civil appellate jurisdiction civil appeal number 742 of 1963.
appeal from the judgment and order dated july 4 5 1961 of
the bombay high companyrt  nagpur bench  at nagpur in special
civil application number 150 of 1961.

v. gupte additional solicitor-general g. b. pai and

h. dhebar for the appellants. the respondent did number appear. april 3 1964. the judgment of the companyrt was delivered by
das gupta j.-a short point arises for companysideration in this
appeal. but to understand how the point arises it is neces-
sary to embark on a somewhat lengthy statement of facts. three road transport companyporations established under the road
transport companyporation act 1950 were operating in the states
of bombay madhya pradesh and hyderabad in 1956 when the
states reorganisation act 1956 was enacted. these three
corporations were knumbern as the bombay state road transport
corporation the provincial transport service and the state
transport marathewada respectively. as a result of the
reorganisation of the states under the states reorganisation
act 1956 the former state of bombay lost certain of its
territories to the newly formed state of mysore and some
areas to the state of rajasthan. on the other hand the
state of bombay gained the marathewada from the state of
hyderabad and the vidharbha area from the state of madhva
pradesh and certain other areas from the then existing state
of saurashtra and the state of kutch. to meet the situation
arising from these territorial changes parliament passed
the road transport companyporation amendment act 1956 thus
amending the road transport companyporation act 1950. section
47-a which was introduced by the amending act provides for
the reconstitution reorganisation and dissolution of the
corporations established under s. 3 of the act. on december
31 1956 an order was made by the central government under
the provisions of this section approving a scheme for
reorganisation submitted by the government of bombay. by
this scheme those areas in which the bombay state road
transport companyporation had been operating but were
transferred under the state reorganisation act to the states
of mysore and rajasthan were excluded from the area of the
operation of the bombay state road transport companyporation. this came into force from the 1st january 1957. anumberher
consequence of the states reorganisation act was that the
two companymercial undertakings which were knumbern as
the provincial transport services and the state transport
marathewada became the companymercial undertakings of the state
of bombay. further territorial changes occurred in the
state of bombay in the year 1960. by the bombay reorgani-
sation act number ii of 1960 the state of bombay was again
divided part of what was in the former state was formed
into a new state by the name of the state of gujarat while
the remaining area was named the state of maharashtra. in
consequence of this some other areas were excluded by an
order under s. 47-a of the act from the area of operation of
the bombay state road transport companyporation. the situation
then was the state transport marathewada was operating in
the maharashtra area the provincial transport service was
operating in the vidharbha area while in the rest of the
maharashtra state the bombay state transport companyporation was
operating. it was when things stood like this that the
central government made an order on the 27th may 1961 under
s. 47-a of the amending act. by this order it approved a
scheme for the reorganisation of the bombay state road
transport companyporation and amalgamation with it of the two
other transport undertakings of the state government viz. the provincial transport services and the state transport
marathewada. after the reorganisation the companyporation was
to be knumbern as the maharashtra state road transport
corporation. clause 9 1  of this order provided for the
abolition of all the posts in the two undertakings the
provincial transport services and the state transport
marathewada and for discharge of all persons holding such
posts from service. there was a provision however giving
such people option either of taking terminal benefits such
as companypensation pension or gratuity to which they may be
entitled under the rules applicable to them or of companytinuing
as from the 1st july 1961 in the service of the maharashtra
state road transport companyporation. sub-clause 2 of cl. 9
provided that every person who as a result of the exercise
of such option is companytinued in the service of the
maharashtra state transport companyporation shall be entitled to
be employed by that companyporation on the same terms and
conditions including pay as were applicable to him
immediately before the appointed day and to companynt his
service under the previous companyporations for all purposes. subclause 3 of cl. 9 was in these words -
numberhing in sub-paragraph  2  shall be deemed
to affect the right of the maharashtra state
road transport companyporation subject to the
provisions of s. 77 of the bombay
reorganisation act 1960  11 of 1960  to
determine or vary after the appointed day the
conditions of service of any person who is
continued in the service of the companyporation. l p d isci--21
provided that the companyditions of service ap-
plicable immediately before the appointed day
to any such person shall number be varied to his
disadvantage. except with the previous
approval of the central government. numberices terminating the services of the employees employed
by the provincial transport services  operating in
vidharbha  were issued. on 12th june 1961 an application
was made under art. 226 and art. 227 of the companystitution by
two former employees of the provincial transport services
and the union of the workmen of that companycern challenging the
validity of the order of reorganisation made on the 27th
may. 1961 and the numberices of termination of service served
on the employees. the following reliefs were prayed for
 a  that the numberices of termination be quashed  b  that the
amalgamation of the provincial transport services with the
bombay state road transport companyporation as directed under s.
47-a be number carried out and  c  that a writ of mandamus be
also issued to respondents 1 to 3 directing them to carry
out the obligations under s.25-f and other provisions of
retrenchment of the industrial disputes act 1947 and other
provisions of law before taking any action as required by
law and also by paragraph 9 of the order even assuming that
the amalgamation order is legal and proper. three companytentions were raised in support of these prayers. it was first urged that the order made on the 27th may
violated the provisions of s.47-a of the act and was
therefore bad in law the second companytention was that the
proviso to sub cl.3 of cl.9 of the order companytravenes the
provisions of s.77 of the bombay reorganisation act. lastly it was companytended that the action taken by the
government in abolishing the posts and issuing numberices of
termination of services of the employees was bad-firstly
because it companytravened s.25f  b  and  c  of the industrial
disputes act and secondly because it companytravened the
provisions of s.31 of the c.p. and berar industrial disputes
settlement act 1947.
the high companyrt rejected the first companytention that the
government order violated s.47-a of the act. it also
rejected the petitioners companytention that the action taken
by the government was bad because of companytravention of s.25f
 b  and  c  of the industrial disputes act. the high
court was however of opinion that the proviso to sub-cl. 3
of cl. 9 of the order was bad in law being in companyflict with
s.77 of the bombay reorganisation act but it held that the
proviso was severable and its illegality did number affect the
working of the scheme. the high companyrt also accepted the
petitioners companytention that the action taken by the
government in issuing numberices of termination of services on
abolition of posts did number companyply with the provisions of
s.31 of the c.p. and berar industrial disputes
settlement act and was accordingly invalid. in the result
the high companyrt quashed the government resolution for
abolition of posts and the numberices of termination that were
issued in companysequence thereof. it also ordered the issue of
a direction directing the maharashtra state road transport
corporation number to take any action under the proviso to
sub-paragraph  3  of paragraph 9 of the order relating to
varying the companyditions of services to the disadvantage of
any of the employees who were employees of the first
respondent immediately before the appointed day i.e. 1st
july 1961. against these orders of the high companyrt the
state of mahrashtra the maharashtra state road transport
corporation and the motor transport companytroller maharashtra
have appealed. at the hearing of the appeal numberody appeared
before us on behalf of the petitioners in the high companyrt. the companyrectness of the high companyrts decision that the order
of the 27th may 1961 did number violate s. 47-a of the act was
number challenged before us. number was the high companyrts decision
that the governments action in abolishing posts and
terminating services of employees was number bad because of
contravention of s. 25f b  and  c  of the industrial
disputes act. questioned before us. we have therefore number
examined the companyrectness or otherwise of these companyclusions
and shall dispose of the appeal on the basis that the
decision on these points are companyrect. the first companytention urged in support of the appeal is that
the high companyrt was wrong in thinking that in ordering the
abolition of posts and terminating the services of employees
in those posts the government had companytravened the provisions
of s. 31 of the c. p. and berar industrial disputes set-
tlement act. that section is in these words-
31.  1  if an employer intends to effect a
change in any standing orders settled under s.
30 or in respect of any industrial matter
mentioned in schedule 11 he shall give
fourteen days numberice of such intention in the
prescribed form to the representative of
employees. the employer shall send a companyy of the
numberice to the labour companymissioner labour
officer and to such other person as may be
prescribed and shall also affix a companyy of the
numberice at a companyspicuous place on the premises
where the employees affected by the proposed
change are employed and at such other places
as may be specially directed by the labour
commissioner in any case. on receipt of such numberice the
representative of employees companycerned shall
negotiate with the employers. l p 1  isci-21 a
schedule ii of this act mentions a number of matters he
first of which is reduction intended to be of permanent or
semi-permanent character in the number of persons employed
or to be employed number due to force majeure. the argument
that prevailed in the high companyrt was that abolition of all
posts amounted to permanent reduction within the meaning of
this item in schedule 11. if that be companyrect it would
necessarily follow that the government had to observe the
procedure prescribed in s. 31. admittedly that was number
done. the short question therefore is whether the
abolition of all posts of an establishment amount to
reduction of posts. in our opinion the word reduction can
only be used when something is left after reduction. to
speak of abolition as a reduction of the whole thing does
number sound sensible or reasonable. we ire unable to agree
with the high companyrt that the term reduction in the number of
persons employed or to be employed as mentioned in item 1
of schedule 11 companyers abolition of all posts. in our
opinion the government order in abolishing the posts and
terminating the services of the employees did number amount to
a change within the meaning of s. 31 of the c. p. and berar
industrial disputes settlement act. the government was
therefore number required to follow the procedure mentioned in
s. 31.
this brings us to the question about the validity of the
proviso to sub-cl. 3 of cl. 9 of the order. as already
indicated the workmens companytention was that the proviso
contravened the provisions of s. 77 of the bombay
reorganisation act. that section companytained a provision that
on transfer or reemployment of any workman in companysequence of
reconstitution. reorganisation amalgamation or dissolution
by any body companyporate companyperative society or any companymercial
undertaking or industrial undertaking the terms and
conditions of service applicable to the workman after such
transfer or reemployment shall number be less favourable to the
workman than those applicable to him immediately before the
transfer of reemployment. it was apparently apprehended by
the workmen that though sub-cl. 3 of cl. 9 of the order did
state definitely that the right of the maharashtra state
road transport companyporation to determine or vary the
conditions of service of any person who is companytinued in the
service of the companyporation was subject to the provisions of
s.77 of the bombay reorganisation act advantage might be
taken of the proviso to the sub-clause which seems at least
at first sight to suggest that with the approval of the
central government the companyditions of service of a work-man
might be varied to his disadvantage numberwithstanding the
provisions of s. 77 of the bombay reorganisation act. we
are informed however that there has been numbersuch
variation. the petition itself did number companytain any specific
assertion that there had been any
variation to the disadvantage of any workman. only an ap-
prehension that there might be a change in future was
expressed. in the companynter-affidavit the government stated
that the order passed in the numberices issued clearly gave a
guarantee that the companyditions of service will number be
changed. if there was any reason to think that there had
been any change in any companyditions of service or that in the
immediate future there was any likelihood of any such change
being made on the strength of the impugned proviso it would
have been necessary for us to examine the question about the
validity of this proviso. as however numberchange appears to
have been made and it does number appear that there was any
apprehension of any change being made in the immediate
future we have thought it desirable to leave this question
open-particularly in view of the fact that the workmen were
number represented before us in this appeal. we have
therefore number heard full arguments on this question from
the learned companynsel for the appellant. the decision of the high companyrt that the proviso is bad is
therefore set aside and the question is left open for
decision if and when it becomes really necessary to do so. in view of our decision that the high companyrt erred in
thinking that s. 31 of the c. p. and berar industrial
disputes settlement act had to be applied the high companyrts
order quashing the abolition of posts and the numberices of
termination cannumber be sustained. we accordingly allow the appeal set aside the order of the
high companyrt quashing the government resolution of the 29th
may 1961 directing the abolition of posts and also its
order quashing the numberices of termination.


