Case Note & Summary
The dispute concerned the management and proposed sale of two evacuee business concerns in Kozhikode, which vested in the Custodian of Evacuee Property after their proprietors migrated to Pakistan in 1947. The appellant, Lekhraj Satramdas Lalvani, was appointed Manager of the two firms in 1952 under Section 10(2)(b) of the Administration of Evacuee Property Act, 1950, furnishing security of Rs. 20,000. In 1956, the Chief Settlement Commissioner and the Custodian issued letters indicating an in-principle decision to allot the concerns to the appellant and ultimately sell them to him, but terms were never finalized. In 1958, a public auction was advertised, prompting the appellant to move the Kerala High Court, which initially restrained the sale pending an order from the Chief Settlement Commissioner. After the Chief Settlement Commissioner's order in September 1959, the Deputy Custodian terminated the appellant's management by order dated December 18, 1959 and took over possession. The appellant filed a writ petition seeking to quash the termination, regain possession, and prevent sale. A Single Judge of the Kerala High Court granted partial relief by restraining the sale but refused the third prayer; on cross-appeals, a Division Bench dismissed the appellant's appeal and allowed the respondents' appeal, denying all reliefs. The appellant then appealed to the Supreme Court by certificate under Article 133(1)(a) of the Constitution. The Supreme Court framed four main issues: whether the Deputy Custodian had implied power to cancel the appellant's appointment under Section 10(2)(b) of the 1950 Act read with Section 16 of the General Clauses Act, 1897; whether the cancellation order was invalid because it was made under the Displaced Persons (Compensation and Rehabilitation) Act, 1954, which conferred no such power; whether writ relief was available for a contractual appointment; and whether the 1956 letters constituted a final allotment or concluded contract of sale. The appellant argued that no power of removal was conferred by the 1950 Act, that the order under the 1954 Act was ultra vires, and that the letters created a vested right. The respondents contended that the power to appoint includes the power to dismiss, that the 1950 Act remained in force, and that no concluded contract existed. The Court held that the power of appointment under Section 10(2)(b) necessarily includes the power to suspend or dismiss, as expressly provided by Section 16 of the General Clauses Act, 1897. It rejected the argument that the cancellation order was invalid because it was made under the 1954 Act, since the 1950 Act had not been repealed and the officer also held authority as Deputy Custodian under that Act; the act should be ascribed to the authority that makes it valid. The Court further held that writs under Article 226 cannot be issued to enforce contractual obligations; the appellant's appointment was contractual, not statutory. Finally, the letters Ex. P-5 and Ex. P-8 were merely statements of intent and did not amount to a final allotment or concluded contract of sale. Accordingly, the Supreme Court dismissed the appeals and affirmed the High Court's decision, finding the cancellation valid and denying all reliefs claimed by the appellant.
Headnote
A) Administrative Law - Implied Powers - Termination of Appointment - General Clauses Act, 1897, Section 16; Administration of Evacuee Property Act, 1950, Section 10(2)(b) - The appellant was appointed as Manager of evacuee shops under Section 10(2)(b) and later removed by the Deputy Custodian. The court held that the power to appoint implies the power to suspend or dismiss, as codified in Section 16 of the General Clauses Act, 1897. Held that the Deputy Custodian could lawfully terminate the appellant's management ([124 F-G]). B) Administrative Law - Validity of Order under Wrong Provision - Ascription to Valid Authority - Administration of Evacuee Property Act, 1950, Section 10(2)(b); Displaced Persons (Compensation and Rehabilitation) Act, 1954 - The cancellation order was signed by the Managing Officer-cum-Deputy Custodian under the 1954 Act, which did not confer such power. The court assumed the 1954 Act did not authorize cancellation but the 1950 Act remained in force and the officer held authority as Deputy Custodian under that Act. Held that the act of a public servant must be ascribed to an actual existing authority under which it would be valid, so the order was valid ([125 C-E]). C) Writ Jurisdiction - Contractual Appointments - Mandamus Not Available - Constitution of India, Article 226 - The appellant's appointment as Manager arose under a contract, not a statutory duty. The court held that writs can be issued only to enforce performance of statutory duties, not duties under a contract. Referred to Commissioner of Income-tax, Bombay Presidency and Aden v. Bombay Trust Corporation Ltd. and P.K. Barnerjee v. L.J. Simonds. Held that even if the cancellation was illegal, the appellant was not entitled to a writ from the High Court ([126 A-B]). D) Contract Law - Concluded Contract - Allotment and Sale - Administration of Evacuee Property Act, 1950 - The letters Ex. P-5 and Ex. P-8 indicated an in-principle decision to allot and ultimately sell the concerns to the appellant, but did not constitute a final allotment or concluded contract of sale. Held that the letters did not show any concluded contract, so the appellant could not claim possession or prevent sale based on them ([127 A-B]).
Issue of Consideration
Whether the Deputy Custodian had power to cancel the appellant's appointment as Manager under Section 10(2)(b) of the Administration of Evacuee Property Act, 1950 read with Section 16 of the General Clauses Act, 1897; whether the cancellation order made under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 was invalid; whether writ jurisdiction could be invoked to enforce a contractual appointment; and whether letters Ex. P-5 and Ex. P-8 constituted a final allotment or concluded contract of sale.
Final Decision
The Supreme Court dismissed Civil Appeal Nos. 414-416 of 1963. It held that the Deputy Custodian had implied power to cancel the appellant's appointment under Section 10(2)(b) of the Administration of Evacuee Property Act, 1950 read with Section 16 of the General Clauses Act, 1897. The cancellation order was valid despite being made under the Displaced Persons (Compensation and Rehabilitation) Act, 1954, because the 1950 Act remained in force and the officer had authority as Deputy Custodian under that Act. Further, writs were not maintainable to enforce a contractual appointment. The letters Ex. P-5 and Ex. P-8 did not constitute a final allotment or concluded contract of sale. The High Court's decision was affirmed.
Law Points
- Power of appointment includes power to suspend or dismiss
- Section 16 General Clauses Act
- 1897
- Section 10(2)(b) Administration of Evacuee Property Act
- 1950
- Act of public servant ascribed to valid existing authority
- Writs not available for contractual duties
- Letters of intent do not constitute concluded contract
