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Saturday, October 31, 2015

the adverse observations against the conduct of the officers and a direction by the High Court to record displeasure in the annual confidential report of the assessing officer and the appellate authority. Going through the materials available on record as produced by both sides, we find that there is no justification for any such direction by the High Court. Apparently, the authorities have only discharged their functions under law. It appears that there has been some procedural irregularity. But that does not mean that there is any malafide or illegal conduct on the part of the officers. It may be noted that even according to the High Court, an inquiry is to be conducted for fastening the liability. If that be so, there is no justification for the remarks against the assessing officer and the appellate authority. It is seen from the records that there is marked difference in the pattern of consumption after the new meter was installed in January, 2010. In such circumstances, it is difficult to digest any allegation of motivated conduct on the part of the two officers.Accordingly, the appeal is allowed with directions as above on reassessment. The adverse remarks on the conduct of the officers are expunged and the directions contained in paragraphs-48, 49 and 51 of the impugned judgment are vacated. The order on costs is also vacated.


                        IN THE SUPREME COURT OF INDIA

                       CIVIL  APPELLATE  JURISDICTION

                       CIVIL APPEAL NO.  9148  OF 2015
                  (Arising from S.L.P. (C) No. 23721/2012)


U. P. Power Corporation Limited
and others                              … Appellant (s)

                                   Versus

Vimla Devi and another                  … Respondent (s)


                               J U D G M E N T

KURIAN, J.:



    Leave granted.


The short dispute in this case pertains to the steps taken by the appellant-
Corporation for levying the energy charges on the first respondent  for  the
period of the alleged meter fault. On the basis of the inspection  conducted
on 25th/28th November,  2009  by  the  Junior  Engineer  of  the  appellant-
Corporation, the first respondent was served with a notice dated  23.03.2010
demanding an amount of Rs.1,97,815/- towards energy  charges  which  escaped
billing. The first respondent filed a writ petition before  the  High  Court
which was disposed of by judgment dated 18.05.2010 permitting  her  to  file
objections and directing the Executive Engineer to consider  the  objections
and  pass  a  speaking  order.  The  Executive  Engineer,  by  order   dated
08.06.2010, passed the revised order limiting  the  demand  to  Rs.50,891/-.
The said order was challenged before the High Court in C.W.P. No.  19347  of
2012 leading to the impugned judgment.

The High Court, having conducted  an  elaborate  inquiry  into  the  matter,
found that there was no justification for the demand. It was held  that  the
proper procedure prescribed under law was not  followed  in  inspection  and
preparation of the  report.  Still  further,  it  was  held  that  even  the
appellate authority did not discharge its functions  as  expected  of  them.
The displeasure on the conduct of the assessing officer  and  the  appellate
authority was directed  to  be  recorded  in  their  annual  character  roll
(annual confidential report) for the relevant period. The writ petition  was
thus allowed with  costs  of  Rs.10,000/-  to  be  paid  by  the  appellant-
Corporation with liberty to recover the same from  the  officials  concerned
after conducting an appropriate inquiry.  There  was  also  a  direction  to
communicate the order to the Chief Secretary for ensuring compliance of  the
directions by the High Court. And thus aggrieved, the  Corporation  and  its
officials have come up in appeal.

Heard learned Counsel appearing for the appellants and the respondents.

Though several contentions are raised by the  Counsel  on  both  sides,  the
dispute  essentially  is  in  a  very  narrow  compass.  According  to   the
appellants, for whatever  reason,  there  was  short  assessment  of  energy
charged at the premises of the first respondent during  the  period  between
05.11.2008, when the old meter was replaced and 31.01.2010.  It  is  not  in
dispute that a new  meter  was  installed  at  the  premises  of  the  first
respondent on 23.01.2010. It is fairly conceded that when the meter  at  the
premises  of  a  consumer  is  reported  to  be   non-functional,   and   if
consequently, there is short assessment for a long period, the bills can  be
revised for that period but limiting to twelve months. What  should  be  the
basis of the assessment, is the simple question.

There is no case for the appellants that the meter installed  on  23.01.2010
had any fault thereafter, in any  case,  for  quite  some  time.  Therefore,
having regard to the entire facts and circumstances of the case, we  are  of
the view that interest of justice will be served if the energy bills of  the
first respondent are revised for a  period  of  twelve  months  ending  with
31.01.2010, taking the average of twelve months from  01.02.2010.  In  other
words, based on the average  consumption  for  a  period  of  twelve  months
beginning from 01.02.2010, the energy bills of the first  respondent  for  a
period of twelve months ending with 31.01.2010 shall  be  revised.  A  fresh
demand on that basis shall be issued to  the  first  respondent  within  two
months from today. After adjusting the amounts already  paid  for  the  said
period, the first respondent shall pay the  balance  amount  within  another
one month  failing  which  it  will  be  open  to  the  appellants  to  take
appropriate coercive action permitted under law. It is made clear that  this
order has thus given a quietus to the entire  dispute  raised  in  the  writ
petition regarding the short assessment.

Having said that we have also  to  address  the  grievances  raised  by  the
appellants with regard to the adverse observations against  the  conduct  of
the officers and a direction by the High Court to record displeasure in  the
annual confidential report  of  the  assessing  officer  and  the  appellate
authority. Going through the materials available on record  as  produced  by
both sides, we find that there is no justification for  any  such  direction
by the High Court. Apparently, the authorities have  only  discharged  their
functions under  law.  It  appears  that  there  has  been  some  procedural
irregularity. But that does not mean that there is any malafide  or  illegal
conduct on the part of the officers. It may be noted that even according  to
the High Court, an inquiry is to be conducted for fastening  the  liability.
If that be so, there  is  no  justification  for  the  remarks  against  the
assessing officer and the appellate authority. It is seen from  the  records
that there is marked difference in the pattern of consumption after the  new
meter  was  installed  in  January,  2010.  In  such  circumstances,  it  is
difficult to digest any allegation of motivated conduct on the part  of  the
two officers.

Accordingly,  the  appeal  is  allowed   with   directions   as   above   on
reassessment. The adverse  remarks  on  the  conduct  of  the  officers  are
expunged and the directions contained in paragraphs-48, 49  and  51  of  the
impugned judgment are vacated. The order on costs is also vacated.

There shall be no order as to costs.

                                                              ..…….…..…………J.
                     (T. S. THAKUR)



                                                                ..……………………J.
                    (KURIAN JOSEPH)
New Delhi;
October 30, 2015.
-----------------------
NON-REPORTABLE


-----------------------
6


Thursday, October 29, 2015

whether there is curtailment or extinction of a legal right of the appellant. The writ petitioner before the High Court was trying to establish her right in an independent manner, that is, she has an independent legal right. It is extremely difficult to hold that she has an independent legal right. It was the first allottee who could have continued in law, if his licence would not have been cancelled. He was entitled in law to prosecute his cause of action and restore his legal right. Restoration of the legal right is pivotal and the prime mover. The eclipse being over, he has to come back to the same position. His right gets revived and that revival of the right cannot be dented by the third party. 51. In view of the aforesaid premises, we do not perceive any merit in this appeal and, accordingly, the same stands dismissed. There shall be no order as to costs.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO.  6774 of 2015
                        (@ SLP(C) NO. 16650 OF 2012)



Poonam                                       ...   Appellant

                                Versus

State of U.P. & Ors.                         ...   Respondents




                               J U D G M E N T



Dipak Misra, J.

       The  appellant  invoked  the  jurisdiction  of  the  High  Court   of
Judicature at Allahbad under Article 226 of the Constitution praying,  inter
alia, for issue of writ of certiorari  for  quashment  of  the  order  dated
2.3.2012 passed by the respondent  no.2,  Commissioner,  Azamgarh  Division,
Azamgarh in Appeal No. 85/109/153/334/M of 2008-12  and  further  seeking  a
writ of Mandamus against the respondents not to interfere  in  the  peaceful
functioning of  fair  price  shop  in  Gram  Sabha  Ardauna,  Tehsil  Sadar,
District Mau.
2.    The facts that formed the bedrock of the  writ  petition  are  that  a
fair price shop being shop no. 2 was run  by  the  5th  respondent  in  Gram
Sabha Ardauna, Tehsil  Sadar,  Block  Ratanpura,  District  Mau,  which  was
allotted to him  by  allotment  order  dated  11.5.2001  and  while  he  was
continuing, on various complaints being made against him pertaining to  non-
distribution of essential  commodities,  Sub-Divisional  Magistrate,  Sadar,
District Mau ordered an enquiry and after obtaining  the  report,  suspended
his licence and  called  for  an  explanation  from  him  vide  order  dated
30.5.2008.  As the factual matrix would depict  vide  order  dated  3.6.2008
the shop of respondent no.5 was attached to another shop being  run  by  one
Bhupendra Singh and the respondent no.5 handed over the charge  of  shop  on
19.7.2008.  On the said date the final enquiry report was placed before  the
Deputy District Magistrate, Sadar, District Mau  and  the  report  reflected
that there was improper distribution of essential commodities  in  violation
of instructions and accordingly the competent authority by its  order  dated
23.7.2008 cancelled the allotment of the respondent no.5.
3.    Being dissatisfied with the order of cancellation, the 5th  Respondent
preferred an appeal before the Commissioner, Azamgarh  assailing  the  order
dated 23.7.2008, along with an application for stay of the  cancellation  of
allotment,  but  the  appellate  authority  declined  to  pass  any  interim
protective order.  Eventually, the appeal preferred  by  the  appellant  was
allowed.  May it be  stated  that  the  appellant  herein  had  got  herself
impleaded in the appeal on the ground that she had been  allotted  the  shop
no.2 after cancellation of the allotment along with the licence  granted  in
favour of the original allottee, the appellant therein.
4.    The appellate authority after hearing the appellant and the  impleaded
party and upon perusal of  the  file,  opined  that  the  entire  proceeding
against the original allottee  was  initiated  on  the  basis  of  the  oral
statements pertaining to the allegations made by some BPL card holders  that
the shopkeeper had told them that their cards had been cancelled; and  there
was no enquiry and investigation by the Deputy District Magistrate from  the
official documents as regards the cancellation of original ration  cards  of
the BPL card holders; that the allottee was not provided  the  copy  of  the
investigation report and hence, he was deprived  of  opportunity  to  submit
his clarification and on the whole, there were  serious  procedural  lapses;
and that on a careful scrutiny of number  of  aspects,  it  was  perceptible
that the investigation carried out by  the  Block  Development  Officer  was
absolutely faulty.  Being of this view, the  appellate  authority  by  order
dated 2.3.2012, allowed the appeal of the appellant, restored the  allotment
and cancelled the allotment of the subsequent allottee.
5.    Aggrieved by the aforesaid order, the appellant  herein  who  was  the
subsequent allottee in respect of shop no.2 preferred C.M.W.P. No. 16390  of
2012 before the High Court  which  by  the  impugned  order  dated  3.4.2012
relied upon an earlier judgment in Sri  Pal  Yadav  v.  State  of  U.P.  and
others[1] and dismissed the writ petition on the  ground  that  she  had  no
right to continue the litigation being a subsequent allottee,  for  she  had
no independent right.

