PETITIONER: THE COLLECTOR OF CUSTOMS, <NAME> Vs. RESPONDENT: <NAME> SETTY DATE OF JUDGMENT: 19/04/1962 BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA AIYYAR, T.L. VENKATARAMA SINHA, <NAME> P.(CJ) GAJENDRAGADKAR, P.B. WANCHOO, K.N. CITATION: 1963 AIR 1319 1963 SCR (2) 277 CITATOR INFO : F 1973 SC 194 (8) D 1975 SC 769 (3,12) R 1975 SC2288 (1) D 1977 SC 597 (41) ACT: High Court-Decision of Customs Authorities-Construction of entiries in tariff Schedule-Jurisdiction to interfere"Feed oats" used horse feed-Whether falls within "folder" or "grain"-Import Trade Control Schedule, Part IV. Item Nos. 32 and 42- Specific Relief Act , 1877  8. 45 HEADNOTE: Item 42 of Part IV of the Import Trade Control Schedule permitted "fodder.... . " to be imported without a special import licence from a soft Currency area... Item 32 of the same Schedule related to "grain...... and included oats; and a licence was necessary for importing goods covered by this item. The respondent imported from Australia, without a licence, goods described as "feed-oats" for feeding race horses. He claimed that the goods were covered by Item 42 and could be imported without a licence. The customs authorities held that the goods were "grains" within the meaning of Item 32 which could not be imported without a licence, confiscated the goods and imposed a penalty in lieu of confiscation. The respondent moved <ORG> for the issue of a writ of mandamus under s. 45 specific Relief Act. <ORG> held that the 278 goods were covered by item 42 and issued a writ prohibiting the authorities from recovering the penalty imposed. Held, that <ORG> had no, jurisdiction to interfere with the decision of the customs authorities that the goods fell within item 32. It is primarily for <ORG> to determine the head of entry under which any particular commodity falls, and only when the construction adopted is perverse are the courts entitled to interfere. In the present case the decision of the customs authorities was not one which could not be supported on any,reasonable basis, and could be called perverse. <NAME> v. <NAME>, A. I. R. 1961 S. C. 1506, referred to. Held, further that the goods imported fell within item 82 and not within item 42. Oats are undoubtedly grain. Any particular species of grain cannot be, excluded, from the item "grain" merely because it is capable of being used as cattle or horse feed. The matter is made clear by the reference to "coats" in item 32 where grain is classified into two categories, oats and "other gains". JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 568 of 1960. Appeal from the judgment, and order dated April 6, 1956, of <ORG> in 0. S, A. No. 147 of 1953. <NAME>, Additional Solicitor-General of India, <NAME> and <NAME>, for the appellant. <NAME>, <NAME> and <NAME>, for the respondent.

1962. April 19. The Judgment of the Court was delivered by AYYANGAR, J.-The point involved in this appeal which comes before us on a certificate of fitness under Art. 133 (1)(e) granted by <ORG> is a very short one and relates to the nature and extent of the jurisdiction posses- sed by <ORG> in considering the validity of an order of <ORG> interpreting the provisions of the entries in the Tariff Schedule as regards the imposition of duties.

The respondent imported from Australia a quantity of oats which was described in the indent, contract and shipping documents as "'standard feed-oats". The commodity imported consisted of oats in whole grain. The question raised related to the proper classification of the goods imported under the Import Trade Control Schedules current during the period July to December 1952 when the consignment reached India. The controversy centered round the point whether the "feed-oats" fell within item 42 or within item 32 of the Circular. Item 42 ran:

"'Fodder, bran and pollards-O.G.L.-Soft" i.e., this item was covered by an open general licence and so no special import licence was necessary for the import of these goods from a soft currency area, while as regards item 32 the entry ran:

"Graio, not otherwise specified, including broken grain but excluding flour-

(a) oats (b) others --Ports -Nil---A.V."

which meant that a licence was necessary for the importation of the goods specified in it which would be granted by the Joint Chief Controller of Imports or Exports at Calcutta and Bombay, if they were the ports of entry, and by the Deputy Chief Controller of Imports & Exports Madras if they were to be imported through Madras; "nil" that no quotas were specified limiting the quantity to be imported, & that actual users (A.U.) could apply for the licence.

The respondent who carried on business in fodder under the name and style of <ORG> placed an order with an Australian firm for the supply of whole grain "feed- oats" without obtaining any licence for the import. The goods arrived in Madras on August 1, 1952 and when the respondent attempted to clear the goods, <ORG> insisted on the production of a licence before he would be permitted to do so. The Assistant Collector hold that. the goods imported fell within item 32 and as admittedly the respondent held no licence from the Deputy Chief Controller of Imports & Exports, Madras covering the import, there had been a contravention of a. 19 of the Sea <ORG> Act read with s. 3(2) of the Import & Export Control Act, 1947 and so proceeded to deal with the violation under s. 167 (8) of the Sea <ORG> Act. He directed the confiscation of the good sand imposed a fine of Rs.5,000/- in lieu of confiscation, if the. respondent desired to clear the goods. An appeal filed to the Collector of <ORG> was rejected and thereafter the respondent moved <ORG> for the issue of a writ of mandamus under s. 45 of the Specific Relief Act.

In his affidavit in support of the application the respondent besides contending that oats in full-grain fell within the head fodder' under item 42, set out earlier, because (1) he had imported them for being made available solely for feeding race-horses at Bangalore, (2) that in South India oats was not used as human foods but only as feed for horses, and (3) that in any event, he had been misled by an answer that he received from the Deputy Chief Controller of Imports, Madras of whom he had made an enquiry as to whether feed-oats could be imported under an open general licence under serial No. 42 and had received an affirmative answer, The learned Single Judge who heard the application dismissed it on the ground that the order of <ORG> classifying uncrushed feeds-oats as grain and not as fodder could not be said to be either perverse or malafide and that consequently the Court could not interfere with the decision of the authorities. An appeal was perferred therefrom to <ORG> and the learned Judged allowed the appeal and issued a direction prohibiting the Collector and his subordinates from collecting or taking steps to recover the fines and penalties imposed on the respondent. It is the correctness of this order of <ORG> that is challenged in this appeal.

Shortly stated, the ground on which the learned Judges allowed the respondent's appeal were : (1) that the decision of the <ORG> authorities as regards the entry of the Tariff classification within which an imported commodity fell was not final but was open to judicial review and had ultimately to be decided by the <ORG>s, (2) In the case before the <ORG>, entry 32 reading "grain" had, in the absence of any specific entry regarding oats to be read as excluding all grains which would be "fodder" i.e., which were usually used as cattle or animal feed, and that as the respondent had imported the oats for use as horse-feed the proper item within which the goods imported fell was item 42-Fodder etc. In arriving at this conclusion the learned Judges referred to the answer of the Deputy Chief Controller to the query by the respondent to which we have adverted earlier, as a circumstance indicative of the doubts entertained by the departmental authorities themselves on this matter. With very great respect to the learned Judges we are unable to agree with them both as regards the function and jurisdiction of the <ORG> in matters of this type, as well as in their actual construction of the relevant entries in the Import Trade Circular. As regards the limits of the jurisdiction of the <ORG> it is sufficient to refer to the decision in <NAME> v. <NAME>. (1) That was a case where a party moved the High <ORG> under Art.226 of the Constitution, and not as here under s. 45 of the Specific Relief Act under which the power of the <ORG> to interfere is certainly narrower and not wider. This <ORG> proceeded on the basis that it is primarily for the Import Control authorities to determine the head or entry under which any particular commodity fell; but that if in doing so, these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was perverse then it was a case in which the <ORG> was competent to interfere. In other words, if there were two constructions which an entry could reasonably bear, and one of them which was in favour of <ORG> was adopted , the <ORG> has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the <ORG> as the better one to adopt.

In the present case it could not be contended that uncrushed oats did not answer the description of "grain" and therefore the decision of the <ORG> authorities holding that the oats imported fell within item 32 could not be Raid to be a view which on no reasonable interpretation could be entertained. In other words, the conclusion or decision of the <ORG> authorities wag rationally supportable. We consider that even if there was no specific reference to "oats" in entry 32, any particular species of grain cannot be excluded merely because it is capable of being used as cattle or horse feed. The word "'fodder" is defined in the <ORG>' dictionary as 'dried food, hay, straw etc. for stall feeding Cattle". Without resorting to (1) A.I.R. [1961] S.C. 1506, <NAME>'s famous definition of "'oats" in his Dictionary, it is sufficient to point out that oats, though they may serve as food for horses, is also used as human food; in other words it is not by its nature or characteristic capable of serving solely as food for animal,% and incapable of use in the human dietary. For instance, all coarse grains like Ragi and Khambu- serve as food for man as well as for cattle. The mere fact therefore that a grain is capable of being used as horse or other cattle feed does not make it "fodder" excluding it from the category of grain to which it admittedly belongs. The decision of the Assistant Collector. and of the Collector on appeal holding the oats imported by the respondent to be grain cannot therefore be characterised as perverse or malafide and in the circumstances we consider that the learned Judges of <ORG> erred in interfering with the order of the appellant.

