Input:
ivil Appeal No. 5483 of 1983.
From the Judgment and Order dated 7.10.
1982 of the Madhya Pradesh High Court in M.P. No. 169 of 1982.
R.F. Nariman and P.H. Parekh for the Appellants.
V.N. Ganpule, V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain, R.S. Singh, and Rameshwar Nath for the Respondents.
The appellant, a partnership firm filed the writ petition seeking writ of mandamus and other direction to remove Rajdhani Distilleries Corporation, the 7th respondent in the writ petition in the High Court and 6th respondent in this appeal for short 'respondent ' or his 'servants ' or 'agents ' and to deliver vacant and peace ful possession of U j jain Distillery and warehouses at tached to it and the plant and machinery mentioned in the schedule Annexure P 3 to the writ petition.
It also sought for mandamus or other order to have the valuation of the plant and machinery in Annexure P 3 assessed or direction to return the goods or things described in Annexure P 7 or on its failure to pay a sum of Rs.8,48,179.28 and a mandamus directing the State Govt.
to terminate the licence granted on August 25, 1981 to the respondent and to issue licence to the appellant under section 13 of the M.P. Excise Act, 19 15, for short 'the Act ', etc.
Thus this appeal.
The material facts, to dispose of the point arose in this appeal, lie 482 in a short compass as stated hereunder: In the State of Madhya Pradesh nine distilleries for the manufacture of spirit were established and one of which was situated at Ujjain.
The appellant and its predecessors continuously had licence under sections 13 and 14 of the Act in form D 2 to distil rectified spirit or denatured spirit or liquor and D I licence for wholesale supply of country made liquor in the distillery to retail vendors in the area attached to the distillery.
The licence was for a period of 5 years.
The last licence of which was for the period from April 1, 1977 to March 31.
The normal procedure in vogue was to call for tenders and the lowest was being accepted, though sometimes highest was also preferred.
Next licensing period commenced from April 1, 198 1 to March 31, 1986 and the respondent became the successful tenderer which the appellant impugned in Misc.
Petition No. 701/81 and obtained stay of dispossession from the distillery and the attached warehouses, The interim stay was later vacated and the petition was dismissed on August 20, 198 1.
We may also mention here that the writ petition was also dismissed and the special leave petition was dismissed by this court.
Thus grant of licence to the respondent under D 1 and D 2 li cences became final.
On August 21, 1981 the Officer in Charge of the distillery wrote a letter to the appellant calling upon them to be present on August 22, 1981 to deliv er the distillery, plant, machinery, etc.
to the respondent.
The appellant neither received it nor cooperated to deliver possession of the distillery, etc.
to the respondent.
In stead it locked the distillery and went away.
In the mean while the Excise Department also put their locks on the distillery etc.
On August 27.
1981 the District Excise Officer again called upon the appellant to be present on August 28, 1981 to deliver possession of the distillery, etc.
to the respondent.
But the appellant remained absent.
Consequently possession was taken of the distillery and warehouses, after taking inventory of stock in hand in the presence of the witnesses and the same were handed over to the respondent on August 28, 1981.
The appellant sent a letter on February 23, 1982 valuing the goods taken posses sion of at Rs.8,36,988.61.
On August 8, 1982 the appellant demanded redelivery of the distillery, plant and machinery and warehouses and the value of the stock in trade or pay the amount.
On March 16, 1982 the appellant filed the writ petition in the High Court but was dismissed.
The appellant contended in the High Court that it had been in exclusive possession of the distillery, plant and machinery at Ujjain and the attached warehouses and dispossession was unlawful and that, 483 therefore, the appellant was entitled to restitution of the plant and machinery and also to the grant of licence after cancellation of the licence granted to the respondent.
The High Court found that the appellant had no exclusive posses sion which always remained with the Excise Department.
The appellant worked out the contract of manufacturing rectified spirit or spirit (country made liquor) in the distillery and wholesale supply to the retail vendors within the area attached to the distillery.
Due to non cooperation of the appellant possession was taken and delivered to the incoming licensee, the respondent, as per rules and the appellant was not entitled to restitution.