6.    Calling in question the legal defensibility of  the  order  passed  by
the writ court, it is submitted by Mr. Dushyant  Parashar,  learned  counsel
for the appellant is that the approach  of  the  High  Court  is  absolutely
erroneous inasmuch as it had treated  the  allotment  of  the  appellant  in
respect of the fair price shop  as  a  stop  gap  arrangement  and  she  had
entered into  the  shoes  of  the  original  allottee  and,  therefore,  her
allotment was subject  to  attainment  of  finality  of  cancellation  order
totally remaining oblivious to the fact that she was appointed as  a  dealer
under Visually Handicapped quota.  It is  further  urged  by  him  that  her
rights being independent in nature, she has a right to assail the  appellate
order and the High Court could not have dismissed the writ petition  without
adverting to the merits of the case.
7.    Mr. Vikrant Yadav,  learned  counsel  appearing  for  the  State,  per
contra, would contend that in the village  Ardauna,  two  fair  price  shops
were in existence and one was allotted to Mr. Bhupinder Singh and the  other
one to Mr. Arvind Kumar, the 5th respondent herein and on the basis  of  the
complaint  made  by  the  Gram  Sabha,  the  Sub-Divisional  Magistrate  had
attached the shop of respondent no.5 to the shop of Bhupinder  Singh,  after
suspending his licence on 3.6.2008 and eventually, an order of  cancellation
was passed;  and when the order of cancellation was  set  aside  in  appeal,
the original allottee is entitled to get back his allotment  in  respect  of
shop no.2. and hence, the appellant has no legal right to assail  the  order
passed by the appellate authority.  Learned  counsel  for  the  State  would
further submit that shop no.2 having become available  and  there  being  no
order that said shop is declared as  the  shop  reserved  for  any  kind  of
quota, either vertical or horizontal, the present  appellant  cannot  assert
any independent right in respect of the said shop.
8.    At the very outset, we  must  unequivocally  state  that  we  are  not
required to enter into the issue whether cancellation was justified  or  not
or the order passed by  the  appellate  authority  allowing  the  appeal  is
defensible in the facts and circumstances of the case, for  the  High  Court
has expressed its disinclination  to  enter  into  the  said  arena  at  the
instance of the  present  appellant  on  the  foundation  that  she  was  an
allottee after the cancellation of the allotment who  was  the  licencee  to
run the fair price shop of the 5th  respondent.   Learned  counsel  for  the
appellant has also rightly not advanced any argument in that  regard  except
emphasising on the facet that as the appellant had an independent  right  on
her own the High Court was under the lawful  obligation  to  address  itself
with regard to legal substantiality of the order  passed  by  the  appellate
authority on the  touchstone  of  exercise  of  writ  jurisdiction,  however
restricted it may be.  To bolster the said submission, immense  emphasis  is
placed on the nature of the allotment made in favour of the appellant.
9.    Be it noted, before the appellate authority,  the  appellant  had  got
herself  impleaded  after  coming  to  know  that  the  5th  respondent  had
preferred  an  appeal  challenging  the  order  of  cancellation,  and   the
appellate authority had considered the submissions of the original  allottee
as well as the present appellant.  The thrust of the matter is  whether  the
appellant can be regarded as a person who is a necessary party  to  the  lis
in such a situation and is entitled under law to advance the  argument  that
the order passed  by the appellate forum being  legally  unsustainable,  the
writ court was obliged to adjudicate the controversy on merits.
10.    It is an admitted position that village  Ardauna  had  initially  two
shops.  Shop no.2 was allotted in favour of the 5th respondent  and  he  was
granted licence to run the  fair  price  shop.   On  the  basis  of  certain
complaints being received the  competent  authority  after  an  enquiry  had
cancelled the licence.  The  appellate  authority  after  ascribing  certain
reasons, has overturned the said order.  The effect of the  said  order  has
to be that the  original  allottee  remains  an  allottee  and  his  licence
continues.   The  appeal  was  preferred  challenging  the  cancellation  of
allotment and the order of licence.  It is not a situation where the  appeal
had been treated to have been rendered  infructuous  on  the  basis  of  any
subsequent event, such as, the shop in question has been demarcated for  any
reserved category.  In that event, such  subsequent  fact  would  have  been
brought to the  notice  of  the  appellate  authority  and  in  that  event,
possibly no relief could have been granted by  the  appellate  authority  to
the appellant except removing the stigma.  The stand of the  State  is  that
initially the shop no.2 was attached to the other  licencee  and  thereafter
on the basis of the resolution passed by the Gram Sabha, it was allotted  to
the present appellant though it was  mentioned  that  it  had  been  granted
under the visually impaired quota.
But the character of the shop remained the same.
11.    At this juncture, it is obligatory  on  our  part  to  refer  to  the
letter-circular dated 1.2.2009 issued by the Chief Secretary,  which  refers
to the Government Order dated 17.8.2002 in respect of the  scheduled  caste,
scheduled tribe and other backward classes.  Thereafter, there is  reference
to certain horizontal reservation which refers  to  the  ladies  of  certain
reserved categories, family members of the  army  who  had  expired  in  the
concerned reserved category, ex-army  personnel,  freedom  fighters  of  the
concerned reserved categories and their wives and  the  handicapped  persons
of the concerned category.  After  so  stating,  the  circular  proceeds  to
mention as under:-

“In this regard I was direction to say that for the allotment  of  FPS  shop
in the rural and urban area, according to the above  arrangement  Horizontal
reservation is also approved, under which there is arrangement to  give  02%
reservation to the  candidate  of  handicapped  persons.   In  view  of  the
problem  of  the  blind  persons  after   appropriate   consideration,   the
administration  has  decided  that  the  blind  handicapped  be  granted  1%
reservation  under  Horizontal  reservation.  In  this  manner  now  to  the
handicapped person in place of 2% shall be approved 3%  reservation  and  in
this manner  1%  increased  reservation  shall  be  approved  only  for  the
handicapped of blind persons.  In this manner  in  para  no.3  of  the  Govt
order sub para Gh adding para 3(d), the handicapped person shall be  granted
1% reservation.

In this manner Horizontal reservation shall be 36% in place of 35% which  is
under the total reservation category of 50%.”

12.   After issue of the said circular, a  further  letter  dated  12.8.2008
was issued which mentioned  the  subject  granting  priority  to  the  blind
handicapped for completing the backlog in the vacant fair price shops  under
the public distribution system in rural and urban area.  It is  relevant  to
produce certain paragraphs of the said circular:-

“1.  Through Govt. order no. 2715/29-6-02-162-Sa/01 dated 17th August,  2012
for the allotment of FPS shop for  the  implementation  of  reservation  has
been issued guidelines and for the reservation of FPS shop also applied  the
Horizontal arrangement.  Under the above arrangement there is the  provision
to grant 2% reservation to the handicapped.  In the above  horizontal  there
was no clear arrangement for blind handicapped  persons.  Vide  Govt.  order
no. 311/29.06.08-162 SA/01 T.C. dated 01 February, 2008 amending  the  above
Govt. order granted one percent horizontal reservation to handicapped  blind
person.

2.    It came in the notice of the administration  that  in  regard  to  the
reservation of blind handicapped persons  vide  Govt.  order  they  are  not
getting the representation.  It is pertinent to mention  here  that  in  the
entire district of the state  given  the  direction  on  the  administration
level to complete  the  quota  of  reservation.   The  administration  after
appropriate consideration  has  taken  decision  till  then  backlog  cannot
completed for the present reservation of the blind,  since  then  the  blind
person should be granted first priority in the allotment  of  the  shop,  in
consideration they are fulfilling the prescribed  condition  issued  by  the
Govt for the allotment of the shop.  In case that resident  of  gram  Sabha,
who is entitled, the blind do not apply then the resident  of  concern  Gram
Sabha block development area,  other  blind  person  shall  be  entitled  to
apply.  In the allotment of FPS shop under  Public  Distribution  system  on
the basis of total shop the reservation  should  be  assessed.   Up  to  the
completion of blind  handicapped  should  not  furnish  the  shop  from  any
category, under the public distribution system in regard to  FPS  shop  time
to time issued Govt order should be treated amended up to this limit.”
                                                         [underling is ours]

13.   Though, the narration of facts is reflective of  a  different  contour
of controversy. i.e., allotment and grant of licence for a fair price  shop,
the seminal issue, as noted hereinabove, would hinge on the  answer  to  the
question pertaining to right to assail the  order  passed  in  appeal.   The
appellant was not impleaded as a party in the appeal  but  she  herself  got
impleaded.  Assuming the appellant authority would have decided  the  appeal
in favour of the  original  allottee  in  her  absence,  could  the  present
appellant, a subsequent allottee in respect of  the  same  shop,  have  been
allowed in law to make a grievance  by  invoking  the  jurisdiction  of  any
statutory forum or for that matter the High Court under Article 227  of  the
Constitution.   In  essence,  whether  she  is  a  necessary  party  to  the
litigation and entitled to contest the legal vulnerability of the  order  of
cancellation or in any manner advance the plea that her allotment would  not
be affected despite the  factum  that  the  order  of  cancellation  of  the
earlier allottee has been quashed.   To appreciate the said  issue  we  will
dwell  upon  certain  authorities  though  they  may  pertain  to  different
jurisprudence.
14.   First, it is necessary to understand about the  concept  of  necessary
and proper party.  A Four-judge Bench in Udit  Narain   Singh  Malpaharia  v
Additional Member Board of Revenue, Bihar and another[2] has observed thus:-

“7. ....it would be convenient at the outset to ascertain who are  necessary
or proper parties in  a  proceeding.   The  law   on  the  subject  is  well
settled:  it is enough if we state the principle.  A necessary party is  one
without whom no order can be made effectively; a  proper  party  is  one  in
whose absence  an  effective  order  can  be  made  but  whose  presence  is
necessary for a complete and final decision  on  the  question  involved  in
this proceeding. ”

15.   In Vijay Kumar Kaul and others v. Union of India  and  others[3]   the
court referred to the said decision and has opined thus:-

“36. Another aspect needs to be highlighted.  Neither  before  the  Tribunal
nor before the  High  Court,  Parveen  Kumar  and  others  were  arrayed  as
parties. There is no dispute over the factum that they  are  senior  to  the
appellants and have been conferred the benefit of promotion  to  the  higher
posts. In their  absence,  if  any  direction  is  issued  for  fixation  of
seniority, that is likely to jeopardise their interest. When they  have  not
been impleaded as parties such a relief is difficult to grant.

