Conflict Decisions in Joginder Tuli vs. S.L. Bhatia, (1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd. vs. Modern Construction & Co., (2014) 1 SCC 648. The question of law we are required to answer is that if a plaint is returned under Order VII Rule 10 and 10A of the Code of Civil Procedure 1908, (hereinafter called as “the Code”) for presentation in the court in which it should have been instituted, whether the suit shall proceed de novo or will it continue from 1 the stage where it was pending before the court at the time of returning of the plaint.

 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(s). 2904 OF 2020

(arising out of SLP (Civil) No(s). 16893 of 2018)

M/S. EXL CAREERS AND ANOTHER  ...APPELLANT(S)

VERSUS

FRANKFINN AVIATION SERVICES 

PRIVATE LIMITED ..RESPONDENT(S)

JUDGMENT

NAVIN SINHA, J.

Leave granted.

2. The present appeal has been placed before us on a reference

by a two Judge Bench opining a perceived conflict between two

Division   Bench   decisions   in  Joginder   Tuli   vs.   S.L.   Bhatia,

(1997) 1 SCC 502 and Oil and Natural Gas Corporation Ltd.

vs.   Modern   Construction   &   Co.,  (2014)   1   SCC   648.   The

question of law we are required to answer is that if a plaint is

returned under Order VII Rule 10 and 10A of the Code of Civil

Procedure   1908,   (hereinafter   called   as   “the   Code”)   for

presentation in the court in which it should have been instituted,

whether the suit shall proceed  de novo  or will it continue from

1

the stage where it was pending before the court at the time of

returning of the plaint. The order of reference also leaves it open

for consideration if the conduct of the appellant disentitles it to

any relief notwithstanding the decision on the issue of law. 

3. The   respondent   filed   a   suit   for   recovery   against   the

appellant arising out of a franchise agreement dated 24.03.2004,

before the Civil Judge (Sr. Division) at Gurgaon. In view of the

exclusion   clause   in   the   agreement,   the   plaint   was   returned

holding that the court at Gurgaon lacked territorial jurisdiction

and that the court at Delhi alone had jurisdiction in the matter.

The High Court by the impugned order dated 13.03.2018 has

held that the suit at Delhi shall proceed from the stage at which

it was pending at Gurgaon before return of the plaint and not de

novo.   Aggrieved,   the   appellant   preferred   the   present   appeal.

Further proceedings were stayed on 13.07.2018 culminating in

the order of reference.

4. Shri Manoj Swarup, learned senior counsel appearing on

behalf   of   the   appellant,   submitted   that   there   is   no   conflict

between the  decisions in  Joginder   Tuli  (supra) and  Modern

2

Construction  (supra) requiring consideration by a larger Bench.

The latter lays down the correct law that the suit will have to

proceed  de   novo  at  Delhi  and   cannot  be continued  from  the

earlier stage at Gurgaon.  Joginder Tuli (supra) cannot have any

precedential value not being based on consideration of the law,

but having been passed more in the facts of that case. 

5. Shri Swarup submitted that the High Court erred in not

appreciating that it was not exercising transfer jurisdiction under

Section 24 of the Code. The plaint could be returned at any stage

of the suit under Order VII Rule 10 and 10A. The fact that the

pleadings and evidence may have concluded before the Gurgaon

court was inconsequential. The suit was filed on 06.01.2011. The

appellant had preferred the objection under Order VII Rule 10

promptly on 26.08.2011.  Order XVIII Rule 15 also could not be

invoked in view of the nature of jurisdiction conferred under Rule

10 for return of the plaint.   Rule 10A is only a  sequitur with

regard to the procedure to be followed for the same. It cannot be

interpreted as providing for continuation of the suit. The High

Court in the first revisional order dated 05.09.2017 had rejected

the objection with regard to the advanced stage at which the suit

3

was at Gurgaon. The mere use of the words ‘return the file’ are

irrelevant and cannot be construed as enlarging the scope of

jurisdiction under Order VII Rule 10.  The order attained finality

as no appeal was preferred against the same. Significantly under

Order   VII   Rule   10A   fresh   summons   had   to   issue   upon

presentation   of   the   plaint   before   the   court   of   competent

jurisdiction. Shri Swarup in this context referred to Order IV Rule

1 with regard to the institution of the suit by presentation of a

plaint   and   issuance   of   summons   under   Order   V   Rule   1   to

contend that under Rule 10A when summons are issued by the

new court where the plaint is presented the proceedings go back

to the inception of the suit by institution.    

6. In support of his submission that the suit has necessarily to

proceed de novo on return of the plaint, he relied upon Ramdutt

Ramkissen  Dass  vs.  E.D.  Sassoon  &  Co., AIR 1929 PC 103;

Amar Chand Inani vs. The Union of India, (1973) 1 SCC 115;

Harshad Chimanlal Modi (II) vs. DLF Universal Ltd., (2006) 1

SCC   364   and  Hasham   Abbas   Sayyad   vs.   Usman   Abbas

Sayyad, (2007) 2 SCC 355, to submit that the institution of the

4

suit at Gurgaon being coram non judice the suit had necessarily

to commence de novo at Delhi.

7. Shri P.S. Patwalia, learned senior counsel appearing for the

respondent, submitted that the special leave petition suffers from

suppression of material facts. Had the materials placed in the

counter   affidavit   been   brought   to   the   attention   of   the   court

perhaps the special leave petition may not have been entertained.

The appellant in his first objection did not raise the ground under

the exclusion clause 16B of the agreement but limited it to the

grounds that no business was carried on at Gurgaon and that

defendant   no.2   did   not   reside   there   also.   The   first   order   of

rejection dated 12.03.2015 has not been annexed to the appeal.

Thereafter jurisdiction was framed as a preliminary issue which

was again decided in favour of the respondent on 06.09.2016.

The revision by the appellant having been allowed by the High

Court on 05.09.2017, it did not take any steps for having the

plaint retuned to the respondent. It was left for the respondent to

file   a   fresh   application   under   Order   VII   Rule   10   praying   for

transfer   of   the   entire   judicial   file   from   Gurgaon   to   Delhi

considering the advanced stage of the suit which was allowed by

5

the Civil Judge and affirmed in the impugned order by the High

Court.  

8. Shri   Patwalia   next   submitted   that   the   High   Court   on

05.09.2017   had   consciously   directed   for   return   of   the   file.

Nothing precluded the High Court from directing the return of the

plaint.  The Trial Court has justifiably reasoned that the order of

the High Court for return of the file was based on the premise of

the advanced stage of the suit for continuation of the same at

Delhi, as otherwise it would be a travesty of justice if the suit was

to proceed  de novo  at Delhi. The High Court correctly affirmed

the same by the impugned order. The present was not a case

where   the   Gurgaon   court   lacked   complete   jurisdiction.   The

respondent has been non suited at Gurgaon only in view of the

exclusionary clause at 16B of the franchise agreement. It shall be

a question on the facts of each case, if the trial should proceed

afresh or continue from the earlier stage and the matter could

not be put in a straight jacket. The present being a case of

overlapping jurisdictions it would be a travesty of justice and will

cause great injustice and prejudice to the respondent if the suit

is directed to proceed de novo at Delhi.  Shri Patwalia relied upon

6

R.K.  Roja  vs.  U.S.  Rayudu,  (2016) 14 SCC 275 and  Oriental

Insurance   Company   Ltd.   vs.   Tejparas   Associates   and

Exports Pvt. Ltd., (2019) 9 SCC 435, to submit that the latter

also follows Joginder Tuli (supra). 

9. We have considered the submission on behalf of the parties

and considered the materials on record.  The franchise agreement

was executed between the parties at New Delhi on 24.03.2004 for

running courses in Aviation, Hospitality and travel Management

at Meerut in accordance with the prescriptions and standards of

the   respondent.     Clause   16B   of   the   agreement   stipulated   as

follows:

“B. JURISDICTION

Only   Courts   in   Delhi   shall   have   exclusive

jurisdiction   to   settle   all   disputes   and

differences   arising   out   of   the   AGREEMENT,

whether during its term or after expiry/earlier

termination thereof.”

10. The respondent on 06.01.2011 instituted a suit before the

Civil Judge (Sr. Division) at Gurgaon against the appellant for

recovery of Rs.23,11,190/­.   The appellant filed an application

under Order VII Rule 10 CPC on 26.08.2011 contending that the

Gurgaon court had no territorial jurisdiction as it did not carry

7

on   any   business   within   its   jurisdiction   and   neither   was   it   a

resident, requiring the plaint to be returned to the respondent.

No objection was raised under clause 16B of the agreement. The

Civil   Judge,   Gurgaon   on   12.03.2015   rejected   the   objection

opining that it could not be decided summarily and was required

to be framed as a preliminary issue. The appellant then filed its

written statement and the respondent its replication.  Issues in

the suit were framed on 01.10.2015 inadvertently ignoring the

earlier   order   leading   to   framing   of   the   preliminary   issue   on

01.10.2015 with regard to jurisdiction.  The appellant offers no

explanation why the objection under clause 16B of the agreement

was not raised in its application dated 26.08.2011 under Order

VII Rule 10 CPC. 

