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A.J. George and anr. Vs. Coffee Board and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1972)IILLJ276Ker
AppellantA.J. George and anr.
RespondentCoffee Board and ors.
Cases ReferredPramodrai Shamaldas Bhavsar v. Life Insurance Corporation of India
Excerpt:
.....for the disposal of the case but i must first deal with the arguments advanced on behalf of the coffee board by counsel that no application under article 226 of the constitution would lie as the coffee board at best can only be said to be a statutory authority and there being no failure by the statutory authority to comply with any rule or law, there can be no question of this court exercising jurisdiction under article 226 of the constitution. the circumstance that the board under the electricitysupply act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the board must be excluded from the scope of the word 'state' as used in article 12. on the other hand, there are provisions in the electricity supply act which..........representations ext. p3 and p4 made by the two petitioners against a list of the employees of the coffee board appended to an order ext. p2 as well as against the confirmation of respondents 2 to 7 as chief coffee inspectors by an order ext. p7, dated 11-10-1966, be heard and disposed of by orders as also a direction that the representations made by some respondents be heard and disposed of by orders.2. i shall presently refer to the facts in so far as they are necessary for the disposal of the case but i must first deal with the arguments advanced on behalf of the coffee board by counsel that no application under article 226 of the constitution would lie as the coffee board at best can only be said to be a statutory authority and there being no failure by the statutory authority to.....
Judgment:

P. Govindan Nair, J.

1. The short question in this petition is whether in all the circumstances of the case, This Court will be justified in giving a direction to the 1st respondent, the Coffee Board, constituted under the Coffee Act, 1942, to dispose of the representations Ext. P3 and P4 made by the two petitioners against a list of the employees of the Coffee Board appended to an order Ext. P2 as well as against the confirmation of respondents 2 to 7 as Chief Coffee Inspectors by an order Ext. P7, dated 11-10-1966, be heard and disposed of by orders as also a direction that the representations made by some respondents be heard and disposed of by orders.

2. I shall presently refer to the facts in so far as they are necessary for the disposal of the case but I must first deal with the arguments advanced on behalf of the Coffee Board by counsel that no application under Article 226 of the Constitution would lie as the Coffee Board at best can only be said to be a statutory authority and there being no failure by the statutory authority to comply with any rule or law, there can be no question of This Court exercising jurisdiction under Article 226 of the Constitution. The answer to this contention is that the Coffee Board is 'the State' as defined in Article 12 of the Constitution of India. I must decide this question first before I consider the other aspects.

3. The Board has the power to appoint its own employees (vide Section 7 of the Coffee Act, 1942). Whether the Board is 'other authority' within the meaning of Article 12 of the Constitution has to be decided by This Court on the basis of the ruling of the Supreme Court in Rajasthan State Electricity Board, Jaipur v. Mohan Lal and Ors. 1968-I L.LJ. 257 : A.I.R. 1967 S.C. 1857. By that decision it has been established that the expression 'other authorities' in Article 12 of the Constitution need not be construed ejusdem generis with the expression that preceded 'other authorities'. It is laid down that there is no common genus between the authorities mentioned in Article 12 of the Constitution, and a passage from the judgment of the Supreme Court in Smt. Ujjam Bai v. State of Uttar Pradesh (1963) 1 S.C.R. 778, is quoted with approval. After deciding this question their Lordships proceeded to lay down the criterion for deciding what authorities can be said to be 'other authorities' within the meaning of those words occurring in Article 12 of the Constitution. The relevant part of the judgment is in these terms:

These decisions of the Court support our view that the expression 'other authorities' in Article 12 will include all constitutional or statutory authorities on whom powers are conferred by law. It is not at all material that some of the powers conferred may be for the purpose of carrying on commercial activities. Under the Constitution, the State is itself envisaged as having the right to carry on trade or business as mentioned in Article 19(1)(g). In Part IV, the State has been given the same meaning as in Article 12 and one of the Directive Principles laid down in Article 46 is that the State shall promote with special care the educational and economic interests of the weaker sections of the people. The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under Article 298 to carry on any trade or business. The circumstance that the Board under the ElectricitySupply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word 'State' as used in Article 12. On the other hand, there are provisions in the Electricity Supply Act which clearly show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence. In these circumstances, we do not consider it at all necessary to examine the cases cited by Mr. Desai to urge before us that the Board cannot be held to be an agent or instrument of the Government. The Board was clearly an authority to which the provisions of Part III of the Constitution were applicable.