In this particular case however, the matter is placed beyond the pale of controversy by the specific reference to "oats" in entry 32 where "grain" is classified into two categories "oats" and "other. grains". It is apparent that unfortunately the attention of the learned Judges was 'not drawn to the entry in full, because, in the course of the judgment they point out that the construction of entry 42 would be different if there had been a specific reference to oats in entry 32.

Learned Counsel for the respondent laid some stress on the respondent having been misled by the answer of the Deputy Chief Controller of Exports to a query as regards the scope of entry 42. The answer which was stated to have misled was in these terms :

"Feed oats classifiable under serial 42 of Part IV can be imported under Open General License No. XXIII".

an answer by no means a model of clarity. This letter is dated September 14, 1951, and it is the case of the respondent that he placed an order for the import of "feed- oats" because he was led to believe that for its import no licence was necessary. The contract for the purchase of the foods for import was entered into in the beginning of June, 1-952, but before that date the Deputy Chief Controller wrote a further letter to the respondent on January 1, 1952, clarifying the answer he gave in his earlier letter, and pointing out that whereas if the oats were in whole grain it would fall within item 32, but if the same was crushed, it would be "fodder" within item 42. The respondent however, denied having received this letter and there is no specific finding on this point by the learned Judges of <ORG>. We do not propose to record any finding either. We are drawing attention to this matter merely for pointing out that it is a matter which the authorities could properly take into account in modifying, if they consider that the respondent has really been misled, the quantum of penalty imposed on the respondent.

The appeal is accordingly allowed and the order of <ORG> of <ORG> set aside. The application filed by the respondent under s. 45 of the Specific Relief Act will stand dismissed. In the circumstances of the case we direct that the parties bear their own costs in this <ORG>.

Appeal allowed.


JUDGMENT

1. The circumstances giving to this appeal are as follows:-

<NAME> respondent was at the material time posted as Superintendent of police, Guedaspur. A government jeep was supplied to him for official use. It was being maintained at Government expense. The tyres of this jeep became worn out. <NAME>, therefore, on the 7th June, 1966 wrote a letter to the controller of stores, Punjab, chandigarh, that inter alia, some tyres and tubes for government jeep and other transport under his charge were urgently required by him. The controller was requested to intimate the amount involved so that sanction of the competent authority to purchase those articles might be obtained. He followed this by a reminder, dated 23-6-1966, requesting the controller to make necessary arrangements for the supply of types and tubes at an early date. The controller of stores, in reply sent the letter, dated 24-6-1966, requesting the respondent to send his demand in the new prescribed from the controller of printing and stationary, Punjab. He added that that further action would be taken on hearing on hearing from him (respondent).

2. On the 20th July, 1966 <NAME> proceeded in the <ORG> jeep no. PNP-15 registered in the name of Superintendent of police, Gurdaspur, on official duty, to Pathankot. The jeep was driven by Constable <NAME> 43. It was raining at about 6.45 P. M. when the jeep was on the road near village Paniar, it skidded and overturned, as a result on which <NAME> received injuries. His right clavical bone was fractured . He remained in plaster for 6 weeks suffering intense pain. Mr. <NAME>, therefore made an application to <ORG>, Punjab chandiaarh, claiming rs. 5.000/- as compensation. It was alleged that the accident occurred due to the worn out tyres of the government vehicle, which were not replaced by the appellant-State, despite repeated requests, in time. At the time of the accident it was raining and the road was wet; consequently, the vehicle skidded and overturned.

3. The application was opposed by the state of Punjab through its secretary in the home department. In its written statement, the state denied its liability to pay any compensation, It was added that the officer had taken out the jeep on the road against the instructions of the Inspector-General of police, and that the superintendent of police, Gurdaspur, being himself the registered owner of the vehicle, could not claim compensation against himself.

4. The <ORG> framed these issues:-

1. Was the accident due to any negligence on the part of the driver of the vehicle or due to any defect in the vehicle involved in the accident?

2. What is the quantum of compensation due if any and and from whom?

3. Is not the claimant entitled to any compensation?

4. Is the government not liable to pay any compensation to the claimant?

5. after recording the evidence produced by the parties, the <ORG> found:-

"The accident no doubt took place because the tyres were worn out and had become unserviceable and the driver was not to blame as it was raining that day and the tyres slipped, but the driver was negligent in the performance of his duties as he did take the defective vehicle on the road and did not inform his officer about its unserviceable that day. The accident was, therefore, both due to the negligence of the driver as well as due to the defect of the tyres. The respondents have also admitted that requisition had been made to the controller of Stores by the applicant much before the accident for the supply of new tyres. Had they been supplied prior to the accident, it would not have occurred."

6. The two-pronged issue No. 1 was thus decided entirely in favour of the claimant. The remaining issues were also decided against the state. In the result Rs. 4,000/- were awarded as compensation under section 110-B of the Motor Vehicles Act, 1939, to the claimant against the appellant -State, with costs. It was further directed that the amount be paid within a month of the date of the award, failing which it will carry interest at 6% per annum. Hence this appeal by the state.

7. Mr. <NAME>, the learned counsel for the appellant state, has canvassed these points in the course of his arguments:-

1. The claimant as Superintendent of police was the registered owner of the vehicle, and at the material time, it was being driven by his own subordinate, Constable-driver. It was a rainy day the claimant knew or should have, by the exercise of ordinary diligence, known that the tyres of the vehicle were worn out and unserviceable, and it was dangerous to take it out on a rainy day on the road. This act of the claimant, <NAME>, and his constable-driver in taking out the jeep, which was not in a roadworthy condition, on that rainy day, amounted to an offence under section 121 of the Motor Vehicles Act, read with Rules 5.1 and 5.3 of the Motor Vehicles Rules. The claimant, therefore could not claim compensation for his own wrong or negligence.

2. the state was not liable, because no negligence either on the part of the controller in not supplying the new tyres, or the driver in driving the vehicle, was established.

3. There were several transport vehicle under the control of the superintendent of police, Gurdaspur. The claimant could avoid travelling on that rainy day in that unsafe vehicle, by selecting some other vehicle, or adopting any other mode of conveyance. The accident was, therefore, self-invited and the direct result of the negligence on the part of the claimant.

8. Mr. <NAME>, the learned Counsel for the claimant-respondent contends occurred as a result of the negligence of the appellant-<ORG> in not replacing the worn out tyres of the government jeep in time, despite requisitions made by the claimant: secondly, even if there was no such negligence, the liability of the <ORG> to compensate its servant for an injury sustained by him in the performance of his duty was absolute. It was not dependent on proof of any negligence either on the part of the Controller in not supplying the new tyres in time, or on the part of the drives of the vehicle in driving it. The claim ant as well as the driver both were servants of the <ORG>. The claimant was required to go on official tours in this jeep. While it was the duty of the constable-driver to drive it. A jeep with worn out tyres when driven on the road on a rainy day, is an intrinsically dangerous vehicle.

It was only in answer to the call of duty, which was paramount, that the claimant-respondent tool the risk of taking the unsafe vehicle on the road, and thereby met an accident and got injured. It was the duty of the master to keep the vehicle in a roadworthy condition, in which the servant was required to travel in the performance of his duties. It is maintained that the principle of res ipsa loquitur will be attracted. It is also said that section 110-B of the Motor Vehicles Act does not say that compensation can be awarded only when negligence on the part of the driver of the vehicle or its owner is established. I n support of this contention, Mr. <NAME> has referred to <CITATION> roadways, Ambala 1962-64 Pun LR 448=(AIR 1962 Punj 540): <ORG> and sons, Ltd., (1921) 2 KB 674: <ORG>, (1955) 1 All ER 6: and <ORG>, (1944) 1 All ER 465.