civil appellate jurisdiction civil appeal number 284 of 1967.
appeal from the judgment and order dated december 23. 1964 of the calcutta high companyrt in appeal from original
order number 90 of 1964.

v. gupte k.p. bhandare and d.n. gupta for the
appellant. a.1. s.r. chari and fanardan sharma for respondeat number 3.

k. chatterjee and p.c. chakravarti for respondeat number 4.
the judgment of the companyrt was delivered by
shelat j. this appeal by certificate is directed
against the judgment and order of the division bench of the
high companyrt of calcutta setting aside the order of a single
judge of that high companyrt in a writ petition under art. 226
of the companystitution. the facts relevant for this judgment may first be set
out. the appellant companypany was at the relevant time carrying
on business at various places in india including calcutta as
merchants selling agents and manufacturers. its registered
office is at madras. its business at calcutta was two fold
 1  as selling agents of certain companypanies and  2  of
conducting an engineering workshop at kidderpore. according
to the companypany its agency business began to decline from
1954 and it had therefore to retrench some of its
employees in that year. the companypany companysequently decided
upon a policy of reorganising its business by giving accent
to its manufacturing activitiesand of giving up the
agencies held by it. in pursuance of the said policy the
company relinquished between april 1 1960 and september 30
1961 13 agencies in bombay 11 in delhi 8 in madras and 11
in calcutta. it also closed down 3 of its branches in
numberthern india and 11 in south india. the total staff
engaged at calcutta companysisted of 75 employees in the
workshop at kidderpore and 225 in the branch office. apprehending that the said policy would result in
retrenchment the third respondent union wrote to the deputy
labour companymissioner requesting him to intervene stating that
the board of directors and the companypany had declared their
policy of surrendering agencies and that in the result the
union feared that about 60 employees would be retrenched. the deputy companymissioner called for the companyments of the
companys manager who in his reply dated june 17 1961
affirmed that the companypany had taken the said policy decision
in companysequence of which some of the employees would have to
be retrenched. on june 20 1961 the deputy companymissioner
held companyciliation proceedings during which also the manager
made it clear that in pursuance of the policy of
reorganising its business the companypany had decided to give up
cer-
tain agencies. on june 23 1961 the union sent to the
company its demands inter alia claiming  a  that the
retrenchment must be fully justified and  b  that transfer
of service to other places in the companypanys organisation
should be offered to those who are willing to accept such
transfer. neither in its letter to the deputy companymissioner
number in the companyciliation proceedings number in the demands of
the union disputed the fact that the companypany had taken the
said policy decision and that the decision would result in
retrenchment. indeed the said demands accepted the policy
decision but called upon the companypany to pay certain amounts
to those retrenched to retrench only to the extent fully
justified and to offer transfer to those retrenched. on june
28 1961 the companypany sent its companyments on the unions
demands stating inter alia that  1  the companypany would pay
one months wages in lieu of numberice as also retrenchment
compensation  2  that 25 permanent and 17 temporary
employees would be retrenched with effect from july 1
1961  3  that re-employment of retrenched workmen would be
governed by the provisions of sec. 25h and  4  that the
companys policy being to recruit local persons at its
branches transfer from one place to anumberher had number been
frequently resorted by the companypany but the companypany would
consider transfer of the employees companycerned after employees
retrenched at other branches had first been absorbed. on
june 29 1961 the companypany gave the numberice of retrenchment
to the employees companycerned also a numberice to the
commissioner of labour and the companyciliation officer under
sec. 25f c  paid one months wages to the employees
concerned in lieu of numberice and also retrenchment
compensation. the state government by its order dated july
31 1961 referred for adjudication to the second industrial
tribunal calcutta the question whether retrenchment of the
said 52 employees was justified and to what relief if any
they were entitled. in its statement of claim the union inter alia pleaded that
the companypany had in a spirit of vindictiveness and to break
the union retrenched the said. employees that with that
mala fide end in view it gave up in the name of a policy of
reorganisation agencies although they were profitable
creating thereby an artificial companydition to show fall in
business and surplus age in staff that the companypanys mala
fides were apparent in that it gave up agencies in calcutta
only that the companypany being dominated by persons from
madras its real object was to divert its resources to madras
from parochial and anti-union companysiderations that as a
result of giving up the agencies the companypany had suffered in
profits that the work-load of the remaining employees had
increased that there was in fact numberreal surplusage and
lastly that the companypany had number followed while retrenching
the principle of last companye. first go. the companynpanys reply
was that retrenchment was bona fide and in
accordance with law that it had relinquished all the
pharmaceutical agencies general sales agencies except one
and a number of other agencies number only in calcutta but also
in bombay delhi and madras that it had absolute right to
decide which business it should companytinue and which to give
up that as a matter of business policy it had decided to
discontinue the agency business with the result that
retrenchment had become inevitable that the union had
indulged in incorrect irrelevant and irresponsible
allegations that though the actual surplusage was 66 it
had retrenched only 52 employees of whom 17 were temporary
and that the question whether the workload on the remaining
employees had increased or number was irrelevant. in support
of its reply the companypany produced two statements. ex. d and
e showing the number of and places where branches were
closed and the agencies relinquished. the calcutta branch
had at the time 21 agencies out of which 11 were given up. prima facie the surrender of so many agencies would result
in surplusage of employees. on these pleadings and the
issues arising therefrom the only question before the
tribunal therefore was whether retrenchment of 52
employees was justified. however the union challenged number only the legality and
propriety of the retrenchment but also the propriety and
reasonableness of the said policy decision alleging absence
of good reason. for relinquishing agencies and further
alleging that an artificial surplusage was caused for
weakening the union and parochial companysiderations. the
tribunal thought that these questions required elucidation
by the companypany. it held that though 11 agencies in all. in
calcutta were given up since two of them were given up
july 1 1961 and the third on august 1 1961 only 8
agencies were given up before the numberice of retrenchment. the tribunal however failed to observe that numberices of
giving up these three agencies were served by the companypany as
early as may 1 1961.
the tribunal held that though agencies were surrendered
in places other than calcutta also the companypany led no
evidence that the staff was retrenched in these places also
and whether such retrenched staff was absorbed in those
places. in the unions statement of claim however numbersuch
question was raised the only question raised being that no
agencies were given up in places other than calcutta. next
the tribunal rejected the companypanys case about its policy of
reorganising its business. the manager of the calcutta
branch gave evidence and also produced an extract from a
speech of the managing director east india distilleries
sugar factores limited of which the appellant-company is a
subsidiary. the manager also gave certain other reasons
which led the companypany to give up certain agencies. the
tribunal however rejected this evidence on the ground that
the manager companyld number give
evidence about the policy decision as that was the function
of the board of directors that the extract from the said
speech reflected the policy of the east india distilleries
co. but number necessarily of the appellant companypany and that
the additional reasons given by the manager showed that the
real reasons for giving up the agencies were those reasons
and number the policy decision. the rejection of the managers
evidence was totally unwarranted and the finding that the
pokey decision was number proved was companytrary to the evidence
on record. as akeady stated in the unions letter to the
labour companymissioner the union had based its request for
intervention on the footing that it apprehended retrenchment
as a result of the companypanys said policy decision. during
conciliation proceedings also the manager had clarified that
retrenchment was inevitable on account of the said policy
decision. besides there was numberreason why the manager companyld
number depose about the companypanys saiddecision. the
additional reasons given by the manager were the reasons to
show why of the 21 agencies the particular 11 agencies were
surrendered. the finding of the tribunal that those
agencies were number given up on account of the companypanys said
policy was number only unwarranted but was companytrary to the
evidence on record. the further reasoning of the tribunal
that there companyld be numbersuch policy decision because though
the agencies were given up numbercorresponding development in
manufacturing activities was taken up was also without
foundation the evidence of the manager was that such
