterate population whose property is small and negligible the element of social backwardness is observed. When effective territorial specialisation is not possible in the absence of means of communication and technical processes as in the hill and Uttrakhand areas the people are socially backward classes of citizens. Neglected opportunities and people in remote places raise walls of social backwardness of people.

Educational backwardness is ascertained with reference to these factors. Where people have traditional apathy for education on account of social and environmental conditions or occupational handicaps, it is an illustration of educational backwardness. The hill and Uttrakhand areas are inaccessible. There is lack of educational institutions and educational aids. People in the hill and Uttrakhand areas illustrate the educationally backward classes of citizens because lack of educational facilities keep them stagnant and they have neither meaning and values nor awareness for education.

Relying on the decisions of <CITATION> (supra) and <CITATION> .  1 S.C.R. 103 the Attorney General contended that the people of rural areas are socially and educationally backward classes of citizens within the meaning of Article 15(4). It is said that people of rural areas are grouped together because of their common traits, their occupation, their residence in the rural areas and they are identifiable by such on traits and have for long constituted and continued to constitute a well-known division of Indian society. It was emphasised that the people in rural areas are always grouped together under the general or class name of "rural people.

<CITATION> . (supra) this Court said that the members of an entire caste or community may, in the social, economic and educational scale of values at a given time, be backward and may, on that account be treated as a backward class, but that is not because they are members of a caste or community, but because they form a class.

In <NAME>'s case (supra) this Court said that social backwardness is on the ultimate analysis the result of poverty to a large extent and that the problem of backward classes is in substance the problem of rural India. Extracting these observations the Attorney General contended that poverty is not only relevant but is one of the elements in determining the social backwardness. We are unable to accept the test of poverty as the determining factor of social backwardness.

The 1971 <ORG> showed population in India to be 54.79 crores. 32-89 crores or 80.1 per cent live in rural areas. 10.91 crores or 43.9 per cent live in cities and towns. In 1921 the rural population in India was 88.8 per cent. In 1971 the rural population was reduced to 80.7 per cent. The rural population of Uttar Pradesh in 1971 was roughly seven and a half crores. The population in Uttrakhand was roughly seven and a half lakhs. The population of Hill areas in Uttar Pradesh was near about twenty-five lakhs. It is in- comprehensible as to how 80.1 per cent of the people in rural areas or 7 crores in rural parts of Uttar Pradesh can be suggested to be socially backward because of poverty. Further, it is also not possible to predicate poverty as the common trait of rural people. This Court in <CITATION>  3 S.C.R. 236 said that if poverty is the exclusive test a large population in our country would be socially and educationally backward class of citizens. Poverty is evident everywhere and perhaps more so in educationally advanced and socially affluent classes. A division between the population of our country on the ground of poverty that the people in the urban areas are not poor and that the people in the rural areas are poor is neither supported by facts nor by a division between the urban people on the one hand and the rural people on the other that the rural people are socially and educationally backward class.

Some people in the rural areas may be educationally backward, some may be socially backward. there may be few who are both socially and educationally backward. bit it cannot be said that all citizens residing in rural areas are socially and educationally backward.

80 per cent of the population in the <ORG> of Uttar Pradesh in rural areas cannot be said to be a homogeneous class by itself. They are not of the same kind. Their occupation is different. Their standards are different. Their lives are different. Population cannot be a class by itself. Rural element does not make it a class. To suggest that the rural areas are socially and educationally backward is to have reservation for the majority of the <ORG>. On behalf of the <ORG> it is said that it is necessary to have reservation of seats for the people from rural areas in order to attract people from those areas who are otherwise handicapped in the matter of education, so that they can serve the people in the rural areas on completion of their medical education. In order to attract medical men for service in rural areas arrangements are to be made to attract them. The special need for medical men in rural areas will not make the people in the rural areas socially and educationally backward classes of citizens. It was said that the number of marks obtained by candidates from rural areas showed that they were much lower than the marks obtained by general candidates and this would indicate educational backwardness. That is neither a valid nor a justifiable ground for determining social and educational backwardness. Educational institutions should attract the best talents. It has been held by this Court in <NAME>'s case (supra) that 50 per cent of the seats in educational institutions should be left open to general competition. in the present case, it appears that 85 candidates from rural areas were selected in the general seats. One candidate from Uttrakhand area, 7 candidates from hill areas and one Scheduled Caste candidate also completed for the general seats. The candidates from hill areas, <ORG> and Scheduled Castes are exceptions and their performance will not detract from the reservations for Scheduled Caste, bill and Uttrakhand areas. The performance of 85 candidates from rural areas speaks eloquently for the high standards of education in rural areas.

The reservation for rural areas cannot be sustained on the ground that the rural areas represent socially and educationally backward classes of citizens. This reservation appears to be made for the majority population of the State. 80 per cent of the population of the State cannot be a homogeneous class. Poverty in rural areas cannot be the basis of classification to support reservation for rural areas. Poverty is found in all parts of India. In the instructions for reservation of seats it is provided that in the application form a candidate for reserved seats from rural areas must submit a certificate of the District Magistrate of the District to which he belonged that be was born in rural area and had a permanent home there, and is residing there or that he was born in India and his parents and guardians are still living there and earn their livelihood there. The incident of birth in rural areas is made the basic qualification. No reservation can be made on the basis of place of birth, as this would offend Article

15. The onus of proof is on the <ORG> to establish that the reservations are for socially and educationally backward classes of citizens. The <ORG> has established that the people in hill and Uttrakhand areas are socially and educationally backward classes of citizens. The Attorney General submitted that if the <ORG> failed to establish that the people in rural areas are socially and educationally backward classes of citizens the reservation for rural areas could be sustained on the ground that the reservations are clearly on geographical or territorial basis. The Attorney General referred to the instruction for reservation of seats and submitted that the basis of reservation is not only place of birth but place of birth as well as the residence of the applicant or place of birth as well as the residence of the applicant parents or guardian. He relied on the decision of this Court in <CITATION> .  1 S.C.R. 1215 in support of the proposition that a classification on the basis of residence is valid as a geographical or territorial classification. On behalf of the <ORG> it was said that under Article 41 the <ORG> has a duty to make effective provision for securing the right to education. Reliance was placed on Article 46 that the <ORG> shall promote with special care the educational and economic interests of the weaker sections of the people. The Attorney General submitted that the reservations for the rural areas was really to obtain students from the source of rural areas. In <NAME> case (supra) the <ORG> Government made a rule that no capitation fee should be charged for students who are bona fide residents of Madhya Bharat but capitation fee should be retained for non-Madhya Bharat students. This rule was challenged as an infraction of Article 14 and 15(1). This Court held that the rule did not infringe the fundamental right guaranteed by Article 15(1) because residence and place of birth are two distinct conceptions with different connotations both in law and fact. This Court said that Article 15(1) prohibited discrimination based on place of birth and the prohibition could not be read as one of discrimination based on residence. A division into two groups, viz., bona fide residents of Madhya Bharat and nonresidents of Madhya Bharat was held not to be a violation of Article 14. A classification based on residence was held to have a fair and substantial relation to the purpose of the law. It was said that if the <ORG> had to spend money on education, it was not unreasonable that the <ORG> should order the educational system in such a manner that the advantage of it would to some extent ensure for the benefit of the <ORG>.

