Full Judgment Text
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PETITIONER:
LEKHRAJ SATRAMDAS, LALVANI
Vs.
RESPONDENT:
DEPUTY CUSTODLAN-CUM-MANAGING OFFICER & ORS.
DATE OF JUDGMENT:
04/05/1965
BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
SARKAR, A.K.
HIDAYATULLAH, M.
CITATION:
1966 AIR 334 1966 SCR (1) 120
CITATOR INFO :
R 1968 SC 292 (4)
RF 1975 SC1121 (17)
RF 1976 SC2243 (28)
RF 1977 SC1496 (19)
F 1977 SC2149 (15)
F 1977 SC2257 (14)
ACT:
Administration of Evacuee Property Act 1950, s. 10(2)(b)-
Manager for evacuee shops appointed by Deputy Custodian of
Evacuee Property Deputy Custodian whether can cancel
appointment subsequently.
HEADNOTE:
The appellant was appointed Manager of two evacuee shops
which vested in the Custodian of Evacuee Property. The
appointment was made in 1952 under s. 10(2) (b) of the
Administration of Evacuee Property Act, 1950, In 1956 the
appellant was informed by letter Ex. p.8 written by the
Custodian of Evacuee Property that a decision to allot the
shops to him had been taken and that subsequently the shops
would be sold to him. The letter was based on the orders of
the Chief Settlement Commissioner in Ex. p. 5. However the
said decision could not be implemented and in pursuance of
orders from the Chief Settlement Commissioner the Deputy
Custodian by Ex. p. 13 and proceedings Ex. p. 16 cancelled
the appointment of the appellant as Manager and asked him to
hand over possession of the shops. The appellant tiled a
writ petition in the High Court praying that the order Ex.
p. 13 and proceedings p. 16 be quashed, that the ion of the
shops be given to him, and that the sale of the shops be
stopped. The High Court granted the first two prayers but
not the third. Both parties appealed to a Division Bench of
the High Court which held against the appellant on all these
counts. By certificate under Art,. 133(1) (a) he came to
the Supreme Court.
It was contended on behalf of the appellant : (1) that he
was not lawfully removed from the management of the shops as
the Deputy Custodian had no power to cancel an appointment,
(2) that the order of removal in Ex. 13 and Ex. 16 was made
by the Managing Officer cum Deputy Custodian of Evacuee
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property under the Displaced Persons (Compensation and
Rehabilitation) Act 1954 which conferred no power on such an
officer to cancel the appointment of the manager and (3)
that by virtue of Ex. p. 5 and Ex. p. 8 the shops stood
allotted to the appellant.
HELD:(i) Section 16 of the General Clauses Act provides
that the power to ternunate is a necessary adjunct of the
power of appointment and is exercised as an incident to or
consequence of that power. The power of appointment
conferred on the Custodian under s. 10(2) (b) of the 1950
Act confers by implication upon the Custodian the power to
suspend or dismiss any person appointed. It is manifest
that the management of the appellant with regard to the
business concerns could be lawfully terminated by the Deputy
Custodian by virtue of s. 10(2) (b) of the 1950 Act read
with s. 16 of the General Clauses Act. [124 F-G]
(ii)The order cancelling the appellant’s appointment as
manager could not be said to be invalid on the ground that
it purported to have been made under the 1954 Act. The Act
of 1950 was not repealed by the Act of 1954 and continued in
force. Under s. 10(2) (b) of the 1950 Act the Deputy
Custodian is the proper authority to cancel the appointment
of a manager and the order of cancellation must therefore be
held to be valid. The principle is that the act of public
servant must be ascribed to an actual existing authority
under which it would have validy rather than one under which
it would be void. [125 C-E]
121
Balakataiah v. The Union of indict, [1958] S.C.R. 1052,
referred to.
(iii) Even onthe assumption that the order of cancellation
was illegal the appellant wasnot entitled to a writ from
the High Court. Writs can be issued only toenforce the
performance of statutory duties, not duties under a
contract. The appointment of the appellant was under a con-
tract [126 A-B]
Commissioner of Income-tax Bombay Presidency and Aden v.
Bombay Trust Corporation Ltd., 63 I.A. 408 and P. K.
Barnerjee v. L. J. Simonds, A.I.R. 1947 Cal. 307 referred
to,
(iv)Ex. 5 and Ex. 8 did not make any final allotment in
favoitr of the appellant, The letters did not show any
concluded coatract of sale. 127 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 414- 416 of
1963.
