PETITIONER: KUNNATHAT THATHUNNI MOOPIL NAIR Vs. RESPONDENT: THE STATE OF KERALA AND ANOTHER(with connected petitions) DATE OF JUDGMENT: 09/12/1960 BENCH: <NAME>, BHUVNESHWAR P.(CJ) BENCH: <NAME>, BHUVNESHWAR P.(CJ) IMAM, SYED JAFFER SARKAR, A.K. SUBBARAO, K. SHAH, J.C. CITATION: 1961 AIR 552 1961 SCR (3) 77 CITATOR INFO : R 1962 SC 123 (12) R 1962 SC 148 (1) R 1962 SC1006 (37,38,78,799) RF 1962 SC1371 (42) R 1962 SC1406 (37) RF 1962 SC1563 (22) R 1962 SC1621 (31,55,109,121) R 1962 SC1733 (3A) RF 1963 SC 591 (7) RF 1963 SC1667 (12) RF 1964 SC 370 (10) R 1964 SC 925 (45) R 1964 SC1013 (25) R 1966 SC 619 (7) E 1967 SC 691 (26,66) F 1967 SC1458 (23) R 1968 SC 658 (8) RF 1969 SC 378 (3) RF 1970 SC 169 (11) R 1970 SC1133 (5,7,8,18,23,24,25,26,29,30,31 D 1971 SC1321 (11,14) RF 1971 SC1801 (4) R 1972 SC 828 (27) D 1972 SC 845 (5,14,25,30) RF 1972 SC2563 (16) R 1974 SC 497 (21) R 1974 SC 543 (32) D 1974 SC 849 (19) RF 1975 SC 511 (17) RF 1975 SC1208 (28) R 1979 SC 321 (5) F 1980 SC 271 (43,49) E 1980 SC 286 (51,52) RF 1980 SC1789 (36) D 1983 SC 762 (12) D 1986 SC1668 (11) D 1986 SC1930 (18) R 1990 SC 40 (8) RF 1992 SC 999 (12) ACT: Land Tax-Constitutional validity of enactment-Uniform basic tax on all lands-Classification--Tax on forest areas-Legis- lative competence of <ORG>--<ORG>'s power to exempt- Provisional assessment-Validity-Travancore-Cochin Land Tax Act, 1955 (Travancore-Cochin 15 of 1955), as amended by Act 10 of 1957, ss. 4 , 5-A , 7-Constitution of India, Arts. 14, 19(1)(f), 31, 265, Schedule 7, List II, Entries 19, 49. HEADNOTE: The Travancore-Cochin Land Tax Act, 1955 was passed by the legislature of the <ORG> of Travancore-Cochin and was amended by Act 10 of 057, by the <ORG> of Kerala. By s. 4 Of the Act all lands in the <ORG> of whatever description and held under whatever tenure were to be charged and levied a uniform rate of tax to be called the basic tax. Section 7 gave power to the <ORG> to exempt from the operation of the Act such 78 lands or class of lands which the <ORG> may, by notification, decide. Section 5A which was introduced into the Act by the Amending Act enabled the <ORG> to make a provisional assessment of the basic tax in respect of the lands which had not been surveyed by the <ORG> and provided that the <ORG> after conducting the survey shall make a regular assessment and make the necessary adjustments in respect of the amounts paid already. There was, however, no time fixed for the conduct of the survey. The petitioners who owned forest in the <ORG>, challenged the constitutional validity of the Act on the grounds that the provisions of the Act contravened Arts. 14, 19(i)(f) and 31(1) of the Constitution of India inasmuch as (1) the Act did not have any regard to the quality of the land or its productive capacity and the levy of a tax at a flat rate of RS. 2 per acre imposed very unreasonable restrictions on the right to hold property, (2) the. Act did not lay down any provision calling for a return from the assessee for an enquiry or investigation of facts before the provisional assessment was made or any right of appeal to any higher authority and, in fact, did not make any provision for hearing the assessee at any stage, (3) S. 7 gave arbitrary power to the <ORG> to pick and choose in the matter of grant of total or partial exemption from the provisions of the Act, and (4) the tax proposed to be levied had absolutely no relation to the production capacity of the land sought to be taxed or to the income they could derive, and therefore the Act had been conceived with a view to confiscating private property, there being no question of any compensation being paid to those who may be expropriated as a result of the working of the Act. The petitioners also challenged the legislative competence of the legislature of the <ORG> to levy a tax on lands on which forests stood. The case on behalf of the <ORG> of Kerala, inter alia, was that the Act had its justification in Art. 265 Of the Constitution of India, which was not subject to the provisions of Part III of the Constitution and that, therefore, Arts. 14, 19 and 31 could not be pressed in aid of the petitioners. , Held, (<NAME>, J., dissenting), that the Travancore-Cochin Land Tax Act, 1955, infringed the provisions of Art. 14 Of the Constitution of India. The Act obliged every person who held land to pay the tax at the flat rate prescribed, whether or not he made any income out of the property, or whether or not the property was capable of yielding any income. Consequently, there was no attempt at classification in the provisions of the Act and it was one of those cases where the lack of classification created inequality. It was therefore hit by the prohibition to deny equality before the law contained in Art. 14.  Section 5A of the Act which enabled the <ORG> to make a provisional assessment of the basic tax payable by the 79 holder of unsurveyed land imposed unreasonable restrictions on the rights to hold property safeguarded by Art. 19(1)(f) of the Constitution, inasmuch as (1) the Act did not impose an obligation on the <ORG> to undertake survey proceedings within any prescribed or ascertainable period, with the result that a landholder might be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax assessed, and (2) the Act being silent as to the machinery and procedure to be followed in making the assessment left it to the Executive, completely ignoring the legal position that the assessment of a tax on a person or property was at least of a quasijudicial character. Section 7 of the Act which vested the <ORG> with the power wholly or partially to exempt any land from the provi- sions of the Act did not lay down any principle or policy for the guidance of the exercise of discretion by the <ORG> in respect of the selection contemplated by the section, and was, therefore, discriminatory in effect and offended Art. 14. The section was not severable from the rest of the Act as both the charging sections, S. 4 and S. 7 , authorising the <ORG> to grant exemptions from the provisions of the Act were the main provisions of the statute. <NAME> v. Sri justice <NAME>,  S.C.R. 279, relied on. The Act was also confiscatory in character inasmuch as the provisions of the Act had the effect of eliminating the private owners through the machinery of the Act, without proposing to acquire the privately owned forests in the <ORG> after satisfying the conditions laid down in Art. 31 of the Constitution. Per <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, JJ.- Article 265 of the Constitution which provided that the <ORG> shall not levy or collect a tax except by authority of law referred to a valid law, and in order that the law might be valid, the tax proposed to be levied must be within the legislative competence of the <ORG> imposing a tax and authorising the collection thereof and, secondly, the tax must be subject to the conditions laid down in Art. 13 , by which all laws inconsistent with or in derogation of the fundamental rights in Part III shall be void. Per <NAME>, J.-(1) The object of the Act was to tax land in the <ORG> for raising revenues by providing for a low and uniform rate of basic tax replacing all other dues payable to the <ORG> and the tax payers were classified according to the area of lands held by them. Such a classification had an intelligible basis and had a rational relation to the object of the Act. As tax was to be levied not because the land was productive but because the land was held in the <ORG>, the classification did not offend Art. 14 Of the Constitution, even though it might impose unequal burden of the tax on the owners of land on account of owners of less productive land being put on a larger burden. 80 (2) Section 5A did not offend Art. 14 and in the absence of express provisions laying down the procedure according to which the provisional assessment was to be made, the Act could not be held invalid on the ground that it was against the rules of natural justice. (3) Section 7 , even if it were considered invalid on the ground that it gave arbitrary power to the <ORG> and offended Art. 14 , was severable from the rest of the Act and would not affect the other provisions of the Act. (4) The Act did not infringe the fundamental rights in Art. 19(1)(f) as the rate of tax fixed by the Act was a very low rate and the restrictions on those rights were reasonable. (5) The Act was not in its nature expropriatary and did not offend Art. 31. As there was no want of legislative competence, theAct could not be assailed as a piece of colourable legislation on the ground that though in form a taxing statute it, in effect, was intended to expropriate lands by imposing a tax too heavy for the land to bear. (6)The word "land" in Entry 49 of List II, Sch. 7, of the Constitution, included "land on which a forest stands" and, therefore, under that Entry taxation on land on which forests stood was permissible and legal. The Act , therefore, could not be challenged as being beyond the legislative competence of the <ORG> <ORG>. JUDGMENT:

ORIGINAL JURISDICTION: Petitions Nos. 13 to 24, 42 and 46 to 54 of 1958.

Petitions under Article 32 of the Constitution of India for enforcement of Fundamental Rights.

<NAME>, Attorney-General for India, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, for the petitioners in petitions Nos. 13-18, and 46- 54 of 1958.

<NAME>, Solicitor-General of India, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, for the petitioners in Petitions Nos. 19-24 of 1958. <NAME>, <NAME>, <NAME> and <NAME>, for the petitioner in petition No. 42 of 1958. <NAME>, Advocate General of Kerala and <NAME>, for the respondents.