The passage just quoted is from the judgment of Bhargava, J, speaking for himself and for Chief Justice Subba Rao, Justice Shelat and Justice Mitter. Justice Shah who was aparty to this decision wrote a separate judgment and certain passages from that judgment which have been characterised by text-book writers as expressing a different opinion from that expressed by the majority judgment may also be extracted. To begin with, Justice Shah observed:

The Board is an authority invested by statute with certain sovereign power of the State.

The Board referred to is the Electricity Board. Throughout the passage emphasis has been laid on the aspect that the authority must be invested with certain sovereign powers in order it may be termed 'other authority' and the question had been to find out whether the Electricity Board had been invested with such power. After referring to the provisions in the Electricity (Supply) Act, 1948, the learned Judge came to the conclusion that the Board was 'other authority' within the meaning of Article 12 of the Constitution. At the same time, the learned Judge expressed the view that he was unable to agree that every constitutional or statutory authority on whom powers are conferred by law is 'other authority' within the meaning of Article 12 of the Constitution and proceeded to say that the sovereign power must be invested on the authority before it can be said to be 'other authority' within the meaning of the expression under Article 12 of the Constitution. Two aspects have been emphasised by the learned Judge. Article 12 occurs in Part III of the Constitution dealing with the fundamental rights and, therefore, the view was expressed that whether an authority is 'other authority' within that Article must be considered with reference to the power of that authority to exercise the sovereign power of the State to curtail in certain circumstances the fundamental freedoms guaranteed by Part 111 of the Constitution. Reference was made to the power of the State to impose reasonable restrictions in the exercise of such fundamental rights and the question considered was whether the authority too was conferred with such sovereign powers of the State to curtail in given circumstances the fundamental freedoms guaranteed by Part III of the Constitution. This was expressed, J think, in a different way in the following paragraph by referring to the power of the authority to frame rules or regulations impinging on the fundamental guarantees under the Constitution. 1 cannot do better than read the two paragraphs 11 and 12 of this judgment in regard to this aspect of the matter.

(11) The expression 'State' is denned in Article 12 for the purpose of Part 111 of the Constitution. Article 13 prohibits the State from making any legislative or executive direction which takes away or abridges the rights conferred by Part 111 and declares any law or executive direction in contravention of the injunction void to the extent of such contravention. In determining what the expression 'other authority' in Article 12 connotes, regard must be had not only to the sweep of fundamental rights over the power of the authority, but also to the restrictions which may be imposed upon the exercise of certain fundamental rights (e.g.,those declared by Article 19) by the authority. Fundamental rights within their allotted fields transcend the legislative and executive power of the sovereign authority. But some of the important fundamental rights are liable to be circumscribed by the imposition of reasonable restrictions by the State. The true content of the expression 'other authority' in Article 12 must be determined in the light of this dual phase of fundamental rights. In considering whether a statutory or constitutional body is an authority within the meaning of Article 12, it would be necessary to bear in mind not only whether against the authority, fundamental rights in terms absolute are intended to be enforced, but also whether it was intended by the Constitution-makers that the authority was invested with the sovereign power to impose restrictions on very important and basic fundamental freedoms.

(12) In my judgment, authorities constitutional or statutory, invested with power by law not sharing the sovereign power do not fall within the expression 'State' as defined in Article 12. Those authorities which are invested with sovereign power, i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of 'State' in Article 12, and constitutional or statutory bodies which do not share that sovereign power of the State are not, in myjudgment, 'State' within the meaning of Article 12 of the Constitution.

It is unnecessary in the light of this judgment -- no other judgment of the Supreme Court on this aspect has been brought to my notice -- to refer to the other decisions of the High Courts in India, for understanding the principles to be applied. Two decisions of High Courts have interpreted the Supreme Court decision in totally different ways. The Bombay High Court in the decision in Pramodrai Shamaldas Bhavsar v. Life Insurance Corporation of India : AIR1969Bom337 , held that the Life Insurance Corporation is not 'other authority' within the meaning of Article 12. I shall read the relevant passages from that judgment:

6. It is clear from the judgment of Mr. ' Justice Bhargava that the Supreme Court adopted the test formulated by Mr. Justice Ayyangar in Ujjam Bai's case : [1963]1SCR778 , and held that the Electricity Board was an authority within the meaning of Article 12. It is not possible to read the judgment to say that 'authority' includes any and every autonomous body merely because it is constituted by a statute, whatever be its functions and this could not be so. The very fundamental conception of an authority is that there is in it power to command and compel its obedience either by enforcing the same or by punishing disobedience. The Electricity Board had such powers while administering the law framed by the Parliament and, therefore, the Court held that it fell within the meaning of Article 12. If the Court intended to hold that merely because it was constituted under a statute of the Parliament or of the State Legislature and thus it fell within Article 12, the subsequent discussion could not be necessary.