Appeals from the judgment and order dated December 6, 1960
of the Kerala High Court in A.S. Nos. 445 and 484 of 1960.
R.Mahalingier and K. N. Keswai, for the appellant (In
both the appeals):
Gopal Singh, R. N. Sachthey and B. R. G. K. A char, for the
Respondents (In both the appeals).
The Judgment of the Court was delivered by
Ramaswami. J. The proprietors of two firms styled "Adam
Haji Peer Mohd. Essack" and "Haji Ebrahim Kasim Cochinwala"
had, in the year 1947, migrated to Pakistan and both these
firms became vested in the Custodian of Evacuee Properties
for the State of Madras under s. 8 of the Administration of
Evacuee Property Act, 1950, hereinafter referred to as the
1950 Act. On March 6, 1952 the appellant was appointed as
Manager of the two firms under S. 10(2) (b) of the 1950 Act.
The appellant also furnished security of Rs. 20,000/- before
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taking possession of the business of the firms as Manager.
The order of appointment-Ex. P-1 dated March 6, 1952 states
:
"The Custodian approves the proposal of the
Deputy Custodian, Malabar that the Management
of both the firms of Adam Hajee Peer Muhammad
Issack and Hajee Ibrahim Kassam Cochinwala at
Kozhikode may be allotted to Sri L. S. Lalvani
for the present on the same system as exists
now between the Government and the present two
managers and on his furnishing a security of
Rs. 20,000 to the satisfaction of the Deputy
Custodian. The question of outright allotment
as contemplated in Custodian General’s letter
No. 2811/CG/50 dated 20-3-50 will be taken up
in due course."
122
On October 9, 1954 the Displaced Persons (Compensation and
Rehabilitation) Act, 1954 was passed which will hereafter be
referred to as the 1954 Act. On April 11, 1956 there was an
advertisement published in the Press for the sale of the
aforesaid evacuee properties. The appellant applied to the
Chief Settlement Commissioner for stopping the sale of the
two concerns. On April 25, 1956 the Central Government made
an order-Ex. P-5 -which states :
"I am directed to state that it has been
decided in principle that the aforesaid
evacuee concerns will be allotted to you. The
terms of allotment will be communicated to you
separately. Meanwhile, you will continue to
function as the Custodian’s Manager for these
concerns in terms of section 10(2) (b) of the
Administration of Evacuee Property Act, read
with Rule 34 of the rules made under the Act."
On June 21, 1956 another letter-P-8-was
written to the appellant by the Custodian of
Evacuee Properties which states :
"The Deputy Custodian is informed that the
Government of India have decided that the two
evacuee concerns viz., firms of Adam Hajee
Peer Mohammed Essack and Hajee Ebrahim Kassam
Cochinwala of Kozhikode are to be allotted to
the present Manager Shri L. S. Lalvani and
ultimately sold to him. He is also informed
that until the question of terms and
conditions of allotment of the concerns in
question is decided Shri Lalvani will continue
to function as Custodian’s Manager for these
concerns in terms of Section 10(2) (b) of the
Administration of Evacuee Property Act, 1950
read with rule 34 of the rules made
thereunder. The Deputy Custodian is requested
to evaluate the business concerns properly
after getting prepared a balance sheet of each
year of the vesting of the concerns,
evaluating the concerns, the Deputy Custodian
should keep in view the other assets and
liabilities of the concerns and their goodwill
etc. His comment and suggestions as to how
and by what easy instalments the value of the
concerns if sold to Shri Lalvani is to be
realised from him should also be intimated.
The bargain was not concluded and on March 25, 1958 there
was an advertisement in the Press about the public auction
of the business of the firms. The appellant moved the High
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Court of Kerala
123
for grant of a writ restraining the District Collector from
selling the business of the firms by a public auction. The
application was allowed and on June 25, J959 the Kerala High
Court directed the District Collector not to sell the
properties of the business of the two firms without an
appropriate order of the Chief Settlement Commissioner. The
decision of the High Court is based upon the ground that
there was, no order under the 1954 Act by the Chief
Settlement Commissioner for sale of the properties and that
in the absence of such an order the sale of the properties
cannot take place. It appears that the order of the Chief
Settlement Commissioner was subsequently made on September
15, 1959. In pursuance of that order the management of the
appellant was terminated and the possession of the business
was taken over by the Deputy Custodian--Respondent no. 1.
