Madras High Court
Selvi Travels And Etc. vs Union Of India And Another on 11 September, 1992
Equivalent citations: AIR1993MAD216, AIR 1993 MADRAS 216, (1992) WRITLR 801
ORDER
1. These two writ petitions are for issue of a writ of certiorari to call for the records relating to Circular No. 26(1) AD/92 dated 24-7-1992 issued by the Passport Officer, Thiruchirapalli and quash the same. The petitioner in W.P. 10619 of 1992 is a proprietary concern running a Travel Agency while the petitioner in W.P. 10914 of 1992 is a registered association of recognised travel agents. The impugned circular which is circulated to all recognised travel agenls reads thus :--
"Government of India has decided to withdraw with immediate effect the entire system of recognising Travel Agents to deal with passport matters. With immediate effect all the Travel Agents will be free to deposit application forms at passport offices like any other individual. The completed passports will be despatched to the applicant at the address given in the application form by Registered Post acknowledgment due or they will be handed over to the applicant himself. No completed passport will handed over to any third person. These orders come into effect immediately."
2. The circular is based on the revised criteria issued by the Ministry of External Affairs, Government of India under MSG No. 2158 dated 23-7-1992, the relevant part of which reads as follows:--
RTO/TO FROM CTO KINDLY REFER TO THE CIRCULAR LETTER No. V1I/415/2/19/91 DATED 21-5-91 WHEREIN CRITERION FOR RECOGNISING TRAVEL AGENCIES AND FOR REVIEWING RECOGNITION OF TRAVEL AGENCIES TO DEAL IN PASSPORTS WAS LAID DOWN(.) ". IN THIS CONNECTION, YOU MAY ALSO KINDLY REFER TO CIRCULAR LETTER. NO. VI/401/40/9I DATED 6-11-91, WHEREIN BEEN CLARIFIED THAT ANY INDIVIDUAL CAN SUBMIT A PASSPORT APPLICATION ON BEHALF OF ANY OTHER INDIVIDUAL AND IT IS NOT NECESSARY FOR THE APPLICANT TO HIMSELF SUBMIT HIS APPLICATION FORM (.)
3. THE QUESTION OF THE PROCEDURES TO BE ADOPTED FOR SUBMISSION OF APPLICATION FORMS HAVE BEEN REVIEWED AND IT HAS BEEN DECIDED THAT WITH IMMEDIATE EFFECT THE ENTIRE SYSTEM OF RECOGNISING TRAVEL AGENTS TO DEAL WITH PASSPORT WORK STANDS WITHDRAWN(.) WITH IMMEDIATE EFFECT ALL THE TRAVEL AGENTS SHALL BE FREE TO DEPOSIT APPLICATION FORMS AT PASSPORT OFFICES LIKE ANY OTHER INDIVI-DUAL(.)
4. THE COMPLETED PASSPORTS SHALL BE "DESPATCHED TO THE APPLICANT AT THE ADDRESS GIVEN IN THE APPLICATION FORM BY REGISTERED POST ACKNOWLEDGMENT DUE OR THEY WILL BE HANDED OVER TO THE APPLICANT HIM-SELF(.) NO COMPLETED PASSPORT SHALL BE HANDED OVER TO ANY THIRD PERSON(.)"
A clarification was issued on 28-7-1992 which is in the following terms :--
KINDLY REFER TO CIRCULAR TELEX DATED 23RD JULY WHEREIN IT HAD BEEN INDICATED THAT FINISHED PASSPORT WOULD BE HANDED OVER TO THE APPLICANT HIMSELF OR SENT TO HIS ADDRESS BY REGISTERED POST ACKNOWLEDGMENT DUE(.) MANY PASSPORT OFFFICERS HAVE RAISED QUERIES AND IT IS HERE BY CLARIFIED AS FOLLOWS :
THE PROCEDURE CONTAINED IN MY CIRCULAR TELEX DATED 23RD JULY RELATES TO FRESH PASSPORTS I.B. WHEN AN APPLICANT IS APPLYING FOR A PASSPORT FOR THE FIRST TIME THE PASSPORT SHALL BE HANDED OVER TO THE APPLICANT OR SENT RAD POST AND NOT HANDED OVER TO ANY THIRD PER-SON(.) IN THE CASE OF MISC. SERVICES IE CHANGE IN DATE OF BIRTH, RENEWAL AFTER FIVE YEARS, ENTRY OF NAMES AND DELETION ETC., THE PASSPORT MAY BE HANDED OVER TO SAME PERSON WHO DEPOSITS WHETHER OR NOT HE IS THE APPLICANT HIMSELF(.) " IF A TRAVEL AGENT DEPOSTS APPLICATION FOR RENEWAL AFTER A PERIOD OF FIVE YEARS, entry of minor children etc. please process AS USUAL BUT ENSURE THAT AFTER GIVING MISC. SFRVICE THE DOCUMENT IS HANDED OVER TO THE SAME PERSON WHO DEPOSITED IT(.) I TRUST THE ABOVE INSTRUCTIONS ARE CLEAR THAT ONLY IN CASE OF FRESH APPLICATION FOR A PASSPORT FOR THE FIRST TIME, THE COMPLETED PASSPORT SHOULD NOT BE HANDED OVER TO ANY THIRD PERSON."
3. The prayer in the petitions is only against the circular of the Passport Officer, Probably, the petitioners were not in a position to ascertain the particulars of the order of the Ministry as they are not mentioned in the impugned order. The arguments are directed against the Government order and the respondents have attempted to sustain the order of the Government. In fact, the copies of the orders of the Government dated 23-7-1992 and 28-7-1992 are produced by the respondents only. The validity of the said order has to be considered here.