37. In this context we may  refer  with  profit  to  the  decision  in  Indu
Shekhar Singh v. State of U.P.[4] wherein it has been  held  thus:  (SCC  p.
151, para 56)

“56. There is another aspect of the matter. The appellants herein  were  not
joined as parties in the writ petition filed by the  respondents.  In  their
absence, the High Court could not have determined the question of  inter  se
seniority.”

38. In Public Service Commission v. Mamta Bisht[5] this Court while  dealing
with the concept of necessary parties and the effect of  non-impleadment  of
such a party in the matter when the selection process is  assailed  observed
thus: (SCC pp. 207-08, paras 9-10)

“9. … in Udit Narain Singh Malpaharia v. Board of  Revenue[6],  wherein  the
Court has explained the distinction between necessary  party,  proper  party
and proforma party and further held that  if  a  person  who  is  likely  to
suffer from the order of the court and has not been  impleaded  as  a  party
has a right to ignore the said order as it has been passed in  violation  of
the principles of natural justice. More so, proviso to Order  1  Rule  9  of
the Code of Civil Procedure, 1908 (hereinafter called ‘CPC’)  provides  that
non-joinder of necessary party be fatal. Undoubtedly, provisions of CPC  are
not applicable in writ jurisdiction by virtue of the  provision  of  Section
141  CPC  but  the  principles  enshrined  therein  are  applicable.   (Vide
Gulabchand Chhotalal Parikh  v.  State  of  Gujarat[7],  Babubhai  Muljibhai
Patel  v.  Nandlal  Khodidas  Barot[8]  and  Sarguja  Transport  Service  v.
STAT[9].)

10. In Prabodh Verma v. State of U.P.[10] and Tridip Kumar Dingal  v.  State
of W.B.[11], it has been held that if  a  person  challenges  the  selection
process, successful candidates or  at  least  some  of  them  are  necessary
parties.”

16.   At this juncture, it  is  necessary  to  state  that  in  Udit  Narain
(Supra) question arose whether a tribunal is a necessary party.  Recently  a
two-Judge  Bench  in  Asstt.  G.M  State  Bank  of  India  v.  Radhey  Shyam
Pandey[12] referred to Hari Vishnu Kamath v. Ahmad Ishaque and Ors.[13]  and
adverted to the concept of a tribunal being a necessary party  and  in  that
context ruled that:-
“In Hari Vishnu Kamath (supra), the larger Bench was  dealing  with  a  case
that arose from Election Tribunal which had ceased to  exist  and  expressed
the view how it is a proper party.  In Udit Narain Singh (supra), the  Court
was really dwelling upon the controversy with regard to the  impleadment  of
parties in whose favour orders had been passed and in that context  observed
that tribunal is a necessary party.   In Savitri  Devi  (supra),  the  Court
took exception to courts and tribunals being made parties.  It  is  apposite
to note here that propositions laid down in each case has to  be  understood
in proper perspective.  Civil courts, which decide matters,  are  courts  in
the strictest sense of the  term.   Neither  the  court  nor  the  Presiding
Officer defends the order before the superior court  it  does  not  contest.
If the High Court, in  exercise  of  its  writ  jurisdiction  or  revisional
jurisdiction, as the case may be,  calls  for  the  records,  the  same  can
always be called for by the High court without the Court  or  the  Presiding
Officer being impleaded as a party.  Similarly, with  the  passage  of  time
there have been many a tribunal which only adjudicate and they have  nothing
to do with the lis.  We may cite few  examples;  the  tribunals  constituted
under the Administrative Tribunals Act, 1985, the Custom, Excise  &  Service
Tax Appellate Tribunal, the Income Tax Appellate Tribunals,  the  Sales  Tax
Tribunal  and  such   others.    Every   adjudicating   authority   may   be
nomenclatured as a tribunal but the said authority(ies) are  different  that
pure and simple adjudicating authorities and that is  why  they  are  called
the authorities.  An Income  Tax  Commissioner,  whatever  rank  he  may  be
holding, when he adjudicates, he has to be made a party, for he  can  defend
his order.  He is entitled to contest.  There  are  many  authorities  under
many a statute.  Therefore, the proposition that can safely  be  culled  out
is that the authorities or the tribunals, who in law are entitled to  defend
the orders passed by them,  are  necessary  parties  and  if  they  are  not
arrayed as parties, the writ petition can be treated to be not  maintainable
or the court may grant liberty to implead them as  parties  in  exercise  of
its discretion.  There are tribunals  which  are  not  at  all  required  to
defend their own order, and in that case such tribunals need not be  arrayed
as parties.”

      The principle that has been culled out in the  said  case  is  that  a
tribunal or authority would only become a necessary party which is  entitled
in law to defend the order.
17.   The term “entitled to defend” confers an inherent right  to  a  person
if he or she is affected or is likely to be  affected  by  an  order  to  be
passed by any legal forum, for there would be violation of natural  justice.
 The principle of audi alteram partem has its  own  sanctity  but  the  said
principle of natural justice is not always put  in  strait  jacket  formula.
That apart, a person or an authority must have a legal  right  or  right  in
law to defend or assail.
18.   We may first clarify that as  a  proposition  of  law  it  is  not  in
dispute that natural justice is not an unruly horse.  Its applicability  has
to be adjudged regard being had to the effect and impact of  the  order  and
the person who claims to be affected; and  that  is  where  the  concept  of
necessary party become significant.   In The General Manager, South  Central
Railway, Secunderabad and another v. A.V.R. Siddhantti  and  Others[14]  the
Court was dealing with an issue whether the private respondent  therein  had
approached the High Court under Article 226 of the  Constitution  for  issue
of a writ of mandamus directing the General Manager, South  Central  Railway
and the Secretary, Railway Board to fix the inter se, seniority  as per  the
original proceedings, dated 16.10.1952, of the Railway Board and to  further
direct  them  not  to  give  effect  to  the  subsequent  proceedings  dated
2.11.1957 and 13.01.1961 of the Board issued by way  of  “modification”  and
‘clarification”  of  its  earlier  proceedings  of  1952.   The  High  Court
accepted the contentions of the  private  respondent  and  struck  down  the
impugned proceedings.  A contention was canvassed  before  this  Court  that
the writ petitioners had not impleaded about 120 employees who  were  likely
to be affected by the decision and, therefore, there  being  non-impleadment
despite they  being  necessary  parties,  it  was  fatal  to  the  decision.
Rejecting the said submission the court held:-
“As regards the second objection, it is to be noted that  the  decisions  of
the Railway Board impugned  in  the  writ  petition  contain  administrative
rules  of  general   application,   regulating   absorption   in   permanent
departments, fixation of  seniority,  pay  etc.  of  the  employees  of  the
erstwhile  Grain   Shop   Departments.   The   respondents-petitioners   are
impeaching the validity of those policy decisions on  the  ground  of  their
being violative of Articles 14 and 16 of the Constitution.  The  proceedings
are analogous to those in which the constitutionality of  a  statutory  rule
regulating seniority of Government servant is assailed. In such  proceedings
the necessary parties to be impleaded are those against whom the  relief  is
sought, and in whose absence no effective decision can be  rendered  by  the
Court. In the present case, the relief is claimed only against  the  Railway
which has been impleaded  through  its  representative.  No  list  or  order
fixing  seniority  of  the  petitioners  vis-a-vis  particular  individuals,
pursuant to the impugned decisions, is being challenged. The  employees  who
were likely to  be  affected  as  a  result  of  the  re-adjustment  of  the
petitioner’s seniority in accordance with the principles laid  down  in  the
Board’s decision of October 16, 1952, were, at the most, proper parties  and
not necessary parties, and their non-joinder could not be fatal to the  writ
petition.”

19.   The court further agreed with the principle  stated  in  B.  Gopalaiah
and Ors v. Government of  Andhra  Pradesh[15],  J.S.  Sachdev  and  Ors.  v.
Reserve Bank of India, New Delhi[16] and Mohan Chandra  Joshi  v.  Union  of
India and Ors.[17]   In this context reference to the authority in State  of
Himachal Pradesh and another v. Kailash Chand Mahajan and  Others[18]  would
be appropriate.  In  the  said  case  a  contention  was  raised  that  non-
impleadment of the necessary party was  fatal  to  the  writ  petition.   In
support of the said stand reliance was placed  upon  two  decisions  of  two
different High Courts; one, State of Kerala v. Miss Rafia Rahim[19] and  the
other in Padamraj  v. State of Bihar[20].  The Court distinguished both  the
decisions by holding thus:-


“The contention of Mr Shanti Bhushan that the  failure  to  implead  Chauhan
will be fatal to the writ petition does not seem to be  correct.  He  relies
on State of Kerala v. Miss Rafia Rahim. That case related  to  admission  to
medical college whereby invalidating the selection  vitally  affected  those
who had been selected already. Equally,  the  case  Padamraj  Samarendra  v.
State of Bihar, has no application. This was  a  case  where  the  plea  was
founded in Article 14 and arbitrary selection. The  selectees  were  vitally
affected. The plea that the decision of the court in the absence of  Chauhan
would be violative of principle of natural justice as any  adverse  decision
would affect him is not correct.”


The Court placed reliance  on  A.  Janardhana  v.  Union  of  India[21]  and
ultimately did not accept the submission that  the  writ  petition  was  not
maintainable because of non-impleadment of the necessary party.

20.   In this context the authority in Sadananda Halo and Others  v.  Momtaz
Ali Sheikh and Others[22] is quite pertinent.  The Division  Bench  referred
to the decision in All India SC & ST Employees’ Assn. v. A. Arthur  Jeen[23]
wherein this court had addressed the  necessity  in  joining  the  necessary
candidates as parties.  The Court  referred  to  the  principle  of  natural
justice as enunciated in Canara Bank v. Debasis Das[24].  We may  profitably
reproduce the same:-
“Natural justice has been variously defined. It is another name  for  common
sense justice. Rules of natural justice are not codified  canons.  But  they
are principles ingrained into the conscience of man. Natural justice is  the
administration of justice in a common sense liberal way.  Justice  is  based
substantially on natural ideals and  human  values.  The  administration  of
justice is to be freed from the narrow and restricted  considerations  which
are  usually  associated  with  a  formulated   law   involving   linguistic
technicalities and grammatical niceties. It  is  the  substance  of  justice
which has to determine its form. Principles of  natural  justice  are  those
rules which have  been  laid  down  by  the  courts  as  being  the  minimum
protection of the rights of the individual against the  arbitrary  procedure
that may  be  adopted  by  a  judicial,  quasi-judicial  and  administrative
authority while making an order affecting  those  rights.  These  rules  are
intended to prevent such authority from doing injustice.”

