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PETITIONER: LEKHRAJ SATRAMDAS, LALVANI

       Vs.

RESPONDENT: DEPUTY CUSTODLAN-CUM-MANAGING OFFICER & ORS.

DATE OF JUDGMENT: 04/05/1965

BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. SARKAR, A.K. HIDAYATULLAH, M.

CITATION:  1966 AIR  334            1966 SCR  (1) 120  CITATOR INFO :  R          1968 SC 292  (4)  RF         1975 SC1121  (17)  RF         1976 SC2243  (28)  RF         1977 SC1496  (19)  F          1977 SC2149  (15)  F          1977 SC2257  (14)

ACT: Administration  of Evacuee Property Act 1950,  s.  10(2)(b)- Manager  for evacuee shops appointed by Deputy Custodian  of Evacuee   Property  Deputy  Custodian  whether  can   cancel appointment subsequently.

HEADNOTE: The  appellant  was appointed Manager of two  evacuee  shops which  vested  in the Custodian of  Evacuee  Property.   The appointment  was  made  in 1952 under s. 10(2)  (b)  of  the Administration  of Evacuee Property Act, 1950, In  1956  the appellant  was  informed by letter Ex. p.8  written  by  the Custodian  of Evacuee Property that a decision to allot  the shops to him had been taken and that subsequently the  shops would be sold to him.  The letter was based on the orders of the  Chief Settlement Commissioner in Ex. p. 5. However  the said  decision could not be implemented and in pursuance  of orders  from  the Chief Settlement Commissioner  the  Deputy Custodian  by Ex. p. 13 and proceedings Ex. p. 16  cancelled the appointment of the appellant as Manager and asked him to hand  over possession of the shops.  The appellant  tiled  a writ  petition in the High Court praying that the order  Ex. p. 13 and proceedings p. 16 be quashed, that the ion of  the shops  be  given to him, and that the sale of the  shops  be stopped.   The High Court granted the first two prayers  but not the third.  Both parties appealed to a Division Bench of the High Court which held against the appellant on all these counts.   By certificate under Art,. 133(1) (a) he  came  to the Supreme Court. It  was contended on behalf of the appellant : (1)  that  he was not lawfully removed from the management of the shops as the Deputy Custodian had no power to cancel an  appointment, (2) that the order of removal in Ex. 13 and Ex. 16 was  made by  the  Managing Officer cum Deputy  Custodian  of  Evacuee

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property  under  the  Displaced  Persons  (Compensation  and Rehabilitation) Act 1954 which conferred no power on such an officer  to  cancel the appointment of the manager  and  (3) that  by  virtue of Ex. p. 5 and Ex. p. 8  the  shops  stood allotted to the appellant. HELD:(i) Section 16 of the General Clauses Act provides that  the power to ternunate is a necessary adjunct  of  the power  of appointment and is exercised as an incident to  or consequence  of  that  power.   The  power  of   appointment conferred  on the Custodian under s. 10(2) (b) of  the  1950 Act  confers by implication upon the Custodian the power  to suspend  or  dismiss any person appointed.  It  is  manifest that  the  management of the appellant with  regard  to  the business concerns could be lawfully terminated by the Deputy Custodian  by  virtue of s. 10(2) (b) of the 1950  Act  read with s.   16 of the General Clauses Act. [124 F-G] (ii)The  order  cancelling the appellant’s  appointment  as manager  could not be said to be invalid on the ground  that it purported to have been made under the 1954 Act.  The  Act of 1950 was not repealed by the Act of 1954 and continued in force.   Under  s.  10(2) (b) of the  1950  Act  the  Deputy Custodian is the proper authority to cancel the  appointment of a manager and the order of cancellation must therefore be held  to be valid.  The principle is that the act of  public servant  must  be ascribed to an actual  existing  authority under which it would have validy rather than one under which it would be void. [125 C-E] 121 Balakataiah  v.  The Union of indict,  [1958]  S.C.R.  1052, referred to. (iii) Even onthe assumption that the order of cancellation was illegal the appellant wasnot  entitled to a  writ  from the High Court.  Writs can be issued only toenforce     the performance   of  statutory  duties,  not  duties  under   a contract.  The appointment of the appellant was under a con- tract [126 A-B] Commissioner  of  Income-tax Bombay Presidency and  Aden  v. Bombay  Trust  Corporation  Ltd.,  63 I.A.  408  and  P.  K. Barnerjee  v. L. J. Simonds, A.I.R. 1947 Cal.  307  referred to, (iv)Ex.  5  and Ex. 8 did not make any final  allotment  in favoitr  of  the  appellant, The letters did  not  show  any concluded coatract of sale. 127 A-B]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 414- 416 of 1963. Appeals  from the judgment and order dated December 6,  1960 of the Kerala High Court in A.S. Nos. 445 and 484 of 1960. R.Mahalingier  and  K. N. Keswai, for the  appellant  (In both the appeals): Gopal Singh, R. N. Sachthey and B. R. G. K. A char, for the Respondents (In both the appeals). The Judgment of the Court was delivered by Ramaswami.   J.  The proprietors of two firms  styled  "Adam Haji Peer Mohd.  Essack" and "Haji Ebrahim Kasim Cochinwala" had,  in the year 1947, migrated to Pakistan and both  these firms  became vested in the Custodian of Evacuee  Properties for the State of Madras under s. 8 of the Administration  of Evacuee  Property Act, 1950, hereinafter referred to as  the 1950  Act.  On March 6, 1952 the appellant was appointed  as Manager of the two firms under S. 10(2) (b) of the 1950 Act. The appellant also furnished security of Rs. 20,000/- before