11. The Civil Judge Gurgaon by his order dated 06.09.2016

rejected the argument with regard to exclusive jurisdiction at

Delhi under clause 16B of the Agreement.   The High Court in

revision on 05.09.2017 set aside the order of the Civil Judge

dated   6.9.2016   holding   that   in   view   of   clause   16B   of   the

franchise   agreement,   the   Gurgaon   court   lacked   territorial

jurisdiction directing return of the file.   The submission of the

8

respondent   with   regard   to   the   advanced   stage   of   the   suit   at

Gurgaon   was   rejected.   Prior   thereto,   the   suit   had   made

substantive progress as in the meantime evidence of the parties

had been closed and the matter has been fixed for final argument

on 01.06.2017.  We are of the considered opinion that the mere

use of the words ‘return the file’ in the order dated 05.09.2017

cannot enlarge the scope of jurisdiction under Order VII Rule 10

to mean that the High Court has directed so with the intention

for continuance of the suit. Firstly, that objection was expressly

rejected. Secondly the order itself states that the file be returned

under Order VII Rule 10 and 10A of the Code. Clearly what the

High Court intended was the return of the plaint. 

12.   Thereafter  it  was  left  for  the  respondent   who   moved  an

application on 11.10.2017 before the Civil Judge at Gurgaon that

in the peculiar facts of the case, the advanced stage at which the

proceedings   were   at   Gurgaon,   it   would   be   in   the   interest   of

justice that the entire judicial file be transferred to the court

having jurisdiction at Delhi, which was allowed by the Civil Judge

Gurgaon on 14.02.2018 noticing that the High Court in revision

had directed for transfer of the file. In the fresh revision preferred

9

by   the   respondent   against   the   order,   the   High   Court   by   the

impugned   order   dated   13.03.2018   declined   to   interfere   and

rejected the contention of the appellant for a  de novo  trial at

Delhi.  We have referred to the facts of the case with brevity to

notice the conduct of the parties and all other relevant aspects to

be kept in mind while passing final orders.

13.  It is no more res­integra that in a dispute between parties

where two or more courts may have jurisdiction, it is always open

for them by agreement to confer exclusive jurisdiction by consent

on one of the two courts. Clause 16B of the agreement extracted

above leaves us in no doubt that the parties clearly indicated that

it   was   only   the   court   at   Delhi   which   shall   have   exclusive

jurisdiction with regard to any dispute concerning the franchise

agreement and no other court would have jurisdiction over the

same. In that view of the matter, the presentation of the plaint at

Gurgaon was certainly not before a court having jurisdiction in

the matter. This Court considering a similar clause restricting

jurisdiction by consent in Swastik Gases (P) Ltd. vs. Indian Oil

Corpn. Ltd., (2013) 9 SCC 32, observed as follows:

10

“32.   ….It   is   a   fact   that   whilst   providing   for

jurisdiction clause in the agreement the words

like   “alone”,   “only”,   “exclusive”   or   “exclusive

jurisdiction” have not been used but this, in

our view, is not decisive and does not make

any material difference. The intention of the

parties—by having Clause 18 in the agreement

—is clear and unambiguous that the courts at

Kolkata shall have jurisdiction which means

that   the   courts   at   Kolkata   alone   shall   have

jurisdiction. It is so because for construction of

jurisdiction   clause,   like   Clause   18   in   the

agreement,   the   maxim  expressio   unius   est

exclusio  alterius  comes into play as there is

nothing to indicate to the contrary. This legal

maxim means  that expression of one is the

exclusion of another. By making a provision

that   the   agreement   is   subject   to   the

jurisdiction   of   the   courts   at   Kolkata,   the

parties have impliedly excluded the jurisdiction

of other courts. Where the contract specifies

the jurisdiction of the courts at a particular

place and such courts have jurisdiction to deal

with the matter, we think that an inference

may be drawn that parties intended to exclude

all other courts. A clause like this is not hit by

Section  23  of the  Contract  Act at  all. Such

clause  is  neither  forbidden  by law   nor  it  is

against the public policy. It does not offend

Section 28 of the Contract Act in any manner.”

14. This   was   reiterated   in  State   of   West   Bengal   vs.

Associated   Contractors, (2015)   1   SCC   32,   holding   that

presentation of the plaint in a court contrary to the exclusion

clause could not be said to be proper presentation before the

court having jurisdiction in the matter.

11

15. That brings us to the order of the reference to be answered

by   us.     In  Joginder   Tuli  (supra)   the   original   court   lost

jurisdiction by reason of the amendment of the plaint. The Trial

Court   directed   it   to   be   returned   for   presentation   before   the

District Court.  This Court observed as follows:

“5. … Normally, when the plaint is directed to

be   returned   for   presentation   to   the   proper

court   perhaps   it   has   to   start   from   the

beginning but in this case, since the evidence

was already adduced by the parties, the matter

was   tried   accordingly.   The   High   Court   had

directed to proceed from that stage at which

the suit stood transferred. We find no illegality

in   the   order   passed   by   the   High   Court

warranting interference.”

To our mind, the observations are very clear that the suit

has to proceed afresh before the proper court. The directions

came to be made more in the peculiar facts of the case in exercise

of   the   discretionary   jurisdiction   under   Article   136   of   the

Constitution.   We   may   also   notice   that   it   does   not   take   into

consideration   any   earlier   judgments   including  Amar   Chand

Inani   vs.   The   Union   of   India  (supra)   by   a   Bench   of   three

12

Honourable Judges. There is no discussion of the law either and

therefore it has no precedential value as laying down any law. 

16.   Modern  Construction (supra), referred to the consistent

position in law by reference to  Ramdutt  Ramkissen  Dass  vs.

E.D.   Sassoon  &   Co.,  Amar   Chand   Inani   vs.   The   Union   of

India,  Hanamanthappa   vs.   Chandrashekharappa, (1997) 9

SCC 688,  Harshad Chimanlal Modi (II)  (supra) and after also

noticing  Joginder   Tuli  (supra),   arrived   at   the   conclusion   as

follows:

“17. Thus, in view of the above, the law on the

issue can be summarised to the effect that if

the court where the suit is instituted, is of the

view that it has no jurisdiction, the plaint is to

be returned in view of the provisions of Order 7

Rule 10 CPC and the plaintiff can present it

before the court having competent jurisdiction.

In   such   a   factual   matrix,   the   plaintiff   is

entitled to exclude the period during which he

prosecuted the case before the court having no

jurisdiction in view of the provisions of Section

14 of the Limitation Act, and may also seek

adjustment   of   court   fee   paid   in   that   court.

However, after presentation before the court of

competent   jurisdiction,   the   plaint   is   to   be

considered as a fresh plaint and the trial is to

be   conducted   de   novo   even   if   it   stood

concluded   before   the   court   having   no

competence to try the same.”

13

Joginder   Tuli  (supra)   was   also   noticed   in  Harshad

Chimanlal Modi (II) (supra) but distinguished on its own facts.

17. We find no contradiction in the law as laid down in Modern

Construction (supra) pronounced after consideration of the law

and precedents requiring reconsideration in view of any conflict

with  Joginder  Tuli  (supra).  Modern  Construction  (supra) lays

down the correct law. We answer the reference accordingly. 

18. We regret our inability to concur with Oriental Insurance

Company   Ltd.  (supra), relied   upon   by   Mr.   Patwalia,   that   in

pursuance of the amendment dated 01­02­1977 by reason of

insertion of Rule 10A to Order VII, it cannot be said that under

all circumstances the return of a plaint for presentation before

the   appropriate   court   shall   be   considered   as   a   fresh   filing,

distinguishing it from Amar Chand Inani (supra). The attention

of the Court does not appear to have been invited to  Modern

Construction  (supra) and the plethora of precedents post the

amendment. 

14

19. Order VII Rule 10-A, as the notes on clauses, indicates was

inserted by the Code of Civil Procedure (Amendment) Act, 1976 (with

effect from 01.02.1977) for the reason:

“New Rule 10-A is being inserted to obviate the necessity

of serving summonses on the defendants where the return

of plaint is made after the appearance of the defendant in

the suit.”

Also, under sub-rule (3) all that the Court returning the plaint can do,

notwithstanding that it has no jurisdiction to try the suit is:

“10A. Power of Court to fix a date of appearance in the

Court where plaint is to be filed after its return.

xxx xxx xxx

(3) Where an application is made by the plaintiff under subrule (2), the Court shall, before returning the plaint and

notwithstanding that the order for return of plaint was made

by it on the ground that it has no jurisdiction to try the suit,

—

(a) fix a date for the appearance of the parties in the Court

in which the plaint is proposed to be presented, and

(b) give to the plaintiff and to the defendant notice of such

date for appearance.”

20. The language of Order VII Rule 10-A is in marked contrast to the

language of Section 24(2) and Section 25(3) of the Code of Civil

Procedure which read as under:

“24. General power of transfer and withdrawal.

15

xxx xxx xxx

(2) Where any suit or proceeding has been transferred or

withdrawn under sub-section (1), the Court which is

thereafter to try or dispose of such suit or proceeding may,

subject to any special directions in the case of an order of

transfer, either retry it or proceed from the point at which it

was transferred or withdrawn.

25. Power of Supreme Court to transfer suits, etc.

xxx xxx xxx

(3) The Court to which such suit, appeal or other

proceeding is transferred shall, subject to any special

directions in the order of transfer, either retry it or proceed

from the stage at which it was transferred to it.”

