whether recall of witnesses, at the stage when statement of accused under Section 313 of the Code of Criminal Procedure (“Cr.P.C.”) has been recorded, could be allowed on the plea that the defence counsel was not competent and had not effectively cross-examined the witnesses, having regard to the facts and circumstances of this case.= We may now sum up our reasons for disapproving the view of the High Court in the present case: (i) The trial court and the High Court held that the accused had appointed counsel of his choice. He was facing trial in other cases also. The earlier counsel were given due opportunity and had duly conducted cross- examination. They were under no handicap; (ii) No finding could be recorded that the counsel appointed by the accused were incompetent particularly at back of such counsel; (iiii) Expeditious trial in a heinous offence as is alleged in the present case is in the interests of justice; (iv) The trial Court as well as the High Court rejected the reasons for recall of the witnesses; (v) The Court has to keep in mind not only the need for giving fair opportunity to the accused but also the need for ensuring that the victim of the crime is not unduly harassed; (vi) Mere fact that the accused was in custody and that he will suffer by the delay could be no consideration for allowing recall of witnesses, particularly at the fag end of the trial; (vii) Mere change of counsel cannot be ground to recall the witnesses; (viii) There is no basis for holding that any prejudice will be caused to the accused unless the witnesses are recalled; (ix) The High Court has not rejected the reasons given by the trial court nor given any justification for permitting recall of the witnesses except for making general observations that recall was necessary for ensuring fair trial. This observation is contrary to the reasoning of the High Court in dealing with the grounds for recall, i.e., denial of fair opportunity on account of incompetence of earlier counsel or on account of expeditious proceedings; (x) There is neither any patent error in the approach adopted by the trial court rejecting the prayer for recall nor any clear injustice if such prayer is not granted. Accordingly, we allow these appeals, set aside the impugned order passed by the High Court and dismiss the application for recall. =2015 S.C. MSKLAWREPORTS

 whether recall of witnesses, at the stage when statement  of  accused  under Section 313  of  the  Code  of  Criminal  Procedure  (“Cr.P.C.”)   has  been recorded, could be allowed on the plea that  the  defence  counsel  was  not competent and had  not  effectively  cross-examined  the  witnesses,  having regard to the facts and circumstances of this case.=      

We may now sum up our reasons for disapproving the view  of  the  High
Court in the present case:

(i)   The trial  court  and  the  High  Court  held  that  the  accused  had
appointed counsel of his choice.  He was facing trial in other  cases  also.
The earlier counsel were given due opportunity and had duly conducted cross-
examination.  They were under no handicap;

(ii)  No finding could  be  recorded  that  the  counsel  appointed  by  the
accused were incompetent particularly at back of such counsel;

(iiii)      Expeditious trial in a heinous offence  as  is  alleged  in  the
present case is in the interests of justice;

(iv)  The trial Court as well as the High Court  rejected  the  reasons  for
recall of the witnesses;

(v)   The Court has to keep in mind  not  only  the  need  for  giving  fair
opportunity to the accused but also the need for ensuring  that  the  victim
of the crime is not unduly harassed;

(vi)  Mere fact that the accused was in custody and that he will  suffer  by
the delay could be  no  consideration  for  allowing  recall  of  witnesses,
particularly at the fag end of the trial;

(vii) Mere change of counsel cannot be ground to recall the witnesses;

(viii)      There is no basis for holding that any prejudice will be  caused
to the accused unless the witnesses are recalled;

(ix)  The High Court has not rejected the reasons given by the  trial  court
nor given any justification for permitting recall of  the  witnesses  except
for making general observations that recall was necessary for ensuring  fair
trial.  This observation is contrary to the reasoning of the High  Court  in
dealing with the grounds for recall, i.e., denial  of  fair  opportunity  on
account of incompetence of earlier counsel  or  on  account  of  expeditious
proceedings;

(x)   There is neither any patent error  in  the  approach  adopted  by  the
trial court rejecting the prayer for recall nor any clear injustice if  such
prayer is not granted.

Accordingly, we allow these appeals,  set  aside  the  impugned  order
passed by the High Court and dismiss the application for recall.
=2015 S.C. MSKLAWREPORTS

Mere Misdescription in description of parties in agreement and notices can not affect the maintainability of the suit as it can be explained = While it is correct that there is some confusion with regard to the description of the parties in the sub-agreements; the legal notice(s); and the letter(s) of invocation; the L.O.Is. issued in respect of the works and the correspondences exchanged by and between the parties make it clear that the applicant Taiyo Membrane Corporation Pty. Ltd. and Taiyo Membrane Corporation are one and the same entity and the works under the sub- agreements had been allotted by the respondent to the said entity. In this regard it may also be relevant to note that under the Australian Corporation Act, 2001 (Section 57A) a Corporation includes a Company and a proprietary Company Limited by shares is incorporated as Pty. Ltd. 6. In the above circumstances the alleged mis-description will not affect the maintainability of the present application. As already observed, the Court does not find any ambiguity or inconsistency in the description of parties so as to non-suit the applicant-petitioner by dismissing its application on the above basis. The ambiguity, if any, in the description of the parties having been explained and the respondent Company itself having issued L.O.Is. and having exchanged subsequent correspondences with the applicant with regard to the works under the sub- contracts, though executed in the name of the Taiyo Membrane Corporation and Taiyo Membrane Corporation (India), the applicant's petition cannot be held to be not maintainable as urged on behalf of the respondent.

                                                              NON-REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                    ARBITRATION CASE (CIVIL) NO.2 OF 2015


TAIYO MEMBRANE CORPORATION PTY.
LTD.                                              ...PETITIONER

                            VERSUS

SHAPOORJI PALLONJI & CO.LTD.           ...RESPONDENT



                               J U D G M E N T



1.     This  application  under  Section  11(6)  of  the   Arbitration   and
Conciliation Act, 1996 (hereinafter referred  to  as  “the  Act”)  has  been
lodged by one Taiyo Membrane Corporation Pty. Ltd.  seeking  appointment  of
an arbitrator to resolve certain disputes that have arisen out of three sub-
contracts executed with the respondent  in  respect  of  works  relating  to
renovation of the Jawaharlal Nehru Stadium, New Delhi.  The said works  were
awarded to the respondent by the C.P.W.D.
2.    The area of dispute is small and narrow, namely,  the  entitlement  of
the  petitioner  to  5%  of  his  claimed  dues  which,  according  to   the
petitioner, has been wrongly withheld by the respondent.

3.    The respondent has objected to the appointment  of  an  Arbitrator  by
the Court, inter alia,  on  the  ground  that  the  contractual  obligations
incumbent on the petitioner/applicant have not been fulfilled without  which
the demand for release of the amount, as aforesaid, is  not  justified.   As
the said objection itself raises an  arbitrable  issue  the  same  need  not
engage the attention of the Court.   Such  attention,  however,  has  to  be
focused on the principal objection of the respondent.  The same  is  to  the
effect that the two  of  the  sub-agreements  were  between  Taiyo  Membrane
Corporation  and  the  respondent  Company  whereas  one  sub-agreement  was
between  Taiyo  Membrane  Corporation  (India)  and  the   respondent.   The
applicant is Taiyo Membrane Corporation Pty. Ltd. which is not  a  party  to
any of the said sub-agreements.  Besides, it is  contended  that  invocation
of the arbitration clause was by the applicant who is not  a  party  to  the
agreements.  On the  said  basis,  it  is  urged  that  there  is  no  valid
invocation of the arbitration clause and consequently there  is  no  failure
on the part of the respondent to appoint the arbitrator so as to warrant  an
order from the Court under Section 11(6) of the Act. It is also  urged  that
one of the sub-agreements being  between  two  Indian  entities  i.e.  Taiyo
Membrane Corporation (India) and the respondent Company any  appointment  of
an arbitrator would fall  outside  the  jurisdiction  of  this  Court  under
Section 11(6) of the Act.

4.    The above objections of the respondent have been sought to be  met  by
the petitioner by filing  a  rejoinder  affidavit  to  point  out  that  the
Letters of  Intent  with  regard  to  the  works  allotted  under  the  sub-
agreements were issued in favour of Taiyo  Membrane  Corporation  Pty.  Ltd.
That  apart,  several  correspondences  exchanged  between  the   respondent
Company and the Taiyo Membrane Corporation Pty.  Ltd.  with  regard  to  the
works covered by the sub-contracts have also been  referred  to  and  relied
upon to contend that there is no doubt and  ambiguity  with  regard  to  the
fact that the  Taiyo Membrane  Corporation  Pty.  Ltd.  and  Taiyo  Membrane
Corporation are  one  and  the  same  entity.   Insofar  as  the  agreements
executed by Taiyo Membrane Corporation (India) is  concerned,  it  is  urged
that  the  above  position   has   also   been   clarified   by   subsequent
communications exchanged between the respondent Company and  Taiyo  Membrane
Corporation Pty. Ltd. with respect to the work covered by the  agreement  in
which one of the parties is Taiyo Membrane Corporation (India).