The other two decisions on which Attorney General relied on are <CITATION> .  6 S.C.R. 368 and <CITATION> . etc.  Supp. S C.R ' 608 The classification in the present case was laid by the Attorney General to encourage higher education to bona fide applicants from the rural areas. It is also said that the candidates from rural areas will have to execute a bond that they agree to serve the Government for five years so, that doctors could be provided in rural areas. This was said to be a relevant consideration for supporting the classification. In <NAME>'s case (supra) the Government of Mysore defined backward classes and directed that 30 per cent of the seats in professional and technical colleges and institutions would be reserved for them. <ORG> laid down that classification of socially and educationally backward classes should be on the basis of (1) economic condition, and (2) occupation. According to that order, a family whose income is Rs. 1,200 per annum or less and persons or classes who followed occupations of agriculture petty business, inferior services, crafts or other occupations involving. manual labour were defined to be socially economically and educationally backward. This Court said that the classification of backward classes based on economic conditions and occupation does not. offend Article 15(4). This Court explained <NAME>'s case (supra) by stating that the authority concerned might take costs into consideration in ascertaining the backwardness of a group of persons but if it did not, the order would not be bad on that account if it could ascertain the backwardness of a group of persons on the basis of other relevant material.

In <NAME>'s case (supra) one of the rules made reservation for children of political sufferers and another rule provided for distribution of seats according to <ORG>. The reservation for children of political sufferers was upheld on the ground that such a classifica- tion has reasonable nexus with object of the rules, viz., a fair and just distribution of seats. With regard to the distribution of seats according to the <ORG>, the rule provided that seats in the general pool would be distributed University-wise. Scats in colleges affiliated to <ORG> were to be allotted to persons passing from colleges affiliated to that University and seats in colleges affiliated to Bangalore and Mysore <ORG> were to be respectively allotted to persons passing from colleges affiliated to each such University. The rule also provided that not more than 20 per cent of the seats in the colleges affiliated to any university might in the discretion of <ORG>, be allotted to students passing from colleges affiliated to any other university in the State or elsewhere. This classification was impeached to be neither based on any intelligible differentia nor to have a rational nexus with the object to the rules.

This Court in <NAME>'s case (supra) held that since the universities were set up for satisfying the educational needs of different areas where they were set up and medical colleges were established in those areas, it could safely be presumed that they also were so set up to satisfy the needs for medical training of those attached to those univer- sities. Such a basis for selection did not have a disadvantage of district wise or unit-wise selection as any student from any part of the <ORG> could pass the qualifying examination in any of the three universities irrespective of place of birth or residence. The discretion of the selection committee to admit outsiders upto 20 per cent of the total available seats in any of these colleges was held to advance the interest of education by drawing the best students not only in the <ORG> but also elsewhere in India.

In the present case, the reservation for the rural area cannot be upheld because there is no classification based on residence between students coming from within the State and others coming from without. The object of providing medical education to students in Uttar Pradesh is to secure the best possible students for admission to these colleges. It is in this context that districtwise allocation was held by this Court in <CITATION>  (2) S.C.R. 786 to violate Article 14. The University-wise distribution of seats which was found to be valid in <NAME>'s case (supra) does not have any application in the present case. The submission of the Attorney General that rural population would be a source for drawing students cannot be upheld. An illustration of different sources of categories of students is <CITATION> .  1 S.C.R. 413. There the categories of students were classified as residents of Delhi; sons/daughters of <ORG> servants posted in Delhi; candidates whose father is dead and is wholly dependent on borther/sister who is a <ORG> servant posted in Delhi; sons/daughters of residents of Union Territories including displaced persons registered therein; sons/daughters of <ORG> servants posted in Indian Missions abroad; cultural scholars. Colombo Plan Scholars; Thailand Scholars and <ORG>, Rural area in Uttar Pradesh cannot be said to be a source for reservation of the type in <NAME> case (supra).

The Attorney General relied on <NAME> v. <ORG> 50, L.Ed. 246, <NAME> v. <ORG> 70 L.ED. 654 and <ORG> v. <NAME> 81. L.ED. 703 in support of the proposition that if an evil is especially experienced in a particular branch of business, the Constitution embodies no Prohibition of laws confined to the evil or doctrinaire requirement that they should be couched in all embracing terms- it was said if the law was intended to remove the evil where it was most felt it was not to be overthrown because there were other instances to which it might have been applied. This rule really means that there is no doctrinaire requirement that the legislation should be couched in all embracing terms. A case of under classification would be an instance of this rule. The present case of classification of rural areas is not one of under classification. This is a case of discrimination in favour of the majority of rural population to the prejudice of students drawn from the general category. The classification is unconstitutional. In CivilAppeal No. 1385 of 1973 two other minor contentions were raised. One was that the reservation was beyond 50 per sent. The total number of seats to be filled in through the combined test is 732. The number of general seats is 368. 26 seats are reserved for <ORG> nominees under various beads. The reservation of 26 seats was contended to be considered while calculating the percentage of reserved seats. If 26 seats are included it was said that the reserved seats would come to 52 per cent. 26 seats form a source from which selection is made. The Government bears the burden of expenses of education. A provision laying down a source is not a reservation [see <NAME>'s case (supra)].

The other contention was that <ORG> changed the percentage of reserved seats after the premedical test was held. The contention was that candidates belonging to reserved classes were able to secure some of the general seats on the basis of then better performance in competitive test and therefore more seats went to people from reserved classes. The Government did not change the number of seats for reserved classes. Candidates belonging to the reserved classes were selected by reason of their excellence in education. The reservation has not been changed. We have already held that the success of candidates from rural areas at the open competition indicates that the rural areas do not represent educationally backward classes of citizens. For these reasons we hold that the reservation in favour of candidates from rural areas is unconstitutional. The reservations for the, hill and Uttrakhand areas are severable and these are valid.

We allow Civil Appeal No. 1385 of 1973 in part. Civil Appeal No. 1542 of 1974 is also allowed in part. The reservations for the hill and Uttrakhand areas are upheld in both the appeals and the reservations for the rural areas in both the appeals are unconstitutional.

Writ Petition No. 442 1974 succeeds in part. The reservation for rural areas aggregating 131 seats is declared unconstitutional. Reservation for hill and Uttrakhand areas is held to be valid.

Parties will pay and bear their own costs in the writ petition as well as in <ORG>.

P.B.R. Appeals and Petition allowed in part.