9. Before entering on the merits of the case, it will be worthwhile to elucidate the law on the point. It is true that there is nothing either in Ss. 110, 110- A, 110-B or 110- C of the Motor Vehicles Act , which says that compensation can be awarded by <ORG> only when negligence on the part of the driver of the vehicle concerned is established. These provisions, however, do not lay down any criterion for awarding compensation. They merely substitute the Motor Accidents claims tribunal for the Civil courts, for adjudicating claims to compensation in respect of accidents, involving death of or bodily injury to persons, arising our of the use of motor vehicles. They do not deal with the question as to who is to be held liable and in what circumstances, if any injury results from an accident. For fixing liability, in the absence of any specific statutory provision, we have to go back to the law of torts, according to which, generally speaking negligence in causing the accident is essential to hold the negligent person liable.

As observed by I. D. dua, J. in shri ram Pertap's case, 1962-64 Pun LR 448=(AIR 1962 Punj 540) the cardinal principle of liability on tort, when death or bodily injury has been caused to a person, is negligence or failure to take the requisite amount of care required by law. Similarly, in <CITATION> . AIR 1963 Punj 214, the accident in which the claimant received injuries while travelling in a bus, run by the state, was not proved to be due to any rash or negligent act of the driver. It was held that the claimant was not entitled to claim any compensation from the state for the injuries received by him.

10. It must be remembered that 'absolute liability' - which means liability without any fault or negligence on the part of the respondent, is exception under the common law, the general rule being that a person is liable only for the injury or harm directly flowing from his intention or negligence and not for any harm resulting from an unavoidable accident. The rule of absolute liability has grown in modern times. In Rylands V. Fletcher. (1865) 3 H & c 774 (sic) (1868- 3 HL 330 reversing (1865) 3 H & C 774), it was laid down that a person who brings dangerous things on his land and a harm results due to their escape, is liable. An extension of this rule casts vicarious liability on employers towards their employees. Employing servants or workmen in industry of business under the present conditions in this machine age is attended with risk of injury due to the negligence or mischief of the employees, which their employer cannot avoid with any amount of care. Statutory provisions, such as Workmen's Compensation Act , have been made to put the employer in the position of an insurer against harm done to the employees or its workmen within the scope of the employment. This principle of insurance against harm is in consonance with the socialistic pattern of society envisaged in our constitution.

11. In applying the doctrine of absolute liability, the <ORG> have to perform a delicate task. They have to give a new look to the old principles in the light of the present-day circumstances. They have to adopt the old principles to the modern world. If the old principles are to live and not become flint fossils of time, they must be constantly renovated, molded, and attuned to the changing social conditions. The courts play a limited role in this process by placing, what is called a dynamic interpretation on principles which carry behind them the sanction of tradition and precedent. They cannot, however, in the absence of any statutory provision, sanctioning that course, cut themselves completely adrift from their past moorings, and arrogate to themselves the functions of the <ORG>. Introducing entirely new principles, radically differing from a conflicting with the fundamental principles of Common law that have evolved through the centuries. Leaving aside the cases governed by special statutory provisions, such as Workmen's compensation Act, in cases of the kind before me, negligence on the part of the master or his agent must be proved before he can be fastened with the liability to compensate his servant, sustaining an injury in the course of the service.

12. The above being the law on the point, I pass on to consider whether in the present case, the accident resulting in injury to the claimant was due to negligence - actual or presumed - on the part of the employer - <ORG> or its servant, the driver of the vehicle concerned.

13. It was first on the 7th June 1966, that the claimant wrote to the controller of <ORG> that some tyres and tubes for <ORG> jeep and other transport under his charge were urgently required by him. This letter was more or less of an exploratory nature, inasmuch as the controller was requested to intimate the amount involved so that sanction of the competent authority to purchase those articles might be obtained. To this letter, the controller of stores sent a reply, dated 24-6-1966, asking the claimant -respondent to send his demand in the prescribed indent form available from the controller of printing and stationary, Punjab. There is nothing on the record to show that the claimant-respondent had sent his demand in the prescribed form thereafter. In the letter, dated 7-6-1966, Exhibit D. B., the claimant-respondent did not even say that the tyres of the vehicles had become unserviceable or worn our. The only thing mentioned therein is, that certain number if tyres and tubes were urgently required.

On the other hand, the controller of stores in his letter, Exhibit D. D., dated 24-6-1966, clearly intimated the claimant-respondent that further action in the matter could be taken only on respect of his demand on the prescribed indent forms No. "UF 88". It is true that the knowledge of the employer or the controller about this unserviceable or dangerous condition of the motor vehicle concerned is not a sine qua non for fixing him with the liability. It is, however, an important piece of evidence showing that were was no negligence on his part. Thus, it was not established that there was any negligence on the part of the appellant or its servant, the controller of stores, in not replacing the worn out tyres of the vehicle in time. Indeed, there was negligence on the part of the claimant in not making the demand well in time in the prescribed form. <ORG>, also, has not recorded any clear finding that there was negligence on the part of the state in replacing the worn out tyres, though it has said that the accident occurred due to the defect in the tyres.

14. Having seen that no negligence on the part of the employer-state has been proved, I pass on to consider, whether any negligence on the part of the driver held been established. The <ORG> has held that the driver was not to blame for the accident, which occurred due to the rain and the worn out and unserviceable condition of the tyres. The <ORG> has however, held that the driver was negligent as he did take the defective vehicle on the road and did not inform his officer about its unserviceable that day.

15. I am unable to appreciate this reasoning. It was the claimant's own case that the tyres of the vehicle had become worn out and unserviceable and they required urgent replacement. The knowledge of the claimant about the worn out condition of the tyres can be inferred from the circumstances that he wrote to the controller as far back as the 7th June 1966, that the tyres and tubes of the <ORG> jeep and other transport vehicles were urgently needed by him. He followed up this letter by a reminder, dated 23-6-1966. Thereafter, he received the reply of the controller that the requisition should be sent in the prescribed form. The accident occurred only about 4 weeks after the receipt of this letter. It is therefore, preposterous to suggest that Mr. <NAME> did not know about the worn our and unserviceable condition of the tyres.

He further knew that it was a rainy day. By ordinary diligence, therefore, he ought to have known that it was dangerous to take out the vehicle with unserviceable tyres on a rainy day. He did not require to be told by the Constable-driver about the condition of the tyres and the consequent roadworthy condition of the jeep on that rainy day. This act of the driver in driving that dangerous and unsafe vehicle on that rainy day, with its unserviceable tyres, and also act of <NAME> in allowing his subordinate driver to drive the vehicle on that day, might amount to the commission of an offence by the claimant as well as the driver under section 121 of the Motor Vehicles Act. Section 121 of the Act, reads as follows:-

"121. Using vehicle in unsafe condition. Any person who drives or cause or allows to be driven in any public place a motor vehicle or trailer while the vehicle or trailer has any defect, which such person knows of or could have discovered by the exercise of ordinary care and which is calculated to render the driving of the vehicle a source of danger to persons and vehicles using such place, shall be punishable with fine which may extend to two hundred and fifty rupees, or if as a result of such defeat an accident is caused causing bodily injury or damage to property, with imprisonment for a term which may extend to three months or with fine which may extend to one thousand rupees, with both."

16. Thus, the claimant and the driver both committed a wrongful act which is interdicted Act. The claimant, therefore cannot be compensated for a harm flowing from his own wrongful act or negligence.

17. The facts of the cases referred to by Mr. <NAME> were materially different from those of the instant case. The sheet-anchor of Mr. <NAME>, is the case, (1921) 2 KB 674. The plaintiff, Mr. <NAME>, a commercial traveler, was employed by the defendants, who were wholesale grocers. His duties were to travel round the district, show samples, take orders and deliver goods, and for that purpose he was supplied by the defendants with a motor-car, the starting gear of which was defective. He complained of this on several occasions to the defendants, who admitted that it was defective, but failed to remedy the defect. While the plaintiff was upon one of his journeys the car stopped, and in trying to restart it, he was severely injured. In an action brought by the plaintiff to recover damages in respect of personal injury resulting from the negligence of the defendants, it was held that the plaintiff notwithstanding his knowledge of the defect in the starting gear, had never undertaken or consented to take upon himself the risks arising from continuing to use the car, that he had sustained the injury owing to the personal negligence of the defendants, and that, not having been guilty of contributory negligence, he was entitled to recover.

18. It is important to note that Mr. <NAME> had repeatedly complained to his employers about the defect in the starting gear of the car. But the defect was not removed. The last time he complained about the defect to his employers, he was told: "Well we do not want you to be laid up, Use the car this week, as no other car is available. I will then have it seen to when you get back and you can go your next round by rail". It was in compliance with this direction of the employer that Mr. <NAME> started on his journey in the car, with the starting gear still defective.

