Supreme Court of India
L.T.C. BHADRACHALAM PAPERBOARDS AND ANR.versusMANDAL REVENUE OFFICER, ANDHRA PRADESH AND ORS.
- Citation
- 1996 INSC 1013
- Decided
- 9 September 1996
- Disposal
- Dismissed
- Bench
- B P JEEVAN REDDY
Holding
Publication of an exemption order in the Official Gazette and compliance with the statutory mode of promulgation are mandatory; non‑publication renders the order invalid, and promissory estoppel cannot be invoked against such statutory non‑compliance, making G.O. No. 386 valid and G.O. No. 201 ineffective.
Summary
The appellant, T.C. Bhadrachalam Paper Boards Ltd., claimed exemption from non‑agricultural land assessment on the basis of G.O. No. 201 (1976) issued under Section 11 of the Andhra Pradesh Non‑Agricultural Lands Assessment Act, 1963. The order was not published in the Official Gazette nor laid before the Legislature as required by the Act. The State issued G.O. No. 386 (1990) retrospectively declaring that the exemption would be effective from 17‑December‑1976, thereby superseding G.O. No. 201. The Supreme Court examined whether the Gazette publication and laying requirements are mandatory, whether the power under Section 11 is conditional legislation capable of retrospective operation, and whether promissory or equitable estoppel could be invoked against the Government. The Court held that publication in the Gazette is an imperative statutory requirement, that non‑publication invalidates the exemption order, and that estoppel cannot defeat mandatory statutory provisions. Consequently, G.O. No. 386 is valid and G.O. No. 201 is ineffective, and the appeal is dismissed.
Issues considered
- The statutory requirement of publishing an exemption order under Section 11(1) of the Andhra Pradesh Non‑Agricultural Lands Assessment Act in the Official Gazette – whether it is mandatory or directory.
- The requirement of laying the order before the Legislative Assembly under Section 11(2) – whether it is mandatory.
- The validity of G.O. No. 201 (1976) despite non‑publication and non‑laying.
- The applicability of promissory/equitable estoppel against the Government for non‑compliance with mandatory statutory provisions.
- Whether the power conferred by Section 11 is conditional legislation and can be exercised retrospectively.
- The validity of G.O. No. 386 (1990) giving retrospective effect and its supersession of G.O. No. 201.
Legislation cited
Subjects
tax exemptionnon‑agricultural land assessmentofficial gazettemandatory publicationconditional legislationpromissory estoppeladministrative lawretrospective effect
Judgment
l.T.C. BHADRACHALAM PAPERBOARDS AND ANR. A
v.
MANDAL REVENUE OFFICER, ANDHRA PRADESH AND ORS.
SEPTEMBER 9, 1996
[B.P. JEEVAN REDDY AND K.S. PARIPOORNAN, JJ.) B
LOJ!d Laws:
Andhra Pradesh Non-Agricultural Land Assessment Act, 1963: Section
11(1) and (2). C
Levy-Exemption-Order of-Publication in Official Gazette-Require-
, ment of-Held : mandatory-Giving full publicity to the order not sufficient
compliance-While other requirements mentioned in S.11 (1) were mandatory,
it-cannot be said requirement of mode of publication to be directory.
D
·Exemption of Ttre-Grant of-Power confe1red on Govemment to grant
either pem1anently or for specified period-Held : provision was a piece of
conditional legislation.
"
Exemption of Tax-Grant of-Power confe"ed 011 Government to grant
either pennanently or for specified period-Exemption granted for period E
ante1ior to date of order but subsequent to commencement of Act-Hetd :
power to grant exemption could be excercised prospectively-Hence, such
order of exemption valid.
Exemption of Ttre-Grant of-Requirement of 'laying' of such order
before State Legislature-Held : requirement of 'laying' was not mandatory-- F
Such requirement was one f o= of legislative control over subordinate legis-
lation.
Andhra Pradesh General Clauses Act, 1891: Section 21.
Order/mle-Requirement of publication of-Jn Official Gazette-Held: G
mandatory-Object of publication in Official Gazette not merely to give
info=ation to public-But was official confi=ation uf such order/mle-lt is
also official version of order/mle and could be relied upon by Courts under
S. 83 Evidence Act-To call such requirement as dispensable was unaccep-
table-Evidence Act, 1872, S.83. H
643.
644 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.
A Administrative Law:
Delegated f;,egislation-Publication or promulgation-Mode of-
Prescribed by Statute-Held : such presC1ibed mode must be followed, which
was imperative and could not be dispensed with.
B Delegated f:egislation-Govemmeni orders-Statutory and non-
statutory GOs--Both covered same subject and period-Held: if inconsistent
with each other statutory G.O. would prevail over non-statutory G.O.
Promisso_ry, estoppel-Against Government-Applicability of-Ad-
ministrative act and act done under statute-Distinction betwem-Govem-
C ment order issued without complying with mandatory requirements of
law-Acted upon by person on basis of 'promise' or 'representation' made by
such GO-Held : such a distinction should be kept in mind-If act done by
Government was invalid and ineffective for non-compliance of mandatory
requirements of law such act would not constitute 'promise' or 'representation'
D for invoking rnle of promissory/equitable estoppel on basis of such an
act-There could be no estoppel against statute.
Interpretation of Statutes :
Order/mies inade under Act-Mode of publication of-Presoibed by
E Act-Held : such requirement of mode of publication mandat01y.
Tax exemption----Power confeJTed on Government to grant-Held : Dis-
pensing with levy or payment of tax was a serious matter-Requirements of
provision conferring such power were mandatory and must be strictly com-
F plied with.
Conditional legislation-Power conferred on Government to bring Act
into force and also to grant exemption-Held : were instances of conditional
legislation and not delegated legislation.
G Conditional legislation-Power conferred on Government by
Act-Held: could be exercised with retrospective effect provided it was for
period anterior to commencement of Act.
Public duty-:;Creation of-By provisions of statute-Act neglected per-
f onnances of such public duty-Holding of such act as null and void would
H work serious general inconvenience or injustice to persons having no control
1.T.C. BHADRACHALAM PAPERHOARDSv. MANDALREY. OFFICER 645
over those entlusted with such duty and also would not promote main objects A
of legislature-Provisions creati11g such duty should be treated as direc-
tory-Applicability of principle-Held : inapplicable whe11 requireme11t of
provision itself was mandatory.
, Section 11 of the Andhra Pradesh Non-Agricultural Lands Assess-
B
ment Act, 1963 (NALA Act) conferred upon the Government the power to
exempt any class of non-agricultural lands from the levy. The Government
issued GOMs No. 877 which provided incentives to the industries estab-
lished both in the public and private sectors in the State. Subsequently,
the Government issued GOMs No. 201 which was n11t issued under any
enactment(s). It stated that in the case of indnstries set up in the scheduled C
areas usual land revenue be levied on the extent of land instead of non-
agricultural assessment. It was stated that the orders, issued in the said
G.O. would come into force with immediate effect. The concerned
authorities were requested to give full publicity to the scheme. Thereafter,
the Government i~sued GOMs No. 386 which stated that GOMs No. 201 D
was not published in the State Gazette as required under Section 21 of the
Andhra Pradesh General Clauses Act, 1891 and that it also did not clarify
whether the concession granted thereby was a permanent one or was
operative only for five years as was provided in GOMs No. 877. With a
view to providing incentives the said GO 386 granted exemption from E
payment of assessment under NALA Act to industries for five years but it
was directed that "usual land revenue be levied on the extent of land
instead of non-agricultural lands assessment as per rules".
The appellant established a factory in the scheduled area. The land
F
was acquired by the State for the purpose of the appellant. The appellant
completed the construction of the factory in 1979 and commenced produc-
tion on and from 1.10.1979. When a demand was made by the Tehsildar in
the year 1980 for payment of tax under NALA in respect of the said land,
the appellant submitted that by virtue of GO Ms 201, it was not liable to
pay the said tax. However, the Manda) Revenue Officer continued to issue G
demand notices and sought to attach the movables of the appellant. In
these circumstances, the appellant filed a writ petition before the High
Court for a direction that the said demand was illegal and unenforceable.
The High Court dismissed the writ petition. Being aggrieved the appellant
preferred the present appeal. H
646 SUPREME COURT REPORTS [1996) ~.UPP. 5 S.C.R.
A On behalf of the appellants it was contended that GO Ms No. ~01 was
a valid order of exemption issued under Section 11 of the Acti 'that the
requirements of publication of the G.O. in the Official Gazette and its
'laying' before the legislature for the requisite period were merely directory
and not mandatory; that it was enough if due publicity was given to the
order; that GOMs No. 201 was a representation made by the Government
B acting within the scope of its ostensible authority or. which the appellant
acted, the Government must be held bound by it; that any defect in
procedure or any irregularity could be waived so as to render the repre·
sentation valid; that the doctrine of promissory/equitable estoppel and of
legitimate expectations were attracted; that if the Government was allowed
c to go back upon its promise contained in GOMs No. 201 it would virtually
amount to permitting it to commit a legal fraud; that the retrospective
operation given to GOMs 386 was in the nature of delegated legislation;
and that in the absence of a specific provision in the Act, the rule-making
authority could not give retrospective effect to the rules made by it.