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taking  possession of the business of the firms as  Manager. The order of appointment-Ex.  P-1 dated March 6, 1952 states :               "The  Custodian approves the proposal  of  the               Deputy Custodian, Malabar that the  Management               of both the firms of Adam Hajee Peer  Muhammad               Issack and Hajee Ibrahim Kassam Cochinwala  at               Kozhikode may be allotted to Sri L. S. Lalvani               for  the present on the same system as  exists               now between the Government and the present two               managers  and on his furnishing a security  of               Rs.  20,000 to the satisfaction of the  Deputy               Custodian.  The question of outright allotment               as contemplated in Custodian General’s  letter               No. 2811/CG/50 dated 20-3-50 will be taken  up               in due course." 122 On  October 9, 1954 the Displaced Persons (Compensation  and Rehabilitation) Act, 1954 was passed which will hereafter be referred to as the 1954 Act.  On April 11, 1956 there was an advertisement  published  in the Press for the sale  of  the aforesaid evacuee properties.  The appellant applied to  the Chief  Settlement Commissioner for stopping the sale of  the two concerns.  On April 25, 1956 the Central Government made an order-Ex.  P-5 -which states :               "I  am  directed  to state that  it  has  been               decided   in  principle  that  the   aforesaid               evacuee concerns will be allotted to you.  The               terms of allotment will be communicated to you               separately.   Meanwhile, you will continue  to               function as the Custodian’s Manager for  these               concerns in terms of section 10(2) (b) of  the               Administration  of Evacuee Property Act,  read               with Rule 34 of the rules made under the Act."               On   June  21,  1956  another   letter-P-8-was               written  to the appellant by the Custodian  of               Evacuee Properties which states :               "The  Deputy  Custodian is informed  that  the               Government of India have decided that the  two               evacuee  concerns  viz., firms of  Adam  Hajee               Peer Mohammed Essack and Hajee Ebrahim  Kassam               Cochinwala of Kozhikode are to be allotted  to               the  present  Manager Shri L. S.  Lalvani  and               ultimately  sold to him.  He is also  informed               that   until   the  question  of   terms   and               conditions  of  allotment of the  concerns  in               question is decided Shri Lalvani will continue               to  function as Custodian’s Manager for  these               concerns in terms of Section 10(2) (b) of  the               Administration  of Evacuee Property Act,  1950               read   with   rule  34  of  the   rules   made               thereunder.  The Deputy Custodian is requested               to  evaluate  the business  concerns  properly               after getting prepared a balance sheet of each               year   of   the  vesting  of   the   concerns,               evaluating the concerns, the Deputy  Custodian               should  keep  in  view the  other  assets  and               liabilities of the concerns and their goodwill               etc.   His comment and suggestions as  to  how               and by what easy instalments the value of  the               concerns  if  sold to Shri Lalvani  is  to  be               realised from him should also be intimated. The  bargain was not concluded and on March 25,  1958  there was  an advertisement in the Press about the public  auction of the business of the firms.  The appellant moved the  High