5.    While it is correct that there is some confusion with  regard  to  the
description of the parties in the sub-agreements; the legal  notice(s);  and
the letter(s) of invocation; the L.O.Is. issued in respect of the works  and
the correspondences exchanged by and between the parties make it clear  that
the applicant Taiyo  Membrane  Corporation  Pty.  Ltd.  and  Taiyo  Membrane
Corporation are one and the  same  entity  and  the  works  under  the  sub-
agreements had been allotted by the respondent to the said entity.  In  this
regard  it  may  also  be  relevant  to  note  that  under  the   Australian
Corporation Act, 2001 (Section 57A) a Corporation includes a Company  and  a
proprietary Company Limited by shares is incorporated as Pty. Ltd.

6.    In the  above  circumstances  the  alleged  mis-description  will  not
affect  the  maintainability  of  the  present  application.    As   already
observed, the Court does not find any  ambiguity  or  inconsistency  in  the
description of  parties  so  as  to  non-suit  the  applicant-petitioner  by
dismissing its application on the above basis. The  ambiguity,  if  any,  in
the description of the parties having  been  explained  and  the  respondent
Company  itself  having  issued  L.O.Is.  and  having  exchanged  subsequent
correspondences with the applicant with regard to the works under  the  sub-
contracts, though executed in the name of  the  Taiyo  Membrane  Corporation
and Taiyo Membrane Corporation (India), the applicant's petition  cannot  be
held to be not maintainable as urged on behalf of the respondent.

7.    Having held as aforesaid and the  remaining  objections,  as  noticed,
being within the province of the Arbitrator the Court is inclined  to  grant
the prayers made. Accordingly, Dr. Justice M.K. Sharma, a  former  Judge  of
this Court is appointed as the sole Arbitrator.

8.    All disputes including the disputes raised  in  the  present  petition
are hereby referred to the learned sole Arbitrator.  The learned  Arbitrator
shall be at liberty to fix his own fees/  remuneration/other  conditions  in
consultation with the parties.

9.    Let this order be communicated to the learned Arbitrator so  that  the
arbitration proceedings  can  commence  and  conclude  as  expeditiously  as
possible.

10.   The Arbitration Petition is disposed of in the above terms.


                                          ................................J.
   (RANJAN GOGOI)

NEW DELHI
SEPTEMBER 09, 2015

to consider the respondents for regularisation of their services as and when the vacancies arise and till that time they be paid the emoluments, which are being paid by university authorities to similarly situated workmen against the unsanctioned posts.=In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would subserve the ends of justice.” 17. In the light of the above discussion, the impugned judgment of the High Court is modified and keeping in view the fact that the respondents are facing hardship on account of pending litigation for more than two decades and the fact that some of the respondents are over aged and thus have lost the opportunity to get a job elsewhere, interest of justice would be met by directing the appellant-university to pay compensation of rupees four lakhs to each of the respondents. By order dated 11.07.2011, this Court directed the appellant to comply with the requirements of Section 17B of the Industrial Disputes Act, 1947 and it is stated that the same is being complied with. The appellant-university is directed to pay the respondents rupees four lakhs each within four months from the date of receipt of this judgment. The payment of rupees four lakhs shall be in addition to wages paid under Section 17B of the Industrial Disputes Act, 1947. 18. In the result, the impugned judgment is modified and these appeals are partly allowed in the above terms. No order as to costs.

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.5731 OF 2011

VICE-CHANCELLOR, LUCKNOW UNIVERSITY
LUCKNOW, U.P.                                               ..Appellant

                                   Versus

AKHILESH KUMAR KHARE & ANR.                       ..Respondents

                                    WITH
   C.A.NO.5732/2011, C.A.NO.5733/2011, C.A.NO.5736/2011, C.A.NO.5737/2011,
                     C.A.NO.5738/2011, C.A.NO.5739/2011,
  C.A.NO.5740/2011, C.A. NO.5741/2011, C.A.NO.5742/2011, C.A.NO.5743/2011,
                    C.A. NO.5744/2011, C.A.NO.5745/2011,
           C.A.NO.5746/2011,  C.A.NO.5747/2011, C.A. NO.5748/2011,
                   C.A. NO.5749/2011 AND C.A.NO.5750/2011