PETITIONER: MADHAVRAO JIWAJI RAO SCINDIA & ANR. ETC. Vs. RESPONDENT: SAMBHAJIRAO CHANDROJIRAO ANGRE & ORS. ETC. DATE OF JUDGMENT09/02/1988 BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH OZA, G.L. (J) DUTT, M.M. (J) CITATION: 1988 AIR 709 1988 SCR (2) 930 1988 SCC (1) 692 JT 1988 (1) 279 1988 SCALE (1)261 CITATOR INFO : D 1991 SC1260 (70) R 1991 SC2176 (49) RF 1992 SC 604 (104) ACT: Criminal Procedure Code , 1973: Section 482-Prosecution at the initial stage-Quashing of-Test to be applied by Court-Whether uncontroverted allegations establish a prima facie offence-Whether expedient in interest of justice to permit prosecution to continue. Indian Penal Code , 1860: Sections 34, 120-B, 406, 467- Allegation that officers of Trust in collusion with trustee created tenancy in respect of trust flat-Whether case of breach of trust-Whether amounts to a criminal offence or only a civil wrong. Indian Trusts Act 1882: Section 53-Lease of trust property-Allegation that officers of Trust in collusion with trustee created tenancy in respect of flat of trust- Prosecution under Section 406 , 467 I.P.C.-Whether maintainable. HEADNOTE: % A trust with the settler, her son and two others, as trustees was created. Part of the trust property included a large house. Respondents in Criminal Appeal No. 658 of 1986, were employed as Secretary and Manager of the trust between 1976 and June, 1981. On a complaint filed in the court of the Metropolitan Magistrate by one of the trustees alleging that these two officers, in conspiracy with one of the trustees, son of the settler, and his wife, had created documents showing tenancy in respect of a flat of the large house, forming part of the trust property, in favour of the aforesaid trustee's wife, summons were directed to be issued against the aforesaid four accused for offences punishable under sections 406 and 467 read with section 34 and 120B of the . The accused persons challenged the proceedings before <ORG> which quashed the proceedings against two of the accused, but sustained the order of the Magistrate against the other two accused, appellants in Civil Appeal No. 657 of 1986. 931 Appeals against the aforesaid order were filed in this Court both by the two accused, whose prosecution was not quashed, as also the complainant. On behalf of the accused-appellants, it was contended that the trust-deed authorised the trustee to look after the affairs of the trust, but the tenancy in favour of the trustee's wife could not be considered as creating an interest in favour of the trustee as the wife was an independent person having her own income, that there was no mens rea involved for initiating criminal proceedings and, at the most it amounted to a civil wrong, and that the court machinery should not be permitted to be utilised for private vengeance as the mother and the son had fallen out. On behalf of the complainant it was urged that in view of s. 53 of the Indian Trusts Act, it was a clear case of breach of trust and that every breach of trust would simultaneously be a civil wrong and a criminal offence, and an opportunity should be given to the complainant to establish his case by leading evidence, and that no objection could be taken at the preliminary stage. Allowing the appeal of the accused and dismissing the appeal of the complainant, the Court, ^ HELD: When a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations, as made, prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. [934G-H; 935A] A case of breach of trust may be both a civil wrong and criminal offence. But there would be certain situations where it would predominantly be a civil wrong and may or may not amount to criminal offence. The instant case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offence are wanting. [935B-C] 932 Having regard to the relevant documents, including the trust deed and the correspondence following the creation of the tenancy and taking into consideration the natural relationship between the settler and the son and his wife and the fall out and the fact that the trustee's wife does not claim any interest in the tenancy, the criminal case should not be continued. The criminal proceedings against the appellants-accused are quashed. [934F; 935C-D] JUDGMENT:

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal Nos. 657-58 of 1986.

From the Judgment and Order dated 13.2.1986 of <ORG> in Criminal Application No. 120 of 1984.

Dr. <NAME>, <NAME>, <NAME>, Mrs. <NAME>, <NAME>, <NAME> and <NAME> for the Appearing parties.

The Judgment of the Court was delivered by <NAME>, J. Both the appeals are by special leave and are directed against the same judgment of <ORG> on an application under section 482 of the Code of Criminal Procedure. <ORG> by the impugned decision quashed the prosecution against two of the four accused persons. The two accused persons whose prosecution has not been quashed are appellants in Criminal Appeal No. 657 of 1986 while the complainant assails the decision of <ORG> quashing the prosecution of the two accused persons in Criminal Appeal No. 658 of 1986.

<NAME> of Gwalior created a trust on 23rd of February, 1966, known as "Srikrishna Madhava <ORG>" with four trustees in all including the settler, the other three trustees being Mr. <NAME>, Col. <NAME> and <NAME>. <NAME> is the son of the settler while the other two, though residents of Gwalior, are not members of the family. 'Vijay Vilas' a large house located in the Bombay city constituted a part of the trust property. <NAME> and <NAME>, respondents in Criminal Appeal No. 658 of 1986, were employed as Secretary and Manager respectively of the <ORG> between 1976 and 1982. Flat No. 15 of 'Vijay Vilas' was in the occupation of <NAME> on tenancy basis. In June, 1981, the said tenant surrendered the tenancy and on 9th of June, 1981, the Secretary issued a certificate to the effect that the tenancy had terminated. On 31st of March, 1982, the said Secretary issued another certificate to the effect that the aforesaid tenancy terminated with effect from 1st April, 1980, after the entire rental liability had been liquidated. On the allegation that the two officers of the <ORG> in conspiracy with trustee <NAME> and his wife Smt. <NAME> had created documents showing tenancy in respect of that flat in favour of Smt. <NAME>, a complaint was filed by trustee <NAME> in <ORG>, <ORG> Esplanade, Bombay on 27th July, 1983. Summons were directed to be issued against the four persons referred to above for offences punishable under sections 406 , 467 read with sections 34 and 120-B of the Indian Penal Code. The accused persons challenged the proceedings before <ORG> by filing an application under section 482 of the Code and prayed for quashing of the criminal case. By the impugned order dated 13th February, 1986 <ORG> quashed the proceedings so far as accused Nos. 2 and 4 were concerned but sustained the order of the Metropolitan Magistrate in regard to the remaining two accused persons. Hence these appeals have been filed as already stated.

The settler and the accused being mother and son, an attempt was made to bring about a settlement but that having failed the appeals have been heard on merit and are being disposed of by this common judgment.

Dr. <NAME>,, learned counsel appearing for the accused appellants has contended that the criminal proceedings are without any basis and if at all, a civil wrong may be said to have been caused. According to him, the trust deed authorised trustee <NAME> to look after the affairs of the <ORG>. The flat had been tenanted at a particular rent when the tenant vacated; and a new tenant had to be inducted-it being the common case that the flat was intended for tenancy-<NAME> wanted to be the tenant and at the rate of rent which the outgoing tenant was paying, a new tenancy was created. Under the law applicable to tenancies in Bombay, a higher rent is not chargeable and as such no higher amount of rent could be claimed by the <ORG> in regard to the flat. The wife of the trustee is an independent person having her own income and the tenancy in favour of <NAME> cannot be considered to be creating an interest in favour of the trustee. Dr. <NAME> further relied upon a lawyer's notice issued on behalf of the trust calling upon <NAME> to surrender the tenancy in favour of the <ORG> failing which action was threatened. <NAME> volunteered to surrender the tenancy and thus there was really no justification, according to Dr. <NAME>, for initiating criminal proceedings. In the facts and circumstances of the case narrated above, the appellants' counsel contended that there was no mens rea for the offences as alleged and at the most it amounted to a civil wrong. He argued that the mother and the son had fallen out and on that score the machinery of the <ORG> should not be permitted to be utilised for private vengeance.

Mr. <NAME>, appearing for the complainant, on the other hand, maintained that it was a clear case of breach of trust and according to him every breach of trust would simultaneously be a civil wrong and a criminal offence and if summons have been issued by the Metropolitan Magistrate on the basis of the complainant's allegations, no objection could be taken at the preliminary stage. It is appropriate that the complainant should be given an opportunity to establish his case by leading evidence. He relied upon the provisions of section 53 of the Indian Trust Act which provides:

"No trustee, and no person who has recently ceased to be a trustee, may, without the permission of a principal <ORG> of original jurisdiction, buy or become mortgagee or lessee of the trust-property or any part thereof; and such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the advantage of the beneficiary."