4. Prior to 1967, there was no law regulating the issue of passports for going abroad from this country. It was entirely within the discretion of the executive which was unguid-ed and unchaunelled. The Apex Court of..... the country had to point out the necessity for a law regulating the exercise of the right of a person to travel abroad as it is a right covered by the expression "personal liberty" in Article 21 of the Constitution of India. The result was the enactment of the Passports Act, 1967 which came into force on June 24, 1967. The object of the act as its preamble shows is to provide for issue of passports and travel documents to regulate the departure from India of citizens of India and other persons and for incidental and ancillary matters. Section 5 provides for making art application for issue of passports etc., and consideration thereof by the passport authority. Section 6 of the Act lays down the grounds on which the passport authority shall refuse to make an endorsement for visiting any foreign country or issue passport or travel document. Section 7 prescribes for the duration of passports and travel documents. Section 8 provides for renewal of passports. Section 9 provides for prescription of conditions subject to which and the form in which a passport or travel document shall be issued. Section 10 enables the passport authority to vary, impound or revoke passports and travel documents on certain grounds. Section 12 sets out the offences and penalities. Section 24 empowers the Central Government to make rules for carrying out the purposes of the Act.
5. Having regard to the provisions of the Act, different forms were prescribed for different, classes of passports and the applicants had to fill up the forms with utmost care giving full partculars as required therein. As the passport authority is bound to make inquiry before issuing a passport, the process is a time-counsuming one and necessarily the applicants for passports had to wait for some time before their applications are granted. People who were busy in their avocations and people who were not familiar with official procedures had to depend on others to help them to fill up the applications; present them in the passport office and follow them up until the final order is passed by the passport authority. People in rural areas were more in need of such help as the passport officers are situated far away from the places of residence. Thus as a matter of necessity aspirants for passports had to employ agents for remuneration to attend to the matter and naturally an avenue for business opened itself. When several agencies engaged themselves in the business, the Government thought fit to introduce a system of recognition to them if they fulfilled certain criteria. If the requirements were satisfied, the Government issued Registration Certificates and the holders of such certificates came to be known as Recognised Agents. Such certificates were valid for specific periods, and had to be renewed for continuing the validity. The Government fixed the criteria and was changing the same from time to time. As there is no ...........
provision in the Act or the Rules for recognition of agents, the matter has been dealt with administratively and the Government has been issuing administrative directions.
6. As at present, the following are the criteria fixed by the Government:
"ASSETS/ INVESTMENT 1. (a) A company/Firm based in big cities should have paid up capital/asset investment of Rs. 2,00,000/-and a firm based in other places Rupees 1,00,000/-.
NOTE: (i) Big cities would mean 'A' 'B-l* and 'B-2' class cities as per the Ministry of Finance O.M. No. 11016/5-82-E, II (B) dated the 7-2-1983.
(ii)A private limited /Limited Company should have a paid up capital of Rs. 2 Lakhs/Rs. 1 lakh, as the case may be.
(iii) In the case of proprietorship firms; (a) the actual investment in travel business should not be less than 50% of the total asset requirement.
(b)To the extent actual investment falls short of the balance 50% minimum requirement of assets, the proprietor may submit from a Government recognised valuer, a valuation certificate of the immovable property owned by him, with a ......... Certificate of payment of taxes on the value of the immovable property, whereever applicable (all such assets should be included in the balance sheet). Original .ownership documents of immovable propetries must be shown to passport Officer and photo-copy thereof attested by Passport Officer and thus attested photocopies should be attested with the application under sub-paras (iii) and (iv) of this para.
(iv) In respect of partnership firms, the term asset investment shall include; (a) the entire value of office promises, if in the name of the Travel Agency, and if owned by any of the partners to the extent of the share capital of the owning partner in term of the partnership deed; and (b) fixed assets in the name of the firm.
OFFICE SPACE: 1. (b) The office promises of the firm should have a minimum space of 250 sq. ft. in a commercial area.
NOTE: The minimum office space prescribed should be at one location and is exclusive of store, open Varandah etc., if any.
TELEPHONE: 1. (c) A telephone connection at the office in the same of the captioned travel agency or in the name of a Director, partner or proprietor.
EMPLOYEES : 1. (d) A minimum of three regular (full-time) employees in travel division.
NOTE: (f) Besides actual verification of salary register by the Passport Officer at the time of inspection, salary expenditure shown in the Profits and Less account will be taken into consideration.
(ii) Proprietor shall not be treated as an employee.
(iii) The rate of alary of an employee should not be less than the subtistance level as per local standard/ minimum statutory wages for the area."
7. In the case of travel agencies owned by Ex-service Personnel, certain additional criteria are fixed for special recognition. One of them is that the person should submit an affidavit to the effect that he does not have any other business in his name..... or means of livelihood except his pension and retirement benefits. Alternatively, if the person conoftrn-ed is registered with any of the offices of the Resettlement Directorate, he may submit a" appropriate recommendation letter in original along with attested true copy thereof from the concerned Resettlement Directorate, office recommending him for recognising as travel agent.
8. Recognition is granted by the Ministry of External Affairs only after getting positive reports from
(a) Superintendent of Police of the District concerned.
(b) Special branch C.I.D. Madras.
(c) Reserve Bank of India.
(d) Directorate of Revenue Intelligence.
9. The applicants for recognition have to file affidavits containing several undertakings. Some of them are;
(i) that I shall not be a party to wilful violations of the passport Act/ Rules, Regulations and procedures prescribed from time to time,
(ii) that I shall not deliberately delay the delivery of the passports to the applicants.
(iii) that I shall deliver the passport either to applicants themselves against their signatures or their authorised representatives on production of authority letter executed by them or we shall send out-station passports by registered post to the applicants.
(iv) I shall return the passports to the passport office concerned if delivery thereof is not made for any reason whatsoever within 30 days.