                               J U D G M E N T

R. BANUMATHI, J.

This batch of appeals arise out of the common judgment of the High Court  of
Judicature  at  Allahabad,  Lucknow  Bench  dismissing  the  writ  petitions
[W.P.No.6690 of 1996 (S/S) and batch] dated  14.09.2009,  whereby  the  High
Court upheld the award passed by the Industrial Tribunal  and  directed  the
appellant-university to  consider  the  respondents  for  regularisation  of
their services as and when the vacancies arise and till that  time  they  be
paid the emoluments, which are  being  paid  by  university  authorities  to
similarly situated workmen against the unsanctioned posts.
2.          Before  we  advert  to  the  contentious  points,  it  would  be
appropriate to highlight the factual background of the case.   In  the  year
1989,   the   Finance   Officer    of    the    University    of    Lucknow,
Mr.R.S.Vishvakarma engaged the respondents  in  this  batch  of  appeals  as
Routine Grade Clerk (RGC)/Peon by oral engagement as daily  wagers  for  the
Central  Accounts  Office  and  they  were  being  paid  from  out  of   the
contingency fund. In order to prevent the abuse of power in  engaging  daily
wagers,  the then Vice-Chancellor of the  Lucknow  University  issued  Order
No.VC/1932/90 dated 03.08.1990 notifying that the daily wagers would not  be
allowed to continue in  any  case  after  31.12.1990  unless  prior  written
approval was obtained from the  Vice-Chancellor.  It  was  further  directed
that if there was any need of any extra hand, the Section Heads must send  a
demand for creation of posts to the Deputy Registrar  (Admn.)  with  details
justifying the need so that a consolidated statement  for  sanction  of  new
posts in the university be  sent  to  the  State  Government.   As  per  the
appellant-university,  the  Finance  Officer  neither  dispensed  with   the
respondents/daily wagers nor did he obtain written approval from  the  Vice-
Chancellor. The engagement of the respondents came to  an  end  with  effect
from 01.01.1991.
3.          The  terminated  workers  sent  a  legal  notice  on  28.01.1992
through Mazdoor Sabha to the Vice-Chancellor stating that  they  served  the
university till  31.12.1990  continuously  and  that  they  were  terminated
without assigning any reason and put forth the demand for  reinstatement  in
service and backwages.   All the ex-daily wagers  further  filed  individual
applications to the Deputy Labour Commissioner, Lucknow for conciliation  of
the dispute raised by them in February 1992. As  no  conciliation  could  be
achieved, on the recommendation of the  Conciliation  Officer,   the  Deputy
Labour Commissioner by his order dated 18.08.1992 referred all the cases  to
the  Labour  Court,  Lucknow  for  adjudication  of  the   dispute   between
respondents and the appellant-university.   The  Presiding  Officer,  Labour
Court vide order dated 30.01.1996 held that termination of the workmen  from
01.01.1991 by the university is illegal and directed  the  reinstatement  of
respondent No.1 with  full  back  wages.  Being  aggrieved,  the  appellant-
university filed a Writ Petition  before  the  High  Court  challenging  the
award.   The  High  Court  disposed  of  the  writ  petition  and  connected
petitions vide a common order dated 14.09.2009 affirming  the  award  passed
by the Labour Court and  inter  alia  issued  direction  as  aforesaid.  The
university has filed this batch of appeals assailing  the  order  passed  by
the High Court.
4.           Learned  counsel  for  the  appellants  contended  that  merely
because a casual wage worker or a  temporary  employee  worked  continuously
for more than 240 days in a year, he would not be entitled  to  be  absorbed
in regular service or made permanent on the strength  of  such  continuance,
if the original appointment was made without following the  due  process  of
selection as envisaged by the rules. It was submitted the  respondents  were
not engaged as against any sanctioned post and the impugned judgment of  the
High Court directing regularisation is  violative  of  the  principles  laid
down by this Court in Secretary, State of Karnataka and Others  vs.  Umadevi
(3) and Others,         (2006) 4 SCC 1.
5.          Per contra, learned Senior Counsel Ms. Shobha  Dikshit  for  the
respondents submitted that the services of the respondents  were  terminated
without giving any notice or retrenchment compensation and is  contravention
of Section 6-N of the U.P. Industrial Disputes Act,  1947.   It  was  argued
that the respondents were out of employment since 1991 and they are  finding
it difficult to survive along with their families with the meagre amount  of
Rs.650/- awarded to them under Section 17B of the Industrial  Disputes  Act,
1947.  It was further submitted that the respondents’ juniors were  retained
and continued in service and subsequently, even new hands have been  engaged
and while so, the  respondents  were  discriminated  and  the  courts  below
rightly directed their regularisation.
6.           We  have  given  our  thoughtful  consideration  to  the  rival
contentions of both the  parties  and  perused  the  impugned  judgment  and
material on record.
7.          Lucknow University is a statutory body and is  governed  by  the
U.P. State Universities Act, 1973.  The  Vice-Chancellor  is  the  Principal
Executive and  exercises  general  supervision  and  control  over  all  its
affairs including appointments of non-teaching staff. The Registrar  of  the
University is the administrative head who issues orders of appointment  duly
made and approved by the Vice-Chancellor.  The appointments are to  be  made
by the university against the sanctioned posts  created  by  the  Government
and  the  Government  determines  the  pay  scale  and  allowances  of   the
employees. The Finance Officer by  himself  had  no  right  to  appoint  any
person and university has not created extra post of Routine Grade  Clerk  or
Record Boy or Peon.  In  the  present  case,  the  Finance  Officer  in  the
university engaged the respondents as daily wagers for his Central  Accounts
Section. Admittedly, the  respondents were  not  engaged  by  following  due
procedure and their engagement was not  against  any  sanctioned  posts.  In
order  to  curb  the  illegal  practice  of  engaging  daily  wagers,  Vice-
Chancellor of the University issued an  order  dated  03.08.1990  clarifying
that the daily wagers will not  be  allowed  to  continue  after  31.12.1990
until prior written approval is accorded by the  Vice-Chancellor.   No  such
approval  was  taken  qua  the  respondents  for  their   continuance.   The
respondents  were  terminated  w.e.f.  01.01.1991.  When  the   respondents’
appointments were illegal, the respondents would  not  be  entitled  to  any
right to be regularized or absorbed.
8.          As noticed earlier, there is no  appointment  letter  issued  to
the  respondents  by  the  Registrar  on  which  they  were  engaged.    The
respondents have based their claim on  service  certificate  issued  by  Mr.
R.L. Shukla, the then Finance Officer of the  University  of  Lucknow.   Mr.
R.L. Shukla in his evidence has stated that the daily  wagers  were  engaged
by the then Finance Officer,  Mr. R.S. Vishvakarma as daily  wage  employees
in the accounts section as per their need  and  they  were  terminated  when
their services were not required.  He  further  stated  that  no  particular
nature of work was assigned to the respondents in the accounts  section  and
the respondents were being paid out of “recurring expenditure item”. So  far
as the certificate issued to the respondents, Mr.  Shukla  has  stated  that
those certificates issued to the respondents-workmen only to enable them  to
seek other job.
9.          Learned Senior Counsel for the respondents  has  submitted  that
after removal of the  respondents,  similarly  placed  employees  have  been
regularized and drawn our attention to regularisation of one  such  Narendra
Pratap Singh.  Evidence of   Mr. Brij Pal Das Mehrotra, former Registrar  of
the University would show that the persons  who  are  regularized  are  only
those who were appointed by  following  due  procedure.  The  said  Narendra
Pratap Singh was also appointed by following due procedure.   As  seen  from
Annexure (P-5) filed with rejoinder  affidavit,  the  said  Narendra  Pratap
Singh was appointed by the Registrar of  the  University  as  Routine  Grade
Clerk (RGC) on daily wage basis, the respondents were not  so  appointed  by
the Registrar  of  the  university.  The  respondents  have  admittedly  not
produced any document to show that they were  appointed  by  the  university
against  sanctioned  posts  in  accordance  with  statutory  rules.  If  the
original appointment was not made following  due  process  of  selection  as
envisaged   by   the   relevant   rules,   the   respondents   cannot   seek
regularisation. The Labour Court and the High Court, in our  view,  fell  in
error in directing the regularisation of the respondents.
10.         In the rejoinder-affidavit filed  by  the  appellant-university,
it is stated that the university has  requested  the  State  Government  for
sanction of 755 posts in various  categories  in  order  to  regularise  the
persons working in the various departments  of  the  university.  The  State
Government sanctioned only 330 posts in various categories, as a  result  of
which regularisation/samayojan of 330 persons  were  made  strictly  on  the
basis of their seniority.  A  bare  perusal  of  letter  No.26/C.S./70-4-99-
3(27)/99 dated 29.09.1999 by Special Executive Officer, Government  of  U.P.
regarding absorption of non-teaching posts in the  Lucknow  University,   it
is clearly mentioned that if there is any disruption in the service  of  any
employee, then the services of the prior period  from  the  said  disruption
may  not  be  calculated.  A  perusal  of  minutes  of   the   Sub-Committee
constituted by the Executive Committee held on 16.01.2001, it is clear  that
employees  who  were  continuously  working  in  the  university  were  only
regularised.  The respondents have been out of  employment  from  01.01.1991
and at the time of regularisation/Samyojan,  the  respondents  were  not  in
service and, therefore, they cannot seek parity with the  persons  absorbed.

11.         In Umadevi’s case, this Court  settled  the  principle  that  no
casual workers should be regularised by the Courts or the  State  Government
and as per constitutional provisions all the citizens of this  country  have
right to contest for the employment and temporary or casual workers have  no
right to seek for regularization.  In para (47), this Court held as under:
“47. When a person enters a temporary employment or  gets  engagement  as  a
contractual or casual worker and the engagement is not  based  on  a  proper
selection as recognised by the relevant rules or procedure, he is  aware  of
the consequences of the appointment being temporary, casual  or  contractual
in nature. Such a person cannot invoke the theory of legitimate  expectation
for being confirmed in the post when an appointment to  the  post  could  be
made only by following  a  proper  procedure  for  selection  and  in  cases
concerned, in consultation with the Public  Service  Commission.  Therefore,
the theory of legitimate expectation  cannot  be  successfully  advanced  by
temporary, contractual or casual employees. It cannot also be held that  the
State has held out any  promise  while  engaging  these  persons  either  to
continue them where they are or to make them  permanent.  The  State  cannot
constitutionally make such a promise. It is also  obvious  that  the  theory
cannot be invoked to seek a positive relief of being made permanent  in  the
post.”

12.         In para (53) of Umadevi’s case, the  Constitution  Bench  carved
out an exception to the general principles enumerated above and it reads  as
under:
“53. One aspect needs to be clarified. There may be  cases  where  irregular
appointments (not illegal appointments) as  explained  in  S.V.  Narayanappa
(1967) 1 SCR 128, R.N. Nanjundappa (1972)  1  SCC  409  and  B.N.  Nagarajan
(1979) 4 SCC 507 and referred  to  in  para  15  above,  of  duly  qualified
persons in duly sanctioned  vacant  posts  might  have  been  made  and  the
employees have continued to work for ten  years  or  more  but  without  the
intervention of orders of the  courts  or  of  tribunals.  The  question  of
regularisation of the services of such employees may have to  be  considered
on merits in the light of the principles settled by this Court in the  cases
abovereferred to and in the light of this judgment.  In  that  context,  the
Union of India, the State Governments  and  their  instrumentalities  should
take steps to regularise  as  a  one-time  measure,  the  services  of  such
irregularly appointed, who have  worked  for  ten  years  or  more  in  duly
sanctioned posts but  not  under  cover  of  orders  of  the  courts  or  of
tribunals  and  should  further  ensure  that   regular   recruitments   are
undertaken to fill those vacant sanctioned posts that require to  be  filled
up, in cases where  temporary  employees  or  daily  wagers  are  being  now
employed. The process must be set in motion  within  six  months  from  this
date. We also clarify that regularisation, if any already made, but not  sub
judice, need not be reopened based on this judgment, but there should be  no
further bypassing of the  constitutional  requirement  and  regularising  or
making permanent,  those  not  duly  appointed  as  per  the  constitutional
scheme.”

