1997 JTR(SC) 1236
1997 AIR(SC) 3801 ; 1997 AIR(SCW) 3716 ; 1997 4 AllMR(SC) 663 ; 1997 4 CLT(SC) 16 ; 1997 95 ELT 161 ; 1997 8 JT 171 ; 1998 1 MLJ 72 ; 1997 6 Scale 148 ; 1997 7 SCC 752 ; 1997 SCR 122 ; 1997 4 SCT 463 ; 1997 6 SLR 540 ; 1997 KHC 1075 ; 1998 5 Supreme 287
1998(5) Supreme 287
Supreme Court of India
(From Delhi High Court)
J.S. Verma, CJI., Sujata V. Manohar & B.N. Kirpal, JJ.
M/s. Faridabad Ct. Scan Centre -Petitioner
versus
D.G. Health Services & Ors. -Respondents
SLP (C) No. 23964 of 1996
Decided on 15.9.1997
Counsel for the Parties :
For the Petitioner, Mr. Pradeep Jain, Ms. Manjula Gupta, Advocates.
For the Respondents, Mr. N.K. Bajpai, W.A. Qadri, Advocates.
Important Point
The principle of equality enshrined under Article 14 of the Constitution of India does not apply when the order relied upon is unsustainable in law and is illegal.
Act
Referred
:CONSTITUTION OF INDIA : Art.14
CUSTOMS ACT : S.25(1)
(A) The provisions of Article 14 of the Constitution read with Section 25(1) of the Customs Act govern the validity of exemptions and non-discriminatory treatment in administrative orders. The section empowers the Central Government to issue notifications granting exemptions, and Article 14 ensures equality, preventing arbitrary or discriminatory exercise of such powers. This case examines whether an exemption notification under the Customs Act can be extended to a petitioner when similar benefits were erroneously extended to others, and whether such extraneous considerations override the principles of legality and non-discrimination.
(B) Key legal principles include that Article 14 does not protect or legitimize illegal or unsustainable orders, and that wrongful grants of benefit to others cannot be perpetuated through equality provisions. The principle of equality under Article 14 is not a shield to validate illegal administrative actions, and a 3-judge Bench is warranted where ambiguity arises from inconsistent rulings on points of law.
Facts of the case:
A special leave petition was originally dismissed by a two-Judge Bench but was recalled after a contrary decision in a similar case. The core dispute concerned whether a diagnostic centre not attached to a hospital could claim an exemption under a customs notification, and whether the petitioner was entitled to relief despite not being in a comparable position to those who received the exemption.
Findings of Court:
The Court held that diagnostic centres run privately for commercial purposes are not entitled to the exemption. It further held that the petitioner cannot benefit from a wrong order passed in favor of other entities, as Article 14 cannot validate illegal administrative actions.
Issues:
Whether Article 14 can be invoked to regularize an illegal order granting exemption to others, and whether dissimilar entities can be equated for the purpose of such exemptions.
Ratio Decidendi:
Article 14 cannot be used to perpetuate or validate an illegal or unsustainable administrative order, and a petitioner is not entitled to a benefit wrongly conferred on others under a misapplied notification.
Result:
The special leave petition is dismissed.
(A) The provisions of Article 14 of the Constitution read with Section 25(1) of the Customs Act govern the validity of exemptions and non-discriminatory treatment in administrative orders. The section empowers the Central Government to issue notifications granting exemptions, and Article 14 ensures equality, preventing arbitrary or discriminatory exercise of such powers. This case examines whether an exemption notification under the Customs Act can be extended to a petitioner when similar benefits were erroneously extended to others, and whether such extraneous considerations override the principles of legality and non-discrimination.
(B) Key legal principles include that Article 14 does not protect or legitimize illegal or unsustainable orders, and that wrongful grants of benefit to others cannot be perpetuated through equality provisions. The principle of equality under Article 14 is not a shield to validate illegal administrative actions, and a 3-judge Bench is warranted where ambiguity arises from inconsistent rulings on points of law.