1960. December, 9. The Judgment of <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, <NAME>., was delivered by <NAME>, <NAME>, J., delivered a separate Judgment. <NAME>, C. J.-In this batch of 22 petitions under Art. 32 of the Constitution, the petitioners impugn the constitutionality of the Travancore-Cochin Land Tax Act, XV of 1955, as amended by the Travancore-Cochin Land Tax (Amendment) Act, X of 1957, which hereinafter will be referred to as the Act. The Act came into force on June 21, 1955, and the Amending Act on August 6, 1957. The petitioners are owners of forest areas in certain parts of the State of Kerala, which, before the reorganisation of States, formed part of the State of Madras. The respondents to the petitions are: (1) the State of Kerala and (2) the District Collector, Palghat:

These petitions are based on allegations, which are, more or less, similar, and the following allegations made in Writ Petition No. 42 of 1958 may be taken as typical and an extreme case, which was placed before us in detail to bring into bold relief the full significance and effect of the legislation impugned in these cases. The petitioner in Petition 42 of 1958 is a citizen of India, who owns forests in certain parts of Palghat Taluk in Palghat District, which was part of the <ORG> of Madras before the reorganisation of <ORG>s. These forests are now in the <ORG> of Kerala. Up to the time that these forests were in the <ORG> of Madras, as it then was, the Madras Preservation of Private Forests Act, Madras Act XXVII of 1949, governed these forests. Even after these areas were transferred to the <ORG> of Kerala, the said Madras Act, XXVII of 1949, continued to apply to these forests. Under the said Madras Act the owners of forests, like the petitioner, could not sell, mortgage, lease or otherwise alienate any portion of their forests without the previous sanction of the District Collector; nor could they, without similar permission, cut trees or do any act likely to denude the forest or diminish its utility, as such. The District Collector, in exercise of the powers under the Act, does not ordinarily permit the cutting of more than a small number of trees in the forest. Thus the petitioner has not the right fully to exploit the forest wealth in his forest area and has to depend upon the previous permission of the Collector. In exercise of the powers given to the Collector under the Madras Act aforesaid, the petitioner's lessee was given permission to cut certain trees in his forest, which brings to the petitioner by way of income from. the forest, a sum of Rs. 3,100 per year. Under the Act , a tax called land tax at a flat rate of Rs. 2 per acre has been imposed on the petitioner. In pursuance of the provisions of the Act, as amended as aforesaid, the District Collector of Palghat, purporting to act under the provisions of s. 5A of the Act, issued a notice to the petitioner provisionally assessing the petitioner's forest under the said Act to a sum of fifty thousand rupees per annum and informing the petitioner that, if no representation was made within thirty days, the said provisional assessment would be confirmed and a demand notice would be issued. As there has been no survey of the area of forest land in the petitioner's possession, the District Collector has conjectured the said area to be twenty-five thousand acres. The Petitioner had made an application to the District Collector under the Madras Preservation of Private Forests Act for felling trees in an area of one thousand acres, but the Collector was pleased to grant permission to out trees from 450 acres only in the course of five years at the rate of 90 acres a year. The petitioner has leased out that right to another person, who made the highest bid of Rs. 3,100 per year, as the landlord's fee for the right to cut and remove the trees, and other minor produce. Besides the demand aforesaid, the revenue authorities have levied about four thousand rupees as tax on the surveyed portions of the forest. The petitioner's forest has large areas of and rocks, rivulets and gorges. The petitioner, in those circumstances, questions the constitutional validity of the Act, the provisions of which will be examined hereinafter. These petitions have been opposed on behalf of the first respondent and the allegations and submissions made in the petitions are sought to be controverted by a counter affidavit sworn to by an Assistant Secretary of the Kerala Gover nment in <ORG>. It is in similar terms, as a matter of fact printed in most of these cases. It is contended therein on behalf of the respondent that the petitions are not maintainable in as much as no fundamental rights of the petitioners have been infringed; that the allegations about the income, from the forest lands are not admi tted; and by way of submission, it is added, they are irrelevant for the purposes of these petitions. It is stated that the Act was passed with a view to unifying the system of land tax in the whole of the <ORG> of Kerala. It is submitted that the validity of the Act has to be determined in the light of Art. 265 of the Constitution and that Arts. 19 and 31 were wholly out of the way. It is denied that the tax imposed was harsh or arbitrary, or has the effect of violating the petitioner's right of holding property; and it was asserted that the allegations in respect of income from the forests are entirely irrelevant, as the tax was not a tax on income, but was an "impost on land". It is equally irrelevant whether the land is productive or not. It is also contended that, in view of the provisions of Art. 31(5)(b)(i) of the Constitution, Art. 31(2) could not be relied upon by the petitioners. The allegation of the petitioners that the Act is a device to confiscate private forests is denied. It is admitted that, except in certain cases, the entire area is unsurveyed and that steps are being taken for surveying those areas. It is also stated that the areas shown in the notices served on the petitioners are based on information available to the Collector of the District; and lastly, it is stated that only notice has been issued calling upon the petitioners to make their representations, if any, to the proposed provisional assessments. The assessments have not yet been made, and, therefore, there is no question of demand of tax being enforced by coercive processes. Finally, it is suggested that the Act has been enacted for the legitimate revenue purposes of the <ORG>.

Before entering upon a discussion of the points in controversy, it is convenient at this stage to indicate briefly the relevant provisions of the Act which is impugned by the petitioners as ultra vires <ORG>. The preamble of the Act is in these terms:-

"Whereas it is deemed necessary to provide for the levy of a low and uniform rate of basic tax on all lands in the State of Travancore- Cochin."

Basic tax has been defined as "the tax imposed under the provisions of this Act". Section 3 lays down that the arrangement made under the Act for the levy of the basic tax shall be deemed inter alia to be a general revenue settlement of the <ORG>, notwithstanding anything in any statute, grant, deed or other transaction subject to certain provisos not material for our present purposes. The charging section is s. 4 , which is in these terms:-

"Subject to the provisions of this Act, there shall be charged and levied in respect of all lands in the State, of whatever description and held under whatever tenure, a uniform rate of tax to be called the basic tax."

Section 5 lays down the rate of the tax which, by the Amendment, has been raised to Rs. 2 per acre (two pies per cent. of land per annum) and the basic tax charged and levied at that rate shall be the tax payable to the <ORG> in lieu of any existing tax in respect of land. Section 6 lays down that any stipulation in any contract or agreement or lease or other transaction to pay land revenue assessment of any land shall be construed as stipulation for the payment of the amount. of basic tax, as charged and levied under the Act. Section 7 is in these terms:-

" This Act is not applicable to lands held or leased by the <ORG> or any land or class of lands which the <ORG> may, by notification in the <ORG>, either wholly or partially exempt from the provisions of this Act."

Sections 8 and 9 provide for the continuance of the liability to pay certain dues in respect of existing tenures in addition to the basic tax in respect of lands covered by those tenures. Section 10 abolishes the irrigation assessment charged on certain tank beds and other water reservoirs named and described therein. Section 11 preserves the right of the <ORG> to levy certain irrigation and water cesses and lays down that the Act shall not affect the power of the <ORG> to levy any rate or alter any existing rate of irrigation or water cess on any land, as they deem fit. Cesses, other than those mentioned in s. 11 , are also abolished by s. 12 . Section 13 authorises the <ORG> to appoint such officers as they deem necessary for the purpose of the Act. Section 14 lays down the bar of suits against the <ORG> in respect of anything done or any order passed under the Act. Section 15 saves the right of the <ORG> which accrued to it before the Act came into force as also the conditions of any agreement. grant or deed relating to any land, except to the extent indicated in the Act. Section 16 vests the <ORG> with the power to make rules for carrying into effect the provisions of the Act, with particular reference to the power to make rules for the apportionment of the basic tax charged on certain kinds of holdings, for defining the powers and duties of the officers appointed under the Act and for determining the kist instalments and the due date for the payment thereof. These in short are the provisions of the Act. The Act , as indicated above, was amended by Act X of 1957 which substituted the words "State of Kerala" for the words "State of Travancore-Cochin" and made certain other consequential changes. The Amending Act introduced section 5A , which has been very much assailed in the course of the argument before us and it is, therefore, necessary to set it out in full. It is in these terms:-

"S. 5A. Provisional assessment of basic tax in the case of unsurveyed land8.-(1) It shall be competent for the Government to make a provisional assessment of the basic tax payable by a person in respect of the lands held by him and which have not been surveyed by the Government, and upon such assessment such person shall be liable to pay the amount covered in the provisional assessment.

(2)The Government after conducting a survey of the lands referred to in sub-section (1) shall make a regular assessment of the basic tax payable in respect of such lands. After a regular assessment has been made, any amount paid towards the provisional assessment made under sub-section (1) shall be deemed to have been paid towards the regular assessment and when the amount paid towards the provisional assessment exceeds, the amount payable under the regular assessment, the excess shall be refunded to the person assessed."

By s. 9 , s. 3 of the Madras Revenue Recovery Act, 1864, has been substituted in these terms:

"3. Landholder when and to whom to pay kist.- Every landholder shall pay to the Collector or other officer empowered by 'him in this behalf the land tax due from him on or before the day fixed for payment under the rules framed under s. 16 of the Land Tax Act, 1955."