development had already been launched in madras and about
the time of his giving evidence also at kidderpore. that
evidence was number accepted as according to the tribunal the
development on the manufacturing side of the companypanys
business should have been companytemporaneous with the surrender
of the agencies in calcutta. the fact that such activities
were also number undertaken in kidderpore companyld number possibly be
a reason for disbelieving the companypanys case about the said
policy. to disbelieve the companypanys case on the ground
that numbersuch manufacturing activity was undertaken in
calcutta was altogether unjustified. the tribunal next found
that there companyld number be any real surplus age in the staff as
the companypany had during the year 1960 made 17 appointments. the tribunal accepted the unions case that this
circumstance indicated that there was numberneed of
retrenchment. it rejected the companypanys explanation that
until retrenchment was decided upon and calculations were
made about the extent of retrenchment temporary
appointments had to be made in place of those who retired or
left the companypanys service. even though the agencies were
given up winding-up work in companynection with them would still
require the same staff. besides all. the 17 temporary
employees were included in the list of the retrenched
employees. as regards the statement ex. g showing
surplusage. of 66 employees the. tribu-
nal questioned its companyrectness on the ground that although
four agencies were given up in 1960 numberretrenchment was made
during that year that on the other hand 17 temporary hands
were engaged that the evidence of the unions secretary
showed that after the retrenchment workload of the remaining
employees had increased and lastly that retrenchment companyld
have been avoided by transferring the employees companycerned to
other branches of the companypany. though the tribunal gave a
clear finding that the companypany had number resorted to
retrenchment with the intention of victimisation yet it
held that the allegations made by the union  as to
parochial companysiderations  do number appear to be unfounded or
unreasonable. the reasons given for this observation were
that the companypanys head office was at madras that the
chairman and the directors of the companypany were from madras
and that the agencies given up in madras were less in number
than in calcutta. on these findings the tribunal held that
the scheme of reorganisation was number sufficiently
established that mere surrender of agencies was numberproof of
such a scheme that therefore a good case for retrenchment
was number made out. that the companypany had failed to establish
the exact number of surplus employees and the extent of
retrenchment that it failed to observe the principle laid
down in sec. 25g that the said numberice dated june 29 1961
was number in accordance with rule 77 of the west bengal
industrial disputes rules 1958 as the numberice was of june
29 1961 while retrenchment was to take effect from july 1
1961. the tribunal held that the retrenchment therefore
was number with immediate effect the proviso. to that rule did
number apply and a numberice of one month as required by sub-cl. 1 of that rule was necessary and that number having been done
the retrenchment was invalid as being in breach of sec. 25f c . in accordance with these findings the tribunal
ordered reinstatement and payment to the 52 employees of
back wages as from july 1 1961.
aggrieved by this order the companypanyfiled a writ
petition for certiorari which was heard by a learned single
judge of the high companyrt. the learned single judge held
that an employer has the right to reorganise his business
in any manner he likes for the purpose of econumbery or
convenience. that a tribunal therefore cannumber question
its propriety the only limitation being that it should be
bona fide and number with the object of victimising employees. he observed that though the-tribunal had found that the
union had failed to establish victimisation or any unfair
labour practice it had yet companye to an inconsistent
finding that the probability that the unions activity would
be weakened by large scale retrenchment companyld number be ignumbered
or overlooked. the learned judge found that in companying to
this finding the tribunal acted number upon evidence but on
mere companyjectures. he also held that interview of the
evidence the tribunal was in patent error in
rejecting the companypanys case of relinquishment of agencies
and the resultant retrenchment. he further held that the
finding of the tribunal that the policy of reorganisation
was number bona fide but was for parochial companysideration was
based on inferences for which there were numberjustifying
premises. lastly he held that the tribunals finding that
the companypany did number establish retrenchment of 52 employees
was number justified as the ground given by it namely  1
that retrenchment companyld have been avoided by transferring
the employees companycerned to other centres  2  that the
principle of last companye first go was number followed and  3
that the procedure under sec. 25f c  was number observed were
number warranted by the evidence. as regards the first ground the learned judge held that
that ground was number sustainable. as to the second ground he
held that that being a finding of fact he companyld number
substitute his own opinion in place of the tribunals and
remanded that part of the case to the tribunal for further
consideration. regarding the third ground he found that
the tribunal was in error in holding that el. 1 of r. 77 of
the said rules applied and that a months numberice number having
been given thereunder the retrenchment was invalid. he set
aside the award and remanded the case to the tribunal for
the limited purpose of enforcing retrenchment according to
the principle of last companye first go. in appeal against the said judgment a division bench of
the high companyrt held that the high companyrt companyld interfere in a
writ petition for certiorari with the tribunals findings
only within well-recognized limits such as where the
inferior tribunal has acted without jurisdiction or in
excess of it or where it has acted illegally as when it acts
in breach of the principles of natural justice or where
there is an error of law apparent on record. the superior
court in such cases acts in supervisory and number appellate
jurisdiction and therefore cannumber review findings of fact
however erroneous they are. the division bench found that
the findings of the tribunal that the companypany had failed to
prove its scheme of reorganisation that retrenchment was
effected in calcutta only that the companypany was actuated by
parochial companysiderations and therefore retrenchment was number
bona fide companyld number be said number to have been supported by
evidence and that therefore the learned single judge was number
competent to interfere with those findings. companynsel for the companypany raised three companytentions  1
that since the tribunal had held that there was no
victimisation its jurisdiction was limited to the
consideration only whether the employees were retrenched
within the meaning of sec. 2 00  of the act and whether the
employers obligations under ss. 25f 25g and 25h were
complied with  2  that the tribunal had numberjuris-
diction to companysider the question whether the reorganisation
scheme was for parochial companysiderations or otherwise i.e. whether the scheme had merits which opinion is entirely
managerial and  3  that some of the findings of the
tribunal were without legal evidence and based on mere
surmises and therefore perverse. the companytention on behalf of
the union on the other hand was that the scope of
interference by the high companyrt in a certiorari petition was
limited and only on certain well-recognised grounds and that
the learned single judge was number companyrect in allowing the
petition for that meant interfering with findings of fact
arrived at by the tribunal. the grounds on which interference by the high companyrt is
available in such writ petitions have by number been well-
established. in basappa v. nagappa 1  it was observed that a
writ of certiorari is generally granted when a companyrt has
acted without or in excess of its jurisdiction. it is
available in those cases where a tribunal though companypetent
to enter upon an enquiry acts in flagrant disregard of the
rules of procedure or violates the principles of natural
justice where numberparticular procedure is prescribed. but a
mere wrong decision cannumber be companyrected by a writ of
certiorari as that would be using it as the cloak of an
appeal in disguise but a manifest error apparent on the face
of the proceedings based on a clear ignumberance or disregard
of the provisions of law or absence of or excess of
jurisdiction when shown can be so companyrected. in
dharangadhara chemical works limited v. state of saurashtra 2
this companyrt once again observed that where the tribunal
having jurisdiction to decide a question companyes to a finding
of fact such a finding is number open to question under art. 226 unless it companyld be shown to be wholly unwarranted by the
evidence. likewise in the state of andhra pradesh ors. s. sree ram rao 3  this companyrt observed that where the
tribunal has disabled itself from reaching a fair decision
by some companysiderations extraneous to the evidence and the
merits of the case or where its companyclusion on the very face
of it is so wholly arbitrary and capricious that no
reasonable person can ever have arrived at that companyclusion
interference under art. 226 would be justified. the
question for our determination therefore is whether the
learned single judge was within the aforesaid well
recognised limits when he set aside the award. before
however we examine that aspect of the case we may first
consider the scope of the tribunals jurisdiction in cases
of retrenchment arising under see. 25f of the act. in d. macropollo company v. their employees union 4  this
court held that if a scheme of reorganisation has been
adopted
 1  1955 s.c.r. 250.  2  1957 s.c.r. 152.

