Judgement

MANOHAR PERSHAD, J. : -

This is a petition on behalf of Baroness Wilhelmine von Maltazan, under Article 226 of the Constitution of India for the issue of a writ of Certiorari or any other appropriate order or writ directing the respondent to forbear from enforcing the demand contained in the letter, dated 30th August, 1954, or to prohibit the respondent from taking any steps to recover the amount.

2. The facts which give rise to this petition are that the petitioner is the widow of the late Baron J., B. von. Maltazan who died at Nagpur in an air crash on 12th December 1953. The late Baron J. B. von. Maltazan was carrying on business of exporting manganese ore for about 4 years before his death. After collecting and accumulating the quantity of manganese ore for over a year he exported about 8000 tons of manganese ore from the port of Visakhapatnam in October, 1952, having obtained the requisite export licence from Government of fndia. The shipments were made pursuant to and in fulfilment of the contracts made by him with Messrs. Continental Ore Corporation, New York, who were the consignees under the shipment. At the time the goods were delivered, to the customs authorities in Visakapatnam port, the shipping bills were shown and produced to the authorities by Messrs. Best and Co., Ltd., the agents of the consignor. On the value declared by the consignor a duty of Rs. 1,85,816 was demanded by the respondent-authority and was duly paid. Subsequently a sum of Rs. 4,542-6-0 was refunded to him on 25th March, 1953, on account of short shipment of 195 tons. In declaring the value for assessment of duty the late Baron estimated the mineral content at 48 per cent.

The ore according to practice and procedure was submitted to Messrs. Briggs and Co., Ltd., Calcutta, and on the analysis made by them the actual manganese content was ascertained to be 45.3 per cent. Thus it turned out that more than the duty properly chargeable had been paid by the late Baron. He, therefore, made an application on 23rd December, 1952, to the collector of Customs, Hyderabad and Visakhapatnam, claiming a refund of Rs. 18,743-1-0. No orders seem to have been passed on that application and on 11th January, 1954, the Collector of Customs, Hyderabad, sent a letter stating that steps were being taken to finalise the assessment of manganese and that orders will be issued.

3. On 1st, October, 1952, two notices were served upon Messrs. Best and Co., Ltd., the agents of Baron (Petitioner) under section 39 of the Sea Customs Act of 1878 informing him that there was a short levy of duty to the tune of Rs. 9,317-11-0 and Rs. 27,845-8-0 and asking them to pay the same. On 3rd September, 1954, a letter was sent by the respondent to Messrs. Best and Co., Ltd., demanding from the petitioner the differential amount of Rs. 4,875-10-0 and stating that the assessment has been finalised and if the petitioner was aggrieved, she might prefer an appeal to the Central Board of Revenue, New Delhi, after the payment of the amount demanded. The petitioner, gave a notice through a lawyer, dated 20th November, 1954, to the respondent asking for information as to the material, the grounds and other particulars on which the demand was made. The respondent gave a reply on 1st December 1954, stating that the value estimated is the one determined under section 30(b) of the Sea Customs Act, i.e., the value at which goods of the like kind and quality are capable of being delivered at the time and place of exportation. It is this demand of Rs. 4,875-10-0 which is challenged in this petition.

4. Sri Rama Rao, the learned counsel for the petitioner, has advanced various arguments. It is contended first that the levy and demand of Rs. 4,875-10-0 is illegal, ultra vires, unconstitutional, and not bona fide. The second contention is that it is not competent for the authorities to resort to section 30(b) of the Sea Customs Act when price was ascertainable under Section 30 (a). It is next contended that none of the requirements of Section 30 (a) is satisfied and the burden of proof that no other goods of the like kind and quality were available for sale or purchase is on the respondent, but the respondent has failed to discharge that burden.

The other contention advanced is that even if it is accepted that section 30 (a) is not applicable, the method adopted by the respondent in ascertaining the real value was incorrect and arbitrary. The next argument advanced is that there is no provision In the Sea Customs Act for any provisional assessment and when once an assessment was made and no action is taken under Section 32 of the said Act, that assessment would be final assessment and under section 39 in case of short levy, the extra duty could be demanded only on the grounds specified and within three months of the assessment.

In support of the contentions the learned counsel for the petitioner placed his reliance on the case of Vacuum Oil Co. v. Secretary of State, ILR 47 Bom 174 : (AIR 1922 Bom 12) (A), Ford Motor Co., India, Ltd., v. Secretary of State ILR (1938) Bom 249 : (AIR 1938 PC 15) (b).

5. On behalf of the other side it is contended first that when the petitioner has got a right of appeal under Section 188 of the Sea Customs Act and also another remedy by way of revision under section 191 of the said Act, she is not entitled to invoke the extraordinary and descretionary powers of this Court under Article 226 of the Constitution. Reliance is placed on the case of S. Athimoolam Achari v. Deputy Commercial Tax Officer, Kovilpatti, Tirunelveli District 1952-2 Mad LJ 285 : (AIR 1953 Mad 10) (C).