21. The statutory scheme now becomes clear. In cases dealing with

transfer of proceedings from a Court having jurisdiction to another Court,

the discretion vested in the Court by Sections 24(2) and 25(3) either to

retry the proceedings or proceed from the point at which such proceeding

was transferred or withdrawn, is in marked contrast to the scheme under

Order VII Rule 10 read with Rule 10-A where no such discretion is given

and the proceeding has to commence de novo.

22. For all these reasons, we hold that Oriental Insurance Co.

(supra) does not lay down the correct law and over­rule the same.

16

R.K.  Roja  (supra)  has no direct relevance to the controversy at

hand.

23. That brings us to a question with regard to the nature of the

order to be passed in the facts and circumstances of the present

case.   In  Penu   Balakrishna   Iyer   vs.   Ariya  M.   Ramaswami

Iyer, AIR 1965 SC 195, this court observed as follows: 

“7. …The question as to whether the jurisdiction of 

this Court under Article 136 should be exercised or 

not, and if yes, on what terms and conditions, is a 

matter which this Court has to decide on the facts 

of each case.”

24. In Balraj Taneja v. Sunil Madan,  (1999) 8 SCC 396 it was

observed as follows :­ 

“47….It is true that the jurisdiction under Article

136   of   the   Constitution   is   a   discretionary

jurisdiction and notwithstanding that a judgment

may not be wholly correct or in accordance with

law, this Court is not bound to interfere in exercise

of its discretionary jurisdiction….” 

25. In  ONGC  Ltd.   vs.  Sendhabhai  Vastram  Patel,  (2005) 6

SCC 454, it was observed:

“23. It is now well settled that the High Courts

and   the   Supreme   Court   while   exercising   their

equity jurisdiction under Articles 226 and 32 of

the Constitution as also Article 136 thereof may

not exercise the same in appropriate cases. While

exercising such jurisdiction, the superior courts

in India may not strike down even a wrong order

17

only   because   it   would   be   lawful   to   do   so.   A

discretionary   relief   may   be   refused   to   be

extended   to   the   appellant   in   a   given   case

although   the   Court   may   find   the   same   to   be

justified in law.”

26. The   nature   of   jurisdiction   under   Article   136   of   the

Constitution was again considered in  Shin­Etsu  Chemical  Co.

Ltd.   (2)   vs.   Vindhya   Telelinks   Ltd., (2009) 14 SCC 16.   In

Karam Kapahi vs. Lal Chand Public Charitable Trust, (2010)

4 SCC 753, it was observed as follows:

“65. The jurisdiction of this Court under Article

136   of   the   Constitution   is   basically   one   of

conscience.   The   jurisdiction   is   plenary   and

residuary   in   nature.   It   is   unfettered   and   not

confined within definite bounds. Discretion to be

exercised here is subject to only one limitation

and that is the wisdom and sense of justice of

the   Judges   (see  Kunhayammed  vs.  State   of

Kerala, (2000) 6 SCC 359). This jurisdiction has

to be exercised only in suitable cases and very

sparingly as opined by the Constitution Bench of

this Court in Pritam Singh vs. State, AIR 1950 SC

169…”

27. In the peculiar facts and circumstances of the case, because

the appellant did not raise the objection under clause 16B of the

agreement at the very first opportunity, the first order of rejection

attained finality, the objection under clause 16B was raised more

as an after­thought,  the second application under Order VII Rule

18

10 had to be preferred by the respondent, that pleadings of the

parties have been completed, evidence led, and that the matter

was   fixed   for   final   argument   on   03.07.2017,   we   are   of   the

considered   opinion   that   despite   having   concluded   that   the

impugned order is not sustainable in view of the law laid down in

the  Modern   Construction  (supra),   in   exercise   of   our

discretionary jurisdiction under Article 136 of the Constitution

and in order to do complete and substantial justice between the

parties under Article 142 of the Constitution in the peculiar facts

and circumstances of the case nonetheless we decline to set aside

the impugned order of the High Court dated 13.03.2018.

28. The appeal stands disposed of.

………………………..J.

   (R.F. Nariman)  

………………………..J.

   (Navin Sinha)  

………………………..J.

   (Indira Banerjee)  

New Delhi,

August 05, 2020 

19

whether the deployment of the appellants as RTOs would amount to a promotion or whether it was a mere reorganisation and the appellants were entitled to the ACP separately in terms of the ACP Scheme.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5829-5830 OF 2012

RAMA NAND AND ORS. ….APPELLANTS

VERSUS

CHIEF SECRETARY, GOVT. OF NCT OF DELHI & ANR. ….RESPONDENTS

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. The appellants were all working as Telephone Operators with the Delhi

Fire Service (“DFS”). On account of reorganisation of the wireless

communication system, ninety-six posts of Radio Telephone Operators were

sought to be created in terms of a letter dated 29.8.1983. Six Radio

Operators were already operating as such, while twenty-seven Telephone

Operators, in the pay scale of Rs. 260-400 were sought to be deployed as

Radio Telephone Operators (“RTOs”) in a higher pay scale. The

reorganisation scheme was approved on 10.10.1983 by the Municipal

Corporation of Delhi.

1

2. The Telephone Operators had to go through a training and to be

deployed as RTOs, a further condition was imposed of 5 years regular

service, though it is alleged by the appellants that the same was not part of

the letter dated 29.8.1983. An important development took place on

9.8.1999 whereby the Department of Personnel and Training, Government of

India issued an Office Memorandum introducing an Assured Career

Progression (“ACP”) Scheme, by which a decision was taken to grant two

financial upgradations after completion of 12 and 24 years of regular service

respectively. It is the case of the appellants that they were entitled to get

their first financial upgradation as on 9.8.1999 or on completion of 12 years

of service in the DFS as Telephone Operators/RTOs, but that the same were

denied to the appellants since the respondents treated their conversion of

the aforesaid posts as a promotion. The limited controversy which arises for

adjudication in the present case is whether the deployment of the appellants

as RTOs would amount to a promotion or whether it was a mere

reorganisation and the appellants were entitled to the ACP separately in

terms of the ACP Scheme.

3. The appellants filed OA No. 983/1995 before the Central Administrative

Tribunal (“CAT”), Principal Bench, New Delhi and succeeded in terms of the

judgment dated 6.10.1999 granting them the pay scale of RTOs, i.e., Rs.380-

560 on the principle of “equal pay for equal work”.

2

4. One of the RTOs made a representation on 31.5.2001 on the non-grant

of the benefits of the ACP Scheme. Thereafter, the respondents sought a

clarification from the Government of India, Department of Personnel and

Training as to whether placement/appointment in higher pay scales is a

promotion/financial upgradation and is to be offset against the financial

upgradations per the ACP Scheme. It is a case of the appellants that the

clarification issued in this behalf, through an Office Memorandum dated

18.7.2001, would have no application to the appellants in view of the

statutory recruitment rules (though stated to be not notified as per the

appellants and thus inapplicable) and on account of the

restructuring/reorganisation which had come to prevail.

5. OA No. 1224/2003 was filed in May 2003 before the CAT, Principal

Bench, New Delhi seeking relief for the first financial upgradation in terms of

the ACP Scheme, which was opposed by the respondents. The Tribunal

decided the issue vide judgment dated 29.10.2003 opining that promotion

and merger of cadres operated in different spheres and the requirement to

be categorised as ‘promotion’ is that it must specify certain basic

qualifications. On the other hand, conversion of the posts was in exercise of

the powers of the Government in the given exigencies. Hence, what was

granted to the appellants was not a promotion and the Tribunal consequently

opined that the appellants were entitled to the benefits of the ACP Scheme.

3

6. The aforesaid order was assailed by the respondents before the Delhi

High Court by filing writ petition being WP (C) No. 8406-07 of 2004. The High

Court called for the records and, on the pleadings being completed, passed

the impugned judgment dated 8.5.2009 allowing the writ petition filed by the

respondents. The gravamen of the reasoning of the High Court is that the

conversion of posts of Telephone Operators to RTOs was with a condition of

completion of 5 years of regular service, with the benefit of the higher pay

scale from Rs. 260-400 to Rs. 380-560 and consequently, was liable to be

treated as promotion, thus disentitling the appellants to the benefits of the

ACP Scheme.

7. We have considered respective submissions of learned counsel for the

parties.

8. On an examination of the Office Memorandum dated 9.8.1999 bringing

forth the ACP Scheme, it is apparent that the same was a consequence of the

Fifth Central Pay Commission Report recommending such a Scheme for

civilian employees, and was to be viewed as a safety net to deal with the

problem of genuine stagnation and hardship faced by the employees due to

lack of adequate promotional avenues. The moot point, thus, which arises

for consideration is whether the benefits accruing to the appellants as a

consequence of the reorganisation scheme of wireless and communication

systems could be said to give them the benefit of a promotion and whether

4

they were still entitled to a financial upgradation on account of the ACP

Scheme.

9. Our attention has been drawn to the circular dated 24.2.1984 that

provided for a training to be conducted at the headquarters of DFS for a

period of two months. Such training had to be carried in two batches under

the supervision of the Wireless Officer. In fact, the reference of the

reorganisation of the wireless and communication system in the DFS as per

item no. 137 contained in the Commissioner’s letter dated 29.8.1983, sets

out the reasons for the same as an endeavour to increase the efficiency of

the original wireless communication system introduced in 1961 and the

requirement of reorganisation in view of the change in the technology itself.