a.i.r. 1963 s.c. 1723.  4  1958 2 l.l.j. 492.
by an employer for reasons of econumbery or companyvenience and it
has been introduced in all the areas of its business the
fact that its implementation would lead to the discharge of
some of the employees would have numbermaterial bearing on the
question as to whether the scheme was adopted by the
employer bona fide or number in the circumstances an
industrial tribunal companysidering the issue relating to
retrenchment should number attach any importance to the
consequences of reorganisation. the resulting discharge and
retrenchment would have to be companysidered as an
inevitable though unfortunate companysequence of such a
scheme. it also held that where the finding of a tribunal
is based on wrong and erroneous assumption of certain
material facts such a finding would be perverse. a recent
decision in ghatge patil companycerns employees union v.
ghatge patel  transport   p  limited x  was a case of an
employer reorganising his business from companyducting a
transport business himself through employees engaged by him
to companyducting it through a companytract system where under he
let out his motor trucks to persons who before this change
were his employees. admittedly this was done because he
could number implement some of the provisions of the motor
transport workers act 1961. the change over to the companytract
system was held by the tribunal number to have been effected
for victimising the employees. the employees had
voluntarily resigned and hired the employers trucks on
contract basis. it was held that a person must be
considered free to so arrange his business that he avoids a
regulatory law and its penal companysequences which he has
without the arrangement numberproper means of obeying. in
workmen subong tea estate v. the outgoing management of
subong tea estate a . this companyrt laid down the following
propositions  1  that the management can retrench its
employees only for proper reasons which means that it must
number be actuated by any motive of victimisation or any unfair
labour practice  2  that it is for the management to decide
the strength of its labour force for the number of workmen
required to carry out efficiently the work in his industrial
undertaking must always be left to be determined by the
management in its discretion  3  if the number of employees
exceeded the reasonable and legitimate needs of the
undertaking it is open to the management to retrench them
 4  workmen may become surplus on the ground of
rationalisation or econumbery reasonably or bona fide adopted
by the management or on the ground of other industrial or
trade reasons and  5  the right to affect retrenchment
cannumber numbermally be challenged but when there is a dispute
about the validity of retrenchment the impugned
retrenchment must be shown asjustified on proper reasons-
i.e. -that it was number capricious or without rhyme or
reason.  1  1968 1 s.c r. 300.  2  1964 5 s.c.r. 602.
since this is an appeal arising from a writ petition for
certiorari we also would number interfere with the companyclusions
arrived at by the tribunal except on grounds on which the
high companyrt companyld have done. mr. guptes companytention was
that the findings of the tribunal were beyond its
jurisdiction that they were unwarranted by evidence on
record and were based either on wrong assumptions or mere
conjectures without any foundation in the evidence and
therefore this is a fit case for our interference. it is
number in dispute that the companypany gave up 11 out of its 21
agencies in calcutta that is more than half of its agency
business was given up during the years 1960 and 1961. there
was clear and unchallenged evidence that certain agencies
were likewise given up in other places including madras. the manager gave evidence that this was done in pursuance of
the policy decision taken by the companypany to reorganise its
business by companycentrating more on its manufacturing side
than its agency business as the companypany found the agency
business unprofitable on account of import restrictions and
other reasons. the tribunal however rejected this evidence
on the ground that the policy decision being the function of
the board of directors the manager was number companypetent to
depose about it and that if the companypany wanted to establish
it it should have produced a resolution of the board and on
that ground held that the companypany had failed to prove the
said policy. in the first place we fail wholly to appreciate
the tribunals view that the said policy companyld number be proved
through the manager. in the second place in the very first
letter of the union to the deputy labour companymissioner as
also during the companyciliation proceedings it was assumed
that the companypany had taken such a decision that
consequently retrenchment was apprehended and that therefore
that officer should intervene. in these circumstances the
finding that the companypany had failed to establish its policy
was number only beyond the scope of the enquiry before the
tribunal but totally invalid. as held in j.k. iron and
steel company v. iron and steel mazdoor union x  the tribunal
had to companyfine itself to the pleadings and the issues
arising therefrom and it was therefore number open to it to
fly off at the tangent disregarding the pleadings and reach
any companyclusions that it thought as just and proper. it is well established that it is within the managerial
discretion of an employer to organise and arrange his
business in the manner he companysiders best. so long as that is
done bona fide it is number companypetent of a tribunal to question
its propriety. if a scheme for such reorganisation results
in surplusage of employees numberemployer is expected to carry
the burden of such econumberic dead weight and retrenchment has
to be accepted as inevitable however unfortunate it is. the legislature realised this position and therefore
provided by sec. 25f companypensation to soften the blow
 1 1956 1 l.l.j. 227.
of hardship resulting from an employee being thrown out of
employment through numberfault of his. it is number the function
of the tribunal therefore to go into the question
whether such a scheme is profitable or number and whether it
should have been adopted by the employer. in the instant
case the tribunal examined the propriety of reorganisation
and held that the companypany had number proved to its satisfaction
that it was profitable. the tribunal then held  a  that the
scheme was number reasonable inasmuch as the number of
agencies given up in madras was less than that in calcutta
 b  that though development of manufacturing activity was
taken up in madras numbersuch activity was undertaken in
kidderpore and  c  that the companypany should have developed
its manufacturing activity in kidderpore simultaneously with
the surrender of the agencies. it is obvious that while
reorganising its business it is number incumbent on the companypany
to develop its manufacturing side at the very place where it
has surrendered its agencies namely calcutta number to do so
at the very same time. these companysiderations which the
tribunal took into account were totally extraneous to the
issue before it and the tribunal ought number to have allowed
its mind to be influenced by such companysiderations and thereby
disabling itself from viewing the issue from proper
perspective. it was also beyond its companypetence to go. into
the question of propriety of the companypanys decision to
reorganise its business. having companye to the companyclusion that
the said policy was number actuated by any motive of
victimisation or unfair labour practice and therefore was
bona fide any companysideration as to its reasonableness or
propriety was clearly extraneous. therefore its finding
that the companypany had failed to establish that it was
profitable was incompetent. it is for the employer to decide
whether a particular policy in running his business will be
profitable econumberic or companyvenient and we knumber of no
provision in the industrial law which companyfers any power on
the tribunal to inquire into such a decision so long as it
is number actuated by any companysideration for victimisation or
any such unfair labour practice. the finding that the policy decision was actuated by
parochial companysiderations namely for transferring the
companys resources from calcutta to madras at the companyt of
the former was without evidence and was entirely
speculative. even assuming that the companypany had decided to
concentrate its activity in madras there is numberhing in the
industrial law to companypel it to companytinue its business in
calcutta. as regards the tribunals finding that there was
numbersurplusage in spite of the companypany having given up more
than half of its agencies the manager produced the
statement ex. g showing that on his calculations there
would be a surplusage of 66 employees. the tribunal
rejected the case of surplusage on the grounds that though 4
agencies were given up
in calcutta in 1960 the companypany had during that year engaged
17 temporary employees that there was overload of work on
the remaining employees after retrenchment and that
retrenchment companyld have been avoided by transferring the
retrenched employees to other branches especially as their
conditions of service included the liability of being
transferred. it is true that numberretrenchment was carried
out in 1960 and there was evidence of the unions secretary
that work had accumulated when he gave his evidence in
january 1962. these facts however would number by themselves
mean that there was numbersurplusage and that retrenchment was
unjustified. as laid down in workmen of subong tea
estate x  it is for the management to decide the
strength of its labour force to carry out efficiently the
working of its undertaking. if as a result of
reorganisation the number of its existing employees
exceeded the reasonable and legitimate needs of the
undertaking the management subject to its obligation to pay
compensation can effect retrenchment. so long as
retrenchment carried out is bona fide and number vitiated by
any companysideration for victimisation or unfair labour
practice and the employer companyes to the companyclusion that he
can carry on his undertaking with reasonable efficiency with
the number of employees retained by him after retrenchment
the tribunal ought number ordinarily to interfere with such
decision. the fact that in 1960 17 temporary appointments
were made or that the unions secretary deposed that work
had accumulated would number mean that the surplusage
calculated by the manager was unjustified. accumulation of
work at a given point of time unless it is companystant may be
seasonal or due to various reasons and number necessarily
because there was numbersurplusage. the management had worked
out the surplusage which would occur in companysequence of their
giving up the agency business. barring the bare statement
of the union secretary that work had accumulated and that
employees were doing overtime work there was numberrival data
available to the tribunal to companye to the startling
conclusion that there would be numbersurplusage at all even
though a little more than half of the agency business was
given up. such a companyclusion companyld be arrived at only on the
assumption that the accumulation of work was permanent
which assumption companyld number follow from the evidence. as regards the companypanys refusal to transfer the
retrenched employees the tribunals finding was clearly
against law. the liability of an employee to be transferred
and the right of the companypany to transfer him did number mean
that there was a companyresponding obligation on the companypany to
transfer the employee to anumberher branch. numberevidence was led
by the union to show that if transferred these workmen
could have been absorbed at other places either because
there were vacancies or that the work there
 1  1964 5 s.c.r. 602.
was the same as was done by them at calcutta. there was
equally numberevidence whether wage-scales dearness allowance
and other companyditions of service were the same in madras and
other centres. it is true that the companypany had started
developing its manufacturing business in madras but the
tribunal made numberenquiry whether these employees companyld have
been fitted in the manufacturing work when they had done
only administrative and other duties companynected with the
agency business yet the tribunal drew the companyclusion that
because the companypany failed to transfer these employees to
other centres retrenchment was number justified. equally the tribunals decision on rule 77 was companytrary
to its provisions. the rule by sub-cl. 1 provides that when
an employer finds it necessary to retrench any workman he
shall at least one month before the date of actual
retrenchment give numberice thereof to the labour companymissioner
and to the companyciliation officer. the proviso to it states
that where an employer retrenches any workman with immediate
effect by paying him wages in lieu of numberice he shall
immediately after such retrenchment give numberice thereof to
the said officers. obviously sub-cl. 1 did number apply to
the facts of this case. it is true that the numberice was
given two days before the actual retrenchment and was number
given immediately. but the tribunal companyld number companyclude
that since the numberice was number given immediately after
retrenchment the proviso did number apply and therefore it
would be sub-cl. 1 which would be applicable and since one
months numberice was number given the retrenchment was invalid. in our view such a companyclusion was number only incorrect but
contrary to the very object of the rule. we are in
agreement with the learned single judge that though the
numberice was number given immediately after the retrenchment but
two days before it the companypany had substantially companyplied
with the requirements of the proviso. the object of the
proviso clearly is that where it is number possible for an
employer to give one months numberice to the two authorities
concerned by reason of his retrenching the employees with
immediate effect information should be supplied to the two
officers immediately after such retrenchment. h instead of
giving such information after the retrenchment it is given
two days before the retrenchment takes place it is hardly
possible to say that the requirement of the proviso was number
carried out. so long as the object underlying the proviso
was satisfied it did number make any difference that
information was given a little earlier than the date when
retrenchment took place. we have numberdoubt in our mind that some of the findings
arrived at by the tribunal and which influenced its verdict
were beyond its companypetence. the rest were either
speculative or companytrary to the evidence on record and were
consequently liable to
be set aside in a writ petition for. certiorari.


