Holding

The termination of K.C. Joshi’s service was illegal, arbitrary and violative of Articles 14 and 16; the High Court judgment is set aside and ONGC must pay back wages and compensation in lieu of reinstatement.

Summary

K.C. Joshi was appointed as Store Keeper in the Oil and Natural Gas Commission (ONGC) and, after completing his probation, was placed on the regular establishment. He was an active trade‑union worker and, following union actions, his services were terminated on 29 December 1967 with one month’s pay in lieu of notice, the corporation citing unsatisfactory work. Joshi challenged the termination by a writ petition; the Allahabad High Court held he remained a temporary employee and that the termination was lawful under the corporation’s regulations. The Supreme Court reversed, holding that ONGC is an instrumentality of the State and its employees are protected by Articles 14 and 16 of the Constitution; Joshi was a regular employee and could not be dismissed by a one‑month notice without a fair enquiry, making the termination arbitrary and violative of natural justice. The Court set aside the High Court judgment, ordered ONGC to pay Rs 2 lakhs as back wages and compensation in lieu of reinstatement, and directed relief under Section 89 of the Income‑Tax Act.

Issues considered

Whether ONGC is an instrumentality of the State within the meaning of Article 12 and its employees are entitled to the protection of Articles 14 and 16.
Whether the appellant was a regular employee or a temporary employee at the time of termination.
Whether the termination of service by one month’s notice without an enquiry violated the principles of natural justice and the constitutional guarantee of equality.
Whether the termination order contravened the Oil and Natural Gas Commission (Conduct, Discipline and Appeal) Regulations, 1964.
Whether the appellant is entitled to back wages, compensation in lieu of reinstatement and relief under Section 89 of the Income‑Tax Act, 1961.

Legislation cited

Constitution of Indias. Art.12, s. Art.14, s. Art.16, s. Art.310, s. Art.311
Income Tax Act, 1961s. Sec.192, s. Sec.89
Income Tax Ruless. Rule 21A
Industrial Disputes Act, 1947s. Sec.33(4)
Industrial Employment (Standing Orders) Act, 1946s. Sec.13B
Oil and Natural Gas Commission (Conduct, Discipline and Appeal) Regulationss. Regulation 25

Subjects

instrumentality of Statefundamental rightsequalitytermination of servicenatural justiceback wagescompensationincome tax reliefpublic sector undertakingtrade union

Judgment

869

A

.K.C. JOSHI

v.
B
UNION OF INDIA AND ORS.

April 23, 1985

[D,A. DESAI AND RANGANATH MISRA, JJ.]
c
Constitution of India 1950, Ariic/es 12,14,16 310 and 3/1:

Oil and Natural Gas Commission-Whether ·an instrumentality of the State
-Whether amenable to writ juri.fdiction-Employees of corporation-Whether entf..
tied to protect/oil of equality in 1narters of public e111ploy1nent.
D
Labour Law:

Employee elnployed on 'regular basis until further orders'-Services of
employee-Whether could be ter1ninated by one month's notice.

Income Tax Act 1961, Section 89 and Income Tax Rules, Rule 21A: E

Emp/oyee-TerminaJion order set aside-Awarded back wages and c_,on1pen-
sation in lieu ofreinstate1nent-Re/ief of incon1e tax-Entitle1nent of..

The appellant was .initially appointed in the -Respondent·Public Sector F
Undertaking as an Assistant Store Keeper and la~cr selected as a Store Keeper.
The office orde_r recited that the appellant had been appointed as Store Keeper
till further orders, that his appointment was purely temporary, that he will be
on probation for period of 6 months, and that the appointment m'.ly be termi-
nated_at any time by a month's notice. On successful completion of the proba-
tion period of six months·, the appe11ant was informed that 'he was continued in
service on a regular basis until further orders.' The appellant wa~ later transfer- G
red. aad the Transfer Order was challenged by him in a suit, and he obtained an
interim order restraining the undertaking from implementing the transfer order.

The E~p!oyees' Union 'sub1nitted a charter of demands and it was folio·
wed by a notice threatening direct action by the members of the Union. The
appellant was an a1;tive worker of the union, The Employees went on strike, and ff
870 WPREMP. COURT REPORTS (1985] 3 S.C.R.

