2014-Oct. Part-S.C.-CIVIL APPEAL NO. 9394 OF 2014 (ARISING OUT OF SLP (C) NO. 39122 OF 2013) |M/S. IVT (IB VALLEY TRANSPORT), | | |VLT (VIJAY LAXMI PVT. LTD.), | | |CC (COAL CARRIERS) (JV) |.....APPELLANT(S) | |VERSUS | | |CHAIRMAN-CUM-MANAGING DIRECTOR | | |MAHANADI COALFIELDS LTD. & ORS. |.....RESPONDENT(S) |

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 9394 OF 2014
                 (ARISING OUT OF SLP (C) NO. 39122 OF 2013)


|M/S. IVT (IB VALLEY TRANSPORT),            |                             |
|VLT (VIJAY LAXMI PVT. LTD.),               |                             |
|CC (COAL CARRIERS) (JV)                    |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|CHAIRMAN-CUM-MANAGING DIRECTOR             |                             |
|MAHANADI COALFIELDS LTD. & ORS.            |.....RESPONDENT(S)           |


                                  O R D E R


A.K. SIKRI, J.
                 Leave granted.

In this appeal, the appellant is challenging the validity  of  orders  dated
November 21, 2013 passed by the  High  Court  of  Orissa  in  Writ  Petition
(Civil) No. 22022 of 2013 whereby the High  Court  has  dismissed  the  writ
petition on the ground that the dispute between the parties arises out of  a
commercial contract and, therefore, remedy for adjudication thereof  by  way
of writ petition under Article 226 of the  Constitution  is  not  available.
The High Court has, thus, observed that such a dispute  has  to  be  settled
either in a suit or in other proceedings in accordance with the contract.

The brief  facts  which  are  discernible  from  the  record  are  that  the
respondents  floated  a  tender,  i.e.  NIT  No.   MCL/SBP/GM(TC)/   NIT-514
(hereinafter referred to  as  'NIT-514')  dated  November  18-19,  2008  for
“transportation of surface miner coal fact  to  Kanika  Railway  Siding  and
transportation of surface miner reject to face to surface miner reject  dump
of Kulda OCP, Basundhara Garjanbahal Area”.  The period of contract for  the
said NIT was for three years  and  the  estimated  value  of  the  work  was
?63,68,45,000/- (rupees sixty three crores sixty eight lacs and  forty  five
thousand only).  The appellant also submitted its  bid  and,  on  evaluation
thereof, emerged as  the  Lowest  Tenderer  (L-1).   This  resulted  in  the
issuance of the letter of acceptance dated March 20, 2009 which  was  served
upon the appellant and the first work order was issued on May 18, 2009.   As
per the appellant, it is only after 22 months from the  date  of  letter  of
acceptance i.e. on June 7, 2011, the site was handed over to the  appellant.
 As such the appellant started execution of the contract  with  effect  from
June 07, 2011.  The contract was performed upto June 06, 2014.

A dispute arose between the  parties  which  is  about  the  rate  at  which
payment of revised wages is to be made by  the  appellant  to  all  contract
workers  engaged  in  the  mining  activities.   It  originated  under   the
circumstances mentioned hereinafter.

It so happened in the Work Order dated May 18, 2009,  working  details  were
described pursuant to NIT-514.   Clause  37.06  of  NIT-514  contained  Wage
Compensation Formula,  which  will  be  referred  to  by  us  later  at  the
appropriate stage.  What is relevant to point out at this stage is  that  on
September 28, 2012, the Central Government issued another  notification  for
the revision of the Minimum Wages in Mines and Establishment  falling  under
the Government of India.   It  prescribed  the  minimum  wages  for  workers
working above the ground for the categories of unskilled  as  ?186/-,  semi-
skilled as ?231/-, skilled/clerical as ?279/- and highly skilled as  ?324/-.
 According to the appellant, it has been paying the  workers  wages  at  the
aforesaid revised rates with effect from January 01, 2013.

While the appellant was executing the said work, the first communication  in
regard to the payment of revised wages was made by the  respondents  through
a letter dated June 21-22, 2013 directing therein that the  appellant  shall
pay to all contract workers engaged in the mining  activities,  pursuant  to
NIT-514, the revised wages as per  the  recommendation  of  the  High  Power
Committee of Coal India Limited contained  in  its  Circular  No.  CIL/C-5B/
JBCCI/HPC/566 dated February 18, 2013.  In this letter, the respondents  had
categorically   stated   that   there    is    no    provision    of    Wage
Escalation/Compensation Formula in the contract awarded  to  the  appellant.
However, if the appellant had  any  reservation/  grievance  in  paying  the
revised wages to the workers,  the  appellant  ought  to  submit  a  written
representation.

In reply to the aforesaid letter, the appellant, vide letter dated June  29,
2013, intimated the respondents that it is ready and willing to  accept  the
rate derived considering the Wage Compensation Formula  as  per  the  clause
inserted in the contract of other NITs, the work of which is in progress  in
the same project (Kulda OCP), even though  there is no  provision  of  Wages
Escalation/Compensation Formula in the contract awarded  to  the  appellant.
The appellant started paying the revised wages to the  contract  workers  as
per the directions of the respondents vide letter dated June 21-22, 2013.

While the things stood at that stage, the respondents  issued  orders  dated
August 06, 2013 and called upon the appellant to pay wages at  the  rate  of
?279/- (basic wage ?180/- plus ?99/- as  variable  dearness  allowance)   as
base rate of minimum wages.  In  this  communication,  the  aforesaid  basic
wage is arrived at by  taking  aid  of  the  Government  Notification  dated
November 28, 2012 which became effective from October 01,  2012.   According
to the appellant, the  aforesaid  mode  of  calculating  the  base  rate  of
minimum wage by taking into consideration  rates  prescribed  in  Government
Notification dated November 28, 2012 is per se  erroneous  inasmuch  as  the
said Notification became effective only from October 01, 2012,  whereas,  as
per Clause 37.06 of NIT-514, the rate of  minimum  wages  which  has  to  be
taken  into  consideration  is  as  per  Central  Government's  Notification
“corresponding to the last  date  of  submission  of  tender”.   It  is  the
submission of the appellant that  since  the  last  date  of  submission  of
tender  was  December  23,  2008,  the  Government  Notification  which  was
applicable as on that date had to be taken into consideration to  arrive  at
base minimum wage and as per this, ?111/- per day was the minimum  wage  for
skilled category of workers in  terms  of  Central  Government  Notification
dated  October   27,   2008.    The   appellant,   accordingly,   made   the
representation dated  August  29,  2013  objecting  to  the  basic  wage  as
calculated by the respondents in  its  letter  dated  August  06,  2013  and
intimating its willingness to accept the rate derived considering  the  Wage
Compensation Formula as per the  aforesaid  clause  in  NIT-514.   Since  no
reply was received, the appellant filed the aforesaid  writ  petition,  fate
whereof has already been mentioned above.

When the special leave petition came up for hearing  on  January  10,  2014,
following order was passed:
“Issue notice returnable in two weeks as  we want to remit  the  case  to  a
particular forum after hearing the  other  side.   Dasti,  in  addition,  is
permitted.”

The respondents have filed the counter affidavit wherein it is, inter  alia,
pleaded   that  the  appellant  had  not  followed  the  general  terms  and
conditions of Clause 12, which provides for a dispute resolution  mechanism.
 This clause states that if any dispute takes place between  the  contractor
and the department, effort shall be made to settle the disputes  at  company
level.  Further, this clause states that the contractor should make  request
in writing to the Engineer Incharge for settlement of such  disputes/  claim
within 30 days of arising of cause of the dispute/claim,  failing  which  no
dispute/claim of the contractor shall be  entertained  by  the  respondents.
The respondents have also sought to justify the rates of  minimum  wage  for
skilled workers, as derived in their communication from August 06, 2013,  in
respect of which decision has been taken by the Coal  India  Limited,  which
is the parent company of Mahanadi Coal Fields Limited (respondents  herein).
 However, we are not concerned with the merits of the  dispute  and  we  are
only to decide the appropriate forum where the dispute is to be decided  and
hence, we are not taking note of those submissions  made  on  the  basis  of
which the respondents justify the  contents  of  their  communication  dated
August 06, 2013.