13.         As the respondents worked as casual workers only for  about  one
and half years and not against any sanctioned posts, be it noted  that  even
the benefit of para (53)  of  Umadevi’s  case  cannot  be  extended  to  the
respondents.
14.         In Satya Prakash & Others vs. State of Bihar & Others  (2010)  4
SCC 179, this Court held as under:
“7. We are of the view that the appellants  are  not  entitled  to  get  the
benefit of regularisation of their services since they were never  appointed
in any sanctioned posts. The appellants were only engaged on daily wages  in
the Bihar Intermediate Education Council.
8.  In Umadevi (3) case (2006) 4 SCC 1, this Court held that the courts  are
not  expected  to  issue  any  direction  for  absorption/regularisation  or
permanent continuance of temporary, contractual, casual, daily  wage  or  ad
hoc employees. This Court held that such  directions  issued  could  not  be
said  to  be  inconsistent  with  the  constitutional   scheme   of   public
employment. This Court held that merely because a temporary  employee  or  a
casual wage  worker  is  continued  for  a  time  beyond  the  term  of  his
appointment, he would not be entitled to be absorbed in regular  service  or
made permanent, merely on the strength of such continuance, if the  original
appointment was not  made  by  following  a  due  process  of  selection  as
envisaged by the relevant rules. In view  of  the  law  laid  down  by  this
Court, the directions sought for  by  the  appellants  cannot  be  granted.”
(Underlining added)

15.         The respondents were merely casual workers and they do not  have
any vested right to be regularised against the posts. The  High  Court  fell
in error in affirming  the  award  passed  by  the  Labour  Court  directing
regularisation.  In  the  facts  and  circumstances  of  the  case,  as  the
respondents were out of employment for more than twenty years and  now  they
are over aged and cannot seek for regular  appointment,  in  our  view,  the
interest of justice will be subserved if the judgment of the High  Court  is
modified to the extent by directing payment  of  monetary  compensation  for
the damages to the respondents.
16.         In considering the violation of Section 25F  of  the  Industrial
Disputes Act, 1947 in Incharge Officer & Anr. vs. Shankar  Shetty  (2010)  9
SCC 126 and after referring to the various decisions, this Court  held  that
the relief by way of back wages is not automatic  and  compensation  instead
of reinstatement has been held to meet the ends of justice and it  reads  as
under:-
“2.  Should an order of reinstatement automatically follow in a  case  where
the engagement of a daily wager has been brought  to  end  in  violation  of
Section 25-F of the Industrial Disputes Act, 1947 (for short “the ID  Act”)?
The course of the decisions of this Court in recent years has  been  uniform
on the above question.

3.   In Jagbir Singh v. Haryana State Agriculture  Mktg.  Board,  (2009)  15
SCC 327, delivering the judgment of this Court, one of us (R.M.  Lodha,  J.)
noticed some of the recent decisions  of  this  Court,  namely,  U.P.  State
Brassware Corpn. Ltd. v. Uday Narain Pandey, (2006) 1 SCC  479,  Uttaranchal
Forest Development Corpn. v. M.C. Joshi, (2007) 9 SCC 353, State of M.P.  v.
Lalit Kumar Verma (2007) 1 SCC 575, M.P. Admn. v.  Tribhuban  (2007)  9  SCC
748, Sita Ram v. Moti Lal Nehru Farmers Training Institute (2008) 5 SCC  75,
Jaipur Development Authority v. Ramsahai (2006) 11 SCC  684,  GDA  v.  Ashok
Kumar (2008) 4 SCC 261 and  Mahboob  Deepak  v.  Nagar  Panchayat,  Gajraula
(2008) 1 SCC 575  and stated as follows: (Jagbir Singh case  (2009)  15  SCC
327, SCC pp. 330 & 335, paras 7 & 14)
“7.  It is true that the earlier view of  this  Court  articulated  in  many
decisions reflected the  legal  position  that  if  the  termination  of  an
employee was found to be illegal, the  relief  of  reinstatement  with  full
back wages would ordinarily follow. However, in recent past, there has  been
a shift in the legal position and in a long line of cases,  this  Court  has
consistently taken the view that relief by way of  reinstatement  with  back
wages is not automatic and may be  wholly  inappropriate  in  a  given  fact
situation even though the termination of an employee is in contravention  of
the prescribed procedure. Compensation instead  of  reinstatement  has  been
held to meet the ends of justice.
*        *  *
14.  It would be, thus, seen that by a catena of decisions in  recent  time,
this Court has clearly laid down that an order  of  retrenchment  passed  in
violation of Section 25-F  although  may  be  set  aside  but  an  award  of
reinstatement should not, however, be automatically  passed.  The  award  of
reinstatement with  full  back  wages  in  a  case  where  the  workman  has
completed 240 days of work in a year  preceding  the  date  of  termination,
particularly, daily wagers has not been found to be  proper  by  this  Court
and instead compensation has been  awarded.  This  Court  has  distinguished
between a daily wager who does not hold a post and a permanent employee.”

4. Jagbir Singh (2009)  15  SCC  327  has  been  applied  very  recently  in
Telegraph Deptt. v. Santosh Kumar Seal (2010) 6 SCC 773, wherein this  Court
stated: (SCC p. 777, para 11)
“11. In view of the aforesaid legal position and the fact that  the  workmen
were engaged as daily wagers about 25 years back and they worked hardly  for
2 or 3 years, relief of reinstatement and back wages to them cannot be  said
to be justified and instead monetary compensation would  subserve  the  ends
of justice.”

17.         In the light of the above discussion, the impugned  judgment  of
the  High  Court  is  modified  and  keeping  in  view  the  fact  that  the
respondents are facing hardship on account of pending  litigation  for  more
than two decades and the fact that some of the  respondents  are  over  aged
and thus have lost the opportunity to  get  a  job  elsewhere,  interest  of
justice  would  be  met  by  directing  the  appellant-university   to   pay
compensation of rupees four lakhs to each  of  the  respondents.   By  order
dated 11.07.2011, this Court directed  the  appellant  to  comply  with  the
requirements of Section 17B of the Industrial Disputes Act, 1947 and  it  is
stated that the same is being complied with.   The  appellant-university  is
directed to pay the respondents rupees four lakhs each  within  four  months
from the date of receipt of this judgment. The payment of rupees four  lakhs
shall be in addition to wages paid  under  Section  17B  of  the  Industrial
Disputes Act, 1947.
18.         In the result, the  impugned  judgment  is  modified  and  these
appeals are partly allowed in the above terms.  No order as to costs.

                                                                 ………………………J.
     (DIPAK MISRA)


                                                                 ………………………J.
     (R. BANUMATHI)
New Delhi;
September  8, 2015

it would, thus, be clear that, on constitution of the District or Regional Council, paragraph 19 ceases to operate and power of the Governor becomes coterminous and ceases to exist. Simultaneously, the power of the District or Regional Council becomes operational to make laws on subjects covered in paragraph 3 of the Sixth Schedule. Proprio vigore, paragraph 12- A comes into force. By operation of paragraph 12-A(b), the President has been empowered to direct by a notification that any Act of Parliament should not be made applicable or made applicable with such modifications and exceptions, as may be specified in the said notification. In other words, until such notification is published by the President, all Acts of Parliament which are not occupied by the provisions contained in paragraph 3 shall proprio vigore become operative in the area of the Autonomous Regions or Districts in the State of Meghalaya.” (underlining is ours) 14. We also do not find any substance in the arguments advanced on behalf of the appellant that the Notification dated 14.3.1966 would continue to be applicable to the Union Territory and the successor State of Mizoram by virtue of Section 24 of the General Clauses Act. We do not see how the said provisions of the General Clauses Act can have any application to the present case. 15. Consequently, we dismiss the present appeal and affirm the view taken by the High Court.

                                 REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL  NO. 3536 OF 2008


J. Thansiama                                       ...   Appellant (s)

                                   Versus
State of Mizoram & Ors.                                ...    Respondent(s)


                               J U D G M E N T

RANJAN GOGOI, J.

1.    The Gauhati High Court  by  the  impugned  judgment  and  order  dated
01.08.2005 has held the Limitation Act, 1963 to be applicable to  the  State
of Mizoram.  Consequential to the said conclusion of  the  High  Court,  the
suit filed by the appellant for declaration of title etc. was  dismissed  as
being time barred.  This was  in  reversal  of  the  decree  passed  by  the
learned Trial Court on merits after holding that the  Limitation  Act,  1963
would not be applicable to bar the suit of the appellant-plaintiff.

2.    The High Court in a very  exhaustive  and  illuminating  judgment  has
traced the history of the creation of the  present  day  State  of  Mizoram.
Equally, the laborious arguments advanced by the  learned  counsel  for  the
parties have thrown further light into the  evolution  of  the  present  day
State.  However, we do not consider it necessary to  burden  this  order  by
referring to the said details  except  to  record  what  would  be  strictly
required for the purposes of the  present  adjudication,  namely,  that  the
present day State of Mizoram was earlier known as Lushai Hills District  and
formed part of the original undivided State of  Assam.   The  said  district
was included in the list of tribal areas of the State of Assam under  Part-A
of the table appended to Para 20 of the Sixth Schedule to the  Constitution.
 Thereafter, Lushai Hills District was  renamed  as  Mizo  District  by  the
Lushai Hills District (Change of Name) Act, 1954.   A  consequential  change
in Para 20 of the Sixth Schedule to the Constitution was also made.