It is clearly stated that the existing twenty-seven Telephone Operators would

be in the higher pay scale as set out aforesaid “after necessary training of

short duration”. There was also a requirement of the fulfilment of the

essential condition of 5 years of experience in the post of Telephone Operator

as even set out in the writ petition filed before the High Court.

10. Mr. Balbir Singh Gupta, learned counsel for the appellant as well as Ms.

Madhavi Divan, learned ASG have both relied in support of their respective

submissions on the judgment of this Court in Bharat Sanchar Nigam Limited

v. R. Santhakumari Velusamy and Others.

1

1 (2011) 9 SCC 510

5

11. Learned counsel for the appellant sought to refer us to para 29 which

sets out the principles as under:

“29. On a careful analysis of the principles relating to

promotion and upgradation in the light of the aforesaid

decisions, the following principles emerge:

(i) Promotion is an advancement in rank or grade or

both and is a step towards advancement to a higher

position, grade or honour and dignity. Though in the

traditional sense promotion refers to advancement to a

higher post, in its wider sense, promotion may include an

advancement to a higher pay scale without moving to a

different post. But the mere fact that both—that is,

advancement to a higher position and advancement to a

higher pay scale—are described by the common term

“promotion”, does not mean that they are the same. The

two types of promotion are distinct and have different

connotations and consequences.

(ii) Upgradation merely confers a financial benefit by

raising the scale of pay of the post without there being

movement from a lower position to a higher position. In an

upgradation, the candidate continues to hold the same

post without any change in the duties and responsibilities

but merely gets a higher pay scale.

(iii) Therefore, when there is an advancement to a

higher pay scale without change of post, it may be referred

to as upgradation or promotion to a higher pay scale. But

there is still difference between the two. Where the

advancement to a higher pay scale without change of post

is available to everyone who satisfies the eligibility

conditions, without undergoing any process of selection, it

will be upgradation. But if the advancement to a higher

pay scale without change of post is as a result of some

process which has elements of selection, then it will be a

promotion to a higher pay scale. In other words,

upgradation by application of a process of selection, as

contrasted from an upgradation simpliciter can be said to

be a promotion in its wider sense, that is, advancement to

a higher pay scale.

(iv) Generally, upgradation relates to and applies to all

positions in a category, who have completed a minimum

period of service. Upgradation can also be restricted to a

percentage of posts in a cadre with reference to seniority

(instead of being made available to all employees in the

6

category) and it will still be an upgradation simpliciter. But

if there is a process of selection or consideration of

comparative merit or suitability for granting the

upgradation or benefit of advancement to a higher pay

scale, it will be a promotion. A mere screening to eliminate

such employees whose service records may contain

adverse entries or who might have suffered punishment,

may not amount to a process of selection leading to

promotion and the elimination may still be a part of the

process of upgradation simpliciter. Where the upgradation

involves a process of selection criteria similar to those

applicable to promotion, then it will, in effect, be a

promotion, though termed as upgradation.

(v) Where the process is an upgradation simpliciter,

there is no need to apply the rules of reservation. But

where the upgradation involves a selection process and is

therefore a promotion, the rules of reservation will apply.

(vi) Where there is a restructuring of some cadres

resulting in creation of additional posts and filling of those

vacancies by those who satisfy the conditions of eligibility

which includes a minimum period of service, will attract the

rules of reservation. On the other hand, where the

restructuring of posts does not involve creation of

additional posts but merely results in some of the existing

posts being placed in a higher grade to provide relief

against stagnation, the said process does not invite

reservation.”

He submitted that in terms of sub-para (iii) and (iv), when there is an

advancement to a higher pay scale without change of post, it may be

referred to as upgradation or promotion to a higher pay scale. But there is a

difference between the two. In case such change of post is available to

everyone who satisfies the eligibility condition without undergoing any

process of selection, it will be upgradation. While, if it is a result of some

process which has element of selection, then it will be a promotion to the

higher pay scale. Sub-para (iv) is stated to further clarify this aspect that if

there is process of selection or consideration of comparative merit or

7

suitability for granting the upgradation or benefit of advancement to a higher

pay scale, it will be a promotion.

12. On the other hand, learned ASG submitted that the aforesaid principle

have to be read in the context of what has been set out before in paras 27

and 28. The law explaining the difference between upgradation and

promotion was set out in Union of India v. Pushpa Rani

2 and those principles

have been extracted in para 27, the relevant portion of para 27 reads as

under:

“27. In Union of India v. Pushpa Rani [(2008) 9 SCC

242 : (2008) 2 SCC (L&S) 851] this Court examined the entire

case law and explained the difference

between upgradation and promotion thus: (SCC pp. 244h245h)

“In legal parlance, upgradation of a post involves

transfer of a post from lower to higher grade and

placement of the incumbent of that post in the

higher grade. Ordinarily, such placement does not

involve selection but in some of the service rules

and/or policy framed by the employer for

upgradation of posts, provision has been made for

denial of higher grade to an employee whose service

record may contain adverse entries or who may have

suffered punishment. The word ‘promotion’ means

advancement or preferment in honour, dignity, rank,

grade. Promotion thus not only covers advancement

to higher position or rank but also implies

advancement to a higher grade. In service law, the

word ‘promotion’ has been understood in wider

sense and it has been held that promotion can be

either to a higher pay scale or to a higher post.”

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx”

2 (2008) 9 SCC 242

8

13. The posts in the case of Pushpa Rani (supra) was held to be promotion

for the reasons set out in para 28.

 “28. In Pushpa Rani [(2008) 9 SCC 242 : (2008) 2 SCC (L&S)

851], this Court while considering a scheme contained in the

Letter dated 9-10-2003 held that it provided for a restructuring

exercise resulting in creation of additional posts in most of the

cadres and there was a conscious decision to fill up such posts

by promotion from all eligible and suitable employees and,

therefore, it was a case of promotion and, consequently, the

reservation rules were applicable.”

14. The submission of learned ASG was that the conclusions will have to be

read in the aforesaid context. Thus, a promotion is an advancement in rank

or grade or both and is a step towards advancement to a higher position,

grade or honour and dignity - “in its wider sense, promotion may include an

advancement to a higher pay scale without moving to a different post.”

15. Learned counsel in the aforesaid context, while turning to the factual

matrix of the present case, submitted that there are three aspects which are

material in the present case:

(i) prequalification of minimum of 5 years of service;

(ii) higher financial emoluments;

(iii) rigorous of a specialised training

These make a candidate eligible. It was, thus, a submission that if all these

three are considered together, there can be no doubt that the present case is

one which should be considered as the promotion for the purpose of ACP

Scheme.

9

16. We have examined the aforesaid contention and we are of the view

that the benefits of ACP Scheme cannot be held applicable to the appellants

and consequently the High Court was right in interfering with the order of the

CAT.

17. The reasons for coming to this conclusion is based on the principles set

out in the BSNL case (supra). No doubt, sometimes there is a fine distinction

which arises in such cases, but, a holistic view has to be taken considering

the factual matrix of each case. The consequence of reorganisation of the

cadre resulted in not only a mere re-description of the post but also a much

higher pay scale being granted to the appellants based on an element of

selection criteria. We say so as, at the threshold itself, there is a

requirement of a minimum 5 years of service. Thus, all Telephone Operators

would not automatically be eligible for the new post. Undoubtedly, the

financial emoluments, as stated above, are much higher. The third important

aspect is that the appellants had to go through the rigorous of a specialised

training. All these cannot be stated to be only an exercise of merely redescription or reorganisation of the cadre. On applying the test in BSNL case

(supra), as per sub-para (i) of para 29, promotion may include an

advancement to a higher pay scale without moving to a different post. In the

present case, there is a re-description of the post based on higher pay scale

and a specialised training. It is not a case covered by sub-para (iii), as

canvassed by learned counsel for the appellants, where the higher pay scale

is available to everyone who satisfies the eligibility condition without

10

undergoing any process of selection. The training and the benchmark of 5

years of service itself involve an element of selection process. Similarly, it is

not as if the requirement is only a minimum of 5 years of service by itself, so

as to cover it under sub-para (iv).

18. We have already observed that the complete factual contours of the

difference between the two posts would have to be examined in the given

factual situation and the triple criteria of minimum 5 years of service, a

specialised training and much higher financial emoluments leaves us in no

manner of doubt. What was done has to be considered as a promotion

disentitling the appellants to the benefits of the ACP Scheme. As the very

objective of the ACP Scheme, as set out, is “to deal with the problem of

genuine stagnation and hardship faced by the employees due to lack of

adequate promotional avenues.”

19. Appeals are, accordingly, dismissed leaving the parties to bear their

own costs.

……..……………………………….J.

 [SANJAY KISHAN KAUL]

……..……………………………….J.

 [AJAY RASTOGI]

……..……………………………….J.

 [ANIRUDDHA BOSE]

11

NEW DELHI.

AUGUST 06, 2020.

12

NDPS Act - the prosecution had not established conscious possession of the house with the appellant so as to attribute the presumption under the NDPS Act against him with regard to recovery of the contraband. Conviction could not be based on a foundation of conjectures and surmises to conclude on a preponderance of probabilities, the guilt of the appellant without establishing the same beyond reasonable doubt

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

    CRIMINAL APPEAL NO. 504 OF 2020

(Arising out of SLP (Crl.) No.7415 of 2019)

GANGADHAR alias GANGARAM ....APPELLANT(S)

VERSUS

STATE OF MADHYA PRADESH       ...RESPONDENT(S)

JUDGMENT

NAVIN SINHA, J.