The other findings are not necessary as they are not pressed before this court.
The appellant had given up the reliefs of valuation of the plant and machinery and stock in trade.
During the pendency of the appeal on an application made by the appellant this court directed the state to make over payment of a sum of Rs. 10 lacs deposited by the respondent with the State Govt.
and also further directed the respondent to deposited sum of Rs.5 lacs in the Registry of this court and directed the Registry to keep that amount in fixed deposit to earn inter est thereon subject to adjustment at the final hearing.
Despite issuance of several notices by the department, the appellant did not cooperate in the estimate of the value of the plant and machinery of the distillery and warehouses.
the Committee appointed in terms of the conditions of the licence, fixed a sum of Rs. 10,53,016.45 as total value payable to the appellant.
Since a sum of Rs. 10 lacs had already been paid, the appellant is still entitled to the balance amount of Rs.53,016.45.
R.F. Nariman, learned counsel for the appellant, in his thorough and analytical arguments based on record made a shift in the stand and now contended that on a read ing of several clauses in the licence exhibit P 2, in particu lar, clause 50 enjoins the state to fix the valuation of all materials like buildings, still, machinery, etc.
belonging to the appellant as an outgoing licensee; should be pur chased by the respondent before the expiry of the contract and commencement of the succeeding contract of the respond ent; the Committee appointed by the Excise Department in this behalf should estimate fair valuation and payment thereto be made to the appellant before taking over posses sion and handing over the plant and machinery of the dis tillery and the attached warehouses to the respondents as a condition precedent to dispossess the appellant and start the operation of the contract by the respondent which admit tedly were not done.
This is in contravention of the manda tory conditions of the licence and the rules.
The 484 appellant, therefore, is entitled to restitution of the plant and machinery of the distillery and the attached warehouses illegally taken possession of by the respondent and the state.
In support thereof he placed strong reliance in Godhra Electricity Co. Ltd. & Anr.
vs State of Gujarat & Ors.
, ; He also referred to us in support of his contention various documents.
In our view it is not necessary to dwelve deep into them.
Sri Ganpule and Sri Tarkunde, the learned senior counsel for the State and the respondent.
contended that the appellant was requested twice to be present for delivery of the plant and machinery in the distillery and warehouses to the respondent and due to its non cooperation possession was taken.
Even for the assess ment of the valuation, before the expiry of the contract.
the appellant was given several notices requesting it to furnish the evidence of the value of the plant and machinery stock in trade, etc., and due to its non cooperation.
the valuation could not be made.
Prior valuation and payment are not condition precedent to work out the licence.
The appel lant has no right to the restitution after the expiry of the licence.
Sri Tarkunde, in particular, emphasised that the restitution prayed for became infructuous on account of the subsequent events, namely, pursuant to December 1984 Govt.
policy the respondents established their distillery at U j jain at their own expenses.
The second period of licence also expired in 1991.
There was further change in the policy of the Govt.
, namely each District was made a supply area under a separate licence for two years.
Under these circumstances the appellant is not entitled to any reliefs.
It is also further contended that the conditions in the licence in exhibit P 2 marked in the High Court should be read harmoniously.
It is clear that prior fixation of the valuation and the payment of the price is not a condition precedent.
The ratio in Godhra Electricity Co. Ltd. case is inapplicable to the facts of this case.
The sole question is whether fixation of the price of the plants and machinery at Ujjain and the attached ware houses and stock in trade and payment thereof to the appel lant is a condition precedent to take possession and deliv ery thereof to the respondent on August 28, 1981.
At the outset we may make it clear that, though Sri Nariman con tended that the grant of licence to the respondent was in gross violation of the conditions of the tender as the respondent did not comply with any of the mandatory condi tions stipulated therein and the delivery of the possession of the distillery in pursuance of the illegal contract is without jurisdiction, we decline to go into this question, though prima facie may be plausible to be countenanced, for the 485 reasons that the grant of licence for the period of 1981 to 1986 to the respondent became final and expired by efflux of time.