3.    Para 20 of the Sixth Schedule as it was at the point of time  relevant
to the case [on 14.3.1966 or prior to  the  changes  brought  in  by  North-
Eastern Areas (Reorganisation) Act, 1971] read as follows :
“Tribal Areas    20.  (1) The areas specified in Parts A and B of the  table
below shall be the tribal areas within the State of Assam.

(2)    The  United  Khasi-Jaintia  Hills   District   shall   comprise   the
territories which before the commencement of this  Constitution  were  known
as the Khasi States and the Khasi and Jaintia Hills District, excluding  any
areas for the time being comprised within the  cantonment  and  municipality
of Shillong but,  including  so  much  of  the  area  comprised  within  the
municipality of Shillong as formed part of the Khasi State of Mylliem :

      Provided that for  the  purposes  of  clauses  (e)  and  (f)  of  sub-
paragraph (1), paragraph 3, paragraph 4,  paragraph  5,  paragraph  6,  sub-
paragraph (2), clauses (a), (b)  and  (d)  of  sub-paragraph  (3)  and  sub-
paragraph (4) of paragraph  8,  and  clause  (d)  of  sub-paragraph  (2)  of
paragraph 10 of this Schedule, no part of  the  area  comprised  within  the
municipality of Shillong shall be deemed to be within the district.

(2a)  The Mizo District shall comprise the areas which at  the  commencement
of this Constitution was known as the Lushai Hills District...

(3)   Any reference in the table below  to  any  district  (other  than  the
United  Khasi-Jaintia   Hills   District   and   the   Mizo   District)   or
administrative area shall be construed as a reference to  that  district  or
area at the commencement of this Constitution :

      Provided that the tribal areas specified in Part B of the table  below
shall not include any such areas in the plains as  may,  with  the  previous
approval of the President, be notified by the  Governor  of  Assam  in  that
behalf.



                                    TABLE

                                  PART   A

1.    The United Khasi-Jaintia Hills District.
2.    The Garo Hills District.
3.    The Mizo  District.
4.    ******
5.    The North Cachar Hills
6.    The Mikir Hills.

                                   PART  B

******       ******  *****   *****           *****”

4.    The Governor of Assam issued  Notification  bearing  No.  TAD/GA/12/64
dated 14.3.1966 whereby  the  operation  of  the  Limitation  Act  1963  was
excluded from the tribal areas of Assam as specified in the  Sixth  Schedule
of the Constitution, the details of which have  been  extracted  above.  The
Notification dated 14.3.1966 is in the following terms :
“In exercise of the powers conferred by clause (b) of the sub-paragraph  (1)
and sub-paragraph  (2)  of  paragraph  12  of  the  Sixth  Schedule  to  the
Constitution of India, the Governor of Assam is pleased to direct  that  the
Limitation Act, 1963, (No. 36 of 1963) shall not apply to the  Tribal  Areas
of Assam specified in Part A of the table appended to paragraph  20  of  the
Sixth Schedule to the Constitution of India, with effect  from  the  1st  of
January, 1964.”

5.    It will be necessary to take note of the fact that as on the  date  of
the said Notification Mizo District was included  in  the  tribal  areas  of
Assam.

6.    The next relevant fact that will have to  be  taken  note  of  is  the
enactment  of   the   North-Eastern   Areas   (Reorganisation)   Act,   1971
[hereinafter referred to as ‘the Reorganisation  Act’]  which  provided  for
the establishment of the States  of  Manipur,  Tripura,  Meghalaya  and  the
Union Territories of Mizoram  and  Arunachal  Pradesh  by  reorganising  the
original  State  of  Assam.   Section  6  contained  in  Part  II   of   the
Reorganisation Act provided for the formation  of  the  Union  Territory  of
Mizoram from the effective date i.e. 21.1.1972, comprising  the  territories
of the Mizo District of the original State of Assam.
      Section 71  of  the  Reorganisation  Act  stipulated  that  the  Sixth
Schedule to the Constitution shall stand amended as provided in  the  Eighth
Schedule  to  the  Reorganisation  Act.   In  the  Eighth  Schedule  to  the
Reorganisation Act, Para 20  dealing  with  tribal  areas  was  amended  and
divided into three parts.  Of relevance would be Part  III  which  specified
the tribal areas of the Union Territory of Mizoram as “the  Mizo  District”.
Para 12B to the Sixth Schedule was also introduced and  the  said  provision
dealt with application of the Acts of  Parliament  and  other  Acts  to  the
autonomous  districts  of  Mizoram.   Under  Para  12B  the  President   was
authorized to direct that any Act of Parliament shall  not  apply  or  apply
with  modification  to  an  autonomous  district  or  region  in  the  Union
Territory of Mizoram. Para 12B was further  amended  by  the  Government  of
Union Territories (Amendment) Act, 1971 as it became so necessary  upon  the
Constitution of the Legislative Assembly of the Union Territory of  Mizoram.
However, it is not necessary for us to specifically notice  the  details  in
this regard so far as the present case is concerned.
 Section 77 of the Reorganisation  Act  provided  that  notwithstanding  the
establishment of the newly constituted States and Union Territories any  law
which was applicable to a territory prior to the constitution of  the  State
or Union Territory will continue to apply in the newly established State  or
a Union Territory.
      Section 79 of the Reorganisation Act provided that to  facilitate  the
application of any law in relation to any State or  Union  Territory  formed
under the provisions of Part II of the Reorganisation  Act  the  appropriate
Government may, before the expiration of two years from the appointed  date,
make such adaptations or modifications of the law as  may  be  necessary  or
expedient.  Once such adaptation or modification is made the law shall  have
effect subject to such adaptations  and  modifications  until  the  same  is
altered  or  repealed  by  the  competent  legislature  or   the   competent
authority.

7.    It will also require to be noticed that  with  effect  from  29.4.1972
Part III of Para 20 of the Sixth Schedule was further amended and “the  Mizo
District” ceased to be a part of the tribal areas of the Union Territory  of
Mizoram and the Chakma, Lakher and Pawi districts came  to  be  included  in
Part III as the tribal areas of the Union Territory of Mizoram.  There  were
some further changes in the aforesaid tribal areas with which we  would  not
be strictly concerned in the present case.