And again:-
“Concept of natural justice has undergone a great deal of change  in  recent
years. Rules of natural justice are not rules embodied always  expressly  in
a statute or in rules framed  thereunder.  They  may  be  implied  from  the
nature of the duty to be performed under a statute. What particular rule  of
natural justice should be implied and what its context should be in a  given
case must depend to a great extent on the facts and  circumstances  of  that
case, the framework of the statute under which the enquiry is held. The  old
distinction between a judicial act and an administrative  act  has  withered
away. The adherence to principles of natural justice as  recognised  by  all
civilised States is of supreme importance….”

21.   We have referred to the aforesaid passages as  they  state  the  basic
principle behind the doctrine of natural justice, that is, no  order  should
be passed behind the back of a person who is to  be  adversely  affected  by
the order.  The principle behind proviso to Order I Rule 9 that the Code  of
Civil Procedure enjoins it and the said principle is also applicable to  the
writs.  An unsuccessful candidate challenging the selection as  far  as  the
service jurisprudence is concerned is bound to make the selected  candidates
parties.
22.   In J.S. Yadav Vs State of U.P. & Anr[25] in Paragraph 31 it  has  been
held thus:-
“No order can be passed behind the back of a person adversely affecting  him
and such an order if passed, is liable to be ignored being  not  binding  on
such a party as the same has been passed in violation of the  principles  of
natural justice.  The principles enshrined in the proviso to Order 1 Rule  9
of the  Code  of  Civil  Procedure,  1908  provide  that  impleadment  of  a
necessary party is mandatory and in case of non-joinder of necessary  party,
the petitioner-plaintiff may not be entitled for the relief sought  by  him.
The litigant has to ensure that the necessary party is before the court,  be
it a plaintiff or a defendant, otherwise the proceedings will have to  fail.
In  service  jurisprudence  if  an  unsuccessful  candidate  challenges  the
selection process, he is bound to implead at least some  of  the  successful
candidates in representative capacity.  In case the  services  of  a  person
are terminated and another person is appointed at his  place,  in  order  to
get relief, the person appointed at his place is  the  necessary  party  for
the reason that even if the petitioner-plaintiff succeeds,  it  may  not  be
possible for the Court to issue  direction  to  accommodate  the  petitioner
without removing the person who filled up the post manned by the petitioner-
plaintiff. (Vide Prabodh Verma V. State of  U.P,  Ishwar  Singh  Vs.  Kuldip
Singh, Tridip Kumar Dingal Vs. State of W.B, State  of  Assam  V.  Union  of
India and Public Service Commission V. Mamta Bisht).  More  so,  the  public
exchequer cannot be burdened with the liability to pay  the  salary  of  two
persons against one sanctioned post”.

23.   To  appreciate  the  said  decision  in  a  real  perspective,  it  is
absolutely necessary to  state  the  facts  under  which  the  decision  was
rendered and such a statement of law was made.  The issue that arose  before
this Court related to an order passed by the  High  Court  of  Allahabad  by
which it had dismissed the writ petition filed by the appellant  challenging
the notification dated 28.05.2008 by which on the date  of  constitution  of
the Uttar Pradesh State Human Rights Commission, the appellant was  declared
to cease to hold the office as a member of the said commission.  This  Court
noted the facts which were relevant and germane  for  the  disposal  of  the
appeal in paragraph 2.  The appellant therein was appointed as a  member  of
the Commission on 29.06.06 for a period of five  years.  Certain  provisions
of the  Protection  of  Human  Rights  Act  1993,  stood  amended  vide  the
Protection of Human Rights (Amendment Act, 2006) which came  into  force  on
23.11.2006.   After  completion  of  the  tenure  by  Chairperson   of   the
Commission and other members in October 2007,  the  appellant  remained  the
lone working member of the Commission.   The  State  Government  issued  the
notification on 28.05.2008 to the effect that the appellant  had  ceased  to
hold the office as a Member of the Commission.  The  said  notification  was
challenged on the ground that he had been appointed for  a  tenure  of  five
years and that period  could  not  be  curtailed.   The  appellant  had  not
impleaded  any  of  the  members  who  had  been  appointed  as  members  on
06.06.2008.   Various contentions were raised on  behalf  of  the  appellant
and the said submissions were resisted by the State on two  counts,  namely,
that the appellant had not impleaded the newly appointed members as  parties
and further he had suffered the disability by virtue  of  the  operation  of
the amended  law.   This  court  referred  to  the  provision  contained  in
unamended Section 21(2) of the Act and the  Amended  Section  21(2)  of  the
Act.  Prior to the amendment, the qualification prescribed  for  Member  was
“a person who is or has been a District Judge in that State” and  after  the
amendment the qualification of the member was changed to the extent  “he  is
or has been a Judge of a High Court or District Judge in the  State  with  a
minimum of 7 years experience as a District Judge”.  The court  referred  to
Article 236(a) of the Constitution and Section 3(17) of the General  Clauses
Act, 1897.  Be it stated, the contention was advanced that a person who  has
gained experience as an Additional District Judge, he would be entitled  for
consideration as his experience is equivalent to that of a  District  Judge.
Repelling the said submission, the Court held:-
“12. The aforesaid submission  seems  to  be  very  attractive  but  has  no
substance for the reason that a cadre generally  denotes  a  strength  of  a
service or a part  of  service  sanctioned  as  a  separate  unit.  It  also
includes sanctioned strength  with  reference  to  grades  in  a  particular
service. Cadre may also include temporary, supernumerary  and  shadow  posts
created in different grades. The expressions “cadre”, “posts” and  “service”
cannot be equated with each other. (See Union of India v.  Pushpa  Rani  and
State of Karnataka v. K. Govindappa[26].) There is no prohibition in law  to
have two or more separate grades in the same cadre based on  an  intelligent
differential.  Admittedly,  the  post  of  District  Judge  and   Additional
District  Judge  in  the  State  of  U.P.  is  neither  interchangeable  nor
intertransferable. The aforesaid Rules  merely  provide  for  an  integrated
cadre for the  aforesaid  posts.  Thus,  the  submission  is  liable  to  be
rejected being preposterous.

                         xxx         xxx        xxx

14. In such a fact situation, we do not see any  cogent  reason  to  take  a
view contrary to the same for the reason that in  case  the  legislature  in
its wisdom has prescribed a minimum experience of seven years as a  District
Judge knowing it  fully  well  the  existing  statutory  and  constitutional
provisions, it does not require to be interpreted ignoring  the  legislative
intent. We cannot proceed with an assumption that legislature had  committed
any mistake enacting the said provision. Clear statutory provision  in  such
a case is required to be literally construed by considering the  legislative
policy. Thus, no fault can be found with the impugned judgment and order  of
the High Court on this count.”

24.   After so stating, the Court noted the fact  that  2006  amendment  was
not under challenge.  However, it noted  that  the  issue  agitated  by  the
appellant was that the legislature  never  intended  to  apply  the  amended
provisions with  retrospective  effect  and,  therefore,  it  could  not  be
discontinued  from  the  post,  for  his  rights  stood  protected  by   the
provisions of Section 6 of the General Clauses Act. The  Court  referred  to
the authorities in State of Punjab v. Bhajan Kaur[27],  Sangam  Spinners  v.
Regl.   Provident   Fund   Commr.[28],   and   Railway   Board    v.    C.R.
Rangadhamaiah[29] and held as follows:-
“Thus, from the above, it is evident that accrued  rights  cannot  be  taken
away by  repealing  the  statutory  provisions  arbitrarily.  More  so,  the
repealing law must provide for taking away  such  rights,  expressly  or  by
necessary implication.”

25.   Thereafter, the Court proceeded to lay down as follows:-
“There is no specific  word  in  the  2006  Amendment  Act  to  suggest  its
retrospective applicability. Rather the positive  provisions  of  Section  1
suggest to the contrary as it reads:-

“1. Short title and commencement.—(1)      ***

(2) It shall come into force on such date as the Central Government may,  by
notification in the Official Gazette, appoint.”

Undoubtedly, the amended provisions came into force on 23-11-2006 vide  S.O.
2002 (E), dated 23-11-2006, published in the Gazette  of  India,  Extra  Pt.
II, Section 3(ii) dated 23-11-2006. In fact,  the  date  23-11-2006  is  the
pointer and puts the matter beyond doubt. Thus, in view of the above, we  do
not have any hesitation to declare that the Notification dated 28-5-2008  is
patently illegal.”

26.   After so stating, in paragraph 32 of  the  judgment,  the  Court  held
thus:-
“The appellant did not implead any person who  had  been  appointed  in  his
place as a Member of the Commission. More so, he made it  clear  before  the
High Court  that  his  cause  would  be  vindicated  if  the  Court  made  a
declaration that he had illegally been dislodged/restrained to  continue  as
a Member of the Commission. In view of the above, he cannot be  entitled  to
any other relief except the declaration in his favour which  had  been  made
hereinabove that the impugned Notification dated 28-5-2008 is illegal.”

27.   On a keen understanding of the aforesaid authority,  two  aspects  are
clear.  First, it had noted the fact what was pleaded before the High  Court
that the selected members were not arrayed as parties.  Thereafter,  it  had
proceeded to deal with the distinction  between  a  District  Judge  and  an
Additional  District  Judge,  that  is,  for  the  purpose  of  meeting  the
qualification under  the  amended  Act.   Thereafter,  as  is  manifest,  it
proceeded  to  analyse  the  retrospective  applicability  of  the   amended
provision and opined that the provision is  not  retrospectively  applicable
and, therefore, notification is bad in law.  Paragraph 31  of  the  decision
proceeded to state that unless necessary parties are arrayed, no relief  can
be granted.  Irrefragably, there can be no cavil over the  said  proposition
of law.  Thereafter, the Division Bench proceeded to state that in case  the
services of a person are terminated and another person is appointed  in  his
place, in order to get the relief, the person appointed at his place is  the
necessary party for the reason that even if the petitioner succeeds, it  may
not be possible for the Court  to  issue  a  direction  to  accommodate  the
petitioner without removing the person who filled up the post manned by  the
petitioner.  To arrive at the said conclusion, five  authorities  have  been
relied upon.  We shall discuss at length the said decisions.

