TMI Blog1982 (4) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... s of that Act against them (the petitioners). A Division Bench of this Court heard those writ petitions along with a large number of similar writ petitions. By its common order dated 24-8-1979 Hunsa Corporation v. State of Karnataka (1) that Division Bench allowed those petitions, held the Entry Tax Act, 1079 as unconstitutional, struck down the notification dated 31-5-1979 issued by the State Government under S. 3 of that Act and issued a mandamus directing the State Government and its officers and servants to forbear from enforcing the provisions of that Act against the petitioners. Though a common otder was made by this Court in as many as 159'0 writ prtitions, the State of Karnataka chose to prefer to the Supreme Court only one appeal, C. A. No. 3094 of 1979 from the common order of this Court, in so far as it related to W.P. No. 7039 of 1979 wherein the petitioner was M/s Hansa Corporation. The State of Karnataka did not prefer appeals from that common order dated 24-8-1970 in so far as it related to other 1589 writ petitions. The present appellants-petitioners were among the petitioners in those 1589 writ petitions. The Supreme Court by its judgment dated 25-9 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and the mandamus issued in those writ petitions, had become final, as no appeal bad-been preferred to the Supreme Court from that order, in so far as it related to their writ petitions and that therefore the State of Karnataka and its officers and servants were bound by that order and the mandamus and hence could not enforce the Entry Tax Act, 1979 against then. ( 5. ) On behalf of the State, it was contended that the judgment of the Supreme Court upholding the validity of the Entry Tax Act, 1979, was a judgment in rem and that the law declared in that judgment was binding on every Court, authority and persons, it was also con. tended that S. 3 of the Repealing Act, 1981 had rendered ineffective every judgment or Order of this Court which had held the Entry Tax Act, 1979 as uncon. stitutional and also rendered unenfore. able the mandamus issued by this Court in pursuance of such judgment or order. ( 6. ) The learned single Judge upheld the above contentions and dismissed the writ petitions. In these appeals, Sri K. Srinivasan, learned counsel for the appellants, reiterated the contention that though the Supreme Court upheld the constitutional validity of Entry Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal by the State Government should succeed, would be that the finality of the orders passed in the other three writ petitions by the Punjab High Court would not He disturbed and that those three successful writ petitioners would be entitled to retain the advantages which they had secure by the decision in their favour not being challenged by an appeal being filed. That however would not held the present respondent who would Be bound by our judgment in this appeal and besides, so far as the general law is concerned as applicable to everyone other than the three writ petitioners (who would be entitled to the benefit of decisions in their favour having attained finality), the law would still be as laid down by this Court. ( 7. ) On the other hand, the learned Government Advocate who appeared for the State of Karnataka strongly relied on a later decision of the Supreme Court in Makhan Lal Waza v. State of Jammu and Kashmir (4). There the facts were briefly these : An order of the Government of Jammu and Kashmir providing reservation for Muslims, Jamvi Hindus and others in making promotions to posts in the State service in the ratio of 50:40:10 was assailed before the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court therein and could not disregard the direction of the Supreme Court on the ground that the promotees were not parties in the earlier writ petition. Thus, the decision of the Supreme Court in Makhan Lal Waza's case (2) is diatinguishable on facts. As the material facts of the present cases are similar to those in Jcginder Singh's case (1) the law laid down by the Supreme Court in that case, is squarely applicable to these cases. ( 8. ) All the petitioners in the 1589 writ petitions which were decided in their favour and from which no appeals were preferred by the State, would have been entitled to the benefit of the decision of this Court in their favour in spite of the decision of the Supreme Court in CA No. 3094 of 79 if nothing more had happened. But, as stated earlier, after the decision of the Supreme Court, the State legislature enacted the Repeal. ing Act, 1981 and S. 3 thereof provides, inter alia, that the Entry Tax Act, 1979, shall notwithstanding anything contained in any judgment, decree or order of any Court, be deemed always to have been valid and in force. We shall now examine the effect of such validating provision. S. 3 of the Repealing Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the subject-matter, and secondly, whether by validation the legislature has removed the defect which the Courts had found in the previous law. To these we may add a third; Whether it is consistent with the provisions of Part III of the Constitution. ( 9. ) We shall now examine whether the three tests Ltd down by the Supreme Court in regard to validation of a law which has been declared as invalid by the Court have been satisfied in the present cases. It was not contended by Sri Srinivasan that the State legislature had no legislative competence over the subject matter of the