It was also contended by Sri Nariman that the valua tion made at Rs. 10,53,0 16.45 was not proper and contrary to the tender 's conditions which stipulated deposit of a minimum of Rs. 19 lacs by the respondent as a condition to grant licence, and that, therefore, the appellant is enti tled to valuation of at least Rs. 19 lacs.
We decline to go into that question also since the relief of valuation was given up in the High Court.
It is also clear from the record that the appellant had not cooperated in estimating the value and the Committee of designated officers, namely the Addl.
Collector, the District Excise Officer, Astt.
Commis sioner of Excise and Accounts Officers was compelled to go into the question and made an assessment of the value on January 5, 1984.
That valuation was also not questioned in the writ petition.
To find whether it is a condition precedent to fix the valuation of the plants and machinery of the distillery and the warehouses and the stock in trade and payment thereof before taking over possession and handing over the same to the incoming licencee, the material clause 50 to be looked into reads thus: "All the materials like buildings, still, machinery, drums, wood fuel, coal, mahua, bottling, machinery, bottles, spices, red sealing wax, coaltar, pilfer proof seals, crown corks, alongwith alu capsules, etc.
belonging to the outgoing licensee purchased for the use of distillery and warehouses attached thereto, shall be valued before the expiry of the old contract and the commence ment of the new one by a committee appointed by the Excise Department in this behalf.
The committee aforesaid shall be appointed by the Excise Commissioner under the previous sanc tion of the Government (Separate Revenue Department) and it shall consist of five members, namely (1) Collector or Additional Collector convenor, (2) Assistant Commissioner of Excise of the Division concerned member (3) Executive Engineer Technical member, (4) Accounts Officer of the Excise Department Member, and (5) Representative of the licensee Member.
If the representative of the licensee remains absent in the committee at the appointed time, the remaining four members shall begin their work in his absence and no objection of the licensee in this respect shall be heard.
The valuation made and agreed upon by the Committee shall be sanc tioned by the Excise Commis 486 sioner with such necessary changes as he deems fit and in case of difference of opinion amongst the members, the Excise Commissioner shall pass orders relating to disputed valua tion.
The orders of Excise Commissioner shall be final and binding upon the licensee.
Note: The valuation of sanctioned plant at the warehouses may be done by a committee consisting of some of the members of the above referred committee, subject to the orders of the Excise Commissioner, which shall be final and binding on the licensee.
Prima facie, if the clause by itself is read in isola tion, it would indicate that prior fixation of the value and payment is a condition precedent.
But in our view all the conditions of the licence, policy of the Act and Rule of the possession, manufacture, supply, sale and distribution of the rectified spirit or denatured spirit or liquor from the stage of manufacture in Distillery till retail sale to the consumer be viewed as an integrated whole and the human behaviour of the outgoing licensee also has to be kept in view.
Any other view would disrupt smooth transition from the outgoing to the incoming licensee; hampers the continui ty of supply and sale of intoxicants and cause collosal loss of public revenue.
So let us consider the relevant proposi tions from this background.
Section 13 of the Act requires a licensee to manufacture intoxicants: (a) Licence is required for manufacture, etc.
of intoxicants; (b) No intoxicant shall be manufactured or collected . . . (f) No person shall induce, keep in his possession any material. . for the purpose of manufacture of intoxicants, other than tari, except under the authority and subject to the terms and conditions of the licence granted in that behalf.
Section 14 provides that: (a) establish a distillery in which spirit may be manufactured under licence granted under section 13 on such conditions as the Govt.
may impose. 487 (C) license on such conditions as the State Govt.
may impose the construction and working of the distillery and brewery; (c) establish or licence warehouses wherein any intoxicant may be deposited and kept without payment of duty, subject to payment of such fee as the State Govt.
may direct. .
Section 17 provides inter alia that no intoxicant shall be sold except under the authority and subject to the terms and conditions of licence granted in that behalf.
Thus it is clear that establishment of a distillery or a warehouse; manufacture of intoxicants, spirit (country made liquor), the possession and distribution and sale thereof are regulated under the Act.