7. Applying the test in the present case, can the Life Insurance Corporation be said to have any authority in the matter of administering any law enacted by Parliament or by the State Or is it required to make any decision under any such law and to implement those laws Obviously it is a trading corporation and is not concerned with implementing any law which affects in any manner any member of the public. The prohibition for any private agency to do the same business is not by reason of any order that is made by the Life Insurance Corporation but by reason of the statute itself as we have already seen.

4. On the other hand, the Allahabad High Court in the decision in Shyatn Lai Sharma v. Life Insurance Corporation of India, Bombay and Anr. (1970) All. L.J. 214, felt itself compelled to hold that all constitutional or statutory authorities on whom powers are conferred by law will be 'other authorities' within the meaning of Article 12 of the Constitution. This, I believe, their Lordships said on the basis of the passage of the Supreme Court judgment which I have already extracted reading as follows:

These decisions of the Court support our view that the expression 'other authorities' in Article 12 will include all constitutional or statutory authorities on whom powers are conferred by law.

But I consider that this passage in the judgment of the Supreme Court must be read with what is stated later in the same paragraph to the following effect:

On the other hand, there are provisions in the Electricity Supply Act which clearly show that the powers conferred on the Board include power to give directions, the disobedience of which is punishable as a criminal offence.

5. If this is the test to be applied, there is no doubt whatever that the Coffee Board constituted under the Coffee Act, 1942, has been given the power to give directions under Section 25(2) that delivery should be made to the Board in such places, at such times and in such manner as the Board may direct, and such directions may provide for partial delivery to the surplus pool at any time whether or not at that time the internal sale quota had been exceeded; and the coffee delivered shall be such as to represent fairly in kind and quality the produce of the estate. A disobedience of this direction has been penalised and Section 38A has provided that 'Any registered owner or licensed curer who fails to deliver any coffee to the Board as required by or under Sub-sections (1) and (2) of Section 25 shall be punishable with fine which may extend to one thousand rupees, and the Court by which such person is convicted may order the confiscation and delivery to the Board of any coffee in respect of which the offence was committed.'

6. If the power to give directions and the provision that the failure to comply with those directions will be punishable are alone sufficient to uphold the contention that the Coffee Board is 'other authority' within the meaning of that expression in Article 12, the provisions in Sections 25 and 38A are enough to uphold the contention of the petitioners that the Coffee Board is 'other authority'. But there is more in the Act. The Act has empowered the Board to decide the quantum of what is called 'internal sale quota' which is the amount of coffee, which a grower, who is obliged to take registration under the Act, is entitled to sell in the open market. 'Internal sale quota' has been denned in Section 3(h) of the Act in these terms:

'internal sale quota' means that portion stated in terms of bulk or weight, of the whole of the coffee produced by the estate in the year, which a registered estate is permitted under this Act to sell in the Indian market.

7. Section 22 of the Act enables the Board to allot to each registered estate an internal sale quota for the year. The section is in these terms:

22. (1) Unless with the previous sanction of the Central Government the Board decides that no internal sale quotas shall be allotted, the Board shall, as soon as may be, allot to each registered estate an internal sale quota for the year.

(2) The internal sale quota shall be a fixed percentage, common to all registered estates, of the probable total production of the estate in the year as estimated by the Board.

(3) The Board may at any time vary the internal sale quota by varying the fixed percentage common to all registered estates, or may express the whole or any part of the internal sale quota of an estate in terms of bulk instead of in terms of weight.

8. The power to fix the internal sale quota under the Act is a power which enables the Coffee Board to interfere with the freedom of every grower to deal with the coffee grown in his estate in the manner that he liked best. He is not at liberty to sell all the coffee, grown in his estate to whomsoever he liked. The excess over the internal sale quota has to be sold to the Coffee Board according to the provisions of the Act. What is the amount of the internal sale quota is to be determined by the Board each year. This power to decide what should be the internal sale quota for each year is a necessary infringement of the otherwise free right of a grower to sell as he liked. This I conceive is an infringement of the guarantee under Article 19 of the Constitution. The Board having been given power to restrict the guarantee under the Constitution, 1 conceive that the test laid down by Justice Shah in paragraph 11 of the judgment in Rajasthan State Electricity Board, Jaipur v. Mohan Lal and Ors. : (1968)ILLJ257SC , is also satisfied in this case.