(v) that I shall not process passport applications on behalf of any unauthorised person or agent,
(vi) that I shall maintain a complete record of all passports submitted, collected and disposed of in the prescribed proforma (Annexure VIII and IX) and it would be made available for inspection, when required, to the Chief Passport Officer and/or the Passport Officer and/or their authorised representative.
(vii) that I shall display at a prominent place in our office our service charges in English, Hindi and regional language for various passport services and will not charge in excess of the prescribed service charges, which is Rs. 100/- for a fresh passport and Rs. 25/- for other miscellaneous services.
(xii) that I shall not knowingly process passport applications in respect of persons who are not ordinarily residing in the jurisdiction of passport office concerned and undertake to satisfy myselt about genuineness/ authenticity of details being furnished by the applicant, before accepting to represent that applicant before the REQ/PU with the help of birth certificate, ration card, employer's letter, bank account, LIC and similar other documents before submitting application to the passport office concerned.
(xiii) that 1 shall submit to Passport Office in a monthly report in respect of the passports collected, the number of passports delivered to the applicants and passports pending delivery with us over 15 days.
(xiv) that I am aware that no priority for issue of passports, at the instance of recognised travel agents is given. In case any priority is required to be accorded in a particular genuine case, I undertake to produce the applicant along with available documentary evidence to establish urgency.
(xvi) that I shall not bring undue political pressure on the concerned authorities for granting recognition or for expediting issue of passports to any applicant after the recognition is accorded.
(xix) that I shall be liable to be suspended/ derecognised in the event of any irregularities and malpractices detected against us and for violation of any of the conditions of recognition and terms of undertaking.
10. The Government permits the recognised 'agents to collect a maximum of Rs. 100/- per passport application as service charges. If any travel agency is found to have contravened any of the conditions mentioned in the Registration Certificate, the passport officer concerned, after serving show-cause notice, shall have authority to suspend recog-nition of the travel agency for a period not exceeding three months, after the expiry of which the suspension order shall automatically stand revoked. In the meantime, travel agency shall have the right to appeal, to the Chief Passport Officer against the order of suspension. If the passport officer feels that stringent action like suspension for a longer period or cancellation of recognition is required in any particular case, a full report shall be required to be sent to the Ministry for consideration and action as is deemed fit. Action to suspend or cancel the recognition of a travel agency can also be taken if it is reported either by the concerned passport office or police authorities that any criminal case directly or indirectly connected with the travel business is pending against any of the directors/partners/proprietors.
11. The petitioners have stated that they collect only a part of the charges initially when particulars are given to them for filing applications for passports and the balance is collected only when they deliver the passports to the applicants. It is stated in the affidavit filed in support of the petitions that the applicants are not normally willing to pay the complete service charges until the services are completed by issuance of the passports. It is also averred that the petitioners educate the applicants about the importance of the passports. It is further stated that the petitioners are maintaining complete records of the applications and passports and even if their clients happen to lose the passports, they can get all the relevant particulars thereof from the petitioners.
12. Thus, the petitioners are rendering very useful service to those who aspire to obtain passports in order to go to foreign countries. Moreover, when the Government found it difficult to provide sufficient number of application forms to public, they permitted the recognised travel agents to print and supply the forms on certain conditions. The relevant part of the circular is as follows:
"Keeping in view the various difficulties in making available sufficient number of passport application forms to public on demand in all parts of the country it has been decided by the ministry to allow travel agents recognised by the ministry to print and supply the prescribed forms to the public free of cost subject to the following conditions:
(1) The format of the forms including index card shall be exactly as notified in Schedule III Part I of the Passport Rules.
(2) The forms shall be page to page in black ink in Hindi (Devanagri Script) English bilingual format on white paper of not less than 60 gins. and not more than 70 gms.
(3) The size of each page shall be 21 c.m. (width) x 29 c.m.
(4) Index card shall be on not less than 200 gms. and not more than 25 gms. pulp board and shall be of the size of 18 c.m. x 18.5 c.m. Index Card shall be vertifically perforated 1.5 c.m. from the left margin and shall be stapled on top of the EA(P) I form.
(5) Box provided for photograph on the forms and the index card shall be on top right hand corner and shall be of the size of 35 m.m. x 45 m.m.
(6) The forms shall be in 10 point type face.
(7) Signature/Thumb Impression column in the form shall be on the left hand side and shall be of the size of 3.5 c.m. x 1.5 c.m.
(8) Various columns shall not be combined and shall be printed in different lines as per format given in the Schedule.
(9) At least two-third of page shall be left blank at the end of the form for official use of the Passport Office.
(10) The binding of EA(P) I form shall be done in such a way that the personal particulars form (duplicate) can be removed as 4 page pullpouts without removing the binding."
13. The Government has been issuing Passport Information Booklets. It contains instructions, one of which is that application for passport may be submitted personally or through a representative or through a travel agent recognised by Ministry of External Affairs or by registered post. It is stated therein that passport will be despatched by registered post unless submitted through MEA recognised travel agent. Thus, under the system that existed till the impugned G. O. is issued, Recognised travel agents had a status which inspired confidence in the public and those who were desirous of getting passports approached them and availed of their services. Nobody grudged against the charges and the Government had taken care to fix the maximum. Nor did the travel agents have any grievance against the conditions imposed by the Government for granting recognition to them. There is no dispute that such recognised travel agents have invested heavy amounts for carrying on the business. It is the case of the petitioners that most of their clients hail from rural are as who are not in a position to fill up the applications for passports. The Registration certificate issued to the petitioner in W. P. 10619 of 1992 is valid upto 17-2-1984. Similarly, the periods of validity of certificate issued to the members of the petitioner in the other writ petition have not expired and some of them extend even upto 1995. Under the existing system, the petitioners are rendering all services in connection with passports and after collecting the passports from the passport authority they hand them over to their respective clients who pay the balance charges payable to the petitioners at that time.