Leave granted.

2. The appellant assails his conviction under Section 8C

read   with   Section   20(b)(ii)(c)   of   the   Narcotics   Drugs   and

Psychotropic Substances Act, 1985 (hereinafter called as “the

NDPS Act”) for recovery of 48 Kgs 200 gms. cannabis (ganja),

sentencing him to 10 years of rigorous imprisonment with a

default stipulation.

1

3. The appellant was held to be the owner of the House in

question from which the  ganja  was recovered, relying upon

the voters list of 2008 rejecting his defence that he had sold

the house to co­accused Gokul Dangi on 12.06.2009. Gokul

Dangi has been acquitted in trial. 

4. Shri   Puneet   Jain,   learned   counsel   for   the   appellant

submitted that the conviction based on a mere presumption

of ownership of the house, without any finding of conscious

possession   was   unsustainable.   Reliance   was   placed   on

Gopal vs. State of Madhya Pradesh, (2002) 9 SCC 595. The

police had received information that Gokul Dangi had kept

contraband in his house. The appellant and Ghasiram, the

village chowkidar had identified the house of the accused to

the police when it came to the village for search and seizure.

Both of them were witness to the  panchnama  for breaking

open   the   lock   to   the   house   when   the   contraband   was

recovered. It stands to reason why the appellant would take

the police to his own house, have the lock broken to recover

the contraband and implicate himself. Ghasiram and P.W.11,

2

were both witnesses to the sale agreement dated 12.06.2009,

Exhibit P­28 executed by the appellant in favour of Gokul

Dangi. It was produced before the police by the appellant the

very next day but was never investigated, Ghasiram has not

been examined for no explicable reasons. The entries in the

village panchayat records with regard to ownership of the

house   had   not   been   investigated.   The   appellant   was

subsequently made an accused during investigation because

of the failure of the police to investigate properly.

5. Ms.   Swarupama   Chaturvedi,   learned   Addl.   Advocate

General   for   the   State,   submitted   that   P.W.11   had   denied

being a witness to the sale agreement alleging that his thumb

impression had been impersonated. The deed was therefore

rightly   held   to   be   a   forged   and   fabricated   document

confirmed by the  voter list entry of  2008 that  the  house

belonged to the appellant.  The village panchayat records also

mentioned the ownership of the appellant.

3

6. We have considered the submissions on behalf of the

parties and have carefully perused the evidence on record

also. P.W. 6, the first investigation officer deposed that secret

information had been received of Gokul Dangi having stored

contraband in his house. The appellant and Ghasiram along

with   other   villagers   identified   the   house   as   belonging   to

Gokul Dangi on 11.08.2009 leading to recovery after the lock

was broken open. The witness admitted that on 12.08.2009

itself the appellant had submitted the sale agreement dated

12.06.2009 Ex. P­28 to him but that it was never investigated

by him.  Acknowledging that ownership details are mentioned

in the gram panchayat records, the witness stated that he did

not   investigate   the   same.   P.W.   16,   who   took   over   the

investigation   after   transfer   of   the   former   recorded   the

statements   of   Ghasiram   and   P.W.   11   as   also   of   other

witnesses. The appellant was then made an accused on basis

of his name being entered in the voters list of 2008. Contrary

to the evidence of P.W.6, the witness stated that the gram

panchayat records had been looked into by the former. No

explanation   was   offered   for   not   investigating   the   sale

4

agreement. The appellant was acknowledged not to be living

in the house from where the contraband was recovered, but

was alleged to be using it as a store room on basis of no

evidence whatsoever. 

7. P.W.   3   and   P.W.7,   the   police   constable   who   had

accompanied   P.W.   6,   deposed   that   the   appellant   and

Ghasiram had identified the house as belonging to Gokul

Dangi which was corroborated by the panchayat records.

8. Ghasiram, as the village chowkidar was the best person

in the know of the ownership and possession of the house.

He   was   one   of   the   two   witnesses   to   the   sale   agreement

Exhibit P­28.   The prosecution for inexplicable reasons has

not examined him. P.W. 11 denied his thumb impression on

the   sale   document   contending   that   it   was   a   fabricated

document.     No   forensic   report   was   obtained   by   the

prosecution. The witness acknowledged that the appellant

did not visit his own house and lived in his new house for the

last 15 years denying any knowledge who the owner was. Yet

5

his   statement   was   accepted   as   gospel   truth   without   any

further investigation.

9.  The   presumption   against   the   accused   of   culpability

under Section 35, and under Section 54 of the Act to explain

possession satisfactorily, are rebuttable. It does not dispense

with the obligation of the prosecution to prove the charge

beyond all reasonable doubt. The presumptive provision with

reverse   burden   of   proof,   does   not   sanction   conviction   on

basis of preponderance of probability. Section 35(2) provides

that a fact can be said to have been proved if it is established

beyond   reasonable   doubt   and   not   on   preponderance   of

probability. That the right of the accused to a fair trial could

not be whittled down under the Act was considered in Noor

Aga vs. State of Punjab, (2008) 16 SCC 417 observing: 

“58.  …   An   initial   burden   exists   upon   the

prosecution and only when it stands satisfied,

would   the   legal   burden   shift.   Even   then,   the

standard   of   proof   required   for   the   accused   to

prove his innocence is not as high as that of the

prosecution.   Whereas   the   standard   of   proof

required to prove the guilt of the accused on the

prosecution is “beyond all reasonable doubt” but

it   is   “preponderance   of   probability”   on   the

6

accused.   If   the   prosecution   fails   to   prove   the

foundational facts so as to attract the rigours of

Section 35 of the Act, the actus reus which is

possession of contraband by the accused cannot

be said to have been established.

59. With a view to bring within its purview the

requirements of Section 54 of the Act, element of

possession of the contraband was essential so as

to   shift   the   burden   on   the   accused.   The

provisions being exceptions to the general rule,

the   generality   thereof   would   continue   to   be

operative, namely, the element of possession will

have to be proved beyond reasonable doubt.”

10. The   stringent   provisions   of   the   NDPS   Act,   such   as

Section 37, the minimum sentence of 10 years, absence of

any   provision   for   remission   do   not   dispense   with   the

requirements of prosecution to establish a prima facie case

beyond reasonable doubt after investigation, only where after

which the burden of proof shall shift to the accused.   The

gravity of the sentence and the stringency of the provisions

will therefore call for a heightened scrutiny of the evidence for

establishment of foundational facts by the prosecution.

11.  It is apparent that the police being in a quandary with

regard   to   the   ownership   and   possession   of   the   house   in

question   due   to   a   flawed,   defective   and   incomplete

7

investigation found it convenient to implicate the appellant

also,   sanguine   that   at   least   one   of   the   two   would   be

convicted. Sri Jain is right in the submission that according

to normal human  prudence, it stands to reason  why  the

appellant who was residing in his new house for the last 15

years would identify his own erstwhile house as that of the

accused Gokul Dangi, be a witness to the breaking of the lock

and recovery to implicate himself.  

12.   The   appellant   had   produced   the   sale   agreement,

Exhibit P.28 with promptness the very next day. It was never

investigated for its genuineness by the police and neither

were the panchayat records verified. The panchayat records

are public documents and would have been the best evidence

to   establish   the   ownership   and   possession   of   the   house.

Despite   the   best   evidence   being   available   the   police

considered it sufficient to obtain a certificate Exhibit P­37

signed   by   P.W.   14   who   acknowledged   her   signature   but

denied knowledge of the contents of the certificate. The voters

8

list entry of 2008 being prior to the sale is of no consequence.

It is not without reason that the co­accused had absconded. 

13. The appellant was held guilty and convicted in view of

his name being recorded as the owner of the house in the

voters list 2008, ignoring the fact that sale agreement was

subsequent to the same on 12.06.2009.   The prosecution

cannot   be   held   to   have   proved   that   Exhibit   P­18   was   a

fabricated   and   fictitious   document.     No   appeal   has   been

preferred by the prosecution against the acquittal of the co

accused. 

14. In  view  of  the   nature  of  evidence  available  it  is  not

possible   to   hold   that   the   prosecution   had   established

conscious possession of the house with the appellant so as to

attribute the presumption under the NDPS Act against him

with regard to recovery of the contraband. Conviction could

not be based on a foundation of conjectures and surmises to

conclude on a preponderance of probabilities, the guilt of the

9

appellant without establishing the same beyond reasonable

doubt.

15.  The   police   investigation   was   very   extremely   casual,

perfunctory and shoddy in nature.  The appellant has been

denied the right to a fair investigation, which is but a facet of

a fair trial guaranteed to every accused under Article 21 of

the Constitution.  The consideration of evidence by the Trial

Court, affirmed by the High Court, borders on perversity to

arrive at conclusions for which there was no evidence.  Gross

misappreciation of  evidence by two  courts, let alone  poor

investigation   by   the   police,   has   resulted   in   the   appellant

having to suffer incarceration for an offence he had never

committed.

16.  Normally this Court in exercise of its jurisdiction under

Article   136   of   the   Constitution   does   not   interfere   with

concurrent   findings   of   facts   delving   into   appreciation   of

evidence. But in a given case, concerning the liberty of the

individual, if the Court is satisfied that the prosecution had

10

failed to establish a prima facie case, the evidence led was

wholly insufficient and there has been gross misappreciation

of evidence by the courts below bordering on perversity, this

Court shall not be inhibited in protecting the liberty of the

individual. 