19. In the instant case, it was neither alleged not proved by the claimant that he was peremptorily required by his employer or any superior officer to use the jeep with its defective tyres on that rainy day and thus run the risk of being injured. The claimant has not alleged, much less proved, (1) that the official work for which he had to travel on that day was so urgent and paramount that he could not, as a devoted and faithful servant of the state, avoid, and (2) that in the circumstances, he had no choice but to use this very defective jeep. It is apparent from the letter written by the claimant to the controller that there were several <ORG> transport vehicles under his control.

He has not alleged that all the other vehicles were unserviceable and in a more unroadworthy condition than the jeep concerned. Indeed, it was never the claimant's case that the exigencies of the official mission to be performed by him were so urgent and imminent that he had no choice but to travel in this defective jeep, except at the cost of committing dereliction of the official duty and the consequent incurrence of displeasure of the master. There was no proof that the master had done some act either by issuing peremptory direction to the servant to use this defective vehicle on that day and thereby expose him to danger, or had in any manner put the servant in that dangerous situation which he could not, by the exercise of ordinary diligence or discretion, avoid.

20. In (1921) 2 KB 674, it has no-where been laid down that the master's Liability is absolute and is not dependent on his personal negligence towards the servant. Mr. Justice <NAME>, who decided this xase, agreed that in order to cast liability on the master it was not necessary to prove that the master knew of the danger and that the servant was ignorant of the danger. In this opinion, both these branches of the proposition as enunciated in <NAME>'s case, (1884) 13 QBD 259, were erroneous. The learned Judge further observed:-

"I do not think it was ever essential not is it now essential to show that the master has actual knowledge of the danger or defect. The action against the master by a servant for negligence was based., as it purported to be based, on negligence and not on knowledge. It may well be that negligence could not in certain cases be shown without proof of knowledge. It may also be that once knowledge was shown the inference of negligence would be drawn. But proof of knowledge was only a useful method of proving negligence. Negligence could exist and can exist without actual knowledge by the master of the danger or defect. Indeed the absence of knowledge may itself be the basis of the charge of negligence.

The relationship between master and servant normally places upon the master the duty of care towards his servant...........

Now what does the duty of care involve? The answer is supplied by the well-known words of <NAME> in <ORG>, (1856) 11 Ex 781, 784, where he defines negligence as "the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do." Subject to the observation in <NAME>, (1893) 1 QB 491, the words of <NAME>, are still a useful guiding rule.

It follows therefore that a master may be liable for a danger or defect (causing hurt to his servant) not only where he knew but where he ought to have known of it. The negligence may be either (a) where he knows and negligently fails ro remedy, or (b) where he ought to have known but negligently fails in acquiring knowledge and therefore negligently fails to remove the danger or defect."

21. Thus, from what has been quoted above, it is quite clear that negligence on the part of the master is still the basis of an action for compensation in cases of this kind. In the case before me, the master was not apprised of the fact that the tyres of all the vehicles, including the jeep in question had become unserviceable. Secondly, it was not the master who put the servant in that situation. It was the claimant's own negligence that exposed him to that danger. The claimant's negligence consists first in not placing the indent in time in the prescribed form, and further allowing the jeep to be taken out in that road unworthy condition on a rainy day. Thus, the rule in <NAME>'s case, 1921-2 KB 674 does not advance the proposition expounded Mr. <NAME>.

The general rule is that the plaintiff must establish some negligence or a breach of duty by the defendant towards him and its causal connection with his injury. I do not agree that the case is covered by the principle or res ipsa loquitur. This rule has been very succinctly stated in the leading English case, Scott V. London and <ORG> (1865) 3 H & c 596. There the plaintiff, a customs officer, went inti the defendant's docks on business and in passing from one door way to another, six bags of sugar which were hung by a chain, fell on him. It was held that on these facts negligence of the defendant's servant could be inferred. The rule applicable to such cases was enunciated as follows:-

"Where the thing is shown to be under the management of the defendant or his servants, and the accident is such as in the ordinary course of things does not happen it those who have the management use proper care, it affords reasonable evidence in the absence of explanation by the defendant, that the accident arose from want of care."

22. In case before, me the vehicle concerned was not under the 'management' of the appellant-state or its servant, the driver, It was registered in the name of the superintendent of Police Gurdsapur, and was under his control . that is to say, it was under the, management of the claimant himself, and the accident would not have happened if the claimant, who had the management and control, used proper care either to get the tyres replaced in time or to avoid using this dangerously unsafe vehicle on that rainy day. The accident occurred for want of care on the part of the claimant himself. The rule of res ipsa loquitur , (which for the sake of convenience maybe called the rule of presumptive negligence on part of the defendant), has therefore, no application to the facts of the <ORG> case.

23. It is not necessary for me to over-burden this judgment by discussing all the cases cited by Mr. <NAME>. It would suffice to say that their facts were entirely different.

24. For all the reasons aforesaid, I have no hesitation in holding that the claimant was not entitled to any compensation. In the result, I would allow this appeal, and dismiss the claimant's application, leaving the parties to bear their own costs throughout.

25. SSG/D.V.C.

26. Appeal allowed.


JUDGMENT <NAME>, J.

1. These cases have come up on a reference to us made by the Honourable single Judge in view of a conflict of decisions between single Judges in respect of the matter involved in the present revisions. STR Nos. 400, 401 and 402 of 1980 raise the question as to whether ice-cream is entitled to exemption from tax being a milk product, on the strength of notifications issued under Section 4 of the Act, in spite of the notifications issued under Section 3-A from time to time making ice-cream taxable under those notifications. STR No. 848 of 1980 raises the question as to whether lassi is entitled to exemption on the same score.

2. Before we refer to the conflicting decisions of this <ORG> on the two items involved in the revisions, we may refer to the relevant notifications under Sections 4 and 3-A. We propose first to refer to the notifications under Section 4 exempting milk products from tax. The first notification on the subject is Notification No. ST-911/X dated 31st March, 1956. Item No. 10 of this notification is in the following terms :

10. Milk and milk products such as chhena, dahi, khoa, butter and cream but excluding (1) products sold in sealed containers; and (2) sweetmeats.

3. The next notification is ST-3506/X dated 10th May, 1956. This notification amended the earlier entry No. 10 and ran as under :

10. Milk and milk products such as chhena, dahi, khoa, butter and cream but excluding (1) products sold in sealed containers, (2) sweetmeats, and (3) ghee.

4. There was a hiatus of about a decade before the next notification on milk products came. The next notification being Notification No. ST-775/X-900 (16-A)-1964 dated 16th February, 1965, which substituted the existing entries by the following:

Milk and milk products but excluding (1) products sold in sealed containers, (2) sweetmeats, (3) ghee and (4) butter and cream.

5. This notification was followed by two other notifications, one being ST-II-6625 dated 1st December, 1973, and the other being Notification No. ST-II-2686/X dated 21st May, 1974. The notification of 1973 substituted existing entry No. 10 in the notification of 16th February, 1965, by the following :

Milk and milk products but excluding (1) products sold in sealed containers, (2) sweetmeats, (3) ghee and (4) butter, cream and cheese.

6. The notification of 21st May, 1974, again effected a substitution in entry No. 10. The substituted entry as it stood after the amendment effected by the notification of 21st May, 1974, stood :

10. Milk (other than condensed milk, milk powder or baby milk), and milk products excluding (1) products sold in sealed containers, (2) sweetmeats, (3) ghee, and (4) butter, cream and cheese.

7. There is another notification regarding milk products of 30th July, 1981, being Notification No. ST-II-62/X-6(ll)-1980 dated 30th July, 1981, which we will refer to after referring to the notification issued under Section 3-A which made ice-cream and lassi taxable under the notification issued under that section.

8. It would be convenient first to refer to Notification No. ST-II-6628/X dated 1st December, 1973, under Section 3-A of the Act. Item No. 17 of this notification, inter alia, made the turnover of ice-cream and lassi liable to tax at all points of sale. Item No. 17 of the notification so far as it is relevant may be extracted :

17. Hot and cold drinks, ice-cream, kulfi, milk shake, lassi, beverages, squashes or sharbat, when served to customers.

9. The next notification regarding ice-cream and lassi is Notification No. ST-II-7768/X dated 4th November, 1974, which only increased the rate of tax on the sale of ice-cream and lassi to customers. Then comes Notification No. ST-II-4949/X dated 30th May, 1975. By this notification ice-cream and lassi were made liable to tax at the point of sale to the consumers, the rate of tax being 3 per cent. The relevant item being item No. 13 of the notification is to the following terms :

13. Hot and cold drinks, ice-cream, kulfi, milk shake, lassi, beverages, squashes or sharbat, when served to customers.

10. As far back as 1971 this <ORG> in the case of <NAME>, <NAME> v. Commissioner of Sales Tax, U.P. 1971 UPTC 131 had held that lassi was a milk product and as such was exempt from sales tax in view of the notification issued under Section 4 of the Act. However, there was no direct decision on the question as to whether ice-cream is a milk product until 1979.