We have considered the relevant documents including the Trust deed as also the correspondence following the creation of the tenancy. We have also kept in view the submissions advanced on behalf of the parties by their respective counsel. We have further taken into consideration the natural relationship between the settler and the son and his wife and the fall out.

The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage.

Mr. <NAME> has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Several decisions were cited before us in support of the respective stands taken by counsel for the parties. It is unnecessary to refer to them. In course of hearing of the appeals, Dr. <NAME> made it clear that <ORG> does not claim any interest in the tenancy. In the setting of the matter we are inclined to hold that the criminal case should not be continued.

Criminal Appeal No. 657 of 1986 is allowed and the criminal prosecution against the two appellants being <NAME> and <NAME> is quashed. In view of what we have stated above, Criminal Appeal No. 658 of 1986 has to fail and is dismissed.

N.P.V. Appeal dismissed.


PETITIONER: M.B. MAJUMDAR Vs. RESPONDENT: UNION OF INDIA DATE OF JUDGMENT22/08/1990 BENCH: <NAME>, JAGDISH SARAN (J) BENCH: <NAME>, JAGDISH SARAN (J) PUNCHHI, M.M. REDDY, K. JAYACHANDRA (J) CITATION: 1990 AIR 2263 1990 SCR (3) 946 1990 SCC (4) 501 JT 1990 (3) 655 1990 SCALE (2)345 ACT: Administrative <ORG>s Act 1985/Central Administrative <ORG> (Salaries and Allowances and Conditions of Service of Chairman, Vice-Chairman and Members) Rules 1985. Sections 4 , 7 , 14 , 17 , 35 /Rule 3--Central Administrative <ORG>s-Members-Not equated with <ORG> Judges/Vice Chairman of <ORG> for purposes of pay and superannuation whether valid and legal. HEADNOTE: The petitioner is a Judicial Member of <ORG>. In this writ petition he claims equality of the Members of <ORG> with the Judges of the <ORG>, or even the Vice-Chairman of the <ORG>, in the matter of pay, and age of superannua- tion. The Central Administrative <ORG> (Salaries and Allow- ances and Conditions of Service of Chairman, Vice-Chairman and Members) Rules, 1985 were framed in exercise of the powers conferred by section 35(2)(c) of <ORG>s Act, 1985. Rule 3 of the Rules specifies Rs.8,000 p.m. as the pay of the Vice-Chairman and the pay scale of Rs.7300-100-7600 p.m. for a Member. Rule 8 prescribes the age of superannuation for the Chairman and Vice Chairman at 65, and for any other Member 62 years. It was contended on behalf of the petitioner that an arbitrary distinction had been made in the conditions of service, particularly in regard to pay and age of superannu- ation, between the Vice-Chairman and the Members; that the judicial functions discharged by the Vice Chairman and the Members of <ORG> were the same and, therefore, the principle of "equal pay for equal work" applied, and on that basis Article 14 had been violated; and that <ORG> being a substitute for the <ORG> for adjudicating disputes relating to service matters, the Members of the <ORG> should be equated with the <ORG> Judges for all purposes 947 including their pay and age of Superannuation. <CITATION> ,  1 SCC 124, relied upon. On behalf of the respondent it was contended that all the functions of the Vice-Chairman and the Members were not the same in as much as the Vice-Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharged certain administrative functions entrusted to him by the Chairman. Dismissing the writ petition, this Court, HELD: (1) It is the law enacted by <ORG> constitut- ing <ORG> which has to be first seen for the purpose of ascertaining the real nature and status of the <ORG> and the persons constituting it. [1953 E] (2) It is not possible for <ORG> to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage. [956G] (3) There is no ambiguity in the provisions of <ORG>s Act , 1985, and the exact status and service conditions of the Chairman, Vice-Chairman and Mem- bers of <ORG> together with the quali- fications for appointment to these offices have been clearly spelt out in the Act. [953F] (4) From the scheme of the Act and the rules flamed thereunder it is quite clear that their enactment is in the manner laid down in Article 323-A of the Constitution. From the scheme it is evident that the Chairman, Vice-Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the <ORG>s. Such elaborate provisions were unnecessary if the <ORG> was to be equated with the <ORG>s and its members with <ORG> Judges. 1953D; 954C] (5) Article 323-A and 323-B themselves require the law constituting these <ORG>s to provide for the pay and other conditions of service of its Members and, therefore, the same would he governed in the case of each <ORG> by the provisions of the statute giving birth to the <ORG>. These statutes being different, the provisions therein in this behalf can also be different, which has been left to the legislative wisdom to decide. [955G-H] 948 (6) Equation of the <ORG> with the <ORG> was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case. [956C] <CITATION> ,  1 SCC 124, distinguished & explained. (7) The foundation of initial equality on which the argument of discrimination is based, is non-existent. The parent statute itself shows that they were not born equals. [956E] JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition (Civil) No. 960 of 1987.

(Under Article 32 of the Constitution of India). <NAME>, <NAME>, <NAME> and <NAME> for the Petitioner.

<NAME>, <NAME> and Ms. <NAME> for the Respondent.

The Judgment of the <ORG> was delivered by <NAME>, J. This writ petition under Article 32 of the Constitution by a Judicial Member of <ORG> purports to be a sequal of this <ORG>'s deci- sion in <CITATION> .,  1 SCC 124. The petitioner contends that the decision in <NAME> case (supra) equates <ORG> with the High <ORG> and therefore, its Chairman has to be equated with the Chief Justice of a High <ORG> and the Vice-Chairman and Members must be equated with the sitting Judges of the High <ORG> in all respects. It is contended that while the Vice-Chairman have been equated with sitting Judges of the High <ORG>, the Members have not been so equated in their pay and other conditions of serv- ice. It is further contended that a distinction has been made in the conditions of service, particularly the pay and age of superannuation between the Vice-Chairmen and the Members, which is arbitrary and therefore, the Members also should be given the same pay as the Vice-Chairmen and their age of superannuation should also be the same i.e. 65 years as that of the Vice-Chairmen. It is urged that the judicial functions discharged by the Vice-Chairmen and the Members of <ORG> are the same and therefore, the principle of "equal pay for equal work" applies. Violation of Article 14 of the Constitution is alleged on this basis.

Part XIV-A containing Articles 323-A and 323-B were inserted in the Constitution of India by the Constitution (Forty-second Amendment) Act, 1976 enabling the setting up of Administrative Tribunals and Tribunals for other matters by legislative enactments.