Repealing Act, 1981. Nor did he contend that the provisions of S. 3 of that Act violated any of the provisions of Part III of the Constitution. Hence, it is Sufficient to focus our attention to the test whether the State legislature in enating S. 3 of the Repealing Act, 1981 removed the defects which this court had, in its common order in Hansa Corporation case, found in the Entry Tax Act, 1979 and the notification dated 31-5-1979 issued by the State Government under that Act. Those two defects, according to that decision were : (i) Non-exemption of petty dealers from the levy of Entry Tax imposed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conditions of service of such employees including the bonus payable to them. That settlement was approved by the Central Government. Subsequently, the LIC., by its Circular dated 25-9-1975, directed that no bonus should be paid to its employees under the then existing provisions until further instructions, since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance issued on that date. Thereupon, the All India Insurance Employee's Association and some others filed a writ petition in the High Court of Calcutta praying for a mandamus directing the LIC to act in accordance with the terms of the settlement dt. 24-1-1974. A single Judge of that High Court allowed that petition and issued a mandamus as prayed for. Against that decision, the LIC preferred a letters patent appeal. In the meantime, the Life Insurance Corporation (Modification of settlement) Act, 1976 (hereinafter referred to as the Modification Act) came into force. The LIC withdrew the appeal before the Division Bench stating that there was no need to proceed with that appeal. The result, was that the judgment of the learned single Judge became final. S. 3 of the Modification Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporation shall be entitled to profit sharing bonus. However, the Corporation may, haying regard to the financial condition of the Corporation in respect of any year and subject to the previous approval of the Central Government, grant non-profit sharing bonus to its employees in respect of that year at such rate as the Corporation may think fit and on such terms and conditions as it may specify as regards the eligibility for such bonus . The effect of that amendment was to annul cash bonus in terms of the settlement of 1974. Such amendment was challenged in a writ petition before the Allahabad High Court which allowed that petition. From that decision, the LIC preferred an appeal which was dismissed by the Supreme Court. Thereafter, the Life Insurance Corporation (Amendment) Ordinance, 1981 was promulgated on 31-1-1981 inserting new sub-clause (cc) in subsec. (2) of S. 48 of the Life Insurance Corporation Act and new sub-sections (2-A) (2-B) and (2-C) in S 48 of that Act, with retrospective effect from 20-6-1979. By the Notification dated 2-2-1982 certain rules were made with retrospective effect providing that no class-III or class-IV employee of the L1C. shall be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere these : In Patel Hargordhahdas v. Municipal Commissioner Ahamadabad (9), the levy of property tax by the Municipality on buildings and lands on the basis of capital value thereof, was held to be invalid, since S. 73 of the Bombay Municipal Boroughs Act, 1925 empowered the Municipality to levy the'rate' on buildings and lands, and the term 'rate' was confined to imposition on the basis of the annual letting value. To overcome the effect of the judgment of the Supreme Court in Patel Hargordhandas case (8) the Gujarat Imposition of Taxes of Municipalities (Validation) Act, 1963 was enacted. S. 3 of that Act provided that notwithstanding anything contained in any judgment, decree or order of any court, no tax assessed or purported to have been assessed by a Municiplity on the basis of a capital value of a building or land and imposed, collected and recovered by the Municipality at any time before the commencement of the validation Act, shall be deemed to have been invalidly assessed, imposed, collected or recovered and the imposition, collection and recovery of the tax so assessed shall be valid and shall be deemed always to have been valid and shall not be called i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red circumstance of fundamental character. By S 3 of the Repealing Act, 1981 the legislature did not seek to reverse the decision of this Court in Hansa Corporation case which had already been reversed by the Supreme Court. S. 3 of the Repealing Act, 1981, should, in our opinion, be construed as reenacting the Entry Tax Act, 1979, after the obstacle to its validity had been removed by the Supreme Court which reversed the decision of this court in Hansa Corporation case. In other words, the decision of this court holding the Entry Tax Act, 1979 as invalid, became irrelevant after that decision was reversed by the Supreme Court and did not stand in the way of the State Legislature re-enacting that Act by declaring that the Entry Tax Act, 1979, shall be deemed always to have been valid notwithstanding anything contained in any judgment, decree or order of any Court and be deemed to be in force and shall continue to be in force. In our opinion, the ratio of the decision of the Supreme Court in M. M Pathak's case-(6) and A. V. Nanchane's case (7), does not apply to the present case, because, as stated earlier, S. 3 of the Repealing Act, 1981 should be regarded as having re-en ..... 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