From a review of the provisions of the Act, as amended as aforesaid, it will be clear that the provisions of the Act lay down in barest outline the policy to impose a uniform and, what is asserted to be, a low rate of land tax on all lands in the State of Kerala. Unlike other taxing statutes, it does not make any provision for issue of notice to the assessee, nor is there any provision for submission of a return by the assessee. By s. 5A , it authorises the Government to make a "provisional assessment" in respect of land, which has not been surveyed, and such provisional assessment is made payable by the person made liable under the Act. It does not make any provision for any appeals in cases where the assessee may feel dissatisfied with the assessment. The Act does contemplate the making of "a regular assessment of the basic tax". But it does not indicate as to when the regular assessment would be made, except indicating that it can be made only after a survey has been made in respect of the land assessed. The Act could not have been cast in more general terms and the proceedings under the Act could not have been more summary. It has thus the merit of brevity as also of simplicity, derived from the fact that a tax is levied at a flat rate, irres- pective of the quality of the land and consequently of its productive capacity. Under the Act , the charge has to be levied, whether or not any income has been derived from the land. The <ORG> was so much in earnest about levying and realising the tax that it could not even wait for a regular survey of the lands to be assessed with a view to determining the extent and character of the land. Such are the provisions and the effect of the Act, which has been assailed on a number of grounds on behalf of the petitioners. It is contended, in the first instance, that inequality is writ large in the provisions of the Act, which is clearly discriminatory in character and effect and thus infringes Art. 14 of the Constitution. As the Act does not have any regard to the quality of the land or its productive capacity, and a tax at a flat rate of Rs. 2 per acre is proposed to be levied under the Act, it is further contended, it imposes very unreasonable restrictions on the right to hold property and is thus an invasion on the rights guaranteed to the petitioners under Art. 19(1)(f) of the Constitution. The Act does not lay down any provision calling for a return from the assessee, for any enquiry or investigation of facts before the provisional assessment is made or for any right of appeal to any higher authority from the order of provisional assessment; in fact, there is no provision for hearing the assessee at any stage. The Act is of an arbitrary character and is thus wholly repugnant to the guaranteed rights of the petitioners. Section 7 quoted above gives uncanalised, unlimited and arbitrary power to the Government to pick and choose in the matter of grant of total or partial exemption from the provisions of the Act. It also suffers from the vice of discrimination. It has also been vehemently argued that the Act, though it purports to be a tax on land, is really a law relating to forests in possession of the petitioners and would not come within the purview of entry 18 read by itself or in conjunction with entry 45 of List II, but is law relating to forests under entry 19. If we tear the veil in which the real purpose and effect of the Act has been shrouded, 'it will I appear that the true character and effect of the Act is not to levy a tax on land, but to expropriate the private owners of the forests without payment of any compensation whatsoever. Lastly, it has been urged that the whole Act has been conceived with a view to confiscating private property, there being no question of any compensation being paid to those who may be expropriated as a result of the, working of the Act. This last argument is based on the assertion that the tax proposed to be levied on private property in the State of Kerala has absolutely no relation to the paying capacity of the persons sought to be taxed, with reference to the income they could derive, or actually did derive from the property.

On behalf of the State of Kerala, the learned Advocate- General has argued that, though in most of the cases, that is to say, except in seven petitions (Petitions 21, 22, 47, 49, 50, 51 and 54) the lands have not been surveyed, the areas mentioned in the notices proposing provisional assessment have been ascertained through the local agencies of the Government. It was further contended that the State had only declared the liability to the payment of the tax at a flat rate of Rs. 2 per acre in respect of land, irrespective of the income to be derived therefrom. Hence there was no necessity for making provision for a detailed enquiry or investigation. The rate of the tax being known, and the area of the land to be taxed having been locally ascertained, even though without any regular survey, what remained was merely quantifying the tax, which was of a purely administrative character. The local agencies estimated the land in possession of particular persons. Those persons were called upon to pay provisionally at the rate fixed by the statute. The State has, by executive action, appointed authorities who are expected to act in accordance with the principle of natural justice. There was, therefore, no need for laying down any elaborate procedure as in other instances of taxing statutes. There is a presumption that the authority appointed by the Government would act bona fide and in a proper manner. If there was any case of unfair dealings, the matter could be brought to the <ORG>. It was greatly emphasised that as a flat rate of taxation had been envisaged by the Act and as ultimately the tax at that rate would be realised from land found to be in possession of particular persons after a regular survey, the regular survey to be ultimately made would automatically determine the amount of tax to be paid and the adjustment of the taxes already paid could be made on that basis. On the legal aspect of the controversy raised on behalf of the petitioners, it was argued that the Act has its justification in Art. 265 of the Constitution, which was not subject to the provisions of Part III of the Constitution and that, therefore, Arts. 14, 19, 31 could not be pressed in aid of the petitioners. It was also contended that even if the Act is, in effect, confiscatory, it cannot be questioned, being a taxing statute. Finally, it was urged that the question of the amount of income derived by the petitioners from the property sought to be taxed is wholly irrelevant, because the Act was not a tax on income but it was a tax on the property itself.

The most important question that arises for consideration in these cases, in view of the stand taken by the <ORG> of Kerala, is whether Art. 265 of the Constitution is a complete answer to the attack against the constitutionality of the Act. It is, therefore, necessary to consider the scope and effect of that Article. Article 265 imposes a limitation on the taxing power of the <ORG> in so far as it provides that the <ORG> shall not levy or collect a tax, except by authority of law, that is to say, a tax cannot be levied or collected by a mere executive fiat. It has to be done by authority of law, which must mean valid law. In order that the law may be valid, the tax proposed to be levied must be within the legislative competence of the <ORG> imposing a tax and authorising the collection thereof and, secondly, the tax must be subject to the conditions laid down in Art. 13 of the Constitution. One of such conditions envisaged by Art. 13(2) is that the <ORG> shall not make any law which takes away or abridges the equality clause in Art. 14 , which enjoins the <ORG> not to deny to any person equality before the law or the equal protection of the laws of the country. It cannot be disputed that if the Act infringes the provisions of Art. 14 of the Constitution, it must be struck down as unconstitutional. For the purpose of these cases, we shall assume that the <ORG> <ORG> had the necessary competence to enact the law, though the petitioners have seriously challenged such a competence. The guarantee of equal protection of the laws must extend even to taxing statutes. It has not been contended otherwise. It does not mean that every person should be taxed equally. But it does mean that if property of the same character has to be taxed, the taxation must be by the same standard, so that the burden of taxation may fall equally on all persons holding that kind and extent of property. If the taxation, generally speaking, imposes a similar burden on every one with reference to that particular kind and extent of property, on the same basis of taxation, the law shall not be, open to attack on the ground of inequality, even though the result of the taxation may be that the total burden on different persons may be unequal. Hence, if the <ORG> has classified persons or properties into different categories, which are subjected to different rates of taxation with reference to income or property, such a classification would not be open to the attack of inequality on the ground that the total burden resulting from such a classification is unequal. Similarly, different kinds of property may be subjected to different rates of taxation, but so long as there is a rational basis for the classification, Art. 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality, the law may be struck down as creating an inequality amongst holders of the same kind of property. It must, therefore, be held that a taxing statute is not wholly immune from attack on the ground that it infringes the equality clause ill  Art. 14 , though the <ORG> are not concerned with the policy underlying a taxing statute or whether a particular tax could not have been imposed in a different way or in a way that the <ORG> might think more just and equitable. The Act has, therefore, to be examined with reference to the attack based on Art. 14 of the Constitution.

It is common ground that the tax, assuming that the Act is really a taxing statute and not a confiscatory measure, as contended on behalf of the petitioners, has no reference to income, either actual or potential, from the property sought to be taxed. Hence, it may be rightly remarked that the Act obliges every person who holds land to pay the tax at the flat rate prescribed, whether or not he makes any income out of the property, or whether or not the property is capable of yielding any income. The Act , in terms, claims to be "a general revenue settlement of the <ORG>" (s. 3). Ordinarily, a tax on land or land revenue is assessed on the actual or the potential productivity of the land sought to be taxed. In other words, the tax has reference to the income actually made, or which could have been made, with due diligence, and, therefore, is levied with due regard to the incidence of the taxation. Under the Act in question we shall take a hypothetical case of a number of persons owning and possessing the same area of land. One makes nothing out of the land, because it is arid desert. The second one does not make any income, but could raise some crop after a disproportionately large investment of labour and capital. A third one, in due course of husbandry, is making the land yield just enough to pay for the incidental expenses and labour charges besides land tax or revenue. The fourth is making large profits, because the land is very fertile and capable of yielding good crops. Under the Act , it is manifest that the fourth category, in our illustration, would easily be able to bear the burden of the tax. The third one may be able to bear the tax. The first and the second one will have to pay from their own pockets, if they could afford the tax. If they cannot afford the tax, the property is liable to be sold, in due process of law, for realisation of the public demand. It is clear, therefore, that inequality is writ large on the Act and is. inherent in the very provisions of the taxing section. It is also clear that there is no attempt at classification in the provisions of the Act. Hence, no more need be said as to what could have been the basis for a valid classification. It is one of those cases where the lack of classification creates inequality. It is,, therefore, clearly hit by the prohibition to deny equality before the law contained in Art. 14 of the Constitution. Furthermore, sec. 7 of the Act, quoted above, particularly the latter part, which vests the <ORG> with the power wholly or partially to exempt any land from the provisions of the Act, is clearly discriminatory in its effect and, therefore, infringes Art. 14 of the Constitution. The Act does not lay down any principle or policy for the guidance of the exercise of discretion by the <ORG> in respect of the selection contemplated by a. 7. This <ORG> has examined the cases decided by it with reference to the provisions of Art. 14 of the Constitution, in the case of <CITATION> (1). <NAME>, C. J., speaking for the <ORG> has deduced a number of propositions from those decisions. The present case is within the mischief of the third proposition laid down at pages 299 and 300 of the Report, the relevant portion of which is in these terms:-

"A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the <ORG> to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the <ORG> to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the <ORG> in the matter of the selection or classification.