A the Union submitted a list of work1nen to the CorpJration requesting the Corpo-
ration to give them the statu'i of protected workn1en as required by section 33(4)
of the Industrial Di5putcs Act, 1947. The Appellant's name app~:tred at S.No.
2 in the letter. By an Office Order the service~ of the app.:llant wi~re terminated
with immediate effect in accordance with the term<> and conditions of the
service, and a cheque for one month's pay in lieu of notice accompanied 'the
order.
B
The appellant challenged the legality and validity of the order termina-
ting his service in a Writ Petition and a Division Bench of the High Court
dismissed the Petition. It held t'hat though on successful completion of the
probation period, the appellant had been appointed on a regular basis as Store
Keeper, he was non-the-Jess a te1nporary employee of the Corporation till the
date on which his services were terminated. The Corporation was not an
c Industrial Establishment within the n1eaning of the expression in the Industrial
Employment (Standing Orders) Act, 1946 and therefore the Model Standing Or-
dersenacted under the Act were not applicable to the CorpOration. The Oi.der of
termination of service was not violalive of the Oil and Natural Gas Commission
(Conduct, Discipline and Appeal) Regulations, 1964 as the service of the appel-
lant was not dispensed with on the allegation of misconduct, but it was an order
of termination of service sirnpliciter in accordance with Regulation 25. As the
D service of the appellant 'vere tenninatcd not because of any personal bias of the
officers of the Corporation, but because of his unsatisfactory work, the allegation
of mala tides cannot be upheld.

Allowing the appeal to this Court,

E 1-IELD : l. The judgment of the J-Iigh Court is quJshed and set aside
and the rule is made absolute in the writ petition. The Oil and Natural Gas
Cornmission is directed to pay Rs.2 lakhs to the appellant in lieu of back wages
and compensation in lieu of reinstatement within a period of four weeks. Tht:
appellant is entitled to relief under section 89, Income Tax Act, 1961 read with.
Rnle 21 A of the Jn:::ome Tax Rulc1, be.::ause the compensation awarded include
salary wl1ich had been in arrear for 18 y~ars a'> also the compensation in lieu
F of reinstatement [878H, 879A, E-GJ

2. If the appellant was appointed on regular basis, his service cannot be
terminated hy one month's notice, If it was by way of punishment, as the High
Court has found it to be so, termination is violative of the principles of natural
justice in that no opportunity was giv.::n to the appdlant to clear himself of the •
alleged misconduct whic\1 proved the real ban;; for making of the order ofter- , ·
G mination of service. If it is discharge sitnpliciter, it would beviolative of Article
16, because a nutnber of store-keepers junior to the appellant are shown to have
been retained in the service and cannot b~ picked arbilrarily. Jfe had the pro.:
tection of Article 16 which confers on him the fundamental right of equality
and equal treatme~t in the matter of public employment.

3. The sever~l communications which include q letter of appreciation a.m;J
Q
K.C. JOSHI v. UNION 871
a certificate eulogizing the services of the appellaat, clearly show that the charge
of unsuitability was either cooked up or conjured up for a collatt:ra·J purpose of
A.
doing away with the service of an active trade-union worker who because of his
activities became an eye-sore. The view taken by the High Coult that the
termination of service was legal, valid or justified is not therefore tenable.
[877H ; 878C]

4. Ordinarily, where the order of termination of service is sliown 8.
to be bad and illegal, the nec<!s;ary declaration must follow that the employee
continues to be in an uninterrupted service and he is entitled.to full back·
wages. [8780]

In the instant case, the appellant was out of service from December 29,
1967. A period of nearly 18 years have rolled by and he would have to go back
to some chag3.rined master. On enquiry, the appellant .jnfdrmc:d that substan- C1
tial and adequate compensation would be more acceptable to him than rein-
statement with backwages. [878EJ

Shri Sant Raj & Anr. v. Sh. O.P.Sing/a & Anr, Civil Appeal No. 650/82
dated April 9, 1985 referred to.
D
S. -An unbiased Judge, and an opportunity to controvert the aUegation
and to clear oneself are· the minimum principles of natural justice which must
inform the drastic power of dismissal affecting the livelihood of an employee.
(876F]

6. The Oil and Natural Gas Commission is an instrumentality of the·
State and is comprehended in the expression 'other authority' in Art. 12, and E
any terrainatation of service of the employee of the Corpora.tion, ·if successfully
questioned would permit the court to make a declaration that the employee
continues to be in service. Even if the employees of the Corporation, which
is aQ. instrumentality of the State, cannot bi said to be the members of a civil
1ervice of th• Union or an All India Service, or hold aoy civil post under the
Union, for the purpose of Articles 310 and 311 and therefore, not entitled· to the
protection of Art. 311, they would none-the.. !ess be entitled to the protection of F_
thefundamental rights enshrined in Articles 14 and 16 of the Constitution that is
they would be entitled to the protection of equality in the matter of emp!oyment
in public service and they caaoot be dealt with in_ an arbitrary manner.
(8740; 875C]