6. It is next contended that it is not correct to say that the levy and demand of Rs. 4,875-10-0 was illegal and ultra vires. As regards the argument that section 30(b) of the Sea Customs Act is not applicable, it is contended that the authorities concerned have rightly held that section 30 (b) is applicable and not section 30 (a). Conceding that at the time of agreement between the parties there was no provision for provisional assessment, it is contended that the provisional assessment was made at the instance of the petitioners husband and for his benefit and when the petitioners husband has taken advantage of this it could not now be said that it was unjustified and illegal. Adverting to the argument relating to the burden of proof it is contended on behalf of the respondent that it was only after the authority was satisfied that all the requirements of S. 30 (a) were fulfilled that they started to ascertain the real value and that the calculation could not be held to be arbitrary. Conceding that the demand under S. 39 of the said Act has to be made within 3 months, it is contended that in the instant case the demand is not for the refund of the amount, but for the balance and the difference. In order to appreciate the arguments of the learned counsel a reference to the relevant provisions of the Sea Customs Act is necessary. But before discussing the relevant provisions of the said Act, we would like to deal with the objection of the respondent which relates to the maintainability of the petition, for if it is held that the writ petition is not maintainable we need not go into the merits of the petition. What is contended on behalf of the respondent is that the petitioner has got another remedy available to him, i.e., she has got a right of appeal under S. 188 of the Sea Customs Act and a revision under S. 191 of the said Act which he urges disentitles her to relief under Art. 226 of the Constitution of India. In this connection the learned counsel drew our attention to the case of 1952-2 Mad LJ 285 : (AIR 1953 Mad 10) (C). On behalf of the petitioner, it is urged that the contention that, because a remedy under the impugned Act was available to the petitioner it disentitles him to a relief under Art. 226 of the Constitution of India has been negatived by the decision in the cases of State of Bombay v. United Motors, India, Ltd., 1953 SCJ 373 : 1953-1 Mad LJ 743 : (AIR 1953 SC 252) (D) and Himatlal Harilal Mehta v. State of Madhya Pradesh, 1954 SCJ 445 : 1954-1 Mad LJ 690 : (AIR 1954 SC 403) (E). We do not agree with the contention of the learned counsel for the respondent that because a remedy under an Act is available to the petitioner, it disentitles him to a relief under Art. 226 of the Constitution. No doubt, the relief under Art. 226 of the Constitution of India is discretionary in nature and it would be an abuse of Art. 226 to ask the Court to interfere under that Article if there is an adequate and specific remedy other than by a writ, and if such a remedy is equally convenient and not of an onerous and burdensome character. But to say in general terms that because a remedy is available to him, no writ would lie under Art. 228 would not be proper. In the instant case, no doubt, two remedies are open to the petitioner; one by way of appeal under S. 188 and the other a revision under S. 191 of the said Act. But before the petitioner could avail of these remedies she has to deposit the entire amount under S. 191 of the said Act. Such a provision can hardly be described as an adequate alternative remedy. It may be that in some cases the amount of deposit may be so heavy that the petitioner may not be in a position to deposit the same. It would in such cases amount to taking away the right of appeal by another process, namely, imposing a condition for the deposit of the amount. The case relied upon by the learned counsel for the respondent does not help his contention. That was a case under Art. 226 of the Constitution for the issue of a writ of prohibition directing the other side to forbear from assessing the petitioner to sales-tax for 1950-51. Objection was taken on behalf of the respondent that the petitioner had adequate remedy under the Act itself and therefore the writ could not be issued. The contention of the respondent was accepted, as the condition precedent for preferring the appeal was the payment of the tax admitted, and not the payment of the entire amount. It was not a case where the remedy was onerous or was of a burdensome character. We do not wish to go into a further discussion of this point, as in our opinion, the petitioner has no case on merits. The relevant provisions for the purpose of this petition are Ss. 29, 30, 32, 39 and 137. When goods are brought for shipment the owner has to declare the real value of the goods under S. 29 which reads :

"On the importation into, or exportation from, any customs port of any goods, whether liable to duty or not, the owner of such goods shall, in his bill of entry, or shipping bill, as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief and shall subscribe a declaration of the truth of such statement at the foot of such bill.

In case of doubt, the Customs Collector may require any such owner or any other person in possession of any invoice, brokers note, policy of insurance or other document, whereby the real value, quantity or description of any such goods can be ascertained, to produce the same and to furnish any information relating to such value, quantity or description which it is in his power to furnish. And thereupon such person shall produce such document and furnish such information.