After such scrutiny the <ORG> will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the <ORG> in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the <ORG> so as to enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself" (p. 299 of the Report).

The observations quoted above from the unanimous judgment of this Court apply with full force to the provisions of the Act. It has, therefore, to be struck down as unconstitutional. There is no question of severability arising in this case, because both the charging sections, s. 4 and s. 7 , authorising the <ORG> to grant exemptions from the provisions of the Act, are the main provisions of the Statute, which has to be declared unconstitutional. The provisions of the Act are unconstitutional viewed from the angle of the provisions of Art. 19(1)(f) of the Constitution, also. Apart from the provisions of ss. 4 and 7 discussed above, with reference to the test under Art. 14 of the Constitution, we find that s. 5(A) is also equally objectionable because it imposes unreasonable restrictions on the rights to hold property, safeguarded by Art. 19(1)(f) of the Constitution. Section 5(A) declares that the <ORG> is competent to make a provisional assessment of the basic tax payable by the holder of unsurveyed land. Ordinarily, a taxing statute lays down a regular machinery for making assessment of the tax proposed to be imposed by the statute. It lays down detailed procedure as to notice to the proposed assessee to make a return in respect of property proposed to be taxed, prescribes the authority and the procedure for hearing any objections to the liability for taxation or as to the extent of the tax proposed to be levied, and finally, as to the right to challenge the regularity of assessment made, by recourse to proceedings in a higher <ORG>. The Act merely declares the competence of the <ORG> to make a provisional assessment, and by virtue of s. 3 of the Madras Revenue Recovery Act, 1864, the land-holders may be liable to pay the tax. The Act being silent as to the machinery and procedure to be followed in making the assessment leaves it to the <ORG> to evolve the requisite machinery and procedure. The whole thing, from beginning to end, is treated as of a purely administrative character, completely ignoring the legal position that the assessment of a tax on person or property is at least of a quasi-judicial character. Again, the Act does not impose an obligation on the <ORG> to undertake survey proceedings within any prescribed or ascertainable period, with the result that a land-holder may be subjected to repeated annual provisional assessments on more or less conjectural basis and liable to pay the tax thus assessed. Though the Act was passed about five years ago, we were informed at the Bar that survey proceedings had not even commenced. The Act thus proposes to impose a liability on land-holders to pay a tax which is not to be levied on a judicial basis, because (1) the procedure to be adopted does not require a notice to be given to the proposed assessee; (2) there is no procedure for rectification of mistakes committed by <ORG>; (3) there is no procedure prescribed for obtaining the opinion of a superior <ORG> on questions of law, as is generally found in all taxing statutes, and (4) no duty is cast upon <ORG> to act judicially in the matter of assessment proceedings. Nor is there any right of appeal provided to such assessees as may feel aggrieved by the order of assessment. That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face. Taking the extreme case, the facts of which we have stated in the early part of this judgment, it can be illustrated that the provisions of the Act, without proposing to acquire the privately owned forests in the <ORG> of Kerala after satisfying the conditions laid down in Art. 31 of the Constitution, have the effect of eliminating the private owners through the machinery of the Act. The petitioner in petition 42 of 1958 has been assumed to own 25 thousand acres of forest land. The liability under the Act would thus amount to Rs. 50,000 a year, as already demanded from the petitioner on the basis of the provisional assessment under the provisions of s. 5(A) . The petitioner is making an income of Rs. 3,100 per year out of the forests. Besides, the liability of Rs. 50,000 as aforesaid, the petitioner has to pay a levy of Rs. 4,000 on the surveyed portions of the said forest. Hence, his liability for taxation in respect of his forest land amounts to Rs. 54,000 whereas his annual income for the time being is only Rs. 3,100 without making any deductions for expenses of management. Unless the petitioner is very enamoured of the property and of the right to hold it may be assumed that he will not be in a position to pay the deficit of about Rs. 51,000 every year in respect of the forests in his possession. The legal consequences of his making a default in the payment of the aforesaid sum of money will be that the money will be realised by the coercive processes of law. One can, easily imagine that the property may be sold at auction and may not fetch even the amount for the realisation of which it may be proposed to be sold at public auction. In the absence of a bidder forthcoming to bid for the offset amount, the <ORG> ordinarily becomes the auction purchaser for the realisation of the outstanding taxes. It is clear, therefore, that apart from being discriminatory and imposing unreasonable restrictions on holding property, the Act is clearly confiscatory in character and effect. It is not even necessary to tear the veil, as was suggested in the course of the argument, to arrive at the conclusion that the Act has that unconstitutional effect. For these reasons, as also for the reasons for which the provisions of ss. 4 and 7 have been declared to be unconstitutional, in view of the provisions of Art. 14 of the Constitution, all these operative sections of the Act, namely 4, 5A and 7, must be held to offend Art. 19(1)(f) of the Constitution also.

The petitions are accordingly allowed with costs against the contesting respondent, the State of Kerala.

SARKAR,J.- These petitions were filed under Art.32 of the Constitution, challenging the validity of the Travancore- Cochin Land Tax Act, 1955, as amended by Act X of 1957. The principal Act was passed by the legislature of the State of Travancore-Cochin and the Amending Act , by the legislature of the State of Kerala, in which the State of Travancore- Cochin had been merged. The petitioners are owners of lands in the State of Kerala. The Act as amended and hereafter referred to as the Act, levied a certain basic tax on all lands in the State of Kerala. The petitioners say that the levy is illegal and violates their fundamental rights. It appears from the preamble that the Act was passed as it was deemed necessary to provide for the levy of a low and uniform rate of basic tax on all lands in the State. The Act provides that the arrangement made by it for the levy of the basic tax is to be deemed to be a general revenue settlement of the State. Section 4 of the Act is the charging section and it lays down that there shall be charged and levied in respect of all lands in the State, of whatever description and held under whatever tenure, a uniform rate of tax to be called the basic tax. Section 5 fixes the rate of the tax at 2 n.P. per cent which works out at Rs. 2 per acre per annum. This section also provides that the basic tax shall be the tax payable to the <ORG> in lieu of any other existing tax in respect of land. Section 12 abolishes all cesses on land except irrigation cess.

The first ground on which the validity of the Act is challenged is that it offends the provision as to the equal protection of the laws contained in Art. 14 of the Constitution. The Act applies to all lands in the <ORG> and it imposes an uniform rate of tax, namely, Rs. 2 per acre. It is said that all lands in the <ORG> have not the same productive quality; that some are waste lands and others, lands of varying degrees of fertility. The contention is that the tax weighs more heavily on owners of waste lands than on owners of fertile lands. It is said that it is bound to happen that some owners make no income out of their lands or make a small income and they would have to pay the tax out of their pocket while the owners of better classes of lands yielding larger income would be able to pay the tax out of the income from the lands. It is contended that the Act therefore discriminates between several classes of owners of lands in the <ORG> and is void as infringing the equality clause in the Constitution. It may be conceded that all lands in the <ORG> are not of the same degree of fertility. I am however unable to see that because of that, the Act can be said to discriminate between the owners of them.

What is really said appears to be that the Act makes a classification of the owners of lands according to areas. Assume that the Act does so. The question then is, is such a classification illegal? The equal protection clause in the Constitution does not mean that there shall be no classification for the purpose of any law. It has been said by this Court in <CITATION> (1): "It is now well established that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differential which distinguishes persons or things that are grouped together from others left out of the group and (ii) that differential must have a rational relation to the object. Bought to be achieved by the statute in question". On the argument of the petitioners, the Act makes a classification between owners of lands using as the differentia, the area of the land held by them. The question then, is, is that differentia intelligible and has that differentia a rational relation to the object of the Act? Now it seems to me that both the tests are satisfied in the present case. The tax payers are classified according to the area of lands held by them. That is quite an intelligible basis on which to make a classification; holders of varying areas of land can (1)  1 S.C.R. 1045 1049.

quite understandably be placed in different classes. Next, has such a basis of classification, a rational relation to the object of the Act? The Act is a taxing statute. It is intended to collect revenue for the governmental business of the <ORG>. It says that one of its objects is to provide a low and uniform rate of basic tax. Another object mentioned is to replace all other dues payable to the <ORG> in respect of the ownership of the land by a uniform basic tax. Why is it to be said that the use of the area of land held as the basis of classification has no rational relation to these objects. I find no reason. The object is to tax land held in the <ORG> for raising revenues. It is the holding of the land in the <ORG> that makes the owner liable to pay tax. It would follow that the quantum of the tax can be reasonably linked with the quantum of the holding.

Why is it said that the classification on the basis of area is bad? It is only because it imposes unequal burden of the tax on the owners of land; because owners of less productive land would have a larger burden put on them. Now if this argument is right, then tax on land can be imposed only according to its productivity. I have not been shown any authority which goes to this length. I am further unable to see how productivity as the basis of classification could be said to have a more rational relation to the object of a statute collecting revenue by taxing land held in the <ORG>. The tax is not levied because the land is productive but because the land is held in the <ORG>. Again if the tax which could be imposed on land had to be correlated to its productivity, then the <ORG> would have no power to tax unproductive land and the provision in the Constitution that it would have power to tax land would, to that extent, be futile. It seems to me that a contention leading to such a result cannot be accepted.

Reliance was placed for the petitioners on <ORG> v. <ORG> (1) in support of the contention that a tax on land not based on its productivity, violates Art. 14.

(1) 76 L.Ed. 146.