8.    To make the narration of facts complete, the provisions of  the  State
of Mizoram Act, 1986 may be referred to for  the  purposes  of  bringing  on
record the fact of creation of the State of Mizoram  by  the  aforesaid  Act
with effect from 20.02.1987.  There were certain  parallel  changes  in  the
provisions of the Sixth Schedule including Para  12B  and  Para  20  thereof
upon creation of the State of Mizoram.  However, as the said  facts,  again,
are not strictly relevant to the present case,  a  detailed  notice  thereof
would not be necessary.
9.     What,  however,  would  require  a  pointed  notice   is   that   the
Notification dated 14.03.1966 issued by the Governor of Assam excluding  the
operation of the Limitation Act from the tribal areas of the State of  Assam
ceased to be applicable to the Mizo District once the areas therein no  long
formed a part of the tribal areas of Assam and, instead, became  a  part  of
the tribal areas  of  the  Union  Territory  of  Mizoram  with  effect  from
21.1.1972.   The  further   developments   (historical,   geographical   and
constitutional), namely, the exclusion/omission of the  Mizo  district  even
from the tribal areas of the Union Territory of Mizoram; the dissolution  of
the Mizo District Council and the  addition  of  Pawai,  Lakher  and  Chakma
Districts to part III of Para 20 of the Sixth Schedule as the  tribal  areas
of the Union Territory of Mizoram, of which all  developments  had  occurred
subsequent to the creation of the Union Territory of Mizoram, would  further
fortify the above position.  The aforesaid facts would demonstrate that  the
Notification dated 14.03.1966 ex facie would not apply to the  areas  within
the erstwhile Mizo District of the  State  of  Assam  once  the  said  areas
ceased to be so and came to comprise the Union  Territory  of  Mizoram  with
effect from 21.1.1972 by virtue of Section 6 of the Reorganisation Act.
10.   Indeed it is correct that the Gauhati  High  Court  in  The  State  of
Meghalaya  vs.  U.  William  Mynsong[1]  has  held  that  in  view  of   the
notification dated 14.3.1966, the Limitation Act 1963 will not apply to  the
State of Meghalaya. The reasoning of the High Court in  the  said  case  has
been pressed into service for our acceptance in the  present  case  also  on
account of the parity of the facts of the two cases.   Having  gone  through
the said judgment we are unable to accept the reasoning  contained  therein.
However, we say no more as the correctness of view expressed  in  the  State
of Meghalaya vs. U. William Mynsong (supra) is not  under  challenge  before
us; neither is the question involved therein,  namely,  the  application  of
the Limitation Act, 1963 to the State of Meghalaya the issue arising in  the
present case.
11.      In Regional Provident  Fund  Commissioner  vs.  Shillong  City  Bus
Syndicate & Ors.[2]  the question of applicability of Acts of Parliament  to
Khasi Hills autonomous District in the light of the provisions of the  Sixth
Schedule had received an elaborate consideration of this Court. In the  said
case, the provisions of the Employees’  Provident  Funds  and  Miscellaneous
Provisions  Act,  1952  were  held  to  be  inapplicable   to   the   tribal
areas/District Council areas of Khasi Hills by  the  High  Court.  The  High
Court seems to have proceeded on the basis that after  constitution  of  the
tribal  areas  of  State   of   Meghalaya   by   the   North-Eastern   Areas
(Reorganisation) Act, 1971, no notification was published  by  the  Governor
under Para 19 of the Sixth Schedule making the aforesaid Act  applicable  to
the Khasi Hills District.  The  said  Act,  therefore,  did  not  come  into
operation  and,  consequently,  after  the  constitution  of  the   District
Council, the Act did not become operative and effective on its own.
12.   Dealing with the aforesaid view of the High Court, it was pointed  out
that the provisions of Para 19 of the Sixth Schedule  are  transitional  and
with the constitution of the District Council, Para 19  ceased  to  operate.
Therefore, the application of laws were to be governed by the provisions  of
Para 12A (as applicable to the State of Meghalaya)  of  the  Sixth  Schedule
which required the exclusion or application with modifications  of  any  Act
of Parliament to be made by notification issued by the President. To  arrive
at the above conclusion in the matter, references  have  been  made  to  the
Constituent Assembly Debates and  to  a  celebrated  work  on  the  subject,
reference to which are to be found in Para 12 and 14  of  the  report  which
may be usefully extracted below:-

12. Dr Ambedkar, during the debates in the Constituent  Assembly  stated  in
unequivocal terms that:
“…the other binding force is this that the laws made by Parliament  and  the
laws made by the Legislature of Assam  will  automatically  apply  to  these
Regional Councils and to the District Councils. Unless the  Governor  thinks
that they ought not to apply,  in  other  words,  the  burden  is  upon  the
Governor to show why the law which is made by the Legislature  of  Assam  or
by  Parliament,  should  not  apply.  Generally,  the  laws  made   by   the
Legislature and the laws made by  Parliament  will  also  be  applicable  to
these areas”.

14. B.L. Hansaria, J. in his Sixth Schedule to the Constitution of  India  —
a Study (1983 Edn.) published by M/s Ashok  Publishing  House,  Gauhati  has
stated at p. 45 thus:
“Insofar as the Acts or (sic) Parliament are concerned,  the  provisions  in
respect of tribal areas broadly speaking is that the Governor,  in  case  of
tribal areas in Assam, and the President in respect of the two other  tribal
areas, may notify that the Act shall not apply to an autonomous district  or
region, or shall apply subject to such exceptions or  modifications  as  may
be specified. A question arises whether an Act  of  Parliament  would  apply
proprio vigore if there be no notification prohibiting its application.”

13.   The eventual conclusion of this Court are  to  be  found  in  Para  16
which is quoted below with the  clarification  that  Para  12A  referred  to
therein pertains to the autonomous Districts or  Regional  Councils  in  the
State of Meghalaya whereas in the instant case the  relevant  provisions  of
the Sixth Schedule would be Paragraph 12B as  initially  applicable  to  the
Union Territory of Mizoram and thereafter to the State of Mizoram.

“16. It would, thus, be clear that,  on  constitution  of  the  District  or
Regional Council, paragraph 19 ceases to operate and power of  the  Governor
becomes coterminous and ceases to exist. Simultaneously, the  power  of  the
District or Regional Council becomes operational to make  laws  on  subjects
covered in paragraph 3 of the Sixth Schedule. Proprio vigore, paragraph  12-
A comes into force. By operation of paragraph  12-A(b),  the  President  has
been empowered to direct by  a  notification  that  any  Act  of  Parliament
should not be made applicable or made  applicable  with  such  modifications
and exceptions, as may be specified  in  the  said  notification.  In  other
words, until such notification is published by the President,  all  Acts  of
Parliament which are not occupied by the provisions contained  in  paragraph
3 shall proprio vigore become  operative  in  the  area  of  the  Autonomous
Regions or Districts in the State  of  Meghalaya.”          (underlining  is
ours)


14.    We also do not find  any  substance  in  the  arguments  advanced  on
behalf  of  the  appellant  that  the  Notification  dated  14.3.1966  would
continue to be applicable to the Union Territory and the successor State  of
Mizoram by virtue of Section 24 of the General Clauses Act.  We do  not  see
how the said provisions of the General Clauses Act can have any  application
to the present case.
15.   Consequently, we dismiss the present appeal and affirm the view  taken
by the High Court.


                                            ..……..……......................J.
                                                      (RANJAN GOGOI)


                                             ….……..…….....................J.
                                                   (N.V. RAMANA)
NEW DELHI
SEPTEMBER 08, 2015.
-----------------------
[1]    (1987 (2) GLR 221)
[2]    1996 (8) SCC 741

Monopolies and Restrictive Trade Practices Act, 1969 (for brevity hereinafter referred to as ‘the Act’). The practice under scrutiny is of the year 1999 when the appellant was to begin the manufacture and delivery of newly introduced Tata Indica cars into the market with effect from February 1999, with the installed capacity of approximately 60,000 cars in a year=The appellant is a company engaged in manufacture and sale of automobiles. It is aggrieved by the impugned order dated 28.2.2006 passed by the Monopolies and Restrictive Trade Practices Commission (for brevity ‘the Commission’) in U.T.P. Enquiry nos. 86/99, 87/99 and 90/99 whereby the Commission has directed the appellant to cease and desist from continuing with the practices complained of and not to repeat the same in future.= We do not find any material or even allegation in the PIR which could satisfy any of the four unfair trade practices covered by various Clauses such as Clause (i), (ii), (iv) and (vi) of Section 36-A (1) of the Act. A careful perusal of the Notice of Enquiry dated 25.9.2000 reveals that no doubt a copy of the PIR was enclosed but the notice made it clear itself that the Commission came to a considered opinion that the Director (Research) had found the appellant indulging in unfair trade practices falling precisely and only under clauses (i), (ii), (iv) and (vi) of Section 36A(1) of the Act. The enquiry, as per the notice, was to cover:- (a) whether the respondent has been indulging in the above said unfair trade practice(s) and (b) whether the said unfair trade practice(s) is/are prejudicial to public interest. A scrutiny of the judgment under appeal discloses that the Commission failed to keep in mind the precise allegations against the appellant with a view to find out whether the facts could satisfy the definition of Unfair Trade Practice(s) as alleged against the appellant in the Notice of Enquiry. The Commission was apparently misled by the Preliminary Investigation Report also which claimed to deal with reply received from the appellant in course of the preliminary enquiry but patently failed even to notice the stipulation as regards payment of interest on the booking amount although this fact was obvious from the terms and conditions of the booking and was reportedly relied upon by the appellant in its reply even at the stage of preliminary investigation. The Commission noticed the relevant facts including provision for interest while narrating the facts, but failed to take note of this crucial aspect while discussing the relevant materials for the purpose of arriving at its conclusions. Such consideration and discussion begins from paragraph 32 onwards but without ever indicating that the booking amounts had to be refunded within a short time or else it was to carry interest at the rate of 10% per annum. The order of the Commission appears to be largely influenced by a conclusion that the appellant should not have asked for deposit of an amount above the basic price because in the opinion of the Commission it was unfair for the appellants to keep excise and sales tax with itself for any period of time. Such conclusion of the Commission is based only upon subjective considerations of fairness and do not pass the objective test of law as per precise definitions under Section 36A of the Act. The submissions and contentions of Mr. Desai merit acceptance. Even after stretching the allegations and facts to a considerable extent in favour of respondent Commission, we are unable to sustain the Commission’s conclusions that the allegations and materials against the appellant make out a case of unfair trade practice against the appellant. Nor there is any scope to pass order under Section 36-D(1) of the Act when no case of any unfair trade practice is made out. Hence, we are left with no option but to set aside the order under appeal. We order accordingly. As a result the appeal stands allowed. However, there shall be no order as to costs.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 2069 OF 2006

Tata Engineering and                           …..Appellant
Locomotive Company Ltd.