The Govt.
in exercise of its power under section 62 of the Act made rules regulating the control of distilleries and warehouses by Officers of the Excise Department, especially appointed by the Excise Commissioner for that purpose.
Therefore, any licensee, under the Act and the Rules, be it incoming or outgoing, should have D 2 and D I licences for establishment of distillery and warehouses, possession of raw materials, manufacture of liquor or rectified spirit or denatured spirit and supply to the retail vendors of the area attached to the distillery.
Any infraction is an of fence.
It is settled law by several decisions of this court that there is no fundamental right to a citizen to carry on trade or business in liquor.
The state under its regulatory power, has power to prohibit absolutely any form of activity in relation to an intoxicant, its manufacture, possession, import and export.
No one can claim, as against the state, the right to carry on trade or business in any intoxicants, nor the state be compelled to part with its exclusive right or privilege of manufacture, sale, storage of liquor.
Fur ther when the state has decided to part with such right or privilege to the others, then state can regulate consistent with the principles of equality enshrined under article 14 and any infraction in this behalf at its pleasure are arbitrary violating Article 14.
Therefore, the exclusive right or privilege of manufacture, storage, sale, import and export of the liquor through any agency other than the state would be subject to rigour of Article 14.
Vide Har Shankar & Ors.
vs Dy.
Excise & Taxation Commissioner & Ors., and State of M. P.v.
Nandial Jaiswal.
; , 488 When the state was dealing with the grant of the privi lege of establishing or manufacturing intoxicants, rectified spirit or denatured spirit, spirit (country made liquor) in a distillery owned or regulated by it, and invites tenders in this regard it should conform to the rigour of article 14 of the Constitution.
Admittedly, the licence of the appellant expired on March 31, 1981 and thereafter it had no right to manufacture and store at distillery in Ujjain and distribu tion as wholesaler of the country made liquor from the attached warehouses to the retail vendors within that area granted to the respondent.
But for the stay granted by the High Court the operation of the respondent 's licence was to begin on April 1,198 1.
The outgoing licensee, the appel lant, had to hand it over to the respondent on that date.
The conditions in the licence P 2 postulate of mutual rights and obligations between the outgoing licensee to sell and the incoming licensee to purchase the plant and machinery of the distillery, stock in trade and also the machinery in the warehouse including the apparatus, etc.
enumerated in the conditions either at the price fixed or agreed directly between the parties or fixed by the committee of the desig nated officers.
In case of any difference in the valuation between the members, the Commissioner of the Excise or the State Govt.
would fix the valuation, which was made final.
The Committee designated was to be constituted with prior approval of the Govt.
as per condition 50 to evaluate the plant and machinery of the distillery and some of them of the warehouses.
Outgoing licensee also is entitled to repre sent in the Committee.
On his non cooperation the rest of the four members of the Committee are empowered to determine the value.
Clause 23(iii) provides that any dispute relating to valuation of the sanctioned plant shall be referred to the State Government and the decision of the State Govt.
shall be final and binding on the parties to the dispute.
Clause 2 thereof refers that the licensee shall made over the said distillery and warehouses buildings on the termination of the licence in as good condition as they were at the com mencement hereof excluding reasonable wear and tear.
Clause 36(4) provides that any dispute relating to the sale of spirit or plant by the licensee or the valuation of the plant shall be referred to the State Govt.
and the decision of the State Govt.
shall be final and binding.
Clause 39(1) in particular, mentions that at the commencement of the term of this licence, the licensee shall buy all sanctioned plant at the U j jain distillery including spare parts, furniture, motor trucks and fittings at a price to be fixed by the State Government.
Licensee shall pay the price thereof within 30 days of the communication.
Similarly, clause 41, 42(1) and clause 44 provide that the incoming licensee shall take on lease all 489 other buildings structures attached to the distillery at Ujjain on such conditions and terms as per Public Works Department Manual Vol.
II within a period of one month of the intimation of the acceptance of the tender.
Then comes clause 50 quoted hereinabove.