17. The   conviction   of   the   appellant   is   held   to   be

unsustainable and is set aside. The appellant is acquitted. He

is directed to be set at liberty forthwith unless wanted in any

other case.  

 18.  The appeal is allowed.

…………...................J.

[R.F. NARIMAN]

…………...................J.

[NAVIN SINHA]

NEW DELHI

AUGUST 05, 2020.

11

constitutional validity of, The Constitution (One Hundred and Third Amendment) Act, 2019 [for short, ‘the Amendment Act’]. By the aforesaid amendment, Articles 15 and 16 of the Constitution of India were amended by inserting clause (6), after clause (5), in Article 15 and by inserting clause (6) after clause (5), in Article 16.

W.P.(C)No.55 of 2019 etc.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (C) NO.55 OF 2019

Janhit Abhiyan …..Petitioner

Versus

Union of India & Ors. …..Respondents

W I T H

WRIT PETITION (C) NO.73 OF 2019; WRIT PETITION (C) NO.72 OF

2019; WRIT PETITION (C) NO.76 OF 2019; WRIT PETITION (C)

NO.69 OF 2019; WRIT PETITION (C) NO.80 OF 2019; WRIT

PETITION (C) NO.122 OF 2019; WRIT PETITION (C) NO.106 OF 2019;

WRIT PETITION (C) NO.95 OF 2019; WRIT PETITION (C) NO.222 OF

2019; WRIT PETITION (C) NO.133 OF 2019; WRIT PETITION (C)

NO.178 OF 2019; WRIT PETITION (C) NO.182 OF 2019; WRIT

PETITION (C) NO.249 OF 2019; WRIT PETITION (C) NO.146 OF 2019;

WRIT PETITION (C) NO.168 OF 2019; WRIT PETITION (C) NO.212 OF

2019; WRIT PETITION (C) NO.162 OF 2019; TRANSFER PETITION

(C) NO.341 OF 2019; TRANSFER PETITION (C) NO.323 OF 2019;

WRIT PETITION (C) NO.331 OF 2019; TRANSFER PETITION (C)

NO.357 OF 2019; TRANSFER PETITION (C) NO.539 OF 2019;

TRANSFER PETITION (C) NO.630 OF 2019; WRIT PETITION (C)

NO.341 OF 2019; WRIT PETITION (C) NO.343 OF 2019; TRANSFER

PETITION (C) NO.675 OF 2019; WRIT PETITION (C) NO.419 OF 2019;

WRIT PETITION (C) NO.427 OF 2019; WRIT PETITION (C) NO.446 OF

2019; WRIT PETITION (C) NO.493 OF 2019; WRIT PETITION (C)

NO.854 OF 2019; WRIT PETITION (C) NO.596 OF 2019; WRIT

PETITION (C) NO.732 OF 2019; AND WRIT PETITION (C) NO.798 OF

2019.

1

W.P.(C)No.55 of 2019 etc.

O R D E R

Writ Petition(C)No.55 of 2019 etc.

1. In this batch of writ petitions, petitioners have challenged the

constitutional validity of, The Constitution (One Hundred and Third

Amendment) Act, 2019 [for short, ‘the Amendment Act’]. By the

aforesaid amendment, Articles 15 and 16 of the Constitution of India

were amended by inserting clause (6), after clause (5), in Article 15 and

by inserting clause (6) after clause (5), in Article 16. The newly inserted

Articles 15(6) and 16(6) read as under :

“15(6). Nothing in this article or sub-clause (g) of

clause (1) of article 19 or clause (2) of article 29 shall

prevent the State from making, -

(a) any special provision for the advancement of any

economically weaker sections of citizens other than

the classes mentioned in clauses (4) and (5); and

(b) any special provision for the advancement of any

economically weaker sections of citizens other than

the classes mentioned in clauses (4) and (5) in so

far as such special provisions relate to their

admission to educational institutions including

private educational institutions, whether aided or

unaided by the State, other than the minority

educational institutions referred to in clause (1) of

article 30, which in the case of reservation would be

in addition to the existing reservations and subject

to a maximum of ten per cent. of the total seats in

each category.

Explanation.-For the purposes of this article and

article 16, “economically weaker sections” shall be

such as may be notified by the State from time to

2

W.P.(C)No.55 of 2019 etc.

time on the basis of family income and other

indicators of economic disadvantage.

16(6). Nothing in this article shall prevent the State

from making any provision for the reservation of

appointments or posts in favour of any economically

weaker sections of citizens other than the classes

mentioned in clause (4), in addition to the existing

reservation and subject to a maximum of ten per cent.

of the posts in each category.”

2. By virtue of Article 15(6) of the Constitution, States are

empowered to make a special provision for the advancement of any

economically weaker sections of citizens other than the classes

mentioned in clauses (4) and (5) and to make a special provision

relating to their admission to educational institutions including private

educational institutions, whether aided or unaided by the State, other

than the minority educational institutions referred to in clause (1) of

Article 30, in addition to existing reservations and subject to a maximum

of ten per cent of the total seats in each category. Similarly, Article 16(6)

empowers the State to make any provision for the reservation of

appointments or posts in favour of any economically weaker sections of

citizens other than the classes mentioned in clause (4), in addition to the

existing reservation and subject to a maximum of ten per cent of the

posts in each category.

3. The above said impugned constitutional amendments are

questioned in this batch of cases mainly on the ground that the

impugned amendments are ultra vires as they alter the basic structure of

3

W.P.(C)No.55 of 2019 etc.

the Constitution of India. Further, it is also the case of the petitioners

that the impugned amendments run contrary to the dictum in the

majority judgment, in the case of Indra Sawhney & Ors. V. Union of

India & Ors.1

. It is the case of the petitioners that a backward class

cannot be determined only and exclusively with reference to economic

criterion. Petitioners have also pleaded that the reservation of ten per

cent of vacancies, in available vacancies/posts, in open competition on

the basis of economic criterion will exclude all other classes of those

above the demarcating line of such ten per cent seats. It is further

pleaded that reservation in unaided institutions violates the fundamental

right under under Article 19(1)(g) of the Constitution. It is their case that

the State cannot insist on private educational institutions which receive

no aid from the State to implement the State policy on reservation for

granting admission on lesser percentage of marks, i.e., on any criterion

except merit.

4. The counter affidavit is filed on behalf of respondent-Union of

India. In the counter affidavit filed by the Under Secretary to the Ministry

of Social Justice and Empowerment, the following averments are made :

 While denying various allegations made by the petitioners, it is

stated that, the Amendment Act was necessitated to benefit the

economically weaker sections of the society who are not covered

within the existing schemes of reservation, which as per statistics,

constitute a considerably large segment of Indian population. In

1 1992 Supp.(3) SCC 217

4

W.P.(C)No.55 of 2019 etc.

order to do justice across all the weaker sections of the society, it

was considered imperative that the Constitution be appropriately

amended to enable the State to extend various benefits, including

reservations in educational institutions and public employment, to

the economically weaker sections of the society, who are not

covered by existing schemes of reservation to enable them equal

opportunity to get access to educational institutions and also in

employment.

 Subsequent to the decision of this Court in the case of Indra

Sawhney1

, the Government appointed an Expert Committee to

recommend the criteria for exclusion of advanced sections of

Socially and Educationally Backward Classes, i.e., the creamy

layer. The said Committee made certain recommendations for

exclusion of creamy layer and the Government, by accepting the

same, has issued Office Memorandum dated 08.09.1993 on the

exclusion criteria. Thereafter a Commission for Economically

Backward Classes, chaired by Maj. Gen. (Retd.) S.R. Sinho, was

constituted to suggest the criteria for identification of

Economically Backward Classes (EBC) as well as to recommend

welfare measures and quantum of reservation in education and

Government employment to the extent as appropriate. In its

report dated 02.07.2010, the Commission recommended that all

BPL (Below Poverty Line) families among general category as

notified from time to time and also all families whose annual

5

W.P.(C)No.55 of 2019 etc.

income from all sources is below the taxable limit should be

identified as EBCs. In view of the report submitted by Sinho

Commission, it was deemed necessary that a constitutional

amendment be brought in to promote social equality by providing

opportunity in higher education and employment to those who

have been excluded by virtue of their economic status.

 While referring to the duty of the State as per directive under

Article 46 of the Constitution and in view of the recommendations

made by the Committee, The Constitution (One Hundred and

Twenty Fourth Amendment) Bill, 2019 was introduced and same

was passed in the Lok Sabha on 08.01.2019 and on 09.01.2019.

By referring to the Statement of Objects and Reasons of the Bill,

it is stated that to ensure economically weaker sections of

citizens get a fair chance of receiving higher education and

participation in employment in the service of the State, the said

amendments were brought.

 While denying the allegation of the petitioners that the impugned

amendments alter the basic structure of the Constitution, it is

pleaded that, to sustain a challenge against a constitutional

amendment, it must be shown that the very identity of the

Constitution has been altered. It is stated that a mere

amendment to an Article of the Constitution, even if embodying a

basic feature, will not necessarily lead to a violation of basic

feature involved. By stating that the said newly inserted

6

W.P.(C)No.55 of 2019 etc.

provisions, namely, Articles 15(6) and 16(6) are enabling

provisions for advancement of economically weaker sections and

such provisions are in fact in conformity with the principle of

reservation and affirmative action which are the touchstone of

protection of equality of citizens and also the basis under Articles

15(1); 15(2); 16(1) and 16(2).