SEfkhdev Singh & Ors. V. Bhagatram Sardar Singh Raghuvanshl &: Anr:,
[1975] 3 SCR 619 and A. L. Kalra v. Project and Equipment Corporatioii of India
Ltd., (1984] 3 SCC 317 referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3187 of 1982
From the Judgment and Order dated 22.1.1974 of the
Allahabad Hi~h Court in C.M.P. No. 1395 of 1968,
872 SUPREME COURT REPORTS [1985] 3 s.c.R.

A A.K. Gupta for the Appellant.

B. Datta, Rishi Kesh, Badri Prasad, Ajit Pudissary, Girlsh
Chandra and Ms. A. Subhashini for the Respondents.

B The Jndgment of the Court was delivered by

·DESAI, J. Another unequal fight between a giant public
sector undertaking : Oil and Natural Gas Commission C'Cor·
poration' for short) and a Store Keeper which has been br 0ught
to this Court by the ultra legalist stand ·taken by th~ Corpor~tion
c which lacks equanimity and smacks of victimisation.

The appellant was appointed as Assistant Store Keeper
in April, 1962 and was posted at Dehradun. Later on when the
Corporation decided to recruit Store Keeper, the appellant was
D selected in open competition and was appointed on December 7,
1963 as such. He was posted at Cambay, Gujarat and fater on
on December 24, 1963 sent back to Dehradun. The office order
dated February 26, 1964 recites that the appellant has been appoin-
ted as'Store Keeper till further orders and the post is sanctioned
for the period February 7, 1964 to February 29, 1964. Jn other
words, a man selected in an open competition was offered the
post which was to last for 22 days.roughly. He was also told
that his appointment was purely temporary and that other terms
of service were those as set out in the letter dated December 7,
1963, one of which was that the appellant will be on probation for
a period of six months from the dale of the appointment aild the
F
same may be extended at the discretion of the appointing autho-
rity and that the appointment may be terminated at any time by a
months' notice given by either side. On January 13, 1965, the
appellant was informed in writing by the Memorandum No. ,
PF/K-44-/64-ENT that the appellant on successful completion of
G the probation period of six months, is continued in service on re-
gular basis until further orders. By oll!ce order dated April 6,
1947, the appellant who was described as Store Keeper, Grade I
Mech. Engg. Branch was transferred to Cambay-Nawagam pro-
ject. This transfer order was challenged by the appellant on
diverse grounds in a suit filed by him. He sought an interim in·
K.C. JOSHi v. UNiON (Desai, J.) 873

junction restraining the respondentg from implementing'the order A
of transfer. Interim injunction as prayed for was granted.

The Oil & Natural Gas Commission Employees Mazdoor
Sabha (Union for short), Dehradun submitted a charter of demands
on May 15, 1967 and it was followed by a notice threatening
direct action by the members of the Union. It appears that the B
appellant was an active worker of the Union. The usual mana-
gement response emerged by a secret letter dated September 1,
1967. Shri R.P. Sharma, Chief Engineer under whom the appel-
lant was at the relevant time working was told that the appellant
is the main trouble maker and that he is being given free hand c
,,_, by his immediate superiors and that the Chief Engineer did not
/ - keep strict vigilance over the activities of the appellant. The
employees of the Corporation went on strike on September 12,
1967. It wa1 called off on September 24, 1967. On September 28,
1967, tbe Union submitted a list of workmen to the Corporation
requesting the Corporation to give them the status of protected D
workmen as required by Sec. 33 (4) of tbe Industrial Disputes Act,
!947. Appellant's name appears at S. No. 2 in this letter. On
December 27, 1967 the Union complained of victimisation of the
active union workers including the appellant. On December 29,
!967 Office Order No. M (Engg) 1 (1)/67 was issued by which the
services of the appellant were terminated with immediate effect E
in. accordance with the terms and conditions of bis service. A
cheque in the amount of Rs. 317 accompanied the order being
one month's PlfY in lieu of notice. The appellant challenged in
Writ Petition No. 1395/68 in the Allaliabad High Court the lega-
lity and validity of the order terminating his services.
F
A Division Bench of the Allahabad High Court held that
despite the order dated January 13, 1965 that on successful comp-
letion of the probation period, the appellant has been appointed
on a regular basis as Store Keeper, he was none-the-less a tempo-
rary employee of the Corporation till the date on which his
services were terminated. The High Court further held that the G
Corporation is not an industrial establishment within the meaning
of the expression in Industrial Employment (Standing Orders) Act,
1946 and therefore the Model Standing Orders enacted under the
Act were not applicable to the undertaking of t,he Corporation.
}lowever, the Hi$h Court e11amined an alternative contention that ff
874 SUPREME COURT REPORTS [1985) 3 SC.R.