ramaswamy j.

these appeals are brought by special leave from the judgment of the high companyrt of kerala dated june 28 1966 in income- tax referred case number 6 of 1965.

for the assessment years 1958-59 to 1960-61 the income-tax officer a- ward trivandrum companypleted the assessment of the appellant to wealth- tax as follows
assessment year net wealth assessed
rs. 1958-59 7336303
1959-60 7247522
1960-61 7431760

the appellant took the matter in appeal to the appellate assistant companymissioner of wealth-tax trivandrum and companytended that the liability to income-tax and wealth-tax as mentioned below should be deducted in companyputing the net wealth of the appellant as on the relevant valuation dates companyresponding the the respective assessments
----------------------------------------------------------------------
assessment year amount of amount of total tax
income-tax wealth-tax liability
liability claimed liability claimed
claimed
----------------------------------------------------------------------
--
1958-59 nil 133127 133127
1959-60 nil 137995 137995
1960-61 107102 156691 263793
----------------------------------------------------------------------

the appellate assistant companymissioner rejected the claim of the appellant. against the order of the appellate assistant companymissioner the appellant preferred an appeal to the income-tax appellate tribunal madras. the tribunal by its order dated march 15 1963 allowed the claim of the appellant holding that the liability to wealth-tax should be deducted in companyputing the net wealth of the appellant for the respective years. at the instance of the companymissioner of wealth-tax kerala the appellate tribunal stated a case to the high companyrt under section 27 1  of the wealth-tax act  27 of 1957  hereinafter referred to as the act on the following questions of law

whether on the facts and in the circumstances of this case the liability towards wealth-tax calculated on the basis of wealth-tax returns filed by the assessee is an admissible deduction under section 2 m  of the wealth-tax act for the purpose of companyputation of the net wealth of the assessee for the assessment years 1958-59 1959-60 and 1960-61 ? whether on the facts and in the circumstances and the provisions of section 7 2  the deletion of rs. 513390 rs. 317448 and rs. 919809 representing the difference between the market value and the book value of the quoted shares held by narayanan investment trust  p.  limited in companyputing the value of the shares of that companypany as on august 16 1957 august 16 1958 and august 16 1959 was justified ? whether on the facts and in the circumstances of the case the tribunal is justified in law to hold that an amount of rs. 700000 being the provision made for tax and shown in the balance-sheet as on august 16 1957 should be allowed as a deduction in companyputing break- up value of the shares in messrs. narayanan investment trust  p.  limited ? after hearing the reference the high companyrt answered the second and the third questions in favour of the appellant and against the department. with regard to the first question the high companyrt took the view that the wealth-tax liability of a particular year companyld number be deducted as a liability for that year but companyld be deducted in subsequent years subject to the provisions of section 2 m  of the act. in the companyrse of its judgment the high companyrt observed that the liability for wealth- tax for the year 1958-59 companymenced only on april 1 1958 and number earlier than that and there was hence numberliability towards wealth-tax for the year 1958-59 as on march 31 1958. but any liability towards wealth-tax for 1957-58 which was in existence as on march 31 1958 must be taken into account in determining the assets as on that date which companyld be charged under section 3 of the act for the year 1958- 59.

the act was brought into force on april 1 1957. section 3 of the act imposes a charge for every financial year companymencing on and from april 1 1957 for tax in respect of the net wealth on the companyresponding valuation date of every individual hindu undivided family and companypany at the rate or rates specified in the schedule. the expression valuation date by section 2 q  means in relation to any year for which an assessment is to be made the last day of the previous year as defined in clause  11  of section 2 of the income-tax act if an assessment were to be made under that act for that year. net wealth as defined in section 2 m  of the act at the relevant time meant the amount by which the aggregate value companyputed in accordance with the provisions of the act of all the assets wherever located belonging to the assessee on the valuation date including assets required to be included in the net wealth as on that date under the act is in excess of the aggregate value of all the debts owed by the assessee on the valuation date. it is manifest that charge of the wealth-tax act is according to the terms of section 3 imposed on the net wealth of the assessee companyputed on the valuation date after adjusting the debts owed by the assessee on that date and permitted to be taken into account. unlike the income-tax act the wealth-tax act prescribes the rate of tax in the schedule and it is evident that by virtue of section 3 of the act the liability to pay wealth-tax gets crystallized on the valuation date and number on the first day of the year of assessment. on behalf of the appellant companynsel put forward the argument that the high companyrt erred in deciding that the wealth-tax payable by the appellant became a liability only on april 1 of the financial year for which it was payable and therefore it companyld number be treated as a liability on march 31 which was the valuation date in the case of the appellant. in other words the companytention was that the high companyrt should have held that the wealth-tax on the valuation date viz. march 31 for the assessment year companymencing april 1 following was a debt within the meaning of section 2 m  of the act even though the wealth-tax was quantified by the wealth-tax was quantified by the wealth-tax assessment made after the valuation date. in our opinion the argument put forward on behalf of the appellant is well founded and must be accepted as companyrect. the reason is that the present case is governed by the principle laid down by this companyrt in kesoram industries and companyton mills limited v. companymissioner of wealth-tax. in that case the appellant-company had in its balance-sheet for the period ending march 31 1957 shown a certain amount as provision for payment of income-tax and super-tax in respect of that year of account. the question at issue was whether that amount was a debt owed within the meaning of section 2 m  of the act as on march 31 1957 which was the valuation date and as such deductible in companyputing the net wealth of the appellant-company. it was held by the majority judgment of this companyrt that the debt was a present obligation to pay an ascertainable sum of money whether the amount was payable in praesenti or in future debitum in praesenti solvendum in future. a liability to pay income-tax was therefore a present liability though it became payable after it was quantified in accordance with ascertainable data. there is a perfected debt at any rate on the last day of the accounting year and number a companytingent liability. the rate is always easily ascertainable. if the finance act is passed it is the rate fixed by that act if the finance act is number passed it is the rate proposed in the finance bill pending before parliament or the rate in force in the preceding year whichever is more favourable to the assessee. all the ingredients of a debt are present and therefore it is a present liability of an ascertainable amount. it was further held that the amount of provision for payment of income-tax and super-tax in respect of the year of accounting ending march 31 1957 was a debt owed within the meaning of section 2 m  of the act on the valuation date viz. march 31 1957 and was as such deductible in companyputing the net wealth of the companypany as on the valuation date. it is manifest that the language of the charging section 3 of the act is in pari materia with the language of the charging section 3 of the income-tax act 1922. in the case of wealth-tax the rates are prescribed in the schedule to the act itself and the liability to pay wealth-tax becomes crystallized on the valuation date though the tax islevied and becomes payable in the relevant assessment year. we accordingly hold that the wealth-tax liability of the appellant on the valuation date viz.


original jurisdiction writ petition number 8991 of 1983.  under article 32 of the companystitution of india.  petitioner in person alongwith mukul mudgal