The order-Ex. P-13 dated December 18, 1959 states :
"Shri L. S. Lalvani is informed that his
services as Manager of the business concerns
of Adam Haji Peer Mohd. Essack and Haji
Ibrahim Kassam, Cochinwala, at Kozhikode are
hereby terminated with immediate effect. He
is further required to hand over immediate
possession of the premises and the stock-in-
trade, account books and other assets of the
business including furniture etc."
The appellant filed a writ petition in the High Court of
Kerala being O.P. no. 1438 of 1959 for grant of (1) a writ
of certiorari for quashing the order dated December 15,
1959--Ex. P-13 -and the proceedings dated December 18,
1959-Ex. P-16, (2) a writ of mandamus directing respondents
nos. 1 and 2 to hand over possession of the two business
concerns including the premises, stock-in-trade all records
etc. to the appellant, and in prayer ( 1 ) & (2) but (3)for
a writ of mandamus or appropriate writ or order directing
respondents nos. 1 to 3 not’ to sell by public auction or
otherwise the two evacuee business concerns. S. Velu
Pillai, J. by his order dated June 8, 1960, granted writ to
the appellant as prayed for restraining the respondents from
selling the business by public auction. Against the order
of the Single Judge the respondents filed an appeal being
A.S. no. 484 of 1960 before the Division Bench of the High
Court. The appellant also preferred an appeal A.S. no. 445
of 1960 against the order of Single Judge which was in
regard to the refusal of the third relief. By judgment
dated December 6, 1960 the Division Bench of the High
Cl/65-9
124
Court dismissed Appeal A.S. no. 445 of 1960 filed by the
appellant but allowed the appeal A.S. no. 484 of 1960 filed
by the respondents. The present appeals are brought on
behalf of the appellant by certificate of the Kerala High
Court granted under Art. 1 3 3 ( 1 ) (a) of the
Constitution.
The first question arising in this case is whether the
appellant was lawfully removed from the management of the
business by the order of the respondent no. 1 dated
December 18, 1959Ex. P-13 and P-16. It was submitted on
behalf of the appellant that under s. 10(2) (b) of the 1950
Act the Custodian had the power to appoint a Manager for the
Evacuee Property for carrying on any business of the evacuee
and there was no power conferred by the Act upon the
Custodian to remove the Manager so appointed. It was argued
by the Counsel on behalf of the appellant that an
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indefeasible right of management was conferred upon the
appellant because of the, order of the Custodian-Ex. P-1
dated March 6, 1952. In our opinion, there is no warrant
for this argument. The power of appointment conferred upon
the Custodian under s. 10 (2) (b) of the 1950 Act confers,
by implication, upon the Custodian the power to suspend or
dismiss any person appointed. Section 16 of the General
Clauses Act states
"Where, by any Central Act or Regulation, a
power to make any appointment is conferred,
then, unless a different intention appears,
the authority having for the time being power
to make the appointment shall also have power
to suspend or dismiss any person appointed
whether by itself or any other authority in
exercise of that power."
It is manifest that the management of the appellant with
regard to the business concerns can lawfully be terminated
by the Deputy Custodian by virtue of s. 10(2) (b) of the
1950 Act read with s. 16 of the General Clauses Act. The
principle underlying the section is that the power to
terminate is a necessary adjunct of the power of appointment
and is exercised as an incident to or consequence of that
power.
It was then contended on behalf of the appellant that the
order of removal-Ex. P-13 and P-16-was made by the Managing
Officer-cum-Deputy Custodian of Evacuee Property of Southern
States under the 1954 Act which conferred no power on such
an officer to cancel the appointment of a Manager. It was
pointed out that the order of removal was made after the
provisions of the 1954 Act had come into force. In our
opinion, there is no
125
justification for this argument. We shall assume that the
Managing Officer under the 1954 Act is not the proper
authority to cancel the appointment of a Manager but it is
not disputed that the provisions of the 1950 Act have not
been repealed and still continue to be in force. Under S.