From the aforesaid narration of facts, it becomes clear that  Clause  12  of
the General Terms  and  Conditions  provides  for  a  mechanism  of  dispute
resolution  before  resorting  to   the   legal   remedies.    This   clause
specifically states that it  is  incumbent  upon  the  contractor  to  avoid
litigation and disputes during the course  of  execution.   If  any  dispute
takes place between the contractor and the department, effort shall be  made
first to settle the disputes at the company  level.   Further,  this  clause
states that the contractors should make request in writing to  the  Engineer
Incharge for settlement of such dispute/claim within 30 days of  arising  of
cause  of  dispute/claim.   Further,  as  per  Section  8  of  NIT-514,  the
contractor can avail second resolve mechanism  technique,  i.e.  Independent
External Monitor (IEM) to resolve the dispute.  It was to be resorted to  in
the first instance before  approaching  the  Court.   There  is  no  quarrel
between the parties in respect thereof.  However, issues are joined  on  the
utilization of the said mechanism.  As per the  appellant,  after  receiving
the offending Office Order dated August 06, 2013, it had sent  communication
dated August 29, 2013 requesting therein  to  revise  the  aforesaid  Office
Order to the extent that the rate of minimum wages should be taken as ?101/-
 per day in respect of ?279/- per day, but no response thereto was  received
within the period of 30 days.  The appellant argues that in this  manner  it
had exhausted the said channel  and  only  thereafter  approached  the  High
Court.  The respondents maintained that writing of letter dated  August  29,
2013 was not in terms of Clause 12.

We find some justification in the stand taken by the respondents. No  doubt,
in its representation dated August 29, 2013 the appellant  stated  that  the
value of Po of Wage Compensation Formula (Clause No.  37.06)  has  not  been
incorporated in the above Office Order correctly and  the  rate  of  minimum
wages as on the last date of submission of tender  was  December  23,  2008.
On this basis, request is made to revise the  calculations  and  communicate
the same to the appellant.  However, it  is  not  stated  that  dispute  has
arisen on that account and it should be resolved  in  terms  of  Clause  12.
Clause 12 of NIT-514 reads as under:
“It is incumbent upon  the  contractor  to  avoid  litigation  and  disputes
during the course of execution.  However, if a dispute takes  place  between
the contractor and the department, efforts shall be  made  first  to  settle
the disputes at the company level.

The contractor should make request  in  writing  to  the  Engineer  I/C  for
settlement of such disputes/ claims within 30 days arising of the  cause  of
dispute/claim failing which no dispute/claim  of  the  contractor  shall  be
entertained by the company.

If differences still persists, the settlement of  the  disputes  with  Govt.
agencies shall be dealt  with  as  per  guidelines  issued  by  Ministry  of
Finance, Govt. of India in this regard.   In  case  of  parties  other  than
Govt. agencies, the redressal of the dispute may be sought in the  Court  of
Law within the jurisdiction of District  Court/High  Court  where  the  work
will be executed.”

It is manifest that representation dated August 29, 2013 in no way  attempts
to invoke the  mechanism  provided  in  Clause  12  for  the  settlement  of
dispute.  The  respondents  in  the  counter  affidavit  have  categorically
stated that vide letter dated June 28, 2013, the Staff Officer  (Mining)  BG
had given the details of methodolgy for  calculation  of  wage  compensation
and, therefore, clarification was given.

It is clear from the above that a dispute has arisen about  the  methodology
for calculation of wage compensation.  In such circumstance, as  per  Clause
12, the appellant was  supposed  to  write  to  the  Engineer  Incharge  for
resolving the dispute. Pertinently, communication dated August 29,  2013  is
addressed to the Staff  Officer  (Mining).   Therefore,  by  no  stretch  of
imagination, it can be said that  the  appellant  availed  the  departmental
remedy provided under Clause 12, before filing the writ petition.

Having regard  to  the  aforesaid  facts,  we  dispose  of  this  appeal  by
directing the appellant to exhaust the remedy under Clause 12 by  requesting
the Engineer Incharge to resolve the dispute before taking recourse  to  any
suitable legal remedy.
                 No costs.

                             .............................................J.
                                                            (J. CHELAMESWAR)



                             .............................................J.
                                                                (A.K. SIKRI)
New Delhi;
October 10, 2014.

2014-OCT.PART- S.C. - CIVIL APPEAL NO. 9394 OF 2014 (ARISING OUT OF SLP (C) NO. 39122 OF 2013) |M/S. IVT (IB VALLEY TRANSPORT), | | |VLT (VIJAY LAXMI PVT. LTD.), | | |CC (COAL CARRIERS) (JV) |.....APPELLANT(S) | |VERSUS | | |CHAIRMAN-CUM-MANAGING DIRECTOR | | |MAHANADI COALFIELDS LTD. & ORS. |.....RESPONDENT(S)

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 9394 OF 2014
                 (ARISING OUT OF SLP (C) NO. 39122 OF 2013)


|M/S. IVT (IB VALLEY TRANSPORT),            |                             |
|VLT (VIJAY LAXMI PVT. LTD.),               |                             |
|CC (COAL CARRIERS) (JV)                    |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|CHAIRMAN-CUM-MANAGING DIRECTOR             |                             |
|MAHANADI COALFIELDS LTD. & ORS.            |.....RESPONDENT(S)           |


                                  O R D E R


A.K. SIKRI, J.
                 Leave granted.

In this appeal, the appellant is challenging the validity  of  orders  dated
November 21, 2013 passed by the  High  Court  of  Orissa  in  Writ  Petition
(Civil) No. 22022 of 2013 whereby the High  Court  has  dismissed  the  writ
petition on the ground that the dispute between the parties arises out of  a
commercial contract and, therefore, remedy for adjudication thereof  by  way
of writ petition under Article 226 of the  Constitution  is  not  available.
The High Court has, thus, observed that such a dispute  has  to  be  settled
either in a suit or in other proceedings in accordance with the contract.

The brief  facts  which  are  discernible  from  the  record  are  that  the
respondents  floated  a  tender,  i.e.  NIT  No.   MCL/SBP/GM(TC)/   NIT-514
(hereinafter referred to  as  'NIT-514')  dated  November  18-19,  2008  for
“transportation of surface miner coal fact  to  Kanika  Railway  Siding  and
transportation of surface miner reject to face to surface miner reject  dump
of Kulda OCP, Basundhara Garjanbahal Area”.  The period of contract for  the
said NIT was for three years  and  the  estimated  value  of  the  work  was
?63,68,45,000/- (rupees sixty three crores sixty eight lacs and  forty  five
thousand only).  The appellant also submitted its  bid  and,  on  evaluation
thereof, emerged as  the  Lowest  Tenderer  (L-1).   This  resulted  in  the
issuance of the letter of acceptance dated March 20, 2009 which  was  served
upon the appellant and the first work order was issued on May 18, 2009.   As
per the appellant, it is only after 22 months from the  date  of  letter  of
acceptance i.e. on June 7, 2011, the site was handed over to the  appellant.
 As such the appellant started execution of the contract  with  effect  from
June 07, 2011.  The contract was performed upto June 06, 2014.

A dispute arose between the  parties  which  is  about  the  rate  at  which
payment of revised wages is to be made by  the  appellant  to  all  contract
workers  engaged  in  the  mining  activities.   It  originated  under   the
circumstances mentioned hereinafter.

It so happened in the Work Order dated May 18, 2009,  working  details  were
described pursuant to NIT-514.   Clause  37.06  of  NIT-514  contained  Wage
Compensation Formula,  which  will  be  referred  to  by  us  later  at  the
appropriate stage.  What is relevant to point out at this stage is  that  on
September 28, 2012, the Central Government issued another  notification  for
the revision of the Minimum Wages in Mines and Establishment  falling  under
the Government of India.   It  prescribed  the  minimum  wages  for  workers
working above the ground for the categories of unskilled  as  ?186/-,  semi-
skilled as ?231/-, skilled/clerical as ?279/- and highly skilled as  ?324/-.
 According to the appellant, it has been paying the  workers  wages  at  the
aforesaid revised rates with effect from January 01, 2013.