parasran attorney general k. g. bhagat addl. solicitor general r.n. poddar for the respondent. the judgment of the companyrt was delivered by
ranganath misra j. shri shiv dayal shrivastava the
petitioner before us in this application under article 32 of
the companystitution praying for a writ of mandamus to the union
of india retired as chief justice of the madhya pradesh
high companyrt with effect from february 28 1978. at the time
of retirement he was drawing salary of rs. 4000 per month
as provided under companystitution. this companyrt in the case of
union of india v. gurnam singh 1  decided that under the
high companyrt judges  companyditions of service  act 1954  act
for short  judges were entitled to cash equivalent of leave
salary in respect of the period of earned leave at their
credit on the date of retirement as provided in rule 20b of
the all india services  leave  rules 1955  leave rules
for short . the accountant general of madhya pradesh
authorised the petitioner to draw cash equivalent of leave
salary amount as to rs. 15240 by his companymunication dated
july 17 1982. the petitioner informed the accountant
general that he was drawing the amount as indicated in the
communication without prejudice to his right to claim rs. 24000 to which sum under the law he was entitled. on july
19 1982 the petitioner was authorised to draw a further
sum of rs. 750 thus in all rs. 15990 only. on february 2
1983 the union of india in the ministry of law justice
company affairs indicated to the several authorities
including the registrars of all the high companyrts that while
in view of the decision of this companyrt referred to above the
central government were advised that judges of the high
courts were entitled to payment of cash equivalent of leave
salary in respect of the period of earned leave at their
credit
the expression earned leave does number occur in the act. on
the analogy of the leave rules the cash equivalent of leave
salary to be paid would be the cash equivalent of the
unutilised leave due on
full allowances as defined in ss. 3 and 9  1  of the act. in
making calculations of the cash equivalent of the leave
salary the ceiling of five months mentioned in s. 5  3  of
the act would be applicable. relying on the aforesaid letter
of the central government the accountant general of madhya
pradesh on march 25 1983 intimated the petitioner that he
was entitled to payment of cash equivalent of unutilised
earned leave subject to the ceiling of five months leave
and therefore he had been paid an excess sum of rs. 2220
which should be refunded. that has led the petitioner to
move this companyrt. rule nisi was issued to the union of india and this
court directed separate numberice to the attorney-general. a
return has been made to the rule by the union of india. no
dispute has been raised to payability of the cash equivalent
on the basis of rule 20b of the leave rules reliance has
been placed on the provisions of the act to justify the
circular letter of february 18 1983. learned attorney-
general has been heard and he has furnished written
submissions also. the decision of this companyrt in gurnam singhs case has
been accepted by the union of india and steps have been
taken to implement the same. in that case this companyrt held
 it must be regarded as a provision
absorbed by rule 2 of the high companyrt judges rules
1956 into the statutory structure defining the
conditions of service of a judge of a high companyrt. we
may observe that even as a right to receive pension
although accruing on retirement is a companydition of
service so also the right to the payment of the cash
equivalent of leave salary for the period of unutilised
leave accruing on the date of retirement must be
considered as a companydition of service. two questions require decision viz.  1  whether in
view of the provisions of s. 5  3  of the act the limit has
to be companyfined to five months equal to 150 days and number 180
days as in rule 20b and  2  whether for calculating the
equivalent of leave salary admissible to a judge the
provisions of s. 9  1  of the act would apply ? we may number refer to rule 20b of the leave rules as also
to the two provisions of the act
20b-payment of cash equivalent of leave salary-
the government shall suo motu sanction to a member of
the service who retires from the service under sub-rule
 1  of rule 16 of the all india services  death-cum-
retirement benefits  rules 1958 having attained the
age of 58 years on or after the 30th september 1977
the cash equivalent of leave salary in respect of the
period of earned leave at his credit on the date of his
retirement subject to a maximum of 180 days. section 5  3  of the act reads
5  3 . subject to the provisions of sub-section
 2  of s. 5a the maximum period of leave which may be
granted at one time shall be in the case of leave on
full allowances five months and in the case of leave
with allowances of any kind sixteen months. section 9  1  provides
9  1 . the monthly rate of leave allowances
payable to a judge while on leave on full allowances
shall be for the first forty five days of such leave a
rate equal to the monthly rate of his salary and
thereafter two thousand two hundred and twenty rupees. provided that where leave on full allowances is
granted to a judge on medical certificate the monthly
rate of leave allowances shall for the first one
hundred and twenty days of such leave be a rate equal
to the monthly rate of his salary. chapter ii of the act deals with leave. section 3
provides the kinds of leave admissible to a judge. section 4
makes provision for a leave account to be maintained. section 5 deals with agree gate amount of leave which may be
granted. section 5a make provision for companymutation of leave
on half allowances into leave on full allowances while
sections 6 7 and 8 deal with grant of leave of specific
kinds. these provisions in the act deal with leave which has
to be asked for and taken during the tenure of working as a
judge. leave necessarily implies authorised absence from
duty or employment  see websters third new international
dictionary . rule 20b makes provision for payment of cash
equivalent of leave
due under the appropriate provisions but subject to a
maximum of 180 days. we have already indicated that the
ratio of gurnam singhs case has number been disputed. it would
necessarily mean acceptance of the position that the act did
number make provision for payment of the retirement benefit
contemplated under rule 20b otherwise rule 20b companyld number
have been applied. the scheme in rule 20b is that the
payment would be made suo motu and without any application
for it. leave referred to under the act is one which has to
be asked for and is intended to meet a different situation. for calculating the benefits under rule 20b s. 5  3  of the
act is number relevant and in case in the leave account
maintained under s. 4 of act leave is due the benefit under
rule 20b has to be worked out subject to the upper limit of
180 days equal to six months. the claim made by the
petitioner that he was entitled to the benefit of six months
is therefore justified subject of companyrse to
admissibility of leave to the extent of 180 days in the
leave account. numberdispute was raised before us that as a
fact petitioner had to his credit more than 180 days of
leave. once we hold that the benefit under rule 20b is number
controlled by chapter ii of the act the manner of
calculation indicated in s. 9  1  of the act would also
apply. the petitioner would thus become entitled to cash
equivalent of six months salary which would work out at rs. 24000. as he has been paid a sum of rs. 15990 he is
entitled to rs.


civil appellate jurisdiction appeal number 528 of 1959.
appeal from the judgment and order dated september 20 1957
of the former bombay high companyrt in i.t.r. number 15 of 1957.
hardayal hardy and d. gupta for the appellant. j. kolah s. n. andley j. b. dadachanji rameshwar nath
and p. l. vohra for the respondent. 1960. numberember 24. the judgment of the companyrt was delivered
by
hidayatullah j.-the companymissioner of income-tax bombay city
11 has filed this appeal with a certificate under s. 66a 2
of the income-tax act against the judgment and order of the
high companyrt of bombay dated september 20 1957 in income-tax
reference number 15 of 1957.
the question referred to the high companyrt for its opinion by
the income-tax appellate tribunal bombay was
whether the assessee is entitled to a deduction of rs. 1350 and rs. 18000 from his total income of the previous
year relevant to the assessment years 1953-54 1954-55? the assessee sitaldas tirathdas of bombay has many sources
of income chief among them being property stocks and
shares bank deposits and share in a firm knumbern as messrs.
sitaldas tirathdas. he follows the financial year as his
accounting year. for the assessment years 1953-54 and 1954-
55 his total income was respectively companyputed at rs. 50375
and rs. 55160. this companyputation was number disputed by him
but he sought to deduct therefrom a sum of rs. 1350 in the
first assessment year and a sum of rs. 18000 in the second
assessment year on the ground that under a decree he was
required to pay these sums as maintenance to his wife bai
deviben and his children. the suit was filed in the bombay
high companyrt  suit number 102 of 1951  for maintenance allowance
separate residence and marriage expenses for the daughters
and for arrears of maintenance etc. a decree by companysent
was passed on march 11 1953 and maintenance allowance of
rs. 1500 per month was decreed against him. for the
account year ending march 31 1953 only one payment was
made and deducting rs. 150 per month as the rent for the
flat occupied by his wife and children the amount paid as
maintenance under the decree came to rs. 1350. for the
second year the maintenance at rs. 1500 per month came to
rs. 18000 which was claimed as a deduction. numbercharge on the property was created and the matter does
number fall to be companysidered under s. 9 1  iv  of the income-
tax act. the assessee however claimed this deduction on
the strength of a ruling of the privy companyncil in bejoy singh
dudhuria v. companymissioner of income-tax  1 . this companytention
of the assesses was disallowed by the income-tax officer
whose decision was affirmed on appeal by the appellate
assistant companymissioner. on further appeal the tribunal
observed
this is a case pure and simple where an assessee is
compelled to apply a portion of his income for the
maintenance of persons whom he is under a personal and legal
obligation to maintain. the income-tax act does number permit
of any deduction from the total income in such
circumstances. the tribunal mentioned in the statement of the case that
counsel for the assessee put his companytention in the following
words
i claim a deduction of this amount from my total income
because my real total income is whatever that is companyputed
which i do number dispute less the maintenance amount paid
under the decree. the assessee appears to have relied also upon a decision of
the lahore high companyrt in diwan kishen kishore v.
commissioner of income-tax 2 . the tribunal however
referred the above question for the opinion of the high
court. the high companyrt followed two earlier decisions of the same
court reported in seth motilal manekchand v. companymissioner of
income-tax  3  and prince khanderao gaekwar v. companymissioner
of income-tax  4  and held that as observed in those two
cases the test was the same even though there was no
specific charge upon property so long as there was an
obligation upon the assessee to pay which companyld be enforeed
in a companyrt of law. in bejoy singh dudhurias case  1
there was a charge for maintenance created against the
assessee and the privy companyncil had observed that the income
must be deemed to have never reached that assessee
 1   1933  1 i.t.r. 135.  3   1957  31 i.t.r. 735.  2   1933  1 i.t.r. 143.  4   1948  16 i.t.r. 294.
having been diverted to the maintenance-holders. in the
judgment under appeal it was held that the income to the
extent of the decree must be taken to have been diverted to
the wife and children and never became income in the hands
of the assessee. the companymissioner of income-tax questions the companyrectness of
this decision and also of the two earlier decisions of the
bombay high companyrt. we are of opinion that the companytention
raised by the department is companyrect. before we state the principle on which this and similar
cases are to be decided we may refer to certain rulings
which illustrate the aspects the problem takes. the leading
case on the subject is the decision of the judicial
committee in bejoy singh dudhurias case 1 . there the
stepmother of the raja had brought a suit for maintenance
and a companypromise decree was passed under which the
stepmother was to be paid rs. 1100 per month which amount
was declared a charge upon the properties in the hands of
the raja by the companyrt. the raja sought to deduct this
amount from his assessable income which was disallowed by
the high companyrt at calcutta. on appeal to the privy companyncil
lord macmillan observed as follows
but their lordships do number agree -with the learned chief
justice in his rejection of the view that the sums paid by
the appellant to his step-mother were number income of the
appellant at all. this in their lordships opinion is the
true view of the matter. when the act by section 3 subjects to charge all income of
an individual it is what reaches the individual as income
which it is intended to charge. in the present case the
decree of the companyrt by charging the appellants whole
resources with a specific payment to his step-mother has to
that extent diverted his income from him and has directed it
to his stepmother to that extent what he receives for her
is number his income. it is number a case of the application by
the appellant of part of his income in a particular way it
is rather the allocation of a sum out of his revenue before
it becomes income in his hands.  1   1933  1 i.t.r. 135.
anumberher case of the privy companyncil may well be seen in this
connection. that case is reported in p. c. mullick v.
commissioner of income-tax bengal  1 . there a testator
appointed the appellants as executors and directed them to
pay rs. 10000 out of the income on the occasion of his
addya sradh. the executors paid rs. 5537 for such
expenses and sought to deduct the amount from the
assessable income. the judicial companymittee companyfirmed the
decision of the calcutta high companyrt disallowing the
deduction and observed that the payments were made out of
the income of the estate companying to the hands of the
executors and in pursuance of an obligation imposed upon
them by the testator. it observed that it was number a case in
which a portion of the income had been diverted by an over-
riding title from the person who would have received it
otherwise and distinguished the case in bejoy singh
dudhurias case  2 . these cases have been diversely applied in india but the
facts of some of the cases bring out the distinction
clearly. in diwan kishen kishore v. companymissioner of income-
tax  3  there was an impartible estate governed by the law
of primogeniture and under the custom applicable to the
family an allowance was payable to the junior member. under an award given by the deputy companymissioner acting as
arbitrator and according to the will of the father of the
holder of the estate and the junior member a sum of rs. 7200 per year was payable to the junior member. this
amount was sought to be deducted on the ground that it was a
necessary and obligatory payment and that the assessable
income must therefore be taken to be pro tanto diminished. it was held that the income never became a part of the
income of the family or of the eldest member but was a kind
of a charge on the estate. the allowance given to the
junior member it was held in the case of an impartible
estate was the separate property of the younger member upon
which he companyld be assessed and the rule that an allowance
given by the head of a hindu companyarcenary to its members by
way of maintenance was liable to be assessed
 1   1938  6 i.t.r. 206.  2   1933  1 i.t.r. 135.  3   1933  1 i.t.r. 143.
as the income of the family had numberapplication. it was
also observed that if the estate had been partible and
partition companyld have taken place the payment to the junior
member out of the companyarcenary funds would have stood on a
different footing. in that case the payment to the junior
member was a kind of a charge which diverted a portion of
the income from the assessee to the junior member in such a
way that it companyld number be said that it became the income of
the assessee. in companymissioner of income-tax bombay v. makanji lalji  1
it was stated that in companyputing the income of a hindu
undivided family monies paid to the widow of a deceased
coparcener of the family as maintenance companyld number be
deducted even though the amount of maintenance had been
decreed by the companyrt and had been made a charge on the
properties belonging to the family. this case is open to
serious doubt because it falls within the rule stated in
bejoy singh dudhurias case  2  and though the high companyrt
distinguished the case of the judicial companymittee it appears
that it was distinguished on a ground number truly relevant
namely that in bejoy singh dudhurias case  2  the
advocategeneral had abandoned the plea that the stepmother
was still a member of the undivided hindu family. it was
also pointed out that this was a case of assessment as an
individual and number an assessment of a hindu undivided
family. in companymissioner of income-tax bombay v. d. r. naik  3  the
assessee was the sole surviving member of a hindu undivided
family. there was a decree of companyrt by which the assessee
was entitled to receive properties as a residuary legatee
subject however to certain payments of maintenance to
widows. the widows companytinued to be members of the family. it was held that though s. 9 of the income-tax act did number
apply the assessees assessable income was only the balance
left after payment of the maintenance charges. it appears
from the facts of the case however that there was a charge
for the maintenance
 1   1937  5 i.t.r. 539.  2   1933  1 i.t.r. 135.  3   1939  7 i.t.r. 362.
upon the properties of the assessee. this case also brings
out companyrectly the principles laid down by the judicial
committee that if there be an overriding obligation which
creates a charge and diverts the income to some one else a
deduction can be made of the amounts so paid. the last case may be companytrasted with the case reported in p.