11. It was amply clear from the reasons given in the lassi case (Dina Nath Lassiwala, Bareilly v. Commissioner of Sales Tax,.U.P.) 1971 UPTC 131 that ice-cream was a milk product and as such was exempt from tax, in view of the notifications issued under Section 4 of the Act which have been adverted to earlier. However, in spite of these notifications under Section 4, as referred to earlier, <ORG> issued the notifications dated 1st December, 1973, 4th November, 1974, and 30th May, 1975, under Section 3-A of the Act specifically referring to ice-cream and lassi and making them taxable under those notifications. Thus, it will be seen, while on the one hand there were existing notifications under Section 4 of the Act exempting milk products, one such notification being of the 1st December, 1973. On this very date, there was a notification under Section 3-A imposing tax on ice-cream and lassi under Section 3-A. The State Government was merrily issuing notifications under Section 3-A making ice-cream and lassi taxable under that provision. It was an oddity, and it appears that State Government has by subsequent notification dated 30th July, 1981, amended the Notification No. ST-911/X dated 31st March, 1956, as amended from time to time relating to milk products and has excluded from its purview of exemption both ice-cream and lassi, the amendment effected is in the following terms :

In List II of the said notification, for the existing entry against item 10, the following entry shall be substituted, namely :-

10. Milk (other than condensed milk, milk powder, or baby milk) and milk products excluding (1) products sold in sealed containers, (2) sweetmeats, (3) ghee, (4) butter, cream and cheese, (5) ice-cream and ice-candy, (6) kulfi, (7) milk shake and (8) lassi.

12. These incongruous notifications issued under Sections 4 and 3-A invited a rift in judicial opinion which did occur.

13. In the case of <CITATION> . 1979 UPTC 1283, a learned single Judge of <ORG> held that ice-cream was a milk product and its turnover was exempt from sales tax by virtue of Notification No. ST-775/X dated 16th February, 1965. In the case of <CITATION>  34 STC 396, a similar view was taken.

14. We then come to the year 1980 in which the difference of opinion surfaced, on account of the notification of 1st December, 1973, issued under Section 3-A. In the case of <CITATION> . (page 301 infra) 1980 ATJ 276, one of us took the view that the notification of 1st December, 1973, superseded all earlier notifications and, as such, ice-cream was taxable under the notification under Section 3-A. On the contrary, <NAME>, J., in the case of <CITATION> 1980 UPTC 360 held that kulfi and lassi being milk products were exempt from tax, notwithstanding the notification issued under Section 3-A making them taxable under that provision. We feel that in case the State Government had been more alert in realising the repercussions of issuing notifications under Section 3-A, while milk products including ice-cream and lassi were exempt under the notification issued under Section 4, the divergence of opinions which has led to this reference would not have occurred.

15. Now, the question is as to whether the notifications under Section 4 prevail over the notifications issued under Section 3-A. We have already adverted to the notifications issued under both these provisions. It is apparent that while on the one hand Section 3-A brings to tax ice-cream and lassi sold to consumers, the notifications issued under Section 4 grant exemptions to milk products which on judicial interpretations include ice-cream and lassi.

16. Now, an exemption can be granted only in respect of a matter which is liable to tax. If milk products were not liable to tax either under Section 3-A or under any other provision, no question of granting an exemption under Section 4 would at all arise. We are enforced in this view by the decision of <ORG> in the case of <CITATION>  8 STC 561 (SC). On page 574 the difference between provisions relating to exemption and non-liability to tax is spelt out. It would be profitable to quote the relevant passage from the decision of Bhagwati, J.:

There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non-liability to tax or non-imposition of tax on the other. In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed. In the latter case, the sales or purchases are exempted from taxation altogether. The legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all. The very fact of their nonliability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed.

17. It would, thus, appear that transactions or sales which enjoy exemptions have to be included in the gross turnover, but they are exempted when the net turnover is calculated. In the present case as there are notifications under Section 4 of the Act, even though ice-cream and lassi have been made taxable under Section 3-A, on account of the notifications issued under Section 4, the turnover of these items could not be included in the net taxable turnover. Thus, the view taken by the revising authority that the sale of ice-cream was not taxable in view of the exemption granted under the notification issued under Section 4 in respect of milk products appears to be correct. The decision of the revising authority holding that lassi was liable to tax does not appear to be justified on the view that we have taken.

18. We accordingly dismiss S.T.R. Nos. 400, 401 and 402 and allow S.T.R. No. 848 of 1980. The parties will bear their own costs.