14. Now that the impugned orders have been passed, the passports will be sent directly by registered post to the applicants who apply for a passport for the first time. As a result, the pelitioners will not be in a position to collect their charges, which remain unpaid. The petitioners will have to run after their clients and the latter having received the passports directly from the passport authority may delay and protract the settlement of accounts and some may even refuse to pay on the ground that the petitioners did not fulfil their part of the contract. Thus, the impugned orders will have an immediate impact on the contracts between the petitioners and their clients, practically frustrating them and making them impossible of performance.
15. Hence, the petitioners have come forward with these petitions contending that the impugned orders are violative of Arts. 14, 19, 21 and 300A of the Constitution of India. According to learned counsel for the petitioners, the impugned orders suffer from the vice of generality not based on any principle or valid reason. It is argued that the orders are arbitrary and irrational and they interfere with the fundamental rights of the petitioners to carry on business. It is further contended that the petitioners are sought to be deprived of their property rights. Yet another argument is that the impugned orders are making unequats equals in as much as they seek to place unrecognised agents on par with recognised agents. Learned counsel submit that the principle of promissory estoppel will apply and so long as the periods of validity of registration certificates have not expired, it is not open to the respondents to deprive the petitioners of the benefit of such registration as the petitioners have acted on it and invested heavy amounts in their business. It is submitted that if the respondents intend to cancel the licenses given to the petitoners, they cannot do it wholesale by a general order and they must consider the case of each individual licensee and give reasons for cancelling the particular license.
16. The second respondent has filed a counter-affidavit setting out the reasons for the passing of impugned orders. It is already seen that the orders do not themselves disclose any reason for the decision taken by the Government to withdraw the system of recognising travel agents to deal with passport work. It is better to extract paras 4 and 5 ofthe counter-affidavit in A. P. 10914of 1992 which read as follows:
"4. It is submitted that respondents have not detecognised any existing Travel agents. On the other hand the department has recognised all Travel Agents to deal with the passport office in respect of passport matters without going through the formalities which were prescribed earlier and without payment of any deposit or fees. The system of recognition of Travel Agents has been liberalised as the old system had created a privileged group of people and discriminated against the vast majority of travel agents. As a matter of fact, there were only 750 recognised Travel Agents to deal with the passport offices, while the total number of Travel Agents in India exceeds five thousand. Further as per the new system only when an applicant applies for the first time in his life, the completed passport is handed over the applicant directly or despatched to the address given in the application by registered post. The new policy has been given effect to as the first time applicant has no record in the passport office and the passport issuing authority is also issuing passport without waiting for the police verification reports in order to avoid delay in issuing passports. The passport is a security document and there have been cases noticed by the Government where passports have been misused by people who were neither Indian nor resident in India, consequently it is incumbent on the passport issuing authority to ensure that a person applying for the first time genuinely exists. In the absence of a police report and also in the absence of any record in the passport office about a first time applicant the only precaution that the passport authority can take is to deliver the passport directly to the applicant or despatch it by Registered post to the address furnished by him in the application. In respect of other Misc. Services or renewal of passport no change has been effected, because in such cases there is prima facie evidence available to the passport issuing authority that the person actually exists and is holding a document. In respect of these cases the Travel Agents can continue to deposit the applications and can collect the passport on behalf of the applicants on the basis of letter of authority issued by the applicant.
5. It is admitted that on 23-7-92, revised Criteria had been formulated by the Ministry of external Affairs. A reading of the revised or new criteria will disclose that the existing travel Agents have not been de-recognised. The existing Recognised travel Agents are entitled, to continue within the frame work of the conditions laid down in the circular dated 23-7-92. It is submitted that the new criteria only liberalised the existing system and provided for effective checks to curb the abuse of the facilities given to the Travel Agents."
17. It is further stated that the Passports Act does not provide for recognition of travel agents and facilities were extended purely for administrative convenience on an administrative decision which does not confer any right in the travel agents. It is stated that in many cases, passports which were issued pursuant to applications deposited by Travel agents and sent to the individual concerned by post had been returned undelivered by the postal authorities stating that there was no such addressee, which indicates that the applications have been deposited by some travel agents either without due verification of the existence or otherwise of the applicants and without satisfying themselves of the bona fides and backgrounds of the appellants or by deliberately submitting factitious particulars knowing fully well that no such applicant existed. According to the counter-affidavit, that led to the inference that there was abuse of the facilities extended to travel agents and in order to prevent the same, the impugned orders have been passed. It is stated that the new criteria will give equal opportunities to all the travel agents and in order to prevent the misuse and malpractice of obtaining passports in the names of fictitious and bogus persons, there is a provision for despatch of passports to the first time applicants directly by post and it would enable the department to know whether the said applicants resided in the addresses given in the applications and had actually received the passports. In so far as renewal of passports and miscellaneous services in relation to the passport are concerned, the travel agents have been allowed to collect the passports issued and maintain the services rendered by them without any alteration. According to the counter-affidavit, the grievances of the petitioners are imaginary and devoid of substance. The Government has got right to revoke, modify and amend the administrative instructions and it can be done unilaterally, as there is no vested right in the travel agents. Thus, according to the counter affidavit, there is no violation of any of the Articles of the Constitution of India.
18. The main contention of the respondents is that the impugned order is an administrative one and the existing system of recognising travel agents came into vogue pursuant to an administrative decision which created no vested right in the travel agents. There is no merit in this contention. The law in the country is by now well settled. The Apex Court of the country has repeatedly held that administrative orders of the State should also be free from the vice of arbitrariness and not be unreasonable. A similar contention was raised in Mahabir Auto Stores v. Indian Oil Corporation, and rejected. The Court held that Art. 14 of the Constitution of India was attracted even where the aggrieved person did not have the benefit of either a contractual or a statutory right. In that case, the grievance was made by a person who was not a dealer of 'the Indian Oil Corporation, but merely claimed to have been treated as one by a long course of conduct. It was held that the impugned act of the Indian Oil Corporation was an administrative decision and could be impeached on the ground that it was arbitrary or violative of Art. 14 of the Constitution. It was observed that the instrumentalities of the State should act fairly and fairness in such actions should be perceptible, if not transparent.