 It is pleaded further that the economic criterion can be a relevant

criterion for affirmative action under the Constitution. Reference

is made in the counter affidavit, to the decision of this Court in the

case of Ashoka Kumar Thakur v. Union of India & Ors.2

.

 While answering the allegation of the petitioners, that economic

backwardness cannot be the sole criterion for identifying

backward class, it is pleaded that the ratio decided by this Court

in the case of Indra Sawhney1

cannot be applied to judge the

validity of impugned amendments. It is stated that in the case of

Indra Sawhney1

 memoranda issued by the Government of India

were under challenge and as much as the present challenge

relates to the constitutional amendment, said ratio decided

cannot be applied. It is also pleaded in the counter affidavit that

the limit of 50% of reservation is only applicable to reservations

made under Articles 15(4), 15(5) and 16(4) and does not apply to

Article 15(6).

2 (2008) 6 SCC 1

7

W.P.(C)No.55 of 2019 etc.

 While answering the allegation of the petitioners that imposing

reservation in unaided institutions is manifestly arbitrary and

illegal, it is pleaded that the impugned amendments do not violate

Article 19(1)(g) read with Article 19(6) of the Constitution as the

State is entitled to make any law imposing reasonable restrictions

on the exercise of right in Article 19(1)(g).

5. With the aforesaid pleadings, it is pleaded that there is no merit in

the petitions and they deserve dismissal by this Court.

6. We have heard Sri Rajeev Dhawan, learned senior counsel; Sri

M.N. Rao, learned senior counsel; Sri Gopal Sankaranarayanan,

learned senior counsel; and Ms. Meenakshi Arora, learned senior

counsel for the petitioners and Sri K.K. Venugopal, learned Attorney

General for India appearing for Union of India.

7. Sri Rajeev Dhawan, learned senior counsel appearing for the

petitioner in W.P.(C)No.122 of 2019 while referring to ‘Rules of Court

etc.’ under Article 145(3) of the Constitution, has submitted that as the

case involves a substantial question of law as to interpretation of the

constitutional amendment, the present batch of cases need to be heard

by a Constitution Bench of five Judges. Learned senior counsel also

placed reliance on Order XXXVIII of the Supreme Court Rules, 2013 and

submitted that as much as it is the case of the petitioners that the

impugned Amendment Act violates the basic structure doctrine with

particular reference to right to equality, as such, it constitutes a

8

W.P.(C)No.55 of 2019 etc.

substantial question of law within the meaning as referred above. It is

submitted that having regard to grounds on which the impugned

amendments are questioned, a substantial question of law, namely,

whether the Constitution (One Hundred and Third Amendment) Act,

2019 violates the basis structure of the Constitution, insofar as it relates

to the equality provisions of the Constitution and matters relating thereto,

is to be decided. It is submitted that by applying the tests of ‘width’ and

‘identity’ of equality provisions, the impugned amendments are to be

judged. Learned senior counsel has placed reliance on the judgment of

this Court in the case of M. Nagaraj & Ors. V. Union of India & Ors.3

, in

support of his argument that for examining amendments to equality

provisions of the Constitution, such a matter is to be heard by a

Constitution Bench. On the validity of the impugned Amendment Act,

learned senior counsel has submitted that by applying the tests of ‘width’

and ‘identity’ formulated by this Court in the case of M. Nagaraj3 which is

approved in the case of I.R. Coelho (Dead) by LRs. v. State of Tamil

Nadu4

 and Jarnail Singh & Ors. v. Lachhmi Narain Gupta & Ors.5

, the

impugned amendments affect the ‘width’ and ‘identify’ of equality

provisions, as such same is fit to be declared as unconstitutional. It is

submitted that by applying the above said tests, if the impugned

amendments are examined, the impugned Articles are in violation of the

basic structure of the Constitution. Further, it is submitted that the

impugned Amendment Act violates the rule of 50% quota for affirmative

3 (2006) 8 SCC 212

4 (2007) 2 SCC 1

5 (2018) 10 SCC 396

9

W.P.(C)No.55 of 2019 etc.

action and reservation as enunciated by this Court in the case of Indra

Sawnhey1

. Further, it is submitted by learned senior counsel that the

two-fold test for testing the validity of fundamental right under the basic

structure doctrine is to consider whether (a) identity and (b) width of

fundamental right is affected or not. It is submitted that if identity of the

right is distorted or taken away, such action will be in violation of basic

structure.

8. Sri M.N. Rao, learned senior counsel appearing for the petitioners

in W.P.(C)No.95 of 2019, by referring to various articles in the draft

Constitution prepared by the constitutional adviser and by referring to

debates of Constituent Assembly and by placing reliance on

observations made by this Court in the judgment in the case of Indra

Sawhney1

, has submitted that the educational backwardness of

backward classes is on account of their social backwardness. It is

submitted that the social backwardness is the cause and not the

consequence of either of their economic or educational backwardness.

It is submitted that the reason for providing reservation under Articles

15(4) and 16(4) by carving out an exception to the equality clause is to

confine the benefits only to persons answering the description of

backward classes. It is further submitted that the economic criterion by

itself will not identify the backward class. Finally it is submitted by

learned senior counsel that if economically weaker sections are brought

within the purview of backward classes, it will destroy the ratio legis, the

10

W.P.(C)No.55 of 2019 etc.

very reason or foundation of law to carve out the exceptions to the

equality clause.

9. Sri Gopal Sankaranarayanan, learned senior counsel appearing

for the petitioners in W.P.(C)No.73 of 2019 submitted that the

fundamental balancing factor of the reservation policies has been the

ceiling limit of 50%. It is submitted that it has been consistently held by

this Court that if the reservations exceed such percentage the equality

code of the Constitution would be breached. It is submitted by learned

senior counsel that the ratio of 50% which is initially laid down in the

judgment of this Court in the case of M.R. Balaji & Ors. v. State of

Mysore6

 is finally approved in the judgment of this Court in the case of

Indra Sawhney1

. By referring to the aforesaid judgments of this Court,

it is submitted by learned senior counsel that the impugned Amendment

Act breaches the 50% ceiling limit and runs contrary to the judgments of

this Court as referred above. It is submitted that the petitioners have no

quarrel with the introduction of reservation for economically weaker

sections but at the same time the equality code of the Constitution ought

to be strictly observed and breach of 50% ceiling limit should not be

allowed. Learned senior counsel also submitted that as the questions

involved in this batch of cases amount to substantial questions of law

within the meaning of Article 145(3) of the Constitution, these cases

need to be heard by a Bench of five Judges.

6 (1963) Supp. 1 SCR 439

11

W.P.(C)No.55 of 2019 etc.

10. Ms. Meenakshi Arora, learned senior counsel appearing for the

petitioners in W.P.(C)No.182 of 2019 has submitted that the impugned

Amendment Act violates the basic structure doctrine and also crosses

the limit of 50% which runs contrary to several judgments of this Court.

11. On the other hand, learned Attorney General for India – Sri K.K.

Venugopal – by referring to Preamble of the Constitution and Article 46

of the Constitution of India, submitted that an affirmative action by

making a provision for reservation can be made to the economically

weaker sections of society. It is submitted that to secure justice to all

citizens based on social, economic and political, as referred to in the

Preamble, it is always open for the State to bring a constitutional

amendment so as to promote such economically weaker sections, in

relation to admissions to educational institutions and also in making

appointments in public services. Learned Attorney General has

submitted that a three-Judge Bench of this Court in the case of Society

for Unaided Private Schools of Rajasthan v. Union of India & Anr.7

has approved the classification based on economic criteria as provided

under provisions of Right of Children to Free and Compulsory Education

Act, 2009. He has further submitted that in view of the same the

impugned Amendment Act cannot be said to be either illegal or in

violation of the basic structure of the Constitution. It is submitted that as

observed by this Court in the case of Indra Sawhney1 while 50% shall

be the rule but at the same time in a situation like this, which is an

7 (2012) 6 SCC 1

12

W.P.(C)No.55 of 2019 etc.

extraordinary situation, such limit can be exceeded. Learned Attorney

General has brought to our notice certain observations made in the

aforesaid judgment. Learned Attorney General, in support of his

argument that such percentage can be exceeded, placed reliance on a

judgment of this Court in the case of Voice (Consumer Care) Council

v. State of Tamil Nadu8

. In the State of Tamil Nadu, the Tamil Nadu

Backward Classes, Scheduled Castes and Scheduled Tribes

(Reservation of Seats in Educational Institutions and of Appointments or

Posts in the Services under the State) Act, 1993 was brought into force

providing 69% reservation for BC, SC and ST. When the said Act was

upheld by the High Court, matter is carried to the Supreme Court and

this Court has passed interim order to create additional seats for general

category candidates, with a view to remove the grievance of the general

category candidates. The State of Tamil Nadu has filed application

requesting for modification of the order dated 22.07.1996. This Court

declined to modify such order and dismissed the interlocutory

application. At the same time it is kept open to the State of Tamil Nadu

to take steps for listing of the matters which have been referred to

Constitution Bench. Further relying on the judgment of this Court in the

case of Society of Unaided Private Schools for Rajasthan7

, the

learned Attorney General, has submitted that the questions raised by the

petitioners can no more be considered as substantial questions of law

for being referred to a Bench of five Judges. It is submitted that there is

8 (1996) 11 SCC 740

13

W.P.(C)No.55 of 2019 etc.

no basis for the plea of the petitioners that the impugned Amendment

Act violates the basic structure doctrine. It is submitted by learned

Attorney General that the basic structure comprises of many features

like several pillars in a foundation some of which are enumerated in the

opinions rendered by this Court in the case of His Holiness

Kesavananda Bharati Sripadagalvaru v. State of Kerala & Anr.9

. It is

submitted that the significance of these pillars is that if one of them is

removed the entire edifice of the Constitution will fall. Hence, it is

submitted that in judging the constitutional amendment, the question to

be addressed is whether the said amendment would lead to a collapse

of the edifice of the Constitution. It is submitted that to sustain a

challenge against a constitutional amendment, it must be shown that the

very identity of the Constitution has been altered. It is stated that as no

such grounds exist to show that the identity of the Constitution has been

altered by virtue of the impugned amendment, the plea of the petitioners

that the impugned amendment is in violation of basic structure doctrine

also has no legs to stand.