The incoming licensee shall make payment within 30 days from the date of communication of the value.
Therefore, the courts should adopt realism, pragmatism, practicality and the purpose envisaged under the Act and the rules in construing the relevant clauses in the licence.
The purpose of the Act the rules made therein is to regulate the manufacture, distribution sale of the intoxicants, rectified spirit or denatured spirit, liquor, sale to consumers within the state of Madhya Pradesh.
It is an on going process conducted through the licensing system, an exclusive privi lege of the state through the licences granted under form D 1 and D 2 in this behalf.
The duration of the licence is fixed one.
On expiry of the licence the outgoing licensee shall be bound to handover the distillery plant and machin ery therein, and warehouses attached thereto, the stock in trade and other apparatus and goods used for the manufac ture, storage and distribution.
The outgoing contractor is entitled continue his business activity till the last date of the licence, namely March 31, of the ending year.
The succeeding licensee would take over the business from the outgoing licensee on April 1 of the year of licence.
Thus there should be no hiatus between taking over and handing over the manufacture, possession.
storage of the wholesale business of the spirit (country made liquor) or rectified spirit or denatured spirit.
Under these circumstances it will well nigh be impossible to assess the valuation of the entire stock in trade or plant and machinery in the distill ery or the warehouses till the last date.
In addition the cooperation of the outgoing licensee is also necessary and expected as he would be in possesssion of the records of the previous purchases of the materials, or plant or machinery if any new additions are made etc.
Unless they are made available, it is not possible to assess the value after giving due rebate or depreciation, etc.
to the incoming licensee.
The human nature and conduct would be such that the outgoing licensee, being the unsuccessful tenderer, would not cooperate in handing over possession of the dis tillery and stock in trade and would approach the High Court under article 226 of the Constitution as was done in this case.
The incoming licensee has time of thirty days in case of stock in trade or three months in the case of plant and machinery from the date of communication to him to pay the value to the outgoing licensee.
Keeping those circumstances at the back of our mind we decline to adopt lexographic strict construction of clause 50 which 490 would thwart continuity; create hiatus in smooth operation of manufacture, storage, distribution and sales of the intoxicants.
Moreover, after the assessment is made and in case of any difference of opinion in the valuation or the outgoing licensee claims higher value the final arbiter would be in some cases like stock in trade, the Commissioner of Excise and in case of plant and machinery or warehouses the State Govt.
After the decision of the Commissioner or the State Government, it shall be communicated to the suc ceeding licensee, who has been given maximum period of three months to make payment to the outgoing licensee.
In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the stock in trade, we hold that strict construction would lead to innumerable complications and loss of public reve nue.
We are inclined to hold that before the expiry of the licence, if the outgoing licensee cooperates, the value can be fixed with consensus, payment should also be made within the time stipulated.
In all other cases it could be done even after the expiry of the stipulated period.
In that perspective we have no hesitation to hold that prior valua tion of plant and machinery in the distillery, stock in trade therein or the value of the machinery in the ware houses and stock of the liquor stored therein and payment thereof before taking possession and handing them over to the incoming licensee is not a mandatory, nor a condition precedent.
Therefore, taking over possession from the appel lant on August 28, 1981 and handing over the plant and machinery, etc.
to the respondent is not illegal.
Undoubtedly this court, in Godhra Electricity case held that it is mandatory that a person who is deprived of his property, before its taking over, the value should be esti mated and the payment made or else it is illegal.
But the ratio would be considered in the light of the setting there in.
The licence granted under section 6 of the as amended in 1959 to produce electrical energy was acquired by the Electricity Board.
Section 6(6) provides that where a notice exercising the option of purchasing the undertaking has been served upon the licence, the licensee shall deliver the undertaking to the State Electricity Board on expiry of the relevant period referred to in section 6(1).
In that case the constitutional validity of section 6(6) was ques tioned which did not provide for payment before taking over of the undertaking as offending Article 19(1)(f) and (g) and article 14 of the constitution.