19. The same view was reiterated in Shrilekha Vidyarthi v. Stale of U.P., . The challenge in that case was as to the validity of a Government Order by which the tenure of a!l the Government Counsel was directed to end with 28th February, 1990. The argument that the appointment of District Government Counsel by the State was only a professional engagement as between a private client and his lawyer and it was purely contractual with no public element attaching to it, which may be terminated at any time at the sweet will of the Government excluding judicial review, was rejected. The question was considered even apart from the premise that the office or post of District Government Counsel has a public element. It was held that even if without any puiblic element the appointment was purely contractual, Art. 14 of the Constitution of India applied and the action of the State should satisfy the test of reasonableness. The following passages in the judgment are quite relevant and instructive;
"22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling with the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Art.
14 by alleging that the impugned act is arbitrary" unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Art. 14. To this.extent the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Art. 14 of non-arbitrariness at the hands of the State in any of its actions.
29. It can no longer be doubted at this point of time that Art. 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. (See Rarnana Dayaram Shetty v; The International Airport Authority of India and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir in Col. A. S. Sangwan v. Union of India , while the discretion to change the policy in exercise of the executive power, when not trammelled by the statute or rule, was held to be vide, it was emphasised as imperative and implicit in Art. 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Art. 14 and the requirement of every State action qualifying for its validity on this touch-stone, irrespective of the field of activity of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose.
30. .......The basic requirement of Art. 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its function, when it has the uppermost duty to be governed by the rule of law. Non arbitrariness, in substance, is only fair play in action. We have no doubt that this obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity.
33. ..........The scope of judicial review is limited as indicated in Dwarkadas Marfatia's case, (supra) to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. It is not for the Courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. As indicated by Diplock, L. J., in Council of Civil Service Unions v. Minister for the Civil Service (1984) 2 All ER 935, the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety. In the case of arbitrariness, the defect of irrationality is obvious.
34. In our opinion, the wide sweep of Art. 14 undoubtedly takes within its fold the impugned circular issued by the State of U. P. in exercise of its executive power, irrespective of the precise nature of appointment of the Government counsel in the districts and the other rights, contractual or statutory, which the appointees may have. It is for this reason that we base our decision on the ground, that independent of any statutory right, available to the appointees, and assuming for the purpose of this case that the rights flow only from the contract of appointment, the impugned circular, issued in exercise of the executive power of the State, must satisfy Art. 14 of the Constitution and if it is shown to be arbitrary, it must be struck down.
36. The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question whether an impugned, act is arbitrary or not is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is 'any discernible principle emerging from the im pugned act and if so, does it satisfy the test of reasonableness. Where a mode is prescribed for doing an act and there is no impediment in following that procedure, performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every state action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of men: to whom the governance is entrusted for the time being. It is trite that 'be you ever so high, the laws are above you'.
42. It was stated by the Learned 'Ad-ditional advocate-General that many of the old incumbents were to be reappointed even after this exercise and, therefore, a wholesale, change was not to be made. If at all, this submission discloses a further infirmity in the impugned circular. If it be true that many of the existing appointees were to be continued by giving them fresh appointments, the action of first terminating their appointment and then giving them fresh appointment is, to say the least, uninformed by reason and does not over fall within the scope of the disclosed reason "to streamline the conduct of Government cases and effective prosecution-thereof. It is obvious that at least in respect Of all such appointees who are to be continued by giving them fresh appointment, the act of terminating their appointment in one stroke, was without application of mind by anyone to the question whether a change was at all needed in their case. It would be too much to assume that every Government counsel in all the districts of the State of U. P. was required to be replaced in order to streamline the conduct of Government cases and indeed, that is not even the case of the State which itself says that many of them were to be reappointed.
43. Non-application of mind to individual cases before issuing a general circular terminating all such appointments throughout the State of U. P. is itself eloquent of the arbilrariness writ large on the face of the circular. It is obvious that issuance of the impugned circular was not governed by any fulel but by the whim or fancy of someone totally unaware of the requirements of rule of law, neatly spelled out in the case of John Wilkes, (1770) 4 Burr 2528 more than two centuries back and quoted with approval by this Court almost a quarter century earlier in Jaismghani's case, (supra)."
20. Two of the contentions of the petitioned are based on the above ruling, (i) The impugned orders are arbitrary and unreasonable; (ii) The General orders withdrawing the recognition granted to the petitioners without considering individual cases is unsustainable. Both contentions are well founded.
21. The reasons given in the counter-affidavit for passing the impugned orders are: (i) the existing system has created a privileged group of people: (ii) there are cases of misuse of passports by people who are neither Indians nor resident in India; (iii) passports issued on applications deposited by travel agents and sent to the individuals concerned to the addresses given in the applications have returned undelivered with the endorsement, that there are no such addressess. The first off the reasons is wholly unintelligible. One can even say that it is ridiculous. Whenever a system of licensing is introduced and certain criteria are fixed for issuing licenses, those who satisfy the requirements and obtain licenses will certainly form a class different from those who are not able to get licences as they fail to fulfil the requirements. There is no substance in the contention that out of five thousand travel agents only seven hundred and fifty were recognised. They were re cognised because they could comply with the conditions prescribed and the others could not. The contention is as much absurd 'as saying that out of several lakhs of residents in a city there are only a few thousands of lawyers. The second reason is no better. It is not the case of the respondents that the petitioners or other recognised travel agents were parties to any misuse of passports by non-Indians or they were even aware of the same. The question of misuse of passports will arise only after issue of passports. It is not the case of the respondents that in the case of applications deposited by the recognised travel agents, the inquiry prescribed in the Passports Act is dispensed with. The auth-orities cannot ignore the provisions of the statute and an inquiry has to be made with respect to each application whether presented directly or through a travel agent. Hence the recognised travel agents cannot be blamed as a class for any misuse of passports. The third reason has not been substantiated at all. Even the averment in the counter-affidavit is vague. No details are furnished. In the course of arguments, counsel appearing for the respondents produced some returned postal envelopes, numbering around ten, containing endorsements "no such addressee". The postal seals on all the envelopes produced before me showed that they were posted on 8-8-1992, during the pendency of these writ petitions. No material has been placed before me as to whether the applications in these-cases were deposited by recognised travel agents. Hence, no credence can be attached to such returned envelopes.