28.   We shall deal with the authorities in seriatim.  A  three-judge  Bench
decision in  Prabodh  Verma  and  Others  v.  State  of  Uttar  Pradesh  and
Others[30] requires to be addressed.  The facts in the  said  case  deserved
to be stated.  In the said  case  the  principal  question  that  arose  for
determination before this Court  was  the  constitutional  validity  of  two
Uttar Pradesh Ordinances, namely, (1) The Uttar  Pradesh  High  Schools  and
Intermediate  Colleges  (Reserve  Pool  Teachers)  Ordinance,   1978   (U.P.
Ordinance  10  of  1978),  and  (2)  The  Uttar  Pradesh  High  Schools  and
Intermediate Colleges Reserve Pool Teachers) (Second) Ordinance, 1978  (U.P.
Ordinance 22 of 1978).  The High Court on certain reasons  had  struck  down
the ordinance.  Be it noted, the  writ  petition  was  filed  by  the  Uttar
Pradesh Madhyamik Shikshak Sangh.  Apart from the question of validity,  the
subsidiary question that arose before this Court is whether the  termination
of the services of the appellants and the petitioner before  this  Court  as
secondary school teachers and intermediate college lecturers following  upon
the High Court judgment is valid and, if not, the relief to which  they  are
entitled.  After narrating the facts,  the  Court  observed  that  the  writ
petition  filed  by  the  Sangh  suffered  from  two  serious,  though   not
incurable, defects. We think it appropriate to reproduce  the  statement  of
facts as reproduced in the judgment.
“The first defect was that of non-joinder of  necessary  parties.  The  only
respondents to the Sangh’s petition were the State of Uttar Pradesh and  its
concerned officers. Those who were vitally concerned,  namely,  the  reserve
pool teachers, were not made parties — not even by joining some of  them  in
a representative capacity, considering that their number was too  large  for
all  of  them  to  be  joined  individually  as  respondents.  The   matter,
therefore, came to be decided in their absence. A High Court  ought  not  to
decide a writ petition under Article 226 of  the  Constitution  without  the
persons who would be vitally affected by its judgment  being  before  it  as
respondents or at least by some of them being before it as respondents in  a
representative capacity if their number is too large,  and,  therefore,  the
Allahabad High Court ought not to have proceeded to hear and dispose of  the
Sangh’s writ petition without  insisting  upon  the  reserve  pool  teachers
being made respondents to that writ petition,  or  at  least  some  of  them
being  made  respondents  in  a  representative  capacity,   and   had   the
petitioners refused to do so, ought to have dismissed that petition for non-
joinder of necessary parties.”

29.   Thereafter the Court proceeded to summarise  its  conclusion  and  the
relevant conclusion for the present purpose are reproduced below:-
“50 (1)  A High Court ought not to hear  and  dispose  of  a  writ  petition
under Article 226 of the Constitution  without  the  persons  who  would  be
vitally affected by its judgment being before it as respondents or at  least
some of them being before it as respondents in a representative capacity  if
their number is too large to join them as respondents individually, and,  if
the petitioners refuse to so join, then the High Court ought to dismiss  the
petition for non-joinder of necessary parties.

(2) The Allahabad High Court  ought  not  to  have  proceeded  to  hear  and
dispose of Civil Miscellaneous  Writ  No.  9174  of  1978  —  Uttar  Pradesh
Madhyamik Shikshak Sangh v. State of Uttar Pradesh — without insisting  upon
the reserve pool teachers being made respondents to that  writ  petition  or
at least some of them being made respondents  thereto  in  a  representative
capacity as the number of the reserve pool teachers was too large  and,  had
the petitioners refused to do so, to dismiss that  writ  petition  for  non-
joinder of necessary parties.”

30.   On a studied perusal of the aforesaid judgment, it  is  crystal  clear
that this Court had opined  that  when  the  constitutional  validity  of  a
provision is challenged and there are beneficiaries of the  said  provision,
some of them in a representative capacity have to be  made  parties  failing
which the writ court would not be justified in hearing a  writ  petition  in
the absence of the selected candidates when they are  already  appointed  on
the basis of the provision which was under assail before the writ court.
31.   In Ishwar Singh v Kuldip Singh and others[31], a two-Judge  Bench  was
dealing with the situation where the selection and  consequent  appointments
were challenged by unsuccessful candidates before the High  Court  primarily
on the ground that the interviews held for the said selection  were  a  sham
affair.  The High Court had quashed the selection and  the  appointments  on
the foundation that  the  interviews  held  were  neither  fair  nor  proper
thereby vitiating the selection.  This Court  dislodged  the  order  of  the
High Court on a singular count which is to the following effect: -
“It is not disputed by the learned  counsel  for  the  parties  that  except
Ishwar Singh, no other selected candidate  was  impleaded  before  the  High
Court.   The selection and the appointments have been  quashed  entirely  at
their back.  It is further  stated  that  even  Ishwar  Singh,  one  of  the
selected candidates, who was a party,  had not been served and as  such  was
not heard by the High Court.  We are of the view that  the  High  Court  was
not justified in hearing the writ petition in the absence  of  the  selected
candidates especially when they had already been appointed.”

32.   The decision in the aforesaid  case  is  graphically  clear  that  the
selection was under challenge but  the  selectees  were  not  made  parties.
There can be no shadow of  doubt  that  they  were  necessary  parties  and,
therefore,  this  Court  expressed  the  view,  which  we  have   reproduced
hereinabove.
33.   In Tridip  Kumar  Dingal  and  other  v.  State  of  West  Bengal  and
Others[32] an appeal was preferred by the  appellants  being  aggrieved  and
dissatisfied with the judgment  and  order  passed  by  the  High  Court  of
Calcutta.  The facts giving rise to the appeal by special leave before  this
Court were that the State of West Bengal in the  Department  of  Health  and
Family Welfare taking note of the acute  shortage  and  non-availability  of
adequate number of Medical Technologists, took an initiative to fill up  the
requisite number of vacancies  by  taking  up  the  matter  with  Employment
Exchange.  A Memorandum was issued  by  the  Assistant  Director  of  Health
Services  (Administration)  to  the  Director  of  Employment  Exchange  for
sponsoring the names of candidates for the post  of  Medical  Technologists.
Eventually, on the basis of the marks obtained  in  the  oral  interview,  a
list was prepared.  The candidates who could not get entry into  the  select
list challenged the same before the  West  Bengal  Administrative  Tribunal.
The tribunal granted liberty to the authorities to make appointments of  the
candidates selected and empanelled subject to the  result  in  the  Original
Application.  The matter at various  times  travelled  to  the  High  Court,
which directed for disposal of the Original  Application.   Eventually,  the
tribunal directed for preparation of the fresh merit list on  the  basis  of
marks obtained in the  written  examination  and  oral  interview  excluding
those who were already in service.  The  tribunal  also  observed  that  the
Committee had fixed 40% as pass marks in the oral  interview  and  the  said
standard should be applied on the total marks as pass marks and  appointment
should be given from the fresh panel so prepared in order of  merit  subject
to reservation and  filling  up  of  vacant  posts.   The  decision  of  the
tribunal was challenged before the High Court  and  the  High  Court  opined
that the question of retaining those candidates who had been appointed  must
be considered afresh by the tribunal since the  tribunal  had  not  assigned
any reason as to why they should be permitted to be  continued  in  service.
The High Court had expressed the view that  no  sympathy  should  have  been
shown to the candidates when the tribunal itself had expressed  the  opinion
that the selection process was vitiated.  Various other  reasons  were  also
ascribed by the High Court.   After  remit,  the  tribunal  considering  the
rivalised submissions and taking an overall view of the  matter  found  that
the selection process  was  bona  fide  and  in  accordance  with  law  and,
therefore, it requires to be  approved.   The  tribunal  further  held  that
appointments which had already been made by the authorities  in  respect  of
190 candidates who had gained experience of more than three  years  of  work
of investigation entrusted to them should not  be  disturbed.   A  direction
was issued to the State authorities  to  offer  appointments  to  successful
candidates in the waiting list subject  to  the  availability  of  vacancies
following medical examination and police verification.   The  said  judgment
was challenged before the High Court  which  set  aside  the  order  of  the
tribunal and directed a fresh panel of Medical Technologists to be  prepared
by the State Government on the basis of the qualifying marks  obtained  both
in the written test as well as in the oral  interview.   Certain  directions
were given by the High Court including the one if those candidates  who  had
already been appointed did  not  find  place  in  the  panel,  consequential
orders would be made by the State Government  but  those  who  were  in  the
panel were accommodated if by reason of existing vacancies, they  should  be
accommodated.   The said order became the subject matter  of  special  leave
petition which was dismissed as withdrawn.  As the order of the  High  Court
was not implemented,  a  contempt  petition  was  filed.   An  unconditional
apology was offered on behalf of  the  contemners  stating  that  they  were
ready and willing to carry out the directions.  At that juncture,  the  High
Court passed an interim order to the extent that Court was not  inclined  to
issue any direction for removal/termination of services of  66  persons  who
were working since three to four years.  The Court also directed  the  State
to report to the Court as regards the exact number of vacancies  which  were
available for the appointment of the panel to  be  prepared  and  to  inform
whether nine vacancies which had become defunct could be revived.  When  the
matter was placed again on the next date, the High Court noted that a  panel
of 586 candidates, had been prepared on the basis of 40% marks  obtained  by
candidates both in the written test as well as in the  oral  interview.   It
also observed that 66 persons who had been appointed could  be  accommodated
by granting liberty to the State Government in the manner  it  thought  best
without disturbing their seniority or continuity  of  service.   It  further
directed that remaining vacancies should  be  filled  up  on  the  basis  of
seniority position from the panel of 586  candidates.   With  the  aforesaid
directions, the contempt petition was disposed of and  the  said  order  was
assailed before this Court.  After  hearing  the  learned  counsel  for  the
parties, this Court came to hold that the contention on behalf of the  State
Government  that  written  examination  was  held   for   shortlisting   the
candidates  and  was  in  the  nature  of  elimination  test  had  no  doubt
substance, for the said authorities regard being had to the large number  of
applicants seeking appointment and small number of vacancies, had  no  other
option but to screen candidates by holding a written  examination  more  so,
when there were no rules in that regard.   This Court  further  opined  that
it was an administrative decision and such a plea was raised  by  the  State
in the first round of litigation before the tribunal  which  had  held  that
the action of State authorities to be wrong and the  High  Court  upheld  it
and State did not challenge the order before this Court and,  therefore,  in
the second round the  High  Court  did  not  commit  any  error  of  law  in
directing the authorities to prepare  merit  list  on  the  basis  of  marks
obtained  by  the  candidates  in  written  examination  as  also  in   oral
interview.  It was further held that in such a situation it was not open  to
the State authorities to reiterate and reagitate  the  same  ground  on  the
same occasion.  A contention was raised on  behalf  of  the  appellant  that
there cannot be more than 15% marks at the oral  interview,  which  was  not
accepted by this Court at that stage, for such a  direction  was  issued  as
early as in 2000 and the appellants were applicants before the Tribunal  and
the petitioners before the High Court had accepted  the  said  decision  and
did  not  challenge  the  legality  thereof  by  approaching   this   Court.
Thereafter, the Court proceeded to deal with the  66  candidates.   In  that
context it ruled as follows:-
“Regarding protection granted to 66 candidates, from the record it is  clear
that their names were sponsored by the employment  exchange  and  they  were
selected and appointed in 1998-1999. The candidates who were unable  to  get
themselves selected and who raised a grievance and made a  complaint  before
the Tribunal by filing applications ought  to  have  joined  them  (selected
candidates) as respondents in the original application, which was not  done.
In any case, some of them ought to have been arrayed  as  respondents  in  a
“representative capacity”.  That  was  also  not  done.  The  Tribunal  was,
therefore,  wholly  right  in  holding  that  in  absence  of  selected  and
appointed candidates and without affording opportunity of hearing  to  them,
their selection could not be set aside.”
                                                            [Emphasis added]