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Court of Kerala 123 for grant of a writ restraining the District Collector  from selling the business of the firms by a public auction.   The application was allowed and on June 25, J959 the Kerala High Court  directed  the  District Collector  not  to  sell  the properties  of  the  business of the two  firms  without  an appropriate order of the Chief Settlement Commissioner.  The decision  of  the High Court is based upon the  ground  that there  was,  no  order  under the  1954  Act  by  the  Chief Settlement Commissioner for sale of the properties and  that in  the absence of such an order the sale of the  properties cannot  take place.  It appears that the order of the  Chief Settlement  Commissioner was subsequently made on  September 15, 1959.  In pursuance of that order the management of  the appellant was terminated and the possession of the  business was  taken over by the Deputy Custodian--Respondent  no.  1. The order-Ex.  P-13  dated December 18, 1959 states :               "Shri  L.  S.  Lalvani is  informed  that  his               services  as Manager of the business  concerns               of  Adam  Haji  Peer Mohd.   Essack  and  Haji               Ibrahim  Kassam, Cochinwala, at Kozhikode  are               hereby  terminated with immediate effect.   He               is  further  required to hand  over  immediate               possession  of the premises and the  stock-in-               trade,  account books and other assets of  the               business including furniture etc." The  appellant  filed a writ petition in the High  Court  of Kerala  being O.P. no. 1438 of 1959 for grant of (1) a  writ of  certiorari  for quashing the order  dated  December  15, 1959--Ex.   P-13  -and the proceedings  dated  December  18, 1959-Ex.  P-16, (2) a writ of mandamus directing respondents nos.   1 and 2 to hand over possession of the  two  business concerns including the premises, stock-in-trade all  records etc. to the appellant, and in prayer ( 1 ) & (2) but  (3)for a  writ of mandamus or appropriate writ or  order  directing respondents  nos.  1 to 3 not’ to sell by public auction  or otherwise  the  two  evacuee  business  concerns.   S.  Velu Pillai, J. by his order dated June 8, 1960, granted writ  to the appellant as prayed for restraining the respondents from selling  the business by public auction.  Against the  order of  the Single Judge the respondents filed an  appeal  being A.S.  no. 484 of 1960 before the Division Bench of the  High Court.  The appellant also preferred an appeal A.S. no.  445 of  1960  against  the order of Single Judge  which  was  in regard  to  the refusal of the third  relief.   By  judgment dated December 6, 1960 the Division Bench of the High Cl/65-9 124 Court  dismissed  Appeal A.S. no. 445 of 1960 filed  by  the appellant but allowed the appeal A.S. no. 484 of 1960  filed by  the  respondents.  The present appeals  are  brought  on behalf  of the appellant by certificate of the  Kerala  High Court  granted  under  Art.  1  3  3  (  1  )  (a)  of   the Constitution. The  first  question  arising in this case  is  whether  the appellant  was lawfully removed from the management  of  the business  by  the  order  of the  respondent  no.   1  dated December  18,  1959Ex. P-13 and P-16.  It was  submitted  on behalf of the appellant that under s. 10(2) (b) of the  1950 Act the Custodian had the power to appoint a Manager for the Evacuee Property for carrying on any business of the evacuee and  there  was  no  power conferred by  the  Act  upon  the Custodian to remove the Manager so appointed.  It was argued by   the  Counsel  on  behalf  of  the  appellant  that   an

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indefeasible  right  of management was  conferred  upon  the appellant  because of the, order of the  Custodian-Ex.   P-1 dated  March 6, 1952.  In our opinion, there is  no  warrant for this argument.  The power of appointment conferred  upon the  Custodian under s. 10 (2) (b) of the 1950 Act  confers, by  implication, upon the Custodian the power to suspend  or dismiss  any  person appointed.  Section 16 of  the  General Clauses Act states               "Where,  by any Central Act or  Regulation,  a               power  to make any appointment  is  conferred,               then,  unless a different  intention  appears,               the authority having for the time being  power               to make the appointment shall also have  power               to  suspend  or dismiss any  person  appointed               whether  by itself or any other  authority  in               exercise of that power." It  is  manifest that the management of the  appellant  with regard  to the business concerns can lawfully be  terminated by  the  Deputy Custodian by virtue of s. 10(2) (b)  of  the 1950  Act read with s. 16 of the General Clauses  Act.   The principle  underlying  the  section is  that  the  power  to terminate is a necessary adjunct of the power of appointment and  is exercised as an incident to or consequence  of  that power. It  was then contended on behalf of the appellant  that  the order of removal-Ex.  P-13 and P-16-was made by the Managing Officer-cum-Deputy Custodian of Evacuee Property of Southern States  under the 1954 Act which conferred no power on  such an  officer to cancel the appointment of a Manager.  It  was pointed  out  that the order of removal was made  after  the provisions  of  the 1954 Act had come into  force.   In  our opinion, there is no 125 justification  for this argument.  We shall assume that  the Managing  Officer  under  the 1954 Act  is  not  the  proper authority  to cancel the appointment of a Manager but it  is not  disputed that the provisions of the 1950 Act  have  not been  repealed and still continue to be in force.  Under  S. 10(2) (b) of the 1950 Act the Deputy Custodian is the proper authority  to  cancel the appointment of a Manager  and  the order-Ex.   P-13  and  P-16  dated  December  18,  1959  is, therefore, legally valid.  It is true that the order Ex.  P- 13  and  P-16  is  signed by Mr.  Mathur  as  "the  Managing Officer-cum-Deputy  Custodian of Evacuee Property"  but  the order  of  removal of the appellant from the  management  is valid  because Mr. Mathur had the legal competence  to  make the  order under the 1950 Act, though he has also  described himself  in that order as "Managing Officer".  It  is  well- established that when an authority passes an order which  is within  its  competence, it cannot fail  merely  because  it purports  to  be made under a wrong provision if it  can  be shown  to be within its power under any other rule, and  the validity  of  the  impugned  order should  be  judged  on  a consideration  of  its substance and not of its  form.   The principle  is  that  we must ascribe the  Act  of  a  public servant to an actual existing authority under which it would have  validity  rather than to one under which it  would  be void  (See  Balakotaiah  v. The Union  of  India.)  (1)  We, therefore,  reject  the argument of the  appellant  on  this aspect of the case. In  our opinion, the order of the Deputy Custodian-P-13  and P-16-removing the appellant from the management of the busi- ness  is  not vitiated by any illegality.  But even  on  the assumption   that   the  order  of  the   Deputy   Custodian terminating the management of the appellant is illegal,  the