A assuming that the Industrial Establishment (Standing (Orders) Act,
1946 does apply to the undertaking of the Corporation, yet in
view of the provisions contained in Sec. 13B of the Act, no pro-
visions of the Act would apply to the undertaking of the Corpo-
ration. The High Court repelled the contention of the appellant
B that the order of termination of service is violative of Oil and
Natural Gas Commission (Conduct, Discipline and Appeal), Regu-
lations, 1964 observing that as the service of the appellant was not
dispensed with on the allegation of misconduct, but as it was an
order of termination of service simpliciter in accordance with the
Regulation 25, no other regulation is shown to have been contra-
c vened by the impugned order. The High Court rejected the sub-
mission on behalf of the appellant that as the Corporation is a
State or at any rate instrumentality of the State' as contemplated ~
by Art. 12 of the Constitution and therefore, the appellant is en-
titled to the protection of Art. 14 and 16 observing that 'it is not
D the requirement of law that in or~er to dismiss one employee on
the ground of unsuitability, the Government or the Corporation
is required to dismiss all' an observation which has left us guessing
for its content and meaning. The Division Bench finally con-
cluded that as the service of the appellant were terminated not
because of any personal bias of the officers of the Corporation
but because of his unsatisfactory work, the allegation of mala fides
E
cannot be upheld. Accordingly, the writ petition was dis(llissed
with no order as to costs. Hence this appeal by special
leave.

Mr. B. Datta, learned counsel who appeared for the respon-
F dents did not press before us the contention that the Corporation
is not an instrumentality of the State. In view of the numerous
decisions of this Court and especially one in Sukhdev Singh &
Ors. v. Bhagatram Sardar Singh Raghuvanshi & Anr.(1), a Consti-
tution Bench of this Court in terms held that 'the Oil and Natural
Gas Commission is an instrumentality of the State and is compre-
G bended in the expression 'other authority' in Art. 12, and that any
termination of service of the employee of the Corpora ti on, if

(1) [1975] 3 S.C.R. 619,

"
IC.C. JOSHI. UNION v. (Desai, J.) 875
successfully questioned would permit the court to make a declara
tiori that the employee continues to be in service.' A

Even if the employees of the Corporation, which is an instrumen'.
tality of' the State, cannot the be said to be the members of a civil
service of the Union or an AU-India service or hold any civil post
under the Union, for the purpose of Art. 310 and 311 and there-
fore, not entitled to the protection of Art. 311, they would none·the-
less be entitled to the protection of the fundamental rights enshri-
ned in Art. 14 and 16 of the Constitution. In other words, they
would be entitled to the protection of equality in .the matter of
employment in public service and they cannot be dealt with in an
arDitrary manner. (See A.L. Kalra v. Project and Equipment Corpo- c
ration of India Ltd.)(').

The next question i1 whether the service of the appellant was
terminated in ·accordance with ·Jaw or regulation or in a thoroughly
arbitrary manner ? Factual matrix set out hereinbefore will affirma-
tively show that on successful completion of his probation period, the 'i>
appellant was appointed on the regular establishment as Store
Keeper. Thus effective from 13, 1965, the appellant was appoin-
ted on regular basis as Store Keeper. There is nothing to show
in the order that on completion of the probation period, he was
appointed as a temporary Store Keeper. The words used are: •
'He is continued in service on a regular basis until further orders.' E
The expression 'nntil further orders' suggest an indefinite perio.d.
It is difficult to construe it as clothing him with the status of a
temporary employee. It is even worst than being a probationer
because the apprehended further order may follow the very next
day. Therefore, the expression 'until farther order' being thorough-
_Jy irrelevant has to be ignored. It is even inconsistent with F
the appointment on regular basis as stated in that very order.