PETITIONER: RADHAKRISHNA AGARWAL & ORS. Vs. RESPONDENT: STATE OF BIHAR & ORS. DATE OF JUDGMENT17/03/1977 BENCH: <NAME>, M. HAMEEDULLAH (CJ) BENCH: <NAME>, M. HAMEEDULLAH (CJ) <NAME>, A.C. KAILASAM, P.S. CITATION: 1977 AIR 1496 1977 SCR (3) 249 1977 SCC (3) 457 CITATOR INFO : R 1979 SC 621 (30) F 1980 SC 738 (8) RF 1986 SC1370 (107) D 1986 SC1571 (107,108) RF 1989 SC1076 (21) RF 1989 SC1642 (22) ACT: Constitution of India, 1950-- Article 226 cannot be invoked for alleged breaches of contract--Remedy lies through ordinary civil suit for damages. Constitution of India, 1950-- Article 14-- Discrimination should be alleged at the stage of entry into the contractual area to attract the application of Art. 14. Constitution of India, 1950--Articles 298 and 299--Scope of--Whether the <ORG> has any special obligations and privi- leges attached to it even when it acts within the contractu- al field. Plea for adjournment of the hearing of the case until after the emergency is lifted--Stay orders presumably ob- tained earlier on representation made that no aspect of enforcement of Art. 14 of the Constitution was involved--Propriety of the continuance of stay. HEADNOTE: A contract called a "lease" to collect and exploit sal- seeds from forest area was entered into in 1970, between the respondent <ORG> and the appellants in 1970. Clause (3) in the written contract executed in accordance with the provi- sions of Art. 299 of the Constitution provided for the revision of the. rate of royalty at the expiry of every three years in consultation with the lessee and was to be binding on the lessee.. Under clause (4) of the. lease, the lessee. had to establish a factory within the, <ORG> of Bihar for processing of sal-seeds and extraction of oil therefrom within a period of five. years from the date. of the, agreement, failing which the agreement itself was to terminate. In 1974, the respondent <ORG> revised the rate of royalty payable, by the appellants and after that, can- celled the lease by a letter dated 15th, March 1975. The writ petitions challenging the said orders were dismissed by <ORG>. On appeals by certificates, the appellants contended: (i) the <ORG> acting in its executive capacity through its <ORG> or its officers even in the contractual field cannot escape the obligation imposed upon it by Part III of the Constitution; (ii). Article 14 of the Constitution has been infringed and (iii) Principles. of natural justice have. been violated as no opportunity to show cause against the cancellation of lease was given. Dismissing the appeals the <ORG>, HELD: (1) Article. 14 of the Constitution imports a limitation or imposes an obligation upon the <ORG>s execu- tive power under Art. 298 of the Constitution. The rule of law which regulates. the operation are organs of <ORG> functioning under the Constitution is that all constitution- al powers carry' corresponding obligations with them. [254 <CITATION> . 1975(2) SCR 674 at 677, referred to. (2) The <ORG> acts purely in its executive capacity and is bound by the obligations which dealings of the <ORG> with the individual citizens import into every transaction en- tered into in exercise of its constitutional powers, only at the time of entry into the field of consideration of per- sons with whom the <ORG> could contract at all. But, after the <ORG> or its agents have entered into the field of ordinary contract the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. [255 C-D] 250 (3 ) Article 14 or of any other constitutional provision is not violated when the <ORG> or its agents purporting to act within the contractual field perform. any act. In this sphere they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statu- tory power or obligation on the <ORG> in the contractual field which is apart from contract. In the instant case, the contracts do not contain any statutory terms or obliga- tions and no statutory' power or obligation which could attract the application of Art. 14 of the Constitution is involved. [255 D-E, 260 E-F] (4) The doctrine of discrimination cannot be availed of against the <ORG>'s action purporting to be taken solely within the contractual field when no aspect of any statutory or constitutional obligation appears either from incontro- vertible facts or of facts. The appellants', cases do not raise any question of discrimination alleged at the stage of entry into the contractual area which could attract the application of Article 14. [258 F-G, 259 <CITATION> . 1959 Supp. (1) SCR 787, applied. <ORG> v. <ORG> of West Bengal & Ant. (1975) SCR 674, distinguished. (5) Before any adjudication on the question whether Article 14 of the Constitution could possibly be held to have been violated as between persons governed by similar contracts, they must be properly put in issue and estab- lished. The question whether Article 14 could at all be held to operate within the. contractual field whenever the <ORG> enters into such contracts is such that it cannot be decided without a detailed adduction of evidence which is only possible in ordinary civil suits, to establish that the <ORG>, acting in its executive capacity through its offi- cers, has discriminated between parties identically situat- ed. In the instant case allegations on which a violation of Art. 14 could be based are neither properly made nor estab- lished. It is the contract and not the executive power regulated by the Constitution which governed the relations of the parties. [259 A-D] (6) Proceedings under Art. 226 are, summary proceedings reserved for extraordinary cases where the exceptional and what are described perhaps not quite accurately as "preroga- tive" powers of the court are invoked. If the facts are disputed and require assessment of evidence, the correctness of which can only be tested satisfactorily by taking de- tailed evidence involving examination and cross-examination of witnesses, the case could not be conveniently or satis- factorily decided in proceedings under Art. 226 of the Constitution. Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract facts have to be investigated and found before the question of violation of Art. 14 could arise. The appellants' cases are not such in which powers under Article 226 of the Constitution could be invoked. [255 E-G] Lekhraj Satnam Das Lalvani v.<NAME>, Deputy Custodi- an-cum-Managing Officer AIR 1966 SC 334; <CITATION> . AIR 1972 SC 843 @ 845 and <ORG> etc. etc. v. The Dy. Excise. & Taxation Corotar. & Ors. 3 (1975) 3 SCR 254 @ 265, reiterated. <CITATION> AIR 1973 SC 205; <CITATION> , AIR 1954 SC 592; <CITATION> . AIR 1962 SC 1044; <CITATION> , 1959 Supp. (1) SCR 528; <CITATION> 1967(2) SCR 454 and S.S. Sawhney v.D. <NAME>, Assistant Pass port Officer, <ORG>, New Delhi & Ors. 1967 (3) SCR 525, held not applicable. (7) The Patna High <ORG> had very rightly divided the types of cases in which breaches of alleged obligation by the <ORG> or its agents can be set up into three types: (i) Where a petitioner makes a grievance of breach of an obliga- tion of the <ORG> in cases where on an assurance or repre- sentation of, the <ORG>, he has acted to his prejudice and detriment but the agreement is 251 short of a contract within the meaning of Art. 299 of the Constitution; (ii) Where the contract entered into between the person aggrieved and the <ORG> is in exercise of a statutory power under certain Act or Rules framed thereunder and the petitioner alleges a breach on the part of the <ORG>; (iii) Where the contract entered into between the <ORG> and the person aggrieved is nonstatutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract and the petitioner complains about breach of such contract by the <ORG>. The High <ORG> rightly held that the appellants cases should be placed in the third category where questions of pure alleged breaches of contract are involved and that no writ or order can issue under Article 226 of the Constitution in such cases to compel the authorities to remedy a breach of con- tract pure and simple [255 H, 256 A-B, F-G] <NAME> v. The <ORG> of Bihar AIR. 1973 SC 964 and <NAME> v. <NAME> AIR 1966 SC 334, followed. <CITATION> AIR 1974 Patna 230, approved. <CITATION> AIR 1968 SC 718; <CITATION> AIR 1971 SC 1021; Robertson v. Minister of Pensions (1949)(1) K.B. 227; <CITATION> AIR ;1954 SC 592; <CITATION> AIR 1973 SC 205; M/s. Shrikrishna Gyanaday Sugar Ltd. v. The <ORG> of Bihar AIR 1975 Patna 123, distin- guished and held inapplicable. (8) The object of the appellants is to hold up any adjudication on the cases, by taking shelter behind Article 14 so that the stay orders obtained by them may continue.. To accede to the prayer to adjourn the hearing of the cases until after the emergency is lifted and yet to continue the stay orders is to permit circumvention of the constitutional mandate contained in Art. 359 and to countenance gross abuse of the process of the court. [259 D-E] (9) The interim stay or order or injunction could not be justified at all because so long as the Presidential Order under Art. 359 of the. Constitution is operative, the en- forcement of Fundamental Rights falling under Art.14 of the Constitution is suspended. In such cases even if a petition or a suit is entertained and can be pending no stay order could be passed because that would amount to indirectly enforcing the Fundamental Rights conterred by Art. 14 of the Constitution. It is only where a prima facie case for an injunction of stay can be made out, uqite apart from a right governed by Art. 14 of the Constitution or of any other Fundamental Rights whose enforcement may have been suspend- ed, that an injunction could be granted at all in suitable cases on suitable terms. [260 <CITATION> AIR 1976. SC 1207 @ 1288--1976 Supp. SCR, 172 re- ferred to. (10) The appellants are not entitled to an opportunity to show cause against the cancellation of the leases. The question of distinguishing between an administrative and quasi-judicial decision can only arise in the exercise of powers exercised under statutory provisions. Rules of natural justice are attached to the performance of certain functions regulated by statutes or rules made thereunder involving decisions affecting rights of parties. When a contract is sought to be terminated by the officers of the <ORG> purporting to act under the terms of an agreement between parties, such action is not taken in purported exercise of an agreement between parties, such action is not taken in purported exercise cannot operate upon powers which are governed by the terms of an agreement exclusively. The only question which normally arises in such cases is whether the action complained of is or is not in consonance with the terms of the agreement. [259 F-H, 260 C] JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 227 and 228/ 1976.

(From the Judgment and Order dated 8-1-1976 of <ORG> in C.W.J.C. No. 1053 and 1054 of 1975).

<NAME>, <NAME> and <NAME>, for the appellants. <NAME>, <NAME> and <NAME>, for the respondents.

The Judgment of the Court was delivered by <ORG> These appeals are before us after certifica- tion of the cases, raising identical questions of law as fit for appeal to this Court, dealt with by one judgment and orders of <ORG> of <ORG> on two writ petitions. The petitions were directed against orders of the State Government passed in 1974 revising the rate of royalty payable by the petitioners appellants under a lease of 1970, and, after that, cancelling the lease by a letter of' 15th March, 1975. The petitioners' case was that the revision of the rate of royalty payable by the petitioners for the lease to, collect and exploit sal-seeds from the forest area was illegal during the subsistence of the lease, and thereafter, cancellation of the lease itself was illegal for various reasons.

Primarily, the case of the petitioners is that of a breach of contract for which the <ORG> would be liable ordinarily to pay damages if it had broken it. If the petitioners could establish some right, either contrac- tual or equitable, to continue in possession, the <ORG> could be prevented, by appropriate proceedings, from ousting the petitioners from the forest land from which the peti- tioners have been gathering sal-seeds. The petitioners had also set up mala fides on the part of the Conservator of Forests, in enhancing the royalty unreasonably and then cancelling the lease, allegedly acting under the influence of friends and associates of the Forest Minister of Bihar. The relevant clause relating to revision of royalty in the written contract reads as follows :--

"The rate of royalty will be revised every three years' cycle in consultation with the lessee and the decision will be binding on the lessee".

Apparently, there is no restriction, under the terms of the contract, upon the amount by which the royalty could be increased by a revision after a three years' cycle under this clause. The lessee is only entitled, under the con- tract, to be consulted before a revision. But, the decision of the <ORG> authorities to enhance is binding upon him after that. Hence, if this was the only term of the contract on this question, the petitioners could not complain of unreasonable enhancement in the revised rate of royalty.

Under clause 4 of the lease, the lessee had to establish a factory within the <ORG> of Bihar for processing of sal- seeds and extraction of oil therefrom within period of five years from the date of the agreement, failing which the agreement itself was to terminate. The questions which apparently arose appertained to action alleged by the <ORG> to fall within the terms of the agreement between the par- ties regulated by the duly signed contract which was presum- ably executed in compliance with the provisions of Article 299 of the Constitution. Prima facie, therefore, the appel- lants can only get their remedies, if they can obtain any at all, through ordinary suits for damages or for injunctions to restrain breaches of contract provided they could show how the contracts were broken or were going to be broken.