While considering the constitu tional validity of section 6(6) this court held that valuation and payment is a condition precedent since the Act did not envisage any payment of interest subsequent thereto.
Accord ingly this court directed redelivery of the undertaking 491 to the licensee subject to follow the procedure as per law laid down therein.
In this case admittedly the conditions of licence are not questioned, but expressly given up in the High Court.
Even before us the validity of the valuation has not been questioned.
It cannot cut the branch on which the appellant sits to assail the constitutional validity of the conditions of the licence.
Accordingly we have no hesitation to hold that the appellant is not entitled to the restitu tion of the plant and machinery of the distillery at Ujjain and the attached warehouses.
The appellant though claimed that the value of the plant and machinery was too low, contrary 'to the specification in this behalf in tender condition and though we decline to go into the question, the appellant appeared to have smarted under apprehension that it had to face the plea of acquies cence, if it were to cooperate earlier.
So it is open to the appellant to make a representation to the Govt.
and any officer not below a Secretary preferably of the concerned Department would go into the matter and decide the value as per the material on record.
It is open to the appellant to place all its material.
It is also open to the respondent to place its material and the authority would consider after giving an opportunity of hearing through counsel, if asked for, and decide the value accordingly.
As regards deposit now made in the Registry of this Court, the Registry is directed to make payment of a sum of Rs.53,016.45 and inter est accrued thereon to the appellant and the balance amount and the interest accrued on the residual to the respondent and the respondent 's liability would be subject to the decision by the Secretary as indicated in the judgment.
The appeal is accordingly allowed to the above extent and since the appellant substantially failed there would be no order as to costs.
Y.L. Appeal partly allowed.

Output:
The appellants and its predecessors continuously held licences under Sections 13 and 14 of the Madhya Pradesh Excise Act to distil rectified spirit or denatured spirit or liquor.
The last of such licence which the appellant had related to the period from 1.4.1977 to 31.3.1981.
The next licensing period commenced from 1.4.1981 to 31.3.1986 and the respondent Rajdhani Distilleries Corporation became the successful tenderer in respect thereof which the appellant impugned by means of a writ petition before the High Court but failed both before the High Court as also in this Court in a special leave petition.
Thereupon the appellant was called upon twice to be present to deliver the possession of the distillery to the respondent but the appellant did not co operate.
Likewise the appellant did not co operate in fixing the value of the plant and machinery of the distill ery and warehouses as a result of which a committee was appointed in terms of the licence which fixed a sum of Rs.10,53,016.45 p. as the total value payable to the appel lant.
Due to the non cooperation of the appellant, the Excise Department took over the possession of the distillery after making inventory of stock in hand in the presence of the witnesses and the same was handed over to the respond ent.
The appellant thereafter demanded redelivery of the distillery and on his failure to get the same it filed a writ petition in the High Court praying for a writ of manda mus seeking inter alia restitution of the distillery and the warehouses etc., challenging the quantum of valuation fixed.
The High Court dismissed the writ petition.
The High Court found that the appellant had no exclusive possession which always remained with the excise Department; the appellant worked out the contract of manufacturing rectified spirit etc.
and that due to non cooperation of the appellant, possession was taken and delivered to the incoming licensee as per rules and the 479 480 appellant was not entitled to restitution.
Hence this appeal by special leave.
It is contended on behalf of the appellant that clause 50 enjoins the State to fix the valuation of all the materials belonging to the appellant and pay the same to it as an outgoing licensee, before taking over possession and handing over the distillery and the attached warehouses to the respondents.
According to it, it is a condition precedent under clause 50 to dispossess the appellant and start the operation of the contract by the respondent which admittedly were not done.
This is a contravention of the mandatory conditions of the licence and the rules.
The respondents on the other hand contend that the appellant is not entitled to restitution as it was due to its non cooper ation, possession was taken.
According to them prior valua tion and payment are not condition precedent to work out the licence.
Partly allowing the appeal, this Court, HELD: In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the stock in trade, the Court held that strict construction (of clause 50) would lead to innumerable complications and loss of public revenue.