While the appellant was executing the said work, the first communication  in
regard to the payment of revised wages was made by the  respondents  through
a letter dated June 21-22, 2013 directing therein that the  appellant  shall
pay to all contract workers engaged in the mining  activities,  pursuant  to
NIT-514, the revised wages as per  the  recommendation  of  the  High  Power
Committee of Coal India Limited contained  in  its  Circular  No.  CIL/C-5B/
JBCCI/HPC/566 dated February 18, 2013.  In this letter, the respondents  had
categorically   stated   that   there    is    no    provision    of    Wage
Escalation/Compensation Formula in the contract awarded  to  the  appellant.
However, if the appellant had  any  reservation/  grievance  in  paying  the
revised wages to the workers,  the  appellant  ought  to  submit  a  written
representation.

In reply to the aforesaid letter, the appellant, vide letter dated June  29,
2013, intimated the respondents that it is ready and willing to  accept  the
rate derived considering the Wage Compensation Formula  as  per  the  clause
inserted in the contract of other NITs, the work of which is in progress  in
the same project (Kulda OCP), even though  there is no  provision  of  Wages
Escalation/Compensation Formula in the contract awarded  to  the  appellant.
The appellant started paying the revised wages to the  contract  workers  as
per the directions of the respondents vide letter dated June 21-22, 2013.

While the things stood at that stage, the respondents  issued  orders  dated
August 06, 2013 and called upon the appellant to pay wages at  the  rate  of
?279/- (basic wage ?180/- plus ?99/- as  variable  dearness  allowance)   as
base rate of minimum wages.  In  this  communication,  the  aforesaid  basic
wage is arrived at by  taking  aid  of  the  Government  Notification  dated
November 28, 2012 which became effective from October 01,  2012.   According
to the appellant, the  aforesaid  mode  of  calculating  the  base  rate  of
minimum wage by taking into consideration  rates  prescribed  in  Government
Notification dated November 28, 2012 is per se  erroneous  inasmuch  as  the
said Notification became effective only from October 01, 2012,  whereas,  as
per Clause 37.06 of NIT-514, the rate of  minimum  wages  which  has  to  be
taken  into  consideration  is  as  per  Central  Government's  Notification
“corresponding to the last  date  of  submission  of  tender”.   It  is  the
submission of the appellant that  since  the  last  date  of  submission  of
tender  was  December  23,  2008,  the  Government  Notification  which  was
applicable as on that date had to be taken into consideration to  arrive  at
base minimum wage and as per this, ?111/- per day was the minimum  wage  for
skilled category of workers in  terms  of  Central  Government  Notification
dated  October   27,   2008.    The   appellant,   accordingly,   made   the
representation dated  August  29,  2013  objecting  to  the  basic  wage  as
calculated by the respondents in  its  letter  dated  August  06,  2013  and
intimating its willingness to accept the rate derived considering  the  Wage
Compensation Formula as per the  aforesaid  clause  in  NIT-514.   Since  no
reply was received, the appellant filed the aforesaid  writ  petition,  fate
whereof has already been mentioned above.

When the special leave petition came up for hearing  on  January  10,  2014,
following order was passed:
“Issue notice returnable in two weeks as  we want to remit  the  case  to  a
particular forum after hearing the  other  side.   Dasti,  in  addition,  is
permitted.”

The respondents have filed the counter affidavit wherein it is, inter  alia,
pleaded   that  the  appellant  had  not  followed  the  general  terms  and
conditions of Clause 12, which provides for a dispute resolution  mechanism.
 This clause states that if any dispute takes place between  the  contractor
and the department, effort shall be made to settle the disputes  at  company
level.  Further, this clause states that the contractor should make  request
in writing to the Engineer Incharge for settlement of such  disputes/  claim
within 30 days of arising of cause of the dispute/claim,  failing  which  no
dispute/claim of the contractor shall be  entertained  by  the  respondents.
The respondents have also sought to justify the rates of  minimum  wage  for
skilled workers, as derived in their communication from August 06, 2013,  in
respect of which decision has been taken by the Coal  India  Limited,  which
is the parent company of Mahanadi Coal Fields Limited (respondents  herein).
 However, we are not concerned with the merits of the  dispute  and  we  are
only to decide the appropriate forum where the dispute is to be decided  and
hence, we are not taking note of those submissions  made  on  the  basis  of
which the respondents justify the  contents  of  their  communication  dated
August 06, 2013.

From the aforesaid narration of facts, it becomes clear that  Clause  12  of
the General Terms  and  Conditions  provides  for  a  mechanism  of  dispute
resolution  before  resorting  to   the   legal   remedies.    This   clause
specifically states that it  is  incumbent  upon  the  contractor  to  avoid
litigation and disputes during the course  of  execution.   If  any  dispute
takes place between the contractor and the department, effort shall be  made
first to settle the disputes at the company  level.   Further,  this  clause
states that the contractors should make request in writing to  the  Engineer
Incharge for settlement of such dispute/claim within 30 days of  arising  of
cause  of  dispute/claim.   Further,  as  per  Section  8  of  NIT-514,  the
contractor can avail second resolve mechanism  technique,  i.e.  Independent
External Monitor (IEM) to resolve the dispute.  It was to be resorted to  in
the first instance before  approaching  the  Court.   There  is  no  quarrel
between the parties in respect thereof.  However, issues are joined  on  the
utilization of the said mechanism.  As per the  appellant,  after  receiving
the offending Office Order dated August 06, 2013, it had sent  communication
dated August 29, 2013 requesting therein  to  revise  the  aforesaid  Office
Order to the extent that the rate of minimum wages should be taken as ?101/-
 per day in respect of ?279/- per day, but no response thereto was  received
within the period of 30 days.  The appellant argues that in this  manner  it
had exhausted the said channel  and  only  thereafter  approached  the  High
Court.  The respondents maintained that writing of letter dated  August  29,
2013 was not in terms of Clause 12.

We find some justification in the stand taken by the respondents. No  doubt,
in its representation dated August 29, 2013 the appellant  stated  that  the
value of Po of Wage Compensation Formula (Clause No.  37.06)  has  not  been
incorporated in the above Office Order correctly and  the  rate  of  minimum
wages as on the last date of submission of tender  was  December  23,  2008.
On this basis, request is made to revise the  calculations  and  communicate
the same to the appellant.  However, it  is  not  stated  that  dispute  has
arisen on that account and it should be resolved  in  terms  of  Clause  12.
Clause 12 of NIT-514 reads as under:
“It is incumbent upon  the  contractor  to  avoid  litigation  and  disputes
during the course of execution.  However, if a dispute takes  place  between
the contractor and the department, efforts shall be  made  first  to  settle
the disputes at the company level.

The contractor should make request  in  writing  to  the  Engineer  I/C  for
settlement of such disputes/ claims within 30 days arising of the  cause  of
dispute/claim failing which no dispute/claim  of  the  contractor  shall  be
entertained by the company.

If differences still persists, the settlement of  the  disputes  with  Govt.
agencies shall be dealt  with  as  per  guidelines  issued  by  Ministry  of
Finance, Govt. of India in this regard.   In  case  of  parties  other  than
Govt. agencies, the redressal of the dispute may be sought in the  Court  of
Law within the jurisdiction of District  Court/High  Court  where  the  work
will be executed.”

It is manifest that representation dated August 29, 2013 in no way  attempts
to invoke the  mechanism  provided  in  Clause  12  for  the  settlement  of
dispute.  The  respondents  in  the  counter  affidavit  have  categorically
stated that vide letter dated June 28, 2013, the Staff Officer  (Mining)  BG
had given the details of methodolgy for  calculation  of  wage  compensation
and, therefore, clarification was given.