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appellant  is not entitled to move the High Court for  grant of  a writ in the nature of mandamus under Art. 226  of  the Constitution.  The reason is that a writ of mandamus may  be granted  only  in  a case where there is  a  statutory  duty imposed upon the officer concerned and there is a failure on the  part of that officer to discharge that statutory  obli- gation.   The  chief function of the writ is to  compel  the performance  of public duties prescribed by statute  and  to keep  the  subordinate  tribunals  and  officers  exercising public  functions within the limits of their  jurisdictions. In  the present case, the appointment of the appellant as  a Manager  by  the Custodian by virtue of his power  under  s. 10(2)(b)  of the 1950 Act is contractual in its  nature  and there  is  no statutory obligation as between  him  and  the appellant.  In our opinion, any duty or obligation falling (1)  [1958] S.C.R. 1052 at p. 1059. 126 upon a public servant out of a contract entered into by  him as  such public servant cannot be enforced by the  machinery of   a  writ  under  Art.  226  of  the  Constitution.    In Commissioner  of  Income-tax Bombay Presidency and  Aden  v. Bombay  Trust Corporation Ltd. (1) an application  was  made under  s. 45 for an order directing the Commissioner to  set aside an assessment to income tax and to repay the tax  paid by the applicant; the Bombay High Court made the order asked for but the decision of the Bombay High Court was set  aside by the Judicial Committee.  At page 427 of the report it  is observed by the Judicial Committee :               "Before mandamus can issue to a public servant               it must therefore be shown that a duty towards               the applicant has been imposed upon the public               servant  by statute so that he can be  charged               thereon,  and independently of any duty  which               as  servant  he  may owe  to  the  Crown,  his               principal." A similar view has been expressed by the Calcutta High Court in  P. K. Banerjee v. L. J. Simondsd. ( 2 ) In our  opinion, these cases lay down the correct law on the point. We pass on to consider the next question presented on behalf of the appellant viz., whet-her there was a final  allotment of  the  business in favour of the appellant  by  the  Chief Settlement Commissioner.  It was contended for the appellant that in view of Ex. P-5 dated April 25, 1956 there was final allotment of the business, though the terms of allotment had to  be subsequently determined.  In Ex.  P-5 the  Government of  India state that "It has been decided in principle  that the  aforesaid evacuee concerns should be allotted  to  you" and  the  "terms of allotment would be communicated  to  you separately".   Reference was made to Ex. P-8 dated June  21, 1956 wherein it is stated that the Government of India  have decided  that "the two evacuee concerns viz., firms of  Adam Hajee   Peer  Mohammed  Essack  and  Hajee  Ebrahim   Kassam Cochinwala  of Kozhikode are to be allotted to  the  present Manager Shri L. S. Lalvani and ultimately sold to him".   It is also mentioned in the letter that "until the question  of term and conditions of allotment of the concerns is  decided Shri  Lalvani  will  continue  to  function  as  Custodian’s Manager for these concerns in terms of s. 10 (2) (b) of  the Administration of Evacuee Property Act, 1950 read with  rule 34  of  the  rules made thereunder".  It  was  submitted  on behalf of the appellant that in view of these two letters it must  be  held  that  there was a  final  allotment  of  the business in favour of the appellant.  We do not, (1) 63 I.A. 408. (2) A.I.R. 1947 Cal. 307.

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127 however, think there is any justification for this argument. It  is manifest that the terms and conditions  of  allotment were  not finally settled between the parties and there  was no  concluded contact of sale and, therefore, the  appellant had  no legal right to the business of the two concerns  and the  High Court was right in holding that the appellant  was not  entitled  to  the  grant of a writ  in  the  nature  of mandamus  with regard to the possession of the two  business concerns. In our opinion, there is no merit in these appeals which are accordingly dismissed with costs. Appeals dismissed. 128