34.   We have referred to the said authority in a  comprehensive  manner  to
understand the ratio.  It is quite  simple.   If  a  non-selected  candidate
challenges the selection, he  is  under  legal  obligation  to  implead  the
selected candidates as they are necessary parties and there can  be  no  two
opinions as regards such a proposition of law.
35.   In State of Assam v. Union  of  India  and  Others[33]  the  State  of
Assam, being aggrieved by the decision  rendered  in  writ  appeal  and  the
dismissal of the review application filed by it, had approached this  Court.
 The factual matrix as was presented before the  Court  was  that  Union  of
India had introduced “Family  Welfare  Scheme”  under  its  Family  Planning
Programme and under the said Scheme, there was a provision  for  appointment
of Voluntary Female Attendants on a monthly honorarium of Rs.50/- per  month
from the inception  of  the  Scheme  which  was  subsequently  increased  to
Rs.100/- per month, w.e.f.  February, 2001.  As the factual narration  would
show a writ petition was filed claiming benefit from the respondents of  the
pay of Rs.900/- per month, the minimum of  the  pay  scale  payable  to  the
Voluntary Female Attendants.  A prayer was also made for regularisation.   A
direction was given by the High Court that it was for the  State  Government
to consider the prayers in accordance with law.  A similar  writ  was  filed
by another female attendant wherein the Union of  India  and  the  State  of
Assam were arrayed as respondents and the High Court disposed  of  the  writ
petition relying  on  the  earlier  judgment.   The  Union  of  India  being
aggrieved preferred a writ appeal in which it did not implead the  State  of
Assam as a party to those proceedings.   The  contention  of  the  Union  of
India was that the voluntary female  attendants  were  not  their  employees
and, therefore, the Single Judge was not correct  in  issuing  direction  to
the Union of India for payment of minimum pay scale.  It was urged that  the
State  of  Assam  had  issued  appointment  letters  to  the   said   female
attendants.  There was no mention in those  appointment  letters  that  they
were appointed under the centrally sponsored scheme.  A prayer was  made  to
discharge them of their liability of any payment of  wages  to  the  private
respondents appointed by the State Government.  The Division Bench  accepted
the stand of the Union of India and held that the  appointment  letters  had
nothing to link them  with  the  centrally  sponsored  scheme  of  voluntary
workers at fixed honorarium.  On the basis of the  aforesaid  analysis,  the
Division Bench observed that the Union of India  had  no  responsibility  of
making the payment on the minimum of the pay scale to the  voluntary  female
attendants,  and  fixed  the  liability  on  the  State  of  Assam.    Being
aggrieved, the State of Assam had preferred the  appeal  by  special  leave.
The two-Judge Bench referred to the decision  in  Udit  Narain  (supra)  and
opined thus:-
“15. In aid of  his  submission,  the  learned  Senior  Counsel  has  placed
reliance on the law laid down by this Court in Udit Narain Singh  Malpaharia
v. Board of Revenue, wherein it was held that in proceedings for a  writ  of
certiorari, it is not only the tribunal or authority whose order  is  sought
to be quashed but also the  parties  in  whose  favour  the  said  order  is
issued, are necessary parties and that it is in the discretion of the  court
to add or implead proper parties for completely settling all  the  questions
that may  be  involved  in  the  controversy  either  suo  motu  or  on  the
application of a party to the writ or on application filed at  the  instance
of such proper party.

16. We respectfully agree with the observations made by this Court  in  Udit
Narain case and adopt the same. We may add that the law is now well  settled
that  a  necessary  party  is  one  without  whom,  no  order  can  be  made
effectively and a proper party is one in whose absence  an  effective  order
can be made but whose  presence  is  necessary  for  a  complete  and  final
decision of the question involved in the proceeding.

                               xxx   xxx   xxx

23. We are also unable to comprehend any possible reasons for the  Union  of
India to omit the State of Assam from the  array  of  parties  in  the  writ
appeals filed before the Division Bench of the High Court. The fact  remains
that they were not made parties to the proceedings. The High Court,  in  our
view, while allowing the appeals filed by the Union of  India  and  shifting
the liability of payment of salary/wages to the Voluntary Female  Attendants
on the State of Assam, should have taken a little more care and  caution  to
find out  whether  the  State  of  Assam  is  arrayed  as  a  party  to  the
proceedings and whether they are served with the notice of the  appeals  and
in spite of service, whether they have remained absent. This  is  the  least
that is expected from the Court. Without  making  this  small  verification,
the Division Bench of the High Court  has  fixed  huge  recurring  financial
liability on the State Government.  In  our  opinion,  in  matters  of  this
nature, even by mistake of the party, the proper parties  were  not  arrayed
in the proceedings, it is the duty of the Court to see that the parties  are
properly impleaded. It is well-settled  principle  consistent  with  natural
justice that if some persons  are  likely  to  be  affected  on  account  of
setting aside a decision enuring to their  benefit,  the  Court  should  not
embark upon the consideration and the correctness of such  decision  in  the
absence of such persons.”


36.   The proposition of law stated hereinabove  has  to  be  understood  in
proper perspective.  There were two prayers in the writ  petition.  One  was
for payment of salary, the other was for  regularisation.   Ultimately,  the
Division Bench absolved the Union of India from  liability  of  payment  and
fastened it on the State.  The State was not arrayed as a party to the  lis.
 That was an accepted fact.  Needless to emphasise the State of Assam was  a
necessary party and more so when the Union of India  was  taking  the  stand
that it was the State of Assam which had to bear the liability.   The  State
of Assam was entitled to resist the stand and stance put forth by the  Union
of India in law.
37.    In  Public  Service  Commission,  Uttranchal  v.  Mamta   Bisht   and
Others[34] it was held by  a  two-Judge  Bench  that  the  first  respondent
therein wanted her  selection  against  a  reserved  category  vacancy  and,
therefore, the last selected candidate in  that  category  was  a  necessary
party and without impleading her the  writ  petition  could  not  have  been
entertained by the High Court,  for  if  a  person  challenges  a  selection
process, successful candidates or at least some of them are  to  be  arrayed
as parties they being necessary parties.  To appreciate the controversy,  we
must reproduce two paragraphs from the said authority:-
“9. In case Respondent 1 wanted her selection against the reserved  category
vacancy, the last selected candidate in that category was a necessary  party
and  without  impleading  her,  the  writ  petition  could  not  have   been
entertained by the High Court in view of the  law  laid  down  by  nearly  a
Constitution Bench of this Court in Udit Narain Singh  Malpaharia  v.  Board
of  Revenue,  wherein  the  Court  has  explained  the  distinction  between
necessary party, proper party and pro forma party and further held  that  if
a person who is likely to suffer from the order of the  court  and  has  not
been impleaded as a party has a right to ignore the said  order  as  it  has
been passed in violation of the principles  of  natural  justice.  More  so,
proviso  to  Order  1,  Rule  9  of  the  Code  of  Civil  Procedure,   1908
(hereinafter called “CPC”) provides that non-joinder of necessary  party  be
fatal.  Undoubtedly,  provisions  of  CPC  are  not   applicable   in   writ
jurisdiction by  virtue  of  the  provision  of  Section  141  CPC  but  the
principles enshrined therein  are  applicable.  (Vide  Gulabchand  Chhotalal
Parikh v. State of Gujarat, Babubhai Muljibhai  Patel  v.  Nandlal  Khodidas
Barot[35] and Sarguja Transport Service v. STAT[36].)

10. In Prabodh Verma v. State of U.P. and Tridip Kumar Dingal  v.  State  of
W.B., it has been held that if a person challenges  the  selection  process,
successful candidates or at least some of them are necessary parties.”

38.   The said decision, as we understand, clearly spells out  that  in  the
absence of a necessary party, no adjudication can take place and,  in  fact,
the non-joinder would be fatal to the case.
39.   The aforesaid decisions do not lay down as a proposition of  law  that
in every case when a termination is challenged, the affected person  has  to
be made a party.  What has been stated is when one  challenges  a  provision
as ultra vires the persons who are likely  to  be  affected,  some  of  them
should be made parties in a representative  capacity.   That  has  been  the
consistent  view  of  this  Court  in  service  jurisprudence.   Some  other
decisions, which have been relied upon are directly  connected  with  regard
to the selection and selectees.  On a perusal of the analysis made  in  J.S.
Yadav (supra), we are disposed to think  that  the  Court  has  applied  the
principle pertaining to the constitutional validity by equating it with  the
interpretation of a provision, whether it is retrospective  or  prospective.
That apart, the Court, as is evident from paragraph 32 of the judgment,  has
noted that the prayer made by the appellant only related to the  declaratory
relief.   The said decision has to be understood in the  context.   A  ratio
of a decision has to be understood in its own context, regard being  had  to
the factual exposition.  If there has been  advertence  to  precedents,  the
same has to be seen to  understand  and  appreciate  the  true  ratio.   The
ratiocination  in  the  said  decision   is   basically   founded   on   the
interpretation of the statutory  provision  and  the  relief  claimed.   The
Court has been guided by the fact that when the  interpretation  as  regards
the provision whether it  is  retrospective  or  prospective,  the  selected
members are necessary parties.
40.   In this regard, we may refer to the rule stated by  Lord  Halsbury  in
Quinn v. Leathem[37]:-
“Every judgment must be read as applicable to the  particular  facts  proved
or assumed to be proved, since the generality of the expressions  which  may
be found there are not intended to be  expositions  of  the  whole  law  but
govern and are qualified by the particular facts of the case in  which  such
expressions are to be found.”