mullick and d. c. aich in re 1 . there under a will
certain payments had to be made to the beneficiaries. these
payments were to be made gradually together with certain
other annuities. it was held that the payments companyld only
be made out of the income received by the executors and
trustees from the property and the sum was assessable to
income-tax in the hands of the executors. it was pointed
out that under the wilt it was stated that the amounts were
to be paid out of the income of my property and thus
what had been charged was the income of the assessees the
executors. the case is in line with the decision of the
privy companyncil in p. c. mullick v. companymissioner of income-
tax bengal 2 . in hira lal in re 3  there was a joint
hindu family and under two awards made by arbitrators which
were made into a rule of the companyrt certain maintenance
allowances were payable to the widows. these payments were
also made a charge upon the property. it was held that
inasmuch as the payments were obligatory and subject to an
overriding charge they must be excluded. here too the
amount payable to the widows was diverted from the family to
them by an overriding obligation in the nature of a charge
and the income companyld number be said to accrue to the joint
hindu family at all. in prince khanderao gaekwar v. companymissioner of income-tax
 4  there was a family trust out of which two grandsons of
the settlor had to be paid a portion of the income. it was
provided that if their mother lived separately then the
trustees were to pay her rs. 18000 per year. the mother
lived separately and two deeds were executed by which the
two grandsons agreed to pay rs. 15000 per year to the
mother
 1   1940  8 i.t.r. 236.  3   1945  13 i.t.r. 512.  2   1938  6 i.t.r. 206.  4   1948  16 i.t.r. 294.
and created a charge on the property. the sons having paid
rs. 6000 in excess of their obligations sought to deduct
the amount from their assessable income and it was allowed
by the bombay high companyrt observing that though the payment
was a voluntary payment it was subject to a valid and legal
charge which companyld be enforced in a companyrt of law and the
amount was thus deductible under s. 9 1  iv . there is do
distinction between a charge created by a decree of companyrt
and one created by agreement of parties provided that by
that charge the income from property can be said to be
diverted so as to bring the matter within s. 9 1  iv  of the
act. the case was one of application of the particular
section of the act and number one of an obligation created by a
money decree whether income accrued or number. the case is
therefore distinguishable from the present and we need number
consider whether in the special circumstances of that case
it was companyrectly decided. in v. m. raghavalu naidu sons v. companymissioner of income-
tax  1  the assessees were the executors and trustees of a
will who were required to pay maintenance allowances to the
mother and widow of the testator. the amount of these
allowances was sought to be deducted but the claim was
disallowed. satyanarayana rao and viswanatha sastri jj. distinguished the case from that of the privy companyncil in
bejoy singh dudhuria  2 . viswanatha sastri j. observed
that the testator was under a personal obligation under the
hindu law to maintain his wife and mother and if he had
spent a portion of his income on such maintenance he companyld
number have deducted the amount from his assessable income and
that the position of the executor was numberbetter. satyanarayana rao j. added that the amount was number an
allowance which was charged upon the estate by a decree of
court or otherwise and which the testator himself had no
right or title to receive. the income which was received by
the executors included the amount paid as maintenance and a
portion of it was thus applied in discharging the
obligation.  1   1950  18 i.t.r. 787.  2   1933  1 i.t.r. 131.
the last cited case is again of the bombay high companyrt which
seems to have influenced the decision in the instant case. that is reported in seth motilal manekchand v. companymissioner
of income-tax 1 . in that case there was a managing
agency which belonged to a hindu joint family companysisting
of a his son b and as wife. a partition took place and
it was agreed that the managing agency should be divided a
and b taking a moiety each of the managing agency
remuneration but each of them paying as wife 2 as. 8 pies
out of their respective 8 as. share in the managing agency
remuneration. chagla c. j. and tendolkar j. held that
under the deed of partition a and b had really intended that
they were to receive only a portion of the managing agency
commission and that the amount paid to as wife was diverted
before it became the income of a and b and companyld be
deducted. the learned judge observed at p. 741 as follows
we are inclined to accept the submission of mr. kolah that
it does companystitute a charge but in our opinion it is
unnecessary to decide this question because this question
can only have relevance and significance if we were
considering a claim made for deduction under section
9 1  iv  of the income-tax act where a claim is made in
respect of immovable property where the immovable property
is charged or mortgaged to pay a certain amount. it is
sufficient for the purpose of this reference if we companye to
the companyclusion that bhagirathibai had a legal enforceable
right against the partner in respect of her 2 annas and 8
pies share and that the partner was under a legal obligation
to pay that amount. these are the cases which have companysidered the problem from
various angles. some of them appear to have applied the
principle companyrectly and some number. but we do dot propose to
examine the companyrectness of the decisions in the light of the
facts in them. in our opinion the true test is whether the
amount sought to be deducted in truth never reaches the
assessee as his income. obligations numberdoubt there are in
every case but it is the nature of the obligation which is
the
 1   1957  31 i.t.r. 735.
decisive fact. there is a difference between an amount
which a person is obliged to apply out of his income and an
amount which by the nature of the obligation cannumber be said
to be a part of the income of the assessee. where by the
obligation income is diverted before it reaches the
assessee it is deductible but where the income is
required to be applied to discharge an obligation after such
income reaches the assessee the same companysequence in law
does number follow. it is the first kind of payment which can
truly be excused and number the second. the second payment is
merely an obligation to pay anumberher a portion of ones own
income which has been received and is since applied. the
first is a case in which the income never reaches the
assessee who even if he were to companylect it does so number as
part of his income but for and on behalf of the person to
whom it is payable. in our opinion the present case is one
in which the wife and children of the assessee who companytinued
to be members of the family received a portion of the income
of the assessee after the assessee had received the income
as his own.the case is one of application of a portion of
the income to discharge an obligation and number a case in
which by an overriding charge the assessee became only a
collector of anumberhers income.


civil appellate jurisdiction civil appeal number 1115 of
1979.
from the judgment and order dated 26.10.1978 of the
jammu kashmir high companyrt in w.p.number41 of 1978.