I am unable to hold that this case supports the contention. What had happened there was that a certain statute had imposed a tax ad valorem on all coal situated in a certain area and in assessing the tax, the coal of <ORG> had been assessed by the authorities concerned at its full value while the coal of the rest of the class liable to the tax had been assessed at a lower value. Thereupon it was held that "the intentional systematic undervaluation by State Officials-of taxable property of the same class belonging to other owners contravenes the con- stitutional right of one taxed on the full value of his property." On this view of the matter <ORG> directed readjustment of the assessments. The statute with which this case was concerned had levied the tax ad valorem which, it may be, is the same thing as a tax correlated to productivity. The case had therefore nothing to do with the question that a tax on coal otherwise than ad valorem would be unconstitutional. In fact this case did not declare any statute invalid.

Then it seems to me that if the contention of the petitioners is right, and land could be taxed only on its productivity, for the same reason, taxes on all other things would have to be correlated to the income to be derived from them. The result would be far reaching. I am not prepared to accept a contention producing such a result and no authority has been cited to lead me to accept it. It may be that as lands are not of equal productivity, some tax payers may be able to pay the tax out of the income of the land taxed while others may have to find the money from another source. To this extent the Act may be more hard on some than on others. But I am unable to see that for that reason it is unconstitutional. All class legislation puts some in a more disadvantageous position than others. If the classification made by the law is good, as I think is the case with the present Act, the resultant hardship alone cannot make it bad. It was said in <NAME> v. <ORG>), "It is hardly (1) 42 L.Ed. 1037, 1043.

necessary to say that hardship, impolicy, or injustice of state laws is not necessarily an objection to their constitutional validity."

It is then said that sub-sec. (1) of s. 5A , which was introduced into the Act by the Amending Act , offends Art.

14. The impugned provision is in these terms:

S.5A. (1) It shall be competent for the <ORG> to make a provisional assessment of the basic tax payable by a person in respect of the lands held by him and which have not been surveyed by the <ORG>, and upon such assessment such person shall be liable to pay the amount covered in the provisional assessment.

This section was enacted as at the date of the Act, all lands had not been surveyed and so the areas of all holdings were not known. In the absence of such knowledge the tax which was payable on the basis of the areas of the holdings could not be assessed on unsurveyed lands, so the section provides that pending the survey, the Government will have power to make a provisional assessment on unsurveyed lands. This provision was necessary as the survey was bound to take time.

The contention is that a. 5A(1) gives arbitrary power to the <ORG> to make a provisional assessment on any person it chooses, leaving out others from the provisional assessment. I am unable to read the sub-section in that way. It may be that it leaves it to the <ORG> to make a provisional assessment if it chooses. This does not result in any illegal classification. The surveyed lands and unsurveyed lands are distinct classes of properties and may be differently treated. Again, all unsurveyed lands would on survey have to pay tax from the beginning. It would follow that the holders of both classes of lands are eventually subjected to the same burden. As to the contention that under this section the <ORG> has the right to levy the provisional assessment at its choice on some and not on all holders of unsurveyed lands, I am unable to agree that this is a proper reading of the section. In my view, the expression "a person" in the section does not lead to that conclusion. That expression should be read as "all persons" and it is easily capable of being so read. The section says, "It shall' be competent for the' <ORG> to make a provisional assessment of the basic tax payable by a person". Now the basic tax is payable by all persons holding land. So the provisional assessment, if made, has to be on all persons holding lands whose lands have not been surveyed. The <ORG> cannot, therefore, pick and choose. A statute is intended to be legal and it has therefore to be read in a manner which makes it legal rather than in a manner which makes it illegal. If the <ORG> did not make the provisional assessment in the case of all liable to such assessment, then the <ORG>'s action could be legitimately questioned. It has however not in fact been said in these petitions that in deciding to make the provisional assessment the <ORG> has made any discrimination between the persons liable to such assessment.

Section 5A(1) is also attacked on the ground that it is against rules of natural justice in that it does not say that in making the provisional assessment, any hearing would be given to the person sought to be assessed or requiring a return from him or giving him a right of appeal in respect of the provisional assessment made. It is true that the' section does not expressly provide for a hearing being given. It seems to me however that if according to the rules of natural justice the assessee was entitled to a hearing, an assessment made without giving him such a hearing would be bad. The Act must be read so as to imply a provision requiring compliance with the rules of natural justice. Such a reading is not impossible in the present case as there is nothing in the Act indicating that the rules of natural justice need not be observed. It was said in <NAME> man v. <ORG> (1) where a statute requiring an architect to give a certain certificate which did not provide the procedure as to how the architect was to conduct himself, came up for consideration that, "No doubt, in the (1) 10 A.C. 229, 240.

absence of special provisions as to how the person who is to decide is to proceed, the law will imply no more than that the substantial requirements of justice shall not be violated." Again in Maxwell on Statutes (10th ed.) p. 370 it has been said, "In giving judicial powers to affect prejudicially the rights of person or property, a statute is understood as silently implying, when it does not expressly provide, the condition or qualification that the power is to be exercised in accordance with the fundamental rules of judicial procedure, such, for instance, as that which requires that before its exercise, the person sought to be prejudicially affected shall have an opportunity of defend- ing himself." In so far as this Act confers a power on the <ORG> to discharge the judicial duty of making a provisional assessment, which the petitioners say, it does, it must imply that the judicial process has to be observed. As regards the return, that seems to me not to be of much consequence. If the assessee is entitled to be heard, the fact that he is not asked to make a return, would not constitute a departure from the rules of natural justice. Likewise, the absence of a right of appeal is not something on which the petitioners can rely. Rules of natural justice do not require that there must always be a right of appeal. Under the Act it is the <ORG> which makes the assess- ment and it would not be unreasonable to hold that in view of the high authority of the person assessing, the absence of a right of appeal is not likely to cause any miscarriage of justice. I am therefore unable to hold that in the absence of express provisions laying down the procedure according to which the provisional assessment is to be made, the Act has to be held invalid.

It may here be stated that in those instances where, in the present cases, provisional assessments had been made, the, assessees had either themselves supplied the area of the lands held by them or the area had been determined after giving them a hearing. After the area has been determine , the amount of the tax payable is decided by a simple calculation at the rate of Rs. 2 per acre of land held and with regard to this, no hearing is required.

Then again sub-see. (2) of s. 5A provides that the <ORG> after conducting a survey of the lands mentioned in sub-sec. (1) under which provisional assessment is to be made, shall make a regular assessment and adjustments would have to be made in regard to tax already paid on the basis of the regular assessment. A point is made that there is no time limit fixed within which the regular assessment is to be made and so the Act leaves it to the arbitrary decision of the <ORG> when to make the regular assessment. I do not think that this contention is correct. Properly read, the section in the absence of any indication as to time, means that regular assessment would have to be made as soon after the survey, as is reasonably possible. It is also said that s. 7 of the Act offends Art. 14. This section gives power to the <ORG> to exempt from the operation of the Act such lands or class of lands as the <ORG> may by notification decide. This section does not indicate on what grounds the exemption is to be granted. It therefore seems to me that it gives arbitrary power to the <ORG> and offends Art. 14. But the section is clearly severable from the rest of the Act. If the section is taken out of the Act, the operation of the rest of the Act will not in the least be affected. The only effect will then be that the <ORG> will have no power to exempt any land from the tax. That will not in any way affect the other provisions of the Act. The invalidity of this section is therefore no reason for declaring the entire Act illegal. It may be pointed out that it is not alleged in the petitions that the <ORG> has exempted any lands or class of lands from the operation of the Act. It is contended that s. 8 of the amending Act also shows the arbitrary nature of the Act. That section provides that if any difficulty arises in giving effect to the provisions of this Act, the <ORG> may by order do anything not inconsistent with such provisions which appears to it to be necessary or expedient for removing the difficulty. This is a common form of provision now found in many Acts. The power given under it cannot be said to be uncontrolled for it must be exercised consistently with the Act and to remove difficulties arising in giving effect to the Act. In any event, this provision is contained in the amending Act only. Even if the section be held to be invalid that would not affect, the rest of the amending Act or any question that arises on these petitions. The validity of the Act is also challenged on the ground that it infringes Art. 19 , cl. (1), sub-cls. (f ) & (g). This challenge seems to me to be wholly untenable. Apart from the question whether a taxing statute can become invalid as offending Art. 19 , as to which the position on the authorities does not seem to be very clear, it is plain that Art. 19 permits reasonable restrictions to be put on the rights mentioned in subcls. (f ) & (g). Now there is no dispute that the rate of tax fixed by the Act is a very low rate. It has not been said that the rate fixed is unreasonable. It clearly is not so. The restrictions on these rights under Art. 19(1 ), (f)  & (g) put by the Act, if any, are clearly reasonable. These rights cannot therefore be said to have been infringed by the Act.

The lands of the petitioners are lands on which stand forests. It is said that under the Madras Preservation of Private Forests Act, (Act XXVII of 1949), which applies to the lands with which we are concerned as they are situated in an area which previously formed part of the State of Madras, the owners of the forests can work them only with the permission of the officer mentioned in that Act. It is said that the control imposed by the officer has been such that the income received from the forest is much less than the tax payable under the Act in respect of the land on which the forest stands. Taking by way of illustration Petition No. 13, it is pointed out that the income from the forest with which that petition is concerned was Rs. 8,477 for the year 1956-57 while the tax payable under the Act for more or less the same period was Rs. 1,51,000. I am unable to hold that because of this the Act offends Art. 19(1 ), (f) and (g).