We are inclined to hold that before the expiry of the licence, if the outgoing licensee cooperates, the value can be fixed with consensus, payment should also be made within the time stipulated.
In all other cases it could be done even after the expiry of the stipulated period.
In that perspective the Court had no hesitation to hold that prior valuation of plant and machin ery in the distillery, stock in trade therein or the value of the machinery in the warehouses and stock of the liquor stored therein and payment thereof before taking possession and handing them over to the incoming licensee is not a mandatory, nor a condition precedent.
Therefore, taking over possession from the appellant on August 28, 1981 and handing over the plant and machinery, etc.
to the respondent is not illegal.
[490C E] In this case admittedly the conditions of licence are not questioned, but expressly given up in the High Court.
Even before us the validity of the valuation has not been questioned.
It cannot cut the branch on which appellant sits to assail the constitutional validity of the conditions of the licence.
Accordingly we have no hesitation to hold that the appellant is not entitled to the restitution of the plant and machinery of the distillery at Ujjain and the attached warehouses.
[491A B] It is open to the appellant to make a representation to Government and any officer not below a Secretary preferably of the concerned 481 Department would go into the matter and decide the value as per the material on record.
It is open to the appellant to place all its material.
It is also open to the respondent to place its material and the authority would consider after giving an opportunity of hearing through counsel, if asked for, and decide the value accordingly.
[491D] Godhra Electricity Co. Ltd. and Anr.
vs State of Gujarat and Ors.
, ; ; Hat Shankar & Ors.
vs Dy.
Excise of M. P.v.
Nandial Jaiswal; , , Referred to.


Input:
Civil Appeal No. 233 of 1991 etc.
From the Judgment and Order dated 21.6.1988 of the Central Administrative Tribunal, Bombay Bench in O.A. No. 58 of 1988.
V.C. Mahajan, S.N. Terdal, A.K. Srivastava, C.V, Subba Rao, S.K. Gambhir, Dr. B. L. Wadhera, Sudarshan Menon, P. Parameshwaran and G.D. Gupta for the appearing parties.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
To cater to the educational needs of children of persons employed in the ordnances factory at Ambazari the Central Government has sanctioned and is running a Primary School from classes I to V.
In the same premises, the employees 687 of the ordance factory, by their own arrangement are also having a Secondary School with classes VI to X.
They have appointed the respondents as teachers in the Secondary School.
They are paid honorarium and not full salary.
Their honorarium is paid out of fees from the children and other donations received by the school.
the respondents, however, approached the Central Administrative Tribunal seeking regularisation of their services and demanding equal pay for equal work.
The Tribunal has allowed their claim with certain directions to the appellants including the Union of India.
The directions issued by the Tribunal are as follows: "(i) The respondents will immediately take up an assessment of the needs of the school to carry on its activities at their present level and the number of additional teachers required for this purpose; (ii) After assessing the number of teachers needed, the respondents will proceed to create a sufficient number of posts to be filled up on a regular basis; (iii) After completing the above exercise respondents will take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose.
the applicants who have worked as teachers in past should be first considered for the posts and only if they are found unsuitable should candidates from sources like the Employment Exchange be considered; (iv) Once the procedure outlined above is completed all persons selected should be appointed on a regular basis and on remuneration admissible to the regular teachers of the primary school; (v) Similar procedure should also be followed in respect of posts of peon giving Shri Tadas an opportunity of competing for regular appontment; (vi) Till the exercise outlined above is completed which we hope will be done before the academic year 1989 90 commences the present procedure may continue and such of the applicants as are selected for appointment will be subject to the same conditions of service as before.
" The Union of India and the officers of the ordnance factory have challenged the validity of these directions in Civil Appeal No. 233/1991.
The respondents who have not been recruited as per the directions of the Tribunal have preferred Civil Appeal No. 480/1989.
We have considered the submissions of counsel on both sides in the light of the material on record.
At the outset we may point out that 688 there is no evidence that the respondents were appointed as teachers on honorarium by or on behalf of the Central Government.