D
Dismissing the appeal, this Court
HELD : 1.1. The object of publication in the Gi.zette under Section
11 of the Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963
is not merely to give information to public. The Official Gazette, as the
E very name indicates, is an official document. It is published under the
authority of the government. Publication of an order or rule in the Gazette
is the official confirmation of making of such an order or rule. The version
as printed in the Gazette is final. The same order or rule may also be
published in the 'newspapers or may be broadcast by radio or television.
F If a question arises when was a particular order or rule was made, it is
the date of Gazette publication that is relevant and not the date of
a
publication in newspaper or in the media. The publication of an order
or rule is the official irrefutable affirmation that a particular order or rule
is made, is made on a particular day (where the order or rule takes effect
G from the date of its publication) and is made by a particular authority; it
is also the official version of the order or rule. It is a common practice in
courts to refer to the Gazette whenever there is a doubt about the language
of, or punctuation in, an Act, Rule or Order. Section 83 of the Evidence
Act says that the court shall presume the genuineness of the Gazette. Court
will take judicial notice of what is published therein, unlike the publication
H in a newspaper; which has to be proved as a fact as provided in the
1.T.C. BHADRACHALAM PAPERBOARDS v. MANDAL REV. OFFICER 647
Evidence Act. If a dispute arises with respect to the precise language or A
contents of a rule or order, and if such rule or order is not published in
the Official Gazette, it would become necessary to refer to the original
itself, involving a good amount of inconvenience, delay and unnecessary
controversies. It is for this reason that very often enactments provide that
Rules and/or Regulations and certain type of orders made thereunder shall
B
be published .in the Official Gazette. To call such a requirement as a
dispensable one - directory requirement • is unacceptable. Where the parent
statute presoibes the mode of pu~licatio11 or promulgation that mode has to
be fol/owed and such a requirement is imperative and cannot be dispensed
with. [658-C-G, 660-D]
c
Pankaj Jain Agencies v. Union of India, [1994] 5 SCC 198; Sambhu
Nath Iha v. Kedar Prasad Sinha & Ors., [1972] 1 SCC 573 and B.K.
S1inivasa11 v. State of Kamataka, [1987] 1 SCC 658, relied on.
1.2. A levy created by a statute can be lifted, suspended or withdrawn
only by a statute or in the manner prescribed by the statute creating the D
levy. Dispensing with the levy or payment of tax is a serious matter. It is
done only with a view to promote a countervailing public interest. When
such a power is conferred by Legislature upon another authority, that
authority has to, and can, exercise that power only in strict compliance
with the requirements of the provision conferring that power. It is in the E
interest of general public that such notifications are not only given wide
publicity but there should also be no dispute with respect to the date of
their making or with respect to the language and contents thereof. In the
context of Section 11(1) of the Act there is no reason to make a distinction
that while the other requirements mentioned in Section 11 (1) are man-
datory, only the requirement of publication in the Gazette is not. The power F
given by Section 11 is of a substantive nature besides being in the nature
of an exception. For this reason too, the provision conferring that power
has to be complied with fully, i.e., in all respects. [660-E-G]
Bang/ore Woolen and Cotton Silk Mills v. Corporation of City of G
Bang/ore, [1961] 3 SCR 707; Municipal Board, Sitapur v. Prayag Narain
• Saigal & Fin11 Moosaram Bhagwandas, [1969] 3 SCR 387 and Raza Buland
Sugar Co. Ltd. v. Municipal Board, Rampur, [1965] 1 SCR 970, held
inapplicable.
Har/av. State of Rajasthan, [1952] SCR 110 and State of Kera/a v. P.J. H
648 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.
A Joseph, AIR (1958) SC 296, referred to.
2. The principal of holding provisions of a statute to be directory
only when such provisions relate to the performance of a public duty, the
negligence of which would work serious general inconvenience or injustice
to persons who have no control over those entrusted with the duty and at
B the same time would not promote the main object of the legislature is not
applicable to the instant case when the requirement of the provisions itself
is mandatory in nature. [664-F-G]
Dattatraya Moresliwar v. State of Bombay, [1952) SCR 612; State of
U.P. v. Ma11bodha11 Lal Srivastava, [1958) SCR 533 and J.K. Gas Plant
c Ma11ufactu1i11g Co. Ltd. v. Emper01; (1947) FCR 141, held inapplicable.
3.1. Very often the legisilature makes a law but leaves it to the
I
executive to prescribe a date with effect from which date the Act shall come
into force. The power given to the executive to bring an Act into force as
•1
D also the power conferred upon the government to exempt persons or
properties from the operation of the enactment are both instances of
conditional legislation and cannot be described as delegated legislation.
The power conferred on the Government under Section 11 of the Act is a
category of conditional legislation. [668-F-G]
E Jalan Trading Company v. Mill Mazdoor Union, [1967) 1 SCR 15;
Hamdard Dwakhana v. Union of India, [1960) 2 SCR 671 and Tulsipur
Sugar Co. Ltd.· v. Notified Area Committee, Tulsipur, [1982) 2 SCC 295,
relied on.
Field v. Clarke, [1892) 143 U.S. 649, referred to.
F
Hampton & Co. v. United States, (1927) 276 U.S. 394; The Queen v.
Burah, (1878) 3 A.C. 889; Russel v. The Queen, (1882) A.C. 829; King-
_Emperor v. Be11ga1ilal Sanna, (1944) L.R. 72 I.A. 57 and Sardar lnder Singh
v. State of Rajastha11, [1957) SCR 604, cited.
G 3.2. Section 11(1) of the Act says that the government can grant the
exemption "either permanently or for a specified period". Having regard to.
the nature of the power and the character of the provision, it cannot be
held that this power can be exercised only prospectively. The period
specified can cover either wholly or partly the period anterior to the date
H of order, so long as the period specified is subsequent to the commence-
1.T.C. BHADRACHALAM PAPERBOARDSv. MANDALREV.OFFlCER 649
ment of the Act. [670-A-B] A
A. T7iangal Kunju Musaliar v. M. Venkatachalam Potti, Authorised
Official and Income-Tax Officer & Anr., [1955] 2 SCR ll96, relied on.
3.3. The retrospective operation given to GOMs. No. 386 is valid and
lawful. Once this is so, the very existence of GOMs. No. 201 becomes B
doubtful. There cannot be a· statutory and a non-statutory G.O. covering
the same period, inconsistent with each other. While G.O.Ms. No. 386
provides exemption only for a period of five years prescribed therein,
GOMs. No. 201 pertains to grant the exemption on a permanent basis. The
appellant can, therefore, claim exemption only under and in accordance C
with GOMs. No. 386. [670-C]
4. The requirement of 'laying' prescribed by Section 11 (2) of the Act
is not mandatory and an order of exemption under Section 11 cannot be
said to be ineffective or unenforceable for the reas<'n of 'non-laying' as
required by Section ·11 (2) of the Act. The requirement is one form of D
legislative control over subordinate legislation. [670-E-F]
Mis. Atlas Cycle Industries Ltd. & Ors. v. State of Haryana, [1979] 2
sec 196, followed.
D.K. Klishnan v. Secretary Regional Transport Authority, Chittor,
E
(1956) AP 129, approved.
5. In order to determine the applicability of the principle of Promis-
sory estoppel it is necessary to keep in mind the distinction between an
administrative act and an act done under a statute. Where the field is F
occupied by an enactment, the executive has to act in accordance therewith,
particularly where the provisions are mandatory in nature. There is no
room for any administrative action or for doing the thing ordained by the
statute otherwise than in accordance therewith. Where, of course, the
matter is not governed by a law made by a competent Legislature, the G
executive can act in its executive capacity since the executive power of the
State extends to matters with respect to which the Legislature of a State
has the power to make laws (Article 162 of the Constitution). Ifit is found
that the act done by the Government is invalid and ineffective for non-com-
pliance with the mandatory requirements of law, if would be rather curious
if it is held that notwithstanding such non-compliance, it yet constitutes a H
.J
650 SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
A 'promise' or a 'representation' for the purpose of invoking the rule of
promissory/equitable estoppel. Accepting such a plea would amount to
nullifying the mandatory requirement of law besides providing a licence to
the government or other body to act ignoring the binding provisions of law.