      Versus

The Director (Research)                                   …..Respondents
for and on behalf of Deepak Khanna & Ors.


                               J U D G M E N T



SHIVA KIRTI SINGH, J.

This is an appeal under Section 55 of the Monopolies and  Restrictive  Trade
Practices Act, 1969 (for brevity hereinafter referred to as ‘the Act’).  The
appellant is a company engaged in manufacture and sale  of  automobiles.  It
is aggrieved by the impugned order dated 28.2.2006 passed by the  Monopolies
and Restrictive Trade Practices Commission (for  brevity  ‘the  Commission’)
in U.T.P. Enquiry nos. 86/99, 87/99 and 90/99  whereby  the  Commission  has
directed the  appellant  to  cease  and  desist  from  continuing  with  the
practices complained of  and not to repeat the same in future.
Since there is no dispute on facts, the case of  the  parties  on  facts  is
common and to the following effect:
The practice under scrutiny is of the year 1999 when the  appellant  was  to
begin the manufacture and delivery of  newly  introduced  Tata  Indica  cars
into the market with effect from February 1999, with the installed  capacity
of  approximately  60,000  cars  in  a  year The  appellant  invited   the
prospective customers to book the car through dealers.  The  booking  amount
demanded by the appellant was quite high and close to  the  estimated  price
finally  payable  which  would  include   excise   duty,   sales   tax   and
transportation charges. The terms and conditions for booking  of  order  for
purchase of Tata Indica cars were mentioned in detail indicating  the  model
wise price depending upon the city of booking. It  was  indicated  that  the
price of vehicle as well as taxes, duties and cess will be as applicable  on
the date of delivery. Those making valid booking were  to  be  supplied  the
vehicle as per priority numbers generated and allocated  by  a  computerized
technique, for the first 10,000 bookings only. The terms also provided  that
the payments  against  the  remaining  bookings  will  be  refunded  to  the
customers, without interest, at the earliest but in any case within a  month
from the closing of the booking.  For refunds after a month,  interest  will
be paid at the rate of 10% per annum. The order booking  form  mentioned  in
Clause 7 that  the  person  concerned  had  carefully  read  the  terms  and
conditions of the bookings and agreed to the same.
Although the initial  allotment  was  confined  only  to  10,000  cars,  the
appellant received as many  as  1,13,768  booking  applications  along  with
stipulated amount which aggregated  to  Rs.3,216.44  crores.  The  appellant
gave an option to prospective customers to opt for a second phase of  50,000
vehicles likely to be delivered from  April-May  1999  to  March  2000.   It
refunded the balance amounts to those who desired  for  refund,  along  with
interest as represented. No complaint was made to the Commission by  any  of
the persons who made the booking and thereafter either purchased the car  or
withdrew the deposits with or without interest, as the case may be.
However three complaints were made before  the  Commission  by  persons  who
claimed that they had intentions to make the booking but were  dissuaded  by
the high quantum  of  deposit  required  for  the  purpose.  Their  specific
objection was that the demanded amount exceeded the basic price of  the  car
if cess, taxes and transportation cost  were  left  out.  According  to  the
complainants the appellant had indulged in Unfair Trade  Practice  (UTP)  by
demanding an excessive amount for bookings of Indica cars and  by  including
the likely taxes, cess and transportation cost.
Since the defence taken by the appellant was also not disputed on facts,  it
would be relevant to note the same. When the Commission received  the  three
complaints, it sent them to the Director (Research) for  investigation.  The
Director submitted Preliminary Investigation Reports (PIR) in all the  three
matters and three cases were registered as per numbers  noted  earlier.  The
Notices of Enquiry under Sections 36-B (d), 37, 36-D of the  Act  and  under
Regulation 51 were issued to the appellant  who  contested  the  complaints.
The appellant filed its reply to the Notice of  Enquiry  in  which  it  also
raised a preliminary objection  that  the  allegations  of  the  restrictive
trade practice were vague and not permissible by law. Their further  defence
was that there are no facts and material to show that the  alleged  practice
is prejudicial to the public interest requiring an enquiry under Section  37
of the Act and that no facts were disclosed in  the  Notice  of  Enquiry  to
show prejudice to the public interest. On merits  some  of  the  allegations
were denied as incorrect. It was pointed out that none of  the  complainants
had applied for the booking of Tata Indica vehicle  and  hence  they  lacked
locus standi to file the complaints in the capacity of consumers. On  merits
the appellant also took the defence that there was no false  and  misleading
statement made by the appellant for inviting booking of  Tata  Indica  cars,
the applicants made the bookings  with  open  eyes  being  aware  about  the
stipulation for payment of interest. According to appellant by letter  dated
6.2.1999 the successful applicants were intimated  of  the  priority  number
allotted to them and the unsuccessful applicants  were  also  informed  that
they had an option to be considered for the second phase of 50,000 cars  and
such optees would be entitled to receive interest at the  rate  of  11%  per
annum with effect from 1.2.1999 till the date of  delivery.  Those  who  did
not opt for the second phase deliveries were refunded their booking  amounts
along with 10% interest.
The  appellant  explained  their  practice  by  pleadings  which   are   not
controverted, that their past  experience  as  automobile  manufacturer  was
limited to heavy vehicles and hence in their initial venture  into  the  car
segment, they were not sure of public response and they had decided to  plan
their production schedule on the basis of reality test of  car’s  demand  in
the market. For this speculative bookings were required  to  be  discouraged
and the same was sought to be achieved by demanding an amount closer to  the
anticipated price which the customer would be required to pay. According  to
submissions, such practice  could  not  have  promoted  the  sale  of  their
vehicle rather it was discouraging. The large response shows peoples’  faith
in the products of the appellant and also that the interest rate offered  by
the appellants was appreciable and fair.
Learned Senior Counsel Mr. Ashok H.  Desai  highlighted  the  definition  of
Unfair Trade Practice as indicated in Section 36A  of  the  Act.  Since  the
Notice of Enquiry alleged that the appellant had indulged  in  unfair  trade
practices falling under Section 36A (1) (i), (ii),  (iv)  and  (vi)  of  the
Act, the aforesaid provisions need to be noticed. They read as follows:

1     “36A. Definition of unfair trade practice - In this Part,  unless  the
context otherwise requires “unfair trade practice” means  a  trade  practice
which, for the purpose of promoting the sale, use or supply of any goods  or
for the provisions of any services, adopts any unfair method  or  unfair  or
deceptive practice including any of the following practices, namely :-


(1) the practice of making any statement, whether orally or  in  writing  or
by visible representation which,–


(i) falsely  represents  that  the  goods  are  of  a  particular  standard,
quality, quantity, grade, composition, style or mode;


(ii) falsely represents that the services  are  of  a  particular  standard,
quality or grade;


(iii)  xxxxxxxxx


(iv) represents that the goods  or  services  have  sponsorships,  approval,
performance, characteristics,  accessories,  uses  or  benefits  which  such
goods or services do not have;


(v)   xxxxxxxxxx


(vi) makes a false or misleading representation concerning the need for,  or
the usefulness of, any goods or services;”


According to Mr. Desai the allegations against the appellant do not  attract
any of the practices mentioned in the Notice of  Enquiry  and  contained  in
the definition noted above.
The second limb of arguments also flows from the definition in  Section  36A
of the Act. By placing reliance upon  judgment of this Court in the case  of
Rajasthan Housing Board vs. Parvati Devi (Smt) (2000)  6  SCC  104,  it  was
contended that when supplier and consumer have  entered  into  an  agreement
then the Commission, in order to hold the supplier guilty  of  unfair  trade
practice on the basis of allegations made against  it,  is  required  to  go
into the terms and conditions agreed between the  parties  for  finding  out
whether there was unfair trade practice so as to require further  action  on
the basis of complaints. In support of this proposition reliance was  placed
mainly on paragraph 14 of the judgment which is as follows:
“14. For deciding such question, the Commission has to find  out  whether  a
particular act can  be  condemned  as  an  unfair  trade  practice;  whether
representation contained a false statement and was misleading and  what  was
the effect of such a representation  made  to  the  common  man.  The  issue
cannot be resolved by merely holding that representation was  made  to  hand
over the possession within  the  stipulated  period  and  the  same  is  not
complied  with  or  some  lesser  constructed  area  is  given   after   the
construction of the building. The Commission has to  find  out  whether  the
representation, complained of, contains the element of misleading the  buyer
and whether buyers are misled or they are informed in advance that there  is
likelihood of delay in delivering the  possession  of  constructed  building
and also increase in the cost. For this purpose,  terms  and  conditions  of
the agreement are required to be examined by the Commission. Not only  this,
the Commission is required to consider whether the Board has adopted  unfair
method or deceptive practice for the purpose of promoting the sale,  use  or
supply of any goods or for the provisions of any services. Unless  there  is
a finding on this issue, the appellant Board cannot be penalised for  unfair
trade practice.”