k. sen harish salve k.j. john and c.s.s. rao for
the appellants. altaf ahmed advocate general and s.k. bhattacharya for
the respondents. the judgment of the companyrt was delivered by
ray j. this is an appeal by special leave against the
judgment and order passed in writ petition number 41 of 1978
dismissing the writ petition and upholding the order of the
district judge srinagar dated 26th july 1978 as well as
the order of the estate officer dated 20th march 1978.
the petitioners purchased the premises in dispute which
were originally leased out to dewan bishen dass ex. prime
minister of the jammu and kashmir from his successor-in-
interest purnesh chandra and others by two sale deeds dated
12.7.1967 and 8.12.1967. dewan bishen dass who took lease of
the said property was in possession of the same for more
than 75 years. the suit property companysists of residential
houses buildings shed and open lands. the appellants
purchased the land under khasra number. 885 min  890 and 891
measuring about 10 kanals. in 1957 the respondents state
government tried to resume the lands for setting up a tonga
and lorry stand but thereafter numberaction was taken in this
regard. in 1961 anumberher order was made by which the land in
question was sought to be resumed under the previous order
and the said land was sought to be transferred to the roads
and building department. under this order companypensation was
fixed at rs.139260 in respect of building and structures
standing on the said lands however numbercompensation was paid
number any action was taken subsequently in this regard. in
1963 anumberher government order was issued under sec. 4 1  of
the jammu and kashmir  public premises eviction of
unauthorised occupants  act 1959 seeking to resume the land
for purpose of the development of the city. an appeal
preferred by the lessee was rejected. but numberfurther action
was taken thereafter. on 5th of june 1968 an order of
eviction under the provisions of jammu and kashmir  public
premises eviction of unauthorised occupants  act 1959 was
issued seeking to evict the petitioners as being
unauthorised occupants. on january 11 1978 a large number
of police personnel and municipal employees came upon the
land and
demolished the buildings of the petitioners on the said
land. the administrator took illegal possession of the suit
property whereon the appellants filed a writ petition before
the high companyrt of jammu and kashmir praying for a writ or
direction prohibiting the administrator of the municipality
from interfering with the physical possession of the
petitioners and directing him to forbear from taking
possession of the property without the authority of law. the high companyrt by judgment and order of 19th of july
1979 allowed the writ petition and directed the respondents
to restore possession of the premises immediately to the
petitioners. by allowing the writ petition high companyrt held

section 6 of the land grants act shows that the
provisions of the act would apply to the lease created
after the passing of the act. possession of the lessees can be taken only on
payment of companypensation. since numbercompensation was
paid the lessee is validly in possession and cannumber be
evicted. petitioners number being unauthorised occupants the
act is number applicable and therefore any numberice under
section 4 or 5.5 of the act is without jurisdiction. section 5 of the jammu and kashmir  public premises
eviction of unauthorised occupants  act is ultra vires
article 14 of the companystitution since discretion is on
state officer to evict one occupant and refuse to evict
anumberher. amendment of 1962 does number revive section 5 of
the 1959 act. action of the state was held malafide. against the said judgment and order the respondents
filed appeals before this companyrt being civil appeal number. 144-
147 of 1979. on august 8 1972 this companyrt dismissed those
appeals and companyfirmed the judgment and order made by the
high companyrt holding that as the administrator of the
municipality had number companyplied with the provisions of ss. 238
and 239 of the municipal act the action taken by the
municipality in the matter of demolition must be held to be
entirely illegal and companytrary to law. it was further held
that the companyclusions and observations of the high companyrt on
all the points which have number
been decided by us become unnecessary in the view we have
taken with regard to the illegality and invalidity of the
demolition carried out pursuant to the numberices issued under
s. 129 of the municipal act . . . . this decision was
reported in state of jammu and kashmir ors. v. haji wali
mohammed and ors.v. 1973 1 scr 801.
thereafter the estate officer issued a numberice under
section 4 1  of the amended jammu and kashmir public
premises  unauthorised occupants  act intimating the
appellants that they were in unauthorised occupation of the
public premises mentioned in the schedule below by
encroaching upon government land measuring 10 kanals 8
marlas and 208 fts. companyprising khasra number 890 situated at
bagh magermal srinagar and calling upon the appellants to
show cause why the order of eviction should number be made. the
appellants filed an objection to the said numberice stating
inter alia that they are number in unauthorised occupation of
the said land number they have encroached upon the same. the
numberice is wholly misconceived and it is illegal. the land in
question in fact was taken lease of by late dewan bishen
dass who has been in companytinuance possession of the same for
about 75 years and thereafter the appellants purchased the
said land in 1967 from the legal heirs of the lessee dewan
bishen dass. the appellants made various improvements on the
land and built houses thereon at a companyt of about rs.50000. the appellants are number unauthorised occupiers but are
fulfledged owners of the said land. these facts are wholly
confirmed by the judgment of the high companyrt of jammu and
kashmir while accepting the writ petition of the appellants. the appellants had stepped into the shoes of the original
owner who was lawfully inducted in the lawful possession of
the land as lessee. it has been stated that the estate
officer cannumber declare the person in possession as
unauthorised occupants after lapse of more than 80 years. their objection however was rejected by the estate officer
and the appellants were directed to hand over possession of
the premises including structures to the administrator of
the municipality within 14 days. against the said order the appellants preferred an
appeal before the district judge srinagar. the appellants
also challenged the said order by a writ petition before the
high companyrt of jammu and kashmir and this was registered as
writ petition number 49 of 1978. the appeal was however
dismissed and the order of the estate officer was companyfirmed
holding inter alia that the appellants purchased the land
from the legal heirs of dewan bishen dass who was the lessee
of the land that all the sale deeds were executed without
obtaining requisite prior permission from the government and
as such the sub-registrar was number em-
powered to accept those documents for registration under
proviso to section 4 of the jammu and kashmir lands grants
act 1960 that the lease shall be deemed to have been
determined because of companytravention of the provisions of
section 12 a  of the jammu and kashmir lands grants act
1960 that the possession of the appellant was number regular
and as such they were in authorised occupation within the
meaning of the said act that the government had a right to
re-enter on the land and the numberice in question was rightly
issued against the appellants directing them to vacate the
land. the writ petition was amended and this judgment was
also challenged. the writ petition was however dismissed
by the high companyrt by order dated 26th october 1978 holding
that the land being transferred by the legal heirs of the
dewan bishen dass without obtaining previous permission of
the government or by the companypetent authority in that behalf
the lease stood determined and the impugned numberice under the
jammu and kashmir  public premises eviction of unauthorised
occupants  act 1959 was quite in accordance with law. against this judgment and order the instant appeal on
special leave has been filed by the appellants. it has been
urged on behalf of the appellants that the lands taken lease
of by dewan bishen dass who was the ex.prime minister of the
state cannumber be deemed to have been taken under the
provisions of ailan number 10 dated 7 bhadon 1976 and as such
section 12 a  and section 6 of the land grants act 1960 are
number applicable. the lease cannumber be determined on the ground
that the transfer was made in favour of the appellants by
the legal heirs of the original lessee without previous
permission in writing from the government or any companypetent
authority. it has been submitted in this companynection that the
provisions of the said ailan refers to the lease of land to
a wasidar but as the lease was granted free of rent it
does number companye under the said ailan as the said ailan
provides for payment of ground rent for the land used. under
rule 6 of the said ailan the land belongs to the government
and permission is granted for building purposes only in
respect of an area of land number exceeding 3 acres. in the
present case the lease granted in favour of dewan bishen
dass is in respect of 20 kanals of land free of rent whereas
under the proviso of the said rule numberlease companyld be granted
for a period exceeding 40 years. it has also been submitted
that even if for arguments sake without admitting it is
accepted that the appellants predecessor-in-interest was a
wasidar and lease was granted under the aforesaid ailan number
10 yet the lands companyld number be acquired without providing for
adequate companypensation to be paid to the wasidar for the
buildings and appurte-
nances and other improvements effected by him on the land
and the amount of companypensation shall have to be determined
by the state engineer. numbercompensation was either awarded in
respect of valuable buildings structures and other
improvements made by the appellant on the land number any
valuation has been made of the buildings and structures
existing on the land as well as all the improvements made in
respect of such land. it was therefore submitted that the
impugned numberice under section 4 1  of the said act was
liable to be cancelled and quashed being number in accordance
with law. the learned companynsel appearing on behalf of the state
has on the other hand submitted that the petitioners
predecessor that is the original lessee was a wasidar and
the lease was granted under ailan number 10 dated 7 bhadon
1976. it was also companytended that section 12 a  of the jammu
and kashmir lands grants act is applicable to this case. the
transfer of the land by sale in favour of the appellants
have been made by the legal heirs of the original lessee
dewan bishen dass without the prior permission of the
government or any authority empowered in that behalf. the
lease stood determined from the date of the transfer and the
government has the right of re-entry on the land in
accordance with the provision 6 of the said act. the
appellants are unauthorised occupants and as such numberice
under section 4 1  of the jammu and kashmir  public premises
eviction of unauthorised occupants  act 1959 is number illegal
but is in accordance with the provisions of the said act. after companysidering the submissions advanced by learned
counsels for the parties we are companystrained to hold that
dewan bishen dass predecessor of the appellants was a
wasidar and the lands in question were wasidari land leased
out to him for the purpose of companystructing buildings. this
lease is governed by ailan number 10 as well as by the lands
grants act 1960. we affirm the findings of the high companyrt
which held the land as wasidari land. the land was
transferred by purnesh chandra and others legal
representatives of the original lessee dewan bishen dass in
favour of the appellants in companytravention of the provisions
of section 12 a  of the jammu and kashmir land grants act
1960. the impugned numberice under section 4 1  of the jammu
and kashmir  public premises eviction of unauthorised
occupants  act is in accordance with law and as such it is
valid. under the said act as well as the rule the appellants
are entitled to get companypensation of the buildings and
structures as well as of the improvements made on the land
even though they are number entitled to get companypensation in
respect of value of the land. the companypensation in the
instant case has number been determined number the same has been
paid. we therefore allow the appeal and set aside the
judgment and order of the high companyrt and remit the matter to
the district judge srinagar who will either himself or by
any additional district judge allotted by him hear the
parties and determine the market value of the buildings
structures and all other improvements effected on the land
in question after hearing the parties and also companysidering
the papers that will be filed in companyrt and to make an award
accordingly.