Ifthe appellant was appointed on regular basis, his
service cannot be ierminated by one month's notice. If it is by
way of punishment, as the High Court has found it to be so, G
it will be violative of the principles of natural justice in that
no opportunity ;was given to the appellant to clear himself of the

(I) (1984] 3 s.c.c. 317. H
876 SUPREME COURT REPORTS (19ssi 3s.c.k.
A alleged misconduct which never found its expression on paper
but which remained in the minds of those passing the order of
. termination of service. If it is discharge simpliciter, it would be
violative of Art. 16 because a number of Store Keepers junior to
the appellant ·are shown to have been retained in service and the
appellant cannot be picked arbitrarily. He had the protection of
B Art. 16 which confers on him the fundamental right of equa-
lity and equal treatment in the matter of public employment.

' Mr. Datta however, contended that the earlier order dated
December 7, 1963 recites that the appointment could be termi-
c nated by either side by one month's . notice and that was
the power invoked in terminating the service of the appel-
lant. The order dated December 7, 1963 was at tilt time
when the appellant was appointed on probation. On successful
completion of probation, the appellant became a member
of the regular establishment. The contract of service, if
D any, has to be in tune with Art. 14 and 16 and such unila-
teral power of termination of service without giving reasons
is so abhorent that it smacks of discrimination and therefore,
violative of Art. 14. The High Court brushed aside this aspect
by merely observing that 'in order to dismiss one employee on the
ground of unsuitability, the Government or the Corporation is not
E
required to dismiss all'. If it is suggested that you can dismiss
anyone without a semblance of an enquiry or without whisper
of the principles of natural justice, then such an approach over-
looks the well-~stablished principle that where State actiiln affects
livelihood or attaches stigma, the punitive action can be taken after
holding an enquiry according to the principles of natural justice.
F
In other words, an unbiased Judge, and an opportunity to con-
trovert the allegation and to clear oneself are the minimum
principles of natural justice which must inform such drastic power
of dismissal affecting livelihood of an employee. If the observation
of the High Court was with reference to the contention of the
G order being violative of Art. 14 and 16, it overlooks the fact that
the Corporation attempted to sustain its action on the ground
that the services of the appellant were no more required which
will certainly impel the court to enquire whether the post had been
abolished or whether retaining the juniors, the inconvenient person
was thrown out under the garb of being surplus. Therefore, the
approach of the High Court in this behalf is not appreciable.
ice. 1osai. v. UNION (Desai, i.) s77
A
Accepting the finding of the High Court that the appellant was
removed from service on the ground of bis unsatisfactory work, the
same could not have been done without an enquiry in accordance
with principles of natural justice. At any rate the action appears to
be thoroughly arbitrary. If the facts are properly viewed this public
B.
sector corparation has disclosed the typical private employer's
unconcealed dislike and detestation of an active trade unionist.
From the facts stated in the earlier portion of the judgment, i!
appears that appellant was a protected workman. Add to this the
fact that the secret letter of Mr. L J. Johnson dated September 6,
1967 reveals the inner working C:,f the mind of the top brass of the c
Corporation when Mr. Johnson states that Mr. Joshi (appellant)
is the main trouble maker in the corporation. Earlier on March
1,, 1"7, ta• Assistant Direstor wrote to the Director of Stores to
transfer the appellani from Dehradun to Assam, the usual manage-
ment response namely, to transfer the active trade union worker
to weaken the trade union movement. Even a charge of victimisa- D
tion qua the appellant was made in writing. The then Petroleum
Minister Mr. Ashok Mehta_ wrote to Mr. Natwarlal Shah, ONO.·
Employees Mazdoor Sabha wherein he assured that the Corporation
would not be interested in victimising anyone and. yet soon after
within three months, the services. of the appellant were terminated.
E

And now reasons for the termination of service of the appel·
!ant may be examined. The appellant is considered unsuitable f9r
the job as found by the High Court. How be became unsuitable is
an aspect not even examined by the High Court. On the contrary
one has to refer to several communications eulogizing the services F
of the appellant which have been placed on record. One Ganga
Ram, Personnel Officer, ONGC, Tel Bhavan, Dehradun has certified
on August 26, 1964 that Shri Joshi was found'to be 'very sincere,
conscientious, dependable and hard working official and he is very
much loyal to his duties as Store Keeper and he has done exceed-
ingly well' He also states that 'Mr. Joshi knows his job thoroughly G
well'. On April 15,1965, the Controller of Stores and Purchase, t.he
immediate superior of the appellant writes t.hat 'Mr. Joshi knows
his work very well and be is very conversant with the purchase work,
accounting and maintenance of stores. He is a very bright young
man of blameless character and would do very well in any position
of responsibility'. This letter of appreciation was .sent when the
"
878 SUPkEME COURT IUJPORTS (1985) 3 S.C.ll.
A officer was relinquishing his charge of the post of Controller 0
Stores and Purchase. On January 16.1968, the Chief Engineer Shri
R.P .. Sharma has issued a certificate in which it is stated that he
found Mr. Joshi sincere, intelligent and hard working young man
fully trust-worthy and dependable for any confidence that may be
B reposed in him'. This will clearly show that the charge of unsuitabi.'
lity was either cooked up or conjured up for a collateral purpose of
doing away with the service of an active trade-union worker who I
because of his activities became an eye sore.
•