<ORG> has been constituted under Section 4 of the Administrative <ORG>s Act, 1985 (hereinafter referred to as 'the Act') with a Chairman, Vice-Chairmen and Members-judicial and administrative. The qualifications for appointment of Chairman, Vice-Chairmen or other Members are prescribed by Section 6 of the Act. Sec- tion 7 provides that the Vice-Chairman or, as the case may be such one of the Vice-Chairman as the appropriate Govern- ment may, by notification, authorise in this behalf, shall act as the Chairman in the event of any vacancy in the office of the Chairman for any reason whatsoever, or when the Chairman is unable to discharge his functions for any reason. Section 8 prescribes the term of office of the Chairman, Vice-Chairman or other Members as five years from the date on which he enters upon his office with eligibility for re-appointment for another term of five years provided that no Chairman or Vice-Chairman shall hold the office after he has attained the age of 65 years and any other Member, the age of 62 years. Section 10 of the Act provides for the salaries and allowances and other terms and condi- tions of service of Chairman, Vice-Chairman and other Mem- bers to be such as may be prescribed by the Central Govern- ment. Section 17 confers on the <ORG> the same jurisdic- tion, powers and authority in respect of contempt of itself as <ORG> has under the Contempt of Courts Act , 1971. But for this specific provision, the <ORG> would not have the power of <ORG> in this behalf. Section 18 provides for distribution of business amongst the Benches of the <ORG>. Section 28 excludes the jurisdiction of courts except <ORG> or any Industrial <ORG>, <ORG> or other authority, constituted under the Industrial Disputes Act , 1947 or any other corresponding law for the time being in force in relation to matters over which the <ORG> has been conferred jurisdiction. Section 35 con- tains the rule-making power of <ORG> while Section 36 gives power to the appropriate Government to make rules to carry out the provisions of the Act and particular- ly, for the matters specified therein. The specified pur- poses for which <ORG> can make rules speci- fied in Section 35(2)(c) include the salaries and allowances payable to, and the other terms and conditions of the Chairman, Vice-Chairmen and other Members. The rules framed under the Act are to be laid before the <ORG>. It is not necessary to give further details of the Administrative <ORG>s Act , 1985, the provisions of which were considered at length in <NAME> case (supra) and now stand amended in accordance with the observations of this Court in that decision. <ORG> (Salaries and Allow- ances and Conditions of Service of Chairman, Vice-Chairmen and Members) Rules, 1985 (hereinafter referred to as 'the rules') were framed in exercise of the powers conferred by Section 35(2)(c) of the Administrative <ORG>s Act, 1985. Rule 3 therein, as it now exists, specifies Rs.9,000 p.m. as the pay of the Chairman; Rs.8,000 p.m. as the pay of the Vice-Chairman; and the pay scale of Rs.7300-100-7600 per mensem for a Member. As earlier indicated, the age of super- annuation prescribed in Section 8 of the Act for the Chair- man and Vice Chairman is 65 years and for any other Member, 62 years. The petitioner's grievance is that the pay of any other Member of the <ORG> and his age of superannuation should be Rs. 8,000 p.m. and 65 years respectively as in the case of Vice-Chairmen, since the Members and Vice-Chairmen discharge identical judicial functions. The question is: Whether the principle of "equal pay for equal work", relied on by the petitioner, is applicable to this situation or there is any hostile discrimination against the Members of the Central Administrative <ORG>, as alleged by the petitioner. If the petitioner's contention be correct, then would arise the question of relief which can be granted. The prayer made in this petition is to direct an amendment in the Administrative <ORG>s Act , 1985 and the rules framed thereunder, to prescribe the same pay and age of superannua- tion for the Members as in the case of the Vice-Chairman. The argument of Shri <NAME> and Shri <NAME> in support of the petition is that the Members and the Vice-Chairman of the Central Administrative <ORG> belong to the same class since they discharge identical judicial functions and there is no rational nexus of the classifica- tion made between them with the object sought to be achieved. It is urged that the <ORG> is one entity com- prising of the Chairman, Vice-Chairmen and Members which has been substituted for <ORG> in respect of the juris- diction conferred on the <ORG> and therefore, there is no justification for discriminating between them in the matter of pay and other conditions of service.

In the counter-affidavit of the respondent, it has been stated that all the functions of the Vice-Chairman and the Members are not the same inasmuch as the Vice-Chairman, in addition to filling the casual vacancy in the office of the Chairman, also discharges certain administrative functions entrusted to him by the Chairman while no such administra- tive function is discharged by any Member. It is stated that the office of the Vice-Chairman and any other Member cannot, therefore, be treated as the same or in one class. <NAME>, learned counsel for the respondent contended that <NAME> case (supra) does not lend any support to the petitioner's contention and in this context the observa- tions made therein actually negative the petitioner's stand. It was also urged that the relief claimed for a direction to amend the aforesaid Act and the rules framed thereunder cannot be granted, which alone is the relief claimed in the writ petition.

was rightly not disputed by learned counsel for the petitioner that the relief specifically claimed in the petition of a direction to amend the Administrative Tribu- nals Act, 1985 and the rules flamed thereunder to equate the Members of the <ORG> with the Vice Chairman in the matter of pay and age of superannuation cannot be granted- For this reason, it was urged on behalf of the petitioner that the relief may be suitably moulded to grant the same benefit for the Members of the <ORG> if the allegation of hostile discrimination is accepted. it is not necessary for us to deal further with this aspect since we have no doubt that the plea of violation of Article 14 of the Constitution, raised by the petitioner, is untenable and must fail. The sheet-anchor of petitioner's case is the decision of this Court in <NAME> case (supra). We will present- ly show that the decision in <NAME> case (supra) does not support the petitioner's claim in this petition. It is significant to note that the age of superannuation of <ORG> Judges is 62 years while that of the Chairman and Vice-Chairman of the <ORG> is 65 years and of any other Member is 62 years. No attempt has been made on behalf of the petitioner to justify the fixation of age of superannua- tion of the Chairman and the Vice-Chairman as 65 years if they are to be equated with the Chief Justice and sitting judges of the <ORG> who retire at the age of 62 years only. In respect of the age of superannuation, the Members of the <ORG> are at par with the Chief Justice and the Judges of the <ORG>. Obviously, it is for this reason that an attempt was made to claim the equality with the Vice-Chairman of the <ORG> who gets Rs.8,000 p.m. as pay like a <ORG> Judge but retires at the higher age of 65 years. This disparity itself indicates that the Chairman, Vice-Chairmen and Members of the <ORG> are not equated with the Chief Justice and Judges of the <ORG> for all purposes which, in substance, is the founda- tion of the petition.

The contention of <NAME>, learned counsel for the petitioner, is that <ORG> being a substitute for <ORG> for adjudicating disputes relating to service matters the Members of the <ORG> should be equated with <ORG> Judges for all purposes including their pay and age of superannuation. He contends that the lower pay and age of superannuation of the Members of the <ORG> is discriminatory and violates Article 14 of the Constitution. His argument is that the Members should be equated in this behalf with the Vice- Chairman whose pay is equal to that of a puisne Judge of <ORG>. However, no attempt was made to justify on this reasoning the higher age of superannuation of the ViceChair- man being 65 years against 62 years of a <ORG> Judge. <NAME> supported the petition and contended that the <ORG> being one body, the persons constituting it cannot be bifurcated into separate categories and the pay and age of superannuation of all of them should be the same. He adds that the Members and the ViceChairman should have the same pay and age of superannuation while the slightly higher pay of the Chairman was justified as in the case of the Chief Justce vis-a-vis the puisne Judges of <ORG>s.