The writ petitions, however, raise questions relating not only to action lying within the sphere regulated by the law of contract, but, according to the petitioners, by constitutional provisions relating to the exercise of the executive powers of <ORG> contained in Arti- cle 298 which reads as follows :--

"298. The executive power of the <ORG> and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that--

(a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which <ORG> may make laws, be subject in each State to legislation by the State; and

(b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which <ORG> may make laws be subject to legislation by <ORG>".

It is urged vehemently by Dr. <NAME>, appearing on behalf of the petitioners-appellants, that the <ORG>, acting in its executive capacity through its <ORG> or its officers, even in the contractual field, cannot escape the obligations imposed upon it by Part III of the Constitution. The only article, however, in Part III of the Constitution relied upon by Dr. <NAME> is Article 14 which says:

"14. The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India".

It can be and has been urged on behalf of the <ORG> that Governmental authorities when acting in the contractual field, could not be controlled by Article 14 of the Consti- tution at all. When the <ORG> had entered into contracts with citizens who carry on their trade and pay the royal- ties. In accordance with the agreements reached between the <ORG> and citizens, it does not exercise any special governmental or statutory powers. In such cases, the <ORG> as well as the citizen with whom it contracts are both equally subjected to the law of contract. It has been urged on behalf of the respondent <ORG> that there has been nO breach of contract in the cases before us. The <ORG> is, according to the learned Solicitor General, appearing for the <ORG> of Bihar, not claiming to be above the law of contract governing all parties which subject themselves to the law of contract. The dispute whether there is or there i.s not a breach of contract should, according to the con- tention on behalf of the <ORG>, be determined by ordinary civil courts as in every case between ordinary litigants who cannot invoke the powers of <ORG> under Article 226 of the Constitution simply because there is a dispute whether an agreement has been broken or not. Equal subjection of all parties, including the <ORG>, to the same procedural requirements, when such disputes are to be adjudicated upon, means that the <ORG> should be placed on the same footing as an ordinary liti- gant. It should neither enjoy special benefits and privi- leges, nor be subjected to special burdens and disadvan- tages. This should, it is urged, follow from a strict application of Article 14 if the <ORG> were to be, as a party to a contract and a litigant, placed on the same footing as other .parties who enter into such contracts. It is true that the special provisions of Article 299 of the Constitution are there to protect public interest so that 'the contracts by or on behalf of the Government have to comply with the special requirements of form. But, once the <ORG> enters into the contractual sphere after the require- ments of form, contained in Article 299 , have been complied with, does it have to take its place, in the eye of law, side by side with ordinary parties and litigants or has it any special obligations or privileges attached to it even when it acts within this field ?

Dr. <NAME>'s argument that <ORG> had some special obligations attached to it would have appeared more plausible if it could be shown that the <ORG> or its officers or agents had practised some discrimination against the petitioners-appellants at the very threshold or at the time of entry into the field of contract so as to exclude them from consideration when compared with others on any unreasonable or unsustainable ground struck by Article 14 of the Constitution. It is true that the Article 14 of the Constitution imports a limitation or imposes an obligation upon the <ORG>'s executive power under Article 298 of the Constitution. All constitutional powers carry corresponding obligations with them. This is the rule of law which regu- lates the operation of organs of Government functioning under a Constitution. And, this is exactly what was meant to be laid down by this Court in <CITATION> .,(1) on which learned counsel for the appellants sought to rely strongly. It was held there (at p. 677) :--

"Under Article 298 of the Constitution the Executive power of the <ORG> and the <ORG> shall extend to the carrying on of any trade and to the acquisition, holding and dis- posal of the property and the making of con- tracts for any purpose. The <ORG> can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the <ORG> is subject to Part HI of the Constitution. Article 14 speaks. of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The <ORG> has the right to trade. The <ORG> has therefore the duty to observe equality. An ordinary individual (1)  2 S.C.R. 674 at 677.

can choose not to deal with any person. The <ORG> cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equal- ity of opportunity in the matter of public contract. A person who is on the approved list is. unable to enter into advantageous rela- tions with the <ORG> because of the order of black-listing. A person who has been dealing with the <ORG> in the matter of sale and purchases of materials has a legiti- mate interest or expectation. When the <ORG> sets to the prejudice of a person it has to be supported by legality".

It is thus clear that <ORG>'s case (supra) involved discrimination at the very threshold or at the time of entry into the field o,f consid- eration of persons. with whom the <ORG> could contract at all. At this stage, no doubt, the <ORG> acts purely in its executive capacity and is bound by the obligations which dealings of the <ORG> with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the <ORG> or its agents have entered into the field of ordinary contract, the rela- tions are no longer governed by the constitutional provi- sions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitu- tional provision when the <ORG> of its agents, purporting to act within this field, perform any act. In this sphere,_ they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the <ORG> in the contractual field which is apart from contract.

In the cases before us the contracts do not contain any statutory terms or obligations and no statutory power of obligation which could attract the application of Article 14 of the Constitution is involved here. Even in cases where the question is of choice or consideration of compet- ing claims before an entry into the field of contract facts have to be investigated and found before the question ,of a violation of Article 14 could arise. If those facts are disputed and require assessment of evidence the correctness of which can ,only be tested satisfactorily by taking de- tailed evidence, involving examination and cross-examina- tion of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article '226 of the Constitution. Such proceedings are summary proceedings reserved for extraordinary cases where the exceptional and what are described as, perhaps not quite accurately, "pre- rogative" powers of the <ORG> are invoked. We are certain that the cases before us are not such in which powers under Article 226 of the Constitution could 'be invoked. The Patna High <ORG> had, very rightly divided the types of cases 'in which breaches of alleged obligation by the <ORG> units agents can be set up into three types. These were stated as follows :--

"(i) Where a petitioner makes a grievance of breach of promise on the part of the <ORG> in cases where an assurance or promise made by the <ORG> he has acted to his prejudice and predicament, but the agree- ment is short of a contract within the meaning of article 299 of the Constitution;

(ii) Where the contract entered into between the person aggrieved and the <ORG> is in exercise of a statutory power under certain Act or Rules framed thereunder and the petitioner alleges a breach on the pan of <ORG>; and

(iii) Where the contract entered into between the <ORG>, and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complains about breach of such contract by the <ORG>."

It rightly held that the cases such as <ORG> v.

M/s. <ORG>) and <CITATION> (2); and <NAME> v. Minister of Pensions,(3) belong to the first category where it could be held that public bodies or the <ORG> are as much bound as private individual are to carry out obligations incurred by them because parties seeking to bind the authorities have altered their position to their disadvantage or have acted to their detriment on the strength of the representations made by these authorities. <ORG> thought that in such cases the obligation could sometimes be appropriately enforced on a Writ Petition even though the obligation was equitable only. We do not propose to express an opinion here on the question whether such an obligation could be enforced in proceedings under Article 226 of the Constitution now. It. is enough to observe that the cases before us do not belong to this category.

<ORG> also distinguished cases which belong to the second category, such as <CITATION> ;(4) ' <CITATION> ;(5) and <CITATION> ,(6) where the breach complained of was of a statutory obligation. It correctly pointed out that the cases before us do not belong to this class either. It then, very rightly, held that the cases now before us should be placed in the third category where questions of pure alleged breaches of contract are involved. It held, upon the strength of <CITATION> ;(7) and <NAME> v.N.M. Shah;(8) and <CITATION> (9) that no writ order can issue under Article 226 of the Constitution in such cases "to compel the authorities to remedy are a breach of contract pure and simple".

(1) A.I.R. 1968 S.C. 718.

(2) A.I.R. 1971 S.C. 1021.

(3) [1949] 1 King's Bench 227.

(4) A.I.R. 1954 S.C. 592.

(5) A.I.R. 1973 S.C. 205.

(6) A.I.R. 1975 Patna 123.

(7) A.I.R. 1973 S.C. 964.

(8) A.I.R. 1966 S.C. 334.

(9) A.I.R. 1974 Patna 230.

Learned counsel for the appellants has, however, relied upon a passage from <NAME> case (supra) where this Court observed (at p. 231);

" .... until and unless in the breach is involved violation of certain legal and public duties or violation of statutory duties to the remedy of which the petitioner is entitled by issuance of a writ of mandamus, mere breach of contract cannot be remedied by the <ORG> in exercise of its powers under Article 226 of the Constitution".