It is clear from the above that a dispute has arisen about  the  methodology
for calculation of wage compensation.  In such circumstance, as  per  Clause
12, the appellant was  supposed  to  write  to  the  Engineer  Incharge  for
resolving the dispute. Pertinently, communication dated August 29,  2013  is
addressed to the Staff  Officer  (Mining).   Therefore,  by  no  stretch  of
imagination, it can be said that  the  appellant  availed  the  departmental
remedy provided under Clause 12, before filing the writ petition.

Having regard  to  the  aforesaid  facts,  we  dispose  of  this  appeal  by
directing the appellant to exhaust the remedy under Clause 12 by  requesting
the Engineer Incharge to resolve the dispute before taking recourse  to  any
suitable legal remedy.
                 No costs.

                             .............................................J.
                                                            (J. CHELAMESWAR)



                             .............................................J.
                                                                (A.K. SIKRI)
New Delhi;
October 10, 2014.

2014 - OCT.PART-S.C.- CIVIL APPEAL NO. 9393 OF 2014 (ARISING OUT OF SLP (CIVIL) NO. 33883 OF 2013) |BASAPPA S/O SANGANABASAPPA BAHVIKATTI | | | |.....APPELLANT(S) | |VERSUS | | |T RAMESH S/O TANGAVELU & ANR. |.....RESPONDENT(S) |

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 9393 OF 2014
               (ARISING OUT OF SLP (CIVIL) NO. 33883 OF 2013)


|BASAPPA S/O SANGANABASAPPA BAHVIKATTI    |                               |
|                                         |.....APPELLANT(S)              |
|VERSUS                                   |                               |
|T RAMESH S/O TANGAVELU & ANR.            |.....RESPONDENT(S)             |


                                  O R D E R


            Leave granted.

Unwrapping the events, which have led to the filing of the  instant  appeal,
depict the following scenario:
      On 23.09.2007, the appellant after completion of his  Goundi  (working
at  building  construction  sites)  work,  was  returning  from   Navanagar,
Karnataka on his Motorcycle bearing Reg. No. KA 29/J – 731.  He was  driving
slowly and cautiously on the left side of the road.   At  that  time  a  bus
bearing Reg. No. KA 29/6967 came from opposite direction  in  a  high  speed
and in rash and negligent manner as to endanger human life, dashed into  the
Motorcycle of the appellant.  This happened near the Simikeri  Bypass  Cross
on Gaddanakeri Hubli Road at about 20:30 hours.  Due to the  said  accident,
the appellant sustained grievous injuries on  his  head  and  all  over  his
body.   He  was  immediately  admitted  to  District  Government   Hospital,
Bagalkot where he got  preliminary treatment, whereafter he was  shifted  to
the S.H.K. Hospital, Bagalkot for further  treatment.   After  getting  some
treatment in the said hospital, the appellant had to  be  shifted  again  to
Dr. Kerudi Hospital, Bagalkot because of grievous head  injuries  and  there
he was treated by Dr. Mohan Wamaske, Neurologist.  He underwent  a  surgical
operation in the said hospital where he remained as indoor  patient  for  10
days.   Notwithstanding  this  treatment,  the  appellant   could   not   be
completely cured and has suffered permanent disability of 58% to  the  whole
body.

3)    We may record at this stage that the  aforesaid  facts  pertaining  to
accident caused due to rash and negligent driving of the bus and the  nature
and extent of injuries suffered by the appellant  stand  established  before
the Motor Accident Claims Tribunal (for short 'MACT').   It  would  also  be
worthwhile to mention that against the Driver  of  the  Bus,  a  case  under
Sections 279 and 334 of the Indian Penal Code was  also  registered  at  the
Kaladgi Police  Station.   After  completing  the  investigation,  even  the
chargesheet has been filed against the Driver, though  the  outcome  of  the
said case is not known from the records.

4)    Being a victim of the said accident resulting into  aforesaid  serious
injuries and incapacitation of his  body,  the  appellant  filed  the  claim
petition under Section 166 of Motor Vehicle  Act  claiming  compensation  of
Rs.15,00,000/-.  This  petition  filed  before  the  MACT  at  Bagalkot  was
registered as M.V.C. No.296/2002.   In  this  petition,  the  appellant  had
impleaded respondent No.1 herein, who was the  driver  of  the  vehicle  and
respondent No.2, Manager, Reliance General Insurance  Co.  Ltd.,  which  had
insured the offending vehicle.  The appellant examined himself as  PW-1  and
narrated the details of the  incident.   Another  significant  and  material
witness produced by him was Dr. Sanjeev  S  Kalasoor   (PW-3),  who  deposed
about  the  injuries  suffered  by  the  appellant  and  produced  copy   of
Disability Certificate dated 11.02.2009 and  other  medical  records.    The
respondents also led their evidence.  Arguments were heard.  The  said  case
culminated in the decision dated 25.11.2010 that was rendered  by  the  MACT
recording a  categorical  and  definite  finding  to  the  effect  that  the
accident in question was caused due to the rash and  negligent  act  of  the
driver.   The  Tribunal,  thus,  allowed  the   petition   but   awarded   a
compensation of Rs.93,800/- with interest at the rate of 6%  p.a.  from  the
date of accident till the date of realisation.  Different heads under  which
the said compensation was awarded, thereby  arriving at a  aforesaid  figure
of Rs.93,800/- are as under:

|       |                                 |    |Amount (Rs.)     |
|1.     |Pain and sufferings              |:   |10,000/-         |
|2.     |Medical expenses                 |:   |35,000/-         |
|3.     |Loss of future income            |:   |46,800/-         |
|4.     |Loss of amenities, diet,         |:   |2,000/-          |
|       |nutrition and attendant charges  |    |                 |
|       |Total                            |:   |93,800/-         |

5)    The appellant was not satisfied with the poor amount  of  compensation
and, thus, approached the High Court of Karnataka, Dharwad Bench  by  filing
appeal i.e. MFA No. 21150/2011  (MV).   The  High  Court  has  enhanced  the
compensation to Rs.2,59,500/- vide judgment dated  11.03.2013.  The  breakup
of compensation awarded by the  High  Court  under  different  heads  is  as
follows:

|       |                                 |    |Amount (Rs.)     |
|1.     |Pain and suffering               |:   |25,000/-         |
|2.     |Incidental expenses              |:   |10,000/-         |
|3.     |Medical expenses                 |:   |35,000/-         |
|4.     |Loss of income during laid up    |:   |12,000/-         |
|       |period                           |    |                 |
|5.     |Loss of amenities                |:   |20,000/-         |
|6.     |Loss of future income            |:   |1,57,500/-       |
|       |Total                            |:   |2,59,500/-       |

6)    Still not satisfied, the present appeal  has  been  preferred  by  the
appellant in this Court for enhancement of compensation.

7)    From the perusal of the judgment of the High Court, it  gets  revealed
that the Tribunal as well as the  High   Court  has  accepted  the  injuries
certificate produced by the  doctor.   On  going  through  this  Certificate
along with Disability Certificate, CT Scan Reports, Medical Bills and  Case-
Sheets etc., which were produced by the appellant on record, the High  Court
has recorded that the appellant has sustained grievous injuries in his  head
and all over the face.  As per the testimony of the doctor (PW-3), CT  Brain
reveals acute subdural left front temporal hemorrhagic  with  midline  shift
and  mass  effect.   The  doctor  examined  the  appellant  as  late  as  on
11.02.2009 and found that the appellant's medical condition of  on  and  off
headache,  giddiness  and  vertigo  impaired  memory,  altered   speed   and
imbalance while walking continuous to persist.  He had operative  scar  left
side of scalp (head) motor  aphasia  and  positive  Romberg's.   The  Courts
below have also accepted the fact  that  the  appellant  is  suffering  from
permanent disability of 58% to the whole body.
8)    Having regard to the aforesaid injuries suffered by the  appellant  in
the said accident and the  number  of  days  for  which  the  appellant  was
treated and underwent physical and  mental  pain  and  suffering,  the  High
Court enhanced  the  compensation  under  this  head  from  Rs.10,000/-,  as
awarded by the Tribunal, to Rs.25,000/-.  In  so  far  as  reimbursement  of
medical expenses is concerned, it is maintained at Rs.35,000/-  inasmuch  as
that is the actual amount spent by the appellant, which is evident from  the
medical bills produced by him.  However, considering that the appellant  was
indoor patient in a private hospital for more than 10 days,  Rs.10,000/-  is
awarded  for  incidental  expenses  such  as  conveyance,  nourishment   and
attendant charges.  As regards loss of income during  laid  up  period,  the
amount of Rs.12,000/- has been awarded on the ground that the appellant  had
been earning Rs.125/- per day i.e. Rs.3,750/- per month and as he was  under
treatment and rest for about three months, loss of income was  to  the  tune
of Rs.12,000/-.