Provided that, if the owner makes and subscribes a declaration before the Customs Collector to the effect that he is unable, from want of full information, to state the real value or contents of any case, package or parcel of goods, then the Customs Collector shall permit him, previous to the entry thereof, (1) to open such case, package or parcel, and examine the contents in presence of an Officer of Customs, or (2) to deposit such case, package or parcel in a public warehouse appointed under S. 15 without warehousing the same, pending the production of such information."

7. The statement of the owner need not, however, be accepted by the Customs Official. If the Customs Collector is satisfied that the value given by the shipper is the real value, then the matter ends there, and the goods are allowed to pass. In case of doubt, the Customs Collector may require any such owner or any person in possession of any invoice, brokers note, policy of insurance or other document, whereby the real value, quantity or description of any such goods could be ascertained to produce the same, and to furnish any information relating to the said value, quantity or such description which it is in his power to furnish as is provided under S. 29. If the owner subscribes to a declaration before the Customs Collector to the effect that he is unable, for want of full information, to state the real value or contents of any case, package or parcel of goods, then the Customs Collector shall permit him previous to the entry thereof, first to open such package or parcel of goods and examine the contents. Then he proceeds to determine the real value.

8. Section 30 deals with the procedure to determine the real value. It reads :

"For the purposes of this Act, the real value shall be deemed to be

(a) the wholesale cash price less trade discount, for which goods of the like kind and quality are sold, or are capable of being sold, at the time and place of importation or exportation, as the case may be, without any abatement or reduction whatever, except (in the case of goods imported) of the amount of the duties payable on the importation thereof; or

(b) where such price is not ascertainable, the cost at which goods of the like kind and quality could be delivered at such place without any abatement or deduction except as aforesaid."

9. It is clear from the above provisions that two ways are provided for determining the real value. Section 30 (a) would apply where it would be possible to ascertain the wholesale cash price and if the price is not ascertainable then S. 30 (b) would come into play.

10. What is contended is that the wholesale cash price appearing under S. 30 (a) is not the price which the exporter realises on a wholesale disposal of the goods by him, but the price which is actually paid by him. It is next urged that under Cl. (b) where such price is not ascertainable the real value is the cost at which the goods of like kind and quality should be delivered without abatement and deduction for the purpose of taxation. In other words, the contention put forward comes to this that the wholesale cash price is the same as the cost of goods on the basis that the goods should be taken as being sold to the exporter at the price which cost him to place them for shipment. We are very reluctant to accept contention of the learned counsel for the petitioner. We think the expression used clearly indicates that it must mean the wholesale cash price for which the goods of a like kind and quality are sold or are capable of being sold at the time and place of exportation. The words clearly indicate that it must be the price which the exporter here would be able to realise on a wholesale disposal of goods by them. The expression could not be construed as meaning the price which the exporter may have paid for purposes of exporting the goods. To accept the contention of the learned counsel for the petitioner would amount to this, that the value paid at the time of declaration which was not accepted by the authority would have to be accepted as determining the real value under a. 30 (a). If that was the idea there was no necessity for the introduction of sub-cl. (a) of S. 30 of the Act as in every case the exporter would be entitled to have it decided that the real value of the goods exported was the costs of exportation to him. It may well be, as it appears to be the case on the language of the section that the legislature has adopted one test for cases covered by Cl. (a) and is satisfied with the next best test in other cases, to which the first case cannot be applied. The argument of the learned counsel for the petitioner is based on the assumption that the test in both cases must be the same for which the language does not afford any warrant. We therefore repel the contention of the learned counsel for the petitioner that the wholesale cash price is the actual cost price. The cases relied upon by the learned counsel for the petitioner do not help his contention. The first case relied upon is the case of ILR 47 Bom 174 : (AIR 1922 Bom 12) (A). In this case lubricating oil under the name of Mobil oil was imported by an American Corporation having their principal place of business at Rochester in the United States of America They had established agencies in India and Ceylon. The practice in importing their oils into India was to invoice them at the same price at which they invoiced them to several firms of the oils in other countries. It appears that the Customs Authorities for some period accepted the invoice price fixed by the sniper but later differences arose between the shipper and the Customs Authorities in regard to the customs duty payable in respect of the Mobil oil imported into India. The contention of Customs Authorities was that the shippers were bound to pay customs duty on the rate at which they sold their Mobil oil to their customs in India and refused to accept the invoice prices submitted by the shipper. When the Customs Authorities detained the goods of the shipper and refused to accept the invoice, the shipper filed a suit for wrongful detention and illegal assessment. The suit was dismissed by Mr. Justice Kajiji. The matter was taken up in appeal and the question in the appeal was what was the appropriate construction of S. 30 of the Sea Customs Act of 1878. Sir Norman Macleod C.J., and Shah J., held that the expression "wholesale cash price" in S. 30. Cl. (a) of the Sea Customs Act, means the wholesale cash price for which the goods of like quality and kind are sold, or capable of being sold to any person at the time and place of importation. It does not mean the cost of goods to the importer on the basis that the goods should be taken as being sold to the importer at the price which it cost him to lay them down at the place of importation. This case went in appeal to the Privy Council vide Vaccum Oil Co. v. Secy. of State, 59 Ind App 258 : ILR 56 Bom 313 : (AIR 1932 PC 168) (F), and their Lordships held that the words "wholesale price" are used in the section in contradistinction to a retail price and that not only on the ground that such is the well recognised meaning of the words, but because their association with the words "trade discount" indicates that sales to the trade are those in contemplation, and also because only by attaching that meaning to the word is the "wholesale" price relieved of the loading, representing post-importation expenses, which, as a matter of business, must always be charged to the consumer, and which in the other words of the section already alluded to are so carefully eliminated.