Accordingly we are unable to agree with the view taken by the
c High Court that the termination of service was legal, valid or justified.
This appeal will accordingly succeed. The question then is : what
.relief we must grant ?

.D Ordinarily, where the order of termination of service is shown
to be bad and illegal, the necessary declaration must follow that
the employee continues to be in an uninterrupted service and he is
entitled to full backwages. We would have been perfectly justified
in giving the declaration and making that order. However, the
appellant is out of service from December 29, 1967 till today. A
period of nearly 18 years have rolled by and he will have to go back
to some chagarined master. We therefore, enquired from the learned
counsel appearing for the appellant whether substantial and ade·
quate compensation.would be more acceptable to him or reinstate·
men! with backwages. The appellant opted for the latter and Mr. B.
Datta learned counsel for ·,e commission conceded that the Corpo-
F
ration would willingly payl hs. 2 lakhs as and by way of backwages
and compensation in lieu of reinstatement.

This matter was adjourned to [enable learned coutsel for the
appellant to work out the spread over of backwages. Mr. A.K.
Gupta, learned counsel for the appellant has submitted the calcula-
G. ·1ions of backwages. The figures therein set out are not disputed. We
accept the same and treat it as part of the judgment. A copy of it
shall always be annexed to the copy of this judgment.

Accordingly this appeal is aliowed and the judgment of the
High Court is· quashed and set aside and the rule is made absolu.te
H in the writ petition. The Oil and Natural Gas Commission is directed
I ~·
K.C. JOSHI. v. UNION: (Desai,' J.)

to pay Rs. 2 lakhs to the appellant on .the basis of the calculations I A
herein submitted in lieu of backwages and compensation in lieu of
reinstatement within a period of four weeks from today.

In view of the computation made in respect of backwages and
compensation·from year and year, we must make it abundantly clear H
whether •the Commission would be entitled to deduct income-tax ··
while making the payment. In tr'- ;onnection we would follow .the
decision of this Court 'in Shri :0 Raj & Anr. v. 0. P. Sing la &
Anr.(')
, .
In tune with that decision we give the following directions.
(
Now that.the amount is being paid in one lump sum, it'is
likely that the employer may take recourse to Sec. 192 of the
Income Tax Act, 1961 which provides that when any person
responsible for paying any im:ome chargeable under the head
'Salaries' shall, at the time of payment deduct income tax on the n·
amount payable·at the average rate of income-tax computed ont he
basis of the rates in'.force for the financial year in which the payment
is made, on the estimated income of the assessee under this head for
that financial year. If therefore the employer proceeds to deduct
the income-tax as provided by Sec. 192, we would .like to make it
abundantly clear .that each appellant would be entitled to the relief E
under Sec. 89 of the Income Tax Act which provides that where, by
reason of any portion of assessee's salary being paid in arrears or
in advance or by reason of his having received in any one financial
year salary for more than 12 months or a payment which under
.the provisions of clause (3) of Section 17 is a profit in lieu of salary,
bis income is assessed at a rate higher than that it .would otherwise
have been assessed, the Income Tax Officer shall on an application
made to him in this behalf grant such relief as may be prescribed.
The prescribed relief is set out in Rule 2 iA of the Income-tax Rules.
The appellant is entitled to relief under Sec. 89 because compensa-
tion herein awarded includes salary which has been in arrear for 18
years as also the compensation in lieu of reinstatement and the (,

relief should be given as provided by Sec. 89 of the Income-tax Act

(I) [1985] 3 S.C.R: R 623

H
SUPREME COURT REPORTS [1985[ 3 s.c.R..

A read with Rule ~IA of the Income Tax Rules. The appellant
indisputably is entitled to the same. If any application is necessary to
be made, the appellant may submit the s.ame to the competent
authority aud the Commission shall assist the appellant for obtain-
ing the relief.·

B
The appeal is allowed as herein indicated, with no order as to
costs. ·

c N.V.K. Appeal allowed. >-·

I .