9)    In so  far  as  compensation  in  respect  of  loss  of  amenities  is
concerned, the High Court has enhanced the compensation from  Rs.2,000/-  to
Rs.20,000/- considering the disability reflected in  the  evidence  produced
by the appellant, as according to the High Court, the  appellant  will  have
to undergo discomfort and unhappiness in his  future  life  because  of  the
said accident.

10)   Major head of compensation is loss of future income.  Here,  the  High
Court has observed that though the doctor has assessed permanent  disability
at 58% to the whole body, it may be an exaggeration  and  justice  would  be
met if functional disability is taken at 25%.  On this basis, multiplier  of
14 is applied, keeping in view of the age of  the  appellant,  and  loss  of
future income is assessed at Rs.1,57,500/- and this figure is worked out  by
applying the following formula:
                         Rs.3,750/- x 25% x 12 x 14

11)   The learned counsel for the appellant made  grievance  only  on  three
counts.  In the first instance, he pleaded  for  increasing  the  amount  of
physical and mental pain and suffering.  His vehement  submission  was  that
loss of future income is not assessed appropriately by the High  Court.   He
pointed out that when the permanent disability was 58%, for the purposes  of
calculating the loss of future income, it had to be taken at  100%.  Another
plea of the appellant was that interest should  have  been  granted  at  the
rate of 9% instead of 6%.  We find force in the submissions of  the  learned
counsel on all these aspects.
12)   We are of the opinion that once the High  Court  had  itself  accepted
the evidence of PW-3 the doctor who had treated  the  appellant  and  issued
the Disability Certificate as credible and reliable, there was no reason  to
treat the 'functional disability' at 25%.  The High Court should have  acted
upon the said Disability Certificate taking the permanent disability at  58%
which is to the whole body.  It is to be  borne  in  mind  that  before  the
incident, the appellant was hail  and healthy who enjoyed robust  health  as
it has emerged from the record that he was working as  Goundi  i.e.  at  the
building construction sites.   Because of the permanent  disability  of  the
nature described above, PW-3 has very categorically stated in his  testimony
that the appellant is unable to walk and stand for a long time  and  is  not
capable of doing heavy work.  It is also  testified  that  he  is  suffering
general weakness as well.  This would lead us to  the  conclusion  that  the
appellant  suffers  85%  functional  disability.   On   arriving   at   this
conclusion, we are bolstered by the judgment of this Court in  the  case  of
Raj Kumar v. Ajay Kumar & Another, (2011) 1 SCC 343 wherein this  aspect  is
lucidly explained with  impeccable  erudition,  as  is  discerned  from  the
following passages  of  the  said  judgment,  reading  whereof  would  amply
demonstrate that the nuances are so  exhaustively  dealt  with,  leaving  no
scope for restating, much less refuting or refining:
8. Disability refers to any restriction or lack of  ability  to  perform  an
activity in the manner  considered  normal  for  a  human  being.  Permanent
disability refers to the residuary incapacity or loss of use  of  some  part
of the body, found existing at the  end  of  the  period  of  treatment  and
recuperation, after achieving the maximum  bodily  improvement  or  recovery
which is likely to remain for the remainder life of the  injured.  Temporary
disability refers to the incapacity or loss of use of some part of the  body
on account of the [pic]injury, which will cease to exist at the end  of  the
period of treatment and recuperation. Permanent  disability  can  be  either
partial  or  total.  Partial  permanent  disability  refers  to  a  person’s
inability to perform all the duties  and  bodily  functions  that  he  could
perform before the accident, though he is able to perform some of  them  and
is  still  able  to  engage  in  some  gainful  activity.  Total   permanent
disability refers to a  person’s  inability  to  perform  any  avocation  or
employment related activities as a result of  the  accident.  The  permanent
disabilities that may arise from motor accident  injuries,  are  of  a  much
wider range when compared to the physical disabilities which are  enumerated
in the Persons with Disabilities (Equal Opportunities, Protection of  Rights
and Full Participation) Act, 1995 (“the Disabilities Act”, for  short).  But
if any of the disabilities enumerated in Section 2(i)  of  the  Disabilities
Act are the result of injuries sustained in a motor accident,  they  can  be
permanent disabilities for the purpose of claiming compensation.

                                    X X X

10. Where the claimant  suffers  a  permanent  disability  as  a  result  of
injuries, the assessment of compensation under the head of  loss  of  future
earnings  would  depend  upon  the  effect  and  impact  of  such  permanent
disability on his earning capacity. The  Tribunal  should  not  mechanically
apply the percentage of permanent disability as the percentage  of  economic
loss or loss of earning capacity. In most of the cases,  the  percentage  of
economic loss, that is, the percentage of loss of earning capacity,  arising
from a permanent  disability  will  be  different  from  the  percentage  of
permanent disability. Some Tribunals wrongly assume that  in  all  cases,  a
particular extent (percentage) of permanent disability  would  result  in  a
corresponding loss of earning capacity, and consequently,  if  the  evidence
produced show 45% as the permanent disability, will hold that there  is  45%
loss of future earning capacity. In most of the cases, equating  the  extent
(percentage) of loss of earning  capacity  to  the  extent  (percentage)  of
permanent disability will result in award of either too low or  too  high  a
compensation.

11. What requires to be assessed by  the  Tribunal  is  the  effect  of  the
permanent disability on the earning  capacity  of  the  injured;  and  after
assessing the loss of earning capacity in  terms  of  a  percentage  of  the
income, [pic]it has to be quantified in terms of money,  to  arrive  at  the
future loss of earnings (by applying the standard multiplier method used  to
determine loss of dependency). We may however note that in  some  cases,  on
appreciation of evidence and assessment, the  Tribunal  may  find  that  the
percentage of loss  of  earning  capacity  as  a  result  of  the  permanent
disability, is  approximately  the  same  as  the  percentage  of  permanent
disability in which case, of  course,  the  Tribunal  will  adopt  the  said
percentage  for  determination  of  compensation.  (See  for  example,   the
decisions of this Court in Arvind Kumar Mishra v. New  India  Assurance  Co.
Ltd., (2010) 10 SCC 254 and Yadava Kumar v.  National  Insurance  Co.  Ltd.,
(2010) 10 SCC 341)

12. Therefore, the Tribunal  has  to  first  decide  whether  there  is  any
permanent disability and, if so, the extent of  such  permanent  disability.
This means that the Tribunal should consider and decide  with  reference  to
the evidence:
(i) whether the disablement is permanent or temporary;
(ii) if  the  disablement  is  permanent,  whether  it  is  permanent  total
disablement or permanent partial disablement;
(iii) if the disablement percentage  is  expressed  with  reference  to  any
specific limb, then the effect of  such  disablement  of  the  limb  on  the
functioning of the entire body, that is, the permanent  disability  suffered
by the person.
If the Tribunal concludes that there is no permanent disability  then  there
is no question of proceeding further and  determining  the  loss  of  future
earning capacity. But if the Tribunal  concludes  that  there  is  permanent
disability then it will proceed to ascertain its extent. After the  Tribunal
ascertains the actual extent of permanent disability of the  claimant  based
on the  medical  evidence,  it  has  to  determine  whether  such  permanent
disability has affected or will affect his earning capacity.