11. The other case relied upon is the case of ILR 1938 Bom 249 : (AIR 1938 PC 15) (B). The appellants import Ford Motor Vehicles into India from Canada and the question raised in the appeal related to the amount of customs duty payable upon 256 Ford Motor Cars consigned to the appellants which arrived in Bombay. The appellants have monopoly of supply of Ford Vehicles to India. They sometimes sell direct to their own employees or to the Government for sale to India to various dealers or distributors. The appellants issued from time to time a price list and the terms of the business are that the retail price to be charged by the distributors to the public is that stated in the price list. The distributor has to pay this price before obtaining delivery. The delivery is given by the appellants free on rail. 256 Ford Motor Cars were assessed to customs duty by the Collector of Customs under Cl. (a) of S. 30 of the Sea Customs Act. The appellants disputed this assessment contending that for the motor cars in question, there was no such wholesale cash price ascertainable and that the duty should have been assessed under Cl. (b) of S. 30. The appellants paid under protest the sum demanded and sued the Secretary of State in Council in the High Court of Bombay for a return of Rs. 15,118-11-0 overpaid and for certain declarations as to the correct basis of assessment. The trial Judge Tyabji J., held that the motor cars were in the circumstances assessable under Cl. (a) of S. 30. Upon appeal by both the parties to a Division Bench, it was held that the assessment made by the Customs Authorities was correct and the appellants suit was dismissed with costs. The Ford Motor Co., went in appeal to the Privy Council which was dismissed and it was held :

"If there is an actual price for the goods imported themselves, at the time and place of importation and if it is a wholesale cash price, less trade discount, Cl. (a) of S. 30 of the Sea Customs Act is not inapplicable for want of sale of other goods of the like kind and quality.

12. What we have to see is whether there was any scope for application of S. 30 (a). The allegation of the authorities concerned was that the wholesale price was not ascertainable whereas the plea of the petitioner was that it was ascertainable. We cannot accept the contention of the learned counsel for the petitioner that the wholesale price was ascertainable having regard to her own statement in para 8 (b) of her affidavit where she says that neither in Visakhapatnam nor anywhere in the area was there any market where the goods of the like kind and quantity were at all available for sale and purchase. She further says that there was no market at all for manganese ore as such for local buyers in India. We are, therefore, definite that S. 30 (a) is not applicable and S. 30 (b) applied. In this view of the matter the contention of the learned counsel loses its force that the burden of proof that there were no other goods of like nature to be sold was on the authorities concerned. The other argument of the learned counsel for the petitioner is that even if S. 30 (b) is applicable there is nothing on record to show that the authorities concerned tried to know the cost price. From the statement filed in this Court by the respondent it would appear that they have taken into account the shipping bills of the manganese declared by other consignors on different dates ranging from 3rd October, 1952 to 31 October, 1952 and they have taken the lowest value per unit of 3rd October, 1952 and made the assessment. It cannot, therefore, be said that the authorities have not tried to assess the cost price.

13.Now we have to see whether the price assessed is arbitrary. What is urged is that at one place the authorities have accepted the statement of the petitioner and at another place they have taken the statement of the analyst and ignored the statement of the petitioner. We do find some force in this contention. It is true that the authorities concerned in the one case have accepted the statement of the petitioner and in the other taken into account the statement of the analyst. No doubt in both cases, the analyst had given a statement, but the department had selected the statement of the analyst in one case and the statement of the petitioner in the other. No reason has been given for this action. The learned counsel for the respondent also could not satisfy us on this point and it appears to us that the authorities concerned have selected that which suited best to their purpose. But from this circumstance alone it cannot be said that the calculation was arbitrary.