Such a course would render the mandatory provisions of the enactment
meaningless and superfluous. It falls foul of our constitutional scheme and ,,_
B public interest. It would virtually mean that the rule of promissory estop-
pel can be pleaded to defeat the provisions of law whereas the said rule, it
is well- settled, is not available against a statutory provision. The sanctity
of law and the sanctity of the mandatory requirement of the law cannot be
allowed to be, defeated by resort to rule of estoppel. It cannot, therefore,
C be said that where an act is done in violation of a mandatory provisions
of a statute, such act can still be made a foundation for invoking the rule
of promissory/equitable estoppel. Moreover, when the government acts
outside its authority, as in this case, it is difficult to say that it is acting
within its ostensible authority. [671-B-H; 672-A-B]
D Collector of Bombay v. Municipal Co1poration of the City of Bombay,
[1952) SCR 43; Dadoba Janardhan v. The Collector of Bombay, (1901) ILR
25 Born. 714 and Municipal C01poratio11 of tlie City of Bombay v. T11e
Secretmy of State for India in Council, (1905) ILR 29 Born. 580, held
inapplicable.
E
Wells & Ors. v. Minister of Housing & Local Govemment & Anr.,
[1967) All. E.R. 104, referred to.
Ramsden v. Dyson, (1866) LR 1HL129 andAriff v.Jadunath, (1931)
LR 58 IA 91; cited.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 11821-22
of 1966.
From the Judgment and Order dated 15.4.94 of the Andhra Pradesh
G High Court in W.P. Nos. 3097 and 17179of1990.
Soli J. Sorabjee, Ms. Nisha Bagchi, Kailash Vasdev and C.K. Sasi for
the Appellants.
K. Ram Kumar and (C. Balasubramaniam) for T.V.S.N. Chari for
H the Respondents. ·
LT.C'BHADRACHAIAM PAPERBOARDS v. MANDALREV. OFFICER(JEEVAN REDDY,J.J 651
The Judgment of the Court was delivered by A
B.P. JEEVAN REDDY, J. Leave granted.
The Andhra Pradesh Non-Agricultural Lands Assessment Act, 1963
(the Act) levies non-agricultural land assessment (NALA) for each fasli
year at the rates specified. The rate varies depending upon the nature of B
user. Section 3 is the charging section. Section 7 of the Act provides for
remission of NALA. It reads :
"7 Remission : The Government may, by general or special order
and for just and sufficient reason to be recorded therein, remit in
whole or in part, the assessment payable under this Act in respect c
of any non-agricultural land in a local area."
Section 11 confers upon the government the power to exempt any
class of non-agricultural lands from the levy. Since it is this section which falls
for consideration in this appea~ it would be appropriate :o set it out in full:
D
"11. Power to exempt : (l) The Government may, by order, pub-
lished in the Andhra Pradesh Gazette, setting out the grounds
thereill, exempt either permanently or for a specified period, any
class of non-agricultural lands from the levy uf assessment under
this Act, subject to such restrictions and conditions as the Govern- E
ment may consider necessary to impose.
(2) Every order made under sub-section (1) shall, immediately
after it is made be laid on the table of the Legislative Assembly if
it is in session, and if it is not in session, in the session immediately
following, for a total period of fourteen days which may be com- F
prised in one session or in two successive sessions and if, before
the expiration of the session in which it is so laid or the session
immediately following, the Assembly agrees in making any
modification in the order or in the annulment of the order, the
order shall thereafter have effect only in such modified form, or G
shall stand annulled, as the case may be, so however that any such
modification or annulment shall be without prejudice to the validity
of anything previously done under that order."
Section 13 confers upon the government the power to make rules to
carry out the purposes of the Act. H
652 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.
· A In the year 1965, the government issued G.O.Ms. No. 877 dated June
16, 1965 under Section 7 of the Act directing that "with a view to provide ·
incentives to the industries established both in the public and private
sectors in the State, either before or after the 1st July, 1963, half of the
assessment payable under the Act in respect of the non-agricultural lands
B . in the entire area of the industrial undertakings shall be remitted for a
period of five years from the date of establishment, or upto the date of
production of rated capacity of such undertakings, whichever is · earlier".
The validity of the G.O. is not in issue nor is it sought to be enforced by
the appellant. It is referred to more as representing the first step in the
matter of providing incentives to newly established industries.
c
In December 17, 1976, the government in Social Welfare department
issued G.0,Ms. No. 201. The G.O. does not purport to have been issued
under any enactment(s). At the end of G.O., it is recited that it is issued
"by order and in the name of the Governor or Andhra Pradesh". The
D contents of the G.0. are to the following effect : with a view to explore the
possibilities of rapid industrialisation of scheduled areas in the State, the
government had set up an expert committee which had submitted its report
in February, 1976. The expert committee had recommended the setting up
of a High-Power Committee to formulate and implement industrial
schemes in the scheduled areas. Government, accordingly, constituted a
E High-Power Committee in May, 1976. The High-Power Committee recom-
mended certain incentives and concessions to industries to be established
in scheduled areas. The government examined the said recommendations
in consultation with the Revenue, Industries and Commerce, Finance and
Planning departments and, hence, the said order. Four types of exemptions
F are provided by the G.O., viz., (i) exemption from sales tax on purchase of
raw material, machinery etc.; (ii) a total exemption from Stamp duty; (iii)
fifty percent exemption in the charge for water used for industrial purposes
drawn from sources maintained at the cost of government or any local
body; and (iv} exemption fr~m non-agricultural assessment. It says, "ac-
cording to the orders issued in G.O. Ms. No. 377 Revenue dated 16.6.1965,
G the entrepreneurs who have established industries whether before or after
1.7.1963 are required to pay half the assessment payable under the Andhra
.Pradesh Non-Agricultural Lands Assessment Act, 1963 in respect of non-
agriculturl!l land in the entire areas of the industrial under-takings for a
period ·of' five years from the date of estabFshment or up to the date of
H production of rated capacity of such undertakings, whichever is earlier. In
I.T.C.BHADRACHAIAMPAPERBOARDSv.MANDALREV.OFFICER[JEEVANREDDY,J.)653
the case of industries set up in the scheduled areas, it is hereby ordered that A
the usual land revenue be levied on the extent of land instead of non-agricul-
tural assessment". It is stated that the orders issued in the said G.O. shall
come into force with immediate effect. The Director of Information and
Public Relations, Director of industries and Director of Tribal, Cultural
Research and Trading Institute and the Convenor of High Power Commit-
B
tee were requested to see that the scheme is given full publicity. Though
the G.O. seeks to provide exemption from the relevant provisions of the
Andhra Pradesh General Sales Tax Act, Stamp Act, laws concerning the
municipalities (water charges) and Andhra Pradesh Non-Agricultural
Lands Assessment Act, it does not refer to the provisions for exemption,
if any, in any of the said enactments nor does it recite that it is issued under c
those provisions.
On May 2, 1990, the government of Andhra Pradesh issued another
order contained in G.O.Ms. No. 386. The G.O. is in two parts, the non-
statutory part and the statutory part. In the non-statutory part of the G.O., D
reference is made to G.0.Ms. No. 877 dated June 16, 1965 and to G.0.Ms.
No. 201 dated December 17, 1976. It refers to the contents of G.O.Ms. No
877 and to the contents of G.0.Ms. No. 201 (insofar as it related to
exemption under the Act). It then states that G.0.Ms. No. 201 was not
published in the Andhra Pradesh Gazette as required under Section 21 of
the Andhra Pradesh General Clauses Act, 1891 and that it !J.lso did not E
clarify whether the concession granted thereby was a permanent one or
was operative only for five years as was provided in G.O.Ms. No. 877. The .
G.O. then recites : "A doubt has, therefore, arisen with regard to im-
plementation of the above concession and the District Collectors of
Adilabad and Khammam have sought for a clariEcation'', that the govern- F
ment has examined the matter carefully in'i'onsultation with the Commis-
sioner of Land Revenue and is issuing the appended notification which was
directed to be published in the extra-ordil'.~iry issue of Andhra Pradesh
Gazette dated May 5, 1990. The statutory pu: of the G.O. may now be set
out. It reads :
G
"In exercise of the powers conferred by sub-section (1) of Section
11 of the Andhra Pradesh Non-Agricultural Lands Assessment
Act, 1963 (Andhra Pradesh Act 14 of 1963), the Governor of
Andhra Pradesh hereby directs that with a view to provide incen-
tives to the industries already established or to be established both H
654 SUPREME COURT REPORTS [1996) SUPP:5 S.C.R.
A in the Public and Private Sectors in the Scheduled Areas of the
State, be exempted from payment of assessment under the Non-
Agricultural Lands Assessment Act, 1963, but the usual land
revenue be levied on the extent of land instead of Non-Agricultural
1
Lands Assessment as per rules.
B The .above concession shall be applicable for a period of 5 years
from the date of establishment of the industry or till the industry
reaches its rated capacity in its production whichever is earlier and
thereafter full assessment under Non-Agricultural Land Assess-
ment Act should be levied and collected from such undertak-
c ings/entrepreneurs.
This notification shall be deemed to have come into force with
effect from 17th December, 1976.