13. Ascertainment of the effect of the permanent disability  on  the  actual
earning capacity involves three steps. The Tribunal has to  first  ascertain
what activities the claimant could  carry  on  in  spite  of  the  permanent
disability and what he could not do as a result of the permanent  disability
(this is also relevant for awarding compensation under the head of  loss  of
amenities  of  life).  The  second  step  is  to  ascertain  his  avocation,
profession and nature of work before the accident,  as  also  his  age.  The
third step is to find out whether (i) the claimant is totally disabled  from
earning any kind of livelihood, or (ii) whether in spite  of  the  permanent
disability, the claimant could still effectively  carry  on  the  activities
and functions, which he was earlier carrying on, or  (iii)  whether  he  was
prevented  or  restricted  from  discharging  his  previous  activities  and
functions, but could carry on some other or lesser scale of  activities  and
functions so that  he  continues  to  earn  or  can  continue  to  earn  his
livelihood.
[pic]
14. For example, if the left hand of a claimant is amputated, the  permanent
physical or functional disablement  may  be  assessed  around  60%.  If  the
claimant was a driver or a carpenter, the actual loss  of  earning  capacity
may virtually be hundred per cent, if he is neither  able  to  drive  or  do
carpentry. On the other hand, if the claimant  was  a  clerk  in  government
service, the loss of his left hand may not result in loss of employment  and
he may still be continued as a  clerk  as  he  could  perform  his  clerical
functions; and in that event the loss of earning capacity will not  be  100%
as in the case of a driver  or  carpenter,  nor  60%  which  is  the  actual
physical disability, but far less. In fact, there may not  be  any  need  to
award any compensation under the head of “loss of future earnings”,  if  the
claimant  continues  in  government  service,  though  he  may  be   awarded
compensation under the head of loss of amenities as a consequence of  losing
his hand. Sometimes the injured claimant may be continued  in  service,  but
may not be found suitable for discharging the duties attached  to  the  post
or job which he was earlier holding, on account of his disability,  and  may
therefore be shifted to some other suitable  but  lesser  post  with  lesser
emoluments, in which case there should be a limited award under the head  of
loss of  future  earning  capacity,  taking  note  of  the  reduced  earning
capacity.

19. We may now summarise the principles discussed above:
(i) All injuries (or permanent disabilities arising from injuries),  do  not
result in loss of earning capacity.
(ii) The percentage of permanent disability  with  reference  to  the  whole
body of a person, cannot be assumed to be the percentage of loss of  earning
capacity. To put it differently, the percentage of loss of earning  capacity
is not the same as the percentage of permanent disability (except in  a  few
cases, where the Tribunal on the  basis  of  evidence,  concludes  that  the
percentage of loss of earning capacity is the  same  as  the  percentage  of
permanent disability).
(iii) The doctor who  treated  an  injured  claimant  or  who  examined  him
subsequently to assess the extent  of  his  permanent  disability  can  give
evidence only in regard to the extent of permanent disability. The  loss  of
earning capacity is something that will have to be assessed by the  Tribunal
with reference to the evidence in entirety.
(iv) The same permanent disability may result in  different  percentages  of
loss of earning capacity in different persons, depending upon the nature  of
profession, occupation or job, age, education and other factors.

13)   The  principle  laid  down  in  the  aforesaid  judgment  is  recently
followed in Syed Sadiq  and  others  v.  Divisional  Manager,  United  India
Insurance Company Limited, (2014) 2 SCC 735. After quoting paras 11  and  13
from Raj Kumar (supra), the Court worked out the compensation  treating  the
disability at 85%, whereas the High Court had determined the  disability  at
65%. Following discussion ensued in this behalf:

“7.  Further, the appellant claims  that  he  was  working  as  a  vegetable
vendor.  It is true that a vegetable vendor might not  require  mobility  to
the extent that he sells vegetables at one place.  However,  the  occupation
of  vegetable  vending  is  not  confined  to  selling  vegetables  from   a
particular location.  It  rather  involves  procuring  vegetables  from  the
wholesale market or the farmers and  then  selling  it  off  in  the  retail
market.  This often involves selling vegetables in the cart  which  requires
100% mobility.  But even by conservative approach, if we  presume  that  the
vegetable vending by the  appellant  claimant  involved  selling  vegetables
from one place, the claimant would require assistance with his  mobility  in
bringing vegetables to the marketplace which otherwise  would  be  extremely
difficult for him with an amputated leg.  We are required  to  be  sensitive
while dealing  with  manual  labour  cases  where  loss  of  limb  is  often
equivalent to loss of  livelihood.   Yet,  considering  that  the  appellant
claimant is still capable to fend for his livelihood once he is  brought  in
the marketplace, we determine the disability at 85% to  determine  the  loss
of income”


14)   Applying the aforesaid test to the  facts  of  the  present  case,  as
already pointed out above, the appellant was working as Goundi i.e.  at  the
building construction sites.  Such a work requires good health  and  extreme
fitness  as  it  is  a  strenuous  task  which  involves  lot  of   physical
activities.  The appellant has suffered permanent disability of 58%  to  the
whole body.  It has also come on record he  suffers  from  general  weakness
and is not capable of doing heavy work.  He  is  even  unable  to  walk  and
stand for a long time. For this reason, we have already mentioned  that  his
functional disability is to be taken at 85% as was done in  Syed  Sadiq  and
others (supra).

15)    For  the  purposes  of  calculating  the  compensation,  the  formula
contained in Note (5) of the Second Schedule to the Motor Vehicle Act,  1988
is to be applied which is as under:

“5.  Disability in non-fatal accidents. - The following  compensation  shall
be payable in case of disability to the  victim  arising  out  of  non-fatal
accidents:

Loss of income, if any, for  actual  period  of  disablement  not  exceeding
fifty-two weeks.

Plus either of the following:

(a)  In case of permanent total disablement  the  amount  payable  shall  be
arrived at by multiplying the  annual  loss  of  income  by  the  multiplier
applicable to the age on the date of determining the compensation, or

(b)   In  case  of  permanent  partial  disablement   such   percentage   of
compensation which would have been payable in the case  of  permanent  total
disablement as specified under Item (a) above.

Injuries deemed to result in permanent total  disablement/permanent  partial
disablement and percentage of loss of  earning  capacity  shall  be  as  per
Schedule I under the Workmen's Compensation Act, 1923.”


16)   Applying the aforesaid formula, loss of future income would  work  out
to Rs.5,35,500/- (Rs.3,750/- x 85% x 12 x  14).   Similarly,  for  pain  and
suffering, the amount of Rs.25,000/- awarded by the High  Court  appears  to
be on lower side.  We increase this amount to Rs.60,000/-.

17)   We are also of the view that the appellant should get interest at  the
rate of 9% per annum from the  date  of  claim  petition  till  the  payment
having regard to the  ratio  of  the  judgment  in  the  case  of  Municipal
Corporation of Delhi,  Delhi  v.  Uphaar  Tragedy  Victims  Association  and
others, (2011) 14 SCC 481.
18)   In this manner, the total compensation which would be payable  to  the
appellant comes to Rs.6,72,000/- as against Rs.2,59,500/-,  awarded  by  the
High Court.  We enhance the  compensation  accordingly  with  the  direction
that the appellant shall also be entitled to interest at the rate of 9%  per
annum on the aforesaid amount from the date of claim petition till the  date
of payment.

19)   Appeal is allowed in the aforesaid manner with cost of Rs.25,000/-.

                             .............................................J.
                                                            (J. CHELAMESWAR)



                             .............................................J.
                                                                (A.K. SIKRI)

NEW DELHI;
OCTOBER 10, 2014.