14. After this, we turn to the argument whether the amount demanded by the authorities is the refund amount or the amount of the difference. The learned counsel for the petitioner drew our attention to the entries in the working sheet for finalisation of provisionally assessed shipping bill for manganese ore and contended that out of the amount of Rs. 4,875-10-0 which is demanded by the authorities now Rs. 4,542-6-0 is the amount of refund on short payment and this amount was refunded to the petitioner on 25th March, 1953 and the present demand for refund of the said amount is of 30th August, 1954, which could not be claimed by the authorities being barred under S. 39 of the Sea Customs Act. In order to appreciate the argument of the learned counsel a reference to S. 39 is necessary which runs thus :

When customs duties or charges have been short-levied through inadvertence, error, collusion or misconstruction on the part of the officers of Customs, or through mis-statement as to real value, quantity or description on the part of the owner, or when any such duty or charge, after having been levied, has been, owing to any such cause, erroneously refunded, the person chargeable with the duty or charge so short-levied, or to whom such refund has erroneously been made, shall pay the deficiency or repay the amount paid to him in excess, on a notice of demand being issued to him within three months from the date of the first assessment or making of the refund; and the Customs Collector may refuse to pass any goods belonging to such person until the said deficiency or excess be paid or repaid."

It is obvious therefore that S. 39 relates to payment of duties short-levied or erroneously refunded. No doubt in the working sheet Rs. 4,542-6-0 are shown as the refunded amount, but in the demand notice of 30th August, 1954, this amount is claimed as the amount of difference. To us also the amount claimed appears to be the amount of difference. Admittedly, there was provisional assessment, and it was assessed at Rs. 1,85,816-0-0. This amount was collected. As it was found that it was in excess of the provisional assessment the amount of Rs. 4,542-6-0 was refunded to the petitioner, but when the final assessment was made, it was found that a total amount of Rs. 1,90,691-10-0 was leviable. After deducting the amount actually collected, the authorities made a demand for the difference and while showing the difference, they showed the items of Rs. 334-4-0 and Rs. 4,542-6-0 (amount refunded) instead of showing the actual amount collected and claiming the difference. It is however, clear that the amount claimed is not the amount of refund, but the actual amount of the difference. That apart, there is no question of any error, inadvertence, collusion or misconstruction on the part of the officers of Customs to invoke S. 39. We are definite that S. 39 does not apply.

15. We next proceed to the argument relating to the provisional assessment. What is contended on behalf of the petitioner is that under the Sea Customs Act, as it stood then, that is, at the time of the agreement, there was no provision for any provisional assessment and whatever assessment was made it was one and final and when the respondent refunded the amount as amount paid in excess the same cannot now be claimed under the pretext of final assessment. On behalf of the respondent it is conceded that at the time of agreement there was no provision for provisional and final assessments but it is contended that in practice there used to be a provisional and final assessment and now the Act has been amended and provision has been made for provisional assessment also. 16. It is next contended that the provisional assessment was made at the instance of the petitioners husband and when the petitioners husband has taken advantage of the provisional assessment, the petitioner cannot now turn round and challenge it and say that the provisional assessment was not justified under the provisions of the Act. As it is admitted on behalf of the parties that there was no provision for provisional assessment at the time of the contract, we have to confine ourselves only to the effect of the provisional assessment. Strictly speaking in the absence of any provision for provisional assessment, such an assessment would not be justified, but the question that arises is what is the effect and whether the petitioner can challenge the provisional assessment. The provisional assessment, we may point out, was made at the instance of the petitioners husband. Though such a provisional assessment was not permitted by the provisions of the Sea Customs Act, yet when the petitioners husband has taken advantage of the same, the petitioner cannot, in our opinion, now turn round and challenge it. We, therefore, repel this contention also.

17. It is also contended that if the goods were not valued properly and if no duty was paid the customs authorities would have stopped the shipment under S. 32 or taken action under S. 137 of the said Act. To appreciate the argument a reference to Ss. 32 and 137 is essential.

18. Section 32 enjoins :

"If it appears that such goods are properly chargeable with a higher rate or amount of duty than that to which they would be subject according to the value thereof as stated in the bill of entry or shipping bill, such officer may detain such goods.

In every such case the detaining officer shall forthwith give notice in writing to the owner of the goods of their detention, and of the value thereof as estimated by him; and the Customs Collector shall, within two clear working days after such detention, or within such reasonable period as may with the consent of the parties be arranged, determine either to deliver such goods on payment of duty charged according to the entry of such owner, or to retain the same for the use of the Central Government.

If the goods be retained for the use of the Central Government, the Customs Collector shall cause the full amount stated in the bill as their real value to be paid to the owner in full satisfaction for such goods in the same manner as if they have been transferred by ordinary sale, and shall, after due notice in the Official Gazette or some local newspaper and without unnecessary delay cause them to be put up to public auction in wholesale lots for cash on delivery.

If the Customs Collector deems the highest offer made at such sale to be inadequate, he may either adjourn the sale to some other day, to be notified as aforesaid, or buy in the goods, and without unnecessary delay dispose of them for the benefit of the Central Government.

If the proceeds arising from such sale exceed the sum paid to the owner, together with (in the case of goods imported) the duty to which the goods are liable and all charges incurred by the Central Government in connection with them, a portion not exceeding one-half of the overplus shall, at the discretion of the Chief Officer of Customs, be payable to the officer who detected the undervaluation of the goods.