12. We have heard learned senior counsel for the petitioners and the

learned Attorney General for India for the Union of India.

13. Learned senior counsel for the petitioners at first instance argued

by seeking reference to a larger Bench of five Judges by placing

reliance on Article 145(3) of the Constitution and Order XXXVIII of the

Supreme Court Rules, 2013, which is opposed by learned Attorney

9 (1973) 4 SCC 225

14

W.P.(C)No.55 of 2019 etc.

General appearing for the Union of India on the ground that in view of

the decisions relied on by him no reference need be made.

14. Although we have heard learned senior counsels for the

petitioners and learned Attorney General appearing for the Union of

India, on the issue of reference, as well as on merits of the matter, as we

are in agreement with the submissions made by the learned counsels

appearing for the petitioners that these matters involve substantial

questions of law, as such, they are required to be heard by a Bench of

five Judges in view of the provision under Article 145(3) of the

Constitution of India and Order XXXVIII of the Supreme Court Rules,

2013, we are not entering into the merits of the matter on the validity of

impugned Amendment Act.

15. To refer the matter to a Bench of five Judges, we deem it

appropriate to refer to the provision under Article 145(3) as well as Order

XXXVIII Rule 1(1) of the Supreme Court Rules, 2013. The said relevant

provisions read as under :

“145. Rules of Court, etc.-(1) … … …

(2) … … …

(3) The minimum number of Judges who are to sit for

the purpose of deciding any case involving a

substantial question of law as to the interpretation of

this Constitution or for the purpose of hearing any

reference under article 143 shall be five:

Provided that, where the Court hearing an appeal

under any of the provisions of this Chapter other than

article 132 consists of less than five Judges and in the

course of the hearing of the appeal the Court is

satisfied that the appeal involves a substantial question

of law as to the interpretation of this Constitution the

determination of which is necessary for the disposal of

15

W.P.(C)No.55 of 2019 etc.

the appeal, such Court shall refer the question for

opinion to a Court constituted as required by this

clause for the purpose of deciding any case involving

such a question and shall on receipt of the opinion

dispose of the appeal in conformity with such opinion.”

Similarly, Order XXXVIII Rule 1(1) of the Supreme Court Rules, 2013

reads as under :

“1(1). Every petition under article 32 of the Constitution

shall be in writing and shall be heard by a Division

Court of not less than five Judges provided that a

petition which does not raise a substantial question of

law as to the interpretation of the Constitution may be

heard and decided by a Division Court of less than five

Judges, and, during vacation, by a Vacation Judge

sitting singly.”

16. In view of the aforesaid provisions, it is clear that for the purpose

of deciding any case involving a substantial question of law as to

interpretation of the Constitution it is to be heard by a Bench of five

Judges. Thus it is to be examined whether the question raised in the

writ petitions will involve a substantial question of law or not. It is the

case of the petitioners that the impugned amendments violate the basic

structure of the Constitution mainly on the ground that the existing

provisions of the Constitution empower to provide affirmative action only

in favour of socially backward classes. It is for the first time that by the

impugned amendments in the Constitution itself the new clauses are

incorporated enabling the State to provide affirmative action by way of

reservation to the extent of 10% in educational institutions and for

appointment in services to economically weaker sections of society. The

main plank of the argument from the side of the petitioners is that the

16

W.P.(C)No.55 of 2019 etc.

economic criteria alone cannot be the basis to determine backwardness.

In support of the same, learned counsels for the petitioners strongly rely

on nine-Judge Bench judgment of this Court in the case of Indra

Sawhney1

. Thus it is pleaded that the impugned amendments run

contrary to the above said judgment. It is also the case of the petitioners

that exceeding the ceiling cap of 50% is also in violation of the very

same judgment of this Court. Though learned Attorney General

appearing for the Union of India has strongly relied on the judgment of

this Court in the case of Society for Unaided Private Schools of

Rajasthan7

 where the provisions of Right of Children to Free and

Compulsory Education Act, 2009 are upheld. By virtue of the impugned

amendments, very Constitution is amended by inserting new clauses in

Articles 15 and 16 thereof, which empower the State to make

reservations by way of affirmative action to the extent of 10% to

economically weaker sections. It is the case of the petitioners, that the

very amendments run contrary to the constitutional scheme, and no

segment of available seats/posts can be reserved, only on the basis of

economic criterion. As such, we are of the view that such questions do

constitute substantial questions of law to be considered by a Bench of

five Judges. It is clear from the language of Article 145(3) of the

Constitution and Order XXXVIII Rule 1(1) of the Supreme Court Rules,

2013, the matters which involve substantial questions of law as to

interpretation of constitutional provisions they are required to be heard a

Bench of five Judges. Whether the impugned Amendment Act violates

17

W.P.(C)No.55 of 2019 etc.

basic structure of the Constitution, by applying the tests of ‘width’ and

‘identity’ with reference to equality provisions of the Constitution, is a

matter which constitutes substantial question of law within the meaning

of the provisions as referred above. Further, on the plea of ceiling of

50% for affirmative action, it is the case of the respondent-Union of India

that though ordinarily 50% is the rule but same will not prevent to amend

the Constitution itself in view of the existing special circumstances to

uplift the members of the society belonging to economically weaker

sections. Even such questions also constitute as substantial questions

of law to be examined by a Bench of five Judges as per Article 145(3) of

the Constitution read with Order XXXVIII Rule 1(1) of the Supreme Court

of Rules, 2013.

T.P.(C)Nos.341 of 2019; 323 of 2019; 357 of 2019;

539 of 2019; 630 of 2019; and 675 of 2019

17. These transfer petitions are filed by and/or on behalf of Union of

India, under Article 139A(1) of the Constitution of India read with Order

XLI Rules 1 to 5 of the Supreme Court Rules, 2013 seeking transfer of

writ petitions filed before various High Courts to this Court. Writ Petition

involving the very same question, i.e., challenge to the validity of The

Constitution (One Hundred and Third Amendment) Act, 2019 has been

filed before this Court in W.P.(C)No.55 of 2019 titled, ‘Janhit Abhiyan v.

Union of India & Ors.’ and this Court, by order dated 25.01.2019, has

already issued notice in such writ petition. It is submitted by learned

Attorney General that, as the very same amendment is subject matter of

18

W.P.(C)No.55 of 2019 etc.

challenge in the writ petitions pending before various High Courts and to

avoid conflicting findings by different High Courts, such writ petitions are

required to be transferred to this Court. As much as this Court has

already issued notice in a writ petition wherein validity of very same

Amendment Act is questioned before this Court, we deem it appropriate

that these transfer petitions are fit to be allowed. Accordingly, transfer

petitions are allowed and W.P.(C)|No.1475/2019 titled as ‘R.S. Bharati v.

Union of India’; W.P.(C)No.2099/2019 titled as ‘Desiya Makkal Sakthi

Katchi v. Principal Secretary & Ors.’; W.P.(C)No.1629/2019 titled as ‘Kali

Poongundran v. Union of India & Ors.’; W.P.No.3209/2019 titled as

‘A.S.A. Umar Farooq v. Union of India & Ors.’ pending before High Court

of Madras; W.P.(C)No.884/2019 titled as ‘Telangana State Backward

Classes Welfare Association & Anr. v. Union of India & Ors.’ pending

before the High Court for the State of Telangana; and

C.W.P.No.3220/2019 titled as ‘Rakesh Dhundhara v. Union of India &

Ors.’ pending before the High Court of Punjab and Haryana at

Chandigarh are ordered to be transferred to this Court for being listed

along with W.P.(C)No.55 of 2019 etc. Registry to take necessary steps

by requesting the concerned High Courts to transmit the record of the

abovementioned writ petitions.

All the matters

18. For the aforesaid reasons, we allow the transfer petitions and

refer this batch of cases, including the cases covered by transfer

applications, to a Bench of five Judges. Registry to place the matter

19

W.P.(C)No.55 of 2019 etc.

before Hon’ble the Chief Justice, for obtaining appropriate orders in this

regard.

………….………………………………CJI.

[S.A. BOBDE]

….…………………………………………J.

[R. SUBHASH REDDY]

….…………………………………………J.

[B.R. GAVAI]

New Delhi.

August 05, 2020.

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