In substance, the contention of <NAME> is for equating the Members of the <ORG> with puisne Judges of <ORG> in the matter of pay on the assumption that the <ORG> is equated with <ORG> and with the Vice-Chairman of the <ORG> in the matter of age of super- annuation on the basis of equal work. The contention of <NAME> is slightly different. He argues that <ORG> being one entity there is no reason to treat its Members differently when all of them perform the same judicial function, the only difference being that the Chairman has additional administrative functions to discharge. Part XIV-A of the Constitution of India containing Articles 323-A and 323-B provides for the constitution of administrative and other tribunals for the purpose of adju- dication or trial by these tribunals of disputes relating to matters specified therein. Article 323-A deals with adminis- trative tribunals to be constituted for adjudication of disputes with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the <ORG> or of any <ORG> or of any local or other specified authority. The law enacted by. the <ORG> for this purpose may provide for all matters relating to the consti- tution and functions of the Administrative <ORG>s as well as for exclusion of jurisdiction of all courts, except the jurisdiction of <ORG>, with respect to the matters required to be adjudicated by the Administrative <ORG>. It is for this purpose that the Administrative <ORG>s Act , 1985 has been enacted and Section 28 therein excludes the jurisdiction of all courts except <ORG> or any Industrial <ORG>, <ORG> or other authority constituted under the Industrial Disputes Act , 1947 or any other corresponding law for the time being in force in relation to matters which <ORG> is empowered to adjudicate. The Act also provides for transfer of all pending cases as provided in Section 29 of the Act.

In the first place, the assumption in the argument on behalf of the petitioner that the <ORG> is equated with <ORG> is fallacious. It is not only the service matters required earlier to the adjudicated by <ORG> but also those by the subordinate courts which are now to be adjudicated by the Administrative <ORG>s. That apart, Article 323-A itself clearly contemplates that the Administrative <ORG>s constituted thereunder are distinct from <ORG>s and it is the law enacted by the Par- liament providing for establishment of an Administrative <ORG> which is to provide for all matters relating to the jurisdiction, powers, procedure and all supplemental, inci- dental and consequential matters relating to the Administra- tive <ORG>. It is, therefore, the law enacted by the <ORG> constituting the Administrative <ORG> which has to be first seen for the purpose of ascertaining the real nature and status of the <ORG> and the persons constituting it. There is no ambiguity in the provisions of the Administrative <ORG>s Act , 1985 and the exact status and service conditions of the Chairman, Vice-Chairman and Members of the Administrative <ORG> together with the qualifications for appointment to these offices have been clearly spelt out in the Act. This Act provides expressly for the term of office of the Chairman, Vice-Chairman and Members in Section 8 and for the salaries and allowances and other terms and conditions of service by Section 10 read with Section 35(2)(c) and the rules framed thereunder. The Central Administrative <ORG> (Salaries and allowances and Conditions of Service of Chairman, Vice-Chairmen and Mem- bers) Rules, 1985 have been framed in exercise of the powers conferred by Section 35(2)(c) to provide for the salaries and allowances etc. The scheme of the Act and the rules framed thereunder is quite clear and their enactment is in the manner laid down in Article 324-A of the Constitution.

The term of office and the age of superannuation, pay and allowances and other service conditions of the Chairman, Vice-Chairman and Members are specifically provided in this manner and from the scheme it is evident that the Chairman, Vice-Chairman and Members are not treated as one class for this purpose by the very enactment which provides for the establishment of the <ORG>. Such elaborate provisions were unnecessary if the <ORG> was equated with <ORG> and its Members with <ORG> Judges. Similarly, a higher age of superannuation could not have been prescribed for the Chairman and Vice-Chairman of the <ORG>. Article 323-A of the Constitution itself envisages different provi- sions in this behalf and not the same as. that of <ORG> which is the assumption made in the petitioner's contention. In fact, the provisions of the Act indicate that there is no intention of equating the Chairman, Vice-Chair- man and Members of the <ORG> with the Chief Justice and Judges of <ORG> for purposes other than those expressly provided in respect of jurisdiction, power etc. Section 17 of the Act is a significant indication. By Sec- tion 17, the <ORG> has been given the power to punish for contempt of itself and it is provided that for this purpose the <ORG> shall have, and exercise, the same jurisdic- tion, powers and authority as the <ORG> and the refer- ences in the Contempt of Courts Act , 1971, tO a <ORG> shall be construed as including a reference to such Tribu- nal. It is obvious that the need for enacting such a provi- sion arose only because in the absence of such a provision conferring on the <ORG> the jurisdiction and power of a <ORG> for the purpose of the provisions of the Contempt of Courts Act , 197 1, the <ORG> would not have the same jurisdiction or power while adjudicating those very matters which earlier were to be adjudicated by the <ORG>. Similarly, Section 30 of the Act provides that all proceed- ings before a <ORG> shall be deemed to be judicial pro- ceedings within the meaning of Sections 193 , 219 and 228 of the Indian Penal Code, 1860. This provision also is unneces- sary if the petitioner is right in contending that the <ORG> is equated with the <ORG> for all purposes and must be treated as a deemed <ORG> with all the, logical consequences.

It is, therefore, not possible for <ORG> to shed off or abandon its heritage and substitute its genes with those of its choice of a different heritage. In our opinion, this alone is sufficient to indicate that the petitioner's assumption is fallacious and his attempt to be treated as a deemed <ORG> Judge cannot be accepted. Apart from the obvious fallacy already indicated, the peti- tioner's claim, if accepted, would result in appointment of some deemed <ORG> Judges contrary to the express provision made in the Constitution for appointment of <ORG> Judges.

During the course of heating, it was pointed out that mere substitution of a different forum for adjudication of a dispute does not result in conferring on the new forum the status of the substituted forum for purposes other than the jurisdiction and power to adjudicate that dispute unless their status be otherwise equal. To illustrate, Section 115 CPC by amendment in some states empowers <ORG> instead of <ORG> to decide revisions thereunder, but that does not equate <ORG> with <ORG>. No attempt was made on behalf of the petitioner to answer this.

The slightly modified argument of <NAME> for achieving the same purpose also does not bear close scruti- ny. The Administrative <ORG>s Act , 1985, itself makes a distinction between the Chairman, Vice-Chairman and Members. The age of superannuation of the Chairman and Vice-Chairman is 65 years while that of the Members is 62 years. Similar- ly, there is difference in their salaries. They are not treated to be in one class for this purpose by the Act itself. It cannot, therefore, be said that all of them constitute one class since the <ORG> is one. The case of the Chairman was distinguished by learned counsel on the basis that his position was akin to that of the Chief Jus- tice of <ORG>. However, the age of superannuation of the Chief Justice and the puisne Judges of <ORG> is the same which pattern is not maintained in the Act. A provision is made in the Act for discharge of certain admin- istrative functions of the Chairman by the Vice-Chairman and not by the Members and similarly, there is provision only for the Vice-Chairman to fill a casual vacancy. The founda- tion of initial equality on which the argument of discrimi- nation is based, is non-existent. The parent statute itself shows that they were not born equals.

There is also no merit in the casual argument that there is a proposal for higher pay and age of superannuation for Members of <ORG> for other matters constituted in ac- cordance with Article 323-B of the Constitution. The basic fact to be remembered is that Articles 323-A and 323-B themselves require the law constituting these <ORG> to provide for the pay and other conditions of service of its Members and, therefore, the same would be governed in the case of each <ORG> by the provisions of the statute giving birth to the <ORG>. These statutes being differ- ent, the provisions therein in this behalf can also be different which has been left to the legislative wisdom to decide.

Considerable emphasis was laid on behalf of the peti- tioner on <NAME> case (supra) to contend that the <ORG>s constituted under Article 323-A have been equated with <ORG>. It is sufficient to say that in <NAME> (supra), the question before us in the present petition did not arise for consideration and the observation therin cannot be torn out of context. On the contrary, certain observations in para 22 of that judgment indicate that the retiring age of 62 years or 65 years, for the Members, Chairman and Vice Chairman was treated to be in accord with the pattern of the enactment on the basis that the Members and Chairman or Vice-Chairman were in different categories. Equation of the <ORG> with <ORG> therein was only as the forum for adjudication of disputes relating to service matters and not for all purposes such as the one arising for decision in the present case. We are unable to accept that the decision of this <ORG> in <NAME> (supra) supports the contention before us in this petition.