Nothing in the section shall prevent the Chief Officer of Customs, when he has reasons to believe that any such undervaluation was solely the result of accident, or error, from permitting the owner of the goods on his application for that purpose to amend such entry, on payment of such increased rate of duties on the excess of the amended over the original valuation, or on such other terms as the Chief Officer of Customs may determine Section 137 reads :

"No goods, except passengers baggage, shall be shipped or water-borne to be shipped for exportation until :

(a) the owner has delivered to the Customs Collector or other proper officer a shipping-bill of such goods in duplicate, in such form and containing such particulars in addition to those specified in S. 29 as may from time to time be prescribed by the Chief Customs Officer;

(b) such owner has paid the duties (if any) payable on such goods; and

(c) such bill has been passed by the Customs Collector.

Provided that the Chief Customs Officer may, in the case of any Customs-port or wharf, by notification in the Official Gazette, and subject to such restrictions, and conditions, if any as he thinks fit, exempt goods or any specified goods or class of goods or any specified person or class of persons from all or any of the provisions of this section."

Section 32 provides for a procedure where such goods are undervalued by the owner and S. 137 refers to clearance for shipment. It is true that neither under S. 32 nor under S. 137 any action was taken by the respondent. But this question does not arise in the instant case because there was a provisional assessment and the assessee had agreed to pay the balance amount after the final assessment.

19. We are, therefore, of opinion that the petitioner had failed to make out a case under Art. 226 of the Constitution of India. The petition, therefore, fails and is dismissed with costs. Counsels fee Rs. 200/-.

Petition dismissed. AIR 1958 ANDHRA PRADESH 129 (VOL. 45, C. 41) "V. Raghuramulu v. State of Andh. Pra."

ANDHRA PRADESH HIGH COURT

Coram : 2 SUBBA RAO, C.J. AND KUMARAYYA, J. ( Division Bench )

V. Raghuramulu and another, Petitioners v. State of A. P. and another, Respondents.

Writ Petition No. 565 of 1957, D/- 30 -8 -1957.

Constitution of India, Art.29(2), Art.15 - EDUCATION - EQUALITY - BACKWARD CLASS - CONSTITUTIONALITY OF AN ACT - Admission into educational institutions - Special provision for benefit of backward classes - Provision in effect abridging their rights - Constitutionality.

Every individual citizen as a citizen whether he belongs to the backward classes or not has a right to get admission into an educational institution of the kind mentioned in Cl. 2 of Art. 29. The said fundamental right is abridged by the special provision made by the State for the advancement of any socially and educationally backward classes of citizens. If the provision is for the advancement of such classes the fundamental right of a citizen is not infringed for his right itself is reduced by the provision. But if the provision though it purports to be for the advancement of the backward classes, in effect abridges their rights, the entire provision or that part of it which abridges their rights would be bad leaving untouched the fundamental right of every citizen whether he is a member of the backward classes or not. (Para 10)

Where the Andhra State directed by G. O. Ms. 1254 Health, dated 25-6-1957 that a maximum of 15 per cent of the total number of seats in any faculty may be reserved for backward class candidates, the said rule is obviously made on the assumption that under no contingency more than 15 per cent of the total number of seats in any faculty would be or could be captured by the members of the backward classes in open competition. Where such assumption has been belied in a particular area, the effect of the provision instead of advancing the cause of the backward classes prevents some members of those classes, from getting seats which they would have otherwise got if all the seats were brought under a common pool. (Para 11)

Held that it may be that in other localities where the members of other communities are more advanced educationally than in the area in question, this rule may work for the advancement of the backward classes candidates. It was therefore not necessary to hold that the rule was bad but it would be enough to confine the operation of that rule to a case where the assumption underlying that rule applied and to hold that in other cases where the rule does not operate for the advancement of the backward classes the fundamental right of a citizen of that class was unaffected by the provisions. AIR 1951 SC 223 Ret (Para 11)

Anno. AIR Com. Const, of India, Art. 15, N. 21 ; Art. 29, N. 1.

Cases Referred : Chronological Paras

(A) AIR 1951 SC 226 (V 38) : 1951 SCJ 313 7

P. A. Chowdary. for Petitioners ; Government Pleader (M. Seshaehalapathy) for Respondents.

Judgement

SUBBA RAO, C.J. : -

This is an application under Art. 226 of the Constitution of India to issue a writ of certiorari calling for the records relating to the selection of medical candidates from region No. 2 of the Telengana area and to quash the proceedings relating to the said selection and to order fresh selection.

2. The 1st petitioner belongs to Munnur Kapu caste declared to be a backward class and the second petitioner belongs to the Laddaf caste which is also a backward class. The 1st petitioner passed his B. Sc. examination in the year 1957 with Zoology main and Botany and Chemistry as subsidiaries. He secured 51 per cent, in his optionals.