Learned counsel contends that in the cases before us breaches of public duty are involved. The submission made before us is that, whenever a <ORG> or its agents or offi- cers deal with the citizen, either when making a transaction or, after making it, acting in exercise of powers under the terms of contract between the parties, there is a dealing between the <ORG> and the citizen which involves performance of "certain legal and public duties." If we were to accept this very wide proposition every case of a breach of con- tract by the <ORG> or its agents or its officers would call for interference under Article 226 of the Constitution. We do. not consider this to be a sound proposition at all. Learned counsel for the appellants cited certain author- ities in an attempt to support his submission that the <ORG> and its Officers are clothed with special Constitutional obligations, including those under Article 14 of the Consti- tution, in all their dealings with the public even when a contract is there to regulate such dealings. The authori- ties cited were: <CITATION> (supra) where all that was decided, relying upon <NAME> v. The <ORG> of Mysore (supra), was that, where the source of a right was contractual but the action complained of was the purported exercise of a statutory power, relief could be claimed under Article 226; and, <CITATION> ,(1) where the real question considered was whether the petition- er had a locus standi to question the validity of an enact- ment; <CITATION> .,(2) which has nothing to do with any breach of contract but only lays down that " Article 14 protects us from both legislative and administrative tyranny of discrimination"; <CITATION> .(3) which lays that even executive action must not be exercised arbitrarily but must have the authority of law to support it; S.S. Sawhney v.D. <NAME>, Assistant Pass- port Officer. <ORG>, New Delhi & Ors.,(4) which repeats requirements of action which satisfy Article 14 and 21 of the Constitution where compliance with these provi- sions is obligatory.

A.I.R. 1962 S.C. 1044.

(2) [1959] Suppl. 1 S.C.R. 528 at 551.

(3) [1967] 2 S.C.R. 454.

(4) [1967] 3 S.C.R. 525.

2--4365CI/77 We do not think that any of these cases could assist the appellants or is at all relevant. None of these cases lays down that, when the <ORG> or the officers purport to operate within the contractual field and the only grievance of the citizen could be that the contract between the parties is broken by the action complained of, the appropriate remedy is by way of a petition under Article 226 of the Constitu- tion and not an ordinary suit. There is a formidable array of authority against any such a proposition. <CITATION> ., (supra) this Court said (at p. 337);

"In our opinion, any duty or obligation falling upon a public servant out of a con- tract entered into by him as such public servant cannot be enforced by the machinery of a writ under Art. 226 of the Constitution".

<CITATION> (1) this Court declared (at p. 845):

"If a right is claimed in terms of a contract such a right cannot be enforced in a writ petition."

In <ORG> etc. v. <ORG>,(2) a Constitution Bench of this Court ob- served (at p. 265): "The appellant have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching con- tractual obligations".

Learned Solicitor General, appearing for the <ORG>, contended that there could be no aspect of Article 14 of the Constitution "involved in a case where no comparison of the facts and circumstances of a particular petitioner's case with those of other persons said to be similarly situated is involved. In such a case, he submitted, there was no possibility of inferring a discrimination. In reply, learned counsel for the appellants sought to direct our attention towards some allegations showing that there was discrimination between appellants and other parties gov- erned by similar contracts in other areas. We doubt very much whether the doctrine of discrimination can be at all availed of against the <ORG>'s section purporting to be taken solely within the contractual field when n6 aspect of any statutory or ConStitutional obligation appears either from incontrovertible facts or applicable legal provisions. Indeed, it has been held fin C.K. Achutan v. <ORG> of 'Ker- ala & Ors.,(3) that no question of a violation of Article 14 arises even where one out of the several persons' is: se- lected by the <ORG> for a particular contractual transac- tion. Learned counsel for the appellants submitted that there was a conflict between what was laid down here and the law declared by this <ORG> in <ORG>'s case (supra). We think that the two cases are distinguishable on facts. The propositions of law laid down in the two cases must be read in the context of facts established in each case. In any event, A.I.R. 1972 S.C. 843 at 845.

(2) [1975] 3 S.C.R. 254 at 265 (3) [1959] Suppl. (1) S.C.R. 787.

the cases before us do. not raise any question of discrimi- nation alleged at the stage of entry into the contractual area which could attract the application of Article 14. In the cases.before us, allegations on which a violation of Article 14 could be based are neither properly made nor established. Before any adjudication on the question wheth- er Article 14 of the Constitution could possibly be said to have been violated, as between persons governed by similar contracts, they must be properly put in issue and estab- lished. Even if the appellants could be said to have raised any aspect of Article 14 of the Constitution and this Arti- cle could at all be held to operate within the contractual field whenever the <ORG> enters into such contracts, which we gravely doubt, such questions of fact do not appear to have been argued before <ORG>. And, in any event, they are of such a nature that they cannot be satisfactorily decided without a detailed adduction of evidence, which is only possible in ordinary civil suits, to establish that the <ORG>, acting in its executive capacity through its Offi- cers, has discriminated between parties identically situat- ed. On the allegations and affidavit evidence before us we cannot reach such a conclusion. Moreover, as we have al- ready indicated earlier, the correct view is that it is the contract and not the executive power, regulated by the Constitution, which governs the relations of the parties on facts apparent in the cases before us.

The real object of the appellants seems to be to hold up any adjudication on the cases before us by taking shelter behind Article 14 so that the stay orders obtained by them, presumably on representations made to this <ORG> that no aspect of enforcement of Article 14 of the Constitution 'was involved. We think that to accede to the prayer on behalf of the appellants to. adjourn the hearing of these cases until after the Emergency is lifted and. yet to continue the stay orders is to permit a circumvention of the Constitutional mandate contained in Article 359 and to countenance a gross abuse of the processes of the <ORG>.

A rather desparate argument which has been addressed to us on behalf of the appellants is that they were entitled to an opportunity to. show cause against the cancellation of the leases. It was urged, on the strength of <ORG>. v. <ORG>.,(1) that the distinction made between administrative and quasi-judicial action is thin and a vanishing one. This argument appears to. us to be wholly irrelevant inasmuch as a question of the distinc- tion between an administrative and quasi-judicial decision can only arise in the exercise of powers under statutory provisions. Rules of natural justice are attached to the performance of certain functions regulated by statutes or rules made thereunder involving decisions affecting rights of parties. When a contract is sought to be terminated by the Officers of the <ORG>, purporting to act under the terms of an agreement between parties, such action is not taken in purported exercise of a statutory power at all.

In Additional District Magistrate, Jabalpur, v. Shiva- kant Shukla,(2)it was pointed out (at p. 1288): (1) [1970] 1 S.C.R. 457.

(2) A.I.R. 1976 S.C. 1207 at 1288.

"The principles of natural justice which are so implied must always hang, if one may so put it, on pegs of statutory provisions or necessarily follow from them. They can also be said sometimes to be implied as necessary parts of the protection of equality and equal protection of laws conferred by Article 14 of the Constitution where one of the pillars of <NAME>'s principles of the Rule of Law is found embodied. Sometimes, they may be implied and read the legislation dealing with rights protected by Article 19 of the Constitution. They could at times, be so implied because 'restrictions on rights conferred by Article 19 of the Constitution have to be reasonable".

The limitations imposed by rules of natural justice cannot operate upon powers which are governed by the terms of an agreement exclusively. The only question which normally arises in such cases is whether the action com- plained of is or is not in consonence with the terms of the agreement. As already pointed out by us, even if by some stretch of imagination some case of unequal or discrimina- tory treatment by the officers of the State of persons governed by similar contracts is sought to be made out', a satisfactory adjudication upon the unusual facts of such a case would necessitate proper pleadings supported by accept- able evidence. In that case, the interim stay order or injunction could not be justified at all because so long as a Residential Order, under Article 359 of the Constitution, is operative, the enforcement of fundamental rights falling under Article 14 is suspended. In such cases even if a petition or suit is entertained and kept pending no stay order could be passed because that would amount to indirect- ly enforcing the fundamental rights conferred by Article 14 of the Constitution. It is only where a prima facie case for an injunction or stay can be made out, quite apart from a right covered by Article 14 of the Constitution or by any other fundamental right whose enforcement may have been suspended, that an injunction or stay could be granted at all on suitable 'terms. As we have already said it was on such an assumption that this Court had, apparently, granted the interim stay which must now be discharged. Consequently, we dismiss these appeals with costs throughout, and discharge the stay orders.

<ORG> dismissed.