A.N. TIWARI
D SECRETARY TO GOVERNMENT"
The appellant, Bhadrachalam Paper Boards Limited, established a
factory on an extent of about 507 acres 10 guntas of land in Sarapaka
Village in the Scheduled areas of Khammarn district. The land was ac-
quired by the State for the purpose of the appellant. The appellant says
E that it completed the construction of the factory in 1979 and commenced
production on and from Ist October, 1979. When a demand was made by
the Tehsildar in the year 1980 for payment of NALA in respect of the said
land, the appellant submitted that by virtue of G.O.Ms. No. 201 dated
December 17, 1976, it is not liable to pay the said tax. Representations were
F also made to the Collector and the Secretary to the Government in
Revenue department. Notwithstanding that the matter was being con-
sidered at higher levels, the Manda! Revenue Officer continued to issue
demand notices from time to time. Ultimately, on February 16, 1990, the
authorities under the Act raised a demand in a total sum of Rs.
G 23,10,149.SOp for the fasli years 1393 to 1399 (1983-84 to 1988-89) and for
another sum of Rs. 3,07,850 (for the year 1989-90) and sought to attach
the movables of the appellant. In those circumstances, the appellant filed
a writ petition (No. 3091 of 1990) in the High Court of Andhra Pradesh
for issuance of an appropriate writ, order or direction declaring the said
demand of NALA as illegal and unenforceable and to direct the respon~
H dents not to take any action to collect the said assessment from the
I.TC BHADRACHALAM PAPERBOARDS v. MAN DAL REV. OFFICER (JEEVAN REDDY, J.] 655
appellant. It may be noticed that the writ petition was filed sometime prior A
to May 2, 1990, on which date the aforementioned G.O.Ms. No. 386 was
issued.
The respondents opposed the writ petition contending that G.O.Ms.
No. 201 dated December 17, 1976 was not effective or enforceable in law
and that the o~ly exemption to which the appellant is entitled is the one B
provided in G.O.Ms. No. 386 issued on May 2, 1990. The respondents
pointed out that G.O.Ms. No. 386 has been given retrospective effect from
December 17, 1976 which means that it supersedes G.O.Ms. No. 201,
thereby rendering the latter G.O.Ms. totally ineffective and inoperative.
c
The High Court dismissed the writ petition upholding the conten-
tions of the respondents. It also negatived the plea of promissory estoppel
and legitimate expectation put forward by the appellant.
In this appeal, Sri Soli J. Sorabjee, learned counsel for the appellant,
urged the following contentions : D
(1) G.0.Ms. No. 201 dated December 17, 1976 is a valid order issued
under Section 11 of the Act. Though the G.O. does not recite the source
of power or the provision under which it has been issued, it must he related
to the government's power under Section 11. The G.0. has been issued E
complying with all the requirements of Section 11 except two, viz., (i)
publication in the Andhra Pradesh Gazette and (ii) 'laying' before the
)egislature for the requisite period. Both the said requirements are, how-
ever, directory in nature and are not mandatory. It must be held that the
said G.O. is an order of exemption validly issued under Section 11 of the
~ F
(2) Though not published in the Gazette, the G.O. itself directs th\:
several authorities of the government to give it wide publicity and we must
presume that it was so given. Having regard to the fact that the object of
giving publicity is to acquaint the people of the issuance/.- nstence of such G
an order, the publicity given must be deemed to be sufficient. The mere
non- publication in the Gazette is not fatal.
(3) G .O.Ms. No. 201 does not infringe upon or curtail the rights of
anyone. It does not create any liability of tax nor does it create any other
charge upon anyone. It embodies the policy of the government granting H
656 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.
A incentives to new industries set up in scheduled areas of the State. It is an
invitation, an assurance and a promise to potential entrepreneurs to estab-
lish industries in the schedulec;I areas of the State.
(4) The appellant has no control over the Andhra Pradesh govern-
ment. It was the duty of the Andhra Pradesh government to have published
B the said G.O. in the Gazette. It is well-settled that where the prescriptions
of a statute relate to the performance of a public duty and where the
invalidation of acts done in neglect thereof would work serious general
inconvenience or injustice to persons who have no control over those
entrusted with the duty, without promoting the essential aims of the legis-
c lature, such prescriptions should be treated as directory. Non-compliance
with such prescriptions does not affect the validity of the act done in ·
disregard of them.
(5) It is well-settled by a catena of decisions that 'non-laying' of the
rules/orders on the floor of the Legislature as required by law does not
D render the rules or ·the order void or non-existent. The requirement has
been held to be directory only.
(6) The government having issued G.O.Ms. No. 201 cannot and
should not be allowed to question its validity. More so, because the
appellant has acted on it. Where the government acts within the scope of
E its ostensible authority and makes a representation on which another acts,
it must be held bound by it. A defect in procedure or any irregularity can
be waived so as to render the representation valid. Representations and
promises can be embodied in non-statutory executive orders as well. In
other words, the non-compliance with statutory requirement does not
F affect the 'representation' contained in G.O.Ms. No. 201 in any manner.
The doctrine of promissory/equitable estoppel and of the legitimate expec-
tations are attracted in such a case.
(7) Accepting the contention of the respondents would amount to
permitting them to commit a legal fraud. It would amount to subjecting a.
G person to hardship for the fault of the government in carrying out the
requirement of publication and the requirement of 'laying'. Such a, course
would neither be fair nor reasonable. G.O.Ms. No. 201 still subsists and is
operative. G.O.Ms. No. 386, insofar as it purports to give retrospective
effect to the concession contained therein on and from December 17, 1976
H is invalid' and incompetent. G.O.Ms. No 386 is in the nature of the
I.TC BHADRACHA!AM PAPERBOARDS v. MANDALREV. OFFICER (JEEVAN REDDY, J.( 657
delegated legislation. It is well-settled that in the absence of a specific A
·provision in the Act, the rule-making authority cannot give retrospective
effect to the rules made by it.
On the other hand, Sri Ram Kumar, learned counsel for the State of
Andhra Pradesh, urged the following submissions in support of the judg-
B
ment under appeal : G.O.Ms. No. 201 is not valid or enforceable since it
was not published in the Gazette nor was it laid before the Legislature as
required by Section 11. The requirement of publication in the Gazette is
mandatory and not directory. The power of exemption is not a species of
delegated legislation; it is an instance of conditional legislation. The power
under Section 11 can be exercised only in the manner and in accordance c
with the requirements of Section 11 and in no other manner. It does not
take effect and become enforceable until and unless it is published in the
manner prescribed, i.e., in the Gazette. The power of exemption should be
strictly construed. The order which is not in conformity with the require-
ments of Section 11 cannot be treated as an order thereunder, nor can it D
give rise to or form a foundation for the pleas of promissory/equitable
estoppel or to legitimate expectations. It is already held by this Court that
no exemption notification is effective until and unless it is published in the
Gazette as required by the Act. Public interest demands strict compliance
with the said requirement. Moreover, G.O.Ms. No. 386 has been validly E
issued and the retrospective effect given to it on and from December 17,
1976 is equally valid. It means that G.0.Ms. No. 386 must be deemed to
have been issued on December 17, 1976; it is admittedly a statutory G.O.
If so, there cannot be another non-statutory G.O. on the same subject
inconsistent with the terms of the statutory G.0. covering the same period.
F
For this reason too, G.O.Ms. No. 201 is neither effective nor enforceable.
The first question we have to answer is whether the publication of
the exemption notification in the Andhra Pradesh Gazette, as required by
Section 11(1) of the Act, is mandatory or merely directory? Section 11(1)
requires that an order made thereunder should be (i) published in the G
Andhra Pradesh Gazette and (ii) must set out the grounds for granting
the exemption. The exemption may be on a permanent basis or for a
specified period and shall be subject to such restrictions or conditions as
the government may deem necessary. Sri Sorabjee's contention is that while
the requirements that the power under Section ll should be expressed H
658 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.