As a result of the aforesaid discussion, we have no hesitation in holding that the equality claimed by the Members of <ORG> with the Judges of the High Courts or even the Vice Chairman of the <ORG> in the matter of pay and age of superannuation does not exist being contrary to the pattern and scheme of the parent statute establishing the <ORG> and, therefore, the very foundation for the argument of discrimination being non- existent, the petition must fail.

Consequently, the petition is dismissed. In the circum- stances of the case, the parties will bear their own costs.

R.S.S. Petition dismissed.


PETITIONER: TIRUMALA VENKATESWARA TIMBER ANDBAMBOO FIRM Vs. RESPONDENT: COMMERCIAL TAX OFFICER, RAJAHMUNDRY DATE OF JUDGMENT: 28/11/1967 BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. SHAH, J.C. BHARGAVA, VISHISHTHA CITATION: 1968 AIR 784 1968 SCR (2) 476 CITATOR INFO : RF 1977 SC1275 (13) C 1989 SC1555 (9) ACT: Andhra Pradesh General Sales Tax Act 6 of 1957, Explanation III to s. 2(1) (n)-Whether ultra vires--Whether enlarges scope of 'sale' to include transactions which are not sales- Whether discriminatory. HEADNOTE: The appellant firm carried on business in Andhra Pradesh and was registered as a dealer under the Andhra Pradesh General Sales Tax Act 1957. In its return for the assessment year 1962-63 the firm claimed exemption of certain turnover on the ground that it had sent the goods to its commission agents and under the contract of agency the commission agents were empowered to pay sales-tax and had paid the same directly to <ORG>. When the Commercial Tax Officer sought to assess the appellant firm on the aforesaid turnover the appellant filed a writ petition in <ORG> which was dismissed. In appeal before this Court by certificate it was contended : (i) that Explanation III to s. 2(1) (n) of the Act enlarged the scope of the word 'sale' by treating mere entrustment to an agent as a sale and therefore the Explanation was ,ultra vires, (ii) that the commission agents to whom the appellant had sent the goods for sale had already paid the tax and the appellant could not be taxed again on the same transaction as there was only one sale; (iii) that the Explanation was violative of Art. 14 of the Constitution as it made an arbitrary classification. HELD : (i) The real effect of the third Explanation is to impose the tax only when there was a transfer of title to the goods and not where there is a mere contract of agency. The Explanation says in effect that when there is in reality a transfer of property by the principal to the agent and by the agent in his turn to the buyer there are two transactions of sale. The phrase "when the goods are transferred" in cls. (1) and (2) of Explanation III on a proper construction means "when title to the goods is transferred" and so construed it is impossible to say that the Explanation enlarges the scope of the main section. Explanation III is not. there fore ultra vires. [480 <CITATION> . 9 S.T.C. 353. referred to. (ii) As a matter of law there is a distinction between a contract of sale and a contract of agency by which the agent is authorised to sell or buy on behalf of the principal and make over either the sale proceeds or the goods to the principal. The essence of a contract of sale is the transfer of title to the goods for a price paid or promised to be paid. The transferee in such a case is liable to the transferor as a debtor for the price to be paid and not as agent for the proceeds of the sale. The essence of agency to sell is the delivery of the goods to a person who is to sell them, not as his own property but as the property of the principal who continues to be the owner of the goods, and will therefore be liable to account for the sale proceeds. The true relationship of the parties in 477 each case has to be gathered from the nature of the contract, its terms and conditions, and the terminology used by the parties is not decisive of the legal relationship. [480 G-481 B] Whether the transactions in the present case were sales or contracts of agency was a mixed question of law and fact and must be investigated with reference to the material which the appellant might be able to place before the appropriate authority. The question was not one which could be properly determined in an application under Art. 226 of the Constitu- tion. [482 B] W.T. Lamb and Sons v. Goring Brick Company, Limited  K.B. 710, and <NAME> v. <NAME>  8 A.C. 309, referred to. (iii) The classification contemplated by the Explanation between sales through commission agents who account fully for all collections made and sales through commission agents who do not account for collections is based upon an intelligible differentia and it has a rational relationship with the object sought to be achieved by the statute. It did not therefore, violate Art. 14. [482 C-D] JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2176 of 1966.

Appeal from the judgment and order dated April 16, 1964 of <ORG> in Writ Petition No. 1404 of 1963.

<NAME> for <NAME>, for the appellant. <NAME> and <NAME>, for the respondent. The Judgment of the Court was delivered by <NAME>, J. The appellant is a partnership firm carrying business in bamboos, timber and firewood at Gokavaram in the State of Andhra Pradesh. The firm had been registered as a dealer under the Andhra Pradesh General Sales Tax Act (No. VI of 1957), hereinafter referred to as the 'Act'. For the assessment year 1962-63, the appellant submitted a return showing a gross turnover of Rs. 13,89,130.70 P and claimed exemption on a turnover of Rs. 13,68,174.39 P which according to the appellant represented the amount of sales effected by its commission agents and sales of firewood. By a notice dated November 28, 1963, the Commercial Tax Officer, Rajahmundry called upon the appellant to show cause as to why it should not be assessed for the year 1962-63 on a turnover of Rs. 13,89,130.70 P at 2 per cent. Eleven items were comprised in the notice. Item No 1, relating to a turnover of Rs. 96,527.10 P was under the firewood account. It was alleged by the appellant that it paid the single point tax at 2 per cent to <ORG> on the amounts for which the forest goods were taken in auction. As regards items 2 to 11 the appellant claimed exemption on the ground that its agents, Messrs. <NAME> and <NAME>, Rajahmundry, paid the tax. The case of the appellant was that L1 Sup. C.I./68-16 it sent goods for sale to its commission agents and under the contract of agency the commission agents were empowered to pay sales-tax and had paid the same directly to <ORG>. In accordance with the usual commercial practice the commission agents collected Dharmam on the sales conducted by them and appropriated those collections for charitable purposes. The commission agents furnished accounts to the appellant but in these accounts the amounts collected towards sales-tax and Dharmam were not specifically shown as it was understood between the parties that the amounts collected towards sales tax would be remitted to <ORG> and the amounts collected towards Dharmam would be credited to the charity account of the commission agents and suitably utilised by

-them. Aggrieved by the assessment notice of the respondent disallowing its claim for exemption the appellant-firm filed a writ petition No. 1404 of 1963 dated December 7, 1963 before <ORG> under Art. 226 of the Constitution praying for the grant of a writ in the nature of certiorari calling for the records relating to sales-tax assessments of the appellant for the year 1962-63 and quashing the notice dated November 28, 1963 issued by the respondent. By its judgment dated April 16, 1964 <ORG> dismissed the writ petition. This appeal is brought by a certificate granted by <ORG>. On behalf of the appellant it was contended, in the first place, that Explanation III to s. 2 (1 ) (n) of the Act enlarged the scope of the word "sale" and by means of a fiction converted what are not sales in law into taxable sales for the purpose of the Act and, therefore, the Explanation was ultra, vires of the powers of <ORG> which had no legislative competence to impose a tax under Entry 48 in List II of Sch. VII of the Constitution. Section 2 (1) (n) of the Act defines "sale" as follows :