10(2) (b) of the 1950 Act the Deputy Custodian is the proper
authority to cancel the appointment of a Manager and the
order-Ex. P-13 and P-16 dated December 18, 1959 is,
therefore, legally valid. It is true that the order Ex. P-
13 and P-16 is signed by Mr. Mathur as "the Managing
Officer-cum-Deputy Custodian of Evacuee Property" but the
order of removal of the appellant from the management is
valid because Mr. Mathur had the legal competence to make
the order under the 1950 Act, though he has also described
himself in that order as "Managing Officer". It is well-
established that when an authority passes an order which is
within its competence, it cannot fail merely because it
purports to be made under a wrong provision if it can be
shown to be within its power under any other rule, and the
validity of the impugned order should be judged on a
consideration of its substance and not of its form. The
principle is that we must ascribe the Act of a public
servant to an actual existing authority under which it would
have validity rather than to one under which it would be
void (See Balakotaiah v. The Union of India.) (1) We,
therefore, reject the argument of the appellant on this
aspect of the case.
In our opinion, the order of the Deputy Custodian-P-13 and
P-16-removing the appellant from the management of the busi-
ness is not vitiated by any illegality. But even on the
assumption that the order of the Deputy Custodian
terminating the management of the appellant is illegal, the
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appellant is not entitled to move the High Court for grant
of a writ in the nature of mandamus under Art. 226 of the
Constitution. The reason is that a writ of mandamus may be
granted only in a case where there is a statutory duty
imposed upon the officer concerned and there is a failure on
the part of that officer to discharge that statutory obli-
gation. The chief function of the writ is to compel the
performance of public duties prescribed by statute and to
keep the subordinate tribunals and officers exercising
public functions within the limits of their jurisdictions.
In the present case, the appointment of the appellant as a
Manager by the Custodian by virtue of his power under s.
10(2)(b) of the 1950 Act is contractual in its nature and
there is no statutory obligation as between him and the
appellant. In our opinion, any duty or obligation falling
(1) [1958] S.C.R. 1052 at p. 1059.
126
upon a public servant out of a contract entered into by him
as such public servant cannot be enforced by the machinery
of a writ under Art. 226 of the Constitution. In
Commissioner of Income-tax Bombay Presidency and Aden v.
Bombay Trust Corporation Ltd. (1) an application was made
under s. 45 for an order directing the Commissioner to set
aside an assessment to income tax and to repay the tax paid
by the applicant; the Bombay High Court made the order asked
for but the decision of the Bombay High Court was set aside
by the Judicial Committee. At page 427 of the report it is
observed by the Judicial Committee :
"Before mandamus can issue to a public servant
it must therefore be shown that a duty towards
the applicant has been imposed upon the public
servant by statute so that he can be charged
thereon, and independently of any duty which
as servant he may owe to the Crown, his
principal."
A similar view has been expressed by the Calcutta High Court
in P. K. Banerjee v. L. J. Simondsd. ( 2 ) In our opinion,
these cases lay down the correct law on the point.
We pass on to consider the next question presented on behalf
of the appellant viz., whet-her there was a final allotment
of the business in favour of the appellant by the Chief
Settlement Commissioner. It was contended for the appellant
that in view of Ex. P-5 dated April 25, 1956 there was final
allotment of the business, though the terms of allotment had
to be subsequently determined. In Ex. P-5 the Government
of India state that "It has been decided in principle that
the aforesaid evacuee concerns should be allotted to you"
and the "terms of allotment would be communicated to you
separately". Reference was made to Ex. P-8 dated June 21,
1956 wherein it is stated that the Government of India have
decided that "the two evacuee concerns viz., firms of Adam
Hajee Peer Mohammed Essack and Hajee Ebrahim Kassam
Cochinwala of Kozhikode are to be allotted to the present
Manager Shri L. S. Lalvani and ultimately sold to him". It
is also mentioned in the letter that "until the question of
term and conditions of allotment of the concerns is decided
Shri Lalvani will continue to function as Custodian’s
Manager for these concerns in terms of s. 10 (2) (b) of the
Administration of Evacuee Property Act, 1950 read with rule
34 of the rules made thereunder". It was submitted on
behalf of the appellant that in view of these two letters it
must be held that there was a final allotment of the
business in favour of the appellant. We do not,
(1) 63 I.A. 408.
(2) A.I.R. 1947 Cal. 307.
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127
however, think there is any justification for this argument.
It is manifest that the terms and conditions of allotment
were not finally settled between the parties and there was
no concluded contact of sale and, therefore, the appellant
had no legal right to the business of the two concerns and
the High Court was right in holding that the appellant was
not entitled to the grant of a writ in the nature of
mandamus with regard to the possession of the two business
concerns.
In our opinion, there is no merit in these appeals which are
accordingly dismissed with costs.
Appeals dismissed.
128