A through an order, that it must contain the grounds for granting exemption
and that the order should specify whether the exemption is on a permanent
basis or for a specified period are mandatory, the requirement of publica-
tion in the Gazette is not. According to the learned counsel, the said
requirement is merely directory. It is enough, says the counsel, if due
B publicity is given to the order. H ~ relies upon certain decisions to which
we shall presently refer. We find it difficult to agree. The power under
Section 11 is in the nature of conditional legislation, as would be explained
later. The object of publication in the Gazette is not merely to give
information to public. Official Gazette, as the very name indicates, is an
official document. It is published under the authority of the government.
c Publication of an order or rule in the Gazette is the official confirmation
of making of such an order or rule. The version as printed in the Gazette
,is final. The same order or rule may also be published in the newspapers
or may be broadcast by radio or television. If a question arises when was
a particular order or rule was made, it is the date of Gazette publication
D that is relevant and not the date of publication in a newspaper or in the
media [See Pankaj Jain Agencies v. Union of i11dia, [1994] 5 S.C.C. 198. In
other words, the publication of an order or rule is the official irrefutable
affirmation that a particular order or rule is made, is made on a particular
day (where the order or rule takes effect from the date of its publication)
E and is made my a particular authority; it is also the official version of the
order or rule. It is a common practice· in courts to refer to the Gazette
whenever there is a doubt about the language of, or punctuation in, an Act,
Rule or Ord.er. Section 83 of the Evidence Act says that the court shall
presume the genuineness of the Gazette. Court will take judicial notice of
what is published therein, unlike the publication in a newspaper, which has
F.
to be proved as a fact as provided in the Evidence Act. If a dispute arises
with respect to the precise language or contents of a rule or order, and if
such rule or order is not published in the Official Gazette, it would become
necessary to refer to the original itself, involving a good amount of incon-
venience, delay and unnecessa1y controversies. It is for this reason that very
G often enactments provide that Rules and/or Regulations and certain type
of orders made thereunder shall be published in the Official Gazette. To
call such a requirement as a dispensable one - directory requirement - is,
in our opinion, unacceptable. Section 21 of the Andhra Pradesh General
Clauses Act says that even where an Act or rule provides merely for .
H publication but does not say expressly that it shall be published in the
I.T.C BHADRACHAI.AM PAPERBOARDS" MANDALREV. OFFICER!JEEVAN REDDY,J.J 659
official Gazette, it would be deemed to have been duly made if it is A
published in the official Gazette•. As observed by Khanna, J ., speaking for
himself and Shelat, J. in Sammbhu Nath Iha v. Kedar Prasad Sinha & Ors.,
(1972) 1 S.C.C. 573 at 578, the requirement of publication in the Gazette
"is an imperative requirement and cannot be dispensed with". The learned
. Judge was dealing with Section 3(1) of the Commissions of Inquiry Act, B
1952 which provides inter alia that a Commission of Inquiry shall be
appointed "by notification in the official Gazette". The learned Judge held
that the said requirement is mandatory and cannot be dispensed with. The
learned Judge further observed :
"The commission of inquiry is appointed for the purpose of making c
an inquiry into some matter of public importance. The schedule
containing the various allegations in the present case was a part
of the notification, dated March 12, 1968 and specified definite
matters of public importance which were to be inquired into by
the Commission. As such, the publication of the schedule in the D
Official Gazette should be held to be in compliance with the
statutory requirement. The object of publication in an Official
Gazette is twofold : to give publicity to the notification and further
to provide authenticity to the contents of that notification in case
some dispute arises with regard to the contents."
E
To the same effect are the observations in B.K Srinivasan v. State of
Kamataka, (1987) 1 S.C.C. 658. While pointing out the importance of
subordinate legislation in the affairs of the modern State, Chinnappa
Reddy, J., speaking for himself and G.L. Oza, J., made the following
observations :
F
"But unlike Parliamentary legislation which is publicly made,
delegated or subordinate legislation is often made unobstrusively
in the chambers of a Minister, a Secretary to the Government or
other official dignitary. It is, therefore, necessary that subordinate
legislation, in order to take effect, must be published or promul- G
gated in some suitable manner, whether such publication or
Section 21 reads : "21. Publication of Orders and Notifications in the Official Gazette :
Where in any Act or in any rule passed under any Act, it is directed that any order,
notification or other matter shall be notified or published, that notification or publi-
cation shall, unless the Act otheiwise provides, be deemed to be duly made if it is
published in the official Gazette". H
660 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.
A promulgation is prescribed by the parent statute or or not. It will
then take effect from the date of such publication or promulgation.
Where the Parent statute presc1ibes the mode of publication or
promulgation that mode must be followed. Where the parent statute
is silent, but the subordinate legislation itself prescribes the manner
of publication, such a mode of publication may be sufficient, if
B reasonable. If the subordinate legislation does not prescribe the
mode of publication or if the subordinate legislation prescribes a
plainly unreasonable mode of publication, it will take effect only
when it is published through the customarily recognised official
channel, namely, the Official Gazette or some other reasonable
c mode of publication."
The above decisions of this Court make it clear that where the parent
statute prescribes the mode of publication or promulgation that mode has to
be fallowed and that such a requirement is imperative and cannot be dis-
D pensed with.
G.O.Ms. No. 201 purports to exempt a class of persons from the levy
created by a statute. A levy created by a statute can be lifted, suspended
or withdrawn only by a statute or in the manner prescribed by the statute
creating the levy. Dispensing with the levy or payment of tax is a serious
E matter. It is· done only with a view to promote a countt::rvailing public
interest. When such a power is conferred by Legislature upon another
authority, that authority has to, and can, exercise that power only in strict
~ compliance with the requirem:ents of the provision conferring that power.
It is in the interest of general public that such notifications are not only
F given wide publicity but there should also be no dispute with respect to the
date of their making or with respect to the language and contents thereof.
We see no reason to hold that while the other requirements mentioned in
Section 11(1) are mandatory, only the requirement of publication in the
Gazette is not. We see no reason to make such a distinction in the context
of the said sub-section. The power given by Section 11 is of a substantive
G nature besides being in the nature of an exception. For this reason too, the
provision• conferring that power has to be complied with fully, i.e., in all
respects.
Sri. Sorabjee relied upon certain decisions in support of his conten-
H tion to which a reference would be in order. The first decision relied upon
ITC. BHADRACHALAM PAPERBOARDS v. MAN DAL REV. OFFICER IJEEVAN REDDY,J.J 661
is in Bangalore Woollen and Cotton Silk Mills v. Corporation of City of A
Bangalore, [1961] 3 S.C.R. 707, rendered by a Constitution Bench. The
procedure for Levying Municipal taxes is provided in Section 98 of the City
of Bangalore Municipal Corporation Act. It requires that the resolution
intending to imposti a tax should be published in the Official Gazette and
in the local newspapers. The rate-payers can submit their objections in B
response to such publication, after considering which the Corporation may
levy the tax or duty by a resolution which is also required to be published
in the Official Gazette and in the local newspapers. The Corporation
passed a resolution levying the tax but the notification levying the tax was
not published in the Gazette. It was contended by the appellant before this
Court that the said non-publication was fatal to the legality of the imposi- C
tion of tax. Reliance was placed on the decision of this Court in Har/a v.
State of Rajasthan, [1952] S.C.R. 110 and State of Kera/a v. P.J. Joseph, AIR
(1958) SC 296. The Constitution Bench did not say that the requirement of
Publication in the Official Gazette is not mandatOJy or that it is directOJy. It
merely held that Section 38(1) cured the said defect/hTegula1ity. Section 39(1) D
provides that "no act done or proceeding taken under this Act shall be
questioned merely on the ground ........... (b) of any defect or irregularity in
such ~ct or proceeding not effecting the merits of the case". The Constitu-
tion Bench held that the provision in Section 38(1)(b) is "unambiguous and
clear and it validates any defect in any act done or proceedings taken under
the Act and makes it immune from being questioned on the ground of E
defect or irregularity in such act or proceedings not affecting the merits of
the case". The Court referred to the fact that the said resolution was
published in the newspapers and was also communicated to those affected
by it and was thus well-known. The Court held that the failure to publish
it in the government Gazette did not affect the me1its of the imposition and p
that, therefore, the validity of the levy cannot be questioned. It cannot be
said that the said decision supports the proposition of Sri Sorabjee in any
manner. The entire decision turned upon the provision in and effect of
Section 38(1)(b) of the said Act.
The next decision relied upon is in Municipal Board, Sitapur v. Prayag G
Narain Saigal & Finn Moosaram Bhagwandas, (1969) 3 S.C.R. 387. The
Uttar Pradesh Municipalities Act, 1916 prescribes the procedure for levy
of water tax in Sections 131 to 135. Now, what happened in that case is :
the Municipal Board prepared a draft of the rules proposing to levy tax as
required by Section 131(2) and published it in the manner prescribed by H
662 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.
A Section 131(3) read with Section 94. To wit, the draft rules were published
in "Rashtra Sandesh", a local newspaper published in Hindi. Objections
were received and were duly considered by the Board. The Board decided
to modify the original proposals by reducing the rate of tax. Though the
modified proposals were also required to be published just like the original
B proposals, they were not so published as a fact. After receiving the sanction
of of the appropriate authority, the Board passed a special resolution on
April 23, 1957 as contemplated by Section 134(2) of the Act directing that
the imposition of the tax shall take effect from October 1, 1957. This special
resolution was not published in the manner prescribed by Section 94. Be
that as it may, on receipt of the special resolution, the prescribed authority,
C acting under Section 135(2), notified in the Official Gazette dated August
3, 1957 that the tax imposed shall take effect from the appointed day.