9. There can be no doubt whatever that the Coffee Board has been authorised to administer the law that has been enacted. It has'to issue licences and permits under the Act. It has the powers of seizure of coffee which the grower should have delivered to the surplus pool. These provisions in the Act satisfy the requirements which the Bombay High Court felt must be contained in the statute conferring power on an authority to enable that authority being said to be a 'State' within the meaning of Article 12 of the Constitution. I have already extracted the passage from the. judgment of the Bombay High Court in Pramodrai Shamaldas Bhavsar v. Life Insurance Corporation of India : AIR1969Bom337 , and the questions asked in paragraph 7 of the judgment have to be answered in the affirmative if they are to be answered with reference to the powers conferred on the Coffee Board by the Coffee Act. Considering all aspects, it appears to me that in the light of the Supreme Court ruling there is no alternative but to come to the conclusion that the Coffee Board is a 'State' within the meaning of Article 12 of the Constitution. This being so, this petition cannot be dismissed in limine on the ground that it would not lie.

10. Counsel appearing for some of the respondents, Mr. Bharathan, referred to a decision of the Mysore High Court in a judgment in Writ Petition No. 2431 of 1958, dated 22-7-1961, wherein their Lordships dismissed a writ application filed in similar circumstances by holding that it was premature and urged that that would be the better course for me to adopt in this case as well. His submission was that Sub-rule (1) of Rule 31 of the Coffee Rules, 1955, has provided that the power of the Board to lay down the methods of recruitment, the condition of service, the pay and allowances of all such officers and servants is only subject to the approval of the Central Government and that neither the principles laid down in Ext. P2 nor the principles said to have been laid down by the Executive Committee of the Board in a resolution passed on 2-6-1966, have been approved by the Central Government yet and the further question whether the principles stated in Ext. P2, or in the resolution said to have been passed by the Executive Committee, dated 2-6-1966, should apply to the petitioner and the respondents had to be decided by the Central Government and that, therefore, the matter should not be dealt with by This Court before the Central Government applied its mind to the questions and decided what rule should apply.

11. The complaint of the petitioners in this case is that the rules laid down in Ext. P2 have not been applied in drawing up the list appended to Ext. P2. The case is that the petitioners belonged to a category equated to the category of posts held by respondents 2 to 18 as on the crucial date with effect from which date the integration of what is called the 'propaganda wing' as it was before the integration and the 'marketing wing' should be made. This date is 21-12-1965. On that day the petitioners as well as respondents 2 to 18 admittedly held substantively only the equated posts though respondents 2 to 7 were officiating in a higher category on that day. The principle laid down in Ext. PI, it is stated by counsel, clearly indicates that the date on which integration must take place is 21-12-1965. Thisbeing so it is submitted that the substantive posts held by the petitioners and the respondents as on that date must be the criterion for effecting integration. After integrating the personnel on that basis a common seniority list will have to be drawn up and on that basis the further right to promotions must be decided. This, according to counsel for the petitioners, is what is laid down in Ext. P2 and it is this proposition that has not been adopted according to him in drawing up the list appended Ext. P2. There has been admittedly confirmation given to respondents 2 to 7 after the date, 21-12-1965. They were confirmed by Ext. P7 order, dated 11-10-1966. This confirmation is said to be wrong and has been questioned by the representations Exts. P3 and P4. The petitioners have not received any answer to these representations yet though it is stated in the counter-affidavit that those representations have already been rejected. If they have been rejected, no order giving the reasons for such rejection has been produced before me nor has such an order been communicated to the petitioners. This can hardly be a method of dealing with the employees who on my findings will have to be held employees under a State and, therefore, entitled to the guarantees under the Constitution, The Central Government will come into the picture only after the Board has laid down the principles. They cannot decline to deal with the representations that the rules laid by them have not been followed on the ground that the Central Government's approval is necessary. The petitioners are entitled to an answer to the representations and the reasons for withholding their legitimate rights. Not having done that, they cannot take shelter under Rule 31 that the Central Government is likely to look into the questions. I consider that primarily it is the duty of the Coffee Board to have these grievances redressed.

12. Counsel on behalf of respondents 3, 5, 9, 10, 11, 13, 16 and 17 brought to my notice the fact that some of these respondents also had made representations against the list appended to Ext. P2, and these also have not been considered by the Coffee Board. He has also a case that respondents 3, 5, 9, and 10 are seniors to the petitioners and their ranking above the petitioners cannot in any way be questioned. I am not determining the inter se rights of the parties. All that I think that I should do is to give a direction that the various questions arising from theserepresentations must be dealt with by the Coffee Board and not by its Chairman or by its executive Committee, and appropriate orders passed on those representations and alterations, if necessary, made in the list appended to Ext. P2 giving reasons for that order and giving reasons for the alterations. I direct accordingly. After doing so, the matter may be referred to the Central Government for its approval. I am sure, this matter having been pending for a long time, will be expeditiously dealt with by the Coffee Board.

13. This Original Petition is ordered on the above terms, There will be no direction regarding costs.


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