It is not stated that the land is not capable of producing any income other than the income from the forest standing on it. There is nothing to show that in all times to come the income from the land including the income from the forest, will be less than the tax imposed on it by the Act. The area of the land concerned in Petition No. 13 is enormous being about 75,500 acres. I am further unable to hold the impugned' Act to be invalid because of action that may be taken under another Act, namely, the Madras Act XXVII of 1949.

The validity of the Act is challenged also on the ground that it offends Art. 31 of the Constitution. I am unable to see any force in this contention. If the statute is otherwise valid, as I have found the present Act to be, it cannot, even if it deprives any person of property, be said to offend Art. 31(1). It has been held by this Court in <CITATION> ,. <NAME> (1) that "clause (1) of Art. 31 must be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, for otherwise Art. 265 becomes wholly redundant." No question of cl. (2) of Art. 31 being violated arises here for the Act does not deal with any acquisition of property.

It is also said that the Act is a colourable piece of legislation, namely, that though in form a taxing statute it, in effect, is intended to expropriate lands, held by the citizens in the State by imposing a tax too heavy for the land to bear. As was said in <CITATION> (2) "The doctrine of colourable legislation is relevant only in connection with the question of legislative competency". In the present case, there being in my view, no want of legislative competency in the legislature which passed the Act in question, the Act cannot be assailed as a piece of colourable legislation. I may add that I do not accept the argument that the Act is in its nature expropriatary or- that the tax imposed by it is really excessive.

(1)[1951] S.C.R. 127, 136.

(2) [1956] S.C.R. 303.

I come now to the last argument advanced by the petitioners. It is said that the Act was beyond the legislature competence of <ORG>. It is conceded that <ORG> has power to impose a tax on land under entry 49 of List 2 in the Seventh Schedule to the Constitution, but it is said that land as mentioned in that entry does not include lands on which forests stand. It is contended that <ORG> has power to legislate about forests under entry 19 of that List and also as to land under entry 18. There is however no power to impose a

-axon forests while there is power under entry 49 of that list to tax land. Therefore, it is said, that there is no power to impose tax on lands on which forests stand and the Act in so far as it imposes tax on lands covered by forests, which the lands of the petitioners are, is hence incompetent.

It is not in dispute that <ORG> has no power to impose a tax on a matter with regard to which it has the power to legislate but has been given no express power to impose a tax. Therefore, I agree, that <ORG> cannot impose tax on forests. I am however not convinced that "land" in entry 49 is not intended to include land on which a forest stands. No doubt, a forest must stand on some land. In Shorter Oxford Dictionary, one of the mean- ings of "forest" is given as an extensive tract of land covered by trees and undergrowth, sometimes intermingled with pastures. The concepts of forest and land however are entirely different. The principal idea conveyed by the word "forest" is the trees and other growth on the land. Under entry 19 there may no doubt be legislation with regard to land in so far it is necessary for the purpose of the forest growing on it. It is well known that entries in the legislative lists have to be read as widely as possible. It is not necessary to cut down the plain meaning of the word ,"land" in entry 49 to give full effect to the word "forest" in entry 19. In my view, the two entries namely, entry 49 and entry 18 deal with entirely different matters. Therefore, under entry 49 taxation on land on which a forest stands is permissible and legal. For these reasons I would dismiss these petitions. BY COURT:-In accordance with the opinion of the majority of the Court, these Petitions are allowed with costs against the contesting Respondent, the State of Kerala. Petitions allowed.


CASE NO.: Appeal (civil) 4263 of 1999 PETITIONER: SYNDICATE BANK RESPONDENT: GENERAL SECRETARY SYNDICATE BANK STAFF ASSOCIATION & ANR. DATE OF JUDGMENT: 25/04/2000 BENCH: S. SAGHIR AHMAD & D.P. WADHWA JUDGMENT:

JUDGMENT 2000 (3) SCR 285 The Judgment of the Court was delivered by <NAME>, <ORG> was granted leave to appeal under Article 136 of the Constitution against judgment dated September 11, 1998 of <ORG> of <ORG> in writ appeal upholding the order of the learned single Judge dismissing the writ petition. In the writ petition the <ORG> had challenged the Award of <ORG> for short) dated September 26, 1994. By the Award the <ORG> had directed the <ORG> to reinstate <NAME>, a clerk working in the Cottonpet Branch of the <ORG>. This is what the <ORG> directed by the <NAME> :

"The order of II party (<ORG>) as per Ex. M. 16 is set aside. The II party (<ORG>) is directed to reinstate the I party (<ORG>) forthwith with continuity of service. No back wages. Calculated upto the date of reinstatement, the I party (<ORG>) is not entitled to earn increments for the period during which he had not worked. Reference accepted in part accordingly."

Cause of Dayananda, the workman was taken by the first respondent. The Award arose out of following question, which was referred to the Tribunal for adjudication :

"Whether the action of the management of <ORG> in terminating the services of Sri <NAME>, Clerk Cottonpet Branch of <ORG> is justified? If not, to what relief the workman is entitled to?"

We may now narrate the circumstances which led <ORG> to make the reference of the industrial dispute aforesaid.

In 1975 <NAME> was appointed as Clerk-cum-Typist on probation in the <ORG>. Subsequently he was confirmed. In November, 1983 he was transferred to <ORG> of the <ORG> where he was to joint his duty on or before April 3, 1984. He was relieved from the Branch where he was working, on March 31, 1984 on his transfer to <ORG>. From April 1, 1984 to December, 1985 out of 628 working days <NAME> worked only for 46 days. <NAME> did not report for duty on April 3, 1984. On June 4, 1984 <ORG> sent him a registered notice advising him to report for duty within three days and also requiring him to submit his explanation for his unauthor-ised absence. <NAME> sent a leave letter requesting to treat his absence as leave on health grounds and he assured he would report for duty on July 11, 1984. He did not do so. On July 9, 1984 <NAME> sent his resignation from the <ORG>. His resignation was accepted on August 27, 1984. Subsequently <NAME> withdrew his resignation and requested the <ORG> to allow him to continue in the service on humanitarian grounds. This was accepted by the <ORG> by letter dated December 3, 1984 subject to certain conditions with which presently we are not concerned. <NAME> then joined the <ORG> of the <ORG>. He attended duty up to December 22, 1984 and thereafter he absented. Afterwards he applied for leave from December 23, 1984 to January 5, 1985. <ORG> sent <NAME> a notice to attend his duty. In reply he requested for grant of further leave. <NAME> attended duty from April 1, 1985 to April 6, 1985 and then again absented himself. He applied for leave up to May 27, 1985. The leave was not sanctioned by the <ORG> and he was communicated of the decision. Still <NAME> did not report for duty. On May 16, 1985 <ORG> sent a notice to <NAME> about his unauthorised absence. On November 19, 1985 the <ORG> invoked Clause 16 of the IV Bipartite Settlement between the Management of the <ORG> and the employees. Now the <ORG> called upon <NAME> to show cause for his continued absence and to report back for work by December 19, 1985 failing which he would be deemed to have been voluntarily retired from the services of the <ORG> for his continued absence from April 8, 1985. This notice was sent by registered post to <NAME> but it was returned with the report of the postal authority that he refused to receive the same. This Clause 16 of the Bipartite Settlement we reproduce:

"Where an employee has not submitted any application for leave and absents himself from work for a period of 90 or more consecutive days without or beyond any leave to his credit or absents himself for 90 or more consecutive days beyond the period of leave originally sanctioned or subsequently extended or where there is satisfactory evidence that he has taken up employment in India or the management is satisfied that he has no present intention of joining duties, the management may at any time thereafter give a notice to the employ-ee' s last known address calling upon the employee to report for duty within 30 days of the notice, stating inter alia, the grounds for the management coming to the conclusion that the employee has no intention of joining duties and furnishing necessary evidence, where available. Unless the employee reports for duty within 30 days or unless he gives an explanation for his absence satisfying the manage-ment that he has not taken up another employment or avocation and that he has no intention of not joining duties, the employee will be deemed to have voluntarily retired from the <ORG>'s service on the expiry of the said notice. In the event of the employee submitting a satisfactory reply, he shall be permitted to report for duty thereafter within 30 days from the date of the expiry of the aforesaid notice without prejudice to the <ORG>'s right to take any action under the law or rules of service".

By order dated December 19, 1985 by virtue of Clause 16 of the Bipartite Settlement as aforesaid the <ORG> treated <NAME> as having voluntarily abandoned his services. This order of the <ORG> was similarly sent to <NAME> under registered cover but was returned with the endorsement of the postal authority "not found during delivery time". Matter rested at that for three years. In September, 1988 <NAME> gave representation to the <ORG> for joining duty. He was told that he had abandoned his services with effect from April 8, 1985 and there was no question of his now joining the duty. Industrial dispute was raised by the first respondent which led <ORG> to make the reference to <ORG>.