The second petitioner also passed his B. Sc. examination in the year 1957 with Botany main and Chemistry and Zoology as subsidiaries and secured 52-1 per cent, in his optionals. The former from Suddal, Karimnagar district and the latter from Yeldurti, Medak District applied for admission into the 1st M. B. B. S. Class in the Osmania Medical College, Hyderabad.

Both of them were interviewed by the Selection Committee but were not selected on the ground that the maximum seats allotted for the backward classes were exhausted by the other applicants from backward classes who secured higher marks than the petitioners though, in fact, they got higher marks than the two candidates who were selected for the seats thrown open for general competition. The petitioners complaint is that the selection so made is violative of the fundamental right guaranteed to them under Arts. 15 and 29 of the Constitution of India.

3. The respondent issued an order prescribing a scheme for the selection of candidates for the Medical Colleges in the State. The whole of the former Telengana area was divided into two regions for the purpose of admission of students into Medical Colleges, namely, region 1 comprising the twin cities of Hyderabad and Secunderabad and region 2 comprising the rest of the area.

The 2nd region, on the basic of the population was allotted 97 seats of which 14 were reserved for backward classes, 14 for scheduled castes and 29 seats for lady candidates, and the balance of 40 seats were thrown open for general competition. The Selection Committee made selections to the 2nd region on the said basis. The Selection Committee selected 14 candidates (10 boys, 4 girls) from the backward classes and rejected the applications of the rest of the candidates belonging to those classes on the ground that the quota fixed for the backward classes was exhausted. But they selected Chintayya and Appa Rao who secured 49 per cent, and 50.3 per cent. respectively for the general seats. The petitioners admittedly secured higher marks than those two selected candidates.

4. Learned counsel for the petitioners contends that the scheme of selection laid down by the Government and implemented by the Selection Committee is violative of their fundamental right under Art. 29 (2) of the Constitution while the learned Government Pleader contends that the fundamental right conferred on a citizen under Art. 29 (2) of the Constitution is subject to Art. 15 (4) which empowers the State to make a special provision for educationally backward classes of citizens and therefore the reservation of 15 per cent, of the seats in the 2nd region for backward classes is valid and as the seats so reserved were exhausted by the admission of students from backward classes who secured higher marks than the petitioners, no question of violation of their fundamental right arises in the cases.

5. The relevant articles on the basis of which the conflicting arguments are advanced may conveniently be read at this stage :

Article 29 :

(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds of grounds only of religion, race, caste, language or any of them. Article 15 :

(1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. (4) Nothing in this article or in Cl. 2 of Art. 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the scheduled castes and the scheduled tribes.

(Clause 4 of Art. 15 was inserted by the Constitution (First Amendment) Act, 1951.)

6. These two articles were the subject of judicial scrutiny both by the Madras High Court and by the Supreme Court of India.

7. The State of Madras maintained four Medical Colleges and only 330 seats were available for students in those four Colleges. Out of those seats, 17 seats were reserved for students coming from outside the State and 12 seats were reserved for discretionary allotment by the State and the balance of the seats available were apportioned between four distinct groups of districts in the State.

The same procedure was followed in respect of the Engineering Colleges. The seats so apportioned between the four distinct groups of districts were filled up according to certain traditions set forth in the communal G. O. then in force. For every 14 seats to be filled by the Selection Committee the candidates were selected on the following basis :

Non-Brahmins. ---- 6

Backward Hindus. ----2

Brahmins. ----2

Harijans. -----2

Anglo Indians and Indian Christians. ---- 1

Muslims. ---- 1

This G. O. was impugned by two applicants on the ground that their fundamental right to get admission into the educational institutions maintained by the State was violated. The Madras High Court agreeing with the contentions held that the said G. O. violated the fundamental right of the petitioners and was therefore bad. On appeal the Supreme Court of India in State of Madras v. Champakam Dorairajan, 1951 SCJ 313 : (AIR 1951 SC 226) (A), agreed with the High Court of Madras. Das J. (as he then was) who delivered the judgment on behalf of the Court observed at p. 315 (of SCJ) : (at p. 227 of AIR) :

"The right to get admission into any educational institution of the kind mentioned in Cl. 2 is a right which an individual citizen has as a citizen and not as a member of any community or class of citizens. This right is not to be denied to the citizen on grounds only of religion, race, caste, language or any of them.

If a citizen who seeks admission into any such educational institution has not the requisite academic qualifications and is denied admission on that ground, he certainly cannot be heard to complain of an infraction of his fundamental right under this Article. But on the other hand if he has the academic qualifications but is refused admission only on grounds of religion, race, caste, language or any of them, then there is a clear breach of his fundamental right."