22. Thus, it is seen that the reasons adduced in the counter-affidavit are not reasons at all. The impugned orders do not satisfy the test of reasonableness. With reference to reasons two and three if any recongised travel agent is found to be party to misuse of passports or if it is found that any travel agent has presented applications of non-existent persons action should be taken against such travel agents only. Besides cancelling the recognition granted, other action can also be initiated against such erring travel agents. That will not be ground for withdrawing all the recognitions and cancel all the registration certificates. Reference is made in this connection by learned counsel for the petitioners to the following observation made by the Supreme Court in Gujarat Steel Tubes Ltd. v. Its Mazdoor Sabha, :
"111. The cardinal distinction in our punitive jurisprudence between a commission of enquiry and a Court of Adjudication, between the cumulative causes of a calamity and the specific guilt of a particular person, is that speaking generally, we have rejected, as a nation, the theory of community guilt and collective punishment and instead that no man shall be punished except for his own guilt. Its reflection in the disciplinary jurisdiction is that no worker shall be dismissed save on proof of his individual delinquency. Blanket attainder of a bulk of citizens on any vicarious theory for the gross sins of some Only, is easy to apply but obnoxious in principle."
23. It is argued that the respondents have not dcrecognised the travel agents, but have only liberalised the system by throwing open the gates to all the travel agents in the country enabling them to deposit applications for passports. It is very doubtful whether the concerned authorities have applied their mind to the question. By the so called liberalisation, the mischief that is intended to be prevented will only be perpetrated. The evil instead of being arrested will have a broader avenue for its merry stroll. As rightly pointed out by learned counsel for the petitioners the liberalisation Will also suffer from the vice of making unequals equal. Frankly speaking, the wisdom underlying the so called liberalisation is not discernible. Far from helping the Government to curb the cases of misuse of passports, the new policy may only let loose on the society undesirable elements who are adept in fraud and cheating particularly when cases of bogus travel agencies are on the increase.
24. My attention is drawn to the observa-tions made by a Division Bench of this Court in a case where the right of a power of attorney agent to appear in a Court and argue a matter on behalf of his principal was considered. In Tmyayaraaya v. Pitty Kup-puswamy Naidu, (1937) 2 Mad LJ 552 : (AIR 1937 Mad 937) (FB), a party to a suit executed a power of attorney in favour of a person to do all that is necessary in the conduct thereof including appearing and pleading in person on her behalf. Later, she gave a vakalat in favour of an advocate and the Power of Attorney Agent objected to the appearance of the advocate before his power of attorney was revoked. The Bench negatived the contentions of the Power Agent and held that the provisions of the Civil Procedure Code did not give the Agent any right to plead in Court on behalf of the principal and such an agent did not stand in the same position as an advocate holding a vakalat. It was held that no notice was necessary to the Agent if the Principal wanted to appear and conduct the proceeding himself or appoint an advocate to appear for him and that the Power of Attorney Agent could not carry on business as a solicitor or attorney, drafting, engrossing and filing pleadings and generally issuing legal process and charge fees to the Principal. The relevant observations made by the Bench are in these terms............ .."In conclusion, we would add the following general observations with regard to what the claim put forward by the respondent really amounts to. It is that he should be accorded all the rights and privileges which are enjoyed by members of the legal profession whose qualifications for admission to its ranks are laid down in the rules made by the Bar Council with the sanction of the High Court, and whose professional conduct thereafter is regulated by rules of practise and professional etiquette and who are subject to the disciplinary control of the High Court; whereas the respondent need possess no qualifications whatsoever as regards education and character and is not bound by any rules of professional conduct or etiquette and is not subject to the disciplinary control of the High Court or of any one; and there can be no better example than this case itself affords of the highly objectionable result such a claim may lead to and actually has led to here, because the respondent claims to be remunerated by his principal for his services in question and before us stated that the condition regulating his payment is that he is to receive it only if the result of the proceedings is successful but not otherwise. On his own admission, this is a transaction which, if entered upon by a legal practitioner, would at once render him liable to strong disciplinary action, for to engage in speculative litigation is a grave breach of professional conduct. Yet his claim is that he is free to undertake such business and this is only one example of probable resultant evils".
The situation here is somewhat analogous though the resultant evil may be more harmful to the society at large.
25. Thus, it can be seen that there is no nexus between the proclaimed object of the impugned order and the actual order that has been passed. According to the respondents, the new policy of liberalisation has been adopted in order to put an end to the misuse of passports. Far from achieving the said object, the result which may ensue may be directly contrary or diabolically opposite to the same.
26. Reliance is rightly placed by learned counsel for the petitioners on the ruling in Indian Express Newspapers (Bombay) Private Limited v. Union of India, . It was held that in the case of exercise of discretionary powers conferred :by a statute, it could be challenged on all grounds on which an administrative action may be questioned, such as non-application of mind, taking irrelevant matters and failure to take relevant matters into consideration and overlooking public interest. It is rightly contended that the new policy evolved by the respondents resulting in the impugned orders has overlooked the public interest and taken into consideration irrelevant matters.