There is also no evidence that the respondents were initially appointed in the Primary School and latter they were shifted to the Secondary School.
The fact, however, remains that when the respondents moved the Tribunal for relies they were only teaching in the Secondary School.
It is undisputed that the Central Government has not sanctioned the Secondary School nor created any posts thereto.
the Central Government has only sanctioned the Primary School and the posts connected therewith.
Those posts are being occupied by regularly recruited teachers.
The Tribunal, however, has directed the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis.
The Tribunal has further directed the Central Government to take steps to fill up the newly created posts in accordance with the recruitment rules to be framed for the purpose.
These directions are indeed amazing.
It has compelled the Government to sanction the Secondary School, create adequate number of posts and fill up the posts after framing the recruitment rules for the purpose.
There is no law requiring the Central Government to sanction the Secondary School.
the Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level.
It is a policy matter involving financial burden.
No Court or the Tribunal could compel the Government to change its policy involving expenditure.
The Tribunal therefore, could not have, could not have, issued the directions as it did to compel the Central Government to assess the needs of the school and create the necessary posts without support of law.
Secondly, the respondents are not paid by the Central Government.
They are not holding any appointment under the Central Government.
There is no relationship of master and servant between the Central Government and the respondents.
The respondents are employed in the Secondary School by local arrangement made by the officers of the ordnance factory.
It is not proved that how the Central Government is accountable to such arrangement made by the local officers.
Thirdly, Section 14 of the confers no jurisdiction, power and authority on the Tribunal to deal with the service matters of the employees like the respondents.
689 In any view of the matter, the respondents cannot claim the pay scale admissible to the Government school teachers much less regularisation of their services by the Central Government.
The directions issued by the Tribunal therefore, cannot be sustained.
They are apparently injustified and without authority of law.
In the result we allow the Civil Appeal No. 233/1991, and set aside the order of the Tribunal.
the Civil Appeal No. 480/1989 is dismissed.
In the circumstances of the case, however, we make no order as to costs.
S.B. CA No. 233/91 allowed and CA No. 480/89 dismissed.

Output:
The appellant i.e. the Central Government sanctioned primary school from classes I V to cater to the educational needs of children of persons employed in the ordance factory at Ambazari.
The employees on their own in the same premises opened a secondary school with classes VI to X.
The respondents are teachers in the Secondary School and are being paid out of fees and other donations received by the school, They approached the Central Administrative Tribunal seeking regularisation of their service and demanded equal pay for equal work.
The Tribunal allowed their claim with certain directions to the appellants including the Union of India i.e. directing the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis.
The Tribunal further directed the Central Government to take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose.
Allowing Civil appeal No. 233 of 1991 of the Union of India, and setting aside the order of the Tribunal dismissing Civil Appeal No. 480 of 1989 of the respondents who have not been recruited as per direction of the Tribunal, the Court.
HELD: 1.
There is no evidence in record that respondents were appointed as teachers on honorarium by or on behalf of the Central Government.
There is no evidence that they were initially appointed in primary School and later shifted to the Secondary School.
It is undisputed 686 that the Central Government has not sanctioned the Secondary School nor created any posts thereto.
It had only sanctioned the Primary School and the posts connected therewith which are being occupied by regularly recruited teachers.
[688A B] 2.
The directions of the Tribunal are indeed amazing compelling the Central Government to sanction the Secondary School.
The Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level.
It is a policy matter involving financial burden.
No court or the Tribunal could compel the Government to change its policy involving expenditure.
[688D E] 3.
The respondents are not paid by the Central Government.
There is no relationship of master and servant between the Central Government and the respondents.
The respondents are employed by the local officers so how the Central Government is accountable.
[688G] 4.
Even section 14 of the Administrative Tribunal Act, 1985 confers no jurisdiction, power or authority on the Tribunal to deal with the service matters of the employees like the respondents.
the respondents cannot claim the pay scale admissible to the Government school teachers and much less regularisation of their services by the Central Government.
[688H 689A] 5.
The directions of the Tribunal are apparently unjustified and without authority of law so cannot be sustained.
[688F]