Smt. Ningavva F. Banagara and Others vs The Tahsildar, Ranebennur and Ors.,

Chandrakantharaj Urs, J.-In these three petitions filed as a common petition, petitioners have challenged their termination of the agreement that existed between the petitioners and the Government of Karnataka. By the said agreement, they were permitted or licenced to trade as Fair Price Shops in addition to their trade, trading in such commodities which the Government supply at the prices fixed by the Government for a commission to be given by the Government. The termination has been the result of a Government Order dated 31-12-83. The Deputy Director of Food and Civil Supplies has, by his letter, called upon the Deputy Commissioner to issue necessary direction to cancel the licence granted to the petitioners to run Fair Price Depots in Rainbennur town. Petitioners have not made out their legal right to run Fair Price Shops outside the agreement entered into with the Government.

In identical circumstances in the case of Mahadeshwara Stores v State of Karnataka (1983(2) Kar. L.J. P. 201). It was ruled that the agreements were entered into by the State Government in exercise of its executive power and not Statutory power and therefore, the High Court in exercise of its jurisdiction under Article 226 could not give relief to the petitioners complaining of breach of contractual obligations of the State Government under the agreements. The Division Bench comprising of the then Chief Justice and another Judge of this Court relied on the decisions of the Supreme Court reported in 1981(3) Scale 1413, AIR 1966 SC P. 334, AIR 1975 SC 1121 and AIR 1981 SC 1368.

However,, Mr. Chandrashekar, learned counsel for the petitioners sought to distinguish the Division Bench ruling in Mahadeshwara Store''s case on the ground that the Division Bench did not notice the decision in Ramana Dayaram Shetty v The International Airport Authority of India (AIR 1979 S.C.P. 1628). My attention was drawn to para 11 of the said decision as reported in the All India Reporter. The observations in that paragraph are of a general character, summarised, they mean no more than that the State in distributing the largess available to it cannot discriminate between citizen and such distribution of largess would be arbitrary if it is done on the basis of the colour of the hair of a person or the political party to which a person belongs.

In the instant cases, there is no distribution of the largess by the State Government for the benefit of the petitioners to exploit and accumulate wealth. They are used as outlets for the grains and other essential food commodities which are required to be distributed to the consumers in general, namely, the public at fair price. Under the agreement, they are only entitled to a certain commission paid by the State Government. In other words under the agreement the petitioners act as agents of the Government to distribute essential commodities at Fair Price and they are not given any public largess to exploit and accumulate wealth for themselves. Therefore, termination of their agency by whatever means cannot be questioned in proceedings under Article 266. If petitioners have suffered any loss on account of the termination of the agreement, they are entitled to move the civil courts for relief.

In the light of the decision in Mahadeshwara''s case, these petitions do not deserve to be considered any further. Therefore, they are rejected.

Writ Petition rejected.

1987 (2) kar.l.j.155

KARNATAKA CIVIL SERVICES (SERVICE AND KANNADA LANGUAGE EXAMINATIONS) RULES, 1974 - Rules 3 & 4 - Persons promoted to higher posts though have not passed service examinations prescribed for promotion between 10-1-1974 upto 30-4-1977 - Not liable to be reverted on and after 1-5-1977 on ground that they had not passed service examinations prescribed for such posts under the rules.

Following questions of law referred for the opinion of the Full Bench:

"Whether the persons promoted to the next higher posts though they had not passed the service examinations prescribed for promotion to such posts, under the provisions of the Karnataka Civil Services (Service and Kannada Language Examinations) Rules, 1974, during the period commencing from 10-1-1974 upto 30-4-1977 in view of Rule 4 of the Rules, are liable to be reverted on and after 1-5-1977 if by that time they had not passed the service examinations prescribed for the concerned promotional post under the rule?"

HELD: The combined effect of the opening words of Rule 3 and the opening clause of Rule 4, is that while the prescription of service examination for the purposes of earning increments and confirmation came into effect immediately on the coming into force of the Rules, the condition of eligibility of passing the examination prescribed for higher promotional post as a condition for promotion, was to come into effect only from 10-1-1976, which was later postponed to 1-5-1977. In other words, the effect of Rule 4 was that after 10-1-1974 till 1-5-1977 every civil servant was eligible for promotion on the date when according to his turn in the seniority he was entitled to be considered for promotion, even though he had not passed the service examination prescribed for the higher promotional post and that after 1-5-1977 a civil servant would not be eligible for promotion unless he had passed those service examinations. It was not a case of bringing the prescription of service examination as a condition of eligibility for promotion with immediate effect, that is, on 10-1-1974, and giving time for passing the examination and in the meanwhile permitting temporary promotions to be effected subject to reversion after the period allowed for passing the examination came to an end. If that was the intention of the rule making authority, the rule would have been on the following lines:

"During the period of two years from the date of commencement of the Rules a civil servant may be temporarily promoted subject to his passing the service examination prescribed for the promotional post within the said period and subject to the condition that he shall be liable for reversion after the expiry of two years if he failed to pass the service examination before that date."

But the opening clause of Rule 4 says that no civil servant will be eligible for promotion after the expiry of two years unless he passed the service examination prescribed for the promotional post. This clause clearly means that for a period of two years from the date of commencement of the Rules, which was subsequently extended upto 1-5-1977, Civil servants would be eligible for promotion without passing the service examinations prescribed for the promotional post concerned. This clause has not received due consideration in THIMMAPPA''s case-(1980(1) Kar.L.J. p. 398) and (1985(1) Kar.L.J. p. 300). Therefore, we are of the view that the saving clause incorporated in the opening part of Rule 3 and the opening clause of Rule 4 do not admit of the interpretation given in THIMMAPPA''s case.....For these reasons, we respectfully disagree with the interpretation of the Rules by the learned Judge and the Division Bench in THIMMAPPA''s case-(1980(1) Kar.L.J. p. 398) & (1985(1) Kar.L.J. p. 300) and answer the question referred for our opinion as follows:

"The persons promoted to the next higher posts though they had not passed the service examinations prescribed for promotion to such posts, under the provisions of the Karnataka Civil Services (Service and Kannada Language Examinations) Rules, 1974, during the period commencing from 10-1-1974 upto 30-4-1977, in view of Rule 4 of the Rules, are not liable to be reverted on and after 1-5-1977 on the ground that they had not passed the service examinations prescribed for the concerned promotional post under the Rules."

NOTE: In view of the present Full Bench Decision, the decisions reported in (2) & (4) are no longer good law.