27. At this stage it is necessary to refer to a particular statement in the counter affidavit which causes the raising of eye-brows. In paragraph 4 thereof, which has been extracted earlier in this judgment, it is stated that the Passport Authority is issuing passport without waiting for the police verification report in order to avoid delay in the issue. A clarification was sought by the Court from the Additional Central Government Standing counsel as to the correctness of the said statement. He has produced before me a copy of a telex, message dated 4-8-1992. In so far as it is relevant, it reads thus:--
"In cases where police and C.I.D. reports were still awaited, 4 weeks after despatch of personal particular forms to police and CID authorities, passport Officer was given authority to exercise his discretion to issue a passport disregarding non-receipt of police and CID reports. It has been observed that this discretion has been used rather sparingly by our passport officer, thereby denying issuance of a passport until police and CID reports have actually been received. In order to facilitate 'expeditious issue of passports in cases where police and CID reports are not received even after a period of 4 weeks after the despatch of personal particular forms, it has been decided that if all other documentation is complete passport shall be issued".
It passes one's comprehension as to how police verification reports are dispensed with even while there is a complaint that passports are misused and malpractices are being adopted. It will be like cutting a man's legs to the size of the cot, if the police verification is dispensed in order to quicken the issue of passports. The Government should take such steps as are necessary to expedite the verification by the Police officials and submission of their reports and not to dispense with the same altogether. Counsel for the petitioners submit that in many a case even if the police officials submit the verification reports to the passport authorities well within the time stated above, the issue of passports is considerably delayed, often due to the lethargy on the part of the staff in the passport office and their failure to place the police reports in the respective files as and when they are received.
28. The principle of promissory estoppel is certainly applicable to this case. The travel agents who have secured recognition have invested considerable amounts for the purpose of fulfilling the conditions imposed by the Government for obtaining recognition. As.seen already, the conditions include having office presmises of a minimum area of 250 sq. ft. telephone connection, a typewriter and minimum of three employees. Such travel agents have also executed several undertakings as pointed out already. In the case of ex-servicemen there are some special criteria to which referrence has already been made. In the cases before me, the petitioner in W.P. No. 10619 of 1992 was originally a village Administrative Officer and he resigned the same and commenced the travel agency business with huge investments. In the other writ petition, several of the members of the petitioner association are stated to be ex-servicemen. Having issued registration certificates for particular periods in favour of the j petitioners, after they had fulfilled the condi-lions imposed by the respondents, it is not open to the latter to make the certificates in effective by passing the impugned order. There is no substance in the contention that their certificates are not cancelled and the only direction given at present is to send the passports to the first time applicants by registered post instead of handing them over to the petitioners. It is already pointed out as to how the said direction practically nullifies the contracts between the petitioners and their clients who have applied for passports for the first time in their life.
29. Learned counsel for the petitioners have placed reliance on the principles laid down by the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service (1984) 3 AH ER 935. In that case, an oral instruction issued by the Minister for Civil Service to the effect that the terms and conditions of Civil Servants at Government Communication Head-Quarters (GCHQ), which was a breach in the civil service, whose, main functions were to ensure the security of the United Kingdom military and bfficial communications and to provide signals intelligence for the Government, would be revised so as to exclude membership of any trade union other than a departmental staff association approved by the Director of GCHQ. That instruction was issued without prior consultation' with the staff at GCHQ and pursuant to the Minister's power under Art. 4 of the Civil Service Order in Council, 1982, which enabled the Minister to give instructions for controlling the conduct of 'the Service and providing for the conditions of service. The Order itself was made under the royal prerogative. The appellants before the House of Lords challenged the validity of the said instruction on the ground that 'the Minister had acted unfairly in removing their fundamental right to belong to a trade union without consultation. The trial Judge granted the application on the ground that the Minister ought to have consulted the staff before issuing the instructions. The Court of Appeal allowed the Minister's' Appeal on grounds of national security on further appeal to the House of Lords, it was held that irrespective of whether a power exercised directly under the prerogative was immune from judicial review, delegated powers emanating from a prerogative power were not necessarily similarly immune, since the scope of such delegated powers would, either, expressly or impliedly, be defined, e.g. by reference to their object or the procedure by which they were to be exercised, with the result that such powers were subject to judicial control to ensure that the scope and, limits of the power were not exceeded. It was also held that an aggrieved person was entitled to invoke Judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal. In that case, it was found that the appellants legitimate expectation arising frorn the existence of a regular practice of consultation, which the appellants could reasonably expect to continue, gave rise to an implied limitation on the minister's exercise of the power contained in Art. 4 of the Civil Service Order in Council 1982, namely an obligation to act fairly by consulting the GCHQ staff before withdrawing the benefit of trade union membership and the minister's failure to consult prima facie entitled the appellants to judicial review of the minister's instructions. However, on the facts, the Court held that the evidence produced by the minister proved that the action taken was for reasons of national security and, therefore, it overrode any right of judicial review which the appellants had arising out of denial of legitimate expectation of consultation. In the present case, there is no plea of existence of any reason of national security for the action taken by the respondents. Hence, the impugned orders are vitiated inasmuch as they had been passed without giving any opportunity to the petitioners for making representations against the said action which runs pounter to the legitimate expectation of the petitioners.