41.   A three-Judge Bench in Union of India and  others  v.  Dhanwanti  Devi
and others[38] while discussing about the precedent  under  Article  141  of
the Constitution, held that:-
“9.   Before adverting to and  considering  whether  solatium  and  interest
would be payable under the Act, at  the  outset,  we  will  dispose  of  the
objection raised by Shri Vaidyanathan that Hari Krishan Khosla  case[39]  is
not a binding precedent nor  does  it  operate  as  ratio  decidendi  to  be
followed as a precedent and is per se per incuriam.  It  is  not  everything
said by a Judge while giving judgment  that  constitutes  a  precedent.  The
only thing in a Judge’s decision binding  a  party  is  the  principle  upon
which the case is decided and for this reason it is important to  analyse  a
decision and isolate from it the ratio decidendi.  According  to  the  well-
settled  theory  of  precedents,  every  decision   contains   three   basic
postulates—(i) findings  of  material  facts,  direct  and  inferential.  An
inferential finding of facts is the inference which  the  Judge  draws  from
the direct, or perceptible facts; (ii) statements of the principles  of  law
applicable to the legal problems disclosed by the facts; and (iii)  judgment
based on the combined effect of the above. A decision is only  an  authority
for what it actually decides. What is of the essence in a  decision  is  its
ratio and not every observation found therein  nor  what  logically  follows
from the various observations made in the judgment. Every judgment  must  be
read as applicable to the particular facts proved, or assumed to be  proved,
since the generality of the expressions which may  be  found  there  is  not
intended to be exposition of the whole law, but governed  and  qualified  by
the particular facts of the case in which such expressions are to be  found.
It would, therefore, be not profitable to extract a sentence here and  there
from the judgment and to build upon it because the essence of  the  decision
is its ratio and not every observation found  therein.  The  enunciation  of
the reason or principle on which a question before a court has been  decided
is alone binding as a precedent. The  concrete  decision  alone  is  binding
between the  parties  to  it,  but  it  is  the  abstract  ratio  decidendi,
ascertained on a consideration of the judgment in relation to  the  subject-
matter of the decision, which alone has the force of law and which, when  it
is clear what it was, is binding. It is only the principle laid down in  the
judgment that is binding law  under  Article  141  of  the  Constitution.  A
deliberate judicial decision arrived at  after  hearing  an  argument  on  a
question which arises in the case or  is  put  in  issue  may  constitute  a
precedent, no matter for what reason, and the precedent by long  recognition
may mature into rule of stare decisis. It is the rule  deductible  from  the
application of law  to  the  facts  and  circumstances  of  the  case  which
constitutes its ratio decidendi.

10. Therefore, in order to understand and appreciate the binding force of  a
decision it is always necessary to see what were the facts in  the  case  in
which the decision was given  and  what  was  the  point  which  had  to  be
decided. No judgment can be read as if it is a statute. A word or  a  clause
or a sentence in the judgment cannot be regarded as  a  full  exposition  of
law. Law cannot afford to be static and therefore, Judges are to  employ  an
intelligent technique in the use of precedents......”

42.   From the aforesaid, it is clear as day that what has  been  stated  in
paragraph 31 in the case of J.S. Yadav (supra) does  not  even  follow  from
the authorities referred to therein.  We  have  analysed  the  principle  of
when and in what circumstances, a decision becomes a binding precedent.   We
have also discussed the facts at length  keeping  in  view  the  declaratory
relief made in the writ petition  preferred  before  the  High  Court.   The
context in which the observations have been made have to be  kept  in  mind.
Regard being had to the factual scenario  in  entirety  and  further  taking
note  of  the  fact  that  the  court  was  basically  concerned  with   the
retrospective  and  prospective  applicability  of  the  provision,  we  are
disposed to think that it is not a binding  precedent  for  the  proposition
that in a case of termination or removal or dismissal, the person  appointed
in the place of a terminated, removed  or  dismissed  employee  would  be  a
necessary party.  That is how the said authority has to be  understood,  and
we so understand.
43.   It has been held in Debasis Das (supra),  the  principles  of  natural
justice are to be determined in the context and it must depend  to  a  great
extent on the facts and circumstances of that case.  In  this  context,  the
decision in Kailash Chand Mahajan (supra) becomes extremely  apposite.   May
it be noted, we have already referred to the said judgment  but  a  detailed
analysis is necessary to understand the present controversy.   In  the  said
case, the first respondent, after his retirement, was appointed as a  Member
of the Himachal Pradesh  State  Electricity  Board  and  thereafter  as  the
Chairman of the said Board.  He was granted extensions from  time  to  time.
The last extension was issued on June 12, 1989 for a period of  three  years
i.e., July 25,  1992.   After  the  General  Elections  to  the  Legislative
Assembly  which  was  held  in  January  1990,  the  Government   issued   a
notification on  March  6,  1990  by  which  the  earlier  notification  was
superseded and the appointment  of  the  said  respondent  as  Chairman  was
extended from July 25, 1989 to March  6,  1990.   Another  notification  was
issued on the same date directing that one R.S. Chauhan  shall  function  as
the Chairman of the Board.  The first respondent preferred a  writ  petition
assailing  the  validity  of  the  notification  by  which  his  period  was
curtailed and prayed for certiorari  to  quash  the  same.   When  the  writ
petition was pending, a notification was issued terminating the  appointment
of the writ petitioner.  The High Court  had  passed  a  direction  that  no
appointment to the post of Chairman could be made  till  further  orders  of
the Court.  That order was passed on 30th  March,  1990.   At  the  time  of
conclusion of the hearing, the  learned  Advocate  General  after  obtaining
instructions filed an undertaking to the effect that the notification  dated
March 6, 1990  curtailing  the  period  of  the  writ  petitioner  would  be
withdrawn.  Accepting the undertaking, the writ petition  was  disposed  of.
On June 11, 1990, the Government  withdrew  both  the  notifications,  i.e.,
March 6, 1990 and March 30, 1990.  On June 11, 1990,  a  show  cause  notice
was issued to Kailash Chand Mahajan and  eventually  he  was  suspended  and
R.S. Chauhan, a  Member  of  the  Board  was  allowed  to  function  as  the
Chairman.   The  issuance  of  the  show  cause  notice  and  the  order  of
suspension were challenged in  a  writ  petition.   Various  arguments  were
advanced  from  both  sides  and  the  High  Court  eventually  quashed  the
notifications issued by the State.  Be it noted,  a  contention  was  raised
before the High Court  that  R.S.  Chauhan  having  been  appointed  as  the
Chairman, he ought to have been impleaded as a party which was  rejected  by
the High Court.   This  Court,  dwelling  upon  various  facets,  posed  the
question whether the failure to implead R.S. Chauhan would be fatal  to  the
writ petition.  Addressing the said issue, as  stated  earlier,  this  Court
distinguished the decision of Miss Rafia Rahim (supra) and Padamraj  (supra)
and thereafter proceeded to state thus:-

“104. On the contrary, we think we should  approach  the  matter  from  this
point of view, viz., to render an effective decision  whether  the  presence
of Chauhan is necessary? We will in this connection refer to  A.  Janardhana
v. Union of India it is held as under:

“Approaching the matter from this angle, it may be noticed  that  relief  is
sought only against the Union of India and the Ministry  concerned  and  not
against any individual nor any seniority is  claimed  by  anyone  individual
against another particular individual and, therefore,  even  if  technically
the direct recruits were before the court, the petition  is  not  likely  to
fail on that ground.”

105. What was the first respondent seeking in  the  writ  petition?  He  was
questioning the validity of the Ordinance and the Act whereby  he  had  been
deprived of his further continuance. What is the relief could he have  asked
for against Chauhan?  None. The first point is Chauhan came to be  appointed
consequent to the suspension of the first respondent  which  suspension  had
come to be stayed by the High Court  on  June  12,  1990.  Then,  again,  as
pointed out by the High Court it was “till further  orders”.  Therefore,  we
hold the failure to implead Chauhan does not affect the  maintainability  of
the writ petition.”
                                                            [Emphasis added]


      The said decision, we are inclined to think  is  a  binding  precedent
for the purpose of understanding the concept of necessary party.  The  Court
has relied on the pronouncement in A.  Janardhana  (supra).  What  has  been
really laid down is that R.S. Chauhan was not entitled  in  law  to  contest
the  lis  as  Kailash  Chand,  the  aggrieved  party,  was  challenging  the
ordinance as he had faced the curtailment of period of his tenure.

44.   In this context, we may  refer  to  certain  other  authorities  where
there has been  an  expansion  of  the  concept  of  necessary  party.   The
Constitution Bench in U.P. Awas Evam Vikas Parishad vs. Gyan Devi (Dead)  by
LRs. & Ors.[40] has laid down that in a  land  acquisition  proceeding,  the
local  authority  is  a  necessary  party  in  the  proceedings  before  the
Reference Court and is  entitled  to  be  impleaded  as  a  party  in  those
proceedings wherein it  can  defend  the  determination  of  the  amount  of
compensation by the Collector and oppose enhancement of the said amount  and
also adduce evidence in that regard.  That apart, it has  also  been  stated
that in the event of enhancement  of  the  amount  of  compensation  by  the
Reference Court, if the Government  does  not  file  an  appeal,  the  local
authority can file an appeal against the  award  in  the  High  Court  after
obtaining leave of the Court.  That apart, the Court also opined that in  an
appeal by the person having an interest in the land seeking  enhancement  of
the amount of  compensation  awarded  by  the  Reference  Court,  the  local
authorities should be impleaded as a party and  is  entitled  to  be  served
notice of the said appeal and that could apply to appeal in the  High  Court
as well as in the Supreme Court.

45.   In Delhi Development Authority vs. Bhola Nath  Sharma  (Dead)  by  LRs
and Ors.[41], the question arose whether the  Delhi  Development  Authority,
at whose instance land of the  respondent  and  others  had  been  acquired,
could be treated as a ‘person interested’  within  the  meaning  of  Section
3(b)  of  the  Land  Acquisition  Act,  1894  and  it  was  entitled  to  an
opportunity  to  participate  in  the  proceedings  held  before  the   Land
Acquisition  Collector  and  the  Reference  Court   for   determining   the
compensation.   The  two-Judge  Bench  referred  to  U.P.  Awas  Evam  Vikas
Parishat (supra) and relied upon a passage from SLP (C) No.1608 of  1999[42]
and eventually allowed the appeal and set aside  the  impugned  judgment  of
the High Court as well as that of  the  Reference  Court  and  remitted  the
matter to the Reference Court to decide the reference  afresh  after  giving
opportunity of hearing  to  the  parties  which  shall  necessarily  include
opportunity to adduce evidence for the purpose of determining the amount  of
compensation.