Sub-section (3) of Section 135 provides that "a notification of the imposi-
tion of a tax under sub-section (2) shall be conclusive proof that the tax
has been imposed in accordance with the provisions of this Act". Three
D objections were raised by the rate-payers to the levy of water tax, viz., (a)
omission to publish the preliminary proposal in the manner prescribed by
Section 131(3) .read with Section 94, (b) non-publication of the modified
proposal in accordance with Section 132(2) and (c) non- publication of the
special resolution directing the imposition of tax in accordance with Sec-
E tion 94. All the three objections were negatived by a three-Judge Bench of
this Court. With respect to the first objection, it was held that though the
publication was not in the prescribed from, yet the omission was a mere
irregularity and since the object of publication under Section 131(3) is to
inform the inhabitants of the proposal and to enable them to file objection,
that object was achieved by publication in the local daily "Rashtra San-
F desh". With respect to the second objection, it was held that since the local
inhabitants did have the notice of the proposal and did indeed submit their
objections, no prejudice is caused by not inviting fresh objections to the
modified proposals. The Court also pointed out that the modified
proposals raised the exemption limit and reduced the rate of tax and was
G thus in no way prejudicial to the inhabitants. With respect to the third
objection, the Court observed that the special resolution did not require to
be published in accordance with Section 94. Even if it is assumed that it
required to be so published, the Court held, the non-publication was a
mere irregularity for the reason that the inhabitants had no right to file
H any objections to the special resolution. The Court also observed that the
l.T.C. BHADRACHAl.AM PAPERBOARDS v. MAN DAL REV. OFFICER fJEEVAN REDDY,J.] 663
inhabitants had clear notice of the imposition of the tax from the notifica- A
tion published in the Official Gazette on August 3, 1957 and that the defect
of non-publication of special resolution in the manner prescribed by Sec-
tion 94 was cured by sub-section (3) of Section 135. It would be noticed
immediately that the objection of non-publication pertained to the
proposals and modified proposals to levy taxes and that requirement was B
held to be not mandatory. So far as the special resolution is concerned, the
.~
Court held that it did not require to be published in the manner prescribed
by Section 94. Even if it is required to be published, the Court held, the
said defect of non-publication was cured by sub-section (3) of Section 135
which provided that "a notification of the imposition of a tax under sub-
section (2) (of Section 135) shall be conclusive proof that the tax has been c
imposed in accordance with the provisions of this Act". This decision too
does not say that where a notification levying tax is required by the Act to
be published in the Official Gazette, the non-publication of the Official
Gazette does not vitiate the levy. The decision thus turned upon the
particular facts of that case and the particular provisions concemed therein. D
Sri Sorabjee then relied upon the decision in Raza Buland Sugar Co.
Ltd. v. Municipal Board, Rampur, [1965] 1 S.C.R. 970. This was also a case
of levy of water tax by Rampur Municipal Board under the provisions of
the Uttar Pradesh Municipalities Act, 1916. The draft rules proposing the E
levy of water tax were not published in the manner required by Section
131(3) read with Section 94(3) of the Said Act. In other words,_ the draft
proposals were not published in the Hindi newspaper but were published
in a local newspaper published in Urdu though the notification as publish-
ed was in Hindi. The complaint did not pertain to the non-publication of
the final notification levying taxes but only to publication of draft proposals. F
The majority (Gajendragadkar, CJ., Wanchoo and Raghubar Dayal, JJ.)
held that Section 131(3) read with Section 94(3) consists of two parts, the
first one providing that the proposals and the draft rules for a tax intended
to be imposed should bf'. published for the objections of the public, if any,
and the second laying down that the publication must be in the manner
prescribed in Section 94(3) •. The majority held that having regard to the G
object underlying the provision for publication, it must be held that while
the first part is mandatory, the second part is not. In that case, it was held
Section 94(3) read as follows : "Every resolution passed by a board at a meeting shall,
as soon thereafter as may be, be published in a local paper published in Hindi and
where there is no such local paper, in such manner as the State Government may, by
general or special order, direct.• H
1
I,
t
664 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.
A the first part was complied with but that there was an irregularity in
complying with the second part inasmuch as instead of publishing in a local
newspaper published in Hindi, the proposals were published in a local
paper published in Urdu though the publication itself was in Hindi lan-
guage. It was 'also found that there was no regularly published local Hindi
newspaper in Rampur. It was held that there was substantial compliance
B with Section 9~(3) in the circumstances of the case and fwther that Section
135(3) which created a conclusive presumption that the tax had been imposed
in accordance 'with the provisions of the Act, excludes any complaint of defect
in procedure. We are unable to see how this decision helps the appellant's
contention. There was a publication indeed in that case as required by law.
C The only defect was instead of publication in a local newspaper published in
Hindi (as a matter offact, there was no such newspaper in Rampur), the
publication was effected in a Urdu newspaper though the notification publish-
ed was in Hindi. We are, therefore, of the opinion that the decisions relied
upon do not support the proposition that an exemption notification, which
is a species of conditional legislation, need not be published in the Official
D Gazette though it is so required expressly by the statute itself.
Sri Sorabjee then relied upon the proposition repeatedly affirmed by
' "generally speaking the provisions of a statute creating
this Court that
public duties are directory and those conferring private rights are impera-
E tive. When the provisions of a statute relate to the performance of public
duty and the case is such that to hold null and void acts done in neglect of
this duty would work serious general inconvenience or injustice to persons
who have no control over those entrusted with the duty and at the same
time would not promote the main object of the legislature, it has been the
practice of ,the Courts to hold such provisions to be directory only, the
F neglect of tliem not affecting the validity of the acts done" (Dattatraya
Moreshwar v:'State of Bombay, [1952] S.C.R. 612 reiterating the proposition
in J.K. Gas Plant Manufacturing Company (Rampur) Limited v. Emper01; '
(1947) F.C.R. 141. There can be little doubt about the proposition but it is
difficult to agree that this principle can be employed to dispense with a
G mandatory .requirement. It can certainly be invoked where the omission or
irregularity is directory in nature but certainly not where the requirement
is mandatory. No case has been brought to our notice holding otherwise.
In this vie~, of the matter, we do not think it necessary to deal with the
decisions cited at any length · except with Dattatraya Moreshwar. The
H matter arose under the Preventive Detention Act, 1950. The decision of
1.T.C: BHADRACHAlAM PAPERBCARDS v. MANDALREV. OFFICER (JEEVAN REDDY, J.J 665
the government confirming the detention order was not authenticated in A
the manner prescribed by Article 166. It was argued that since the decision
of the government is not so expressed, it must be deemed that there is no
decision by the government. This contention was repelle<\ holding firstly
that the Preventive Detention Act did not prescribe any particular form
for expressing the decision of the government confirming the detention. B
Even if it is assumed that the said decision being an executive decision, has
to be expressed and authenticated in the manner laid down in Article 166,
the Court held, the omission to comply with those provisions does not
render the executive action a nullity. Where such a decision has in fact
been taken by the appropriate government, it was held, there is no further C
requirement of law which has to be complied with. It is in this connection
that the aforesaid principle was invoked and relied upon. There is a
qualitative difference between the situation dealt with in Dattatraya
Moreshwar and the situation before us. There the Preventive Detention Act
did not require that the decision of the government should be expressed
or authenticated in a particular manner. Since it was a decision of the D
government, it was argued that it had to be I
expressed and authenticated
in the manner prescribed by Article 166. Thus, the defect pointed out in
that case merely related to the from i11 which the decision was commu11i-
.cated. Whereas in the case before us, the requirement relates to the very
manner in which the order is to be made. The decision in State of Uttar E
Pradesh v. Ma11bodha11 Lal Srivastava, [1958) S.C.R. 533 relied upon by Sri
Sorabjee also related to a directory provision (Article 320(3)(c) of the
Constitution).
We may next consider the nature of the power under Section 11. The F
question is whether the power conferred thereunder is a species of
delegated legislation or is it conditional legislation. The matter is no longer
res integra. In fa/an Trading Company v. Mill Mazdoor U11io11, [1967) 1
S.C.R. 15, one of the questions raised and answered pertained to the nature
of the power conferred upon the government by Section 86 of the Payment G
or Bonus Act, 1965. Section 36 empowered the government to exempt an
establishment or a class of establishments from the operation of the Act
provided the government is of the opinion that having. regard to the
financial position and other relevant circumstances of the establishment, it
would not be in the public interest to apply all or any of the provisions of
the Act. Shah, J., speaking for the majority, held that "the power so H
666 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.
A confen-ed does 1io1 amount to delegation of legislative authority. Section 36
amounts to conditional legislation, and is not void". It was further observed
that "condition for exercise of that power is that the Government holds the
opinion that it is not in the public interest to apply all or any of the
provisions of the Act to an establishment or class of establishments, and
that opinion is founded on a consideration of the financial position and
B
other rele~ant circumstances. Parliament has clearly laid down principles
and has given adequate guidance to the appropriate Government in im-
plementing the provisions of S. 36.......Whether in a given case, power has
been properly exercised by the appropriate Government would have to be
considered when that occasion arises." Hidayatullah, J., speaking for him-
C self and Ramaswami, J., (minority opinion) did not say otherwise on this
aspect. The learned Judge observed : "the Section (36) cannot lightly be
described as a piece of delegated legislation".