8. Adverting to the argument that the reservation of seats for backward classes is enjoined by the Constitution and therefore the communal G. O. implementing the said object is valid, His Lordship proceeded to observe at p. 316 (of SCJ) : (at p. 228 of AIR) :

Seeing however, that Cl. 4 was inserted in Art. 16 the omission of such an express provision for Art. 29 cannot but be regarded as significant. It may well be that the intention of the Constitution was not to introduce at all communal considerations in matters of admission into any educational institution maintained by the State or receiving aid out of State funds.

The protection of backward classes of citizens may require appointment of members of backward classes in State services and the reason why power has been given to the State to provide for reservation of such appointments for backward classes may under those circumstances be understood. That consideration, however, was not obviously considered necessary in the case of admission into an educational institution and that may well be the reason for the omission from Art. 29 of a clause similar to Cl. 4 of Article 16."

9. The effect of Art. 29 (2) as interpreted by the Supreme Court would substantially bar students of backward classes from getting admission into professional colleges for as likely as not, at any rate for some time to come they could not succeed in a competition with the students belonging to advanced communities. Naturally therefore there was a furore in those communities which led to the amendment of the Constitution by the insertion of Cl. 4, Art. 15.

By the amendment nothing in Art. 29 (2) prevents a State from making any special provision for the advancement of any socially and educationally backward classes of citizens. To that extent the fundamental right of the citizen under Art. 29 (2) can be abridged by the State. But the abridgment is conditioned and circumscribed by the provisions of the clause. Any special provision made by the State should be for the advancement of the backward classes of citizens and not to abridge the rights guaranteed to them under the Constitution or retard their progress.

10. To illustrate : The State may allot a minimum number of seats in professional Colleges for backward classes. This provision would be for the advancement of the backward classes for irrespective of the marks they secured, certain seats would be guaranteed to those classes. But if in a particular locality the members of the backward classes secure high marks and are able to compete with students of other classes they would not be deprived of their right to get admission into colleges beyond the quota allotted to them.

Such a provision would certainly be for the advancement of the backward classes. On the other hand, if a maximum be fixed, instead of providing for the advancement of those classes in the contingency visualised above, it would retard their progress; for students of those classes who secure more marks than students who compete for the general seats and get less marks than students belonging to their classes would not get seats.

To that extent the provision made by the State would be in excess of the power conferred on it under Cl. (4) and therefore cannot affect the fundamental right of the citizens whether they belonged to backward classes or not. To put it differently, every individual citizen as a citizen whether he belongs to the backward classes or not has a right to get admission into an educational institution of the kind mentioned in Cl. 2 of Art. 29.

The said fundamental right is abridged by the special provision made by the State for the advancement of any socially and educationally backward classes of citizens. If the provision is for the advancement of such classes the fundamental right of a citizen is not infringed for his right itself is reduced by the provision.

If the provision though it purports to be for the advancement of the backward classes, in effect abridges their rights, the entire rights, the entire provision or that part of it which abridges their rights would be bad leaving untouched the fundamental right of every citizen whether he is a member of the backward classes or not.

11.In the instant case the State directed that a maximum of 15 per cent, of the total number of seats in any faculty may be reserved for backward class candidates. The said rule is obviously made on the assumption that under no contingency more than 15 per cent, of the total number of seats in any faculty would be or could be captured by the members of the backward classes in open competition.

This assumption has been belied in the present case. Therefore the effect of the provision instead of advancing the cause of the backward classes prevented some members of those classes from getting seats which they would have otherwise got it all the seats were brought under a common pool. It may be that in other localities where the members of the other communities are more advanced educationally than in the second region of the Telengana Area, this rule may work for the advancement of the backward classes candidates.

It is therefore not necessary to hold that the rule is bad but it would be enough to confine the operation of that rule to a case where the assumption underlying that rule applies and to hold that in other cases where the rule does not operate for the advancement of the backward classes the fundamental right of a citizen of that class is unaffected by the provision.

We would suggest that the rule may be modified by substituting the words minimum of 15 per cent. for the words maximum of 15 per cent. or by any other appropriate way. It is not disputed that but for the provision, the names 0f the two petitioners would have been considered along with the applicants selected from the general pool, and, it so considered, they would have been selected.

12. It is represented to us that the selection Committee had finished its work and the students selected have been admitted into the Colleges. This Court did not give any interim stay in matters of selection of candidates to Colleges as it would introduce complications and prejudicially affect the boys in regard to their collegiate education. However, the fact that selections have been made could not affect the rights of the petitioners. The applications of the two petitioners may now be considered by the respondent and if they have preferential claims over others who have already been selected they may be provided for by creating two additional seats.

13. In this view it is not necessary to express our opinion on the question raised by the learned counsel for the petitioners that G. O. Ms. No. 1254, Health, dated 25-6-1957 having no legislative sanction behind it is void.

14. In the result, we issue the aforesaid direction to the respondent. The respondent will pay the costs of the petitioners. Advocates fee Rs. 100/-.

Order accordingly.

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