30. Learned Additional Central Government Standing Counsel relied on the Judgment in Mediator Company v. State of West Bengal, . The petitioner, which was a private company registered under the Companies Act made an application to the Visa Officer of the Government of West Bengal for permission to act as an agent on behalf of its clients. The Additional Passport-cum-Visa Officer rejected the same on the ground that the Government of West Bengal dealt directly with applicants 'for passport and visa etc., and did not accept applications through intermediaries. The petitioner made a complaint that its constitutional right to carry on the business of agency under Art. 19 of the Constitution of India was affected thereby and prayed for the issue of a writ of Mandamus directing the Government to gram the requisite permission to the petitioner to act on behalf of its client in the matter of application for visa and passports. Rejecting the contention of the petitioner, the Court held that a third party is not bound by a private arrangement between the agent and his principal and the third party will certainly have the freedom to accept or reject the agent and the law will not compel the third party to accept the agent. Considering the question whether there was any infringement of the petitioner's right to carry on the business as guaranteed by Art. 19 of the Constitution of India, it was observed thus (at p. 635 of AIR) :-
"The Government's method of directly dealing with the travellers in matters of passport and visa in respect of Indo-Pak travelling and not to accept applications from intermediaries does not at all affect the essential business of the applicant company. The applicant company can still act as the travelling agent of its clients and constituents. As travelling agent the applicant company can still advise its constituents and clients, help them with necessary details of passport and visa forms, inform them what rules and regulations they have to satisfy and then when the travellers have done all that is required of them to do, the appellant company can take them to the passport office or the visa office. All that business which is the real business of the company remains unaffected. The only effect of the Government not dealing with the intermediaries but dealing with travellers direct in Indo-Pakistan travelling is that the Government does not recognize the agent of the travellers, specially an agent who is a hired agent in the sense of carrying on a business of agency for paid consideration. I am therefore bound to hold that essentially applicant's business of travel agency is not at all affected by the Government's order as communicated in its letter of 31-10-1956."
The facts of the case are entirely different and the ruling will have no bearing on the instant. case. Here, the agency was recognised by the Government and on the basis of representations made by the Government, the travel agents fulfiled the criteria fixed by the Government and obtained registration certificates. They have been carrying on the business subject to the conditions imposed by the Government and it is already seen that even the maximum charges for the services rendered by the recognised travel agents are fixed by the Government. This is like a case in which licence had been issued by the Government to certain persons to carry on a particular business in a particular manner and when that licence is sought to be withdrawn or made ineffective, it will certainly infringe on the rights accrued to such licence holders.
31. Learned Additional Central Government Standing counsel has placed reliance on the judgment of the Supreme Court in Inder Mal Jain v. Union of India , where the court had to consider the case of Railways tourist agents. In a writ petition under Art. 32 of the Constitution of India, the petitioners claimed to be carrying on business as railway travel agents, ordinarily catering to the needs of middle class and lower middle class passengers. They made a complaint that unreasonable restrictions were placed on their right to carry on their lawful business by the Rules framed by the Central Government under S.47 of the Indian Railways Act. The Rules were styled as Railways Tourist Agents Rules, 1980. According to the Rules, persons who carried on business as railway travel agents without recognition from the Railways were liable to be prosecuted and sentenced to suffer imprisonment. It was held that S. 66 of the Railways Act enabled the Railway administration to appoint authorised agent for sale of tickets and it was therefore, necessary for the Central Government to prescribe by rules the conditions of eligibility, lay down criteria and guidelines for appointment of authorised railway agents enjoining power to sell tickets which the Railway administration would be bound to honour. It was also held that the rules framed by the Government were not arbitrary, irrelevant or unreasonable, but they had nexus to the object sought to be achieved and they were not impossible oi compliance, and did not impose any un-reasonable\restriction or right to carry on business. The following passage is worth extracting:--
"5. If what has been stated in the counter affidavit filed on behalf of the railway administration that the petitioners or at least some of them were guilty of cornering reserved accommodation and thereby compelling genuine passengers to turn to them for purchase of tickets booked in fictitious names at high premia, (is true) it was absolutely necessary to check these illegal activities permitting exploitation of the harassed travelling public. If a privilege is granted to do a certain thing, it would be open to prescribe conditions for enjoying the privilege. The railway administration alone should ordinarily sell its tickets, S. 66 enables the administration to appoint authorised agents for sale of tickets. These authorised agents must of necessity fulfil certain crileria. The criteria appear to have been devised with an eye on extending facility to foreign travellers as well as the financial viability to secure against failure to pay for tickets sold by recognised agents. With this end in view, the conditions for minimum financial guarantee and having a money chander's licence and other allied conditions were prescribed. The long term view appears to be that those seeking service of tourist agents, must get a comprehensive service at one place, such as railway tickets, foreign exchange conversion, expertise about the business, easy access and legitimacy in business and indisputably the conditions extracted above assure the same. Intendment underlying the scheme of setting up authorised agents is not only to check sharp practices, curb fleecing of gullible passengers, but render efficient service. The Rules ensure fulfilment of the intendment underlying the impugned provisions. Viewed from this angle, the conditions are neither irrelevant nor arbitrary. It may be that the petitioners may not be able to fulfil the same, but that by itself cannot render them unreasonable. The conditions are reasonable and are conducive to the objects sought to be achieved. Failure or inability of some of the petitioners to comply with them would not be sufficient to reject them as unreasonable, arbitrary or-irrelevant."
Far from helping the respondents, the ruling can be used aginst them in the present case. It may be remembered that one of the reasons given by the respondents in the counter affidavit for passing the impugned orders is that the recognition of certain travel agents gives rise to a previleged group. A perusal of the judgment in the above case will show the absurdity of the said reasoning. It should be noted that in the above case the Supreme Court directed the Railway Board to prepare a scheme for recognising travel gents catering to the needs of Class II passengers with sufficient control over their activities and put the same before the Court within three months from the date of the order.
32. In the circumstances, there is no justification for derecognising the travel agents, who have been granted certificates of registration under the so called liberalisation policy. Hence, the writ petitions are allowed and the impugned circular is quashed. The respondents shall continue to hand over to the petitioners the passports of the persons whose applications are deposited by the petitioners as it has been done hither to, instead of 1 sending them directly by registered post to the applicants themselves. The respondents shall pay the costs to the petitioners. Counsel's fee in each of the writ petitions Rs. 2000/-.
33. Order accordingly.