Both the parties filed their respective statements of claims before the <ORG>. While <ORG> examined its Manager as its witness, <NAME> appeared for himself. During the course of evidence of the Manager of the <ORG> relevant registered covers and the notices sent to <NAME> were brought on record. In his statement <NAME>, however, said that he did not receive the first notice which was returned with the endorsement "refused". It is not disputed that on both the registered covers correct address of <NAME> was given. However, <ORG> was of the view that since the <ORG> did not examine the postman that <NAME> in fact refused to receive the notice, it could not be said that there was service of notice to <NAME>. From this <ORG> was of the view that the <ORG> could not under these circumstances invoke the provisions of Clause 16 of the Bipartite Settlement and on that score along reinstatement of <NAME> had to be ordered. Then relying on a decision of this Court in <CITATION> .,  3 SCC 259 the <ORG> took the view that since no inquiry was held by the <ORG> before terminating the services of <NAME> the action of the <ORG> was illegal. By this Award <ORG> though directed reinstatement of <NAME> with continuity in service, it declined to grant him further relief like back wages. Why the <ORG> did so can gather from paras 13 and 14 of the Award, which we reproduce :

"13. The <ORG>. Counsel for <ORG> (<ORG>) stressed that 1 party (<ORG>) is entitled to back wages. Once <ORG> submitted his resignation which was accepted by the II party (<ORG>). Resignation letter Ex. M.4 shows that he wanted to take up self employment and start departmental stores. In view of the representation made by <ORG>, the II party recalled him to duty on humanitarian grounds. It is clear from the material on record that <ORG> has worked only for 46 days from 1.4.84 to 19.12.85. He was continuously absent from 8.4.85 without obtaining leave, though his leave was refused. This notice Ex. M.10 intimating <ORG> that his leave was rejected has been served on <ORG>. The I party stated that he met with an accident and he was continuously ill. He has not placed any convinc-ing material to prove this.

14. The Nationalised Banks have been working under loss. The unsatisfactory conduct of I party cannot lose sight off. Against the background of Ex. <NAME> it is highly probable that I party workman was not without any employment all these days. If the first party is granted back wages, in my opinion, it will amount to repairing penurious Peter to pay prosperous <NAME>."

Now the <ORG> was aggrieved. It filed a writ petition under Article 226 of the Constitution in <ORG> which, as noted above, was dismissed by the learned single Judge by order dated June 25, 1998. Learned single Judge observed it was not in dispute that the worker had absented and within a span of 620 days he had worked only for 46 days and further the worker had not been able to establish that he had any justifiable cause for his unauthorised absence. <NAME> had not even pleaded that he had sought any leave for his absence. Also relying on the decision of this Court in <NAME> case learned single Judge held that since no inquiry was held before terminating the services of the workman Award of the <ORG> could not be interfered. Learned single Judge deprived the workman of continuity of service, which had been granted by the <ORG>. What weight learned single Judge can be seen from paras 5 and 6 of his judgment, which we quote :

"5. The question looms large in this case is that the worker did not attend the office. But it was incumbent on the Management in such cases to have issued a notice to the worker and conducted an enquiry. Merely on the assumption that the notice was refused by the worker, they cannot forgo the requirement of the enquiry, as held in the decision referred to supra. Likewise, at the same time, one cannot forget that there are certain circumstances which indicate that the worker has indicated that he was not interested in the job. The application he submitted for availing of loan is one such circumstance. If, as a matter of fact, he had applied for loan and that was granted, it means that the worker had impliedly expressed his intention not to continue his job. One does not know what exactly happened to his application and whether his loan was granted to start a Departmental Store. But we find that thereafter he tendered his resignation which was allowed to be withdrawn conditionally. That means, the employer has tacitly condoned the absence of the worker. This is also circumstance to be kept in while examining the scope of the plea of unauthorised absence. All these facts should have been brought out in evidence by conforming the witness by the employer either before the <ORG> or at the domestic enquiry. In the absence of such materials one cannot infer that there was an intention express or implied expressed by the employee to abandon the employment. In these circumstances, the <ORG> was justified in holding that the termination of services is not justified.

6. This takes us to the question as to what should be the relief to be granted. The worker was awarded the relief of reinstatement besides continuous service. Certainly this part of the award call for modifi- cation. If the worker is to be reinstated with continuous service, practicality he loses nothing. Back-wages cannot be awarded, as there is some evidence that he would have been otherwise employed. It is a case where the reinstatement should be ordered without back-wages. There is no gain saying that the absence was unauthorised. Taking into account all the circumstances, I feel the proper order would be to direct the Management to reinstate the worker. The worker will not be entitled to any wages for the period from the last date of absence i.e., from 3.4.1984 till the date of the award. Besides he will not be entitled to continuity of service for the period from 1.4.1984 till the date of award of <ORG>. While fixing the wages on reinstatement he will not be entitled to count any increments or wages earned for the period from 1.4. 1984 till the date of the award, i.e., 26.9.1994. He will earn the increment only from 26.9.1994 the previous increment being awarded to him on or before 1.4.1984." Learned single Judge noticed that <NAME> was being paid wages from September 26, 1994 under Section 17-B of the Industrial Dispute Act, 1947 and that that amount may be set off against the wages payable to him as if he was reinstated on September 26, 1994. To this extent the Award of the Tribunal was modified.

Still dissatisfied the <ORG> went in appeal before <ORG> of <ORG>. <ORG> did not go into the merits of the case and just by referring to the judgment of the learned single Judge dismissed the appeal. That is how the matter is now before us.

Mr. <NAME>, learned senior advocate for the <ORG>, submitted that it could not be said that action of the <ORG> under clause 16 of the Bipartite Settlement was in any way wrong. He said rules of natural justice were inbuilt in clause 15 of Bipartite Settlement and law laid by this Court in <NAME> case was not applicable. <CITATION> .,  3 SCC 259 the workman was intimated that he had willfully absented from duty continuously for more than eight days without leave or prior information or intimation or previous permission from the management and, therefore, "deemed to have left the service of the company on your own account and lost your lien and the appointment with effect from December 3, 1980". This was based on Clause 13(2)(iv)2 of the Certified Standing Order of the company. It was contended by the workman that despite his reporting to duty on December 3, 1980 and everyday continuously thereafter he was prevented entry at the gate and he was not allowed to sign the attendance register. His plea was that he was not permitted to joint duty without assigning any reason. <ORG> found that the workman had failed to prove his case and that the action of the management was in accordance with the Standing Orders and it was not a termination nor retrenchment under the Act and that in terms of

2. Clause 13(2)(iv) Standing Order read thus :

"if a workman remains absent without sanctioned leave or beyond the period of leave originally granted or subsequently extended, he shall lose his lien on his appointment unless :

(a) he returns within 8 calendar days of the commencement of the absence of the expiry of leave originally granted or subsequently extended as the cases may be; and

(b) explains to the satisfaction of the manager/management the reason of his absence or his inability to return on the expiry of the leave, as the case may be. The workman not reporting for duty within 8 calendar days as mentioned above, shall be deemed to have automatically abandoned the services and lost his lien on his appointment. His name shall be struck off from the muster-rolls in such an eventuality. the Standing Orders workman lost his lien on his appointment and he was not entitled to reinstatement. From the Award of the <ORG> matter came to this Court under Article 136 of the Constitution. There could not be automatic termination under the Certified Standing Orders on absence without or beyond the period of sanctioned leave for more than eight days. This Court said that the principle of natural justice and duty to act in just, fair and reasonable manner must be read into the Standing Orders. So the termination under the Standing Orders without holding any domestic enquiry or offering any opportunity to the workman was held to be violative of the principles of natural justice. This Court observed :

" 12. Therefore, fair play in action requires that the procedure adopted must be just, fair and reasonable. The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice. Article 21 clubs life with liberty, dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence. When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice, it would relieve legislative callousness despising opportunity of being heard and fair opportunities of defence. Article 14 has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory dictates. Equality is the antithesis of arbitrariness. It is thereby, conclusively held by this <ORG> that the principles of natural justice are part of Article 14 and the procedure prescribed by law must be just, fair and reasonable."

This Court held :

"Therefore, we hold that the principles of natural justice must be read into the Standing Order No. I3(2)(iv). Otherwise it would become arbitrary, unjust and unfair violating Article 14. When so read the impugned action is violative of the principles of natural justice."

At this we may as well refer to other judgments cited at the <ORG>.

<CITATION> ,  11 SCC 404, respondent workman was an employee of <ORG> on January 5, 1989 passed an order invoking the Rule 23(vi)(E)4 of its relevant Rules, which was to the effect that the workman deemed to have lost his lien on his appointment with the <ORG>. Workman on May 27, 1988 applied for causal leave. Next day an FIR was lodged against him and others under Section 302/201 read with Section 34 . On June 3, 1988 workman after expiry of the casual leave sent an application for earned leave for 11 days giving reason "personal affair" and mentioning his leave address other than what was with the <ORG>. On June 6, 1988 Senior Manager of the <ORG> received a message from the police to direct the workman to report to the police station. Police was informed about the application of the workman for grant of earned leave. Thereafter the workman sent series of leave applications up to November, 1988 without caring to find out whether his previous applications for leave had been sanctioned or not. Initially the workman did not disclose any reason for his absence and subsequently he mentioned "on medical grounds". He did not send any medical certificate and did not disclose his leave address. All this time <ORG> was being approached by the police to inform them the whereabouts of the workman as he was an accused in a murder case. On November 30, 1988 <ORG> informed the workman that his leave on medical ground was not sanctioned as his applications were not supported by medical certificates and that he was liable to be treated as an unauthorised absentee. The workman was, therefore, called upon to submit his explanation, if any, within 15 days of receipt of the letter. In reply thereto workman stated "baldly" that he was suffering from chest plain for quite some time and that he had consulted a specialist outside <ORG> for personal reasons and that medical certificate would be produced at the time of this joining. Under these circumstances <ORG> passed order date January 5, 1989. Workman approached <ORG>, which set aside the order of the Corpo-ration and directed reinstatement of the workman with 50 per cent back wages. This led the <ORG> to come to this Court. This Court said that from the record that the inference had to be drawn that either the medical certificates

4. 23. Penalties -

(vi) Termination of Service (E) loss of lien on his appointment by an employee, (1) Proceeding on leave without prior sanction and remaining unauthorisedly absent for more than 8 consecutive days and/or (2) Overstaying his sanctioned leave beyond originally granted or subsequently extended for more than 8 consecutive days. . were not genuine in the sense that they were not obtained then and there or the workman deliberately did not disclose them along with the leave applica-tions and that even before this <ORG> no proper explanation was forthcoming from the workman on that aspect. It was, however, conceded by the Corpo-ration that Rule 23(vi)(E) had to be construed by reading into it the principles of natural justice. This <ORG> then did not hold the Rule to be ultra vires Article 14 of the Constitution and said :

"12. We consider that in view of this concession made by the learned counsel on behalf of the appellant-Corporation that the said Rule must be read and given effect to, subject to the compliance of the principles on natural justice, it cannot be said that the Rule is arbitrary or unreasonable or ultra vires Article 14 of the Constitution. In other words, before taking action under the said clause, an opportunity should be given to the employee to show cause against the action proposed and if the cause shown by the employees is good and acceptable, it follows that no action in terms of the said clause will be taken. Understood in this sense, it cannot be said that the said clause is either unreasonable or violative of " Article 16 of the Constitution."