46.   We have referred to the aforesaid decisions with the purpose that  the
company or the authority has been  treated  as  a  necessary  party  on  the
foundation that it meets the criterion provided  in  the  definition  clause
and that apart ultimately it has to pay  the  compensation.   Therefore,  it
has a  right  in  law  to  participate  in  the  proceedings  pertaining  to
determination of the amount of  compensation.  Factual  score,  needless  to
say, stands on a different footing.

47.   Few examples  can  be  given  so  that  the  position  can  be  easily
appreciated.  There are provisions in some legislations pertaining  to  Gram
Panchayat or  Panchayat  Samiti  where  on  certain  grounds  the  competent
authority has been conferred the power to remove  the  elected  Sarpanch  or
the Chairman, as the case may be on certain counts.  Against  the  order  of
the Collector, an appeal lies and eventually either a  revision  or  a  writ
lies to the High Court.  After his  removal,  someone  by  way  of  indirect
election from amongst the members of the Panchayats or the Panchayat  Samiti
is elected as the Sarpanch or the Chairman.  The  removed  Sarpanch  assails
his order of removal as he is  aggrieved  by  the  manner,  method  and  the
reasons for removal.  In his eventual success, he has to hold  the  post  of
the Sarpanch, if the tenure is there.  The question,  thus,  arises  whether
the person who has been elected in the meantime from amongst the members  of
the Panchayat Samiti or Sabha is a necessary party.  The answer has to be  a
categorical ‘no’, for he cannot oppose the order of removal assailed by  the
affected Sarpanch nor can he defend his election because he  has  come  into
being because of a vacancy, arising due different situation.

48.   In the instant case, shop no.2 had become vacant.  The  appellant  was
allotted the shop, may be in the handicapped quota  but  such  allotment  is
the resultant  factor  of  the  said  shop  falling  vacant.   The  original
allottee, that is the respondent, assailed his cancellation  and  ultimately
succeeded in appeal.  We are not concerned with the fact that the  appellant
herein was allowed to put her stand  in  the  appeal.   She  was  neither  a
necessary nor a proper party.  The  appellate  authority  permitted  her  to
participate but that neither changes the situation nor does  it  confer  any
legal status on her.  She would have continued to  hold  the  shop  had  the
original allottee lost the appeal.  She cannot assail the said  order  in  a
writ petition because she is not a necessary party.  It is the State or  its
functionaries, who could have challenged the  same  in  appeal.   They  have
maintained sphinx like silence in that regard.  Be  that  as  it  may,  that
would not confer any locus on  the  subsequent  allottee  to  challenge  the
order passed in favour of the former allottee.  She is a third party to  the
lis in this context.  The decisions which we have referred  to  hereinbefore
directly pertain to the concept of necessary party.   The  case  of  Kailash
Chand Mahajan (supra) makes it absolutely  clear.   We  have  explained  the
authority in J.S. Yadav’s case (supra) and opined that it  has  to  rest  on
its own facts keeping in view  the  declaratory  relief  made  therein,  and
further what has been  stated  therein  cannot  be  regarded  as  a  binding
precedent for the proposition that in a case  of  removal  or  dismissal  or
termination, a subsequently appointed employee is a  necessary  party.   The
said principle shall apply on all fours to a fair  price  shop  owner  whose
licence is cancelled.  We may hasten to add,  this  concept  will  stand  in
contradistinction to a case where the land after  having  vested  under  any
statute in the State have been distributed and  possession  handed  over  to
different landless persons.  It is because of such  allotment  and  delivery
of possession in their favour, that is required  under  the  statute  rights
are created in favour of such allottees and, therefore, they  are  necessary
parties as has been held in Ram Swarup & Ors.  vs.  S.N.  Maira  &  Ors.[43]
The subtle distinction has to be understood.  It does not relate to  a  post
or position which one holds in a fortuitous circumstance.   It  has  nothing
to do with a vacancy.  The  land  of  which  possession  is  given  and  the
landless  persons  who  have  received  the  Pattas  and  have  remained  in
possession, they have a right to retain their  possession.  It  will  be  an
anarchical situation, if they are not impleaded as  parties,  whereas  in  a
case which relates to a post or position or a vacancy,  if  he  or  she  who
holds the post because of  the  vacancy  having  arisen  is  allowed  to  be
treated as a necessary party or allowed to assail  the  order,  whereby  the
earlier post holder or allottee succeeds, it will only usher in the  reverse
situation – an anarchy in law.

49.   In this  context,  reference  to  the  judgment  in  Ramesh  Hirachand
Kundanmal vs. Municipal Corporation of Greater Bombay &  Ors.[44]  would  be
fruitful.  The two-Judge Bench was  dealing  with  the  concept  of  duminus
litis which relates to the plaintiff.   The  Court  analysed  the  provision
contained in Order I Rule 10 and various sub-rules.  The subject  matter  in
the case pertained to a dispute between the petitioner  and  the  respondent
no.1 which centered on the demolition and unauthorized construction  by  the
competent authority under the Bombay Municipal  Act.   The  respondent  no.2
was the  lessee  in  possession  of  the  service  station.   The  Municipal
Corporation had not issued any  notice  to  the  said  respondent.   It  was
contended before the Court that the respondent no.2 was instrumental in  the
initiation of the proceeding by the Municipal Corporation against him.   The
court addressed to the issue whether the said respondent is a  necessary  or
proper party.  In the  said  case,  the  appellant  had  instituted  a  case
against the third respondent for  declaration  that  she  was  the  lawfully
married wife of the third respondent who had entered  context  and  admitted
the claim.  An application for impleadment  was  sought  by  the  respondent
nos.1 and 2 on the ground that they were respectively the wife  and  son  of
the third respondent and they were interested  in  denying  the  appellant’s
status as wife and the children as the  legitimate  children  of  the  third
respondent.  The trial court had allowed the application and the said  order
was confirmed by the High Court in its revisional jurisdiction.  This  Court
referred to the authority in Razia Begum vs. Anwar  Begum[45]  and  came  to
hold that there is  a  clear  distinction  between  the  suits  relating  to
property and those suits in which the subject  matter  of  litigation  is  a
declaration as regards status or legal character.  The Court  observed  that
in the former category, the rule of personal interest is distinguished  from
the commercial interest which is required to be shown before  a  person  may
be added as a party and accordingly held :-

“The only reason which makes it necessary to make a person  a  party  to  an
action is so that he should be bound by the result of  the  action  and  the
question to be settled, therefore, must be a question in  the  action  which
cannot be effectually and completely settled unless he is a party. The  line
has been drawn on a wider  construction  of  the  rule  between  the  direct
interest or the legal interest and commercial interest.  It  is,  therefore,
necessary that the person must be directly  or  legally  interested  in  the
action in the answer, i.e., he can say that the litigation  may  lead  to  a
result which will affect  him  legally  that  is  by  curtailing  his  legal
rights.”


And again:-


“It is difficult to say that the rule contemplates joining as a defendant  a
person whose only object is to prosecute his own cause  of  action.  Similar
provision was considered in Amon v. Raphael Tuck &  Sons  Ltd.[46],  wherein
after quoting  the  observations  of  Wynn-Parry,  J.  in  Dollfus  Mieg  et
Compagnie S.A. v. Bank of England[47], that their  true  test  lies  not  so
much in an analysis of what are the constituents of the applicants’  rights,
but rather in what would be the result on the subject matter of  the  action
if those rights could be established, Devlin, J. has stated:

“The test is ‘May the order for  which  the  plaintiff  is  asking  directly
affect the intervener in the enjoyment of his legal rights’.”






      Eventually, the Court unsettled the order passed by  the  trial  court
as well as by the High Court.

50.   We have referred to the said decision in extenso as there is  emphasis
on curtailment of legal right.  The question to be posed  is  whether  there
is curtailment or extinction of a legal right of  the  appellant.  The  writ
petitioner before the High Court was trying to establish  her  right  in  an
independent manner, that is, she has an  independent  legal  right.   It  is
extremely difficult to hold that she has an  independent  legal  right.   It
was the first allottee who could have  continued  in  law,  if  his  licence
would not have been cancelled.  He was entitled  in  law  to  prosecute  his
cause of action and restore his  legal  right.   Restoration  of  the  legal
right is pivotal and the prime mover.  The eclipse being  over,  he  has  to
come back to the same position.  His right gets revived and that revival  of
the right cannot be dented by the third party.

51.   In view of the aforesaid premises, we do not  perceive  any  merit  in
this appeal and, accordingly, the same stands dismissed.  There shall be  no
order as to costs.

                                             .............................J.
                                                               [Dipak Misra]

                                             ..........................., J.
    [R. Banumathi]
New Delhi
October 29, 2015
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[1]     2008 (1) ADJ 718
[2]    AIR 1963 SC 786
[3]    (2012) 7 SCC 610
[4]    (2006) 8 SCC 129
[5]    (2010) 12 SCC 204
[6]    AIR 1965 SC 786
[7]    AIR 1965 SC 1153
[8]    (1974) 2 SCC 706
[9]    (1987) 1 SCC 5
[10]   (1984) 4 SCC 251
[11]   (2009) 1 SCC 768
[12]   2015 (3) SCALE 39
[13]   AIR 1955 SC 233
[14]   (1974) 4 SCC 335
[15]   AIR 1969 AP 204
[16]   ILR (1973) 2 Delhi 392
[17]   C.W. No. 650 of 1970, decided by Delhi High Court
[18]   1992 Supp (2) SCC 251
[19]   AIR 1978 Ker 176
[20]   AIR 1979 Pat 266
[21]   (1983) 3 SCC 601
[22]   (2008) 4 SCC 619
[23]   (2001) 6 SCC 380
[24]   (2003) 4 SCC 557
[25]   (2011) 6 SCC 570
[26]    (2009) 1 SCC 1
[27]    (2008) 12 SCC 112
[28]    (2008) 1 SCC 391
[29]    (1997) 6 SCC 623
[30]   (1984) 4 SCC 251
[31]   1995 Supp (1) SCC 179
[32]   (2009) 1 SCC 768
[33]   (2010) 10 SCC 408
[34]   (2010) 12 SCC 204
[35]    (1974) 2 SCC 706
[36]    (1987) 1 SCC 5
[37]    (1901) AC 495, p. 506
[38]    (1996) 6 SCC 44
[39]    1993 Supp (2) SCC 149
[40]   (1995) 2 SCC 326
[41]   (2011) 2 SCC 54
[42]   Decided on 12.04.1999
[43]   (1999) 1 SCC 738
[44]   (1992) 2 SCC 524
[45]   AIR 1958 SC 886
[46]    (1954) 1 All ER 273
[47]    (1950) 2 All ER 605, 611

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