In.Hamdard Dawakhana v. Union of India, [1960) 2 S.C.R. 671, this
D Court dealt with the distinction between conditional legislation and
delegated legislation. The following observations are apposite : ·
"The distinction between conditional legislation and delegated
legislation is this that in the former the delegate's power is that of
.determining when a legislative declared rule of conduct shall
E become effective; Hampton & Co. v. United Stated, (1927) 276 U.S.
394, and the latter involves delegation of rule making power which
constitutionally may be exercised by the administrative agent. This '
means that the legislature having laid down the broad principles
of its policy in the legislation can then leave the details to be
F supplied by the administrative authority. In other words by
· delegated legislation the delegate completes the legislation by
supplying details within the limits prescribed by the statute and in
the case of conditional legislation the power of legislation is exer-
. cised by the legislature conditionally leaving to the discretion of
· an external authority the time and manner of carrying its legislation
G into effect as also the determination of the area to which it is to
·extend; (The Queen v. Burah, (1878) 3 A.C. 889; Russell v. The
·Queen, (1882) 7 A.C. 829, 835; King-Emporer v. Benoarilal Sanna,
(1944) L.R. 72 I.A. 57; Sardar lnder Singh v. State of- Rajasthan,
(1957) S.C.R. 604. Thus when the delegate is given the power of
H making rules and regulations in order to fill in the details to carry
J.T.C. BHADRACHALAM PAPERBOARDs v. MANDALREV. OFFICER fJEEVAN REDDY,J.] 667
out and subserve the purposes of the legislation the manner in A
which the requirements of the statute are to be met and the rights
therein created to be enjoyed it is an exercise or delegated legis-
lation. But when the legislation is complete in itself and the
legislature has itself made the law and the only function left to the
delegate is to apply the law to an area or to determine the time B
and manner of carrying it into effect, it is conditional legislation.
To put it in the language of another American case :
'To assert that a law is less than a law because it is made to
depend upon a future event or act is to rob the legislature of the
power to act wisely for the public welfare whenever a law is passed C
relating to a state of affairs not yet developed, or to things future
and impossible to fully know.'
The proper distinction there pointed out was this :
'The legislature cannot delegate its power to make a law, but D
it can make a law to delegate a power to determine some fact or
state of things upon which the law makes or intends to make its
own action depend. There are many things upon which wise and
useful legislation must depend which cannot be known to the law
making power, and must therefore be subject of enquiry and E
determination outside the hall of legislature.' ( In Lockes Appeal
72 Pa. 491; Field v. Clark, [1892) 143 U.S. 649."
Hamdard Dawakhana was, of course, a case where clause (d) of
Section 3 of the Drugs and Magical Remedies (Objectionable Advertise-
ments) Act, 1954 conferred upon the government the power to specify by F
Rules made under the Act the diagnosis, cure etc. respecting which the
advertisement of a drug was prohibited. The question before the Court was
whether it is a case of delegated legislation or conditional legislation. The
Court ultimately held that it belongs to the former category and is void
being violative of Article 14 of the Constitution.
G
We may in this connection refer to the decision of the Supreme Court
of United States in Field v. Clarke, (1892) 143 U.S. 649 = 36 lawyers Edn.
294. The Tariff Act of 1890 empowered the President to suspend the
operation of the Act, permitting free import of certain products within
United States, on being satisfied that the duties imposed upon such H
668 SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
A products were reciprocally unequal and unreasonable. It was submitted
that the said power transfers the legislative and treaty-making power to the
President and, hence unlawful. The attack was repelled holding that the
President was a mere agent of the Congress to ascertain and declare the
contingency upon which the will of the Congress was to take effect. The
Court quoted with approval the following passage from an earlier case :
B
"The legislature cannot delegate its power to make a law, but it
can riiake a law to delegate a power to determine some fact or
state of things upon which the law makes, or intends to make its
own action depend. To deny this would be to stop the wheels of
c '
government. There are many things upon which wise and useful
legislation must depend which cannot be known to the law making
power and, must, therefore, be a subject of enquiry and determina-
tion outside the halls of the Legislation.
Reference may also be made to the decision of this Court in T11/sip11r
D Sugar Co. Ltd. v. Notified Area Committee, Tulsipur, (1982] 2 S.C.C. 295
where the power conferred upon the government by Section 3 of the Uttar
Pradesh Town Areas Act, 1914 to extend the limits of town area was also
to be a power in the nature of conditional legislation it was held that the
power was legislative in character and, therefore, the incidents applicable
E to an administrative order do not apply to it.
What is, however, relevant is that the power to bring an Act into
force as well as the power to grant exemption are both treated, without a
doubt, as belonging to the category of conditional legislation. Very often
the legislature makes a law but leaves it to the executive to prescribe a date
F with effect from which date the Act shall come into force. As a matter of
fact, such a. course has been adopted even in the case of a constitutional
amendment, to wit, the Constitution (Forty-fourth Amendment) Act, 1978,
insofar as it pertains to amendment of Article 22 of the Constitution. The
power given to the executive to bring an act into force as also the power
G conferred upon the government to exempt persons or properties from the
operation of the enactment ari~ both instances of conditional legislation and
cannot be described as delegated legislation.
The next question is whether the power of conditional legislation can
be exercised with retrospective effect.. The decision of this Court in A.
H 171a11gal K1111ju Musa/iar v. M. Ve11katachalam Potti, Authorised Official and
lT.C BHADRACHAlAMPAPERBOARDSv. MANDALREV. OFFICER[JEEVANREDDY,J.] 669
Income-Tax Officer & Anr., [1955] 2 S.C.R. 1196 considered this question. A
The Travancore Legislature had enacted the Tranvancore Taxation on
Income (Investigation Commission} Act (14 of 1124}. Section 1(3)
"authorised the government to bring the Act into force on such date as it
may, by notification, appoint". The. government issued a notification in
exercise of that power on July 26, 1949 stating that the Act is brought into
B
force with effect from July 22, 1949; The contention before this Court was
that in the absence of an express provision in Section 1(2} authorising the
government to fix the date of commencement. of the Act with retrospective
effect, the government had no power to·say on July 26, 1949 that the Act
must be deemed to have come into operation on July 22, 1949. This
contention was negatived by the Constitution Bench of this Court in the c
following words :
"The reason for which the Court disfavours retroactive operation
of laws is that it may prejudicially affect vested right.
D
No such reason is involved in this case. Section 1(3} authorises
the Government to bring the Act into force on Such date as it may,
by notification, appoint. In exercise of the power conferred by this
section the Government surely had the power to issue the notifica-
tion bringing the Act into force on any date subsequent to the
passing of the Act. There can, therefore, be no objection to the E
notification fixing the commencement of the Act on 22.7.1949
which was a date subsequent to the passing of the Act.
So the Act has not been given retrospective operative, that is
to say, it has not been made to commence from a date prior to the p
date of its passing. It is true that the date of commencement as
fixed by the notification is anterior to the date of the notification
but that circumstance does not attract the principle disfavouring
the retroactive operation of a statute.
Here there is no question of affecting vested rights. The opera- G
tion of the notification itself is not retrospective. It only brings the
Act into operation on and from an earlier date. In any case it was
in terms authorised to issue the notification bringing the Act into
force on any date subsequent to the passing of the Act and that is
all that the Government did." H
670 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.
A There appears no reason why the logic of the above holding should
not be applied to the power under Section 11{1) of the Act. The sub-sec-
tion says that the government can grant the exemption "either permanently
or for a specified period". Having regard to the nature of the power and
the character of the provision, we find no good reason to hold that this
power can be exercised only prospectively. The period specified can cover
B
either wholly or partly the period anterior to the date of order so long as
the period specified is subsequent to the commencement of the Act. We
are, therefore, of the opinion that the retrospective operation given to
G.0.Ms. No. 386 is valid and lawful. Once this is so, the very existence of
G.0.Ms. No .. 201 becomes doubtful. There cannot be a statutory and a
C non-statutory G.0. On the same subject and covering the same period,
inconsistent with each other. While G.O.Ms. No. 386 provides exemption only
from a period of five years prescribed therein, G.O.Ms. No. 201 pertains to
grant the exemption on a permanent basis. The appellant can, therefore claim
exemption only under and in accordance with G.O.Ms. No. 386.