Then this Court held :

"15. We have extracted Rule 23 in full. The explanation to the Rule specifically states that certain items enumerated thereunder shall not be treated as a penalty at all within the meaning of Rule 23. For our case the relevant sub-clause is (vi)(E) which says that proceeding on leave without prior sanction and remaining unauthorisedly absent for more than 8 consecutive days; and/or overstaying his sanctioned leave beyond the period originally granted or subsequently extended for more than 8 consecutive day would result in loss of lien of the appointment of the employees. In this case we have seen that the first respondent had proceeded on leave without prior sanction and remained unauthorisedly absent for more than 6 months consecutively which obliged the appellant-Corporation to issue communication to the first respondent calling upon him to explain. Unfortunately, the first respondent, for reasons best known to him, has not availed himself of the opportunity as seen earlier but replied in a half- hearted way which resulted in the impugned order. Therefore, under the circumstances, it cannot be said that the principles of natural justice have not been complied with or the circumstances require any enquiry as contemplated under Rule 25."

This Court was thus of the view that there "was no good reason for <ORG> to interfere with the impugned order of the appellant-Corporation dated January 5, 1989".

<CITATION> ,  6 SCC 538, workman was permanent employee of the appellant. On November, 7, 1984 she proceeded and remained till January 29, 1985 on maternity leave. Thereafter she allegedly remained absent with effect from January 30, 1985 till April 12, 1985 without any application for leave and consequently by order dated April 12, 1985 appellant informed the workman that her services stood automatically terminated in terms of Clause 17(g)6of the Certified Standing Orders. This Court, where one of us (<NAME> J.) was a party, said :

"Clause 17(g), which has been extracted above, Significantly does not say that the services of a workman who overstays the leave for more than seven days shall stand automatically terminated. What it says is that "the services are liable to automatic termination". This provision, therefore, confers a discretion upon the management to terminate or not to terminate the services of an employee who overstays the leave. It is obvious that this discretion cannot be exercised, or permitted to be exercised capriciously. The discretion has to be based on an objective consideration of all the circumstances and material which may be available on record. What are the circumstances which compelled the employee to proceed on leave; why he overstayed the leave; was there any just and reasonable cause for overstaying the leave; whether he gave any further application for extension for leave; whether any medical certificate was sent if he had, in the meantime, fallen ill? These arc questions which would naturally arise while deciding to terminate the services of the employee for overstaying the leave. Who would answer these questions and who would furnish the material to enable the management to decide whether to terminate or not to terminate the services are against questions which have an answer inherent in the provision itself, namely, that the employee

6. 17(g) The services of a workman are liable to automatic termination if he overstays on leave without permission for more than seven days. In case of sickness, the medical certificate must be submitted within a week against whom action on the basis of this provision is proposed to be taken must be given an opportunity of hearing. The principles of natural justice, which have to be read into the offending clause, must be complied with and the employee must be informed of the grounds for which action was proposed to be taken against him for overstaying the leave."

<CITATION> ,  4 SCC 374, the management was denied to by <ORG> to lead evidence in support of the impugned order of dismissal. It was not disputed that the request was made before the closure of the proceedings before the <ORG>. This Court held :

"A domestic inquiry may be vitiated either for non-compliance of rules of natural justice or for perversity. Disciplinary action taken on the basis of a vitiated enquiry does not stand on a better footing than a disciplinary action with no enquiry. The right of the employer to adduce evidence in both the situations is well recognised. So the employer is entitled to adduce evidences, for the first time, before the <ORG> even if the employer had held no inquiry or the inquiry held by the employer is found to be perverse."

Two principles emerge from the decision (1) principles of natural justice and duty to act in just, fair and reasonable manner have to be read in Certified Standing Orders which have statutory force. These can be applied by <ORG> and <ORG> even to relations between management and workman though based on contractual obligation; and (2) where domestic inquiry was not held or it was vitiated or some reason the <ORG> or <ORG> adjudicating an industrial dispute can itself go into the question raised before it on the basis of the evidence and other material on record.

In the present case action was taken by the <ORG> under Clause 16 of the Bipartite Settlement. It is not disputed that <NAME> absented himself from the work for a period of 90 or more consecutive days. It was thereafter that the <ORG> served a notice on him calling upon to report for duty within 30 days of the notice stating therein the grounds for the <ORG> to come to be conclusion that <NAME> had no intention of joining duties. <NAME> did not respond to the notice at all. On the expiry of the notice period <ORG> passed orders that <NAME> had voluntarily retired from the service of the <ORG>. Now what are the requirements of principles of natural justice, which are required to be observed? These are : (1) workman should know the nature of the complaint or accusation; (2) an opportunity to state his case; and (3) the management should act in good faith which means that the action of the management should be fair, reasonable and just. All these three criteria have been fully met in the present case. Principles of natural justice are inbuilt in Clause 16 of the Bipartite Settlement. When evidence was led before the <ORG>, <ORG> produced the registered covers, which had been received back with the endorsement "refused" and the addressee "not found during delivery time". <NAME> said he never refused to receive the notice. In these circumstances <ORG> thought in necessary to hold that notice was not served on <NAME> as the <ORG> did not examine the postman. The notice was sent on the correct address of <NAME> and it was received back with the postal endorsement "refused". A clear presumption arose in favour of the <ORG> and against <NAME>. Yet the <ORG> held that no notice was given to <NAME> as postman was not produced by the <ORG>. This appears to us to be rather an incongruous finding by the <ORG>. Unfortunately, <ORG> did not go into this question at all. Considering the conduct of <NAME> all this period and after three years of his having voluntarily retired from the <ORG> in terms of Clause 16 of the Bipartite Settlement his statement that he did not receive the notice was a sheer lie. His whole edifice was built on falsehood and yet the <ORG> was there to give him relief on the platter though at the same time criticised his conduct during his employment with the <ORG>.

It is no point laying stress on the principles of natural justice without understanding their scope or real meaning. There are two essential elements of natural' justice which are : (a) no man shall be judge in his own cause; and (b) no man shall be condemned, either civilly or criminally, without being afforded an opportunity of being heard in answer to the charge made against him. In course of time by various judicial pronouncements these two principles of natural justice have been expanded, e.g., a party must have due notice when the <ORG> will proceed; <ORG> should not act on irrelevant evidence or shut out relevant evidence; if the <ORG> consists of several members they all must sit together at all times; <ORG> should act independently and should not be biased against any party; its action should be based on good faith and order and should act in just, fair and reasonable manner. These in fact are the extensions or refinements of the main principles of natural justice stated above. <ORG> has followed the requirements of Clause 16 of the Bipartite Settlement. It rightly held that <NAME> had voluntarily retired from the service of the <ORG>. Under these circumstances it was not necessary for the <ORG> to hold any inquiry before passing the order. An inquiry would have been necessary if <NAME> had submitted his explanation which was not acceptable to the <ORG> or contended that he did report for duty but was not allowed to joint by the <ORG>. Nothing of the like has happened here. Assuming for a moment that inquiry was necessitated, evidence led before the <ORG> clearly showed that notice was given to <NAME> and it is he who defaulted and offered no explanation of his absence from duty and did not report for duty within 30 days the notice as required in Clause 16 of the Bipartite Settlement.

This undue reliance on the principles of natural justice by the <ORG> and even by <ORG> has certainly led to miscarriage of justice as far as <ORG> is concerned. Conduct of <NAME> as an employee of the <ORG> has been astounding. It was not a case where the <ORG> should have given any relief to <NAME> and yet the <ORG> was directed to reinstate him with continuity of service and mercifully the latter part of the relief <ORG> struck down. There was no occasion for the <ORG> to direct that <NAME> be reinstated in service or for <ORG> not to have exercised its jurisdiction under Article 226 of the Constitution to set aside the Award.

We, therefore, allow the appeal, set aside the impugned judgment of <ORG> and also the Award dated September 26, 1994 of <ORG>.

<ORG> had noticed that since September 26, 1994 Dayananda had been paid wages in terms of Section 17-B of the Industrial Disputes Act, 1947. When the matter came to this <ORG> on special leave petition, while issuing notice on February 8, 1999 it was ordered "Statute quo regarding implemen- tation of the order of the <ORG> as existing today to continue till further orders". It is not clear how long Dayananda has been paid his wages. Even though we have set aside the order of the <ORG> we direct that the wages so far paid to Dayananda be neither recorded nor adjusted by the <ORG>. However, there shall be no order as to costs.