Whether the order of High court holding that a reversion was bad in law and quashed the same with the directions to the appellants herein to restore the promotion of the respondent as ADO from the date he was promoted to the said post, with all consequential benefits by misreading the fact of unwillingness of writ petitioner for promotion post ?.= No doubt, it would have been better for the appellants to write to the respondent, before cancelling the order of promotion, stating that since there was no departmental inquiry, he should report at the Sagar Office or even if such a complaint is pending, that is no reason not to join the office in District Sagar. At the same time, we find in any case the respondent was not interested joining the duties at Sagar and cancelling the promotion for that reason cannot be treated as illegal or arbitrary in the facts of the present case. - The appellants, in their counter affidavit, had specifically pleaded that there was no departmental inquiry pending and that was not the reason for cancellation of the promotion order and, in fact, it was cancelled as the respondent had refused to accept the promotion order by making representation dated August 14, 2006. As we find that it is the respondent himself who is responsible for cancellation of the promotion order as he did not join the promoted post, the impugned order of the High Court is clearly erroneous and against the law. The same is, accordingly, reversed.=2014 OCT. PART - S.C.- CIVIL APPEAL NO. 9486 OF 2014 (arising out of SLP (C) No. 26760 of 2013) |STATE OF MADHYA PRADESH & ORS. |.....APPELLANT(S) | |VERSUS | | |RAMANAND PANDEY |.....RESPONDENT(S) |

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO.  9486  OF 2014
                 (arising out of SLP (C) No. 26760 of 2013)


|STATE OF MADHYA PRADESH & ORS.             |.....APPELLANT(S)            |
|VERSUS                                     |                             |
|RAMANAND PANDEY                            |.....RESPONDENT(S)           |


                               J U D G M E N T


A.K. SIKRI, J.
                 Leave granted.

Matter heard finally as counsel on either side, who were ready to argue  the
matter, made a specific request in this behalf.

The instant appeal arises out of the judgment dated July 10,  2012  rendered
by the Division Bench of the High  Court  of  Madhya  Pradesh  whereby  writ
appeal filed by the appellants herein has been dismissed and  the  order  of
the learned Single Judge passed in the writ petition,  which  was  preferred
by the respondent herein, has been affirmed.  The learned  Single  Judge  of
the High Court had allowed the writ petition  of  the  respondent  in  which
challenge to the order dated November 25, 2006, whereby the  respondent  was
reverted from the  post  of  Agriculture  Development  Officer  (for  short,
'ADO'), was laid.  The learned Single Judge held that such a  reversion  was
bad in law and quashed the  same  with  the  directions  to  the  appellants
herein to restore the promotion of the respondent as ADO from  the  date  he
was promoted to the said post, with all consequential benefits.

The  facts  gathered  from  the  pleadings  are   mentioned   hereunder   in
encapsulated form, as narration there of will reflect the precise  grievance
of the respondent and the  circumstances  under  which  the  said  grievance
arose for consideration.

The respondent was employed in the Agriculture Department of  the  State  of
Madhya Pradesh, i.e. appellant No.1 herein.  Since 1990, he  was  posted  in
District  Bhind.   In  the  year  2005,  when  he  was  working   as   Rural
Agricultural Extension Officer (RAEO), his turn  matured  for  consideration
of his case for promotion to the next post, i.e. ADO.  He was considered  by
the Departmental Promotion Committee for promotion  as  ADO  which  adjudged
him fit for promotion to the said post.  Based on the recommendation of  the
Departmental Promotion Committee,  the  competent  authority  passed  orders
dated December 23, 2005 giving him promotion as  ADO.   In  para  3  of  the
promotion order there was a  stipulation  to  the  effect  that  the  Deputy
Director of  the  concerned  State  District/Division,  where  the  promoted
employee was working, had to examine as to whether any departmental  inquiry
or prosecution was pending against  such  an  employee  or  whether  he  was
facing suspension.  Instruction was given to  the  Deputy  Director  of  the
District/Division to the effect that in case any such  departmental  inquiry
or prosecution was pending  which  would  affect  the  promotion,  then  the
promotion order was to be treated as cancelled and  the  concerned  employee
was not to be communicated  the  promotion  order.   In  such  cases,  after
decision of the departmental inquiry or after the completion of  the  period
of punishment, reconsideration of the case for promotion was to be made.

The  promotion  order  dated  December  23,  2005  of  the  respondent  also
contained a stipulation that  on  promotion  he  was  transferred  from  the
office of Bhind to Sagar and he was supposed to join the  promoted  post  of
ADO in the Agriculture Department in District Sagar.

After receiving the aforesaid  promotion  order,  the  respondent  submitted
representation dated August 14, 2006 to the Deputy Director stating  that  a
complaint regarding disciplinary proceeding  was  pending  against  him  and
till the said complaint is decided, he was  willing  to  go  on  leave.   It
would be relevant to reproduce text of the said representation, which is  to
the following effect:


        “It is to intimate that the plaintiff has been discharged from  duty
on 06.07.06, which was post of Agriculture Development  Officer.   Since  it
was known by the reliable information on  08.07.06  that  the  farmers  have
moved complaint as to departmental inquiry against me before the  Collector,
I shall continue to work on the  post  of  Agriculture  Development  Officer
until the inquiry is disposed of.  I myself am ready to  take  earned  leave
from the aforesaid date 06.07.06 to upniyokti date.  The promotion order  in
original of Directorate, Agriculture Planning is sent back to you.
            Therefore, it is requested that my application should  be  taken
into account.”

On the receipt of the said  representation,  appellant  No.2  passed  orders
dated November 25, 2006 cancelling the earlier  order  of  promotion.   This
order reads as under:
“The appointment of Shri Ramanand  Pandey,  Rural  Agricultural  Development
Officer, Office of the Deputy Director, Agriculture Bhind placed  on  Serial
No.39 of Directorate, Agriculture Order No. A-2/LG/  Pro./R/Est./11-05/6166,
Bhopal dated 23.12.05 on the post  of  Agriculture  Development  Officer  is
hereby cancelled until the next order.”

After receiving the aforesaid order, the respondent did  not  react  thereto
by making any representation to the authorities or questioning the  validity
of the said order by approaching some judicial forum.  Instead,  almost  two
years after the passing of aforesaid  cancellation  order,  on  October  24,
2008,  the  respondent  filed  the  writ  petition  before  the  High  Court
challenging the order cancelling his  promotion.   This  writ  petition  was
contested by the appellants by filing the counter affidavit.  After  hearing
both the parties, the learned Single Judge allowed  the  writ  petition  and
quashed the cancellation order with  the  direction  to  the  appellants  to
promote the respondent from the date he was promoted  vide  promotion  order
dated December 23, 2005.  The sole reason which prevailed with  the  learned
Single Judge in allowing the petition is that the respondent was not  facing
any disciplinary action or criminal case at  the  time  when  the  promotion
order was issued in his case.  The Court noted  that  even  in  those  cases
where disciplinary proceeding or criminal case is pending, the  employee  is
still  to  be  considered  for  promotion  and  only  course  open  for  the
Department is to keep the result in a sealed cover.  In the instant case  as
there was no such departmental proceeding or  criminal  prosecution  pending
against the respondent, there was no reason to revoke his promotion.   In  a
short order passed by the learned Single Judge, the aforesaid  reason  given
in support can be traced to paragraphs 4  and  5  of  the  said  order.   We
reproduce hereunder these paragraphs which would reflect  the  mind  of  the
Court in allowing the writ petition:
“4.  It is settled in law that right of consideration  for  promotion  is  a
statutory as well as constitutional/ fundamental right from Article  14  and
16 of the Constitution of India.  The said right cannot  be  curtailed  even
in case employee is facing disciplinary action or criminal case.   In  those
cases also the employee is required to be considered but his fate is  to  be
kept in the sealed cover.

5.  In 1991 SC 2010 (sic) (Union of India Vs.  K.V.  Jankiraman),  the  Apex
Court held that the sealed cover procedure can also be reported to  only  in
the event a charge sheet in a disciplinary proceeding and  a  challan  in  a
criminal case is issued/filed.  In the present  case,  the  respondents  are
not in a position to demonstrate  that  on  the  date  of  consideration  of
petitioner for promotion and issuance of order Annexure P-2, the  petitioner
was either  facing  disciplinary  action  or  criminal  case.   Needless  to
mention that  respondent  department  is  custodian  of  the  entire  record
including service record of the petitioner.  In this  view  of  the  matter,
merely because petitioner has made a bald statement in Annexure R-1, it  was
not sufficient to cancel the petitioner's promotion order.   In  absence  of
any material to show that petitioner was facing  a  disciplinary  action  or
criminal case, the order Annexure P-1 cannot be upheld.  There is  no  other
justiciable reason assigned in the return for cancelling the said order.”