D
The next question is whether the requirement of 'laying' before the
Legislature is mandatory? Sub-section (2) of Section 11 of the Act requires
that an order made under Section 11(1) shall be laid on the Table of thl
Legislative Assembly for the period prescribed therein and shall be subject
to such modifications as may be made by the Legislature. The legislature
E is also entitled to annul the said order. This is one form of legislative
control over subordinate legislation. Sri Sorabjee cited the decision of this
Court in M/s.'Atlas Cycle Industries Ltd. & Ors. v. State of Haryana, (1979)
2 S.C.C. 196 holding that the requirement of 'laying', couched in the
language akin to Sub-section (2) of Section 11 - a case of 'simple laying' in
F contra-distinction to 'laying subject to negative resolution' and 'laying
subject to affirmative resolution' - is not mandatory notwithstanding the use
of the expression "shall" in the relevant provision. The Court was dealing
with sub-section (6) of Section 3 of the Essential Commodities Act, 1955
which provides for laying the orders made under the Act before the
appropriate Legislature, an instance of 'simple laying' or 'laying without ·
G further procedure'. The said decision appears to be consistent with the
authorities on the subject, both in India and in United Kingdom, and is ·
binding upon us. It is brought to our notice that as early as 1956, Subba
Rao, C.J. had taken the same view in Andhra Pradesh High Court vide
D.K. Krishnan v. Secretary, Regional Transport Authority, Chittoor, {1956)
H AP. 129. Accordingly, we hold that the requirement of 'laying' prescribed
LT.CBHADRACHALAMPAPERBOARDSv.MANDALREV.OFFICER(JEEVANREDDY,J.]671
by sub-section (2) of Section 11 is not mandatory and an order of exemp- A
tion under Section 11 cannot be said to be ineffective or unenforceable for
the reason of 'non-laying' as required by Section 11(2) of the Act
Sri Sorabjee next contended that even if it is held that the publication
in the Gazette is mandatory yet G.O.Ms. No. 201 can be treated as a B
representation and a promise and inasmuch as the appellant had acted
upon such representation to his detriment, the government should not be
allowed to go back upon such representation. It is submitted that by
allowing the government to go back on such representation, the appellant
will be prejudiced. Learned counsel also contended that where.the govern-
ment makes a representation, acting within the scope of its ostensible c
authority, and if another person acts upon such representation, the govern-
ment must be held to be bound by such representation and that any defect
in procedure or irregularity can be waived so as to render valid which
would otherwise be invalid. Counsel further submitted that allowing the
government to go back upon its promise contained in G.O.Ms. No. 201 D
would virtually amount to allowing it to commit a legal fraud. For a proper
appreciation of this contention, it is necessary to keep in mind the distinc-
tion between an administrative act and an act done under a statute. If the
statute requires that a particular act should be done in a particular manner
and if it is found, as we have found hcreinbefore, that the act done by the
government is invalid and ineffective for non-compliance with the man- E
datory requirements of law, it would be rather curious if it is held that
notwithstanding such non-compliance, it yet constitutes a 'promise' or a
representation for the purpose of invoking the rule of promissory/equitable
. estoppel. Accepting such a plea would amount to nullifying the mandatory
requirements of law besides providing a licence to the government or other F
body to act ignoring the binding provisions of law. Such a course would
render the mandatory provisions of the enactment meaningless and super-
fluous. Where the field is occupied by an enactment the executive has to
act in accordance therewith, particularly where the provisions are man-
datory in nature. There is no room for any administrative action or for
doing the thing ordained by the statute otherwise than in accordance G
therewith. Where, of course, the matter is not governed by a law made by
a competent Legislature, the executive can act in its executiv~ capacity
since the executive power of the State extends to matters with respect to
which the Legislature of a State has the power to make laws (Article 162
of the Constitution). The proposition urged by the learned counsel for the H
672' SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.
A appellant falls foul of our constitutional scheme and public interest. It
would virtually mean that the rule of promissory estoppel can be pleaded
to defeat the provisions of law whereas the said rule, it is well settled, is
not available against a statutory provision. The sanctity of law and the
sanctity of the mandatory requirement of the law cannot be allowed to be
defeated by resort to rules of estoppel. None. of the decisions cited by the
B learried counsel say that where an act is done in violation of a mandatory
provision of a statute, such act can still be made a foundation for invoking
the rule of promissory/equitable estoppel. Moreover, when the government
acts outside its authority, as in this case, it is difficult to say that it is acting
within its ostensible authority. If so, it is also not permissible to invok"e the
C principle enunciated by the Court of Appeal in Wells & Ors. v. Min.ister of
Housing & Local Government & Anr., (1967] 2 All. E.R 1041.
· Sri Sorabjee, however, relied upon certain observations in the
opinion of Chandersekhara Aiyer, J. in Collector of Bombay v. Municipal
D Corporation of the City of Bombay, (1952] S.C.R. 43. We may briefly notice
. the factual context in which the observations relied upon were made. In
the year 1865, the Government of Bombay called upon the predecessor-in-
title of the Corporation of Bombay to remove certain existing markets from
a particular site and to vacate it. In considerations thereof, the government
passed a resolution approving and authorising the grant of another site to
E the municipality stating that the government shall not charge any rent for
the said site since it was· to be used for the benefit of the community. The
Corporation accordingly gave up the old markets and constructed a new
market in the alternate site allotted by the government. About eighty years
later, i.e., in 1940, the Collector of Bombay proposed to levy land revenue
on the aforesaid alternate site. The corporation sued for a declaration that
F the said assessment was illegal and for a further declaratioh that it was
entitled to hold the land for ever without payment of.the assessment. It was
held by this court that though there was no effectual grant by th:e govern-
ment passing title in the land to the corporation by reason of non- com-
pliance with the statutory formalities, yet inasmuch as the corporation had
G nevertheless taken possession of the land in terms of the government
resolution and continued in such possession openly, un-interruptedly and
as of right for over seventy years, the corporation had acquired the limited
title it had.been prescribing for, i.e., the right to hold the land in perpetuity
free of rent for the purpose of the market but for no other purpose. The
majority decision did not express any opinion on the question whether the
H principle of equity enunciated in Ramsden v. Dyson, (1866) LR 1 HL U9
l.T.C BHADRACHALAM PAPERBOARDS v. MANDALREV. OFFICER (JEEVAN REDDY,l] 673
can still prevail in India in the face of the decision of the Privy Council in A
Arif! v. Jadunath, (1931) LR 58 I.A. 91. In other words, the majority did
not expr~ss any opinion on the question whether the principle of equity in
Ramsden can be invoked even where the requirements or formalities laid
down in the statute are not complied with. Chandrasekhara Aiyer, J. too,
in his concurring opinion, opined that the corporation had acquired title
to the land by operation of law of limitation, i.e., on account of its long B
standing possession in its own right. Having so held, the learned Judge
made the following observations - relied upon by Sri Sorabjee :
"Can the Government be now allowed to go back on the repre-
sentation, and, if we do so, would it not amount to our countenanc- C
ing the perpetration of what can be compendiously described as
legal fraud which a court of equity must prevent being committed?
If the resolution can be read as meaning that the grant was of
rent-free land, the case would come strictly within the doctrine of
estoppel enunciated in section 115 of the Indian Evidence Act. But D
even otherwise, that is, if there was merely the holding out of a
promise that no rent will be charged in the future, the Government
must be deemed in the circumstances of this case to have bound
themselves to fulfil it. Whether it is the equity recognised in
Ramsden's case, (1866) L.R. 1 H.L. 129, or it is some other form E
of equity, is not of much importance. Courts must do justice by
the promotion of honesty and good faith, as far as it lies in their
power. As pointed out by Jenkins CJ. in Dadoba !011ardhan v. T71e
Collector of Bombay, (1901) I.L.R. 25 Born. 714, a different con-
clusion would be 'opposed to what is reasonable, to what is
F
probable, and to what is fair.'
I am of the opinion that the decision of the Privy Council in Ariff
v. Jadunatlt, (1931) 58 I.A. 91, is not applicable to the facts before
us, as the doctrine of part performance is not being invoked here G
as in that case, to clothe a person with title which he cannot acquire
except by the pursuit of or in conformity with certain legal forms
Here, as pointed out already, the Corporation became the full and
absolute owner of the site on the lapse of 60 years from the date
ofthe grant." H
674 . '
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.
A We. find it difficult to treat the said observations as an authority for
the proposition that even where the government has to and can act only
under and in accordance with a statute - and that too a statute containing
mandatory provisions - an act done by the government in violation thereof
can yet be treated as a representation to found a plea of promissory
estoppel. Sri Sorabjee relied upon certain decisions of the Bombay High
B Court in Dadoba Ja11ardha11 v. The Collector of Bombay, (1901) ILR 25
Born. 714 at 746 and Municipal Corporation of the City of Bombay v. 171e
Secretary of State for India i11 Council, (1905) ILR 29 Born. 580 at 676c78
in support of the said proposition. But in the light of what we have said
hereinabove - which in our opinion is consistent with our constitutional
C scheme and public policy - we do not think it necessary to deal with the
facts and ratio of the said decisions.
"
For the above reasons, the appeals fail and are dismissed. No costs.
This order does not preclude the appellant from seeking the benefit
D of G.O.Ms. No. 386 dated May 2, 1990 in accordance with its terms.
v.s.s. Appeals dismissed.
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