Facts of the case:
A special leave petition was originally dismissed by a two-Judge Bench but was recalled after a contrary decision in a similar case. The core dispute concerned whether a diagnostic centre not attached to a hospital could claim an exemption under a customs notification, and whether the petitioner was entitled to relief despite not being in a comparable position to those who received the exemption.
Findings of Court:
The Court held that diagnostic centres run privately for commercial purposes are not entitled to the exemption. It further held that the petitioner cannot benefit from a wrong order passed in favor of other entities, as Article 14 cannot validate illegal administrative actions.
Issues:
Whether Article 14 can be invoked to regularize an illegal order granting exemption to others, and whether dissimilar entities can be equated for the purpose of such exemptions.
Ratio Decidendi:
Article 14 cannot be used to perpetuate or validate an illegal or unsustainable administrative order, and a petitioner is not entitled to a benefit wrongly conferred on others under a misapplied notification.
Result:
The special leave petition is dismissed.
Order
This petition for special leave was originally dismissed by an order dated 16.12.96 passed by a Bench of two Judges-Verma, J. (as he then was) and Kirpal, J. In view, however, of a judgment of another Bench of two Judges (K. Ramaswamy and G.B. Pattanaik, JJ.) in a similar matter Mediwell Hospital & Health Care Pvt. Ltd. v. Union of India & Ors.1 the order of 16.12.96 was recalled by the order of 8.8.97. The reasons for recall as set out in the order of 8.8.97 are :-
“After we had dismissed SLP (C) No. 23964 of 1996 on 16.12.1996, another 2-Judge Bench appears to have granted relief in a similar matter which may give impression that the view taken therein is different it is, therefore, appropriate that the possible ambiguity or uncertainty on the question of law should be removed by judgment of a 3 Judge Bench. We, therefore, recall our order dated 16.12.1996 dismissing the special leave petition and direct that the special leave petition be listed for hearing before a 3-Judge Bench. The papers be placed before the Hon’ble C.J.I, for constituting the Bench.”
Accordingly, we have heard the parties. In the case of Mediwell Hospital & Health Care Pvt. Ltd. v. Union of India & Ors. (supra), this Court on the merits of the case has not taken a view different from the view taken by the bench in this case while passing the order of dismissal. In para 10 of that judgment it is recorded as follows :-
“Thus a diagnostic centre run by a private individual purely on commercial basis may not be entitled to the exemption under the notification issued by the Central Government. The conclusion of the Central Government as well as that of the High Court on this score, therefore, may not be held to be incorrect.”
2. The Court, however, granted relief to the appellant in that case on the ground that several other individual diagnostic centres not attached to any hospital had been granted the exemption under the notification in question and hence there should not be any discrimination against the appellant under Article 14. The relief was granted entirely on the basis of Article 14.
3. We fail to see how Article 14 can be attracted in cases where wrong orders are issued in favour of others. Wrong orders cannot be perpetuated with the help of Article 14 on the basis that such wrong orders were earlier passed in favour of some other persons and, therefore, there will be discrimination against others if correct orders are passed against them. In fact, in the case of Union of India (Railway Board) & Ors. v. J.V. Subhaiah & Ors.2 , the same Learned Judge in his judgment has observed in para 21 that the principle of equality enshrined under Article 14 does not apply when the order relied upon is unsustainable in law and is illegal. Such an order cannot form the basis for holding that other employees are discriminated against under Article 14. The benefit of the exemption notification, in the present case, cannot, therefore, be extended to the petitioner on the ground that such benefit has been wrongly extended to others. With respect, the decision in Mediwell Hospital (supra) does not lay down the correct law on this point.
4. In the premises, the special leave petition is dismissed.
SLP dismissed.
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Parallel Citations of other Journals :
Faridabad Ct. Scan Centre v. D.G. Health Services, 1998(5) Supreme 287 : JT 1997(8) SC 171 : 1997(VIII) AD (SC) 372
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