"sale" with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business, for cash, or for deferred payment, or for any other valuable consideration, (and includes any transfer of materials for money consideration in the execution of a works contract provided that the contract for the transfer of such materials can be separated from the contract for the services and the work done, although the two contracts are embodied in a single document) or in the supply or distribution of goods by a society (including a co-operative society), club, firm or associations to its members, but does not include a mortgage hypothecation or pledge of, or a charge on goods;

NOTE :- By Amendment Act 26, 1961, the brac- keted words were substituted for the words and includes a transfer of property in goods involved in the execution of a works contract. Explanation III :-Notwithstanding anything contained in this Act or in the Indian Sale of Goods Act , 1930 (Central Act III of 1930), two independent sales or purchases shall, for the purposes of this Act, be deemed to have taken place-

(1) when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or (2) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid-

(i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate; or

(ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate; or

(iii) not to have accounted to his principal for the entire collections or deductions made by him, in the sales or purchases effected by him on behalf of his principal; or

(iv) to have acted for a fictitious or non- existent principal;"

In our opinion the real object of the Explanation is to prevent the misuse by the assessee of the relationship of principal and agent for the purpose of evading tax. The first situation contemplated by the legislature is that covered by cl. 2(i) of Explanation III where the agent has sold the goods at one rate and passed on the sale proceeds to its principal at another rate. The second situation is where the agent has purchased the goods at one rate and has passed them on to the principal at another rate. The third situation is where the agent has not accounted to his principal for the entire collections or deductions made by him in the sales or purchases effected by him on behalf of his principal, and the fourth is where it appears that the agent has acted for a fictitious or non-existent principal. It was contended on behalf of the appellant that the <ORG> legislature was not competent to convert by a legal fiction a mere entrustment of goods for sale into a sale and to impose a tax thereon. In our opinion, there is no warrant for this argument. The real effect of the third Explana-

tion is to impose the tax only when there was a transfer of title to the goods and not where there is a mere contract of agency. The Explanation says in effect that where 'there is in reality a transfer of property by the principal to the agent and by the agent in his turn to the buyer, there are two transactions of sale. In our opinion, the phrase "when the goods are transferred" in cls. (1) and (2) of Explanation III on a proper construction means "when title to the goods is transferred" and so construed it is impossible to say that the Explanation enlarges the scope of the main section. It was pointed out by this Court in <CITATION> .(1) that the expression "sale of goods" in Entry 48 in List II of Sch. VII of the Government of India Act, 1935, cannot be construed in its popular sense but must be interpreted in its legal sense and should be given the same meaning which it has in the Sale of Goods Act , 1930. It is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing therein pursuant to that agreement. In other words, it is necessary for constituting a sale that there should be an agreement between the parties for the purpose of transferring title in the goods, that the agreement must be supported by money consideration and that as a result of the transaction the title to the property must actually pass in the goods. As we have already pointed out, the third Explanation to S. 2 (1) (n) of the Act must be interpreted to mean that where there is in reality a transfer of property in the goods by the principal to the agent and by the agent in his turn to the buyer, there are two transactions of sale. It is therefore impossible to accept the contention put forward on behalf of the appellant that the Explanation has converted what, in fact, is not a sale into a sale for the purpose of assessment to sales-tax.

It was contended on behalf of the appellant that in any event items Nos. 2 to II of the notice related to goods which the appellant had sent for sale to the commission agents and as the latter had already paid the sales-tax the appellant was not liable to be assessed to tax again on the same transaction as there was only one sale. As a matter of law there is a distinction between a contract of sale and a contract of agency by which the agent is authorised to sell or buy on behalf of the principal and make over either the sale proceeds or the goods to the principal. The essence of a contract of sale is the transfer of title to the goods for a price paid or promised to be paid. The transferee in such a case is liable to the transferor as a debtor for the price to be paid and not as agent for the proceeds of the sale. The essence of agency to sell is the delivery of the goods to a person who is to sell them, not as his own property but as the property of the (1) 9 S.T.C. 353.

principal who continues to be the owner of the goods and will therefore be liable to account for the sale proceeds. The true relationship of the parties in each case has to be gathered from the nature of the contract, its terms and conditions, and the terminology used by the parties is not decisive of the legal relationship. For instance, in <ORG> v. <ORG>) there was an agreement in writing by which certain manufacturers of bricks and other building materials appointed a firm of builders' merchants "sole selling agents of all bricks and other materials manufactured at their works". The agreement was expressed to be for three years and afterwards continuous subject to twelve months' notice by either party. While the agreement was in force the manufacturers informed the merchants that they intended in the future to sell their goods themselves without the intervention of any agent, and thereafter they effected sales to customers directly. It was held by <ORG> that the agreement was one of vendor and purchaser and not one of principal and agent. The same principle is enunciated in <NAM<ORG>> v. Lippert(2), in which there was a contract between the defendant and <ORG>, which in its terms purported to be one of guarantee or agency; that is to say, the defendant guaranteed the sale of <ORG>'s property in whole or by lots at a fixed price, <ORG> giving the defendant a power of attorney to deal with the property as he thought fit, and agreeing that he should receive any surplus over and above the fixed price as his commission on and recompense for the said guarantee. It was held by <ORG>, upon a construction of the agreement, that the transaction was really a sale and that the defendant was liable to pay duty on his purchase-money under Act II of 1863. At page 313 of the Report, Sir <NAME>, who delivered the opinion of the Board, stated as follows :

"Under these circumstances it appears to their Lordships that the Chief Justice was justified in saying that the effect of the transaction was to give <NAME> every right which a vendor could legally claim, and to confer upon the defendant every right which a purchaser could legally demand., Does it make any difference that the parties have called this transaction by the name of a guarantee ? It appears to their Lordships that because the parties have used 'this term 'guarantee' in a sense which is unusual and not applicable to this case,--for <ORG> really guaranteed nothing,-the nature of the transaction is not thereby changed; and because they have said that <ORG> was to be entitled to whatever Surplus or balance shall remain on the resale of portions of the property, if any were resold, 'as commission and (1) [1932] K.B. 710.

L1 Sup. Cl/68---17 a (2) [1883] 8 A.C. 309.

<NAME>

recompense for the said guarantee,' this expression does not convert him from a purchaser into an agent."

It is manifest that the question as to whether the transactions in the present case are sales or contracts of agency is a mixed question of fact and law and must be investigated with reference to the material which the appellant might be able to place before the appropriate authority. The question is not one which can properly be determined in an application for a writ under Art. 226 of the Constitution.

It was also submitted on behalf of the appellant that the third Explanation to s. 2(1) (n) of the Act violated the guarantee under Art. 14 of the Constitution since the classification contemplated, i.e., sales through commission agents who account fully for all collection made and sales through commission agents who do not account for collections, was not made on any intelligible differentia and had no rational relationship to the purpose of the statute. In our opinion, there is no substance in this argument as the classification is based upon an intelligible differentia and it has a rational relationship with the object sought to be achieved by the statute. Counsel for the appellant is therefore unable to make good his submission on this aspect of the case.

For the reasons expressed we hold that the judgment of <ORG> is right and this appeal must be dismissed. In the circumstances of the case we do not propose to make any order as to costs.

<NAME>

Appeal dismissed.