On behalf of appellant reliance was also placed upon judgment of this  Court
in the case of  M/s Lakhanpal National Limited vs. M.R.T.P.  Commission  and
Another (1989) 3 SCC  251,  particularly  paragraph  7  and  9  thereof.  In
paragraph 7 it was held that the definition of “Unfair  Trade  Practice”  in
Section 36A is not inclusive or flexible, but specific and  limited  in  its
contents. The Court also considered the object  of  this  provision  with  a
view to resolve the issue as to whether particular acts can be condemned  as
unfair practice or not. We are in full agreement with the view expressed  by
L. M. Sharma, J., as he then was and hence it would be more  appropriate  to
extract para 7 which runs thus:
“7. However, the question in controversy has to be  answered  by  construing
the relevant  provisions  of  the  Act.  The  definition  of  “unfair  trade
practice” in Section 36-A mentioned above is not inclusive or flexible,  but
specific and limited in its contents. The object is  to  bring  honesty  and
truth in the relationship between the manufacturer and the consumer. When  a
problem arises as to whether a particular act can be condemned as an  unfair
trade practice or not, the key to the solution would be to  examine  whether
it contains a false statement and is misleading  and  further  what  is  the
effect of such a representation made by the manufacturer on the common  man?
Does it lead a reasonable person in the position  of  a  buyer  to  a  wrong
conclusion? The issue cannot be resolved by  merely  examining  whether  the
representation  is  correct  or  incorrect   in   the   literal   sense.   A
representation containing a statement apparently correct  in  the  technical
sense may have the effect of misleading the buyer by using tricky  language.
Similarly a statement, which may be  inaccurate  in  the  technical  literal
sense can convey the truth and sometimes more effectively than  a  literally
correct statement. It  is,  therefore,  necessary  to  examine  whether  the
representation, complained  of,  contains  the  element  of  misleading  the
buyer. Does a reasonable man on reading  the  advertisement  form  a  belief
different from what the truth is? The position will have to be  viewed  with
objectivity, in an impersonal manner. It is stated  in  Halsbury’s  Laws  of
England (4th Edn., paras 1044  and  1045)  that  a  representation  will  be
deemed to be false if it is false in substance and in fact; and the test  by
which the representation is to be judged is to see whether  the  discrepancy
between the fact as represented and the actual fact  is  such  as  would  be
considered material by a reasonable representee.  “Another  way  of  stating
the rule is to say that substantial falsity is, on the one hand,  necessary,
and, on the other, adequate, to establish  a  misrepresentation”  and  “that
where the entire representation is a faithful picture or transcript  of  the
essential facts, no falsity is established, even though there may have  been
any number of  inaccuracies  in  unimportant  details.  Conversely,  if  the
general impression conveyed is false, the most  punctilious  and  scrupulous
accuracy in immaterial minutiae will not render  the  representation  true”;
Let us examine the relevant facts of this case in this background.”

In reply Mr. A.K. Sanghi, Senior Advocate defended  the  impugned  order  of
the respondent Commission. According to him the Commission acted  fairly  in
entertaining the complaints from three persons who found the booking  amount
very high and therefore did not deposit the same. According to  him  once  a
Preliminary  Investigation  Report  dated  15.2.2000  was   available   with
conclusion and recommendation to the effect that only  the  basic  price  of
the car ought to have been collected from the public and not further  amount
which can  cover  only  excise  duties  and  sales  tax  that  goes  to  the
Government  and  that  such  amount  should  not  have  been   retained   by
manufacturing units for a long period of time, the Commission  although  did
not find the appellant guilty of any of  the  four  specific  provisions  of
Section   36-A (1) but still it  felt  compelled  to  conclude  against  the
appellant and resultantly  pass  a  cease  and  desist  order  under  powers
conferred upon the Commission by Section 36-D (1) (a) of the Act.
Mr. Sanghi also sought to support the finding of  the  Commission  on  issue
number one that the appellant has  indulged  in  unfair  trade  practice  by
referring to certain narratives  in  the  Preliminary  Investigation  Report
(PIR). As per his submission the Commission had not  only  communicated  the
precise allegations in terms of Section 36-A but had also enclosed with  the
Notice of Enquiry a copy of PIR and therefore findings cannot be  criticized
on the ground that the allegations were not precisely  communicated  through
the Notice  of  Enquiry.  We  find  no  merit  in  these  contentions.   The
Commission could not have travelled beyond the specific allegations  in  the
Notice of Enquiry because such a course would violate rules of fairness  and
natural justice.  The scope of enquiry could have been enlarged  only  after
serving further notice with necessary details of allegations and  supporting
facts.  This was clearly not done by  the  Commission.   It  is  a  flagrant
violation of audi alteram  partem  rule.   It  renders  the  impugned  order
invalid and bad in law.  The order is also bad for non application  of  mind
to requirement of law as stipulated in Section 36A(1) of  the  Act  and  the
relevant facts.
We have gone through the Preliminary Investigation  Report,  the  Notice  of
Enquiry as well as the Order under appeal. We do not find  any  material  or
even allegation in the PIR which could satisfy any of the four unfair  trade
practices covered by various Clauses such as  Clause  (i),  (ii),  (iv)  and
(vi) of Section 36-A (1) of the Act. A careful  perusal  of  the  Notice  of
Enquiry dated 25.9.2000 reveals  that  no  doubt  a  copy  of  the  PIR  was
enclosed but the notice made it clear itself that the Commission came  to  a
considered opinion that the Director  (Research)  had  found  the  appellant
indulging in  unfair  trade  practices  falling  precisely  and  only  under
clauses (i), (ii), (iv) and (vi) of Section 36A(1) of the Act. The  enquiry,
as per the notice, was to  cover:-  (a)  whether  the  respondent  has  been
indulging in the above said unfair trade practice(s)  and  (b)  whether  the
said unfair trade practice(s) is/are prejudicial to public interest.
A scrutiny of the  judgment  under  appeal  discloses  that  the  Commission
failed to keep in mind the precise allegations against the appellant with  a
view to find out whether the facts could satisfy the  definition  of  Unfair
Trade Practice(s)  as  alleged  against  the  appellant  in  the  Notice  of
Enquiry.  The  Commission  was  apparently   misled   by   the   Preliminary
Investigation Report also which claimed to deal  with  reply  received  from
the appellant in course of the preliminary enquiry but patently failed  even
to notice the stipulation as regards payment  of  interest  on  the  booking
amount although this fact was obvious from the terms and conditions  of  the
booking and was reportedly relied upon by the appellant in  its  reply  even
at the stage  of  preliminary  investigation.  The  Commission  noticed  the
relevant facts including provision for interest while narrating  the  facts,
but failed to  take  note  of  this  crucial  aspect  while  discussing  the
relevant materials for the purpose of  arriving  at  its  conclusions.  Such
consideration and discussion begins from paragraph 32  onwards  but  without
ever indicating that the booking amounts had to be refunded within  a  short
time or else it was to carry interest at the rate of 10% per annum.
The  order  of  the  Commission  appears  to  be  largely  influenced  by  a
conclusion that the appellant should  not  have  asked  for  deposit  of  an
amount above the basic price because in the opinion  of  the  Commission  it
was unfair for the appellants to keep excise and sales tax with  itself  for
any period of time. Such conclusion of the Commission  is  based  only  upon
subjective considerations of fairness and do not pass the objective test  of
law  as  per  precise  definitions  under  Section  36A  of  the  Act.   The
submissions and contentions of Mr. Desai merit acceptance.
Even after stretching the allegations and facts to a considerable extent  in
favour of respondent Commission, we are unable to sustain  the  Commission’s
conclusions that the allegations and materials against  the  appellant  make
out a case of unfair trade practice against the  appellant.   Nor  there  is
any scope to pass order under Section 36-D(1) of the Act  when  no  case  of
any unfair trade practice is made out.  Hence, we are left  with  no  option
but to set aside the order under appeal. We order accordingly. As  a  result
the appeal stands allowed. However, there shall be no order as to costs.
                       …………………………………….J.
                       [VIKRAMAJIT SEN]


                       ……………………………………..J.
                                    [SHIVA KIRTI SINGH]
New Delhi.
September 7, 2015.






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