The appellants herein preferred writ  appeal  against  this  order  and  the
Division Bench has dismissed the appeal on the same  ground,  namely,  there
was no material on record  to  show  that  the  respondent  was  facing  any
disciplinary proceeding or criminal case on the  date  of  consideration  of
his name for  promotion.   The  Division  Bench,  thus,  observed  that  the
learned Single Judge had not committed  any  illegality  while  passing  the
order impugned.

Learned counsel for the appellants submitted that the High Court  failed  to
consider that it is the respondent who himself came out with the  plea  that
there was a departmental case pending against him and  for  this  reason  he
did not want to join the duties at Sagar, i.e. the  place  of  transfer,  on
promotion.  He pointed out that at the time  of  promotion,  the  respondent
was posted in District Bhind where he had  remained  for  almost  15  years,
i.e. since 1990,  and  his  intention  was  to  stay  at  that  place  only.
Therefore, he came out with the story of  his  own  that  some  farmers  had
moved a complaint against him on the basis  of  which  departmental  inquiry
was pending before the Collector.  He sent  back  the  promotion  order,  in
original, to the Deputy Director of  his  own.   According  to  the  learned
counsel, since the respondent himself refused the promotion, appellant  No.2
had no option but to cancel the promotion order.  He further submitted  that
the writ petition filed by the respondent suffered from latches  and  delays
and even when specific plea  to  this  effect  was  taken,  it  was  neither
considered by the learned Single Judge nor the Division Bench  of  the  High
Court.
                 Learned counsel appearing for the respondent, on the  other
hand, stuck to the reasons given by the  Court  below,  which  prompted  the
High Court to grant relief in his favour.

After hearing the counsel for the parties and considering the matter in  its
right perspective, we are of the opinion that this  appeal  warrants  to  be
allowed.  The entire approach of the High  Court  is  erroneous  in  dealing
with the matter at hand.  In fact, the issue focused and discussed,  on  the
basis of which cancellation order dated November 25, 2006 is passed,  itself
is extraneous. From the conspectus of factual matrix taken  note  of  above,
it  becomes  clear  that  insofar  as  the  Department  is  concerned,   the
respondent was duly considered for promotion, nay, he was in  fact  promoted
to the post of ADO vide orders dated December 23, 2005 as he was  found  fit
for promotion.  It is, thus, not that kind of a case  where  the  respondent
was either not  considered  for  promotion  or  the  recommendation  of  the
Departmental Promotion Committee  was  kept  in  a  sealed  cover.   On  the
contrary, promotion orders  were  issued,  which,  however,  were  cancelled
subsequently.

It is this cancellation order which was the subject matter  of  dispute  and
validity thereof had to be judged.   In  this  fact  scenario,  holding  the
cancellation order to be bad in law on the ground that  the  respondent  was
not facing any disciplinary action or criminal  case  on  the  date  of  his
consideration for promotion, was totally off  the  mark.   The  judgment  of
this Court in Union of India v. K.V. Janakiraman & Ors.[1]  Relied  upon  by
the High Court would not have any application to decide the issue  at  hand.
Since the High Court  formulated  wrong  issue  for  determination,  namely,
right of consideration for promotion (which was not  the  real  issue)  and,
therefore, committed an obvious error in answering that issue with  the  aid
of the aforesaid judgment, though this issue did not at  all  occur  in  the
given scenario.

What is to be noticed is that the order of promotion is dated  December  23,
2005.  No doubt, in para 3  of  this  order,  the  Deputy  Director  of  the
concerned District was asked to ascertain whether the persons promoted  were
facing any suspension/prosecution or departmental proceedings.  At the  same
time, it was also mentioned in this para that in case it  is  so,  promotion
order shall be deemed to be cancelled and it is  not  to  be  given  to  the
concerned employee.  Insofar as Deputy Director is concerned,  he  naturally
did not find  any  such  prosecution  or  departmental  proceedings  pending
against the respondent.  Obviously, because of this reason, promotion  order
was in fact duly served upon the respondent.  It was even acted upon by  the
appellant as the respondent was even  relieved  from  his  duty  from  Bhind
Office on July 06,  2006  with  instructions  to  report  at  Sagar  Office.
Curiously, it is the respondent who made  the  representation  dated  August
14, 2006 stating therein that some farmers had  moved  a  complaint  against
him and since that complaint was pending, till the  same  is  finalized,  he
was  ready  to  take  earned  leave  until  the  inquiry  is  disposed   of.
Interestingly, he also stated that he would continue to work on the post  of
ADO (which is a promotion post), but at District  Bhind.   So  much  so,  he
returned the promotion  order,  in  original,  to  the  authorities.   After
receiving the said representation, the authorities took the  view  that  the
respondent was not interested to join  the  promotion  post  at  Sagar  and,
therefore, cancelled the promotion order.  The  cancellation  did  not  come
because of the reason  of  pendency  of  any  alleged  departmental  inquiry
against  the  respondent,  which  was  self  created  reason  given  by  the
respondent.  No doubt, it would have  been  better  for  the  appellants  to
write to the respondent, before cancelling the order of  promotion,  stating
that since there was no departmental inquiry, he should report at the  Sagar
Office or even if such a complaint is pending, that  is  no  reason  not  to
join the office in District Sagar.  At the same time, we find  in  any  case
the  respondent  was  not  interested  joining  the  duties  at  Sagar   and
cancelling the promotion for that reason cannot be  treated  as  illegal  or
arbitrary in the facts of the present case.  We would like to summarise  the
circumstantial facts as follows:

Even when the respondent was relieved from the office at District  Bhind  on
July 06, 2006, not only he did not join the duties  at  Sagar,  it  is  more
than  one  month  thereafter,  i.e.  on  August  14,  2006,  he   gave   the
representation.  Further, he returned the promotion order, in original.   It
is clear that he wanted to remain in District Bhind, where he had  continued
since 1990, as he was ready to go on leave instead of joining the  place  of
transfer.  Moreover, for more than two years from the date  of  cancellation
of the order of promotion, the respondent kept totally  mum  and  maintained
stoic silence.  There was not even a semblance of  protest  as  to  why  his
promotion order was cancelled or that he wanted to join the  promotion  post
after the alleged inquiry into the so-called complaint was over.   He  filed
the writ  petition  on  October  24,  2008,  i.e.  almost  two  years  after
cancellation of his promotion order.  So much so, even before filing of  the
writ petition, he did not make any representation of any nature  whatsoever.
 It would also be interesting  to  note  that  in  his  writ  petition,  the
respondent alleged that he was orally told that  some  departmental  inquiry
is pending  against  him  and,  therefore,  his  promotion  order  had  been
cancelled, but no departmental inquiry was ever started against  him.   This
is clearly an afterthought plea.  In the first  instance,  if  that  is  the
reason for cancellation of promotion order, it was not at all necessary  for
him to wait for departmental inquiry to either  start  or  finish,  inasmuch
as, when he was not served with any charge sheet, there was no  question  of
withholding his promotion, which was the position in law, as  laid  down  in
K.V. Janakiraman (supra).  Furthermore, this was not the  reason  stated  in
the cancellation order.  The appellants, in  their  counter  affidavit,  had
specifically pleaded that there was  no  departmental  inquiry  pending  and
that was not the reason for cancellation of  the  promotion  order  and,  in
fact, it  was  cancelled  as  the  respondent  had  refused  to  accept  the
promotion  order  by  making  representation  dated  August  14,  2006.   As
mentioned above, it is this aspect which was to be necessarily looked  into,
which has not been examined by the High Court.

As we find that  it  is  the  respondent  himself  who  is  responsible  for
cancellation of the promotion order as he did not join  the  promoted  post,
the impugned order of the High Court is clearly erroneous  and  against  the
law.  The same is, accordingly,  reversed.   As  a  result,  the  appeal  is
allowed and the writ petition filed by the respondent in the High  Court  is
dismissed.
            There shall, however, be no order as to costs.



                             .............................................J.
                                                            (J. CHELAMESWAR)



                             .............................................J.
                                                                (A.K. SIKRI)

New Delhi;
October 10, 2014.

-----------------------
[1]   (1991) 4 SCC 109